The thing living in the back of Jay Powell’s mind

Make Me Smart May 22, 2023 Transcript

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Kai Ryssdal 

I’m Kai Ryssdal. Thanks for joining us, everybody. Today we’re gonna do what we usually do on a Monday: the news fix, let you know what’s making a smile. Spoiler alert, nothing’s making me smile today. And then we’ll send you on your way. It’s not like I’m having a bad day I just… nothing nothing hit me today. You know, and I that… whatever.

Kimberly Adams 

I had to say I spent a lot of time on the internet today trying to look for some better news and then was struggling myself. But I found something moderately smiley that I’ll contribute later on.

Kai Ryssdal 

But there is lots of news. Just if you have a look at our rundown, there’s like eight links or something. Go ahead..

Kimberly Adams 

So many news. I mean, my news is the news we’ve been talking about, which is that we still do not have a solution to the debt limit. And I’m gonna just go ahead and start calling it a crisis now. Because as we were saying, just before the show, this looks real bad. This looks real bad. And I look, I’m not here trying to like incite panic or anything like that, because as I said last week, we really don’t know what this is going to look like. But as you said last week, all indications are that the economic consequences of this are going to be pretty dire. And we’re kind of already past the point of a timely solution to this process because even if they come up with the deal, it still has to pass the House and the Senate and be signed by the President of the United States. And we’ve laid out the problems that, you know, the Republicans are likely to encounter in the House, that the Democrats are likely to encounter in the House. And aside from all of that, there is still no deal. And over the weekend, the Republican demands got even more extreme. And this is quite the jump from an earlier discussion where the Biden administration was saying, “Look, this needs to be a clean bill to raise the debt ceiling. We don’t usually do this. There was the outlier in the Obama administration, it went badly for everybody. Let’s not do that again.” And now we’re not only in the same place that we have been but almost worse. And so the article that I have to contribute to this is a Politico piece talking about that 2011 debacle, I guess you might call it. It was a deal but it didn’t end up with an outcome that anybody really liked. You know, you had these budget caps that were determined, but then kind of ignored. It ended up still harming the economy, as we’ve talked about before. But this Politico piece looks at sort of what the takeaway lessons were from that 2011 situation. And that one of the takeaways on the GOP side is that they can use this as leverage for political gains. And, you know, that’s what they’re doing again. Anyway, it’s an interesting analysis, sort of breaking out what went down then in case anybody wants a refresher, what the outcome was, what worked, what didn’t, and sort of what the takeaways by both parties had been, whether they be good or bad. So yeah.

Kai Ryssdal 

Yeah it’s a mess. I just, I don’t even know what to say. It’s going to be horrifically, terrifically, economically terrible. Millions of jobs will be lost, companies will stop spending, individuals will be in dire straits and I for the life of me, I don’t what…Yeah, you know. I think… Sorry, let me get a little more serious here. There are clearly members of the Republican Caucus in the House of Representatives who believe it is okay to, not threaten to default, but actually to do it, to drive the bus off the cliff. And I I honestly don’t understand that. Because as I said the other day in ranty terms, and I’ll try to be less ranty right now, this will be really really bad. Interest rates will go up, millions of people will lose their jobs, and economically, it will take us a huge step backward. And I don’t understand why that’s okay with some members of the Republican House caucus. I don’t get it. It does not compute. Sorry go ahead.

Kimberly Adams 

No, I should probably clarify that when I say that in the House, there are going to be problems on the GOP and the Democratic side, they are, they are not the same problems. On the GOP side, it’s what you describe: the willingness to default. And on the Democratic side, it’s an unwillingness to attach any kind of big policy changes to the debt limit increase, or, you know, they don’t want to cut SNAP benefits, or they don’t want to add work requirements for public programs, that these are things that should be discussed separately in bills actually related to those policies. So these are not the same things. But the leverage is what’s being used. Anyway. And I know we don’t often like to cross post the shows, but everybody should go and listen to Kai’s show today, which had a special talking about the debt limit, how we got there, and really about how we make money in this country. Literally make money. And I know that you as you said, it’s Richard Cunningham and Maria Maria Hollenhorst and Nancy Farghalli who did all the work, but it’s worth listening to if anybody has the time. What’s your news?

Kai Ryssdal 

Wait do not want to talk about the water thing, because the water thing is huge.

Kimberly Adams 

Well, I was gonna let you do one, and then I was gonna do another but I’ll talk about the water thing since it directly relates to you in California. It’s a huge deal. So today, there was another deal that actually has been negotiated about water in the Colorado River Basin. And this… the water crisis out west has been ongoing for years. And it’s a little bit of a preview of some of the conflicts that we are going to be having around the world and definitely within this country in the future as a result of global warming and the climate crisis. So there’s a group of seven Colorado River Basin states. Three of them in the lower basin states have come to an agreement and the rest of the states are like “we kind of like the looks of this so for now let’s let’s go with this.” And it is a deal that would basically reduce the amount of consumption and hopefully conserve about 3 million acre feet of water. This is a measurement I didn’t know about until today, million acre feet of water through 2026. One of the ways that they were able to come to this deal is because y’all had a pretty wet winter out west. And that gave everybody a little bit more cushion making these sort of stakes of the deal, a little less scary. But even in this note they acknowledge, in the letter attached to this, they acknowledge and I’m just going to read this. “Finally, the seven states recognize that having one good winter does not solve the systemic challenges facing the Colorado River. We strongly encourage reclamation to advance the process for development of new operating guidelines.” And I can’t impress enough that as hard as this was within the United States where they had looming over them the threat of the federal government stepping in to say, “if you all can’t decide how to allocate the water amongst yourself, the federal government is going to do it for you.” And nobody wanted that. I hope people will take a moment to think about what this is going to look like when it’s played up among countries. You know, in East Africa, this is an ongoing issue. In parts of Asia, there are constant conflicts over water. And those are going to get worse as the planet continues to heat up. So that’s my news. I mean, I have to imagine this is a huge story where you are.

Kai Ryssdal 

It is huge. Water is the new oil just to the larger geopolitical thing. But yeah, this is huge out here. And and I think as you pointed out, the key thing is that we all now recognize this, which is not normal, what we’re doing out here and it’s not sustainable. And so we have to change our ways. And I think that’s that’s fundamentally a good thing. You know? Okay, so my news, couple updates, a personal anecdote and then the big news. Actually, one, one quick update. As we predicted last week on this podcast, and as everybody who was not the governor of the great state of Montana predicted Tiktok has in fact sued the state of Montana and its Governor Gianforte for blocking Tiktok. Yes, it’s a violation of the First Amendment. Let’s move on. Because this one’s not going to hold up. And oh my Lord, are we wasting our time and political posturing is just the bane of our society today. And one of many banes. Anyway, look, TikTok is troubling and ban it on government devices and all that jazz, but this was not the way to get people to think seriously about Tiktok. That’s all I’m saying. Item two, I think I have related on this board before my experience going down to Argentina last summer and inflation down there and how we had to bring crisp new $100 American bills to change for pesos down there because it is a cash economy because inflation is so bad. Well, inflation is well over 100% on an annualized basis down there now. And they have just today, or this week actually, introduced a 2000 peso bill. So when we… so I took my family down there because we had a kid studying in in Buenos Aires last summer. And so we went down there, and we took the crisp new American bills and, and my son who was studying there took them to his guy, he had a guy, to change it into pesos. And the biggest peso Bill was 1000 pesos. And we literally carried around bricks of 1000 peso notes to pay for, again, I’m using this word but I mean it, literally everything. Everything. Big dinner, fancy dinner, which was remarkably cheap, because inflation is terrible down there and it’s cheap if you’re using currency, American currency. Bricks and bricks and bricks of 1000 pesos. They have just this week introduced a 2000 peso note because inflation is so bad down there. 2000 pesos is worth about 4 bucks. This is what hyperinflation looks like. And this, if you really stretch the metaphor, is what’s in the back of Jay Powell his mind. Not that inflation is gonna go to 100% but that it’s going to be sticky, and it’s going to change behaviors, and then it’s going to become a problem. So, Argentina… I was gonna make some, some don’t cry for me joke but I won’t, but I won’t. I’m not gonna, I’m not gonna.

Kimberly Adams 

Good for you.

Kai Ryssdal 

So anyway. So that’s that. That’s that. And then here’s the real thing. So this morning, apparently, this is wild and bad and scary, scary, scary. There was some tweet, AI generated, that talked about, and this did not happen, to be clear this did not happen, talked about an explosion at the Pentagon. And it got picked up on Twitter, because Twitter is a cesspool now and retweeted by some verified accounts. And remember, verification means nothing on Twitter anymore. Right? Markets dipped a little bit, they bounced right back, but markets dipped a little bit. And there was a general state of agita until the department offense came out and said “there was no explosion here.” Man.

Kimberly Adams 

And the verification thing is really key. Because one of the accounts that supposedly tweeted this had the logo, and it said “Bloomberg Feed.” It had the logo, a logo that looked very much like the Bloomberg logo, and it had the little blue verification checkmark. And it obviously was not anything to do with Bloomberg. And look, the AI is getting better. And I’ve I’ve talked about this here before, and I’ve taught it in the class that I teach about government and media, this is going to be such a huge problem when it comes to our elections. I know from my conversations with people in the political consulting industry that the political consultants are already talking about not just how to use it, but also how to protect their candidates from it. Because if you can imagine, you know, how viral a gaffe video, or a secretly recorded conversation goes, you know in the old times, imagine now in one of those conversations, which is fake, how that goes viral. Or even if a conversation that’s real, goes viral, and then the candidate says it’s fake. How are we going to know? Right? So it’s, it’s, it’s a problem. It’s a problem.

Kai Ryssdal 

None of this is great. None of this is great. Maybe this is why I couldn’t find anything to make me smile. Do your thing. Alright you go because you’re it.

Kimberly Adams 

I mean, there was that thing that somebody posted in Slack about capybaras which was very cute and how like the capybaras soaking in the sauna and how adorable they are. Which you know, why not? Cute rodents of unusual size.

Kai Ryssdal 

I was gonna say your definition of cute is different than my definition of cute. But you go with it.

Kimberly Adams 

The real life rodents of unusual size. But they’re, they’re cute when they’re like floating in the water and like not near me, but whatever. Anyhow, that wasn’t actually my smile. But it was very cute. And I appreciate Slack for that. My make me smile is a story in the Associated Press, about Mississippi just skyrocketing in the rankings for children’s literacy rates. So Mississippi and many of the southern states used to be some of the worst ranked in the nation when it came  to children’s literacy. And over the last few years, they have adopted, you know, research science based techniques that improve children’s ability to read, and our parent company has a podcast on this, Sold A Story that gets into this too. But these states have implemented strategies that are proven to work. And if you look at the chart in this AP story, you can see the reading rates for fourth graders just rocketing up on this chart. And not only are they implementing these new strategies that help children read more, but they’re in, you know, implementing more ways to sort of see very early on if kids have, you know, learning disorders like ADHD, or dyslexia, or something like that, that might be preventing them from fully grasping the information. They’re putting kids into summer literacy camps to help them improve their reading. And it works. You know, and it works. And I think, you know, for so long a lot of these states in the deep south have just, you know, they end up at the bottom of all the listings of quality of life and, and especially around children and poverty. And so to see folks implementing strategies that are proven to be good for kids and that work for kids, and then to see the results, you know sometimes we do what we’re supposed to be doing, and it works. And that’s great. And knock on wood it continues. So yay, to children reading. Hopefully, they’ll be reading books and not just like clips on TikTok or whatever the social media platform of choice is.

Kai Ryssdal 

One step at a time. One step at a time.

Kimberly Adams 

One step at a time. Keep it keep it smiley, keep it smiley. So anyway, yes, I’m smiling about that today. All right, let me let me quit while I’m ahead. That is it for today. We’re gonna be back tomorrow with our weekly deep dive and this week, we’re gonna reflect on the legacy of the COVID-19 pandemic now that the public health emergency is over. Remember that ended on May 11. And some things have changed officially, but we’re going to be looking at sort of what has and hasn’t changed for us as a society and then a culture.

Kai Ryssdal 

Until tomorrow or the next time that you hear our voices. If you’ve got a question or a comment or a suggestion leave us a voicemail with a 508-UB-SMART. 508-UB-SMART. Or you can email us at makemesmart@marketplace.org

Kimberly Adams 

Make Me Smart is produced by Courtney Bergsieker. Today’s program was engineered by Jayk Cherry. Ellen Rolfes writes our newsletter. Our intern is Antonio Barreras.

Kai Ryssdal 

Marissa Cabrera is our senior producer. Bridget Bodnar is the director of podcasts …  And Francesca Levy is the executive director of Digital and On Demand. I’m gonna die on that hill

Kimberly Adams 

Speaking of hills, I went mountain biking for the first time this week and I feel like I’m gonna die.

Kai Ryssdal 

Oh did you? Yeah… Did you have a good time?

Kimberly Adams 

Yes. But also, I feel like I’m gonna die.

Kai Ryssdal 

That’s fun. I love mountain biking. It’s great.

Kimberly Adams 

It’s gonna be a little bit before I try that again. It’s gonna take me a bit to recover.

Kai Ryssdal 

Fair enough. Oh, man.