Wealth & Poverty

Ways to Connect

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?

A bottle of fancy vodka, like Grey Goose, costs about $35. A bottle of the cheap stuff can be under $10. That's a wide range, but, by definition, vodka is colorless, odorless, and tasteless. So, could there really be a difference between vodkas? Or is the difference all in the marketing?

Sales of firearms have soared in America over the past twenty years. But fewer people are purchasing.

Today America's guns are concentrated in the hands of a comparatively small number of enthusiasts.

Their love of add-ons and special features has been a boon to gun manufacturers. Their periodic fear of anti-gun regulation has made sales spike in the past. But relying on a concentrated market of mega-buyers can come at a cost.

A couple of weeks ago the biggest labor union in Germany negotiated a big new deal with hundreds of German companies. Workers didn't just get a raise, they also won the option of working just 28 hours a week for up to two years without losing ground in their careers.

We talked to Simon Kuper of the Financial Times about the increasing need for companies to consider flexible working arrangements, as employees work longer and our lives become more complicated.

Tyler Cowen is an economist at George Mason University, but here at The Indicator we like to think of him as a speed-reading, hyper-prolific, polymath blogger — who does economics on the side.

We sometimes play a game with Tyler, a game he actually invented for his own podcast. It's called Overrated/Underrated. We ask him about a book, an idea, a movie, or really anything, and then he tells us whether he thinks it's overrated or underrated.

Today we discuss inflation as an economic threat, the influence of lobbyists, infrastructure, and Chinese food.

Note: This episode originally ran in 2014.

Certain things are just hard to improve. The classic example: the mousetrap. And for a while, the pallet was the mousetrap of good transportation.

In its way, the pallet is perfect. It's cheap and easy to make. It keeps things a few inches off the floor and works with a forklift. If you get cold, you can burn them. Amazing.

Today on the show: Yes, you can build a better pallet.

Project Lakhta was the Russian campaign to spend a million dollars a month to destabilize American democracy.

But that money didn't pay for sophisticated hackers or deadly assassins. Instead, it bought Facebook ads and Twitter accounts.

Today on the show: Russia's plan to mess with our election was crude, expensive ... and surprisingly effective.

Wildfires aren't like other natural disasters. You can't trace a hurricane to the first gust of wind, but you actually can trace your way back to a wildfire's first spark. And sometimes, someone has to pay.

In 2007, the Witch Creek Fire caused billions of dollars worth of damage in Southern California. While the fire was still burning, wildfire investigators showed up on the scene, and traced the flames back to where they began. The results spawned a ten year legal battle over who should pay for the damage.

Hops are the cones of the hop plant. They're used in making beer. Craft beer lovers love hops. (Just ask them; they'll tell you.)

As the market for craft beer exploded over the hops business boomed. Until it didn't.

Today on the show: The craft beer explosion, and the hops boom and bust that went with it.

We're trying a new thing (for us): We ask guests to tell us about something they read that changed how they see the world.

Today, Diane Coyle — an economist who writes a blog about economics books — tells us about Micromotives and Macrobehavior by Thomas Schelling.

Coyle says it's helped her understand everything from why it's so hard to get the water temperature in the shower just right to why ABBA wore such ostentatious costumes on stage.

Grant Blankenship / GPB

Racial disparities in home lending, a practice sometimes called redlining, is alive and well in the United States.

That's the big picture takeaway from new data analysis by the Associated Press and the Center for Investigative Reporting of two years of mortgage lending.

Journalists are a jealous bunch. We steal each other's stories, and sources. And when someone writes a story that we're envious of, we usually curse them under our breath, and move on. But once a year at Planet Money, we give a shout out to our favorite work.

This year, our Valentines go out to:

-Eric Konigsberg, for finding out what people do all day at WeWork 'coworking' spaces in his awesomely-titled article, "Sriracha Is for Closers."

Stimulus Response

Feb 14, 2018

Jared Bernstein has a dilemma. He's a liberal economist, and he's been saying for years that the U.S. needs stimulus — some combination of higher spending and lower taxes — to drive up wages for workers.

Congress and the President recently passed bills to raise spending and cut taxes.

These weren't sold as stimulus packages. They are not Jared Bernstein's dream come true. But they are going to mean lower taxes and higher spending.

Sanctions on Ice

Feb 13, 2018

North Korea has been getting sanctioned for decades. But in spite of the sanctions, North Korea has managed to keep buying fancy stuff for the elites — and fund a nuclear weapons program.

The country has done this by raising money through a clandestine outfit called Office 39. Among other things, Office 39 runs counterfeiting operations, engages in international bank fraud, and sells illegal drugs.

On today's show: sanctions, Office 39 and the North Korean Olympic team

Fear: The Index

Feb 12, 2018

There is this thing called the VIX. Some people call it the fear gauge. It was invented to measure people's expectations about how much the stock market is going to bounce around.

At some point, the VIX went from measuring expectations about the stock market. To being something people bet on.

Then, last week, when the market plunged, the role of the VIX may have gotten even larger: This thing that was invented to measure the stock market may have started driving the market itself.

On today's show, Tracy Alloway of Bloomberg News tells us the story of the VIX.

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