Week of February 6th, 2023

Econ Extra Credit newsletter #137

The Catholic Church has at least $73 billion based on media reports and financial statements, but it likely has billions more.

And it’s adding fuel to the debate over the debt ceiling.

Payday loans, high-fee check-cashing services and scams find fertile ground in a community still affected by generations of discrimination.

Surveys of Americans’ views of the economy lead to contradictory conclusions. What to make of it all? Also, home heating oil prices cool down.

The number of companies debuting IPOs in 2022 hit its lowest level in years. Just 181 companies went public then compared to over 1,000 in 2021. Experts say this year looks a little brighter.

Higher interest rates and inflation still spark anxiety. But wages have grown, and some have a greater feeling of financial security.

A milder winter is one reason why. But it’s still a significant expense, and applications for assistance are up.

The hotly anticipated canine sporting event, which runs counter to the Super Bowl, will return for its 19th year this Sunday.

Egg prices are still up in supermarkets across the board, but there could be relief on the horizon for egg suppliers in the form of eggs from poultry farmers — if regulators give the go-ahead. People have fled en masse from their homes in disaster-affected Turkey to different parts of the country, reports Victoria Craig. Russia announced its production of oil substantially, leading to higher market prices for energy. And, advertisers for Sunday’s Super Bowl showdown are having to navigate their messaging around Americans’ unease about the state of the economy. 

Nintendo announced that The Legend of Zelda: Tears of the Kingdom will retail for $69.99. Several video game publishers have been embracing the $70 price tag as the new standard for major releases.

Expect brands to team up for ads, and a special surprise from Blockbuster.

This Super Bowl weekend, millions of eyes will be trained on TVs around the world to watch the big game — and the multi-million-dollar advertisements that come with it. We check in with Jeanine Poggi, editor of the publication Ad Age, to see what brands have up their sleeves this year. The NFL, meanwhile, is facing a lawsuit from a group of former players over the league’s handling of disability claims. And, a look at why video game prices are starting to deviate from the normal $60 for a new release. 

From the BBC World Service: The UN Secretary-General, Antonio Guterres, is appealing to the world to send emergency supplies and cash to earthquake victims in Turkey and Syria. Pakistan’s talks with IMF officials have ended with no deal agreed. Plus, the chaos in Nigeria continues as the deadline to replace old bank notes with new ones is extended.

Google and Microsoft are working to make their search software act more like ChatGPT. The University of Washington’s Chirag Shah says this could be transformational, in part because search results could become much, much narrower.

Can you trust wellness products’ promises? The FTC is trying to cure the industry’s ills. Also, Disney in transformation.

It’s will depend on why the payments were made and who got them.

Because if people liked a “Frozen 2,” wouldn’t they like a “Frozen 3?”

Plus, who’s watching this year’s Puppy Bowl?

What does this mean for their anti-inflation strategy?

One property in East Los Angeles houses both Sara Valdes’ parents and her workplace.

Health care staffing shortages and high turnover rates means patients end up waiting longer to get through emergency departments.

The FTC says health-related claims need to be backed by relevant, peer-reviewed scientific research. “It’s long overdue,” said one marketer.

A federal district court in New York has ruled in favor of Hermès, the maker of the Birkin brand of handbag, in a trademark case against the artist behind the “Metabirkin” NFT. Art critic Blake Gopnik, who worked with the team defending the artist, walks us through the verdict. KPMG Chief Economist Diane Swonk takes us through what the latest round of layoffs means for the economy. And, inside the CVS’s acquisition of a primary care provider. 

A luxury goods company went up against a digital artist. The artist lost.

CVS is on a quest to become a one stop shop for healthcare. With its acquisition of Oak Street, it’ll have a primary care company too.

The current debt ceiling fight reflects old concerns about government debt, says economist Michael Boskin.

The fight playing out in Congress over the debt ceiling is being called different from previous spats about spending, but many arguments by Republicans today harken back to a longstanding unease with government overspending. We talk to Michael Boskin, a professor of economics at Stanford who headed the U.S. Council of Economic Advisors during George H.W. Bush’s presidency, about his views on the dispute playing out in Washington. And, Disney’s not-so-new CEO, Bob Iger, is running into a litany of challenges as he tries to boost the sagging entertainment giant. 

From the BBC World Service: The head of the World Trade Organisation Ngozi Okonjo-Iweala tells us richer countries have a moral obligation to help poorer ones through the cost of living crisis. Plus, what next for games developer Activision Blizzard and its $70 billion tie-up with Microsoft after the UK competition regulator said it would hurt consumers? And, can Credit Suisse rebuild? After a string of scandals, it has a new management team and a new plan but a massive annual loss – its worst since the 2008 financial crisis – shows the scale of the task ahead.

Sangeeta Singh-Kurtz, co-host of the new podcast “Land of the Giants: Dating Games,” discusses how these apps have become similar to online games and create an experience similar to gambling. The technology is affecting users’ romantic lives, she says.

Today, we’ll do the numbers on our still-shifting labor market. Plus, what it takes to reach a balanced federal budget and what’s behind surging natural gas prices in California.

In 2022, consumer credit increased 7.8% from the year before. But in December, the growth in borrowing decelerated.

You need the courage to make cuts, the wisdom to negotiate and luck, says Linda Bilmes, who worked in the Clinton administration.

Ratepayers report their bills are double or even nearly triple what they paid last year.

It’s bot vs. bot.

The initial idea was to create global pop-up experiences. But Amber Drew and her wife ended up finding a permanent home in Nicaragua.

Especially those closely tied to the housing market.

Here are the industries that saw the biggest job gains and the ones still falling behind.

It’s a sneaky tactic to hide inflation: reduce a product’s size, but not its price.

The most recent issue of the Logistics Managers Index, an industry gauge of retail inventories, showed that sellers expanded their stocks in January. That suggests that consumer demand is remaining strong and that supply chains are sorting themselves out, all good signs for the economy. We spoke with Dr. Julie Varughese, senior vice president of programs and chief medical officer at Americares, a disaster relief nonprofit, about the recent earthquakes in Turkey and Syria. And what’s behind Fed Chair Powell’s most recent words on inflation and rate hikes?

Inside the partnerships getting essential aid and care to those impacted by the recent earthquake.

A new book explores the historical relationship between austerity, the labor force, and fascism.

In January, business inventories expanded. That’s a positive sign about the economy’s health.

Austerity, or government measures to cut spending in times of economic crisis, has a long history of being used to suppress the labor force, argues a new book called “The Capital Order.” We speak to the author, Clara Mattei, an economics professor at the New School for Social Research. And, President Biden’s State of the Union speech last night featured a heavy dose of economic policy, including a proposed billionaire tax. 

From the BBC World Service: Turkish President Erdogan heads to the epicenter of Monday’s earthquake as rescue efforts continue in freezing conditions. The death toll continues to grow and the damage to infrastructure is becoming clearer. Plus, McDonald’s has signed a legal agreement with the UK watchdog, the Equality and Human Rights Commission, in response to concerns about its handling of sexual harassment complaints by staff. And, the trains in Spain – questions are being asked after $250m was spent on 30 trains that can’t fit through some tunnels.

Educators say they’re already seeing students outsource assignments to artificial intelligence. Now they’re grappling with how to deter plagiarism while making productive use of these new tools.

Who’s really winning?

Microsoft announced that it will bring generative AI to its Bing search engine. What does that mean for advertising, the lifeblood of search? Also, a closer look at China’s COVID death toll.

Microsoft’s latest version of Bing includes answers generated by ChatGPT tech. Here’s what that could mean for sponsored links and content publishers.

The dollar’s strong because the Federal Reserve’s been raising interest rates.

And maybe a branding problem, too.

David struggled to help his 83-year-old father before he died of COVID. Will his father’s death be counted in China’s official toll?

Home stagers dress up a house so it’ll sell for more money. The slowing market is hitting them, too.

In the 1970s, NASA welcomed women and minority astronauts for the first time. Meredith Bagby’s new book explores the impact that they made in the world of space travel.

Google announced this week that it is developing Bard, the tech giant’s chatbot intended to rival ChatGPT. Microsoft, meanwhile, is trying to develop its own chatbot to work with the Bing search engine. The recent scandal in India involving the Adani Group, one of the country’s largest companies, is sending waves through the Indian economy. And, a look into why consumer debt is on the rise in the U.S. ahead of the Fed’s report on consumer credit. 

Consumer debt levels have been rising. While wage gains have helped people pay off debt, those gains have been slowing down.

President Biden is likely to tout the strong job market and recovery from the pandemic recession.

President Biden’s State of the Union Address tonight will likely tout recent economic victories, including a recent tempering of inflation and strong jobs numbers. But the president will likely have his work cut out for him bringing around a skeptical American public. Oil producer BP posted record profits, which is just the latest positive result reported by oil giants. And, the Bank of England is considering introducing a digital version of the pound sterling. 

From the BBC World Service: BP has announced its profits in 2022 more than doubled to just shy of 28 billion dollars. But the oil giant scaled back its green targets – we ask why. Nissan’s chief operating officer tells us the company’s alliance with Renault is still going strong. Plus the UK has started a consultation on whether to create a digital pound.  

Many firms cultivated an almost religious sense of devotion from their workers and offered great benefits and perks. Some laid-off workers are now suffering existential distress.

Grab a snack and we’ll explain.

The SOTU is routine business. Some say it should go away.

To pay off expenses caused by storms or power plant retirements, utilities are increasingly turning to something called securitization.

The federal Energy Information Administration predicts that more than half of the new capacity added to the electric grid this year will be solar.

Like other retail businesspeople, Amelia Freeman-Lynde of Durham, North Carolina, has grappled with supply chain and staffing issues.

The U.S. economy is doing better than many expected, and there are signs of strength in the global economy too. Plus, utilities increasingly look to recovery bonds.

Europe’s having a pretty good winter, and other parts of the world aren’t doing too badly, either.

The USDA sends its survey out every five years to create a snapshot of American agriculture, divvy up funds and make policy decisions.

Dozens of original shows and films have been erased from streaming platforms. Some companies can receive tax breaks by nixing content.

Lab-grown meat could be on its way onto grocery store shelves and restaurant pantries sooner rather than later. One California-based startup, UPSIDE Foods, is seeking USDA approval to distribute its cultivated chicken product by the end of this year. Disney and the state of Florida are continuing their spat over Disney World’s special status in the state. And, economist Julia Coronado gives some insight into why there’s optimism that the U.S. economy might be able to avoid a recession this year. 

Lab-grown meat makers are optimistic their products will soon be available at a handful of San Francisco-area restaurants.

According to research from Oxford Economics, streaming customers have a lot to be grumpy about.

Consumers in the U.S. would likely suffer economic pain if Congress fails to raise the debt ceiling, warned International Monetary Fund head Kristalina Georgieva. If it happens, she warned that people could be stuck paying higher interest rates on things like mortgages, car loans and credit cards. Amid Netflix customers’ ire at the coming crackdown on password sharing, new research shows that consumers are frustrated by the high number of different streaming services on offer. And, a trip to the Maryland Zoo, which is having to spend millions to update structures constructed in a different time with different sensibilities about animals. 

The Maryland Zoo in Baltimore is planning to spend millions to build new habitats next to historic wrought-iron cages.

From the BBC World Service: More than 1,000 people have been killed and over 5,000 wounded after one of the most powerful earthquakes to hit the region in decades. It has left aid organisations calling for financial aid and other forms assistance. Plus, it’s another week of strikes in the UK and today marks the biggest in the history of the health service as thousands of nurses and ambulance workers walk out over pay. We look at why no pay deals have been agreed after months of unrest. And, how strong is your coffee? New research has found caffeine levels vary widely among the big brands.

Crypto winter, the FTX implosion, big investment losses and embarrassed celebrities — a lot has changed since crypto was all the rage a mere 12 months ago. How have crypto companies managed, and what’s next for the industry and investors?