Week of May 22nd, 2023

Our creditors range from private investors to foreign governments. Some seek to align the debt limit with the budgeting process.

Plus, do y’all miss the office?

The $24 trillion Treasury bond market plays an important role in the global financial system. Is there any viable alternative?

U.S. Treasurys are a linchpin of the global financial system — and they’re what’s at risk in the unfolding debt limit debacle. Plus, a deep dive into the mermaid economy.

The new film is expected to pull in more than $100 million at the box office. But the movie industry isn’t the only one getting ready for it.

AAA projects a 7% increase in Americans traveling 50 miles or more from home this Memorial Day weekend compared to last year.

Treasury Secretary Janet Yellen said Friday the projected debt ceiling deadline is extended to June 5, four days later than previously estimated.

Lost cable fees mean reduced rights payments to teams. It’s uncertain how it will all play out, says Ben Strauss of The Washington Post.

The Fed’s interest rate fight just got more complicated — the central bank’s preferred gauge of inflation indicated that prices rose 0.4% last month, a speed-up from the previous month that saw a 0.1% increase. We talk to Christopher Low, chief economist at FHN Financial, about what that could mean for interest rates. And finally, a look at how drag show businesses in Nashville are doing amid the state’s attempted crackdown.  

Educators are grappling with the consequences of “almost constant” social media usage by a significant number of teenagers.

In about a week we’ll learn what becomes of Tennessee’s anti-drag legislation. The law, which aims to heavily restrict drag performances in the state, has been stalled in a legal battle over free speech protections. But what has news of the law meant for the business of drag? For Cameron Wade, an HR generalist and […]

The deadline for Congress to raise the debt ceiling is fast approaching, but if signals from top Congressional Republicans and the Biden administration are to be believed, a deal may be imminent. We look at the latest developments in the saga. Plus, schools are on the frontline of what the Surgeon General called social media’s harmful effects on young people. And finally, there’s a whole industry around mock-up mermaid tails that’s getting a boost from Disney’s The Little Mermaid film releasing today. 

From the BBC World Service: Voters in Turkey head to the polls on Sunday for a runoff second-round presidential election. We look at the likelihood of a win for incumbent President Erdogan. Plus, pasta prices in Italy have soared over the past year due to high energy costs, bad weather and supply chain disruption; but there may be some good news on the horizon.

Disney’s live-action “The Little Mermaid” is expected to bring in big bucks at the box office — and for the real-life mermaid industry, which is an actual thing.

Yanely Espinal, host of Marketplace’s new YouTube show “Financially Inclined,” says this method is safer than learning how to invest the hard way in real life.

Econ Extra Credit newsletter #151

Stocks, bonds, index funds, oh my!

The “X date” is nigh.

All the number crunching on government spending and revenue makes determining an exact date kinda fuzzy. Plus, more high school students are rethinking the value of a college degree.

The problem? Too little demand, too much supply. Rising interest rates are also contributing to weaker demand around the world.

Atsi Sheth from Moody’s gives us a behind the scenes look into the company’s ratings process.

Predicting the exact timing of a government default is difficult, given the amount of the variability in government spending and revenue.

This spring, there were 14.2 million undergraduates in the U.S., about 9% fewer than in spring 2019.

“It is eerily similar to a regular production wrap,” says Kenya Morgan. “Only, as I coined it last week, this is the rehearsal wrap.”

Profits fell for the second quarter in a row, partly due to Fed rate hikes. Whether it’s a good thing depends on your role in the economy.

Interest in financial submission has exploded online. But what happens when Matt’s finances can’t keep up with his desires?

The conventional wisdom of old said that more often than not, buying a place to live is cheaper than renting. That’s no longer the case except for four major U.S. cities — Detroit, Philadelphia, Cleveland and Houston. We look at how housing prices have gotten so high and why they’re likely to stay elevated. Plus, the AI boom is driving up demand for microchips, but there are still barriers the industry faces like geopolitical tensions and supply chains. And finally, the BBC reports on a proposal in Spain to subsidize bars in rural towns, which often serve as a community social hubs in the countryside.

Cultural and historical content on the internet can be preserved, but technical barriers and getting people to care can get in the way.

That’s good news if you’re looking to buy in Philadelphia, Detroit, Cleveland or Houston, but what about the rest of us?

Microsoft and intelligence agencies are warning that a hacking group sponsored by the Chinese government has infiltrated critical infrastructure in the U.S. We look at the evolving situation and what’s been said so far. Plus, Germany’s economy has fallen into a technical recession after two straight quarters of negative growth driven by low consumer spending. And, voters in Turkey go to the polls again this weekend to vote in the presidential runoff election — older people are considering how high inflation could affect their economic wellbeing. 

In 2021, the Istanbul Political Research Institute found that 12% of Turks over 65 were still working, in part because pensions are not adequate.

From the BBC World Service: A recession is commonly defined as the economy shrinking in two successive quarters — that’s just what’s happened to Germany, mainly because higher energy prices have hit household budgets and that’s put the brakes on spending. It’s Europe’s biggest economy, so what’s the wider impact? Plus, the International Monetary Fund has approved a multi-billion dollar loan for Ivory Coast. And, we hear from rural Spain where a plan is being considered to help subsidize bars in depopulated areas which have become vital community hubs in a country where 90% of the population lives in urban areas.

But should they?

Raphael Bostic joins the show to explain why we’re at “the hard part” in the fight to tame inflation. Plus, consumers splurge on fun.

Semiconductor company NVIDIA seems to be leading the race in hardware AI.

During the COVID public health emergency, states couldn’t kick anyone off Medicaid. Now, that continuous enrollment is coming to an end.

And if it doesn’t work, they’ll cut production.

Consumers at almost every income level are finding ways to spend on getting out of the house.

Raphael Bostic says the Fed needs to stay focused on its goal of slowing down the economy and reducing inflation to its 2% target.

It’s finally happening. After a slew of setbacks, Netflix has finally released details on its password-sharing crackdown, including an $8 per month fee for people wanting to share account details outside of their respective households. We look into how slowing subscriber growth has played into the company’s decision. Plus, the BBC reports on France’s new law prohibiting short-haul flights between destinations that also have a train connection that would take under 2.5 hours. And, we talk with Yeshiva University professor Abraham Ravid about the origins of the Hollywood writers’ strike. 

Research finds that the money your parents are making when you’re a teen, rather than child, is more predictive of your outcomes as an adult.

Among other things, Hollywood writers are concerned about the potential of artificial intelligence to displace workers.

Enrollment in 2-year culinary programs was up nearly 10 percent this spring from last year. This comes as employment for chefs and head cooks is expected to grow quickly.

A new report from the Fed paints an alarming picture for many people’s personal finances — a growing number of Americans are deciding to forgo healthcare coverage because of the cost. We look at what that means for people’s well-being and what it says about the economy. Plus, enrollment at community colleges is up this year, especially in programs that focus on the culinary arts. And finally, a chat with Steven Durlauf, professor at the University of Chicago’s Harris School of Public Policy, about new research that delves into how generational wealth is created.

From the BBC World Service: A few years ago, France came up with an idea to cut carbon emissions — reduce some short domestic flights and that’s now been signed into law. It affects flights where there’s an option to take a train in less than two-and-a-half hours instead. But how comprehensive and impactful will it really be? And, another industry under scrutiny is steelmaking which is responsible for 8% of global carbon emissions. We hear from a project in northern Sweden where they’re trying to do away with old carbon-intensive coal-fired blast furnaces.

About 28% said they had skipped some form of health care because they couldn’t afford it, although other costs have been rising faster.

Pam Smith, CEO of Verified Voting, says not only is it crucial to have up-to-date, high tech voting equipment, but also low tech voting solutions if it all fails.

Lessons from the COVID-19 pandemic.

Many young remote workers are missing out on building relationships in the office. Plus, what’s next in the Colorado River water rights fight?

This proposal could save the river system from imminent collapse, but in 2026, the current drought management guidelines will expire.

It all depends on the questions pollsters ask. “How are you doing?” will elicit a different answer than “How do you feel about inflation?”

It will need “a lot of TLC,” Candice Sides said about the 19th-century log cabin she bought to be her family’s eventual home.

Work can be a foundational part of socialization for young adults on their own for the first time.

Lydia Clarke’s business struggled in the early days of the pandemic. Now, she says, “I know we can do it.”

As negotiators try to avert a U.S. government debt default, there are questions about what spending would be first on the chopping block in a doomsday scenario. We look at how a potential debt limit breach could play out, starting with benefit checks and public sector salaries. Plus, a check-in with Dr. David Kelly, Chief Global Strategist at JPMorgan Funds, about how investors think the Fed should act at its next interest-rate-setting meeting. And finally, This is Uncomfortable host Reema Khrais tells us about the podcast’s most recent season delving into the business of women selling their eggs. 

Some Congressional Republicans want older Americans to prove that they work or are looking for work to get those benefits.

Supplemental Security Income payments and veterans ‘payments could be among the first checks to be delayed.

TikTok has filed the first legal challenge against Montana’s near-total ban on the social media platform since the law was enacted earlier this month. We look at what both sides are likely to argue in the upcoming court battle. Plus, electric-vehicle makers are looking to shore up their supplies of lithium, a key ingredient in batteries, as competition for the resource intensifies. And finally, work requirements for social benefit programs like SNAP, formerly known as food stamps, are on the table as the White House and Congress race toward a deal to raise the debt ceiling. 

From the BBC World Service: China is now the world’s biggest exporter of cars, helped by a massive growth in electric vehicle production. We look at how it caught up to more established brands. Plus, Thailand’s radical decriminalization of cannabis last year has led to a boom in marijuana-related businesses. But a recent election could lead to a U-turn in the way the country treats the drug.

Augmentative and alternative communication tools help people who have difficulty with speech. Sam Sennott of Portland State University says building these tools with artificial intelligence is increasing and enhancing options for users.

From transitory to sticky.

In a special episode, we explore what’s at stake in the fight over the debt ceiling and what it reveals about the nature of money.

Raising the federal government’s borrowing limit isn’t about spending. It’s about how money works.

European regulators announced today that Meta, Facebook’s parent company, would have to pay a $1.3 billion fine for violating EU rules around internet users’ data privacy. We delve into what went into the decision, as well as what it means for the company going forward. Plus, we check in with Julia Coronado, president of the National Association of Business Economics, about what the group’s latest survey of economists says about the likelihood of a recession on the horizon. And, there’s a move toward “green steel” that’s seeking to de-carbonize the heavily-polluting steelmaking industry. 

AAA expects Americans will break the travel records they set the year before the pandemic started.

If you use renewable energy to make hydrogen and use the hydrogen to manufacture steel, the process would be friendlier to the environment.

The scramble to raise the nation’s debt ceiling has featured prominent calls by Republicans to impose stricter work requirements for recipients of welfare. But today’s debate on Capitol Hill stems from a much older fight over how the poor qualify for benefits. We spoke with Krissy Clark, host of Marketplace’s investigative podcast The Uncertain Hour, about how racial bias played into the formation and early implementation of the rules we know today. And, this summer travel season may be record-setting, according to experts, as the pandemic emergency officially comes to an end worldwide. 

From the BBC World Service: Microchips power everything from cars to smartphones, and they’re now at the center of a global power struggle. The U.S. has been restricting China’s access to high-end chips in recent months, all in the name of national security. Now China has hit back, banning some of the chips made by U.S. firm Micron. We look at the method behind the move. Plus, there’s been an election in Greece where the economy was a key issue. So how is the country faring years after the debt crisis? And, we hear from pop star Jason Derulo on the investments he’s made away from music.

Even though attendance for Bitcoin 2023 was down by about 20,000, those who did come still believe the cryptocurrency is the future.