Make Me Smart April 17, 2023 Transcript

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Kai Ryssdal 

(Music starts) Oh jeez. As I am clearing my throat. Surprise!

Kimberly Adams 

Perfect timing, perfect timing.

Kai Ryssdal 

Hey, everybody, I’m Kai Ryssdal. Welcome back to make me smart, where even when we’re not ready, we make today make sense.

Kimberly Adams 

I mean, in fairness, we did say we could go. But I’m Kimberly Adam, thank you so much for joining us. It’s Monday, and it really truly is a Monday, the 17th of April, We’ve got some news today, some news fixes and some smiles to get to so let’s dive right into the news fix. Kai, why don’t you go first?

Kai Ryssdal 

Alright, I’ll tell you what, I’m going full, wonky, dorky, whatever, lots of economic working papers.

Kimberly Adams 

And that’s why we love you Kai.

Kai Ryssdal 

I just, you know, you come across these things and they can, they sort of like pique your interest. And you’re like, oh, that’s an interesting little nugget. So yeah. Two working papers that crossed my social feed today, even in the reduced amount of time that I’m using the social network… I was just gonna say even the amount of reduced amount of time I’m using the social network that shall not be named, these two came across and they hit me is interesting. The first is a report from the Congressional Budget Office, which is for those who are not familiar, the nonpartisan office that is responsible for assisting the Congress to figure out what to do about the federal budget. And I would say here that any blame on figuring out what has to do with the federal budget lies with Congress, not the CBO. They’re a crew professionals, they are very skilled at what they do and they work super hard. Anyway, the CBO is out with a new paper. It’s, it’s working paper 2023-04, “the US dollar is an international currency and its economic effects.” And I will start… Sorry opening the door so Bonsai can come in. I will spare you the details. But there has been some chatter lately in economic circles about the possible decline of the dollar as the global reserve currency. And people are saying, “Oh, my goodness, the Chinese Renminbi is going to overtake it, the Chinese yuan, or the euro is going to overtake the dollar as the international reserve currency.”

Kimberly Adams 

Can I pause you for a moment?

Kai Ryssdal 

Yes ma’am of course you can.

Kimberly Adams 

I think it’s worth explaining what it actually means to be the international reserve currency.

Kai Ryssdal 

Well, right. So that is the entire theme and purpose of this paper. And it’s really interesting, because it’s in layman’s laypersons terms, it’s easy to understand, it lays out the benefits some of the costs. And it comes to a conclusion, which is that the US dollar net net for the American economy is a positive, and more to the point and this is almost literally the bottom line of the abstract, “Over the next decade, the dollars international use is expected to decline very gradually but it will not be overtaken by either of its closest competitors, the euro or the Chinese renminbi. So this is like a 15 page paper, it’s not long at all, we’ll put it on the show page. It’s kind of interesting, but it lays out all the goods and all the bads. And if you’re interested in macro economic stuff, this is actually a really interesting paper read.

Kimberly Adams 

And here’s why the dollar matters… And Kai’s right and that it’s really clear in laypersons term. So here’s just one nugget and this is under the section “the dollar’s current status as an international currency.” “As of 2023, the US dollar remains the primary international currency, although some metrics suggested dollar strength has eroded over the past few decades. Dollar denominated assets such as US Treasury securities, account for the largest share of all foreign exchange reserves held by central banks around the world. As an international unit of account, the dollar is still the most popular international currency for setting trade prices and for denominating financial assets. And so in addition to evidence suggests the dollar remains most commonly used anchor currency by international central banks.” So when we say that the dollar is the international reserve currency, we mean that banks are holding it, governments are hold holding it and businesses are using it to make their deals globally all the time. And that then has knock on consequences in the way that Kai was talking about, and also what this paper lays out.

Kai Ryssdal 

Yes. So there’s that. Working paper number two comes from the National Bureau of Economic Research. It’s called “the offshore world according to FACTA,” which I’ll explain in a minute, “new evidence on the foreign wealth of US households.” So this is a paper on how much American wealth is held overseas. Okay? FACTA is the Foreign Account Tax Compliance Act. And it lays out, you know, who holds what assets overseas, and here’s the little nugget that struck me as interesting. “We find that US taxpayers hold around $4 trillion in foreign accounts, almost half in jurisdictions usually considered tax havens.” Why does that matter? Well, look, of course, it is legal to hold money overseas, it is legal to have money in tax havens. But we have something of a budget crunch in this country. And we have an Internal Revenue Service, which is underfunded and under resourced, and thus is not collecting as many taxes, as much dollars in taxes as it should. And part of the reason is because Americans are very clever in… rich Americans, let’s be clear, really rich Americans are hiding their assets overseas. Which is, again, completely legal. But of the $4 trillion held in foreign accounts, approximately $2 trillion is held in tax havens, and we ought to just all be aware of that. Isn’t that wild? It’s so much money.

Kimberly Adams 

It is. It’s so much money. And it’s kind of an interesting segue into my news fix, which is about the complete opposite end of the economic spectrum in the United States, which is about nonprofits and the people who need services from nonprofits. I guess it’s also about wealthier Americans who donate their time and money and services to nonprofits. So apparently, there is a nationwide shortage of volunteers for nonprofits. And there has been a precipitous drop in volunteer participation across the country. And this is a story from the Associated Press. And it says, “according to a US a recent US Census Bureau and AmeriCorps survey, formal volunteer participation was just 23.2%, dropping seven percentage points between 2019 and 2021. The largest decrease the survey has recorded since a version of it started in 2002.” And in several states, there’s double digit drops in the number of people volunteering. And there’s all these stories about people, you know, who are still volunteering, really scrambling trying to get more volunteers in the pipeline, to provide some of the services especially for people who are experiencing homelessness or for victims of domestic violence. And some of these volunteer opportunities require training. And so getting people not only to volunteer their time, but volunteer enough time to get training. And there’s a bunch of reasons for this, you know, there’s the pandemic and a lot of people not feeling comfortable putting themselves out there. There’s also you know, retirees who make up a lot of volunteer populations working longer. People having to take on caregiving responsibilities, who might otherwise have used time for volunteering, and so… demand for food…. and also the demand is higher so the demand for food assistance is up. So if you have some time, beloved (Kai yells at Bonsai) listeners of make me smart…

Kai Ryssdal 

Yeah volunteer.

Kimberly Adams 

You can also volunteer in an animal shelter as well in case Kai decides to give up his dog.

Kai Ryssdal 

I know right? No, never.

Kimberly Adams 

I know you never would.

Kai Ryssdal 

She is just turning 12 or something.

Kimberly Adams 

Ah, Jasper is turning 14 in a couple of months.

Kai Ryssdal 

Oh my lord.

Kimberly Adams 

Yeah, he’s he’s deaf and asthmatic and just sleeps a lot. But bless his little heart. He’s real pathetic. He has these little cat asthma attacks, and he’s got like a cat inhaler. It’s real sad.

Kai Ryssdal 

Oh, wow. I don’t even know how that works.

Kimberly Adams 

It’s an endeavor. It’s an endeavor. Anyway. All right, time to do some smiles. Okay, so my Yes, my make me smile is directly tied to my news item, which is a piece in Vox about small acts of kindness and how much they matter, more than you might think. And there’s all this research showing that people really undervalue how much it means to other people when you do something nice for them. Whether that’s just sending a little note to a friend you maybe haven’t talked to in a while saying hello, helping out somebody on the street you know, maybe somebody’s got heavy bags or whatever, a thank you note a compliment to a stranger that is appropriate, keep it in line. These things really make a difference and make people feel so good. And just if you’re thinking about it, and it also makes you feel good, often there’s like direct correlation between doing something nice for somebody else, and positive return in your own emotional well being. So do something nice for people, and it will probably make you feel better. And you know, my dad used to say, “if it costs you very little, and it means a lot to somebody else, why not? Go ahead and do it.”

Kai Ryssdal 

There you go. I like that. That’s good. That’s good. That’s good mentality. Okay, here are my two. They’re not the traditional make me smile. Haha, smile, this is cute or whatever thing. It’s just things of interest that made me that amused me a little bit. First of all, not that they didn’t launch but SpaceX came super, super close today to getting that big giant rocket off the ground. They had a pressurization problem, but they fueled the thing, they took the countdown to t-minus 10 seconds. This is starship that 400 foot tall, aluminum, whatever the heck it is rocket that’s going to eventually go to Mars. So that was super cool. I just think it’s great that they got that done space geek that I am. In 48 hours they will be able to try again. So that’s item one. Item two and this is a little bit snarky, and I apologize in advance. But I literally laughed out loud today when I read in the New York Times that George Santos, the Republican Representative from Long Island in New York, the much troubled representative from Long Island in New York, has announced he’s going to run for re election. And I just I just I couldn’t not laugh. And I think the people that that is going to please the most are Democrats on Long Island.

Kimberly Adams 

Over the weekend, there were several pieces about the Federal Election Committee commission filings for various campaigns. It was the first quarterly filing deadline in this campaign cycle for people who’ve actually said they’re going to run. We learned a bunch of different things, including that Nikki Haley fudged her numbers a little bit. And that DeSantis is not raising nearly as much money as he needs to. But one of the things that we learned was that George Santos, Representative George Santos has actually refunded more money than he has brought in to his campaign.

Kai Ryssdal 

That’s kinda great.

Kimberly Adams 

I’m gonna read this. This is it was a bunch of different places, but I’m reading from Yahoo News right now. “Overall, Santos returned nearly $8,400 in donations, which is more money than he raised. As a result of his net loss Santos’ has cash on hand, it’s just over $25,000. He raised $5,333.26 in the first quarter, but refunded more than that amount. In contrast, another Republican from Nassau County raised $215,000 from individual donors and more than 300,000 from political action committees.” So that shows that not only is Santos barely getting any money from individual donors, he’s definitely not getting money from the party so… And he’s having to give money back.

Kai Ryssdal 

There we go. There we go.

Kimberly Adams 

I mean, it is a make me smile, because man what goes around comes around.

Kai Ryssdal 

It kind of is I actually laughed out loud. Yeah, that’s right. That’s right.

Kimberly Adams 

Yeah. All right. That is it for today. Tomorrow, please join us for our weekly deep dive. And this week, we are going to our favorite topic, which is space, but specifically the space economy. And who knows, maybe we’ll have more news on certain rocket launchers by them. But regardless, we’re gonna get into what the space economy actually is. There’s a bunch of different space economies as it actually turns out, and what it means for our economy as a whole and how all this might work once NASA and other countries and agencies establish a human footprint on the moon.

Kai Ryssdal 

In the meantime, keep sending your questions, comments and suggestions to 508-U-B-SMART. 508-U-B-SMART. You can also email at makemesmart@marketplace.org. We get them. We read them all.

Kimberly Adams 

Make Me Smart is produced by Courtney Bergsieker. Today’s program was engineered by Juan Carlos Torrado. 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 around these parts.