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The last mile of the inflation fight just got bumpy
Apr 10, 2024
Episode 1136

The last mile of the inflation fight just got bumpy

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Wasn't it supposed to be this way all along?

Inflation is coming in hot! Today’s consumer price index shows prices kept rising in March. Kai Ryssdal explains the one thing everybody should be doing right about now in addition to taking a deep breath. Plus, the rising cost of insurance — from homeowners coverage to life insurance — and what companies are doing to dump customers. Also, hear a whale talk to a scientist.

Here’s everything we talk about today:

We love to hear from you. Send your questions and comments to makemesmart@marketplace.org or leave us a voicemail at 508-U-B-SMART.

Make Me Smart April 10, 2024 Transcript

Note: Marketplace podcasts are meant to be heard, with emphasis, tone and audio elements a transcript can’t capture. Transcripts are generated using a combination of automated software and human transcribers, and may contain errors. Please check the corresponding audio before quoting it.

Kai Ryssdal 

All right, Jayk, let’s go. Enough of this freakin old timers’ stuff.

Kimberly Adams

Old people stuff.

Kai Ryssdal

Speak for yourself sister. Hey everybody, I’m Kai Ryssdal. Welcome back to Make Me Smart, where we make today make sense.

Kimberly Adams 

And I am the very youthful Kimberly Adams. Thank you for joining us this Wednesday. It’s April 10. Today we are going to do some news and then some smiles. Let’s get to it. Kai, you’ve got the big news of the day.

Kai Ryssdal 

Well, so the big news of the day, which everybody will have heard by the time they hear this podcast, which is that inflation for last month, the CPI came in this morning. Core at 3.8% annually, which is more than anybody wants it to be, including Jay Powell, and you and me and the entire American public. Here’s what everybody needs to do right now. Nothing.

Kimberly Adams

Get a CD.

Kai Ryssdal

Get a CD, right? I mean, come on, CDs are paying you probably 5%. I should get my mother on the phone and have her move her money over. Everybody needs to just take a deep, deep breath. Look, 3.8% inflation, right, which again, is an annual rate and its core, which takes out food and energy, which of course we all need. So, it bugs me when people concentrate on that, but that’s kind of what you have to do. It’s not great. Everybody knows it’s not great. The Fed knows it’s not great. Jay Powell and everybody are doing what they can. I appreciate that. But now is the time to remember that this was always, and you’re going to hit this later this afternoon on Marketplace and I apologize for repeating content. It was always going to be bumpy. We had a really nice come down from 9% last year, and it came down fast. And it came down hard. And now this last mile as with, you know, delivery systems and getting Amazon packages.

Kimberly Adams

That’s exactly what I was thinking about. The last mile is always the hardest.

Kai Ryssdal

Exactly. It’s the last mile. It’s the last mile. And that’s where we are. And I don’t know. And I’ll deny this if you repeat it. I don’t know or care whether the Federal Reserve is going to cut rates three times this year, two times this year, one time this year or not at all this year. I honestly don’t know. And it doesn’t matter. Right?

Kimberly Adams 

I imagine if you’re running for office, you wouldn’t say that.

Kai Ryssdal 

Yes. But thankfully I’m not running for office. And we can talk about what this means politics wise, if you want to, but right now, this is the way it was always going to be, and everybody needs to not panic. That’s I guess the gist of what I want to say.

Kimberly Adams 

Yeah. I mean, as you know, Washington Post’s Heather Long was in the office here today. And you know, before she came in to talk to you, I was talking to her and, you know, I asked, I was like, you know, what did you think of the inflation numbers, and we were both kind of saying that we thought they were going to be high, but not that high. And my reasoning for it, and her reason was a little different was just because of all this reporting I’ve been doing on, you know, economic belief versus reality. And over and over again, people are just hammering in on grocery prices, food prices, food prices, food prices. And then, this will be relevant later when I get to my news fix. There are a lot of other things that are just legitimately getting more expensive. And so, it was hard to see where, in what sectors prices were meaningfully slowing down. So, I wasn’t surprised to see it go up. I was surprised to see it go up as much as it did. And I think Heather was telling me how she was, you know, kind of trying to sketch out how she was going to talk about it as well, because it’s like, what else is there to say you just kind of gotta wait. And this gets back to that conversation we were having the other day where this economy is not like the economy before, and the old way of maneuvering the economy doesn’t seem to be as effective. And I imagine there will be many interesting papers and levers about this in the years to come.

Kai Ryssdal 

Yeah, that’s a really good way to put it. The old way of maneuvering the economy does not work as well, right? And everybody from Janet Yellen to Jay Powell will look at you and go, yeah, we’re doing the best we can. We just don’t know, man. It’s weird this time. You know.

Kimberly Adams 

I wonder what new levers will come out of this. Somebody somewhere is brainstorming. Yeah, exactly. somebody somewhere is brainstorming what else works in periods of high inflation to bring it down? If traditional interest rate cuts, or interest rate hikes, don’t do it. And I’ll be fascinated to see what other things people come up with. Totally.

Kai Ryssdal

Totally. All right, you go.

Kimberly Adams

So, speaking of prices going up. I saw several articles related to insurance in the last couple of days, and so just bear with me while I go through these and then give my big picture thoughts. So, the first one I saw was a couple of days ago. The Wall Street Journal had the story about insurers using drones, to spy on people’s homes to get evidence to drop them from their homeowners insurance policies.

Kai Ryssdal

Wow. Wow. Wow.

Kimberly Adams

So, the story that they highlighted is this woman who they basically sent a drone over her house and said, your roof is too old. And because you haven’t been maintaining your roof, we’re dropping you from your policy. She got an independent inspection, they were like, your roof is fine. It’s got like another 10 years on it, and they’re like, too bad. We don’t we’re not carrying your policy anymore. And this is happening more and more as insurers try to cut their risks. And they’re like, yeah, if you have a roof that’s going to get messed up by a hailstorm, you should be paying more than somebody who doesn’t. And I brought this up to a friend of mine, you know, because she recently had to deal with some insurance stuff because her neighbor’s tree fell on their driveway, and it hiked up their insurance rates and everything, and so, I’d knew she’d be interested. And she’s actually heard something like this happening to somebody she knew where they were actually able to appeal it, or they gave them a chance to remedy it. But her concern was, it’s already so hard for people to buy homes. And some of these homes are becoming steadily uninsurable. And if the insurance is so expensive, or so impossible to maintain, you know, what happens if you lose your insurance, and you can’t get a new policy? What happens to your mortgage because mortgages require your homeowner’s insurance. That means that more and more homes are off limits for anyone but cash buyers. Who are the cash buyers? There are these investment banks and venture capital firms that are buying up all these homes and renting them back out to people. And so, it’s making homeownership more and more inaccessible. And I saw this article out of you know, your wonderful state of California, called Comstock Magazine, which I’d never heard of before. Business insight for California’s capital region, all about the soaring cost of homeownership. And this poll quote in it was so jarring to me, where they were talking about people trying to buy homes, but their lenders would not allow the policies that they were getting quotes for, because the deductibles were too high, or the terms were messed up. And so, the lenders are like, we’re not giving you a mortgage with this kind of homeowner’s policy because you’re not going to be able to afford it if something goes wrong. And one of the people said, and they’re talking about the buyers, “they’re thinking of the old days when insurance companies wanted your business. Now they don’t.” Right? And so, that’s on the homeowner’s insurance side, which is really challenging. And I then saw today, a story about MassMutual Insurance rolling out. This is a life insurance company, rolling out free genetic testing for members with the idea that this genetic testing might encourage people to exercise better or get testing, getting regular screenings.

Kai Ryssdal

What could possibly go wrong?

Kimberly Adams

But it’s raising real concerns. This means that somebody will be denied a life insurance policy or charged premiums based on their genetic testing. In Delaware, there’s been a bill introduced barring life insurance, that would bar life insurance companies from purchasing genetic information from companies like 23andMe and AncestryDNA to prevent this from happening. But insurance companies are really, really pulling back on what they will cover. And, you know, there’s so much data out there about us. It really makes me wonder what good insurance is anymore. And whether we’re going to end up with something like we had to have with Obamacare, where there had to be a federal law saying you cannot deny people coverage based on their pre-existing conditions. Is there going to be something like that for homeowners’ insurance? If you want to sell homeowners insurance, in this country, you have to sell to everybody to spread out, you know, the dangers. Or can you pick and choose? And I mean, you have insurance companies pulling out of individual states and stuff like that. But what is the remedy here? Because this is just making homeownership and life insurance, in many cases, potentially less and less accessible for a lot more people. And I think this has been eating up a lot of my brain energy for the last couple days. There I go. Rant completed.

Kai Ryssdal 

Yeah. That’s huge. That’s. Wow, wow. Yeah. I love the please give us a DNA, so we can, ah no.

Kimberly Adams 

Well, I mean, remember when some of the car insurance companies started saying, hey if you plug this thing into your car, we’ll track your driving habits. You can get a discount. I mean, it’s the same thing. Like, work some of this data, we’re giving away. Some of it there, you know, getting in ways we probably wouldn’t love, but it’s more and more data that makes it harder and harder for the people with anything wrong to get coverage.

Kai Ryssdal

Totally. Totally. All right.

Kimberly Adams

All right. Let’s get to some smiles.

Kai Ryssdal 

All right, what do you like? Go ahead.

Kimberly Adams 

So, we were talking the other day about how smart dogs are and how they can communicate and all of these things. So, that made me pay special attention to this article I saw in BBC about scientists learning to speak whale. And we’ve known for a long time that whales communicate with each other in very detailed, nuanced conversations, I guess, in ways that we wouldn’t necessarily understand. And I found it fascinating that some of the scientists who are searching for extraterrestrial intelligence are using efforts to understand how whales communicate, to sort of lay the baseline for how we might eventually understand how an alien species might talk to each other. All of this to set up were these researchers off the coast of Alaska believe that they communicated with a humpback whale. And so, the researcher’s name was, Hubbard is the last name. I gotta get the first name. Josie Hubbard, an animal behaviorist currently studying for her PhD at the University of California, Davis. Hubbard was on a research vessel which was floating, and below deck there was another researcher Brendan McCowan, who was broadcasting a recorded humpback contact call a “whup” or “throb” through an underwater speaker. When the whale Twain moved away, they found out that Twain this whale had spoken back engaging in a conversation that had lasted a full 20 minutes. And here’s a clip of what the BBC had of this.

BBC Clip

The team broadcast a recorded humpback greeting call through an underwater speaker. And Twain responded with a similar whup noise. This exchange was repeated 36 times over a 20-minute period.

Kimberly Adams

Whale speech.

Kai Ryssdal 

Sorry. Sounded sounded like a burp, but you know.

Kimberly Adams 

Later on in the article, they talked about these other researchers trying to analyze the conversation of sperm whales while they’re hunting. And they’ve got like all of these nuanced recordings, and they think some of them are like, hey, blow your bubbles over here to move the fish this way. And other recordings, they think, are basically one whale saying to another, you’re an idiot. Why did you do that? You know because they’re messing up the hunt. And so, I just think this is another fun example of animals being way smarter than we give them credit for. And when I was a kid, I used to love this TV show on the Disney Channel called Ocean Girl, which was all about this alien, oddly enough, from another planet, who came to Earth and could communicate with whales. And this kind of makes me remember that and feel happy. And it made me smile. What’d you got?

Kai Ryssdal 

Mine is animals as well, but it’s a little different. And it’s a little more security. So, I saw a piece in the Financial Times today about sheep being used in solar panel fields to control the vegetation growing over the solar panels, which kind of makes sense. The FT, however, has a very rigid paywall, and I’m not an FT subscriber, so I couldn’t get into that article. So, I Googled quickly solar sheep grazing. And I came upon an article from Bloomberg last year. So, this is clearly not a new thing. But then I went farther down the rabbit hole. And I found, and I kid you not, this is actually a thing. solargrazing.org. It is literally the American Solar Grazing Association. They welcome us. There are solar grazing resources. There is a certification program for solar grazing training. There’s a solar grazing map. You can do webinars, and they will give you cattle, or they will facilitate cattle or sheep to be on your thing. Here’s the quote, “we are a community of farmer solar developers and innovators who are shaping the future of solar energy and farming.” They are the leading voice of the solar grazing industry. You literally learn something new every day.

Kimberly Adams 

I love it that there’s an industry group for everything.

Kai Ryssdal

Literally everything.

Kimberly Adams

And their logo is amazing.

Kai Ryssdal

Yeah, isn’t it?

Kimberly Adams 

It’s like a little sheep with like, solar panels on it and grass. It’s very cute. I love that.

Kai Ryssdal 

How about that? Solar grazing?

Kimberly Adams 

That’s a lot of fun. That made me smile. I like it.

Kai Ryssdal 

Mission accomplished. Alright, we’re done for today with the little animal segment on the way out. Back tomorrow as usual, then we’re going to do, it being Thursday, we’re going to do an audio show, so thoughts questions, comments or audio you think we had to talk about? makemesmart@marketplace.org is how you get it to us. You can also just send us a voicemail at 508-U-B-SMART.

Kimberly Adams 

Make Me Smart is produced by Courtney Bergsieker. Ellen Rolfes writes our newsletter. Today’s program was engineered by Jaky Cherry. And Thalia Menchaca is our intern.

Kai Ryssdal 

Ben Tolliday and Daniel Ramirez composed our theme music. Our senior producer is Marissa Cabrera. Bridget Bodnar is the director of podcasts. She must be off because I haven’t heard from Bridget in a very long time. Francesca Levy is the executive director of Digital. Excuse me, speaking of burps. And On-Demand. Sorry, sorry, sorry, sorry. Sorry.

Kimberly Adams 

That’s okay. We’re very comfortable on this podcast.

Kai Ryssdal 

We are actually, you know what? And I think our listeners expect that, so that’s fine. Oh, my God.

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