Summer School 8: Graduation LIVE!

0:00This message comes from NPR sponsor Charles Schwab. Financial decisions can be tricky. Your biases can lead you astray. Financial Decoder, an original podcast from Charles Schwab, can help. Download the latest episode and subscribe at schwab.com slash financial decoder. Quick note before the summer school finale. As you likely saw, President Trump says he is firing Lisa Cook, a Biden appointee to the Federal Reserve Board. This is big. Our short daily show, The Indicator, already has an episode out about it. We'll have a longer one here soon, so please watch our feed. Here at Planet Money, we've covered why Federal Reserve independence is so important for the economy.

0:44the Fed's origin stories, when Nixon tried to pressure the Fed. That time, Turkey fired its central bankers. We even have an episode about Lisa Cook's work long before she was nominated to the Fed. We put all those shows into a playlist for you. If you're in the mood to dive deeper, to binge, to share with everyone you know, check the show notes for a link. We'll also post it to our socials. Okay, now for summer school. It's time to graduate. This is Planet Money from NPR.

1:25Graduates, faculty, parents, maybe there's parents here, long-time listeners a bit confused by the whole fake graduation theme, welcome to Planet Money Summer School. I'm Robert Smith, and this is our live commencement ceremony at the Bell House in Brooklyn.

1:50I stand before you today in a dean's robe, green like the Planet Money podcast logo. It was ordered from China, and like everything else about summer school, it is not recognized by any academic or government institution. Yes. But what it does symbolize is that we have completed a summer's worth of episodes in political economy. And in these days of short attention spans, that, unfortunately, earns you a degree. Today on our final episode, we will test your knowledge. We will salute the unsung heroes of government service. We will have special guests. And we will pick our valedictorian from among you of the class of 2025.

2:27Through a cutthroat competition and quiz, 300 people enter the Bell House, but only one will give an inspirational address to the class that will clock in under one minute. Best graduation ever. Hey, everyone. It's Robert in the studio here, interrupting myself to speak just to you students listening at home. Our graduation ceremony lasted about two hours. That's not bad for a college commencement, but it's still a little too long for the podcast. So today, to help you celebrate your awesome graduation, we're going to play just the very best segments of the evening. We'll fast forward through the opening acts, but to give you a little feel for it, we had Planet Money TikTok guy Jack Corbett introduce himself and why we are all here.

3:16We need to answer tonight's big question. What should the government do in the economy? What a big question. Should the government intervene to take on inequality? Should the government own the land and the tools and the factories on behalf of all of us? Applaud if you agree.

3:35Officers, please arrest those communists We also did the traditional invocation At the beginning of the ceremony We called upon the spirit of Adam Smith And his ghost responded Yes, planet money, tis I Adam Smith Arisen from the grave To give the invisible middle finger To the idea that I was a radical free market zealot And we had a little audience quiz to show off how much you all have learned about political economy this season. We gave audience members the abbreviation of a government agency, and they would usually nail it. We begin SSA. Social Security Administration. Correct. Go to the back of the line.

4:23But as the government agencies got more obscure, only a few audience members were left standing. Next agency, DOC.

4:35doctor good guess but incorrect next person I got nothing census? I don't know oh good guess but no I'm sorry return to your seat it's the department of commerce yes it is we had two of your fellow students who aced the quiz and they will compete later in the show to be our valedictorian for the class. So let's get on with your personalized best of version of your graduation ceremony. And at the end, we'll have instructions on how to get sent your very own and very fake diploma from summer school 2025. Commencement picks up again after the break.

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6:11No need to panic. With your iPhone, you can tap to pay using Apple Card with Apple Pay and earn unlimited daily cash back when you do. Apple Card is ready when you need it. Subject to credit approval. Apple Card issued by Goldman Sachs Bank USA, Salt Lake City Branch. Terms and more at AppleCard.com. Welcome back to Planet Money Summer School Graduation Live at the Bell House in Brooklyn.

6:40Please welcome to the stage host of Planet Money's The Indicator podcast, Darian Woods.

6:50Glad to be here. Every graduation ceremony needs to present an honorary degree. A recognition to the students that you really didn't need to pay tuition or study at all. You just needed to go out and do something cool in the world and then wait for the dean to call. Our honorary degree this year goes to someone from a part of the government. We were actually going to do a whole summer school episode about government statistics. We thought it would be funny, right Darian? to do a whole show on government statistics because it's obscure and no one ever talks about it and it definitely never makes the news.

7:26Yeah, until it did. It was everywhere. It was the top headline. The president fired the head of the Bureau of Labor Statistics, Dr. Erica McIntaffer. So the president was unhappy with the most recent set of jobs numbers. Not only was the number of jobs created in July relatively low, the report revised the jobs numbers for May and June even lower. The president didn't like that and decided that the number and the department needed fixing. The firing was, of course, an intensely political act. And maybe that's what was so shocking to us here at Planet Money. You know, over the years, we've talked to the researchers, we've followed statisticians who produce all the numbers that we use every week.

8:15The unemployment rate, the inflation rate, the gross domestic product, GDP. We've covered this stuff for years. Whenever the jobs numbers come out, the indicator plays an air horn. When my daughters were little, they would ask, is today jobs day? And I'd be like, no, it's the first Friday of the month. Why do we keep going over and over this? I mean, we regularly interviewed people like Erica Groshen, the former head of the Bureau of Labor Statistics. and she warned us a long time ago about this moment. If people don't trust the data, then you might as well not produce it. But when we hear the data, we think about the real people, the hard-working data collectors who dedicate their lives to assembling these data points.

9:04And they go to extreme lengths to get it. In 2015, Planet Money producer Caitlin Kenny rode around Brooklyn with one of the employees of the Bureau of Labor Statistics, George Mincinello. George goes to the same set of stores every month for years, month after month, to check the prices, to look for inflation, and not just in general. He has a very specific list. A bag of romaine hearts of lettuce, which is usually over here. Now we're going to get the price. Hi. Could you scan that for me? I just want to know the price.

9:41$2.99. $2.99. Thank you. So$2.99 is the same price. Oh, wait, we have a change here. It's the same price, however, the weight is different. So effectively, that's a price decrease for these packaged romaine heads. So we're seeing deflation right here. We're seeing a reduction in the price, yes. This is all for one data point. One. They do this thousands and thousands of times each month. In fact, his next stop was to check the price for a size 15 boys cotton shirt. These people are sticklers for the facts. And it's the same for the jobs numbers dismissed by President Trump as, quote, phony. Those jobs numbers are the result of thousands of surveys to businesses across the country.

10:32And in 2022, Waylon Wong and I did a report on the indicator about how the jobs numbers are actually put together. And we got to eavesdrop as data collector Erica Henyon was calling companies. It's Erica with the U.S. Department of Flavor. How are you doing today? Doing good. I think I do nice to know your voice by now when you call. I know. It's been a while for us. The person on the end of the phone line recognizes Erica because the same business will get a call each month for anywhere between two to four years. And Erica, by the way, told me that her mother was a hairdresser, so she's good at talking to strangers to give out information.

11:11And so for that pay period that included May 12th, then, how many total employees worked or received pay? 80. 80? Went up another person, yay! We'll take it. It doesn't happen very often lately, so we'll take it. Now, this whole data collection process is a human endeavor. And like everybody says these days, their jobs are getting harder. The Bureau of Labor Statistics is working with a smaller budget than in the past. When you take into account inflation, the BLS's budget is 10 % smaller than it was in 2009. These cuts have been happening for years. So those lettuce numbers? The BLS is no longer sending out people to price romaine in Provo, Utah.

11:51They cut people pricing arugula in Lincoln, Nebraska, and in Buffalo, New York. We don't really know if endive is getting more expensive. Probably, probably a little bit. The data is still solid, everyone tells us, but the cutbacks are starting to stretch them thin. And after the pandemic, the data collectors started to notice that fewer people were answering surveys and talking to the data collectors. I asked Erica, the woman who was calling about the jobs numbers, how her job was these days. It has gotten harder. It has gotten harder over the years, especially after the pandemic. there has been some pushback from different respondents that don't want to report the data because of the political economy the way it is and everything like that.

12:36There has been some pushback. There is some distrust there. And I've actually had a few people that have yelled at me and screamed at me. And then they called me back and apologized because they realized that they took it out on the wrong person. I'm their outlet. I am the person that they can physically talk to about the government. Now, since the firing, we at Planet Money have talked to just about every living person who once ran the Bureau of Labor Statistics, if you've listened over the last couple of weeks. We talk regularly with the folks at the Census and the Commerce Department and the Federal Reserve, and they all tell us the numbers have not yet been contaminated by politics.

13:10The process they use is transparent. It's been done roughly the same way for decades. The economists in these agencies say it would be very hard to fake the data or spin the numbers. There are laws in place and there are norms. But as the former head of the BLS told us on the indicator, those norms are vulnerable. They can be undermined. It's like what parents tell their kids. Trust takes a long time to build up and it can be ruined in an instant. So not to get cheesy. I mean, come on, it's graduation. This is the perfect time to get cheesy. We all have to do our part, we should answer the surveys, support the data professionals, keep the trust that has been built for 100 years.

13:54We hereby declare an honorary summer school degree. So we're going to give out an honorary degree to the thousands of people in more than a dozen federal agencies who work with data collection across the government. The trust may be precarious, but the numbers don't lie.

14:22To present this award, I want to bring on the host at Planet Money who spends the most time talking numbers with economists, Mary Childs.

14:37Thank you. This is so exciting. I'm honored to be able to present this degree. The honorary degree will be presented to literally thousands of people, but I had to find someone, a person, to accept it. A representative sample of N equals 1. So here to accept is the director of research and the head of the research and statistics group at the New York Federal Reserve, Kartik Athreya. Thank you.

15:16Okay. Kartik, thank you so much for joining us tonight. Thank you so much for having me. This is so cool, and this is going to get less entertaining than... No, no, no, no. No sandbagging here. So you are in charge of getting good data to policymakers at the Fed. You don't make policy. You just help them try to understand what even is going on in the economy, correct? Exactly. Y 'all are always looking at your screens and your numbers, but you do also get out into the world. You go out into your region once a week. Why? What are you looking for and what are those meetings like? So the core question is always kind of the same, which is what is signal and what is noise?

15:57A bunch of stuff comes in. You don't know what's likely to stick and what's likely not to. In my role as a research director, I work with a team of economists, analysts, and statisticians who advised the New York Fed president, in my case, to say, look, we think this is the part of what's unfolding right now that is actually somewhat durable that you should pay attention to. One of the things that happens with data collection, no matter how good it is, is that it takes time to come in. And we often need help in understanding what's happening now when, in fact, hard data may reveal that only a while from now.

16:31So who knows? People making decisions. And I'm going to make a quick plug for Planet Money. it is exceptional in translating decision-making at the individual level back into the economic issues. I think it's what it does particularly well, and it's why I like it.

16:48We didn't even ask for that. That was unprompted. Well, then that makes me feel bad about the framing of this next question. I just won't answer it. I wasn't ready for this emotionally. You spend a lot of time working on all your numbers, so why aren't they perfect? I can do no better than Planet Money just did in telling us all the hurdles that lie between us and a perfect read of the economy at any point in time. This is a huge economy. There's a ton of stuff going on. Endives in Buffalo, you know, lettuce elsewhere. Knowing what's happening in real time, it's actually very complicated simply by the scale of the economy that we operate with.

17:27So I think in that sense, that's already an impediment. The other thing actually was brought up, response rates. We at the New York Fed conduct surveys. surveys, one of the things that we try to do is keep track of household expectations for the economy. People don't always respond to the survey. It is hard to get people to respond. And I think also there's just the general complexity of actually the economy underlying that we can't get a read on perfectly. So you would say to everybody out there, tell your friends to answer the calls. Yeah. If one of us asks you, please be in the survey, say yes.

17:58This is a recruitment event. We didn't mean for that either. Well, Kartik, thank you so much for joining us. And on behalf of Planet Money, I would like to present you and all government statisticians with this honorary degree.

18:25All right. We still need to pick our valedictorian for the class of 2025. It's going to get intense after the break.

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19:29Investing involves risk, including possible loss of principle. This message comes from NPR sponsor Odoo. Some describe Odoo like a magic beanstalk because it scales with you and is magically affordable. Odoo, exactly what a business needs. Sign up at odoo.com. That's O-D-O-O dot com. Class, we have done it. We have worked long and hard this semester studying vocabulary, even doing some extracurricular reading. And now, now we are at the final exam. For tonight's final exam, I will be bringing up the hosts of Planet Money to help proctor. Please welcome back to the stage, Darian Woods, Mary Childs, and Alexi Horowitz-Ghazi.

20:18Our two final contestants vying for the title of Planet Money Summer School Valedictorian 2025. Yael Zhang and Atticus Carnell

20:31Atticus, where are you from? You a big Planet Money listener? Um, no Love it Love it Brutal You're about to figure out what happens when you haven't listened to Planet Money I know And you're given an economics trivia test That's okay, that's okay Yael, where are you from? And are you a big listener? I mean, I live in New York, and I haven't listened to episode seven because I'm not a Planet Money Plus subscriber. Oh.

21:06So this should be an incentive to do so. Yes, yes, it will. Our final exam will be a round of political economy trivia. Each question will be multiple choice with only one correct answer. The contestant with the most correct answers at the end of the game will be, unfortunately, our valedictorian. Sorry about that. Second prize is you don't have to be valedictorian. This title will earn you absolutely nothing tangible, which means it will be weightless as you carry it forever in your heart. Everyone ready? Okay. All right. Our first question for Atticus is from Mary Childs. Hey Atticus Hi Argentina utilized industrial policy to try to grow a whole new sector of its economy They did this by trying to build a specific product entirely within the borders of Argentina What was the product?

22:05A. Learjets B. Blackberry cell phones C. Cheez-Its A. I guess you should have listened to Planet Money

22:20The answer is B Argentinian president Cristina Fernandez de Kirchner Fulfilled a campaign promise to build cell phones entirely in Argentina And while it did work It ultimately resulted in Argentinians having access to blackberries That were full years behind the rest of the world's blackberries Yale It's coming to you from Alexi Yale Dear you. The Federal Aviation Administration, the FAA, for those who were playing earlier, was heavily criticized after two deadly crashes involving the Boeing 737 MAX. Investigations revealed that the FAA delegated significant portions of the aircraft's safety certification to Boeing engineers themselves.

23:07This trend of industry exerting significant influence over its own oversight is known in economics as what? A, tragedy of the commons B, the fox in the hen house conundrum or C, regulatory capture C, regulatory capture Nailed it!