Fed chair, health care, and AI shoe repair

0:01NPR.

0:11Stacey Vanek Smith:This is the Indicator from Planet Money. I'm Darian Woods, joined by Waylon Wong. Hello. And we have our very special guest, Mary Childs. Hi, thanks for having me back. I would like to formally welcome our listeners to Indicators of the Week. Indicators of the Week. That's right, Darian, Mary, we are going back to our favorite Friday activity. We're highlighting numbers from the news. We're going to have some fun and make sense of what's happening in the economy. Today, we're looking at just how rich Trump's nominee is for Federal Reserve chair. We're going to talk about how Allbirds, the shoe company, became an AI firm.

0:49And we're going to talk about why so many people with an Affordable Care Act plan did not pay their first monthly bill.

0:55Stacey Vanek Smith:That's all after the break.

0:59You know, every day on Up First, NPR's Golden Globe-nominated morning news podcast, we bring you three essential stories. At the heart of each story are questions. What really happened? What really mattered? What happens next? At NPR, we stand for your right to be curious and to follow the facts. Follow Up First wherever you get your podcasts and start your day knowing what matters and why.

1:24Stacey Vanek Smith:And to get us the week, Mary, why don't you go first? I would love to go first. I actually never get to go first. I don't know if you knew that. This is an exciting day for me. My indicator this week is 14%. That's how many people who are signed up for the Affordable Care Act plans this year that have not paid their first monthly bill. This is according to an analysis from the actuarial firm Wakely Consulting Group reported in the Wall Street Journal. So people are just letting their health care insurance lapse and is this common? There is actually a drop every year in membership, but normally it's like 5%, 6%.

1:57This year, it's more than twice that. And in some states, it was 25 % or more. 25? What's going on? Well, this year, the plan premiums have gotten way more expensive after federal subsidies instituted during the pandemic started to expire. Yeah, so as the indicators covered, a lot of people with low incomes enrolled in 2021 for plans that at the time didn't cost anything. Looks like maybe a lot of those people are now unenrolling. Exactly. And at the same time, insurers have been hiking their rates because health care costs are going up too.

2:28Stacey Vanek Smith:And so what does this mean for the ACA marketplace? Does that have implications for insurers if they're covering fewer people? Yes. And it's not just that it's fewer people because it's actually fewer younger and healthy people. They are the ones who tend to drop out or cut back on their health care coverage. But they're also who you need for the structure of an insurance system to work. And this pattern does seem to show up in the Wakely data. Among people who signed up with the same ACA insurers in 25 and 26, those who did make their January premium payments were about 10 percent less healthy than those who skipped that January payment.

3:03But like you said, you need the healthier people paying into the system, right? Because if they leave, then the people who are left are going to be on average older, sicker. They're going to need more health care. And so they're going to be more expensive for insurers, right?

3:17Stacey Vanek Smith:Classic adverse selection. Oh, man. Exactly right. It's kind of a spiral. Insurers will start to see the higher costs per insured person on average. So they will raise their premiums to cover it. Weekly projects that ACA enrollment will fall this year by between 17 percent and 26 percent compared to 2025. 26 percent? I know. Well, thanks for that, Mary. Now, Waylon, on to you. Yes. Yes, my indicator is$100 million. That is the conservative estimate for the size of Kevin Walsh's financial holdings. Kevin Walsh is President Donald Trump's nominee for chair of the Federal Reserve. He had to file financial disclosures as part of his vetting process.

3:54And that's where this$100 million figure comes from. He owns at least that much in assets based on his paperwork. That's a lot of money. And that's more than Jerome Powell. Didn't everybody get in a tizzy about Jerome Powell being too rich? Yeah, he was estimated to have between$20 and$55 million. So Warsh is quite a bit above that.

4:12Stacey Vanek Smith:Now, I understand he's kind of married into a bit of that wealth. Yes, he's married to the granddaughter of the couple behind Estee Lauder. So, yeah, tell me about how he made his millions. Yeah, so even setting aside the untold wealth that his wife has from the family fortune, Kevin Warsh collected something like$10 million in consulting fees from an investment firm. He got paid for a bunch of speaking engagements. OK, some expensive speeches. Oh, yeah. And then he has investments in a whole slew of companies. And some you've heard of, like SpaceX and Polymarket. But then I was going through the list, and there are all these random ones.

4:49Like, there's a company that's developing a herpes vaccine. There's a company that makes tights, you know, stockings. And there's an electric boat company. Although I think he'll probably have to divest that one or maybe a lot of these holdings if he becomes Fed chair. It'll probably come up next week. That's when he is scheduled for a Senate confirmation hearing. And the Fed has been making a lot of headlines this week. Trump again threatened to fire Jerome Powell.

5:15Stacey Vanek Smith:And I saw that the Department of Justice actually had some officials trying to knock on the door of those Fed building renovations. This is the project where there's a criminal probe, where the Trump administration is saying that Jerome Powell has mismanaged it. Yeah, a federal judge blocked the administration's subpoenas of Powell over this construction project, but the investigation is still going on. And apparently, these DOJ prosecutors showed up unannounced and were turned away for safety reasons. Next time, bring more of a hard hat and some Hiver's vests. Yeah, I bet the DOJ just wasn't wearing the right footwear.

5:49They didn't have their steel-toed boots on.

5:52Stacey Vanek Smith:Yes. Speaking of footwear, I think, Darian, you might have some news for us about the latest innovations. So, I don't know if you've heard about Allbirds, the shoe company, turning into an AI firm. I love this story. So let's recap. Allbirds was worth billions of dollars a few years ago on this kind of Silicon Valley hope that direct consumer companies like Morby Parker for glasses or Casper for mattresses could be this lucrative new part of the economy. I remember I was working at a tech company when Allbirds launched. And so the CEO of our company definitely had Allbirds. And then I definitely was influenced to go out and buy a pair for my husband, which he still owns.

6:35Wait, aren't Allbirds made out of merino wool from New Zealand from your stomping grounds, Darian?

6:41Stacey Vanek Smith:Yeah, they were actually started. Allbirds actually got its kickstart from a New Zealand government grant to develop better wool technology. Get out! Wow. So I did contribute through my taxes. You did. Oh my gosh. And now they're an AI company. So let's recap the whole story. So the share price has gone down a lot, a lot, a lot over the last few years. In fact, it was a struggling company and it announced it was selling its IP and its brand to a group called American Exchange Group last month. They're presumably going to sell the shoes from now on. And then on Wednesday, we had this announcement that the company was going to pivot to AI services.

7:23Stacey Vanek Smith:It was going to have up to$50 million from an unnamed investor. And then the share price shot up more than 700%. It does feel a bit on the nose that you just literally say AI and then the stock goes up. Like, I thought that was a meme. Yeah, what stage in a bubble are we? So yeah, this has got everything. It's got AI, it's got meme stocks. Oh my gosh. It's like we're spinning a word wheel, you know, like a big bingo wheel of business buzzwords and every single one is popping out. Another word that's on our bingo card apparently is kind of, it kind of sounds like a SPAC. Like AI investors are using the fact that Allbirds is already listed on the stock market almost like it's a special purpose acquisition company so they can raise money for their AI projects without having to go through the hassle and the paperwork and the scrutiny of getting their own company listed publicly.

8:11Stacey Vanek Smith:Yes, it's not technically a SPAC, but it is very SPAC style, this moves here. SPAC energy. Well, I guess it's like you have a publicly traded company that's already done all the work. It's like, what can we have this company do? I mean, props to the financial managers here who have wrapped up every buzzword and trend over the last 20 years and managed to seemingly come away with millions. It is like, you know, they were just sitting around, however social interactions happen in San Francisco. And his buddy is like, man, you should just make it AI. Like, can't it just be a computer? And he's like, no, I couldn't.

8:46I mean, we're a shoe company, man. And he's like, no, no, no. Like, it's literally like that's what happened.

8:51Stacey Vanek Smith:And it works. Well, Mary, this is a pivot that is fun to roast. But there's another pivot that I wanted to celebrate in a sincere way. And that is that you are moving on from Planet Money and NPR. Yeah, we're going to miss you already. We're going to miss you so much. I can no longer terrorize Darian on stage. We had a great event in New York the other day. I forced him to say we were best friends or at least pretend. Oh my gosh, that's so nice. Such a special place. I'm going to miss you. Come back to do more Indicators of the Week with us, Mary. I would love to if you'll have me. I'm going to cry if someone else has to do the credits.

9:31I got you. This episode was produced by Cooper Katz McKim and engineered by Robert Rodriguez. It was fact-checked by Ciara Juarez. Kate Kincannon is our editor. The Indicator is a production of NPR.

9:40Stacey Vanek Smith:Bye, Mary. Bye. That was my last credits.