Government shutdown fallout, price floors, and AI slop against the machine

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0:11This is The Indicator from Planet Money. I'm Waylon Wong. And I'm Adrian Ma. And I'm Darian Woods. Do you guys feel that in the air? I... allergy season? It is for me, that's true. What do you smell in there, pumpkin spice? In addition to antihistamines and pumpkin spice, it is indicators of the week. Favorite time of the week. Indicators of the week. Today on the show, we have frozen federal dollars. An escalating trade war with China. And a strange trend infiltrating the music business. after the break.

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1:47Indicators of the week. Darian, you're up. My indicator is about federal infrastructure funding during the government shutdown. And this indicator is 37. For every infrastructure dollar affected in Republican districts, $37 is frozen or canceled in Democratic districts. That's according to a report by the New York Times earlier this week. OK, that's very stark, that difference. Yeah, this is not controversial to say that it's partisan. This is what the President Donald Trump has said himself. Makes sense, but we're only cutting Democrat programs. We'll be cutting some very popular Democrat programs that aren't popular with Republicans, frankly, because that's the way it works.

2:31So this report is helpful because it puts a number, basically, to what he was saying. $27 billion of funding that was going to transportation or energy projects in democratically controlled areas, missing for now. And only$740 million missing for Republican areas. And as far as where the money is going, what kinds of projects are we talking about here that are getting their funding cut? Yeah, so in this report, they show two big categories, transportation and energy. And on transportation, the biggest chunk is projects in New York City, the Second Avenue subway extension, also the repair of the Hudson River Tunnel between New Jersey and Manhattan.

3:13You've also got a rail extension in the south side of Chicago. And then on the energy side, the Trump administration announced earlier this month that it was terminating$7.5 billion in grants for 223 projects. This is everything from modernizing energy grids to a Californian project to create clean hydrogen, which is a type of fuel produced using renewable energy. A press release from the Department of Energy said that following a thorough review, the agency determined that these projects weren't economically viable and wouldn't give a positive return on investment. I mean, that seems like a plausible explanation if President Trump had not just kind of given up the whole rationale already.

3:57By calling them Democrat projects? Yes. So, yeah, it's hard to know without diving into the details of every single project's cost-benefit analysis. But yes, President Trump is saying that it's basically a partisan thing. As of this recording, at least, all this back and forth and brinksmanship, it doesn't seem like either the Democrats or the Republicans are any closer to making a deal. Well, speaking of brinkmanship, I think this is a good time for my indicator, which is two, as in two words that made headlines this week. U.S. Treasury Secretary Scott Bessent told CNBC in an interview that the government is going to set price floors in certain industries to push back against China.

4:42Price floors, those are the two words that made people sit up in their chairs. Price controls, price ceilings, price floors. So when government officials start throwing around these terms, that kind of gets our economic spidey senses going. Yeah, this means the government's deciding to potentially intervene in the economy, maybe playing a role in setting prices instead of letting the market decide where the prices should be. Yeah, and Scott Besson said these kinds of policies were necessary when, quote, facing a non-market economy like China, end quote. And the one industry he mentioned specifically was rare earths.

5:18He says Chinese prices for rare earths are so low that foreign producers like the U.S. can't compete. We've covered rare earth elements on the show before. These are elements that go into high-end magnets, the kind you might find in an electric vehicle motor. They are really in demand right now, and China dominates the market. Yeah, China's the leader, and it's historically had loose environmental regulations around mining and processing, and that's helped keep their prices low. So what would price floor on rare earths actually look like? Well, I have another indicator for you guys, which is zero, zero details.

5:52It is unclear if Besant is saying the U.S. government will do something to make sure Chinese rare earth prices stay above a certain level, or if it's a policy to somehow enforce a minimum price for American rare earths. It's like shrug emoji. Yeah, because on the one hand, it's like, no, you should sell your products for more and make more money, Chinese producers. Or it's something like they have an agricultural policy. Yeah. So with certain farmers in the U.S., the government doesn't exactly set minimum prices, but it has all these long running programs that give financial support to farmers if commodity prices go below certain levels.

6:29And you sometimes hear these programs described as price support. Well, it looks like the government has opened up another potential front in the trade war with China. I mean, I guess you could say that there's no ceiling to how much this can escalate. I see what you did there, Adrian. Who doesn't love a pun? I know. This actually, my indicator of the week involves a pun too, which we'll get to. I love some wordplay. My indicator is actually inspired by a good friend of mine who is always recommending new music to me. And this week he said, you got to check out this artist called the Professor Nick Harrison.

7:09He does these really awesome cover songs. And for example, there is this Rage Against the Machine song. Okay, so this is the original.

7:21It's called Bulls on Parade. It's this really hard, gritty rock song. Mm-hmm.

7:31And here is the Professor Nick Harrison's version.

7:40This is meant to be a cover. Yeah. Oh, but it's like a soul version. Yes. Oh, interesting. Okay. That's a fun genre of mashup. I gotta say, I don't want to like this. I want to hate it, but I kind of enjoyed it. This vibe is like right up my alley, this sort of like soul gospel thing. And it turns out the professor recently released an entire album of covers called Art Official Soul. You can find it on Spotify and Apple Music. And the name Art Official Soul is actually a pun on the word artificial, because it turns out all the songs are made using AI. I get it. Oh, my goodness. Is this the future, Adrian?

8:22Is this the future of music? It's the present. Oh, that's true. Oh, it's here. My friend was so bummed out to hear this. He didn't realize that this was like a whole AI-generated album. And, you know, the thing is that AI music is actually flooding streaming services right now. So, like, who could be blamed? So a couple of interesting indicators that show the scope of this. There's a French music streaming service called Deezer, which recently estimated that over 30 ,000 fully AI-generated tracks are uploaded to its site every day. And then Spotify says that the flood of AI slop is a big reason why it removed a lot of what it calls spam tracks from its platform last year, about 75 million of them.

9:10Well, a bazooka full of AI slop for your ears. This is not just an issue for music platforms. Of course, it's also an issue for musicians. And while some musicians will undoubtedly find AI useful, there is an interesting study from a nonprofit that represents artists where they estimate that AI will result in musicians seeing a 24 % decline in their revenue over just the next few years. so Opa Tom Morello and the crew are getting some cash from this still goes yeah or maybe they're just they have lots of rage against the AI machine I mean the irony of that being the name of the band that's being covered by AI yeah I mean truly

10:02this episode was produced by Angel Carreras and engineered

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