Are We Being Priced Out of Happiness?

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1:46Stephanie Flanders:I'm Stephanie Flanders, Head of Government and Economics at Bloomberg. and this is Trumponomics, the podcast that looks at what's happening in the economic world of Donald Trump, what's shaping the US and global economy, and what could happen next. This week, we're talking about the great fun shortage. You might think it was an odd topic. I mean, the cost of living, we know, is still a major issue for households on both sides of the Atlantic, and definitely for Donald Trump approaching the midterm elections. But the cost of laughing, of having fun, seems to be going up even faster than other things, and there are fewer and fewer places to lay your hands on it.

2:26Stephanie Flanders:The FIFA World Cup, which culminates this Sunday, the 19th of July, is a case in point. I mean, watch parties are fun, but for those of us like me who prefer to see their sports live, it's been a disaster. Game tickets leading up to the tournament were either incredibly hard to get hold of or ruinously expensive, often both, and the cheapest official ticket for the final this Sunday will cost 32 times more than the equivalent ticket for the European Football Championship final two years ago. Now, if you have zero interest in football, you'll be completely fed up with hearing any further word on this topic.

3:01Stephanie Flanders:But this phenomenon being priced out of fun is part of a broader trend spelled out in a recent Bloomberg piece that got a lot of traction online by the reporter Ben Steverman. As he points out, Americans are spending less time socialising than they used to. Over the past 20 years, America's lost 2 ,000 golf courses and 7 ,000 bars and nightclubs. We're not just talking about leisure time in general, but the shared in-person kind of leisure. Live shows, family trips, nights out with friends. Time use surveys that have been run since the early 2000s show double-digit drops in the hours spent by Americans on things like that, on arts, on sports and social events.

3:44Stephanie Flanders:Now, this may be a business opportunity for some industries, but for everyone else, it raises a bigger question. What happens to an economy and a society when people just can't afford or don't make time to have fun? Well, I'm happy to say I'm joined by Ben, who wrote that piece. He writes about money and people for Bloomberg and is based in New York. Welcome, Ben. Thank you. Happy to be here. And an economist who spent a large part of his career thinking about what makes people happy and, more importantly, why it matters. Professor Lord Richard Layard, co-director of the Wellbeing Programme at the Centre for Economic Performance at the London School of Economics.

4:25Stephanie Flanders:And also the author of several books, including The Origins of Happiness and Can We Be Happier? Professor Layard, Richard, thank you so much for taking the time. My pleasure, Trump.

4:43Stephanie Flanders:Ben, how did you come to this topic, the great fun shortage? I've been thinking about happiness and community in America for years. When you look at the American Time News survey that asked people how they spend their time, you see these sort of very depressing trend in terms of how much work just socializing face to face. We're just doing it a lot less than we used to. And it's been my hunch for years that like that is having major effects on us, on our politics, on our economy. And it doesn't seem like it's sustainable. But when I started the research for this particular piece, I was just really thinking about high gas prices.

5:26And I was sort of like, oh, like maybe this is making this summer a summer of scarcity where people will be cutting back on vacations. And then I was surprised to see that people didn't really cut back that much on travel as much as you would think. People seem to really want to get out there. And I started looking at all the different ways people like to have fun that gets them out of the house, that gets them out with their family or friends or the community, and just seeing the supply shrinking in area after area, industry after industry. And so that's why I wrote the piece.

6:00Stephanie Flanders:You just mentioned it there. There's two elements to this, isn't it? There's sort of there's less available. And I guess often goes with this, but also just a massive increase in the cost of a lot of these events and this kind of activity. But what are you seeing driving those things? There's just the baseline of inflation generally is, first of all, squeezing the sort of a fun budget. People have less money left over for discretionary purchases. That's one thing. The other thing is the fixed costs of running a hotel or a nightclub just soared. But then there's also a supply issue. We really don't build beachfront resorts in the United States anymore.

6:40We have thousands and thousands of miles of coastline and we don't build on places people can gather and have fun in anymore. So then we've also had this inequality trend in the United States. So who ends up in those beachfront luxury resorts? It's the wealthy and the rest of us who maybe these are places you started bringing your kids to and now they're older. And you really have to stop going to those beach towns and you've got to find something else to do. So I think it's a combination of factors and it's different for different kinds of fun. But I think it's a complex mix of dynamics that are really coming together in 2026.

7:20Stephanie Flanders:And demographics, I guess, is another piece of it. Yeah, there's just more people. There's just more people fighting over fewer spots. But I mean, and also older people, you know, there's a chunk of people who are kind of entering retirement who have all the money and maybe are also pushing up prices that way. Yeah, baby boomers retired and they can't stop going on trips. So they're taking all the lounges on the beach. Yeah, the national parks are full of baby boomers with lots of free time. And there's just less spots for everybody else. Richard, I thought you would be a sort of perfect person to talk about this to.

7:53Stephanie Flanders:You've always said happiness is what should be the ultimate yardstick of the success of an economy. I guess we're talking about fun, which isn't necessarily the same as happiness or good mental health. So how do you think about the connection between the kind of activities that Ben's talking about and the kind of happiness, mental well-being that you have focused on for so long? Well, all the research shows that social connections are absolutely central to people's happiness. and social connections, of course, depend on the amount of time that you spend on them. And so the time use evidence that people are spending less time socializing is absolutely central to understanding the other huge fact, which is documented in the World Happiness Report, that overall happiness has fallen in the US by more than in any other country other than, I think, 14 out of all the countries in the world.

8:52And this is particularly affecting young people. And I think that that is a very bad omen for the future because we know that the best predictor of a happy life is how happy you are when you're young. America has now dropped to 62nd position for happiness of young people. And I think all of this is connected with the growth of online living. So I very much agree with Jonathan Haidt's line on this, that the social media are having a poisoning effect on young people. And it's because young people use them more than older people that they are suffering more as a result. And we know that he showed, I thought it was extraordinary, that over half of young people say they wish social media didn't exist.

9:46But they're captive. They have to go on them because everybody else is going on them. So there's a huge amount of evidence that time spent online is destructive of happiness for two reasons. I mean, one is obviously lack of social, ordinary face-to-face social contact, which has been the way humans enjoyed themselves from the beginning of time. But also the negative side, the encouragement of social comparisons and comparing yourself with the perfect life of the influencer, etc. So I think all of that is going into this diminution of fun and increase in unhappiness, which is particularly present in the English-speaking world.

10:38People, of course, questioned whether social media are so important because they are prevalent in other parts of the world. I think what is so interesting is that the English-speaking world has been particularly strongly affected, partly perhaps because of the way the tech companies operate, but also that these are the societies where young people have broken away more from their families and are less controllable by their parents. and parents' values seem to have kept social life going in Latin America and other parts of the world in the way that they haven't in the United States and Britain.

11:18Stephanie Flanders:You've partly answered the question I would have asked you, but it does feel like, you know, large parts of Europe, people are extremely online, but they don't seem to have had, certainly from your World Happiness Report, which also Ben mentions in his piece, they don't seem to have had the same fall in happiness. Well, it's the whole English-speaking world, actually, and it includes Australia and Canada. I think that it is to do with the fact of parents having more influence on young people's social norms in the rest of Europe as compared with Britain. I think that's a very, very important fact.

11:58Stephanie Flanders:One of the things that you mentioned, Ben, in your piece is the potential political consequences of some of this. And I guess we'll get on to some of the policy responses. But in terms of the many reasons that you might worry about it, you cite some, there's studies that show that voters are more likely to vote for populist candidates in years after social spaces and pubs and bars have closed down. Yeah, there are two studies, one from France looking at bar to box, the place to buy. You can get a cup of coffee or you can place a bet or just buy a newspaper. Thousands of those in small French towns have shut down and it actually takes a while.

12:41It's not an immediate effect. But when those places close down, according to this new study, in the next decade or two, those places become gradually more and more right wing and more more more willing to vote for not just conservative parties, but sort of the extreme right wing parties. And then there was another study in the UK looking at pubs and showing similar things. Could I add, the closure of youth clubs has been an extraordinary thing in Britain. We've lost 73 % of the level of activity and funding for youth clubs over the last 10 or 15 years. And of course, the closure rate is different in different areas.

13:21And you can see straight away that the effect on crime in the areas where youth clubs have been closed is quite dramatic. I think if we could just go back to the question of populism, I mean, the clearest fact that's been established really in almost every country is that the people who vote for populists are the discontented people, some of whom have become discontented for policy reasons and some of them for cost of living or other reasons. But discontent is driving people into extreme right-wing or extreme left-wing positions. And that's why one extraordinarily powerful reason why we have to try and put the contentment of the people more central to public policy if we want to preserve democracy.

14:10Stephanie Flanders:Ben, as Richard says, part of this is about a cost of living issue, which is obviously issue number one, not just in the US, but also in the UK and other places. and it doesn't just relate to this. I mean, it relates to the price of groceries and the price of petrol gas going up. But does the people being priced out of fun activities or holidays and everything, does that have a particular resonance? How much is it politically salient on its own or is it just being sort of pushed together along with other things? I noticed you mentioned in New York sort of having more liquor licences as a way to try and encourage some of the bars to come back.

14:51Yeah, I think that inflation in and of itself and the price of just food that you bring home and eat at home, like that is something that is infuriating to people in and of itself and is sort of disconnected perhaps from this fun happiness conversation. But I think when you go to a concert and you feel like you're being squeezed into like to actually get close enough to see the artist and not just watch a screen in from the back row, when you have to pay hundreds of dollars to do that, it's really dispiriting. But when people will go out and try to do that, they're subject to these premiumization regimes where to get in and have the same experience you had a decade ago is going to cost you four times as much, even if the official inflation rate hasn't gone up that much for that particular activity.

15:44We've really created these tiers, whether it's on an airplane or in a concert hall.

15:49Stephanie Flanders:everyone's forgotten that now because the world cup's been quite popular in the u.s but in the lead up to it it was that very intensive tiering by fifa um that i think had sort of have brought that home and richard i can't help thinking i mean many many years ago you know you were the person who had really contributed to people focusing on relative inequality and how that was related to people's happiness and we're seeing that now with the way that the sort of aggressive rent seeking and segmenting of the market into more and more upper tiers seems like a very there's a very close connection between that and people's general sense of well-being even if it's a somewhat trivial example sitting in a concert yes so one mustn't exaggerate the influence of economic factors in the production of discontent um i mean if you try and explain who are the most discontented people in most advanced countries.

16:47The number one factor is going to be mental health and loneliness. These factors are coming through at least as strongly as simple living standards. I was very impressed by the US Surgeon General Vivek Murthy when he went on his first tour as Surgeon General. What were the greatest problems of health, as he thought, facing people? they said loneliness. That was what people reported to him. And that's behind the death of despair and all the rest of it. And it is behind populism because people join these populist parties because it gives them a sense of identity that they feel they're belonging to, something that actually means something and turns over their insides.

17:36So it really is crucial that we deal with this discontent. And it really is important for politicians to understand that the factors that will determine, this is studies of both European elections and US presidential elections, the factors which will determine whether a government gets re-elected are more to do with non-economic factors affecting their happiness than economic factors. And we need much more attention to things that generate the social interactions which we started than just the cost of living.

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19:33Stephanie Flanders:Start your day with Bloomberg Daybreak, the podcast with a global view on the stories that matter. I'm Nathan Hager. And I'm Karen Moscow. Join us each morning for curated stories on current events, politics, business, and foreign relations. Plus one conversation on the day's biggest developments, all in just 15 minutes. Subscribe to Bloomberg Daybreak for a precise, thoughtful take on the stories that matter. Listen to Bloomberg Daybreak each morning on Apple, Spotify, or anywhere you listen.

20:07Stephanie Flanders:We have potentially a moment of opportunity in the UK, despite there not being electioned, an arrival of a new government, a new prime minister anyway, in the coming days. And he seems to be quite open to some of these ideas. And I know we've also heard, and Ben mentioned in his piece, you clearly have Democrat politicians on the ground in the US also trying to address some of these sources of discontent. But when you look at the sort of cost effectiveness of different interventions to improve happiness. But how do you rank something like more spending on counselling and direct efforts to address high levels of depression, for example, against having more parks and more sort of social infrastructure, ways of getting people together, or youth clubs for that matter?

20:58Well, as you say, we have been looking right across the board at the cost effectiveness of different types of public spending. And the most extraordinarily effective is, you call it counselling, I would call it psychological therapy, which is basically paying for itself within a couple of years, both when it's done for adults and when it's done for young people.

21:23Stephanie Flanders:Paying for itself in what way? Are they returns in terms of people working or returns in terms of people feeling better? Of course, the real, really important return is people feeling better. But from the government's point of view, it's of great interest that it won't cost them anything because they get the money back within a couple of years. From people work from tax revenues or from reduced health costs? I'm just trying to work out what the saving would be. When you're talking about adult anxiety and depression, which is the biggest single set of problems, it's just people getting back to work are coming off benefits.

22:00The savings there are so immediate. When you're talking about addicts, you're talking about health care costs as well being saved, people not turning up at A &E, not turning up at inpatient facilities and so on. But you mentioned parks. They are also good value. Small parks being close to green space turns out to be very cost effective. Actually, things like the police turn out to be rather cost effective. They actually encourage people, the theme we're on, mixing freely because they feel safe. Things which are much less cost effective are new roads, new railways. We spend an extraordinary amount on these in a way that's not really questioned.

22:46And I think that we need to subject all public expenditure to this test. What does it ultimately do for the quality of life as people experience it?

22:57Stephanie Flanders:Ben, you obviously spend your time dipping in out of lots of different topics, but I know that you're particularly interested in the sort of dynamics of wealth and how it affects society and affects people. And you've obviously demonstrated that in this piece. And there's been a lot of talk about wealth taxes. But do you think with all this discussion that maybe we'll get into talking about high end consumption taxes? That's really interesting. In terms of policy interventions, I was thinking a little bit more about creating new or more fun infrastructure. This seems like an opportunity for local politicians to bring a little life back to communities, whether that's a free concert or a dance party on a Friday night on a block that's shut to traffic.

23:41But the tax issue, I've looked into these taxes on wealthy people and people's attitudes about billionaires and trillionaires. And like in the United States for a long time, there was a sense that people didn't really resent billionaires that much when you pull them. But that's starting to change. And there's less admiration for the wealthy than there used to be. And I do wonder whether one of the factors there is that there is this sense that the experiences, the cool places and the cool experiences that were once available to a broad middle class population are becoming these premium, expensive, rare luxuries.

24:20Stephanie Flanders:When you were saying that, I was thinking, yeah, well, I guess the billionaires in the past were a bit more low key about spending their billions. But of course, as Richard points out, it's that we see it all on. If we don't see it when we're trying to go to these events, we see it all online in their perfect lives. And it's all it's very much in front of our faces. That reminds me of the billionaires posting from their yachts during COVID when we were all stuck at home. The similar dynamic. Yeah, it's not particularly good PR. Richard, people who regularly listen to this show will find this a curious topic, perhaps, or an unusual topic for us to have gone into, because we haven't been talking only about economics.

24:58Stephanie Flanders:But I guess that's part of the point you're making. I'm a member of something called Action for Happiness, that is promoting a way of life where you pledge to try and create as much happiness as you can in the world. That's putting that as a principle for yourself, how you should live. But of course, it's also a principle for what the government should be doing. But coming back to your original theme, Stephanie, I do think that this decline of face-to-face contact is a massive problem. And we know that people don't go to meetings. I mean, you can't get people to go to things because they are spending so much time online.

25:45And even if they're together, like, for example, in the big space in a university, you'll see hundreds of people sitting around and there's no noise anymore. It's quiet. They're all texting each other. They're even texting people who are in the same room. This is a fundamental cultural change, which I think is not for the better. And I'm hoping we can get a reform of school education where people are taught better life skills. I understand that measurements have been made which show children can't make eye contact in the same way that they used to. We need to restore the basic practice of sociable living as central to people's enjoyment of life.