← HerMoney with Jean Chatzky
HerMoney with Jean Chatzky
Job Numbers, Inflation & Your Money With Economist Kathryn Edwards
00:36:20
And how the firing of the head of the BLS could affect our paychecks.
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- [00:02]
Katherine Edwards
On the current the Consumer Price Index. We've been watching to follow inflation, but y', all, it determines how much Social Security benefits are adjusted year over year. It determines how much your tax bracket will increase year over year. It is the measure of cost of living in the United States comes from the Consumer Price Index, which comes from the Bureau of Labor Statistics. And they've already raised warning flags saying we are running out of money to do this.
- [00:32]
Jean Chatzky
Hey, everybody. Welcome to Her Money. I'm Jean Chat sky, and we are diving back into the economy. We're diving into a story. Maybe it seems wonky on the surface, but trust me, it couldn't be more urgent or more relevant to your life, to your paycheck, to your future. Here's the headline. The head of the Bureau of Labor Statistics. This is the agency that is responsible for the monthly jobs report. And some of the most critical data shaping our economy was fired, and not quietly. The dismissal of Erica McIntarfer has sent shockwaves through the economic community. Why should you care about this? Because when we lose trust in the data that sets interest rates, determines policy, and drives the headlines about inflation and wages, we lose our ability to plan, to invest, to advocate, to protect ourselves. And I say this as a woman, knowing that women already face a steeper climb when it comes to pay equity, job security, and retirement preparedness. If the data gets distorted, make no mistake, we are the ones who stand to suffer most. Which is why we have our favorite economist back with us today. Dr. Catherine Edwards is a leading labor economist. She's hosted the amazing new podcast, Optimist Economy. We're going to see if she stands by that title still. And she's been raising the alarm, calling this firing not just problematic, but potentially catastrophic. So we're going to unpack what happened, what's at stake, what it means for your wallet, your work, and your future. Because, as Katherine Edwards says, this isn't just about one bureaucrat losing their job. It's about whether we can trust the numbers that hold our economy together. We're going to take a very quick break. We'll be right back. Lately, I've been traveling a lot, speaking at conferences, meeting with teams, logging in from hotel rooms and airports and more coffee shops than I can count. And every time I open my laptop to check email or review slides at, I know I'm taking a risk. If I'm not protected, public Wi Fi may be convenient, but it's also one of the easiest places for hackers to grab your personal info. Passwords, credit cards, even bank logins. That's why I love ExpressVPN. It creates a secure encrypted tunnel between your devices and the Internet so you can stay connected and confident no matter where you are. Simple to use, just one click and it works across your phone, laptop and tablet. And if you travel or work on the go like I do, this is one tool that you need in your digital toolkit. Secure your online data today by visiting expressvpn.comhermoney that's E X P R E S S vpn.comhermoney to find out how you can get up to four months extra free. Expressvpn.comhermoney you know that feeling when you walk in the door, kick off your shoes and just melt into your favorite spot? For me, that's my bed. Especially now that I have Cozy Earth sheets. Cozy Earth's bedding, made from viscose from bamboo is temperature regulating, very important. It's also buttery soft and don't even get me started on their bubble cuddle blanket. It's got this plush feel that turns an ordinary night on the couch into a full on self care moment when the world feels chaotic. Cozy Earth helps reset and once you feel it it's there's no going back. Plus it's a risk free upgrade. You get a hundred night sleep trial and a 10 year warranty. But personally I don't think you're going to need the return policy. Head to cozyearth.com and use my code hermoney for up to 40% off. That's cozyearth.com code hermoney and if you get a post purchase survey make sure to let them know you heard about Cozy Earth right here. Cause your bed should be more than a place to sleep, it should be your happy place. Cozy Earth makes that possible. We are talking with Katherine Edwards Keds, economist on Social that's where you'll find her. Katherine if I was Bill Simmons I would call this an emergency pod. This is an emergency pod. Welcome back.
- [05:11]
Katherine Edwards
Thank you for having me and I'm happy to be here.
- [05:13]
Jean Chatzky
You and a number of other economists have said this could be catastrophic. Give me a little bit of context. What happened and what are the risks involved?
- [05:23]
Katherine Edwards
So what happened is that on Friday, August 1st we had our usual jobs day which is typically the first Friday of the month and it gives us data on what happened for the month that just finished. So we find out August 1st what happened in the labor market in July. Well these reports can either be good or bad right? Like you can knock them out of the park. Ton of jobs, unemployment rate falls, everybody feels good. But lately there's been incredible scrutiny over the employment situation, the jobs report, because Trump is pursuing a lot of policies that are detrimental to the economy and detrimental to the labor market. Tariffs hurt the economy, they raise prices, they make it hard for businesses to plan or expand. And we've all been waiting to some degree to see when this will show up in the labor market data. It showed up on Friday. Within hours, Trump took to the airwaves to say that the head of the BLS was politically motivated. She lied, she rigged the report, manipulated data. He basically slandered her and said she was fired. That is what happened. Now, there's, I think, kind of three pieces of context you need to know to get you prepared for digesting this story on Friday morning. The first piece of context is that all over the world, not just in the US and not just with this survey, but for all surveys run by government agencies, response rates are declining. So you get a survey from the government, someone knocks on your door, someone calls you, someone sends you something in the mail saying, this is from the Census Bureau and we'd like you to fill this out. The number of people who fill it out and return it are declining. This in particular all went down over the business survey. Employers are doing the same thing. They're not responding. Now, the degree that this has occurred and why, it's got a lot of reasons behind it. But the second piece of context you need to know is that the BLS and the Census Bureau, but the BLS in particular, has had really limited ability to respond to this problem because their funding has been cut. Fifteen years ago, when we were in the Great Recession, something happened called sequestration, where non critical government agencies saw an automatic freeze and cut to their budget. The BLS has never really recovered. And over the last 15 years, their budget has declined over 20%. In real terms, they're asking to do more. They've been asked to do more with less. So we've got this problem with survey collection, which is so important to every economy. And our agency in particular has been really limited in how well they've been able to respond to it. These two things have combined to see larger revisions in the data. This is basically combining so that now when the data's come out, we have more revision. And then the third piece of context you need to know is that as early as the spring of 2024, part of the presidential election campaign, the Trump candidates, as well as Republican Surrogates used any type of revision to the data as evidence of political manipulation. So this is a playbook that they have had for a while. If the number changes, and I don't like the number, it's because of political manipulation. This is an accusation they've had for a year. What's different now, and what was different about Friday is that now he was empowered to do something about it and he fired her.
- [08:36]
Jean Chatzky
So I've been looking at BLS data. First time I ever remember looking at BLS data. It wasn't a jobs number. It was actually a list that the BLS published of jobs that were likely to be more in demand in the coming years. I used that when I was a puppy reporter at Working Woman magazine in 1987 to write a story about the 10 hottest jobs in the future. Like, I remember this. And it was on paper at that point. It wasn't even on a computer. It was like, I had to look at this on paper in a book that the BLS put out. We have come a long way since then, but this idea that we get a set of jobs numbers and then we go back and we fix them when we have more information is nothing new.
- [09:26]
Katherine Edwards
No. And in fact, you can actually track the size of revisions going back to the 70s. Right. Like 15 years before I was born. You can go back and see how revisions have changed over time. It's worth being honest. This is a safe space, y'. All. Most people don't understand statistics or how the statistical agency works. So I do not think you should hold yourself up to some bar of, like, what do you mean, revisions? This doesn't make any sense. It probably doesn't make sense because statistics is hard. So here's. Here's how the BLS works. When they come up with the data, like the number of jobs added in the economy, they're going to send all the 100,000 surveys out to employers. It arrives at the employer's office, and it gives them a set of questions that they need to answer, and then they're supposed to send it back. Well, the timeline for this is really tight because they basically need to get a survey in mid July that they turn back with enough time for the numbers to be released by Friday, August 1st. Right. There's almost no time for turnaround. So the BLS basically has two options. Either they can sit on the data and not release anything publicly until enough surveys have come in, which means we wouldn't know what happened to the labor market in July until October. The other option is that they release the number, basically the best number that they have as early as they have it, in order to inform decision making. So what should they do? Right. This is the old axiom. You can't be cheap, fast and good. Like, which one does the BLS decide? Well, because they're a agency committed to integrity and they need to inform policymakers, they split the difference. They basically produce the number three times the first estimate, which comes out the first month. And then the next two estimates are the revisions as more surveys are returned. So by the first estimate, they have like 60% of the surveys. By the third, they have closer to 90%. And so each revision is reflecting that they got additional data. This is basically how they've done it since the early 70s. And they've always reported all three numbers because all three are informative about the economy. So there's nothing new with revisions or large revisions.
- [11:33]
Jean Chatzky
Revisions are not anything new. The Wall Street Journal has said that the degree of the revisions has grown over the past, I guess, few years or maybe even over the past decade. That as the. I guess correlating with what you said about the workforce at the BLS and the fact that they're being asked to do more with less, that's impacted the fact that we're getting greater revisions, maybe combined with the fact that fewer people are just answering.
- [12:04]
Katherine Edwards
Well, it's a relative comparison because survey response methodology improved a lot in the 80s and 90s and 2000s. So actually the data was a little bit Messier in the 70s, and we made really big strides in quality in terms of improving methodology. The last few years, we've seen big revisions. And that. That is more a function of survey response. That is not how well they're doing their job, but how well people are partnering with the bls. And to the extent that survey. That's BLS staffing is contributing to the revisions, that link is not as clear in my mind. They've made other technical mistakes that are definitely because of underfunding and staffing shortages. But the revisions themselves are most reflecting survey response rates. And it is bad over the last few years, but it was. We have made generational strides in this. You know, if you took a whole board picture, we're doing better than we used to. And I don't want it to make it sound like 2025 is the worst year for revisions we've ever recorded. That's not right. But yes, we've had bigger revisions in the last couple of years.
- [13:15]
Jean Chatzky
I don't think that a lot of people understand and Honestly, there are gaps in my knowledge about what the BLS data actually means beyond jobs numbers, how it's used to influence how much people pay in taxes and receive in retirement benefits, how much they earn on their investments. Can you explain why this matters?
- [13:34]
Katherine Edwards
So the Bureau of Labor Statistics wears a lot of hats. The one that you most know is they produce what we call a key part of the. We call them the Principal Federal economic indicators, the PFEIs. And their job is to make sure that we have a consistent estimation strategy for these really huge numbers because we never want the number to reflect a change in methodology. We want it to reflect the strength of the economy. But they also do in kind of another hat they do a lot of data collection. One survey that they collect is the establishment survey, the one that goes to employers. Another one that they collect is prices. And they collect all the information for the Consumer Price Index. And this is a survey that has had a hard time collecting data because they can't find people to staff the survey. This is where the data quality is coming from. Understaffing and underfunding. And the current, the Consumer Price Index, we've been watching to follow inflation, but y', all, it determines how much Social Security benefits are adjusted year over year. It determines how much your tax bracket will increase year over year. It is the measure of cost of living in the United States comes from the Consumer Price Index, which comes from the Bureau of Labor Statistics. And they've already raised warning flags saying we are running out of money to do this. And kind of in the middle of this is when she gets fired for the jobs report. But it jeopardizes a lot. I think the tax bracket would hit a lot of people, but the idea that you wouldn't see as much of a Social Security benefit increase for cost of living because the CPI wasn't correctly collected. And that's scary for lot of people.
- [15:14]
Jean Chatzky
What is the danger with this becoming politicized?
- [15:18]
Katherine Edwards
The danger is that we don't know what's going on in the economy and therefore we can't respond to it, good or bad. I don't know if this is comforting or not, but this is not the first time the Bureau of Labor Statistics has come under attack. It's older than the Department of Labor. It is one of the oldest federal agencies that we have. We started it in the 1880s. It is a very long agency and it has been through some pretty turbulent times in the U.S. history and U.S. economy throughout. This isn't the first time a politician has attacked it and it's always the same thing. They're going to produce a number that's not politically convenient, and so they're going to be attacked either for their rigor or for their bias. Two examples for you history buffs out there that are pretty incredible is the BLS did a huge investigation in the early 1900s on the pay and working conditions of children, when child labor was still legal in the United States. And they came to the conclusion that, turns out children are paid a lot less, exploited in their employment. Well, that brought them under incredible fire because some of the biggest concentrations of child labor were in Southern textile mills. And the Southern Democrat delegation worked hard to get the BLS commissioner fired. They were unsuccessful. In the 1970s, Richard Nixon became convinced that there was a Jewish cabal that was conspiring against him. One at the Federal Reserve, one at the Bureau of Labor Statistics. Yeah, it's sounding familiar in all but one detail, but that the Federal Reserve and the Bureau of Labor Statistics was conspiring against him because they were Jews and they were out to get him. And when a bad jobs report came in, it wasn't the August report, it was the July report. He sent a White House staffer to the Bureau of Labor Statistics and said, count how many people there have Jewish last names and got a lot of them fired. He recorded everything in the. In the Oval Office. So all of this is on tape. And the guy who did it, he's like, said publicly over his lifetime, it was like one of the biggest regrets he ever had. I mean, this is a very known thing, but it all came down to a jobs report was bad. And then people at the agency lost their jobs because they were Jews. He was unsuccessful at getting the BLS commissioner fired. Didn't quite go that far. So this type of attack on the people who speak truth to power, not because they're bold or brazen, because it's simply their job to report what they see. We've seen it before. The risk is always that if you lose integrity, if you lose transparency, and if you lose the ability to trust a number about the economy, you lose the ability to govern the economy itself. You can't respond to what's happening because you don't know what's happening. You can't see that there's a price spike on the west coast that's hurting families and therefore you can't help them. You don't see the recession coming. So by the time you know it's there, it's bad.
- [18:07]
Jean Chatzky
You have said that the numbers reported that we are in a dangerously weak labor market. I know I've asked you this on prior shows, but does that mean that we are now on the verge of a recession? Because I know that economic growth actually was up from the prior quarter.
- [18:27]
Katherine Edwards
Oh, this is such a good question. And it's really hard to answer, so I'm going to do my best to do it in under 55 minutes just for the benefit of your listeners. But the Trump administration has three policies that it has championed louder and larger than others. It's going to slash the federal workforce. It's going to deport immigrants, and it's going to start trade wars and institute tariffs. All three of those are contractionary. They will make the economy smaller, they'll hurt workers, they'll create labor shortages, and they'll increase prices. The question basically since January 20th has been, when are these bad things going to show up in the aggregate data? And many people have been watching because economists like myself have said, these are all terrible ideas. These are all very bad for the economy. So when will we be proven right? Or will the economy prove resilient to these basic, like, attacks on stability and growth? What's happened over the course of the first six months is that we've started to get the indicators to trickle in. But in the last week, a lot of them have come together, and it was a very bad week of economic news for Trump. Even before the jobs report, the GDP release showed a bounce back in the total size of the economy and economic growth. And the headline number was good, but, y', all, every number in the report was bad. And the economy averaged over the first six months of the year was really weak, had hardly any growth. And there was big declines in very important measures of growth like household spending, business investment. The economy is slowing down. And even though the headline was, hey, it grew more than the first quarter, the substance of the report was, this is a really clear indication that the economy is slowing down. The second piece of data we got last week was that price indices were released and all of the price indices that were released both by the BLS and by the Bureau of Economic Analysis with the GDP report, they showed prices has gone up and now prices are rising for multiple months in a row. And then we got the data release from the Bureau of Labor Statistics that there were fewer jobs in the economy than we originally thought. So this was the first big validating moment that bad economic policy leads to bad economic outcomes. And so it's an alignment of bad news. And then we are going to follow it by attacking the people who produce that news. That is what is so worrying about right now. It's not just that we're flying into a storm. It's that we're flying blind or we risk flying blind if we don't have good data. I think it's worth me caveating us to say we don't know what will happen at the bls. I mean, the person who immediately replaced the fired commissioner was her deputy, who himself was also a lifelong career statistician for the government. And there's very little concern that he will do anything to disrupt the production of data. But a new political appointee, someone with no experience other than Trump, promises he will, quote, unquote, produce beautiful statistics. That starts to get worrying. So we're in a little bit of a data purgatory at the moment.
- [21:29]
Jean Chatzky
There are other forms of data. There are other surveys that come out from non governmental sources. The folks at Challenger, Gray and Christmas produce a hiring report. There is a hiring report sometimes that comes out of, I believe it's indeed.com Michigan. The University of Michigan produces consumer confidence data. When we don't have as much confidence in the government data, is it appropriate and the best next move to start looking for other sources? And where would you look?
- [22:12]
Katherine Edwards
You're not going to find anything comparable because no one would try to compete with the BLS up until this point, which means that even if some private company was like, oh, this is my chance, I'm going to produce privately produced economic statistics at a large scale, they would never be able to compete with the depth and breadth of the Current Population Survey and the Current Establishment Survey, which are the two reports for the jobs day report. And they wouldn't be able to have the stability of the statistics. And what I mean by that is I want to know right now what is the unemployment rate for college graduates 22 to 27 who are in the Southeast and are male? And I need to know how that's changed over time. Even if this private company were able to marshal the resources to produce that number, it would start today and they wouldn't have any type of historical comparison to frame what they've done. You know, it's not going to be the same. It's not going to be as useful, but it probably won't be as in depth is the real problem.
- [23:09]
Jean Chatzky
We're going to take a very quick break, but when we come back, I want to talk about something else that happened also on Friday at the Federal Reserve. And then I'd like to get into the playbook for investors what can we do? What should we do in this storm of uncontrollability? Where are the things we can control? We'll be right back. You know what doesn't belong in your summer plans? Getting burned by your wireless bill. Whether you're planning beach days, barbecues or that long overdue girls weekend, your phone bill should be the last thing holding holding you back. That's why so many smart savers are making the switch to Mint Mobile and keeping more money in their pockets each month. Mint offers premium wireless service including unlimited talk, text and high speed data on the nation's largest 5G network. This year, skip breaking a sweat and breaking the bank. Get this new customer offer and your three month unlimited wireless plan for just 15 bucks a month at mintmobile.com/hermoney. That's mintmobile.comhermoney upfront payment of $45 required equivalent to $15 a month limited time new customer offer for first three months only. Speeds may slow above 35 gigabytes on unlimited plan. Taxes and fees extra. See Mint Mobile for details. So here's a little behind the scenes moment. My producer Hailey got married a couple years ago and like so many couples, she and her husband had no idea where to even start when it came to merging their finances. Different accounts, different spending styles and a lot of awkward you spent how much this week on takeout conversations? But then they found Monarch Money and it changed everything. It became their go to tool for syncing up financially. They linked all their accounts, checking credit cards, even investments and started doing regular monthly check inside. Now they track spending, set vacation goals and stay on the same page without all the stress. And the best part, Monarch makes it feel easy, like you're both in control of your financial future together. Get control of your overall finances with Monarch Money. Use code hermoney@monimalmoney.com in your browser for half off your first year. That's 50% off your first year. @monimalmoney.com with code HERMONEY we are talking with Katherine Edwards Keds economist on social that's where you'll find her. So Catherine, on the same day that the BLS chief was fired, Federal Reserve Governor Adriana Kugler announced she is resigning. She's a Biden appointee. She was only there for a year. Ish what is the role of a Federal Reserve Governor and is this concerning?
- [26:09]
Katherine Edwards
A Federal Reserve governor is one of the members of the voting bloc that works with the chairman of the Federal Reserve to decide monetary policy, AKA do interest rates go up or down from The Federal Reserve, for a really long period of history, the Board of Governors, Federal Reserve, they've wanted to act as a unit. They want to show that there's very little divisiveness up at the top. They like to have few dissents. So think of it as if the Supreme Court has been working in concert for years so that every time they release their opinion, it's either 90 or 8 1. Right. It's not a divided board. They come to a really good consensus, and they want Americans to know that they come to a consensus. Well, for the first time in a long time, this past week, same week as all this data coming in, there were two dissents. So it was like the equivalent of a. The first 7:2 decision to come out of the Supreme Court. We had the Board of Governors equivalent, and both the dissents were from Trump appointees. So what is likely going to happen is that Trump will appoint someone who will similarly dissent from the Federal Reserve chairman for the last year of his term. And that's. I think, that can be expected. We will hope that person is qualified, but that is what is at risk. Now, it doesn't necessarily change policy because it still has to operate on a majority vote, but it makes the board itself more divided. For what it's worth. It's very hard to understand what's going on, in part because Trump is one of the worst, I mean, one of the worst kind of contributors to his own cause. He wants interest rates to go down because when interest rates go down, it helps stimulate the economy, which means that if the labor market is slowing down and if there's signs that economic activity has slowed, interest rates can help bolster the economy. So the case that you need to make if you want interest rates to go down right now is you need to highlight just how weak the economy is. You need to say the jobs market is not as strong as it looks. People aren't being hired. We had really weak growth. I mean, you need to trumpet from every microphone that you have that you are worried about the economy slipping into a recession and that the Fed needs to act now. Well, Trump doesn't do that because the economy is amazing, and he thinks it's perfect and strong. And if someone comes out with a weak report, he fires them. So he's publicly making the case that Jerome Powell needs to lower interest rates, as he's simultaneously publicly making the case that the economy is the best that it has ever been in US History. Because of him, these two things are in absolute conflict. And so I think that was what makes it so hard to understand all the tensions at play here Because Trump himself is making a terrible argument in advance of his own cause of having interest rates lowered. And for what it's worth, the two dissenters on the Federal Board of Governors in this last decision to not reduce interest rates, they made what we'd expect, the right case, I guess, which is that they said the economy was weaker than thought. The reason why the Fed hasn't lowered interest rates even in the face of all this bad data, is because they're worried about prices, because tariffs are virtually guaranteed to increase prices. And if price growth goes up, the only way to really deal with it from the Fed's perspective, is to raise interest rates. And they are very worried that as more tariffs accumulate and go into effect and start to hurt businesses where they can't spend three months avoiding the consequences of tariffs or stocking up on inventory or taking a couple months of losses, at some point, these tariffs are going to greatly increase prices in the economy. And the Fed doesn't want to be caught flat footed or incapable of answering them. So it is a calculated choice. What is more scary right now, the risk to prices or the risk to economic activity? The price risk is scarier to them. It's the Fed. The price risk is always scarier to them. And that's how they acted. That's all so confusing. Like, that's so many. This is like 3D chess of like, here's what's happening on the price side, here's what's happening on the unemployment side. Trump is saying this not good. They want people to lower interest rates. Totally different motivation. And then in the middle of this, he fires the person that says you produce less jobs. And I think a lot of us, especially member of the economics profession, will tell you he probably fired her because he can't fire Jerome Powell, head of the Federal Reserve, who he has wanted to fire for months. So in some ways she was like the fall guy, the outlet for his frustrations, because he could fire her.
- [30:42]
Jean Chatzky
The Fed has a dual mandate. They are supposed to keep unemployment low and they are supposed to keep inflation low. And here they made a choice.
- [30:54]
Katherine Edwards
Another way to think of it is we all just went through an inflation spike and it was painful, terrible. I mean, it was, it was deeply painful. And it's painful for a lot of people. A recession is hard. Most directly affected people are the people who lose their job or can't find one, who even in the worst recessions will tap out at 9% of the workforce. Now that's not to say that they're the limit of who is affected. But you have a recession and you have a group of people who become unemployed. But we have ways of helping them. We can get them unemployment insurance and top up the benefits. We can do things to try to stimulate the economy once we tip into a recession. But I mean, getting price growth to come back down, we don't have as many options, and it affects a lot more people. Now, I don't like that calculus. I don't necessarily agree with it, but I think that is kind of the dominant thinking at the Federal Reserve. I'm a labor economist. I'm like, one person fired is too many. I don't agree with that assessment. But that is their assessment. And for their point of view, they're not Congress. They're not the president. They're in charge of interest rates. It is a very good policy for curbing prices. It is an okay policy. It's stimulating the economy. And they are the only person who will act when it comes to high prices. Congress won't. But if the economy goes south, Congress will pass some type of package to help boost it up. So it's really just who are all the players on the board? Right. And who has the ability to respond? It's really the Fed standing between us and inflation spike. And I think that's why they always put prices first.
- [32:26]
Jean Chatzky
All right. Playbook. I'm an investor with a 401k. I want to put my kids through college. I want to put food on the table. I'd like to retire. I someday I'd like to keep a job. I'd like to keep my house.
- [32:40]
Katherine Edwards
Preach.
- [32:40]
Jean Chatzky
What do I do?
- [32:43]
Katherine Edwards
What do you do? You know, my assessment as an economist is that there is so many sources of weakness in our economy right now that have nothing to do with Trump or the BLS or the Fed or tariffs, but problems that have long gone unaddressed. And I think this is truly such arrogant advice and so unapplicable or helpful. And I would understand if all of your listeners were like, do not like that. But frankly, I think y' all, so many of us are suffering under problems that are 30 years in the making. And it's not clear that you can invest your way out of it or save your way out of it. I would identify three to five primary market failures that are curbing the economic security and livelihood of so many Americans. Care, child care, and elder care. It's far too expensive. If you have to pay for it, it breaks the bank. It will never get better. Those two forms of care will only get more expensive, drastically more expensive. Their price rises faster than overall. The second is health insurance and the market for health. Y', all. What we have is not working. We have bad health outcomes if expensive health cost. And Congress is actively walking back every patch that they've ever put in place to prop up this terrible system that we have. And the third is housing. We don't produce enough housing, nor do we produce high enough wages to afford the housing that we have. These aren't a tariff issue or an interest rate issue. This is a dereliction of duty on behalf of Congress from both parties for generation to not meet Americans where their economic struggles are. That doesn't really lend itself to personal advice of what an investor can do. But I do want to make clear the context of just how much you can be up against as you find yourself struggling to save and struggling to earn and if struggling to afford a life that shouldn't be so hard to afford.
- [34:47]
Jean Chatzky
And yet you're an optimist.
- [34:48]
Katherine Edwards
I'm an optimist. I am.
- [34:50]
Jean Chatzky
You're an optimist. So. So what do we have to be optimistic about?
- [34:56]
Katherine Edwards
How little we've tried, truly. I mean, you can't feel like we can't get better when all we've tried is almost nothing. Like, what have policymakers done to address the crisis that is the crippling cost of childcare? It's nothing. The answer is nothing. So should you give up on the ability to afford kids and have a good life if Congress has put all of the muster they have into nothing? I mean, I think the optimism comes from knowing that we have so many solutions that have been tested. They've been tested in cities, they've been tested in states, they've been tested in other countries, they've been tested in different localities. And we have a really good idea that they'll work. And we've never tried them. Well, that's awesome. It would be very different if we have tried everything and nothing has succeeded. We've tried nothing, so we have all the potential for success. And I think my optimism comes from knowing in this long view of the US Economy, just how addressable so many of these problems are. And I think there's so much hope there. Like, can we do something about housing, y'?
- [36:01]
Jean Chatzky
All.
- [36:01]
Katherine Edwards
We can do so much about housing. What have we done? I won't lie. Not a lot. And this goes to healthcare, too. I mean, what have we done? We passed one piece of legislation on healthcare over the course of five or six decades. That was a patch that we then dismantled. I mean, the one big beautiful bill is the largest Medicaid cut in the program's history. And it also attacked the individual market, guaranteeing that we're going to have more people uninsured. So it's, it's a cynical type of optimism, but it's one that I try to stress. I don't want to gaslight you or your experience. I'm not going to tell you. Actually, we're fine. Actually, the economy is great. Actually, we have a great labor market. Where I want to meet people is with the idea that we have a lot of solutions that you probably don't know we could use. And there's if I can convince you that policy can make a difference and that the future can be better, then you will fight for it.
- [37:03]
Jean Chatzky
I think we'll leave it there. Katherine, thank you again for explaining all of this to us. It's really important, hard to wrap our brains around complicated, as you said, and yet we all owe it to ourselves and our kids to do our very, very best to try to understand it.
- [37:23]
Katherine Edwards
Thank you again for having me on.
- [37:25]
Jean Chatzky
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