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- [00:00]
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- [00:32]
Joel
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- [00:51]
Matt
That's right, whether you've switched jobs or are just organizing your finances. Learn more@fidelity.com rollover consider all your options and the applicable fees and features of each before moving your retirement assets. Fidelity Brokerage Services LLC Member NYSE SIPC hey, this is Joel and Matt from the how to Money podcast.
- [01:12]
Joel
My kids, Matt, they've got a few long weekends coming up, so I'm looking forward to taking a few trips with my family during those breaks.
- [01:17]
Matt
Nice. Yeah. And while you're away, you can host your house on Airbnb thanks to the Airbnb Co Host feature. Host hosting is now easier than ever. You can access a network of high quality local co hosts who can help you get your home ready for guests. Find a co host@airbnb.com host welcome to how to Money.
- [01:36]
Joel
I'm Joel.
- [01:37]
Matt
I'm Matt and today we're talking tariffs.
- [01:39]
Joel
Doge and your money with no opin.
- [02:00]
Matt
Yeah, Joel. So one of the benefits of hosting your own podcast is that you've got the opportunity to speak with some amazing folks who are much smarter than you. That is definitely the case. Today we're joined by economist Noah Smith, author of the Substack no Opinion, where he takes these big, complex economic ideas and makes them easier to understand for folks like us, Joel. I mean, we tend to focus more on micro econ factors, right? We're a personal finance show, after all. It's still good to take a step back and to look at the big picture, to honestly to understand like what's going on with the water that we're all swimming in. And given all that's been going on lately with tariffs, you know, this is a more timely episode. But we're also excited to get into some topics like declining Birth rates, government spending, the economy overall. Plenty more today. No, he actually, he even believes that rabbits are underrated pets. And I don't know if we'll actually see eye to eye on that one. Who knows? Maybe, Noah, you can convince us. But thank you for joining us today on the podcast.
- [02:59]
Noah Smith
Hey, great to be here. Thanks for having me on.
- [03:01]
Joel
We're glad to have, you know, first question we ask everyone who comes on the show is, what do you like to splurge on? Because I'm sure you're being smart, you're saving, you're being thoughtful about money for your future. Uh, what do you like to splurge on in the here and now, though, besides maybe rabbit food?
- [03:15]
Noah Smith
Splurge on? I don't really splurge anything. Psychotherapy, I guess.
- [03:18]
Joel
Okay.
- [03:19]
Noah Smith
Yeah.
- [03:19]
Joel
All right. Never heard that one before. But I like that.
- [03:21]
Noah Smith
I just, you know, I spend almost nothing. I have like a, you know, over an 80% savings rate.
- [03:27]
Matt
Holy cow.
- [03:27]
Noah Smith
Yeah.
- [03:28]
Joel
Are you part of the fire movement, Noah?
- [03:29]
Noah Smith
No, no, no. I'm already retired. Like, this is. This is retirement. This is my hobby. I'm just, you know, yes, I'm making much more than I made when I was a working person. But, you know, it's. It's. If I. If I called myself retired tomorrow, I would be doing the exact same thing I am now. And so I essentially retired. I have fired. I don't have enough, you know, assets to do that. Like, I'm not.
- [03:58]
Matt
Well, it's fascinating that we can talk.
- [03:59]
Noah Smith
About my personal finance that you continue.
- [04:00]
Matt
To do, like, what you've done before because you used to be over at Bloomberg. And just let's talk about media for a quick second because you're over on Substack writing. We've seen a lot of folks do this over time where they're leaving some of these more legacy mainstream media outlets. How does that work? Can you talk to us about, I guess, quasi making a living writing content over on Substack?
- [04:20]
Noah Smith
Sure, absolutely. Well, so the key to Substack is email distribution. People get your newsletter in their email inbox every day, and so you don't have to worry about promoting each post on social media or having people have you in their RSS feeds or however else people get distribution. Email turns out to be just the distribution method for blogs. Some people click on the link and read it in their web browser. Some people just read it in line in their emails, et cetera. And some people read it in Substack app and there's all these ways to read it but it turns out that email is just the killer app. And so that's how blogs work now. And so Substack is really bringing back the blogosphere. I paywall one out of three posts, which means that two out of three are free to read. And so only 5% of my audience is paid, which means that, yeah, most of the people who are only reading the 2 out of 3 free posts, I could paywall a lot more and I could probably extract a lot more income in the short term from people who read my blog. However, I've chosen not to do this because A, I care about reach and B, I care about long term growth for the unpaid audience.
- [05:31]
Joel
And it's interesting, I feel like some players from legacy media you used to write for legacy media are kind of moving over to substack. I don't know if Paul Krugman is retiring or if he's like, I think I can make more money on Substack.
- [05:43]
Noah Smith
He's not charging and he doesn't plan to charge.
- [05:44]
Joel
Oh, really? Okay. I think it's fascinating for fun when you think about some of the personalities that have, what was it Jennifer Rubenstein from the Washington Post who left and immediately had hundreds of thousands of subscribers. Is that going to happen more and more where people who built up sort of a readership in the legacy media, they're going to switch over and do their own thing?
- [06:05]
Noah Smith
Well, yes, absolutely. Basically, legacy print media combines two things that didn't need to be combined. And this is a post I'm going to write soon because every year I write one sort of navel gazing post about the media industry or how to write a substack or something like that. I limit myself to one a year. Basically how I write or something like that.
- [06:27]
Joel
I don't want to get how the sausage gets made.
- [06:30]
Noah Smith
Yeah, I don't want to write too much about that, too much navel gazing. But I do that once a year. And so my one this year is going to be how the basically mainstream or legacy print media combined news reporting and analysis, which we decided to call op ed writing. And so actually those are two different enough things where the process for producing them is very different. Process for producing them, well, is very different. And unfortunately, you talk to almost any person who edits op ed pieces and they came from newsroom editing and they apply very similar techniques to editing op ed writers as they do to editing journalists and reporters. And the idea that many people even think of op ed writers as journalists and in fact, many, some op ed writers even were reporters before they switched to op ed writing. But in actuality, they're two extremely different skills. Reporting requires you to go cultivate sources, to sift through primary information and to tell truth from falsehood in a very narrow category of the world. Whereas analysis or op ed writing requires you to draw a whole bunch of threads and read very broadly and synthesize using sort of an analytical base such as economics or sociology or history or something to kind of analyze these events. And so it's just two extremely different techniques. Also, op ed writing employs voice, which reporting should not. That's a stylistic thing. But when you, for example, take Matt Levine, he has this famous voice, this sort of like, sort of droll sigh with which he talks about the finance world. And it's wonderful, it's a wonderful voice, but it's not the same as reporting. And now op ed writers who are actually just analysts, they, you know, similar to like a stock analyst or a CIA analyst, op ed writers are realizing that they can be free of editorial constraints, use their own voice, also use their own form factors for analysis. Because for analysis, op ed writing, the appropriate form factor is wildly divergent between topics and between people. And so you can have one person who writes 7,000 word posts with like a million, you know, references to scientific papers, you can have another person who writes like short, punchy, like very dramatically written essays, and you can have all these different kinds of things. And yet at these legacy media places, all the editors are editing the op ed writers as if they're all just basically reporters who are allowed to express opinions, which is an incredibly stultifying, narrow, confining vision for what op ed writing can be.
- [09:08]
Joel
Substack.
- [09:08]
Noah Smith
The reason substack is exceeding is not just individualized email distribution, although, I mean, that's part of it, but mostly it is that it has freed op ed writers, analysts to find their own voice and to use to explore the full potential of the medium.
- [09:26]
Matt
That makes so much sense. Yeah, as opposed to an editor trying to edit down all these different writers to the singular cohesive voice as to what that publication is trying to achieve.
- [09:36]
Noah Smith
Right, and that voice inevitably sounds like the voice of a reporter too. Yeah.
- [09:39]
Matt
Fascinating. Well, I wasn't expecting for us to talk about media. That'll be it though. We'll keep it siloed. We Man, I appreciate that you attempt to stay apolitical as much as possible while you are talking about the economic impacts of political choices. You like to stick to the facts, but how would you describe your overall perspective or your overall philosophy on economics? Like, who have you been influenced the most when it comes to how you approach the different economic ideas that you write about?
- [10:07]
Noah Smith
So it's interesting because I'm pretty eclectic, I think. You know, politically I'm a center left type. Politically I'm like an Obama, Clinton liberal. And I didn't shift strongly to the left in the 2010s, and I'm not shifting very strongly to the right now. I'm just sort of where I was in 2005. My basic politics have not shifted very much. But in terms of what economic approaches I endorse, well, that's always evolving because I learn so much more all the time. But I've never been sort of as, I guess, neoliberal as the other people on the center left tend to be. So if you read Jason Furman's article in Foreign Affairs Today, the post neoliberal delusion, he says some things that I think are very wrong, but then some things that are very right. And so I think that overall I describe myself as an industrialist. I think that we need to intentionally build back up manufacturing and some other high tech industries in America for strategic reasons, for just good economic health in various ways. I think this is a lot more possible to do than people believe. But at the same time, I'm more in favor of trade with poor countries and with other countries than most of the industrialists. And I'm much more skeptical of NEPA permitting laws and unions too. I've nuanced and skeptical views on unions, which sometimes I like, but sometimes I don't like. And so I think that there's no easy way to pigeonhole my economic viewpoint. And until I just write a big book explaining it, I think that I'm gonna always be keeping people guessing as to what I really support because there's no easy word or name to put to my ideology. So basically it's Noahism, which is a cobbled together thing. And so I really just. But before I do that, I'm gonna write a book like your Easy Guide to Macroeconomics. And that's my next book I'm going to write that'll hopefully get done this year and then maybe the next year I'll write a book like, you know, Noah Smith's Total Philosophy of the Economy. And that book will completely destroy and eat my life because I'll be going out on a limb in so many ways that I'll be a perfectionist about it and just do exhaustive research and just argue with the, you know, all these different people who disagree with me. In a million different ways. And I'll become, you know, super depressed and end up as like a hermit living in the fall.
- [12:32]
Joel
Well, I mean, I hope you do.
- [12:34]
Matt
It though, because I want to read.
- [12:35]
Joel
That, but I hope you survive mentally during that project.
- [12:38]
Noah Smith
I'll do what I can.
- [12:39]
Joel
Well, I think that's, that's actually part of what I love about what you write. I don't know what you're going to say before you say it. And there are a lot of people, opinion writers in particular, the op ed pages, and you're like, oh, it's that author. Well, I know what their opinion is going to be. And so yeah, the nuance I think is a part of your success on this podcast. No, we typically talk about personal finance, but macroeconomics policy, they impact all of us as individuals. Like there's, there are direct connections between some of the things that happen, let's say in Washington D.C. in our day to day lives, and maybe less than some people assume. But how do you see the relationship between like big picture shifts that are happening, macroeconomic stuff, and then the individual reality that we all face as Americans and as consumers?
- [13:18]
Noah Smith
That's a really good question because when you look at surveys, you see that people say that the macroeconomic environment is doing terrible and then they say their personal finances are doing great and their city and state are doing pretty good. And the farther you get from you and your own circumstances, the worse people say things are doing. I interpret this to mean that people's ideas about culture and the negativity they see in the media about American culture and politics and stuff like that is bleeding into their assessments of the economy. And especially one data point in my favor is that you see huge partisan shifts here. So then as soon as a Republican gets elected president, the Democrats assessment of the economy just drops off a cliff and the Republican assessments of the economy soars into the stratosphere and the overall numbers don't stay, that don't change much.
- [14:01]
Joel
And that's like literally overnight.
- [14:03]
Noah Smith
Literally overnight. Literally overnight.
- [14:04]
Matt
What indicators, no, are you paying attention to that you think actually will have an impact on individual savers or investors? Just the typical person that's out there. I'm curious, like which sort of numbers or metrics are you keeping an eye on?
- [14:20]
Noah Smith
Yeah, keep an eye on first and foremost, the five year break even inflation expectations rate. That number has proven to. It moves around less than actual inflation, which is good for a forecast. You don't want to forecast to move as much as the real thing. Like if you saw Weather forecasters predict like, you know, frigid cold and searing heat one day after another. You'd be like, this weather forecaster needs to do fewer drugs. So then you want to, you want a forecast that's a little mild in its predictions. You want like, you know, when there's a heat wave or a cold snap, you always want the weather forecaster to be a little bit surprised. So inflation expectations have done a good job of forecasting inflation. So you want to pay attention to that five year break even because that, that gives a sense of people's expectations of inflation once you include Fed policy. So when the five year break even rises, what that means is people expect inflationary pressures to rise and for the Fed to accommodate that instead of raising interest rates to force inflation back down. So then if people expect that, they're going to behave as if it's true, which turns into a self fulfilling prophecy because they want to raise prices ahead of everybody else. And so you get a scramble to raise prices. So when you saw inflation go to like 8% for half a year or a year or however long it did in the post pandemic inflation, which was pretty severe, when you saw that happen, you saw the five year break even rise to 4%, 3.5 to 4%. And so it was a much lower swing. But it basically meant that people thought that the Fed was losing control of inflation or voluntarily giving up control. And that was what that rise in expectations is what actually alarmed the Fed into acting. And so that's a thing I would really, if you want to see when inflation is going to return, keep an eye on the five year break even. And then, you know, the other thing I always keep an eye on is the prime age employment to population ratio. Basically American adults age 25 through 54, how many of them are working? So most employment numbers sort of depend on some statistical sleight of hand in terms of who calls themselves in the labor force, who claims that they're looking for work. So the unemployment rate and the labor force participation rate are both contaminated by this statistical weirdness of do people say they're looking for work or not? Whereas the employment rate, also called the employment to population ratio, those are the same thing. The employment rate is not contaminated by this. So whether you have a job doesn't depend on whether you say you're looking for a job, right? Yeah, it's just whether you have a job. And so do you have a job or do you not have a job? And so you look at that and then you know the, of course there's like early retirements, which is affected by population aging. And then there's varying numbers. There's like rising and falling school enrollment and things like that. And so those things affect people under 25 and over 54. But then if you look at 25 through 54, you get a very clear picture of sort of the macroeconomic employment situation. Look at the employment rate of people age 25 through 54. That's called the prime age employment rate or the prime age employment to population ratio. So between that and the five year break even inflation rate, I think those are the two. If I'm just going to check how the macro economy is doing today. Those are the first two numbers I look at.
- [17:36]
Joel
You just mentioned inflation for a second. I'm curious. Let's talk about tariffs for a second. How do you think it's like the tariffs that would have been, that weren't. That kind of were. And it just feels like the seesaw kind of when it comes to will they or won't they? What's going to happen with tariffs? They get punted by a month. And, and so I'm curious to hear what you think is going to happen there. But also how is that going to impact inflation? I feel like it's commonly been understood from an economic perspective that tariffs will lead to higher prices for the end user, for the end consumer, for all Americans. But I don't know, it feels like maybe some of that line of thinking has shifted recently too.
- [18:14]
Noah Smith
That's fair. Yeah. So I think the actual tariffs we get will be much less than the tariffs that Trump initially announces almost every time. But that doesn't mean we're not going to get any tariffs. First of all, we are going to get some tariffs and I don't know where they'll end up being. Basically, Trump, I think, is guided by the stock market and whichever tariffs tank the stock market least or the tariffs Trump will keep. But I think that. But also because Trump doesn't really have an idea of a counterfactual, it means that the more the stock market rises for unrelated reasons, like optimism about AI I don't know, whatever. The more it rises for unrelated reasons, the more tariffs will get because that will make Trump think stuff's doing okay, stock market's doing okay, therefore it's okay to just put some more tariffs up.
- [19:00]
Joel
Because he thinks he influences everything.
- [19:02]
Noah Smith
Right. Or at least, you know, maybe he thinks that, or maybe he just thinks that a rising stock market will provide cover for the, for the tariff. So it's so it's really, you know, but I think that basically you see that when the stock market falls, Trump backs off pretty consistently, even if it only falls 1%. You know, it's like, I know stocks go up, stocks go down, but then if you've got a good run of stocks and Trump is, like, feeling good and, you know. Yeah. So I think that's my basic assessment, but I think that. So you're going to get some tariffs. I don't know how much you got some during Trump's first term. And ultimately, the effect was not very big because the United States dollar appreciated, the Chinese yuan depreciated, China rerouted some of its exports to Vietnam, and really, the tariffs didn't do a lot, whereas. So targeted tariffs do a lot. You can block specific Chinese products, but changing trade deficits through tariffs is extremely hard to do. And you basically have to raise tariffs so high that it starts breaking something in the economy, which will also entail stock market crash. So I don't think Trump is going to actually change the trade balance through tariffs at all, because he's going to back off of anything severe enough to actually do that. You see what I mean?
- [20:11]
Matt
Yeah, yeah. So do you think it's more just kind of, I guess, posturing and sort of the narrative of him being President of the United States that is also dictating how much he's sticking to his guns when it comes to some of these different tariffs?
- [20:23]
Noah Smith
Yes. But I also think that the main effect of these tariff threats is going to be policy uncertainty, and policy uncertainty hurts investment, and I think it's going to slow down the economy a bit because factory owners are not going to know where to build their factories, so they're going to hold off.
- [20:39]
Joel
Uncertainty for businesses is typically the worst word. Right.
- [20:43]
Noah Smith
So Trump is creating chaos. He's creating uncertainty. It's bad for business. There's tailwinds for business, but then there's, you know, Trump is creating headwinds for business, and the more he instantly backs off, the less the headwinds will be because the more businesses will conclude, okay, this is all just blowing smoke. Right. At the beginning of a president's term, you think that everything might change, but by two years in, you kind of know that, like, whether or not he's going to break stuff, especially because Democrats will probably gain in the midterms. Yeah. So basically, I think that if Trump keeps announcing tariffs and then canceling them the next day, that will create some reassurance that will mitigate the effect of policy uncertainty.
- [21:21]
Joel
Yeah. It also at some point starts to feel like a bluff if you're in another country, like, oh, the thing you said you were going to do, you never. And at some point you have to follow through to make other countries or, you know, other peers feel like you're actually going to do something along lines.
- [21:34]
Noah Smith
It's primarily power posturing, I think.
- [21:36]
Matt
Yeah, well, I mean, do you think, I mean is the geopolitical positioning and posturing, is it worth like in the long term? Right. Because it seems like, like what we're talking about right now is I guess the pain that the US Consumer might experience in the short term. Do you think that near term pain is worth the long term overall health of the country?
- [21:55]
Joel
Sort of protectionist instinct, right?
- [21:57]
Matt
Is that, is that a healthy direction for us to go?
- [21:59]
Noah Smith
So I, I mean, so I basically just what I think is that tariffs are helpful, can be helpful for that, but they won't get there on their own. What you need is industrial policy. Biden actually got it right. So targeted tariffs with targeted industrial policies is the way we re industrialize. And that does work. Simply throwing up tariffs on all imported goods does not work. It's just, it is not a thing that works economically. So you can say is, you know, if I like stick my face on this hot pan, is it worth the long term gains of becoming a Pegasus? And unfortunately, sticking your face on hot pan will not turn you into a Pegasus.
- [22:38]
Joel
If it did though.
- [22:40]
Noah Smith
If it did. If it did. So you're saying there's a chance. So that's the situation we are here. Tariffs on a large number of goods from a large number of countries will not re industrialize America. It will in fact hurt American industry.
- [22:55]
Joel
What is your take right now on? I mean, let's maybe pivot talking about government debt and doge the national debt. The national deficit has been growing like gangbusters and it hasn't mattered really who's in charge. Even the party for a while that talked about cutting government spending never seemed to get around to actually doing it. But how much has government spending played a role in, in the inflation that we've seen? I know it was a lot of supply chain induced issues from COVID but yeah, do you think government spending also plays a role in that? And how much of an actual issue is our country's massive debt load?
- [23:29]
Noah Smith
It's a big issue. In fact, it's a big problem. We need to cut spending and raise taxes. Unfortunately, the amount of spending that Trump will end up cutting is probably relatively modest. And the amount of Tax cuts that Trump is planning is relatively large. So Trump is on track to raise the deficit, increase the deficit instead of decreasing it. That's an important thing to understand, and that is inflationary. Elon Musk is right when he says that deficits are inflationary, because deficits carry the implication that down the road, the Fed is going to have to keep interest rates lower in order to support that interest costs on the debt and that lower interest rates are inflationary. So deficits are absolutely inflationary. And so Trump's planned tax cuts, which I'm sure Congressional Republicans will support, are inflationary, and they will expand the debt, and they will outweigh whatever spending cuts Doge can accomplish. If you look at the actual numbers of amount of spending that Doge might be able to accomplish, even if it stretches the bounds of the law quite a bit, is actually relatively modest compared to the size of the tax cuts Trump has planned.
- [24:37]
Matt
So what you're saying is that Doge isn't really going to be able to do. Truly. What needs to be cut back on are the untouchable spending items that no politician is really willing to even this administration, to tackle at all, the entitlement spending. So you don't foresee there being much progress being made?
- [24:55]
Noah Smith
I mean, those are an issue. That's right. But we have two budget problems in America. The first budget problem is that our population growth has slowed so much that we're unable to support the Social Security and Medicare systems at the same level. We've become accustomed to and are going to have to either cut benefits or massively increase immigration. So that's the first problem. This problem actually hasn't started to bite much yet because aging hasn't hit us as hard as it's going to hit us. So that's a problem, actually, for the future. The current debt problem is that we have not raised taxes to support the size of the welfare state that we have. And so we can either cut welfare spending, which is called Medicaid, or we can. And other health programs. Our welfare is mostly our welfare state. A lot of it is through health, you know, healthcare, paying for often overpriced healthcare for Americans. So we can either cut welfare, we can raise taxes, but we can't just get away without doing either one of those. Military spending has been, like, really cut to the bone a lot. There's not much more gains there, especially with the international military environment getting more dangerous every day. So we can. So basically, we can either slash Medicaid, or we can raise taxes, or we can do Some and Medicaid plus, you know, other health programs that we do that are fundamentally redistributionary. So for the Medicare and Medicaid have similar names, but they're not similar programs. They both provide health insurance, you know, through the government. But they're very different kind of programs. Medicare is for old people. Medicaid is for poor people. So with Medicare, you basically, it's what's called social insurance. You pay into the system and then if you happen to be a person who gets more sick when you're old, you withdraw more than you paid in. Whereas if you happen to be someone who didn't get sick, you put in more than you withdraw. So that's called insurance. And when you force everyone in society to do it, it's called social insurance. Medicaid is a welfare program for poor people to give them health care where we tax everybody, the middle class, the rich, etc. And we use that tax money to give health care specifically to poor people. And almost no one in the country, you know, most of the people in the country will never see any benefits from Medicaid. It's pure redistribution essentially. And so it's redistribution in kind. I would favor abolishing Medicaid and replacing it with cash benefits. Just mail checks to poor people. It would be much more efficient. We're probably not going to do it. The genius of Medicaid was that they gave it a name similar to Medicare. People like social insurance, they don't necessarily like welfare and redistribution. But we named our biggest welfare program something that sounded very similar, you know, sound wise to our biggest social insurance program. And so because people like Medicare, it's very hard to cut Medicaid because people hear that and they think you're cutting Medicare care.
- [27:47]
Joel
Tricky, tricky naming conventions.
- [27:48]
Noah Smith
Very good trick there.
- [27:49]
Matt
No? All right. You mentioned some of the future problems that we might be or that we will be facing in the future, specifically about when it comes to funding Social Security. So we'll get to maybe ways around that and more right after this. This episode is brought to you by Navy Federal Credit Union. At Navy Federal, their mission is to help members of the military, veterans and their families achieve their financial goals. That's why they offer great savings and investing options like certificates. Certificates come with sky high rates and some even have the flexibility to add money anytime during your term.
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Joel
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- [30:01]
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- [30:35]
Joel
All right, we're back at the break. We're still talking with Noah Smith, talking about macroeconomics and kind of what's happening around us, especially as there's a lot changing. No, you. You literally just hit on this right before the break, too. That another economic problem that's coming down the pike is the declining birth rate. And I feel like this is getting more attention and we're seeing it more starkly in other countries, too, countries like Japan. What impact is that having there? What impact is that going to have here? And how do we combat something as kind of existential as not producing Enough humans.
- [31:07]
Noah Smith
Do you want bad news first?
- [31:08]
Joel
Yeah, yeah, start there.
- [31:09]
Noah Smith
All right. The bad news is we have absolutely no idea how to combat this. And it is a big economic problem, for reasons I'll explain. But many countries have tried doing pro natal policies. They've tried doing policies to get people to have more kids. Absolutely none of those have moved the needle. You've seen a very small effect of very large cash payouts. Like, if you basically give everyone, like free daycare and a bunch of money to have kids, you'll have a few more kids on the margin, but it's not nearly of the size. So we're talking. Countries basically are at like 1.5, 1.6. They measure it in children per women. Sorry, maybe that's sexist, but that's how they measure it. That's total fertility. You need about 2 to 2.1 to sustain population at a constant level. Because if you think about it, every couple has to have two kids to replace themselves, right?
- [32:01]
Joel
Yeah.
- [32:02]
Noah Smith
And so you need to have 2 to 2.1 to replace yourself. That's called the replacement rate. Most rich countries are converging on 1.6, 1.5 or even lower. Some countries have lower. So we need policies that increase fertility by 0.5 to 0.7 children per woman. And when you do surveys that ask people, how many children would you like to have? You see, almost everyone says that they'd like to have. So not almost everyone. The Average is over 2. It's like, you know, 2.3, 2.4. In other words, people, at least notionally, at least, they say to surveys that they want to have about the number of kids that would lead to population stability or even a little higher. So that has a lot of people think that if you just make people able to have that many kids, and they will, but it's possible people are just lying on the survey or just don't understand themselves very well and don't understand what they really want, et cetera, and don't really want that many kids. And so that's a possibility. They just sort of say that because that's what their mom would like to hear them say anyway. But then. So we need policies that will raise the fertility rate by 0.5 to 0.7 children per woman. And we don't have those. We have policies that will raise the fertility rate by 0.1 child per woman. And while that's not nothing, it's also quite expensive, involves a lot of welfare payments to poor people and, you know, higher taxes and stuff like that it's pretty expensive and it's, you know, and the effect is very small. So no one has discovered a way to fight this problem. We do not know how to do it yet. So it's currently a giant unsolved problem. Now the question is, why is it a problem? The first and most obvious reason is because when you have population aging, you have a whole bunch of retired people that you have to take care of. The old age dependency ratio just goes up and up and up. There's two ways to take care of old people. Either you can do it yourself at home, or you can pay a nursing home to take care of them, or assisted living center, whatever thing, home care workers, whatever, you can pay for it, or you can do it yourself. You can take care of grandma at home. But somehow the old people have to be taken care of. Old people can't really work. And so you can push up the retirement age to. You can push it up from 65 to 72. But after that, people become really unproductive really fast. So really you have all these retirees, and then we have a much larger ratio of retirees to workers. So Japan has only two workers per retiree. Now, that's really, really severe. And that means that it's a world of toil for workers. Because imagine having to support you + 0.5 other people when you work. That's. That's just a huge burden. And the burden comes either through taxes or through the hours you have to spend doing elder care, which they do a lot of in Japan. And, and so that's. The people focus on the idea of population shrinking, when in fact this is from population aging. This is from the change in the age structure of the population. Old people become a higher percentage.
- [35:03]
Matt
Okay, so you just shared with us the bad news. No, what's the. Is there any good news when it comes to the population shift that we're.
- [35:09]
Noah Smith
Oh, no, there's no good news.
- [35:11]
Matt
I was waiting for this.
- [35:12]
Noah Smith
I was like, there's more bad news. There's more bad news.
- [35:15]
Joel
Oh, good.
- [35:15]
Noah Smith
So in a. So the way you sustain living standards in the face of collapsing population is to raise productivity. However, unfortunately, we have pretty good evidence that an aging population reduces productivity growth, having older people. So one reason could be that old people start managing the companies, and the companies aren't as able to hop on new technologies, new business models. They're not as inventive, not as creative. Old people just are sort of can't teach an old dog new tricks kind of thing. That may be why there's other possible reasons why. But having more young people is associated with higher productivity growth. So fewer young people, less productivity growth at the time when productivity growth is exactly what you need to balance out the effect of aging. More old people means fewer young scientists to discover your next big technological productivity increasing innovations. And so that's something that Chad Jones, the economist, has talked a lot about.
- [36:10]
Matt
Well, what about immigration? You quickly touched on this earlier, but I mean, obviously that debate's pretty fraught right now. But do you think the US Just needs some more common sense immigration policy reform for.
- [36:22]
Noah Smith
That's right, yeah. Well, yeah. So the United States has this special ability to do skilled immigration. Right. We can get not just the world's top few best and brightest, but also just like very large masses of like people with college degrees who are like pretty good at doing, you know, standard middle class jobs. We can do that. We can do that. Right. Unfortunately, we're in the middle of this Trump spasm of just anti immigration feelings. So you've seen on the right this rise in anti Indianism. Right. Anti Indian immigration specifically. Like all these rightists are just like screaming about Indian immigrants and how bad they are. But India is a country of 1.4 billion people and that can help solve our population crisis in the short term. It's not going to fully solve it and it's not going to be. It's not going to solve it in long term because India is getting richer. People aren't going to want to come like 30 years from now. And also because like India has a lot fewer kids now. So India is not going to have nearly as many people to send to us of high qualifications, like right now. So we're in this sort of golden age of this potential bonanza of Indian immigration. And we're not taking it, we're resisting it partly because the MAGA movement has decided that they don't like Indians and it sucks for America.
- [37:31]
Joel
But you think smart immigration policy could help correct a lot of the issues that we have when it comes to kind of demographics?
- [37:39]
Noah Smith
Yes, absolutely. It will ameliorate them in the next 30 years. But then after 30 years, we're in trouble because fertility rates falling everywhere. Even like Africa is sort of the last bastion of high fertility rates. Like Africa, like sub Saharan Africa has like 4.2 kids per woman. I want to say 4.2 sounds like a lot.
- [37:58]
Joel
Right?
- [37:58]
Noah Smith
I mean, like, for us that would be a ton, but that's down from six in just a few years.
- [38:04]
Matt
Wow.
- [38:05]
Noah Smith
So, yeah. So sub Saharan Africa will be at replacement fertility relatively soon. Things are just continuing to plummet. There's a few countries, there's like, I think six countries where the fertility rates are still pretty high and are coming down only slowly. And those countries are going to be sustaining the population of the rest of Africa. So, you know, you're talking about like Niger, Somalia, Central African Republic and other places that normal people may even have never heard of. And you've got these, Democratic Republic of the Congo is another one. And you've got six of these guys. And Democratic Republic of the Congo has more than half the population, I think, of the combined six. So basically you're going to have, you're back to the cradle of humanity, sustaining the rest of humanity for a while. But even their fertility rates are falling. And as those countries get more stable, fertility rates will fall more. So even those countries will not be able to sustain humanity. All of humanity is trapped in this low fertility cycle and we don't know how to solve it yet.
- [39:10]
Joel
While we're talking about depressing stuff, let's talk about health care for a second. Maybe just a bastion of hope. I think on that front, I feel like there's been this recent kind of spotlight on the health insurance system after the, the shooting of the UnitedHealthcare CEO. And you kind of, you actually took that topic head on. You wrote about why the insurance companies aren't to blame, although there is, I think, a lot of loathing about insurance companies from the American public. Can you explain, like, what's going on in US Health care and why we pay like so much more than the rest of the world for what we get?
- [39:45]
Noah Smith
Right. So there's a number of reasons why we pay more. One is because we are richer. So of course richer people will spend more in health care. But even once you control for that, we pay a lot more as a percentage of our GDP than other countries. So there's part of it, that part of our excess costs that you can't really explain with that unless you assume that as people get richer, they spend an exponentially increasing percentage of their income in health care, which would mean that by the time people get to about $100,000 of income per year, they're spending all of their money on health care, which is obviously counterfactual. We know that rich people in America don't spend all their money on health care. So I will say that I spend more money in health care than I used to, but it's one of the only things I'll splurge on a little bit, but honestly, not even that much. So yeah, so basically there's this unexplained portion of costs and part of it is because our insurance industry is so fragmented that insurers can't push back on high prices by providers. So when you go to the hospital pillows costing $2,500 or like an MRI that I got at UCSF cost the insurance company $10,000, when at Simon Med Imaging it would have cost $1,000. So you've got a 10x cost difference there for an MRI. Now the UCSF will farm it out to a radiologist for an instant report. And that radiologist is good, but that's not worth a 10x cost difference. Right. And so I don't think it is. And so basically insurers can't push back on high provider prices. And so insurers basically in America act as pass throughs. They're these incredibly low profit, low margin businesses and everybody hates them, hates them, hates them. Because that's the part of the health care system that you deal with on a daily basis. That's the part of the health care system that you're, they're the people who are paid to deliver you the bad news of like, oops, your coverage was denied on this thing, or like, here's how much your deductible is, right? Your health insurer is who tells you how much to pay. And so you hate it because that's the part of the healthcare system that you interact with. However, ultimately these are low profit margin businesses that are passing through costs from the providers. And when I say providers, I mean hospitals, I mean doctors, I mean the equipment providers, I mean the pharma companies. You know, those are all the providers, those are the people actually give you the care, care. And we have this weird interaction where you go in and the pharmacist is like, here's your drugs. And then I guess they do make you pay a copay at the window. But then the doctor's like, here's your care, I'm just caring for you. And it feels like you're in Cuba in a social system that just wants to wrap you in its loving arms and take care of you. And of course that same hospital is the one sending your insurer a giant bill, which your insurer then struggles to pay. And your insurer has to figure out how to pass as much of the cost on as possible to you or else they just go bust because they're such a low margin, low profit business. And so our interactions with the health care system we have negative interactions with the part that's not making much profit and positive interactions with the people who are making all the profits.
- [42:55]
Joel
Do you think if our health insurance functioned a little bit more like car or home insurance, where that we would be more price sensitive to the care that we're receiving? I think about filing a homeowner insurance claim that the average person files a claim maybe two times in their life if they own a home for a few decades, and yet we're interacting with our health coverage all the time in order to Instead take that $150, $200 price of an appointment with the doctor down to a $25 or $30 copay. That insurance is costly. It's just. Is this friction involved with every single element of health care? If it was just involved less, especially in some of those less expensive healthcare endeavors, would that help, I don't know, fix the system, at least to a certain degree?
- [43:40]
Noah Smith
So the short answer is no. Much of what you pay insurance for is not actually insurance, as you noted. So, for example, you have a yearly checkup with the doctor. That's not a risk, that's something you know you're going to need, right? And so yet the insurer is the sort of the designated person who pays for that. And you pay your insurer premium so that really there is a little bit of administrative cost for that. Right? So some paper pusher or Excel jockey has to say, like, okay, you went to your yearly checkup, here's how much we pay for your yearly checkup, blah, blah, blah. It's extremely low cost actually to pass through those regular expenses. And then there's chronic expenses. So you're a person who, you have the chronic back problem and you just keep going in again and again and you don't know exactly how much you're going to need to go in. So there is some risk there. But then essentially that is actually taken care of. So that actually is a risk. It's just like when you start having that chronic problem, that's when the risk sort of realizes, that's when the risk sort of manifests. And so in that sense, it really does act like insurance. Even though once you've got those chronic injuries, then after that it looks very predictable. But then before the chronic injuries, it's the risk of whether you'll develop a chronic injury or not. So honestly, switching to health insurance that looks like true insurance would save us a little bit of money, but not a ton. Gotcha. And if you look at the countries that do health insurance cheaply, that's not what any of them looks like we're talking about.
- [45:06]
Matt
I guess a lot of negatives kind of touched on the bad news here. And Noah, you mentioned just how individuals, like, on a personal level, they think things are going pretty well. You back that out a little bit to the state, it's fine. As a country, it seems like that we're doing pretty poorly, but compared to the rest of the world, we're actually doing pretty great. Like, what do you think is causing that disconnect between individuals perception of how we're doing as a country versus how it actually is?
- [45:29]
Noah Smith
Well, okay, so first of all, I don't think we're doing badly as a country. I think the debt is a huge problem. Healthcare costs are big. But there is good news about healthcare, which is that healthcare cost growth has slowed hell of a lot. Healthcare costs are no longer increasing as a fraction of gdp. That is huge. And that will take a lot of pressure off the budget deficit. That will take a lot of pressure off people's pocketbooks and wages. And so that's a piece of good news that's not commonly appreciated, but it's true. So there's some good news for you.
- [46:01]
Joel
I appreciate that. Finally, a little bit.
- [46:03]
Matt
We got there a little bit of a silver lining. Yeah.
- [46:07]
Noah Smith
Here's some great news about the American economy. Productivity in America is increasing at a fairly rapid clip. Productivity is the underlying generator of economic wealth. You grow productivity fast, you grow your wealth. That's it. That's how it works. And we've been having pretty high productivity growth historically much higher than the rest of the world. So, like Japan, Korea, Europe, uk, even Australia and Canada. I guess Australia's productivity has been growing a bit, but Canada, those places have been seeing a productivity stagnation while America has been seeing productivity growth. Why is that true? We don't know. But as best we can tell, our economy is more dynamic. We allow a lot more labor reallocation. People are able to quit their job and get a different, better job and move around. Remote work is part of this. And so that labor reallocation has been a big boon for America in ways that it has not been for other countries where labor markets are pretty rigid and people don't shift jobs very much. So America, almost uniquely among rich countries, not uniquely, but almost uniquely, has had tons of labor reallocation and also a lot of entrepreneurship. So what you saw after the pandemic was tons and tons and tons of people started small businesses in America, especially Latinos, disproportionately Latinos are finally starting a lot of small businesses. And so you're seeing this and this is not. But you also did see a boom in high tech entrepreneurship. So a lot more people are doing tech companies which will provide a lot of growth, especially for the stock market, blah, blah, when some of those succeed. But at the grassroots ground level of Main street, you see a ton of people starting small businesses. And this is absolutely great. This is great for dynamism in terms of value added growth. It's high tech startups that provide most of the value added growth over time. But in terms of the actual employment, it's small businesses that employ most of the people. And so I think that you're seeing a lot of these small businesses start and reallocating labor, people moving job to job, all this stuff. This is a lot of dynamism. So America is doing really well at this. Obviously we've got technology on our side too. I think AI is going to be a big deal that will help us a lot. And I think batteries are a big deal that will help us a lot. Batteries and solar and cheap solar energy. Batteries, cheap solar and AI go together really well. Also medical stuff like, you know, MRNA and synthetic biology, CRISPR and all that stuff. That's important too. But I think that the biggest gains will come from those that, that trio of technologies, AI, solar and batteries. The triple technological revolution of our times.
- [48:52]
Joel
Yeah. In your bio you call yourself a techno optimist. So do you think that like technology is a major solution to some of the problems that we face? Is that why maybe you see bright spots ahead?
- [49:05]
Noah Smith
Yeah. So I think America's underlying fundamental economy is strong. I don't think Trumpian policy uncertainty can break it. I think that the debt is a big threat, especially in terms of inflation. I think that it will be painful if and when we cut welfare spending, which we're going to do. And it'll probably be Medicaid that we cut. It will be painful if and when we raise taxes, which we will, and it will probably be middle class taxes that go up. And so I think that those things will be painful, but I think our underlying strength of our economy is strong. We're a very rich country. We're doing better than other rich countries. Even China now has economically stumbled. I think we've got not the brightest people running the country right now, but I think that, you know, that's on us.
- [49:51]
Matt
All right, well, I feel like we've talked a lot about our struggles here stateside, but we're going to take a quick break. And then after that, Noah, we're going to ask you perhaps about another country that seems like that they have been struggling but maybe have turned things around. We'll get to that right after this. This episode is brought to you by Navy Federal Credit Union. At Navy Federal, their mission is to help members of the military, veterans and their famil achieve their financial goals. That's why they offer great savings and investing options like certificates. Certificates come with sky high rates and some even have the flexibility to add money anytime during your term.
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Joel
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- [51:36]
Joel
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- [51:42]
Matt
A bolo. Yeah, you heard him right.
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Joel
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- [52:04]
Matt
That's right. And Joel, the Indochino process was totally legit. We're talking about a customized suit made to order for you. We both went in store, we got measured which was, dude, it was a really cool process. This was totally new for me. But it makes so much sense now. I'm wondering, like, maybe all my clothes should be custom fitted as opposed to something that's pre made off the rack. Now I've got a great looking suit with all the accents and customized details that I picked out. Look like a million bucks, but at a fraction of the cost. I was able to pick out a super high quality fabric. And it's no surprise that Indochino, that they work with fabrics from some of the best mills in the world. You get these European fabrics for an incredible price.
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- [53:02]
Noah Smith
All right, we're back.
- [53:03]
Joel
We're still talking with Noah Smith. And no, we're just obviously talking a lot about the United States, the country that we live in are impacted by. But you recently wrote about Javier Milei, the fairly new president of Argentina, and it's been really interesting to see kind of his economic gravitational pull. It seems to be, I don't know, impacting at least some of the western world. How do you think about and how would you maybe rate his efforts when it comes to turning around like a struggling Argentina economy? And like, what can we learn from that?
- [53:35]
Noah Smith
Well, I'm actually pleasantly surprised. I think even my sort of neoliberal, austerity minded, Argentinian friends like Martin Lusto, who's a senator there, were skeptical of Millet. He was a little, he was crazy. He was a wild man with crazy hair who had, you know, very sort of chainsaws. He's just like a goofy dude, right?
- [53:53]
Matt
And genetically cloned dogs.
- [53:55]
Noah Smith
Genetically cloned dogs. Just like grabbing his girlfriend's butt on camera, you know, all this stuff. He's just a silly guy and he's just like, we're aesthetically superior to the left, you know. That was a great interview. He's fun. But the idea was, oh, he's an idiot. Well, he wasn't. He wasn't an idiot. He was just flamboyant. And it turns out that his policies of working are much more effective than anyone had a right to think. Basically, Argentina is a country that tries to maintain a European style welfare state without a European style income to support. Support it. And Milei is cutting that. It's unsustainable. Milei is cutting that. But in doing that, he's actually making conditions better for a lot of people because growth is. Argentina had like a short, sharp Recession from his anti inflationary policies. And now, you know, like we did in the early 80s, now it's returning to growth and, you know, inflation's down, growth is up, people are, you know, Argentina is doing all right and it's not suffering. So the danger is if Argentina pegs their currency to the dollar to beat inflation, currency pegs in the long run can have bad consequences because then your currency gets overvalued, you tend to have this sudden big drop and like a currency crisis which brings inflation back and all this stuff. So he's got to make sure not to peg the Argentinian peso too high. And. But then, but then I think so far he's doing really surprisingly well.
- [55:26]
Matt
Cutting the fact that he cut back. Do you think that that's the big takeaway? Is that a lesson for the U.S. you know, we've already talked about just future spending on, you know, on our part over here in the US Is that the takeaway for us? Is that the lesson learned?
- [55:39]
Noah Smith
Yes. So I think that basically austerity combined with hard money carries some costs in the short term, but it does stop inflation. So if you've got increasing inflation, as we may soon have from Trump's policies, that's how you beat it. And it is painful. But he managed to get Argentinians to accept that short term pain.
- [56:02]
Joel
Yeah, he seemed to thread the needle. Noah, thank you so much for joining us today on the show, man. Where can our listeners find out more about you, what you're up to and find your substack.
- [56:10]
Noah Smith
Yeah, my substack is no opinion. That's N O A H, P I N I O N. Some people mistakenly put an O in the middle of it and say it's Noah opinion. And I don't understand why anyone does that because it doesn't make a good pun. It just silly.
- [56:26]
Matt
You lose it. Yeah, you lose it if you actually write opinion in there.
- [56:29]
Noah Smith
Yeah, it's no opinion. That's what it is. Anyway, so go to that substack and you can read all my little posty posts and then I'll. I'm working on a book about explaining macroeconomics in simple terms, in fun terms that regular people can understand.
- [56:47]
Matt
Very cool. We will keep an eye out for that. Noah Smith, thanks for talking to us.
- [56:52]
Noah Smith
Absolutely. Until next time. All right.
- [56:54]
Joel
Matt didn't end up talking about rabbits at all in that conversation.
- [56:57]
Matt
Oh, no, I was surprised.
- [56:58]
Joel
We should have brought it up. We did, but he didn't take the bait.
- [57:01]
Matt
You are the one. You've got more pets than I do. And you actually had a rabbit when you were younger, didn't you? I did.
- [57:06]
Joel
Named Skittles. It got really fat and didn't really move. So I did want to debate him on that topic a little bit because my rabbit was not a great pet. But. Yeah. What was your big takeaway from this.
- [57:17]
Matt
Combo that was not pet related? I'm going to have to go with. So we talked about the national debt and the growing deficit. Right. And ultimately, in the end, what Noah mentioned was that what it takes is going to. It's a combination of two things. Increased taxes, so higher amounts of money coming in or reduced spending. The different program programs that the government is shelling out on. And you know what, man? The same thing is true when it comes to our personal finances. And oftentimes we try to. I don't know if it's either a silver bullet or we're looking for a way to make it a little more fancy, but finding some sort of solution that's going to get us to whatever our goals are without the austere measures that are often necessary in order for us to. In order for folks to claw themselves out of debt. Like, specifically if they've got ridiculous amounts of credit card debt, it's like, man, what it's going to take is you spending much less than what you were spending or somehow for you to find a way to drastically increase your income. Maybe a little bit of both. Yeah. And typically it is a combination of both. But it's just a lot of times those two things, those two levers that we can pull, they get lost when we're talking about the federal government because it's such this large tangle of worms is kind of what it feels like just with all the bureaucracy involved.
- [58:27]
Joel
Tough ship to move.
- [58:28]
Matt
Yeah, yeah, yeah. But that was encouraging, though. Cause it's a reminder that even at a very high level when it comes to the US Economy, oftentimes that's. It could be as simple as that.
- [58:37]
Joel
It's not rocket science. Yeah.
- [58:38]
Matt
Doesn't mean it's easy.
- [58:39]
Joel
Yeah.
- [58:40]
Matt
But fairly straightforward.
- [58:41]
Joel
Yeah. I think my big takeaway, Matt, was you should have more babies because four is not enough. We have a declining birth rate in this country.
- [58:49]
Matt
I thought about speaking up.
- [58:50]
Joel
He's like, it's all on your shoulders.
- [58:51]
Matt
He's like, 4.2. I mean, that would be a crazy large number of kids for a family. And I'm just like, well, that's what we got for.
- [58:58]
Joel
Where's your point? You've come in soon.
- [59:00]
Matt
Where's your what is it that's needed? 0.5 to 0.7. Yes, that's what's needed.
- [59:03]
Joel
That's right. So, yeah, just to all of our listeners out there who at least considering it, parenthood's wonderful. Think about it a little more deeply for the good of the country. Okay.
- [59:13]
Matt
Is this your actual takeaway? Are you joking?
- [59:15]
Joel
No, I'm kind of joking, but I'm kind of serious. Like, I do think, well, I mean, not trying to tell people who don't want to have kids to have kids, but I am saying, like, it's. I think some people overestimate, and we've talked about this on the show, how much it costs to have a kid. You see the headlines, and I don't think it's as bad as it might seem from a. From a financial standpoint. And I don't think you have to be not saying, again, don't be prepared, don't think ahead. But I don't think it takes as much preparation or as much money as you think it does to have a kid. And you're going to cut back and spending in other ways when you have a kid. Like, guess what, I don't go to nearly as many, like, concerts or fine.
- [59:51]
Matt
Dinners and you're going out to eat quite as much as you used to.
- [59:53]
Joel
Back in the day. So you'll cut back in other ways. The joy that it provides is meaningful. Again, not trying to coerce people into doing something they're not interested in doing.
- [60:01]
Matt
But if it's something you're thinking about, no. Okay, I'll back you. Because there are a lot of different voices in our heads within society that is telling us to not do that. Whether it's your employer, it's just like, oh, you know what that's going to mean? You're not going to get that promotion. Oh, you know, at least even internally, that, oh, that means you're not going to be placed on this project. And even selfishly, there are different sort of achievements that we're trying to achieve and often. And so when you have all these other voices speaking into us as individuals, it can be easy to not, I guess, necessarily say no to kids proactively. But what happens is that it happens by default. It's something that happens passively. And before you know it, you're a little bit older and you're like, well, shoot, I kind of, I guess maybe I missed my window.
- [60:43]
Joel
And that's happening more and more in our society.
- [60:45]
Noah Smith
Yes.
- [60:45]
Joel
Is it?
- [60:46]
Matt
The reason is that I never got around to it as Opposed to it being something that you're like, oh, no, I'm never gonna have kids. It's fewer folks who are saying that, as opposed to folks who are saying, oh, man, maybe later. Yeah, exactly. Maybe later. Or it just never happened. Yeah.
- [61:00]
Joel
And I just. I do think not everyone. Some people literally go into that proactively and they say, I don't want kids and more power to you. But I think, yeah, I've seen too many. Many people regret that they waited too late, and then it became really difficult, if not impossible. And I just think there is. There are a lot of intangible benefits. It's. It's not that the kids are typically going to bring more money into your life, but there are a lot of beautiful things they bring into your life. Absolutely non financially related.
- [61:26]
Matt
Yeah. Today's message brought to you by trad husband Joel Larsgard. Joel's gonna be over here homeschooling his kids before you follow me on Instagram.
- [61:33]
Joel
Oh, my gosh, they would murder me. And maybe vice versa.
- [61:37]
Matt
All right, real quick, the beer you and I enjoyed today was called Melvin, which was an amber farmhouse ale by Freak Folk Beer. What'd you think about this one?
- [61:45]
Joel
So this beer looks like it was named after a cat because they have a picture of cat on the bottle.
- [61:49]
Matt
And then it also says, in loving memory.
- [61:51]
Joel
Oh, poor Melvin.
- [61:52]
Matt
So I'm guessing this was a brewery cat that they dedicated this beer to.
- [61:55]
Joel
Well, I'm a cat dad myself, so I can get behind this. Although I like my cats, I don't love them. Is that okay? Can I say that?
- [62:02]
Matt
That's fine.
- [62:03]
Joel
I love my kids. I like my cats. There you go. I think all amber beers should have to be sour per a new dictator.
- [62:09]
Matt
Just from now on. Yeah.
- [62:10]
Joel
Because I don't love amber beers, but an Amber sour, wow. Made me really like this thing. It was a nice combo of funky and sour and funky always like, sounds like a weird word, I think, to people, but there's something about a funky beer that really just does hit my mouth in a special way.
- [62:24]
Matt
It's like zestiness or the acidity, but with like.
- [62:27]
Joel
It's a word. The kids use these a lot these days, I think. I think zesty is a hot word.
- [62:31]
Matt
Zipp. Acidity. It's that tartness, but with body. That's what I think of when you say funkiness, because it's not just like the sharpness that you get with, let's say, vinegar, but there's actual flavor behind it. Right.
- [62:42]
Joel
It's.
- [62:43]
Matt
Oh, maybe sort of like acidity is to vinegar as funky is to red wine vinegar. You know, like there's a little more flavors, more body, some more. Yeah, just something more going on, which.
- [62:52]
Joel
I just used red wine vinegar in the making of a food product that. Well, you tried it earlier today. We'll talk about it. Oh, let's talk about it on maybe Friday's episode.
- [63:01]
Matt
Yeah, this episode's going long, but yeah, Freak Folk beer first time had one by them. Really good. Highly recommend. But buddy, that's going to be it for this episode. So until next time, Best friends out. Best friends Out.
- [63:25]
Joel
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- [63:49]
Matt
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- [64:01]
Joel
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Matt
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- [64:33]
Joel
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- [64:46]
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