“There are parts of the business and finance world that are invested in making these things seem intimidating and scary. We really enjoy making things more approachable.” — Alex Mayyasi

What’s the last taboo? The thing that we are totally embarrassed to discuss? No, not sex. It’s money. At least according to Alex Mayyasi — frequent contributor to NPR’s Planet Money — who has just published Planet Money: How to Live Richer, Spend Smarter, and Afford the Life You Want, a field guide to the big economic forces that shape our working, saving, loving and leisure lives.

Mayyasi argues that money is the last taboo. We talk openly (perhaps too openly) about our sex lives now. But we still don’t talk about our money lives — not with spouses, not with parents, not with our children. Companies that have tried full salary transparency report uncomfortable conversations about race and gender. Thus the need for Mayyasi’s new book. It’s not exactly porn, but Planet Money is designed to liberate us from our last taboo.

Five Takeaways

• The Economy Was Invented During the Great Depression: If you asked someone a hundred years ago how the economy was doing, you’d get a strange look back. The concept didn’t exist. It was the Depression that forced the question — because Roosevelt and his advisers had no way of knowing whether the New Deal was working. An economist was tasked with the Don Quixote-like job of counting every transaction in America to produce a single number: GDP. We have lived inside that number ever since.

• Money Is More Embarrassing Than Sex: We talk freely about sex now. We still don’t talk about money — not with spouses, not with parents, not with children. Mayyasi advocates for salary transparency, even though companies that have tried it report uncomfortable conversations about race and gender pay gaps. The discomfort is the point. Maybe we need a Freud of finance to liberate us from the last taboo.

• Financial Time Travel: Markets give us the ability to move money through time — into the future through saving, or from the future to the present through borrowing. Student loans are the most relatable form: young people pulling their future income backwards to fund the human capital they need to earn it. Consumption smoothing across the life cycle is a perfectly valid use of debt, as long as you don’t assume the future will be richer than it actually turns out to be.

• Productive Risk Versus Nihilistic Gambling: The GameStop ride looks quaint compared to today’s parlay bets on whether a certain word will appear in the State of the Union. Higher risk, higher reward is a continuum, and savvy careers are built on calculated risks. But there is a difference between productive risk — the kind that builds businesses and careers — and the nihilistic flip of a coin. Knowing the difference is half of financial literacy.

• Bobby Bonilla and the Magic of Compound Interest: Bonilla agreed to defer his $6 million Mets salary for decades. Every year, the Mets still send him a cheque for over $1 million, which drives Mets fans insane. It looks bone-headed, but it is exactly how every successful retirement plan works: give up consumption now, let compound interest do its work, enjoy something like $30 million in the future. Bonilla was savvier than his critics. We can all learn from him.

About the Guest

Alex Mayyasi is a writer and frequent contributor to NPR’s Planet Money. His new book, Planet Money: How to Live Richer, Spend Smarter, and Afford the Life You Want, was published this week.

References:

• Planet Money: How to Live Richer, Spend Smarter, and Afford the Life You Want by Alex Mayyasi.

• Episode 2863: An Anticapitalist Mutiny — Noam Scheiber on the rise and revolt of the college-educated working class. The other side of Planet Money.

About Keen On America

Nobody asks more awkward questions than the Anglo-American writer and filmmaker Andrew Keen. In Keen On America, Andrew brings his pointed Transatlantic wit to making sense of the United States — hosting daily interviews about the history and future of this now venerable Republic. With nearly 2,800 episodes since the show launched on TechCrunch in 2010, Keen On America is the most prolific intellectual interview show in the history of podcasting.

Chapters:

(00:31) - Introduction: things aren’t quite right on Planet Money
(03:18) - The Great Moderation: a fantastic run that we forgot to celebrate
(05:49) - The economy was invented during the Great Depression
(07:52) - Aristotle’s oikonomia: economics has always been personal
(09:20) - The Planet Money DNA: storytelling and the bank teller who met the ATM
(13:23) - Why money makes everybody nervous
(16:02) - Crypto out, AI in: the great pivot of the writing process
(17:49) - Economists and AI: the longer perspective
(20:03) - Financial time travel: student loans as moving income through time
(22:40) - Productive risk versus nihilistic gambling
(24:41) - Does money make you happy? Beyond the $60,000 plateau
(27:25) - GDP versus the planet: externalities and corporate DNA
(30:15) - More embarrassing than sex: why we can’t talk about money
(33:19) - Salary transparency: the case of Sweden
(41:47) - Bobby Bonilla, the Mets, and the magic of compound interest
(45:48) - Insurance as peace of mind