Karol Markowicz Show: From Brothels to Economics with Allison Schrager

Summary

Podcast Summary: The Clay Travis and Buck Sexton Show Episode: Karol Markowicz Show: From Brothels to Economics with Allison Schrager
Release Date: May 14, 2025
Host: iHeartPodcasts

---

Introduction

In this engaging episode of The Clay Travis and Buck Sexton Show, host Carol Markowitz delves deep into the intricate world of risk management and economics with renowned economist and author Allison Schrager. Through a candid conversation, Schrager shares her unique journey from studying economics to exploring the unexpected intersections of risk in unconventional settings, including her experiences within a brothel. The discussion offers listeners valuable insights into understanding risk, the importance of financial literacy, and the complexities of human behavior in economic environments.

---

Listener Engagement and Episode Overview

[02:28] Carol Markowitz:
Carol begins the episode by highlighting a listener email that praises her recent conversation with Liz Wolf about life trajectories post-parenthood. This sets the stage for the show's focus on personal growth and adaptability, themes that resonate throughout her interview with Allison Schrager.

---

Interview with Allison Schrager

Background and Inspiration

[14:40] Carol Markowitz:
Carol introduces Alison Schrager, an economist and author of "An Economist Walks into a Brothel and Other Unexpected Places to Understand Risk." Carol praises Schrager’s work for its practical application during the COVID-19 pandemic, emphasizing the book's role in enhancing public understanding of risk.

[15:04] Alison Schrager:
Allison acknowledges the relevance of her book, noting that people often focus on a single risk without considering the broader spectrum. She reflects on her own behavior during the pandemic, highlighting her preference for practical risk assessment over societal pressures, such as wearing masks unnecessarily.

Exploring Risk in Unconventional Settings

[16:40] Carol Markowitz:
Curious about the title of Schrager’s book, Carol asks how she transitioned from economics to exploring a brothel.

[17:45] Alison Schrager:
Allison explains her quest to make financial economics accessible, akin to Freakonomics, without a traditional research portfolio. A conversation with her law-practicing cousin led her to interview a manager from the Bunny Ranch, a renowned brothel. This experience provided a rich ground for exploring risk management in an unexpected context.

[19:21] Alison Schrager:
Schrager delves into the operations of the Bunny Ranch, discussing how transactions are individually negotiated and the inherent risks involved. She highlights the financial literacy programs implemented to empower the workers, balancing the risks of their profession with educational support.

Notable Quote:
“All people often forget that there’s upside to risk” — [24:43] Alison Schrager

Understanding and Misconceptions of Risk

[23:04] Carol Markowitz:
Carol inquires about common misunderstandings surrounding risk.

[24:46] Alison Schrager:
Allison identifies two primary misconceptions:

1. Overlooking Upside Potential: People often ignore the benefits that come with taking risks.
2. Desire for Risk-Free Gains: There's a prevalent but flawed belief that one can achieve gains without any associated downsides.

She emphasizes that in finance, the fundamental principle is that higher returns typically require taking on greater risks, a concept often overlooked even by experts.

Notable Quote:
“It's like two sides of the same coin” — [24:46] Alison Schrager

Personal Journey and Commitment to Economics

[25:53] Allison Schrager:
Allison shares her steadfast commitment to economics, tracing back to her high school days in a deindustrialized town in southern New England. Her desire to understand and improve the persistent economic challenges in her community fueled her academic pursuits.

[27:11] Alison Schrager:
Discussing her academic journey, Allison recounts the challenges she faced in the job market post-PhD, highlighting her unwavering dedication to economics despite uncertainties.

[28:14] Alison Schrager:
Allison humorously connects her probabilistic thinking to poker, noting her limited but successful experiences with the game, while expressing discomfort with societal expectations of expertise in areas beyond her control.

---

Reflections on Expertise and Public Perception

[31:28] Alison Schrager:
Allison expresses concerns about the current state of expertise, battling between valuing expert knowledge and criticizing experts for potential abuses of authority. She underscores the importance of robust arguments and engagement when challenging prevailing expert opinions.

[32:46] Carol Markowitz:
Carol mirrors these sentiments, discussing her frustrations with how expert advice was handled during the COVID-19 pandemic. She contemplates the balance between valuing expert knowledge and encouraging informed, amateur-driven discourse.

Notable Quote:
“What's replacing [experts] might be even worse” — [31:28] Alison Schrager

---

Advice and Personal Insights

[35:08] Carol Markowitz:
Carol asks Allison what advice she would give her 16-year-old self.

[35:13] Alison Schrager:
Allison advises maintaining faith in one’s choices, despite external judgments. She reflects on her unconventional paths, such as studying abroad in Scotland and pivoting careers, emphasizing resilience and self-trust.

[37:34] Alison Schrager:
For listeners, Allison recommends staying true to personal values and being acutely aware of what brings happiness, advocating for authenticity over societal expectations.

Notable Quote:
“Be true to your values” — [37:34] Alison Schrager

---

Conclusion

The episode concludes with Carol expressing her appreciation for Allison's insights, encouraging listeners to explore Allison’s work through City Journal, Bloomberg Opinion, and her impactful book. The conversation leaves listeners with a deeper understanding of risk management, the multifaceted nature of expertise, and the importance of personal integrity in navigating life's uncertainties.

---

Key Takeaways

• Risk Management: Understanding both the potential upsides and downsides is crucial in making informed decisions.
• Financial Literacy: Essential life skill often overlooked, crucial for both adults and younger generations.
• Expertise and Public Perception: Balancing respect for expert knowledge with critical evaluation is necessary for societal progress.
• Personal Growth: Embracing change and staying true to personal values leads to fulfillment and adaptability.

---

Notable Quotes with Timestamps

• Alison Schrager [24:46]: “It's like two sides of the same coin.”
• Alison Schrager [31:28]: “What's replacing [experts] might be even worse.”
• Alison Schrager [37:34]: “Be true to your values.”

---

Final Thoughts

This episode offers a profound exploration of economics through the lens of real-world applications and personal experiences. Allison Schrager’s unique perspective challenges conventional notions of risk and expertise, encouraging listeners to broaden their understanding and approach to both personal and professional decisions.

Transcript

[Ryan Reynolds]

You're listening to an iHeart podcast. Are you still quoting 30 year old movies? Have you said cool beans in the past 90 days? Do you think Discover isn't widely accepted? If this sounds like you, you're stuck in the past. Discover is accepted at 99% of places that take credit cards nationwide. And every time you make a purchase with your card, you automatically earn cash back. Welcome to the now it's it pays to Discover. Learn [e-mail] credit card based on the February 2024 Nielsen report every day our world gets a little more connected, but a little further apart. But then there are moments that remind us to be more human. Thank you for calling Amica Insurance. Hey, I was just in an accident. Don't worry, we'll get you taken care of. At Ameca, we understand that looking out for each other isn't new or groundbre breaking. It's human. Amica empathy is our best policy. It's Wednesday night after a long day and the last thing you want to do is cook dinner from scratch. But you still want a satisfying, tasty.

[Liz Wolf]

Meal without the guilt. Enter your freezer sidekick Cauliflower from thin and crispy cauliflower crust pizzas to all natural white meat, chicken tenders and more, Cauliflower is gluten free, always satisfies every craving, and is ready in minutes. Caulifow is available in freezer aisles nationwide. Visit eatcolipower.com wheretobuy to find a store near you.

[Carol Markowitz]

Did you know that parents rank financial literacy as the number one most difficult life skill to teach? Meet Greenlight, the debit card and money app for families. With Greenlight, you can send money to kids quickly, set up Chores Automate allowance, and keep an eye on what your kids are spending with real time notifications. Kids learn to earn, save and spend wisely. And parents can rest easy knowing their kids are learning about money. With guardrails in place, Try Greenlight Risk free [e-mail] iheart avoiding your unfinished home.

[Ryan Reynolds]

Projects because you're not sure where to start. Thumbtack knows homes so you don't have to. Don't know the difference between matte, paint, finish or satin or what that clunking sound from your dryer is with thumbtack. You don't have to be a home pro, you just have to hire one. You can hire top rated pros, see price estimates and read reviews all in the app download today.

[Carol Markowitz]

Hi and welcome back to the Carol Markowitz show on iheartradio. I got a listener email. I love Listener emails about a segment I did on a recent episode of the show. It was from my interview with Liz Wolf last week. Liz and I were talking about the idea that life ends after you have kids. I'll play a short clip from it.

[Liz Wolf]

I think the thing that's really frustrating to me is like, it feels like people live in this world of binary, like very false choices and binaries where it's like either you have to be full on feminist girl bossing it up and wait until you're 45 to have kids and make sure you freeze your eggs or you have to be like barefoot and pregnant eternally right in the kitchen. And to me, this just like it's such a pointless conversation that people have surrounding trad wifery and motherhood because like, this isn't actually how people operate in while I have a job, I also have a child who I spend a lot of time with. There are lots of people who have these sort of hybrid arrangements and there are also lots of people who maybe they have one vision for the timeline that these things will happen at. But then, I mean your story is, I think definitely a point like a story in, in this favor where it's like you don't know on what you don't know timeline things are going to pan out for you. And how frustrating and frankly disrespectful for people to be told that like, oh well, you're doing it wrong if in fact there's a bunch of circumstances where it's actually quite prudent to wait until you're in a good partnership, ideally a good, you know, covenantal marriage, before you begin to bring a bunch of children into the mix. And like, for lots of people it seems like the coupling upside of things is happening later and later and they're not feeling stable and secure in that. I'm a little bit less sympathetic to the oh, the finances aren't in order type of argument because I think people kind of don't realize how inexpensive having a child can be and how you don't necessarily have to have, you know, every child in their own room or every child going to a, a four year Ivy League institution. Like you have a lot of options beyond that. And people are unimaginative with their sense of what having a child actually entails. And I think that our parenting culture suffers because of that because we believe that it has to be so much more complex with, you know, five summer camps that all cost, you know, whatever $3,000, $4,000 a piece for every kid. And it's like, well, no wonder it seems unfathomably expensive. But that's negotiable. That's something that's optional. And I wish more young women didn't feel shame about the timeline or trajectory that they're on, but did do a little bit more rethinking. Like, it's not necessarily as binary as work or quit. It's not necessarily as binary as have your finances perfectly in order or be destitute. There's a lot of range that a lot of people are working with.

[Carol Markowitz]

Absolutely. And your whole economies of scale thing too. A lot of the things that people think is going to cost. You know, again, you don't buy five cribs. You buy the one crib and you pass it down and you. I heard one time somebody say something like, oh, you know, I grew up poor, we grew up with hand me downs. And I was like, I don't know how rich I need to be that my kids are not gonna be wearing each other's hand me downs. They're all wearing each other's hand me downs forever. It's definitely like, oh, you need a new pair of cleats. Let's go see if your brother has an old pair. And that's how I think it's supposed to go. You're so right though. And I think about this a lot where people are just maybe it's because of the online culture and they think that you could put everything neatly into a box of girl boss or trad wife. But most people are some combination. And just because think your life is going to go a certain way doesn't mean it will. I. When I got married, our plan was I was going to be a stay at home mom. And then I opened an unrelated business and then I got into journalism. And you know, you just don't know where life is going to take you. So you can't have what you're doing in this moment be your identity. And I think that's the thing that people don't understand. They're scrambling around for like, what am I going to be? Well, maybe just don't think of it like that. Maybe think about what you're going to going to do instead. And it's, it's a tougher ask because what am I going to be? Sort of gives you the roadmap. But nobody is just that one thing.

[Liz Wolf]

You know, the Drake album, More Life. This is, I feel like my mantra and probably yours too. Like both of us have a little bit of this, like this antsiness, this eagerness to like, stick our hands in a million different charts, even if we're overextended. Like, I've always had this sort of like, Iggy Pop puts it as, like, less for life, right? In Drake world, it's more life. But there's a little bit of the sense of just like, you know, it's.

[Alison Schrager]

It.

[Liz Wolf]

I think there's this narrative out there that's like, once you have a child, your life is over, your life must end. Say goodbye to going out and to the fancy restaurants and to parties with your friends and, you know, forget about throwing a house party ever again. You really have to step into this, you know, different state of being. And in some ways it's true, right? Because you can't do cocaine and stay out till 6am if you have a newborn that you need to nurse, right?

[Carol Markowitz]

The listener writes in. I loved your conversation with Liz Wolf. You said that women shouldn't solidify into an identity like girl boss or tradwife. But I find that very difficult. I'm 28 years old and getting married next year. My entire life I have heard that I have to have something of a brand. The idea is pushed in college all the time. You have to have a path to what you are in everything you do. I would find it very difficult to switch between my current career path and being a trad wife, for example. Example. I don't judge them. It's just impossible for me to consider changing gears. I love this email because my first instinct was to say, wow, I'm so old. This is so crazy. This whole idea about having a brand is also new. But then I remembered a conversation I had in my early 20s where I felt completely pigeonholed in my very specific career path. Right out of college, I became a pharmaceutical paralegal working in a legal department of a pharma company. It was accidental, but because that happened to be the first job I was offered out of college, I kept being offered only roles in that field. I had no idea about anything. I didn't know anything about the field at all. And the skills I was using in that job could have been easier, easily applicable to literally any role in the legal field. Really, any role in any field. I was doing what I later would refer to as, like, monkey work. Checking that papers were numbered correctly, making sure boxes went out on time and were perfect. People have been doing this whole, you chose this at 22 now, you'll be this forever thing for a long time. But what I want people to know is that it's a lie and not only is it a lie, but you can switch and then switch again. I've worked full time part time contract work for myself, for other people, owned my own business and was a stay at home mom. It's all very possible. And I should note that a lot of that I did after I was married because yes, having the stability of a spouse lets you take more chances. But some of that I did when I wasn't married too. I went to graduate school, I switched fields, all before I ever even dated my husband. So don't listen to the voices saying your life must go this one way that you picked when you were 20. You're going to find, especially after you have kids, that it may take a turn and then turn again. It's okay to lean into changes and no one should pigeonhole you into just one thing. You may be a girl boss and a tread wife at different points of your life and those are also very reductionist labels all around. You probably will be somewhere between those two all along. Your life is not an Instagram account. You can do various things with it and not care what the quote unquote audience wants to see. Thanks for listening. Coming up, my interview with Alison Schrager. But first, I'd like to change gears for a minute and talk about Israel. It's now the month of May, and 80 years ago this very month, the horror of the Holocaust, the final solution, came to an end. But do you know that half of all Holocaust survivors live in Israel? The pain of the past now intensified today by October 7, and the rise of antisemitism everywhere. And along with other elderly Jews, thousands in Israel live below the poverty line. There's no safety net. That's why I support the International Fellowship of Christians and Jews. The Fellowship provides a lifeline to these precious ones in the form of hot meals and boxes full of healthy food. And for only $25, you can help provide a food box. Better yet, $335 provides hot meals for an entire year. To give generously, call 888-488 IFCJ 888-488-4325 or go online to [e-mail] that's ifcj.org.

[Ryan Reynolds]

Ryan Reynolds here from Mint Mobile with a message for everyone paying Big Wireless way too much. Please, for the love of everything good in this world, stop with Mint. You can get premium wireless for just $15 a month. Of course, if you enjoy overpaying, no judgments. But that's weird. Okay, one judgment anyway, give it a [e-mail] Switch upfront payment of $45 for.

[Alison Schrager]

3 month plan equivalent to $15 per month Required intro rate first 3 months.

[Carol Markowitz]

Only, then full price plan available, taxes and fees extra.

[Ryan Reynolds]

See full terms@mint mobile.com not everyone who handles your personal information is going to be as careful as you are, and it only takes one mistake to expose it to hackers and identity theft. Maybe that's why there's a new victim of identity theft every five seconds in the United States. Fortunately, there's LifeLock. LifeLock monitors hundreds of millions of data points a second for threats to your identity if your identity is stolen. A LifeLock US based restoration specialist will help solve identity theft issues on your behalf, guaranteed or your money back. Plus, all LifeLock plans are backed by the million dollar protection package, meaning Lifelock will reimburse you up to the limits of your plan if you lose money due to identity theft. You can't control how diligent others are with your personal information, but with Lifelock you can help protect it. Act now and save up to 40% your first year. Call 1-800-LIFELOCK and use promo code IHEARTRA or go to lifelog.com iheart for 40% off. Terms apply at Ameca Insurance we know it's more than just a car or a house. It's the four wheels that get you where you're going and the four walls that welcome you home. When you combine auto and home insurance with Amica, we'll help protect it all. And the more you cover, the more you can save. Amica Empathy is our best policy. Are you still quoting 30 year old movies? Have you said cool beans in the past 90 days? Do you think Discover isn't widely accepted? If this sounds like you, you're stuck in the past. Discover is accepted at 99% of places that take credit cards nationwide. And every time you make a purchase with your card, you automatically earn cash back. Welcome to the now it pays to Discover. Learn [e-mail] credit card based on the February 2024 Nielsen report avoiding your unfinished home projects because you're not sure where to start. Thumbtack knows homes so you don't have to don't know the difference between matte paint, finish or satin or what that clunking sound from your dryer is with thumbtack. You don't have to be a home pro, you just have to hire one. You can hire top rated pros, see price estimates and read reviews all in the app. Download today.

[Carol Markowitz]

Welcome back to the Carol Markowitz show on iheartradio My guest today is Alison Schrager. Allison is an economist, senior fellow at the Manhattan Institute, contributing editor at City Journal, a columnist at Bloomberg Opinion, and the author of a book I really loved called An Economist Walks into a Brothel and Other Unexpected Places to Understand Risk. Hi, Alison. So nice to have you on.

[Alison Schrager]

Hey, it's great to see you.

[Carol Markowitz]

You know, I was a big fan of your book when it came out, and it really helped me during COVID because I thought that one of the main problems during those years was that people hadn't read your book and they didn't understand risk. Did you feel like it was maybe ahead of its time?

[Alison Schrager]

Yeah, I mean, I actually started work on a second book that's still with a publisher, but really thinking, yeah, people really have a poor understanding of risk, particularly the part where, you know, people tend to get fixated on one risk and not see others and just assume that, you know, risk reduction at all costs is valuable. I. I thought about it a lot, and maybe it also explains a lot of my own Covid behavior that was probably out of step with most people's because I. I felt quite confident in my ability. Not that I'm a scientist or a doctor. My ability to do.

[Carol Markowitz]

But we were right.

[Alison Schrager]

Yeah. Mostly, like, things like wearing masks outside. Never did that. You'd get screamed at on the streets in New York.

[Carol Markowitz]

Oh, yeah.

[Alison Schrager]

I even once said to a friend of mine, you know, she's like, well, it's important that we wear masks outside. And I'm like, well, you know, this doesn't have any medical value. She's like, that's not what it's about. It's like, showing that we all care.

[Carol Markowitz]

I hate that.

[Alison Schrager]

I know. It's like, this isn't Iran. Like, we, like, shield our faces out of social solidarity. It's like, I am all down for doing anything that will make, you know, society healthier, that has negative extraordinaries, but I'm not doing something incredibly like sort of disruptive and uncomfortable just for the sake of it.

[Carol Markowitz]

Yeah, well, it's very brave that you didn't mask outside. I did. Even though I knew from the beginning that it was stupid and it had absolutely no benefit because I didn't want to get yelled at. And I'm, more than anything else, didn't want to get yelled at with my kids in tower. But I wish I had kind of took that stand in a more aggressive fashion. Because, of course, when Anthony Fauci delivered the line, as we've been saying all along, masking outside is like, not necessary. And I knew he had not been saying that all along, but that line made me feel like, wow, I should have really, I should have stood stronger and not done it because I knew that the risk was minuscule.

[Alison Schrager]

Yeah. I mean, with your kids it's harder because you don't want to expose them because people would get quite nasty.

[Carol Markowitz]

Oh, I know. Yeah.

[Alison Schrager]

The general strategy is to wear headphones all the time.

[Carol Markowitz]

I don't hear you. Yeah. So how did you get to a brothel? Where did this come from?

[Alison Schrager]

So I had this idea that I wanted to do a book that made financial economics, which is, it's the study of risk and markets more accessible and the way Freakonomics did. But I didn't have a research portfolio like Steven Levitt did because I hadn't been done much research out of grad school. So I wanted to tell stories. And I, you know, I'd worked as a journalist too, so I kind of felt like I could report. But then I realized I don't know how to do reporting on stories. Like, I write about economics. So I was having a drink with a cousin who kind of has some nefarious hobbies.

[Carol Markowitz]

And I love cousins like that.

[Alison Schrager]

Yeah, the most religious of all my cousins too. Interesting. And he, I was like, he's a lawyer. So I was like, do you mean who's committed a crime? Like that could be a good story and maybe that's a good place to start. And he said, well, actually my girlfriend runs sort of sex business online where she matches submissives who want to have sex with their clients. And she makes sure it's a safe transaction. And I'm like, oh, that's interesting. So I think that could be a good story. So I interviewed her and it was interesting because I'm writing about risk and the whole idea is we pay for safety, trade offs of how much risk you want to take on. And like the women who work for her paid her 30% of their earnings. So to make sure that this is a very risky transaction. You can meet some rando on the Internet and he's going to tie you up and then you have sex with him. You want to make sure he doesn't kill you because the probability of that isn't trivial. So she would get 30% to make sure that didn't happen. And I'm like, oh, it's a risk premium. So I wrote this column, I think for courts at the time, and it did really well, as you would expect.

[Carol Markowitz]

Yeah.

[Alison Schrager]

And so the Bunny Ranch PR guy, who is quite Aggressive, good at his job, reached out to me. And it's funny, he's like, I guess there's a hierarchy and prestige with brothels, which I didn't know.

[Carol Markowitz]

And the Bunny Ranch is like, right at the top, right?

[Ryan Reynolds]

Yeah.

[Alison Schrager]

He was like, I don't know why you're writing about this no name person in New York. And like, you write brothels, you're writing about the best brothel, and that's ours. So I was like, I don't write about brothels. I'm a retirement economist. But, you know, I'll take this call. Why not?

[Carol Markowitz]

Yeah, right, of course.

[Alison Schrager]

And, yeah, who wouldn't take that call? So we start talking, and he's describing how there's no set prices, that every transaction is individually negotiated. And I was like, oh, so you have like, women who are like 18 negotiating with men in their 60s who are super rich for money? Like, that's interesting. He's like, yes. And, you know, they tend to not know their value when they come. So we have a negotiation training program. And I had this wonderful editor at the time, wonderful Lauren Brown, who said, you've got to go with a videographer. So I said to Jeremy Lemur, who is their PR guy, like, I want to come and film this. And he. They, they need PR because they can't advertise. So, yeah, he got an invite from Dennis Hoff, and off we went. And in the process of learning how they negotiate, I learned how prices were set and saw a risk story there. And then I went back a couple more times to do more research. So I guess that's. That's how I. It was very. It felt unlikely to me. I ended up there, but that's how it happened.

[Carol Markowitz]

That's amazing. Dennis Hoff is actually. He somehow kind of crossed into the mainstream. Right. He used to be on Howard Stern. I came across an article about him not that long ago where Tucker Carlson sent him some. I want. I don't, I don't. I don't want to mess up the details, but it sounds like a penis made out of elephant husks, something along those lines. And somehow, you know, Tucker Carlson sent that to him. It's just. It doesn't seem like the kind of thing where he is a weird kind of side guy. He's kind of become a mainstream figure.

[Alison Schrager]

Well, he unfortunately died a couple years ago, but I believe actually died or actually died. Well, I think he did, and I liked him a lot. And I think a lot of people, mainstream people like Tucker, who, granted, is in a different place now did go to his funeral, because, first of all, he's very charming. But second of all, you know, when you really. People have very strong feelings about sex work, and I understand why, but they. It's really often not what they think. And I had. I liked about Dennis is I had very complicated feelings about him. And I like people I have complicated feelings about, because no one's all good or bad. And there was a lot of really good things about him in that, you know, he gave all the women financial literacy training. It's the best financial literacy program I've ever seen. And I study this, like, it was very effective. These women who grew up in very financially insecure houses, a lot of them were really, like, talking about the index funds their 401ks were in.

[Carol Markowitz]

Yeah.

[Alison Schrager]

Being very financially savvy, he made them all do vision boards because he says to me, he's like, most of these women are never going to make this kind of money again. So I want them to, like, learn the skills and set life goals beyond here.

[Carol Markowitz]

And.

[Alison Schrager]

But then you'd say, also, they'll work harder and, like, have more sex with people. So it's like, on the one hand, he's really. I go to staff meetings, and he was like, this motivational speaker telling these women, a lot of whom had really never had anyone in their lives, encourage them. Encourage them and tell them anything they set their minds to, they could do. And you're like, yes, but then he also is taking 50% of their money when they have sex with strangers. So, you know, and they have sex with him.

[Carol Markowitz]

That was also part of. Yeah, they encourage each other to have sex with him, because if he likes you, then. Then you get a better situation.

[Alison Schrager]

I mean, they want his approval. They want his attention. If you're having sex with him, you're more likely to do that. There was a lot of weird, icky things. But also, you know, who else is, you know, advocating for them in this way? Who else is giving them this training and different forms of human capital? So I said, I kind of. He's very charming. He was very, very charming, too. I said, I like people I have complicated feelings about. I had very, very complicated feelings about him. There's a lot of things about sex work that I think, you know, you do feel very conflicted about. Like, I was talking to someone recently who said that she's against all sex work. She thinks it goes on even if she doesn't feel that way, because it's always these young women who are being exploited and trafficked and I'm like, that really isn't most sex transactions, like a lot of sex transactions are mentally handicapped people who still have physical needs. There's also, it's common veterans maimed in battle, people with severe physical ailments. That's a big part of the industry. And you know, a lot of people have needs for intimacy that we don't like to talk about. And it does serve a purpose. And who's being exploited isn't always so clear. So that's something you do learn there. It's not what you think. And there's a lot of definitely not something I felt comfortable with. I'd say every minute I was in the brothel I felt incredibly uncomfortable. But it's hard to really have a strong judgment either.

[Carol Markowitz]

Yeah. What do people misunderstand about risk?

[Alison Schrager]

Two things. One is, you know that there's upside to risk. I think people forget that. The second is, and this astounds me because people seem to think they can get nothing, something for nothing. Like if you're going to get that possibility of upside, you do have to face downside risk too. So it's like two sides of the same coin. And I think it's amazing to me that people work in finance are supposed to be risk experts often forget that. They're always like, aha, I found this asset that will beat the market, but it faces no downside risk. And that's their sales pitch. They buy into it. It's like mortgage backed securities or Bernie Madoff or even like our society at large is that people think they can reduce risk and they're not going to be any loss or they can get upside and not face downside risk. And it's, it's like, you know, the sort of underlying theory of all of finance is like there's no arbitrage like there, there's no beating the market without taking on risk. Yet some reason people, even experts, Even people with PhDs in finance seem to forget this all the time.

[Carol Markowitz]

How did you get into this risk? Yeah. Or just the being an economist. What was your path here?

[Alison Schrager]

I took my first economics class when I was in high school and something about it like really connected with me. I think because I grew up in a very small town that deindustrial, I guess now everyone's talking about it, deindustrialized quite early in southern New England and the economic scars of that never really recovered. I think that I was multi generation as fourth generation who grew up there. I think that bothered me a lot really. The persistence of the poverty and how A community.

[Carol Markowitz]

Sorry, but I thought you meant that it was that it bothered you that you were the fourth generation to grow up there.

[Alison Schrager]

Probably that too. Not to have that continue, but especially I think the being multi generation made me feel more connected to the community. It was an academic community too. I think other people who had professional parents didn't feel as connected as I did. So I had a lot of questions growing up. Like, the community was also very averse to development and growth. I couldn't figure that out. So when I started taking economics, it started giving me answers and I felt like I just wanted to know more. And that never stopped. I'm still there where I want to understand the economy better. Really. Since I was 16, I haven't really studied anything else.

[Carol Markowitz]

Right. Wow. So I was going to say, was there ever a plan B? Like, if you didn't become an economist, what would you have done?

[Alison Schrager]

You know, I was very, like, adamant that I was going to be an economist.

[Carol Markowitz]

You're like, there was no Plan B.

[Alison Schrager]

I called myself that. I even, like, took time off before I went to college, where I wasn't like, in school, and it wasn't clear I was even going to college, but I still thought of myself as an economist. And then, you know, did a whole PhD in it and like, when I finished, things didn't go well for me on the job market for a variety of reasons. And. And it was the first time at that point I had a PhD. I was like 28, 29, and I was like, whoa, maybe I'll do something else.

[Carol Markowitz]

What was that going to be?

[Alison Schrager]

I thought about it and I didn't really have a plan B. And I'm still an economist.

[Carol Markowitz]

I feel like a lot of economists like playing poker. If that's, you know, that would. That, that's a solid Plan B. No risk involved at all.

[Alison Schrager]

Yeah. You know, I mean, I've only played poker three times. I've won two times, though. Oh, wow. Fairly large groups. I think. I don't like it because I think everyone expects me to be good at it for that reason.

[Carol Markowitz]

Yes, I agree. I think. I just think that there's some natural connection there.

[Alison Schrager]

Yeah. Well, I mean, I'm a naturally probabilistic thinker, and then there's a game theory and I'm actually calculating risk.

[Carol Markowitz]

All of that.

[Alison Schrager]

Yeah. But that's also why I don't like it, because poker is like a big game of risk and there's a lot of things I can't control, but everyone expects me to be good at it.

[Carol Markowitz]

It. We're going to take a quick break and be right back on the Carol Markowitz Show.

[Ryan Reynolds]

Every day our world gets a little more connected, but a little further apart. But then there are moments that remind us to be more human. Thank you for calling Amica Insurance. Hey, I was just in an accident. Don't worry, we'll get you taken care of. At Amica, we understand that looking out for each other isn't new or groundbreaking. It's human. Amica empathy is our best policy. Not everyone who handles your personal information is going to be as careful as you are. And it only takes one mistake to expose it to hackers and identity theft. Maybe that's why there's a new victim of identity theft every five seconds in the United States. Fortunately, there's LifeLock. LifeLock monitors hundreds of millions of data points a second for threats to your identity. If your identity is stolen, a LifeLock US based restoration specialist will help solve identity theft issues on your behalf, guaranteed or your money back. Plus, all LifeLock plans are backed by the million dollar protection package, meaning Lifelock will reimburse you up to the limits of your plan. If you lose money due to identity theft. You can't control how diligent others are with your personal information, but with Lifelock, you can help protect it. Act now and save up to 40% your first year. Call 1-800-LIFELOCK and use promo code iheart or go to lifelock.com iheart for 40% off. Terms apply. Are you still quoting 30 year old movies? Have you said cool beans in the past 90 days? Do you think Discover isn't widely accepted? If this sounds like you, you're stuck in the past. Discover is accepted at 99% of places that take credit cards nationwide. And every time you make a purchase with your card, you automatically earn cash back. Welcome to the Now It Pays to Discover. Learn more at discover.com credit card based on the February 2024 Nielsen report Avoiding your unfinished home projects because you're not sure where to start. Thumbtack knows homes so you don't have to. Don't know the difference between matte paint, finish or satin or what that clunking sound from your dryer is. With thumbtack, you don't have to be a home pro, you just have to hire one. You can hire top rated pros, see price estimates and read reviews all in the app. Download today. How to have fun anytime, anywhere. Step 1 Go to chumbacasino.com chumbacasino.com Got it. Step 2 Collect your welcome Bonus. Come to papa. Welcome bonus. Step 3 Play hundreds of casino style games for free. That's a lot of games, all for free. Step 4 Unleash your excitement.

[Alison Schrager]

Woo hoo.

[Carol Markowitz]

Ch ch ch.

[Ryan Reynolds]

Chumba.

[Alison Schrager]

Chumba Casino has been delivering thrills for over a decade.

[Ryan Reynolds]

So claim free welcome bonus now and live the chumba life.

[Alison Schrager]

Visit chumbacasino.com no purchase necessary vgw group void where prohibited by law 21 +.

[Carol Markowitz]

Terms and conditions apply what do you worry about?

[Alison Schrager]

Lately I'm worried about expertise, the state of expertise. I'm worried on the one hand that everyone's just disregarding expertise when we really need it still. But I'm also really mad at experts for abusing their authority. So on the one hand, there's part of me that welcomes, let's overthrow the experts. They've abused their power. They have have really let their science go shoddy. On the other hand, what's replacing it might be even worse.

[Carol Markowitz]

Yeah, I think about that a lot also. I feel like I've been mad at experts for a while. The COVID years really, really bothered me a lot the way things were handled. But what we're moving away from these experts and into people who are not just into the topic, they're just completely dabbling in these topics. They read the Wikipedia entry and then put, not sure that's any better, but a lot of people who were not experts did a lot of really great work during COVID And if I saw that kind of movement again of like regular everyday amateurs who immerse themselves in the information and in the data and in the numbers and let things lead them where they may, I feel like I'd be more into throwing the experts out.

[Alison Schrager]

Well, it depends how you do it. I've been thinking about this a lot, you know, because I'm an economist, I hate tariffs. I think they're horrible for the economy. But this is like the one thing all economists agree on. But then there's part of me that is like down with the experts and we're all experts and you know, experts are wrong. Particularly when you have consensus amongst experts, you should be suspicious, right? And so, and I see here these people who are like, all the economists are wrong. And I'm like, okay, I feel like I should be open to their arguments. But then I noticed they're not engaging with our arguments. And I think this is the difference is it's like you can say, hey, you know, the thing about the economy particularly is, well, not everyone's an economist. Everyone participates in the economy so they always have some insight I don't have. So there's a way you can be critical of experts if you understand their argument and can explain why they're wrong. And what I'm seeing with a lot of the sort of anti tariff brigade is they're not doing that. They're not engaging with our arguments, they're just saying well this will be good. And not at the same time understanding where we're coming from, the data we're grappling with and explaining why we're wrong.

[Carol Markowitz]

Right. I mean I'm, I've always been fairly anti tariffs and I find myself right now being like, let's see what happens because maybe I'm wrong but what may happen could be disastrous. So I don't know. It is a delicate balance. But I definitely have softened a little bit on tariff tariffs only because I do think, what if I'm incorrect? What if all of all that I believe and have read is wrong? There is that place where I wonder if I'm not too committed to positions and maybe should bend a little.

[Alison Schrager]

I just said I want to feel that way too. But part of me then wonders if the tariff fans are then doing themselves a disservice because their arguments are terrible. Like I'm open to the idea the entire economics profession is wrong, we've missing things. I mean it's not even that we're wrong, we're basing it on past world and you could argue we're in a different world and economies change and evolve and the old rules change. I'm open to that. I'm open to, you know, I'm really trying to be open to that. But like their arguments are poor and like you can throw the sort of prevailing expertise if you have a good argument but they're not, not bothering to do that and maybe they exist. I just haven't heard it yet.

[Carol Markowitz]

Interesting. What advice would you give your 16 year old self?

[Alison Schrager]

I would have faith in your choices. I made some really strange choices throughout my career and I was told constantly like they were terrible choices and it would ruin my life and they worked out after a while, sometimes not right away. So I, I would have faith that your choices would work out and you really have to like, I think I knew myself very well at a very young age. Like you know, I, I, we've discussed. You lived in Scotland. I went to University of Edinburgh for undergrad. Just sort of like sort of being in Europe out of college and that at the time that was kind of an odd thing to do. But it really was the best thing for me.

[Carol Markowitz]

Yeah, I love Scotland. It's. I mean, that is a place that could use a financial overhaul. But other, other than that.

[Alison Schrager]

I know it's just like the snp. It's like the worst government in Europe.

[Carol Markowitz]

Yeah. It's funny, my second time living in Scotland, I was, I was young and dumb and I was very into the their independence movement and I was looking for a job and I ended up almost going to work for the S and P before they were even ever elected to anything. Like literally just Free Scotland. But I ended up passing on that, thankfully and working in the Scottish government at the time. But I just told the story to my 15 year old recently and she was like, I could not believe that I was S and P or I was for any of that. I was like 19 years old, to be fair.

[Alison Schrager]

Different party. I think what I've learned from the SNP is this is probably really into the weeds for people.

[Carol Markowitz]

Maybe. Yeah, it's okay.

[Alison Schrager]

But a bigger point is no party should be in power for that long unopposed. Like they, they were new, they just had a new government when you were there. And so it was an interesting party. And independence is always stupid, but they had a point. But the problem is they've been unopposed for like 25 years in Scotland in like no part. Like, like that's even why, like, I was begrudgingly okay with labor winning and ousting the Tories. Like, while I am more inclined to conservatives in the uk, I feel like they were in power too long. You need to go out, you need to go back in the wilderness. You need to regroup. No party is good in power forever. And the S and P, when you were dealing with them, were a very different party. So yeah, in all fairness to you.

[Carol Markowitz]

Yeah, thank you, thank you. 19 year old Carol really appreciates that. Well, I've loved this conversation. I always find you so interesting and so just wonderful. End us here with your best tip for my listeners on how they can improve their lives.

[Alison Schrager]

I think you have to be really aware of what makes you happy. I mean, not to be, don't be selfish, but like what matters to you, what your values are and be true to them.

[Carol Markowitz]

I love it. That's really what it's all about. She is Alison Schrager. Check her out in City Journal, Bloomberg Opinion, and by her book, an economist walks into a brothel and and other unexpected places to understand risk. Thank you, Alison.

[Alison Schrager]

Thank you.

[Carol Markowitz]

Thanks so much for joining us on the Carol Markowitz Show. Subscribe wherever you get your podcasts.

[Ryan Reynolds]

Not everyone who handles your personal information is going to be as careful as you are, and it only takes one mistake to expose it to hackers and identity theft. Maybe that's why there's a new victim of identity theft every five seconds in the United States. Fortunately, there's Lifelock. Lifelock monitors hundreds of millions of data points a second for threats to your identity. If your identity is stolen, a LifeLock US based restoration specialist will help solve identity theft issues on your behalf, guaranteed or your money back. Plus, all LifeLock plans are backed by the million dollar protection package, meaning Lifelock will reimburse you up to the limits of your plan if you lose money due to identity theft. You can't control how diligent others are with your personal information, but with Lifelock you can help protect it. Act now and save up to 40% your first year. Call 1-800-LIFELOCK and use promo code iheart or go to lifelock.com iheart for 40% off. Terms apply. It's Wednesday night after a long day and the last thing you want to do is cook dinner from scratch. But you still want a satisfying, tasty.

[Liz Wolf]

Meal without the guilt. Enter your freezer's sidekick Cauliflower. From thin and crispy cauliflower crunch crust pizzas to all natural white meat, chicken tenders and more, Caulipower is gluten free, always satisfies every craving and is ready in minutes. Caulipwer is available in freezer aisles nationwide. Visit eatcolipower.com where to buy to find a store near you.

[Ryan Reynolds]

In the heat of battle, your squad relies on you. Don't let them down. Unlock elite gaming [e-mail] Dominate every match with next level speed, seamless stream and.

[Carol Markowitz]

Performance that won't quit.

[Ryan Reynolds]

So you can push your gameplay beyond performance with Intel Core Ultra processors for the next era of gaming. Upgrade to smooth, high quality streaming with Intel Wi Fi 6e and maximize game performance with enhanced overclocking. Win the tech search power [e-mail] lenovo Lenovo. You know, some people say that Odoo business management software is like fertilizer, the way it promotes growth and all. But other people say Odoo is like a magic beanstalk because it grows with your company and is also magically affordable. And there's some people who would even say Odoo's individual software programs come together to build the perfect suite. Like building blocks. Well, Odoo is all of these things. Fertilizer, magic Beanstalk building blocks for business. So sign up [e-mail] o d o.

[Alison Schrager]

O as America's most trusted movers, Mayflower.

[Carol Markowitz]

Has seen it all. From big dreams and new beginnings.

[Ryan Reynolds]

All right, here we are.

[Carol Markowitz]

Oh, it's perfect. To first steps and fixer uppers from starter homes.

[Alison Schrager]

So guess what?

[Carol Markowitz]

We're having another.

[Ryan Reynolds]

Another. We definitely need more space.

[Liz Wolf]

To more practical homes.

[Ryan Reynolds]

Yes.

[Carol Markowitz]

Mayflower has been there for it all and will always have your back. Every moment.

[Ryan Reynolds]

Every moment.

[Carol Markowitz]

Move every step of the way. Schedule your move now by going to mayflower.com.

[Ryan Reynolds]

You'Re listening to an iHeart podcast.