Brain-controlled iPhones, a Japanese asset buy-a-thon, and Trump tax cut debt

Summary

Podcast Summary: The Indicator from Planet Money

Episode Title: Brain-controlled iPhones, a Japanese asset buy-a-thon, and Trump tax cut debt
Release Date: May 16, 2025
Host: Darren Woods
Guests: Waylon Wong, Jeff Guo
Duration: Approximately 10 minutes

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1. Japanese Asset Buy-a-Thon Amid U.S. Tariff Announcements

Key Points:

• Record Foreign Investment in Japanese Assets: In April, foreign investors purchased a net total of 8.2 trillion yen (approximately $56 billion) in Japanese stocks and bonds. This surge is the largest since Japan began tracking such data in 2005.

• Impact of U.S. Tariff Announcements: The spike in Japanese asset purchases coincided with President Trump's significant tariff announcements at the beginning of April. Contrary to expectations, these tariffs triggered a market reaction where investors sold U.S. Treasuries, typically considered a safe haven, and diverted their investments to other countries, notably Japan.

• Unusual Market Behavior: Traditionally, in times of economic uncertainty or negative news, investors flock to U.S. Treasuries for safety. However, the tariff-induced panic led to the opposite behavior, with bond prices falling as investors moved away from U.S. assets.

Notable Quotes:

• Waylon Wong (02:29): “That was the biggest shopping spree by foreigners for Japanese assets since the government started tracking this data in 2005.”

• Jeff Guo (03:20): “Right. And that's like super weird because Treasuries are supposed to be this safe haven that everyone buys when they think stuff is in trouble.”

• Waylon Wong (03:37): “They’re considered the safe choice. Even when the bad news or the uncertain news is coming from the US, we're still the safest place to park your money.”

Analysis: The episode highlights a significant shift in foreign investment patterns triggered by geopolitical events. The unusual sell-off of U.S. Treasuries suggests a lack of confidence in traditional safe havens during volatile times, prompting investors to seek stability elsewhere, such as in Japanese markets. This behavior underscores the interconnectedness of global economies and the profound impact of U.S. policy decisions on international investment flows.

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2. The Fiscal Implications of Trump's Tax Cuts

Key Points:

• Cost of Tax Cuts: President Trump's tax cuts are projected to cost the U.S. government $3.8 trillion over the next decade, averaging $380 billion per year.

• Budgetary Challenges: The primary question facing Congress is how to finance these tax cuts amidst existing budgetary commitments. The major areas of federal expenditure include Social Security, Medicare, Medicaid, and defense.

• Political “Third Rails”: Historically, Social Security and Medicare have been untouchable in political discourse, termed the "third rails" of American politics due to their unpopularity as targets for cuts. This leaves Medicaid as the primary candidate for potential reductions.

• Shifting Republican Stance: Surprisingly, recent Republican budget proposals have indicated less severe cuts to Medicaid than anticipated. Influential Republican figures, such as Senator Josh Hawley, have publicly defended Medicaid, recognizing its critical role and the political risks associated with cutting it.

• Medicaid Expansion and Political Dynamics: The expansion of Medicaid under the Affordable Care Act (ACA) has provided health coverage to an additional 21 million people, many residing in traditionally Republican ("red") states. This expansion has transformed Medicaid into a new political linchpin, making it increasingly difficult to justify substantial cuts without significant voter backlash.

Notable Quotes:

• Jeff Guo (04:19): “How much it'll cost over the next 10 years to pay for all of the tax cuts that President Trump promised during his campaign.”

• Waylon Wong (07:01): “When you're on the train lines of making policy, you do not want to touch the third rail.”

• Jeff Guo (06:17): “It is turning into the new third rail in politics because it helps a lot of people. It makes their lives better. And when a government program is helping a lot of people, it becomes really hard to cut it.”

Analysis: The discussion delves into the fiscal sustainability of the Trump administration’s tax policies within the broader context of federal budgeting. The reluctance to cut Social Security and Medicare has historically constrained budget flexibility, pushing attention toward Medicaid as a potential area for deficit reduction. However, the expansion of Medicaid has increased its beneficiary base in politically sensitive regions, complicating efforts to implement significant cuts. This dynamic reveals the intricate balance policymakers must maintain between fiscal responsibility and political viability.

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3. Brain-Controlled iPhones: The Future of Neurotechnology

Key Points:

• Innovative Technology for Movement Impairments: Apple is collaborating with Synchron, a company developing brain implants that can interface directly with devices such as iPhones, tablets, and virtual reality headsets. These implants allow users with paralysis or movement impairments to control technology using their thoughts.

• Current Development Stage: The technology is not yet available to the mass market but is undergoing testing. A notable case involves Mark Jackson, a man with ALS, who successfully used the implant to navigate a virtual reality environment by merely thinking about his movements.

• Regulatory and Ethical Considerations: For widespread adoption, these brain implants must receive approval from the FDA. Additionally, there are ongoing concerns regarding animal welfare in the testing phases, as seen with Neuralink, another company in the neurotechnology space facing federal investigations over its treatment of test animals.

• Future Prospects: The CEO of Synchron anticipates obtaining government approval to market these devices by 2030, potentially revolutionizing the lives of the approximately 100 million people worldwide suffering from paralysis or movement impairments. Visionaries like Elon Musk foresee even broader applications, envisioning a future where such implants enhance human capabilities beyond medical necessities.

Notable Quotes:

• Darren Woods (07:08): “My indicator is 100 million. That's how many people around the world have some form of paralysis or movement impairment. But there may be technology around the corner that could make their lives easier.”

• Waylon Wong (09:10): “Elon Musk has talked about a world in which hundreds of millions more people have these kind of implants. They'll have superhuman vision backed up by computer memory, what he calls a Fitbit in your skull. Are you guys tempted?”

• Jeff Guo (09:42): “Yeah, I just don't want to be a part of this meat space anymore.”

Analysis: The segment explores the cutting-edge intersection of technology and healthcare, highlighting the potential of brain-computer interfaces (BCIs) to transform the lives of individuals with severe physical impairments. While the promise of such technology is immense, enabling unprecedented levels of autonomy and interaction with digital environments, it also raises significant ethical, regulatory, and safety concerns. The discussion underscores the delicate balance between innovation and responsibility, as society navigates the profound implications of integrating technology directly with the human brain.

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Conclusion

This episode of The Indicator from Planet Money offers a comprehensive exploration of three distinct yet interconnected economic and technological issues:

1. Japanese Asset Purchases: Illustrating the influence of U.S. policy decisions on global investment flows and the shifting behaviors of investors in times of uncertainty.

2. Fiscal Challenges of Tax Cuts: Highlighting the complexities of federal budgeting, the political intricacies of cutting large-scale social programs, and the evolving landscape of Medicaid as a critical area of focus.

3. Neurotechnology Advancements: Showcasing the transformative potential of brain-controlled devices for individuals with disabilities, while also addressing the ethical and regulatory hurdles that accompany such groundbreaking innovations.

Through engaging dialogue and insightful analysis, the hosts and guests provide listeners with a nuanced understanding of these pivotal topics, emphasizing their relevance to today's economic and technological landscape.

Transcript

[NPR]

Npr.

[Darren Woods]

This is the Indicator from Planet Money. I'm Darren woods here with the wondrous Weylun Wong.

[Waylon Wong]

Wondrous Waylon Wong. Wow, what a Friday treat. Hi, Darian.

[Darren Woods]

We also have the ginormous intellect of Jeff Guo from Planet Money. Welcome.

[Jeff Guo]

That is the nicest thing anyone's ever said to me.

[Waylon Wong]

Oh, wow. I feel so affirmed. We just log off.

[Darren Woods]

We have work to do.

[Waylon Wong]

Oh, no.

[Darren Woods]

It's Indicators of the Week.

[Waylon Wong]

Yay. We are here as always, to bring you the most fascinating snapshots from the week of economic news. And on today's show, Japanese asset buyers make it rain.

[Darren Woods]

IPhone powered by the brain.

[Waylon Wong]

Ooh.

[Jeff Guo]

And how in the world are we going to pay for Donald Trump's tax cuts? We will explain.

[Charles Schwab]

This message comes from NPR sponsor Charles Schwab with its original podcast on investing. Each week you'll get thoughtful, in depth analysis of both the stock and the bond markets. Listen today and [e-mail] on investing or wherever you get your podcasts. This message comes from Apple Card. Picture this. Somewhere in the world, an Apple Card user is getting 3% daily cash back on the purchase of an iPhone 16 at Apple. That's not all. They also earned 2% back on the new shoes they bought using Apple Pay. Visit Apple Co Card calculator and see how much daily cash back you can earn. Subject to credit approval, Apple Card issued by Goldman Sachs Bank USA Salt Lake City Branch terms and [e-mail] this message.

[NPR]

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[Darren Woods]

It'S indicators of the Week. Waylon, you're first.

[Waylon Wong]

Okay, My indicator is 8.2 trillion yen. That's about US$56 billion and that is the net amount of Japanese stocks and bonds purchased by foreign investors in the month of April. Now, according to the Financial Times, this was the biggest shopping spree by foreigners for Japanese assets since the government started track tracking this data in 2005.

[Darren Woods]

Okay, I'm thinking April was notable because.

[Waylon Wong]

Well, to jog your memory, at the beginning of the month, President Trump made this huge tariff announcement. This then kicked off a Bit of a freakout in financial markets, you might recall. And something really weird happened with U.S. treasuries. I talked about this in yesterday's episode. Prices for US Government bonds went down. That means investors were selling Treasuries.

[Jeff Guo]

Right. And that's like super weird because Treasuries are supposed to be this safe haven that everyone buys when they think stuff is in trouble.

[Waylon Wong]

Exactly. They're considered the safe choice. Even when the bad news or the uncertain news is coming from the US we're still the safest place to park your money.

[Jeff Guo]

Yeah.

[Waylon Wong]

In April, something different happened. The markets reacted so badly to the tariff announcement that investors ran away from Treasuries. They didn't want anything to do with U.S. assets and, and they looked at buying stuff in other countries instead, including Japan.

[Darren Woods]

And so as of this recording, the markets have calmed somewhat. Right?

[Waylon Wong]

Kind of. It was a bit of a rocky week for Treasuries, I will say. Bond prices went down again midweek. They've come back. But the markets are still showing concerns over the budget deficit. And of course, we've got this huge budget showdown looming in Congress. Which brings us to your indicator, Jeff.

[Jeff Guo]

Oh, boy, oh boy. Okay, so my indicator of the week is 3. $3.8 trillion US dollars.

[Darren Woods]

Now that's a real indicator, that is.

[Jeff Guo]

How much it'll cost over the next 10 years to pay for all of the tax cuts that President Trump promised during his campaign.

[Darren Woods]

Mere 380 billion a year on average.

[Jeff Guo]

Something like that. Yeah. And so the big fight in Congress right now is how are we going to pay for all of that? And when it comes to the federal budget, there's really only a few big ticket items. There's Social Security, that's the biggest. Then there's healthcare programs like Medicare and Medicaid, and then there's defense.

[Waylon Wong]

Oh, so we're cutting defense.

[Jeff Guo]

That's funny. Funny one, Waylon. Yeah, no, not defense. So it's, it's really just Social Security, Medicare, Medicaid. Pick your poison. And okay, for a long time, there has been this one universal ironclad rule in Washington, which is you, you don't touch Social Security and you don't touch Medicare.

[Waylon Wong]

These things are stacker Sankt. Right. They're like the third rails of American politics.

[Jeff Guo]

Yeah. Like as a politician, you don't want to mess with people's retirements. You don't want to mess with healthcare for the elderly or like your political career is over. Which leaves Medicaid, which, you know, provides healthcare for low income people, especially children. And pregnant women. And so for many decades, budget minded politicians, mostly Republicans, have been clamoring to cut Medicaid. It's this big, juicy target. But this week, when Republicans in the House came out with their budget proposal, it was surprisingly less catastrophic for Medicaid than expected.

[Darren Woods]

So the cuts have not been as deep as some people who are advocates for Medicaid were worried about.

[Jeff Guo]

Yeah, I mean, these are still serious cuts. Millions of people could lose their health care. But what's surprising now is that you're seeing Republican senators like Josh Hawley come out and defend Medicaid, saying Medicaid is important, that you can't touch it, that touching it would be political suicide.

[Darren Woods]

Okay, what's happening in the Republican Party?

[Jeff Guo]

Yeah. Well, the backstory to all of this is that over the past decade or so, thanks to the Affordable Care act, most states have expanded Medicaid. So now around 21 million more people have health insurance. A lot of those people benefiting from Medicaid. They live in red states.

[Waylon Wong]

So those are all the people that stand to get really angry if their health coverage gets cut.

[Jeff Guo]

Yeah. Like the reason that politicians are afraid to cut Social Security or Medicare in the first place is because too many people rely on it. And something similar is maybe happening to Medicaid right now. It is turning into the new third rail in politics because it helps a lot of people. It makes their lives better. And when a government program is helping a lot of people, it becomes really hard to cut it.

[Darren Woods]

When you're on the train lines of making policy, you do not want to touch the third rail.

[Jeff Guo]

All right, Darian, you're next. What's your indicator?

[Darren Woods]

My indicator is 100 million. That's how many people around the world have some form of paralysis or movement impairment. But there may be technology around the corner that could make their lives easier. Apple is working with a brain implants company.

[Waylon Wong]

Whoa. Is this like the new frontier of wearables?

[Darren Woods]

Basically, yes. Apple is working with Synchron, which develops these devices that are kind of like thin needles that get implanted into your brain with wires running through your body that send signals to your device.

[Jeff Guo]

Oh, my God.

[Darren Woods]

You can just think left or right and click. And the message is passed onto a tablet or a phone or a virtual reality headset.

[Waylon Wong]

Whoa. So how far along is this? Are you talking, like, proof of concept prototype? They're actually making these already?

[Darren Woods]

It already exists. It's not in the mass market, but it is being tested. Wall Journal this week reported about a man with als, Mark Jackson. He was one of these test subjects. So the company Synchron installed the implant in Mark's brain, and then he put on a VR headset showing this virtual world in the Swiss Alps. And he could control where he looked and digitally walked around.

[Jeff Guo]

Whoa. So. So he is already living in the future.

[Darren Woods]

Yeah. And of course, to actually sell to the public, a company like Synchron or Elon Musk's Neuralink needs approval from the FD before they go around poking at customers brains with electronic implants. And I should mention there's been federal investigations into Neuralink's animal welfare practices when it comes to testing. The jury's still out on some of those allegations, but, you know, monkeys have died.

[Jeff Guo]

Oh, no.

[Darren Woods]

Anyway, back to Synchron. The CEO of that company thinks they'll get government approval to sell their devices before 2030. So less than five years away.

[Waylon Wong]

Okay, so you mentioned there's like 100 million people around the world with problems with movement that could benefit from this. Potentially. But don't the a techno optimist crowd like Elon Musk at all? Don't they want this technology even for people who have full movements of their limbs?

[Darren Woods]

Elon Musk has talked about a world in which hundreds of millions more people have these kind of implants. They'll have superhuman vision backed up by computer memory, what he calls a Fitbit in your skull. Are you guys tempted?

[Waylon Wong]

If I shoved a Fitbit up my nose, would I get the same result?

[Darren Woods]

Extraordinary senses of smell. That's for the next product development.

[Waylon Wong]

If you couldn't tell, I'm not a techno optimist. I'm a techno pessimist.

[Darren Woods]

Where do you fit on the techno optimist to pessimist scale, Jeff?

[Jeff Guo]

Yeah, I just don't want to be a part of this meat space anymore.

[Waylon Wong]

Well, thanks for being here, Jeff.

[Jeff Guo]

It's been great, guys.

[Waylon Wong]

We'll see you later. If we survive the robot apocalypse.

[Darren Woods]

This episode was produced by Angel Carreras with engineering by Kwesi Lee. It was fact checked by Sarah Juarez. Cake and Cannon edits the show. And the Indicator is a production of npr. And a very special thank you to the producer, Lily Quiros. She lent a helping hand over from Morning Edition. She was a wonderful addition to our team here at the Indicator for the past few months. Thank you, Lily.

[NPR]

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