When the World is Scary and the Economy is Confusing

TOPICS DISCUSSED

  • Unrest in the World 

  • Disarray in the House

  • Bonds, Inflation, and the Economy

  • Outside of Politics: Pantsuit Politics Live in Paducah

Thank you for being a part of our community! We couldn't do it without you. To support the show, please subscribe to our Premium content on our Patreon page or Apple Podcasts Subscriptions, or share the word about our work in your circles. Sign up for our newsletter or follow us on Instagram to keep up with everything happening in the Pantsuit Politics world. You can find information and links for all our sponsors on our website.

EPISODE RESOURCES

TRANSCRIPT

Sarah [00:00:09] This is Sarah Stewart Holland.  

Beth [00:00:10] And this is Beth Silvers. Thank you for joining us for Pantsuit Politics.  

[00:00:14] Music Interlude  

Sarah [00:00:34] Thank you so much for joining us at Pantsuit Politics, where we take a different approach to the news. Today, we are going to talk about an inflection point in history. We are all feeling the impact of the conflict in Israel and Ukraine and the increasing danger that we all can see so clearly around the globe. We're going to talk about the inflection point with regards to the economy and that we seem to have entered an era of higher interest rate. And what that means specifically when it comes to government debt and federal fiscal policy. And then Outside of Politics, we got a lot of love and lightness that will hopefully balance out the heavier first two segments of the show. We're going to talk about our fantastic weekend in Paducah, Kentucky.  

Beth [00:01:18] I will save the gushing about our weekend for the Outside of Politics segment. But I would just like to say thank you to everyone who came. If you didn't make it or if you would like to spend some more time with us, we are going to be in Hammond, Louisiana, at Southeastern Louisiana University on November 9th. We will be the next day in Jackson, Mississippi, with the Diabetes Coalition of Mississippi on November 10th. Both of those events are open to the public. You can get more information about them on our website and in the show notes today. And we would love to see you there.  

Sarah [00:01:50] And, listen, if you are still recovering from our Pete Buttigieg interview, if you came to Paducah this weekend, you're like, "Man, I just need to come down from the excitement." We just got one more quick little thing for you that I have been keeping a secret for months, Beth. Actual months.  

Beth [00:02:07] You have.  

Sarah [00:02:08] Earlier this year, I was interviewed by Hillary Clinton for her podcast, You and Me Both. It was the most surreal day of my life, and I have three children. I spent an hour on Zoom with her. She was absolutely wonderful to me. She kept acting like I had wisdom to impart to her, and it was all I could do, to be like, I don't have anything to tell you. I'm just parroting back what you have taught me over the course of my life.  

Beth [00:02:37] Sarah...  

Sarah [00:02:38] Beth's making a face.  

Beth [00:02:39] You have things to share with everyone, and you know that about yourself.  

Sarah [00:02:42] She brought them out of me. She believed in me. And I made her laugh, which is the best feeling in the whole world, because Hillary Clinton has one of the best laughs in American life. And that episode is airing on her podcast today, Tuesday, October 24th. So you should run over there and check it out. I'm not the only guest. I think there's a couple other guests. We're recording on Monday, so I haven't actually heard the edit yet. I hope it's good and I don't sound crazy. But I walked out of the Zoom and just burst into tears because I was so overwhelmed by the emotional experience of hanging out with Hillary Clinton on Zoom for an hour.  

Beth [00:03:12] I'm really happy that you got to do this, and I'm looking forward to hearing it.  

Sarah [00:03:15] And we're working hard to get her on our show because she did promise me on the Zoom that she would come on Pantsuit Politics. But she has a lot of people between her and her schedule. So we're working on that now. I think Pete and Hillary would make an excellent complement to each other, don't you?  

Beth [00:03:28] The former secretary is welcome here any time.  

Sarah [00:03:31] Anytime, day or night. Up next, we're going to talk about the heaviness we are all feeling about the very precarious nature of global politics right now.  

[00:03:40] Music Interlude 

President Biden [00:03:51] We're facing an inflection point in history, one of those moments where the decisions we make today are going to determine the future for decades to come.  

Sarah [00:04:01] President Biden used a prime time address on Thursday night to tell the American people that things are changing. We are in a time of global transition and the stakes are very, very high. And then, Beth, you sent me a piece by Bill Kristol. He opened with a quote from Lenin. "There are decades when nothing happens, and there are weeks when decades happen." And that certainly feels like the last couple of weeks we've had.  

Beth [00:04:29] I think that's true. Axios has also been doing these round ups that look at the world right now. You have this threat of the conflict between Hamas and Israel threatening to expand throughout the region. You have Vladimir Putin going to Beijing and being praised at China's Belt and Road Summit. You have all of these situations across the world that in an instant could become much more volatile. And so even as in September, this is the point that Bill Kristol makes so well, we felt like the world was fairly stable, in October it's become clear that there was always an underlying fragility to that stability, and the fragility is currently exposed.  

Sarah [00:05:15] There's no stasis, ever. And so you got to just capture those moments of rest knowing that they're not going to last, because I did. It was September, it felt like there were slow news days. Things seem so stable. And then in an instant, so many paradigms can not just shift but be shattered. I think we've come to this place where we thought the Middle East was not a primary area of concern for the United States or the globe. I think we talked about that, about the Biden administration's shifting focus with regards to foreign policy to China and the Indo-Pacific. And the thing is that's still true. That does have to be an area of shifting focus, like they're all tied up together, these growing areas of concern. And how you know that this is a big moment where everything feels different, is how often I'm hearing this from people in my everyday life who don't usually talk politics. I think people are scared. I think people feel like the world is getting scary. The world is getting dangerous. I think these two wars in both Israel and Ukraine have put people in a place of alarm and fear and concern that the world is changing. And, look, that's true. I think that's true. That's always true. But that it's also becoming more dangerous.  

Beth [00:06:43] Because so many Americans are so intimately connected with all parts of the world, because there are so many people in the United States who are related to and love Ukrainians and Russians, who are related to and love Israelis and Palestinians, who through history are connected to many of the unfolding events and through our own recent history have a response to terrorism, have a response to hostage taking. We're just going to feel it all. I think that in one category I think about that sense that we're going to feel it all, and being really mindful of that and sensitive to it and appropriate about it. And then on the other hand, I think about what actually witnessing that means. I'm finding myself pulling away from the day to day details of what's unfolding in both Ukraine-- and that's been true for quite a while for me-- and also now in Israel and Gaza. Because the Internet has made me so distrustful of the day to day accounting of what's happening. And as I watched stories develop where some horrific detail emerges, the bombing of a hospital, the beheading of babies, and then there's this series of stories with recriminations and retractions or walk backs or perhaps this happened, perhaps it didn't, I just I'm trying to realize that level of attention that feels possible to us because of the Internet is still not as accessible and accurate as we want it to be. I don't even know if we want it to be. Like you said, it's more than our souls can carry, but it feels like we should have a constant, reliable accounting. The phrase 'The fog of war' has been around forever for a reason though, and I'm just trying to realize like I can be present with the true and urgent and palpable emotions of people here in the United States because of their connections to those regions, without doing the constant scroll and trying to sort out myself what's true and not true on a daily basis.  

Sarah [00:08:59] Yeah, there's two things there that I think are so important. I mean, when we talk about the world getting more dangerous, as a person who experiences the world, make sense of the world, really just prioritizes travel, I just think about how many parts of the world you could go to six years ago and now you can't. I wouldn't go to China. Definitely wouldn't go to Russia. Americans were traveling to Israel, that's how they got caught up in this. It's just like huge parts of the world that used to be accessible and now are too dangerous to go to. And I remember when we went to Europe, my dad was worried because of the Ukrainian conflict. It feels like larger and larger areas are off limits because they're dangerous. And so that's such an intense, pragmatic way to feel that. Just to say, like, I used to have the world at my footsteps and now there are just whole sections of it I can't go to. Even if you weren't planning to, it does feel like the danger is becoming more palpable. And then to your point about the fog of war, I think that so true. The New York Times printed a big editorial note about their headlines surrounding the bombing of the hospital, which now, based on intelligence from France and Canada, AP video analysis, it looks very clear that it did not come from the Israeli defense. And them saying basically just the way we phrase the headline, the social media alerts-- I thought that part was very interesting-- we have to think about the fact that this shows up in everybody's phone and people are going to see it who never open the app and read the story. And so are you going to do another alert when you get an update? I do not envy the people at The New York Times making those decisions. I am so grateful that here at Pantsuit Politics we take a beat because we can. Because it's so true, it's ever shifting. You just can't take it back. I appreciate their editorial note. I do not envy that decision making. But you can't take it back. You can't take it back. You can't unpaved that neural pathway that sort of got laid in that moment. And even if they could, there's just people that are never going to believe it anyway. So dealing with just basic human psychology, much less before you layer social media on it, much less before you label misinformation and A.I. created videos, that's a very intense informational environment to coexist with the fog of war that's been around for thousands of years, where we're trying to sort out what's happening. The sense of increasing danger in the world in an inflection point, and our heartbreak, heaviness, the heaviness I think we all feel surrounding it, it's well placed. It's well placed.  

Beth [00:11:48] When you were talking about that pragmatic reality of our travel being limited by these events, I want to make sure to say that we recognize people live in these places that are dangerous. When you think to yourself, this part of the world is off limits to me, some of that is an acknowledgment that I cannot be helpful and, in fact, I can be harmful. You could still go, but your presence would not be helpful and could be harmful at these moments in history. And that's how I think about the discussion unfolding about these conflicts as well. There are places where even participating in a common thread is not helpful and could be harmful to someone. It's so difficult to step back and have the humility to say-- and this is all I feel right now-- I do not know what the path forward should look like here. One of our listeners, Eric, sent me a screengrab from one of his friend's Instagram stories that said something like, "We don't have to have a hierarchy around empathy, but there is a hierarchy around intention." And I thought that was a really wise and succinct way to put what I've been wrestling with. That for me, of course, there is no hierarchy between the innocent lives lost on either side of a conflict, and there are policy decisions that have to be made by governments. And I want to compliment the administration again. I think the Biden administration is quietly doing a lot to balance those objectives. All of the reporting that I read this morning talked about how they have tried to buy time to negotiate aid getting in. And as you see these trucks going into Gaza, you know that while the response from Israel has been aggressive, it is not as aggressive as it might have been. And how President Biden has been trying to influence Netanyahu and the Israeli strategy to not repeat our mistakes from 9/11, to not be so enraged that you aren't thoughtful and strategic about your next steps. So this is terrible. And I think we are trying to integrate some lessons. I think American leadership is helping in a way, and it's helping in ways that as a citizen, I'm not privy to all of, I cannot contribute to. And I think it is a moment where I feel really convicted that the best I can do is sit back and support my government as it tries to act on this extremely precarious world stage.  

Sarah [00:14:36] I couldn't agree more. Feeling a sense of trust and just capability and capacity towards our current administration is the best I could ask for right now. Just feeling like the people who are acting on my behalf, they work for us on the world stage at this inflection point in history is the best I can do, is all I have to offer, and I trust those people. And that's giving me Governor Andy during COVID vibes, right? You're just like, well, aren't I grateful that the people making these impossibly hard decisions and taking in all this incredibly difficult information and trying to take the best next step they can are people that I think are thoughtful and smart, and I trust them. Does that mean I don't think they will make mistakes? No, it doesn't. I fully expect them to make mistakes. We cannot get all of this right. It's impossible. It's not available to us.  

Beth [00:15:34] There's not a right.  

Sarah [00:15:35] And that's even how I feel about the hospital story. I keep thinking like on the Good Morning, should I go into now we know? But then I'm like, I'm celebrating that someone else sent a missile that killed a bunch? No, that feels gross and weird too, because there's no place to be righteous here. There just isn't. And people who act like there is, I don't find them trustworthy or authentic. I don't have a lot of room for righteousness right now. And I think that when there are growing threats, when there are increasing dangers, righteousness is not what you should be looking for. It's humility, it's vulnerability, it's empathy. And it's a cool eyed understanding that right and righteous is not available to us. And I think that's really difficult now in theory, Beth. During these inflection points of history, we could find leadership and not just the executive branch of government, but also the legislative branch of government, which also seems to be going through some sort of inflection point in history over at the House of Representatives, where we still don't have a speaker of the House. But don't worry, nine candidates are hoping to unite the Republican caucus. Are you feeling hopeful?  

Beth [00:16:53] Not particularly. The split screen is tough. Where I see the administration, I think, proceeding with a lot of diligence and an attempt to learn the lessons of history.  

Sarah [00:17:08] And just do their job.  

Beth [00:17:09] And do their jobs the best that they can when the options are terrible. And I know that not everybody feels that way. Before I pivot to Congress, I do want to acknowledge not everybody feels that way. There are people who think that none of these awful things in the world would be happening if people were more afraid of the American president. That is not how I perceive the world. That is not my understanding of the climate that has led to these events. But I understand that not everyone feels this way and that's tough. That's tough to take in. So you have that, the executive on one side of the ledger. And then when you look at the Republican conference and the cycle of decision making, not just the ouster of Kevin McCarthy, but then every subsequent decision of the conference that doesn't seem to be integrating the lessons of the past, that we come out of this really embarrassing moment where Jim Jordan gets nominated at all and then he and his team use these strong arm tactics that fail and fail and fail. That in a closed door meeting with a secret ballot, the conference says to him, "We don't want you to continue to be our nominee for speaker." And on the next iteration, nine people jump in to take over. It's hard to see where anyone believes this could go. Every press story I read about it, someone is saying like, Jesus Christ couldn't get 217 votes from our conference. So splitting it up nine ways makes sense? I don't know, guys. I hope that by the time this episode lands in your feed, some clarity has emerged. I really struggle to see how that happens.  

Sarah [00:19:04] Yeah. On Patreon, one of our listeners, Liane said, "Are they actually a majority?" And you know what? I think that's a very valid question. Is this the majority? Nate Cohn had some really good analysis of who was sticking with Jordan through all three votes. Sort of by his count, there's about 40 percent of the conference that is just the hard right wing, which is a higher number than I wish it was. They're a loose coalition at this point. They don't have a leader. They don't have a speaker. They're not going to rally around one of these nine. I seriously doubt the efforts to get a unity pledge where whoever wins the conference vote, we're all going to support on the floor gets going. And in theory I feel, oh, well, that's a good idea. And then I think, no, that means Jim Jordan would be speaker of the House. That's a terrible idea. Again, I don't know what they should do. They don't know what they should do, which is a problem because decision making and knowing what to do is their whole entire job. So I sincerely do not know what's going to happen. I don't think they're going to be able to elect a speaker of the House. And so right now I'm thinking, okay, well, does that mean they're just going to go back to Kevin McCarthy? Is that where we're going to end up? I don't know.  

Beth [00:20:19] Whenever I'm struggling to make a decision, I try to go back to first principles. Like what do I absolutely know about this decision that has to be made? And I think it would be helpful to think really clearly about the role of the speaker of the House. That 40 percent that is really strongly behind Jim Jordan, I think, views the speakership as they view everything in the party right now that we need a fighter, that we need a cult of personality, that we need somebody that our people love. When I hear somebody like Nancy Mace walking around-- I keep harping on Nancy Mace, but I just feel really disappointed.  

Sarah [00:20:54] She deserves it. Don't apologize.  

Beth [00:20:56] But when I hear her saying, "Well, our voters want Jim Jordan," respectfully, doesn't matter who your voters want for speaker of the House, it's not that kind of position.  

Sarah [00:21:06] It's so true.  

Beth [00:21:06] This position is about how the body functions. It is a lot. Like a chief operating officer for the House of Representatives, this person not only has to get votes to the floor, they have to deal with the security of the chamber. They have to deal with budgets and supplies. I mean, it's a job.  

Sarah [00:21:25] Well, and they don't have to be a member of the House. They don't actually have to be elected. That's a pretty good indicator this is not about your constituents' wishes.  

Beth [00:21:32] Right. And I'm not trying to be ugly or dismissive of voters in a democratic republic, but this position has a job description that's hard to fill under the best circumstances. And so if cooler heads are to prevail, I would just like to suggest a Google slide with the responsibilities of the speaker to kick off the next meeting for people to really get real about what they're trying to select. And the other thing that I think it's important to get real about, is that we see over and over again these tactics of bringing everything to a pause, whether it is shutting down the government over a budget or bringing us to the brink on the debt ceiling and now 20 days without a speaker so that the House can even function. And for what? The track record here is, they get nothing from it. There is no accomplishment on the other side. No money is saved when we shut down the government, it costs us more money that period that things were stalled out. This is not a tactic to negotiate some incredible piece of legislation that's going to benefit the American people. There are costs to this period where nothing is happening. How many times are we just going to keep doing the same thing over and over when again, it's not helpful and it causes harm?  

Sarah [00:22:57] If I could get in front of the conference, [inaudible], If they just gave me the mic-- they won't. They never would. But if they did, I would put on my strongest mom voice and say, "You have sowed division for decades and you dare to stand up here and talk about uniting yourselves?" This is what happens. It matters what you say and how you act, even if it's on Fox News and you know you don't mean it. You cannot do this for years and years and years. Depend on division as your primary organizing tool and then expect to get up there with a straight face and talk about uniting your Congress. Karma is a bitch. That's 20 year old Sarah. I can really get in that space which I'm like, "You deserve every minute of it." But 42 year old Sarah knows that my apple wagon is hitched to their damn cart. And I'm like, "Get it together. Get it together. Come on." The fact that we can't do anything-- but that's been true. That's been true the whole time. This division. The consequences were playing out for everybody else, and it's finally come home to roost. And now they're struggling. And there is a part of me that's like, of course it is. Of course it is. Did you think this was all playacting? But I think some of them did. Truly and honestly, I think some of them still do. It's just so infuriating.  

Beth [00:24:23] I feel like the last three or four times we've talked about this, the only phrase that comes into my brain is just this giant billboard that says, "Sober up. Stop with the game theory. This is all very real. At some point, our markets are going to react to this.  

Sarah [00:24:44] Our enemies.  

Beth [00:24:45] Our enemies. I think, already across the globe people have to be looking at this situation and wondering how reliable the statements our administration makes are. When President Biden is out there promising American support for Israel, for aid to Gaza, for Ukraine, Congress must write those checks. And at home, when people are complaining about whatever they're complaining about in a given day, much of it legitimate, we have to have a functioning Congress to solve those problems. A good speech that makes everybody feel better even isn't going to do it. So I don't know. Again, maybe you should go in with the righteous 20 year old Sarah mom voice, and then I could come behind with the PowerPoint and we could try to bring things together. But it's a tough lift right now.  

Sarah [00:25:40] So I guess we'll just continue to pay attention to this slow roasting dumpster fire and hope that there are developments, positive ones, we can talk about on Friday's show. But one of my least favorite phrases in American politics is, 'Well, I'm a fiscal conservative. I hate it. I think it's ridiculous. Everyone's a fiscal conservative. Even people who are in favor of spending think that it's an investment that ultimately saves Americans money. So I just think it's a phrase, it doesn't mean much. Even when people say it with the undercurrent of saying that's why they vote Republican. Republicans have not been fiscally conservative for like a long time. It is not fiscally conservative to cut taxes. So it's very frustrating for me. And I think with this new inflection point in history, which is rising interest rates, maybe it can either take on its actual meaning or we can all stop using it.  

Beth [00:26:58] What do you think its actual meaning is?  

Sarah [00:27:01] What do I think its actual meaning is with low interest rates or high interest rates? In low interest rates it means nothing, because you can either cut taxes from the right, you can spend on the left, and because of lower interest rates there's not a lot of impact for that. But with high interest rates, when the cost of borrowing for everybody, whether it's a house or you're the federal government is going up, then it's got to mean raising taxes or cutting spending for real. Not discretionary spending that we all get to fight about during the budget process, mandatory spending, hard choices. Being fiscally conservative in your own home or the federal government involves a lot of unpopular choices. And so I think that's what it means, and that's almost never what happens.  

Beth [00:27:45] So maybe it would be useful to think about what is fiscally responsible versus fiscally conservative.  

Sarah [00:27:52] I'm fine with that.  

Beth [00:27:53] And maybe it would be useful as we talk about the economy, to talk about the tradeoffs that we are willing to tolerate. I think a lot about this great advice that Kelly Harp, our friend, gave us about being a small business owner. She said to us, "You are always going to have problems. You want to be in a position to choose your problems, to have the best problems available." I will paraphrase it as. And I think that's true in the economy. So as we go into this conversation and we talk about rising interest rates, I think it's important that we remember that rising interest rates are a choice that we have made.  

Sarah [00:28:30] Right.  

Beth [00:28:30] We have picked that problem over the problem of inflation. And we choose that problem alongside the choice to try to stabilize prices instead of lowering them because higher prices that are stabilized is still a problem for people. It's hard, the prices are higher. it's a better problem than deflation 

Sarah [00:28:56] Right.  

Beth [00:28:56] Which is what we kind of want, right? We would all like the prices to just come back down, but we wouldn't all like that because that leads to a new crop of problems.  

Sarah [00:29:04] Layoffs, unemployment.  

Beth [00:29:06] Yes. If we could just get more precise about the problems we would choose if we were in charge and what seems responsible to us, I think that might give us more clarity than staying in a 1980s prism as we identify what we think about monetary policy.  

Sarah [00:29:25] So let's talk about this problem that we've chosen. We all know central banks around the world have been raising interest rates to fight inflation. There is too much money out there, so they made it harder to borrow it. Well, governments also borrow money. The United States federal government borrows money by issuing government bonds. And the yields on those bonds, how much they pay when you cash them in and say, "Okay, I want my money back with the interest because I loaned you that money," rises and falls with interest rates just like mortgage rates. And that means we might pay more for mortgage interest. That also means the U.S. government will pay more on its debt. And for a long time we had what they call an inverted yield. Stay with us. I know. I hear inverted yield and my brain goes, "Oh, bye bye." Stay with us. Because short term borrowing paid more, because people were counting on interest rates continuing to drop. So they're like, I'll loan the government money for just a little bit of time because I don't want to loan the government money for too long of a period of time because interest rates will drop and I'll even make less money. Well, that's not true anymore. Now, with the interest rates rising, now a long term bond is worth money that's going to pay more interest because they're betting that the interest rates will go up, which has not been true for decades. So what that means is paying off our debts is getting more and more expensive for the United States federal government.  

Beth [00:30:48] Two terms, we've talked about this before, but I want to revisit again as we walk through this conversation. The debt and the deficit are different. We have the debt, which is the cumulative borrowing that we are paying interest on. And we have the deficit, which is the amount each fiscal year by which our expenditures exceed our revenue. And we have been running at a deficit so annually spending more than we are taking in revenue since the nineties. We did have a balanced budget in the nineties. But the problem is when we're running at a deficit every single year, that debt continues to rise and we're not making any headway. So we're paying interest, we're not paying down the principal and we are adding to that amount of cumulative borrowing. I don't mean to be insulting about this. We kind of tossed those terms around and it's easy to conflate things that are quite different.  

Sarah [00:31:44] And so as we enter this period of transition, where I do think higher interest rates are here to stay for a little while-- please don't ask me to define a little while because I don't know how long a little while is. Moving target. But in 2007, the federal government debt was 35 percent of GDP, and now it's three times higher because we're spending more and it costs more to borrow the money to spend that money. And so the solutions to this problem that we have chosen are very difficult. Now, I am happy to let the Trump tax cuts expire in 2025. Also, my name is not on a ballot anywhere, so that's a very easy choice for me to make. But that's the first, I think, of these hard choices that we're going to have to face with this problem that we have chosen.  

Beth [00:32:35] I don't think there's any question that we make no progress around the debt for sure without increasing taxes. The Daily from The New York Times had an excellent episode this Monday morning as we're sitting down to record about the fact that we have a revenue problem. And we have a revenue problem in addition to the Trump tax cuts, it is not only that we cut taxes, it's also that for a variety of reasons, including things like filing deadlines being extended because of natural disasters, we just had less money than expected come into the U.S. Treasury this year. So revenue has got to be part of the answer. Expenditures has to be part of the answer too. And as we have discussed around these budget conversations, it is really not possible to address expenditures through the annual appropriations process in a meaningful way. It is the mandatory spending side, the Social Security, Medicare, Medicaid, that spending that Congress has already authorized that we're going to have to deal with, because that is what drives that annual deficit. And that annual deficit is driving our debt.  

Sarah [00:33:53] And military spending in an increasingly dangerous world. What we just talked about 15 minutes ago. Again, impossible choices.  

Beth [00:34:00] Impossible choices. But even that, even if you look at what we have spent on Ukraine so far, it is a drop in the bucket. We could save every dollar of that and not make a dent. It sounds good to talk about military spending alongside mandatory spending because it sucks to think about changing up mandatory spending. And it is, again, not the conversation. You hear voters saying, "Well, we should address our problems at home instead of spending all this money overseas." We are addressing our problems at home. That's what's costing us so much money.  

Sarah [00:34:36] Yeah.  

Beth [00:34:36] It is not the foreign aid that drives these numbers for us. It is not. And we need to be clear-eyed about that if we're going to have any kind of opportunity to make solutions. And when we talk about solutions to this, we're clearly not talking about in this Congress. This is exceptionally difficult work that people very committed to details are going to have to do. And we don't have that Congress today. But down the road, this is going to be an issue. And I think that's why it's important to talk about today because we got to vote for those people. And we are still voting in a mindset that is dated as to what these problems actually represent.  

Sarah [00:35:17] Yeah. We had a conversation about the aging population and the demographics. Those come to play when we're talking about Social Security and Medicare. Social Security, Medicare were at play with regards to the debt before the baby boomers started getting a hold just for the record. And so now that we have this aging demographic, it's just going to become untenable. My husband and I were talking about the chaos with the Republican caucus, and we were saying I just want to be in the minority. And I was like, well, if the Democrats get all three branches next time, we need to get to work. I want the filibuster gone. I want the tax cuts to expire. I want us to show up and say, "Okay, guys, we're the adults in the room and this is the stuff we have to do right now." Especially if Joe Biden is reelected to a second term and 80 years old. Let's go. It's time to do some hard things. Let's do this.  

Beth [00:36:08] And they're going to be very, very hard things that will be deeply unpopular. So I'm going to go back to the book that I'm obsessed with, that I keep mentioning about health insurance, We've Got You Covered. I started to trust the economists who wrote this book when one of their early chapters was called It's A Tear Down. They say our healthcare system is not reformable. It must be completely dismantled and rebuilt. And I'm not talking about every single hospital, but the mechanisms by which we pay for health care, the entire approach does not work. And there are not incremental steps to reform it. And I hate that message. I love incremental steps. I love incremental change. I think most people's brains are not wired for anything else. I think this is the truth about Social Security and Medicare and Medicaid as well. I don't think there is an incrementalist approach here.  

Sarah [00:37:07] Oh, that's very radical.  

Beth [00:37:08] I know. And nobody wants to talk about it. But I think we are going to have to adjust to a new reality of all of us living longer, of the workplace changing, of the economy changing. I don't mean that we shouldn't have a social safety net. We should have a better one that suits the conditions of the world that we live in today. But we're going to have to go back to the drawing board and think about knowing what we know right now, what is the approach that gets us there?  

Sarah [00:37:33] I don't know. Your wish list is big. I was just hoping for a Macron, for somebody rolling in and being like, erase the age, everybody get on board. This is what was happening. You want to tear it down? I don't know. Do you remember how people used to spit on representatives during Obamacare?  

Beth [00:37:46] Yes.  

Sarah [00:37:46] I do. I was traumatized.  

Beth [00:37:48] I said the words deeply unpopular and I meant them. We will not tolerate any level of change to these systems. That's why no one tries. And so the people who are thinking about it, I hope will think seriously enough to think big, you know?  

Sarah [00:38:02] Yeah, that's true. What if to this very specific issue of the bond yields and the growing percentage of debt as relates to our GDP, what if we did like Japan? What if we cap the bond yields? What if we just said, okay, look, you borrow from the federal government, you don't get rich quick. Well, it's not rich because it's a long term bond. But you know what I'm saying? We say, look, there's a limit. There's a limit to how much interest we're going to pay because we're the United States government and we can. I don't think that's a bad idea.  

Beth [00:38:30] I don't think it's a bad idea either, but I also only know enough to know that I can't fully predict all the ramifications of that.  

Sarah [00:38:38] Well, I understand that it would become a less dependable form of investment. I mean, this is the appeal of a U.S. government bond. It's you know they're going to pay and you know they're going to pay the interest rates go up. That's how you get long term bar. I get it. I know enough to be dangerous. And I know that Japan is not always an economy to be jealous of, although right now they're looking good. But they're also dealing with and have been for a long time dealing with some of these problems. I mean, they've had negative interest rates at some point, it was wild. And so I don't know. I'm just curious.  

Beth [00:39:16] I mean, curiosity seems to be a good place to be in for me. This is why I've never found modern monetary theory very appealing. I fully understand that borrowing money for the federal government is different than me, Beth Silvers, going to get a loan from the bank. I also understand that borrowing money, at least in the culture that I was raised in, has this negative connotation of debt. But there are people raised in families where the culture is used leverage. That it's smart to borrow money. And some combination of those attitudes is important, right? It's kind of like the spending and revenue side. This is why we need at least two really healthy political parties, because no one has a lock on how this all works. And there is an element of trial and error and pick your problem and all of that. But the idea that because it's the government, it can just do whatever it wants and it will work out somehow has never made a lot of sense to me because we aren't just talking about money ever. We're also talking about war and peace and political stability and the word of the United States across the world. All these things are so related that when I hear something like, well, let's cap our bond yields, that has intuitive appeal to me. I just know that it also would have externalities that I'm not aware of sitting here today.  

Sarah [00:40:44] Look, there are some very smart economists between monitored monetary theory and they also understand the externalities. And it's easy to sort of break that down in a way that's like just print the money, what's the big deal? But they acknowledge the externalities. I think that they just don't emphasize them. They don't put the same weight on them that other economic theories do. And I, for the most part, think they're right. What's appealing to me about modern monetary theory is the sense that the bold faced acknowledgment that we are different. Now, what is interesting to me about this inflection point in history, is I think so much economic theory, not just modern monetary theory, but the last decade of economic theory was built around this assumption of low interest rates. I actually think higher interest rates are encouraging. I did not want to end up in a negative interest rate situation. You can only drop them so far and then you lose that tool. So in the name of balance and ebbs and flows, I know it sucks. I'm talking because I have a house that I refinanced during COVID at rock bottom interest rates. I acknowledge that. And if that did not happen for you and the timing because of when you were born and a million other factors didn't work out, it sucks to have high interest rates. But at the same time, I remember my mom talking about when they bought the house I grew up in, they were psyched to get like 7 percent. They thought it was like a dream come true because they used to be like 20 percent. And so I just I'm encouraged by some of that ebb and flow. I don't think it's the end of the world. I actually think it was a more dangerous environment to exist in perpetuity in low interest rates where there was all this money flowing everywhere. I think that's why there are some industries really, really struggling right now, media being one of them, because the money was too cheap.  

Beth [00:42:40] Yeah, I think that's right.  

Sarah [00:42:41] The money was too cheap. Money is not cheap, or at least it shouldn't be. So I think it's hard and it's scary and it leads to a lot of really, really difficult choices. But I don't think it's the end of the world. I think the danger we were talking in the first segment deserves our emphasis, not necessarily interest rates, which I think are important, but not the end of the world.  

Beth [00:43:06] Well, to underscore your point, higher interest rates puts a tool back in our arsenal that we've been missing.  

Sarah [00:43:13] Right.  

Beth [00:43:14] Because we had such cheap money, such low interest rates for so long. Which everyone knew was a bad idea, that we kept our interest rates low during periods of relative economic prosperity and stability. Then when COVID came around, we did not have the tool of lowering interest rates to help us through that. And so we are restoring a tool to our arsenal during this period in which we do seem to have achieved a fragile, precarious, bizarre level of economic stability. Doesn't feel good, but it's okay. And this is a time to put some building blocks in place. And that's why you would hope it would be a time when we could start addressing deficit, at least, and perhaps debt or a plan for debt. But we've got to have a functioning Congress to get to that.  

Sarah [00:44:14] Well, there's no stasis even in the chaos. So, again, sending out the same prayers I did at the end of the first segment. Maybe by the time we talk on Friday or next Tuesday or even the Friday after that, I'm willing to build in some sort of rolling deadline. We will have a speaker of the House and we can have more difficult conversations about this new era of higher interest rates. You guys, the fact that we just discussed bond yields, considering the total and complete lack of sleep that Beth and I are both functioning after the amazing weekend we had in Paducah-- I mean, they already made us duchesses of Paducah. So I guess we do have the awards we deserve for this intellectual effort.  

Beth [00:45:22] It was a wonderful weekend. And I did wake up this morning thinking, I don't know that our show topic is a good plan today.  

Sarah [00:45:29] But we did it. We did it, everybody.  

Beth [00:45:31] Yeah, I had a little eye-raising moment at past Beth and Sarah for the schedule, but we did it. We made it.  

Sarah [00:45:37] We did it. You guys, I said this on Good Morning this morning, and Imma say it again. If you are experiencing FOMO, it is well-placed. We had the most special weekend. Everyone was changed. We sang The Judds. We did karaoke in a dive bar. We laughed. We cried. We sang. We danced. We ate. We shopped. We just loved on each other. I got to hold a baby, the sweetest baby. Just everything good. Everything good happened this weekend.  

Beth [00:46:12] I love it. Anytime we get to meet listeners in person, it's wonderful. This was a very, very special weekend. It was a different level.  

Sarah [00:46:21] This wasn't a meet. This was a hang. This was just a good hang. That's what happened from Friday to Sunday. We were hanging.  

Beth [00:46:28] I was driving home all 6 hours of it last night, so overwhelmed by how generous everyone was with us the whole weekend. Everywhere we went, everything that we did. And I just found myself wishing that we could put out into the universe today a call to you just hype the people who don't get it like we do. I wish every person could have one night a year where people say with their applause and their cheers and their hugs and their tears, like, the work that you do matters. And they say it so specifically. People come up to us and they talk about a phrase that we used or a conversation we had. This is how what you do impacts my life. And so if you can find a way to just say that to somebody today who'd never gets to hear it from a big crowd, I wish you would. It changes me to be in that atmosphere, and I think it would change all of us if more of us got to hear, "Hey, I work on my computer every day and you IT person make that possible. I never worry about the software because of you. You know what I mean? Like, there are so many people who deserve this more than you and I do. I wish everyone could have it.  

Sarah [00:47:45] Last night I was journaling, I was doing a little journaling, thinking about this and why it's so hard to hold. And I just think we're in a tough spot because I tell myself, just like what you said, "Oh, but our job is so easy. We just sit in this closet, we get to talk to our friends." And I'm like, I'm going to stop talking like that.  

Beth [00:48:05] No, I don't mean that.  

Sarah [00:48:06] I think there's a part of me that wants to articulate it like that. But when I articulate it like that, it's hard to hold what our listeners say to us. And so I'm trying to find the balance between acknowledging, yeah, this is a great freakin gig. And also it is intense to get on in a moment after Israel and talk about it and keep it together and to offer this conversation to our community. And so I have to feel that too, so I can feel what they bring back to us. I told them when people say to us "You got me through," and you think that we are the source of sturdiness, it's the other way around. You are the source of our sturdiness. There is an energetic flow here, and I never, ever want to minimize that, and I never want to take it for granted. And so to have this moment in person was so many of you being able to hug and cry together and say, like, we've been through it, we are here supporting each other and learning more about ourselves and the world and investing more in ourselves in the world. You guys, I just took my friend Lacey up on stage for about 5 minutes or less just to say, "Hey, she runs Paducah Cooperative Ministries. If you'd like to give back while you're here this weekend," and you all donated over $1,000 with a QR code on a slide that was up there for about 2 minutes. I'm just overwhelmed. I'm overwhelmed and I'm trying to find a way to whelmed. Is whelmed a word? I'm just trying to find a way to be just whelmed. And it's very difficult.  

Beth [00:49:46] Yeah. I think in addition to wishing, I have a bunch of wishes coming out of the weekend. So I wish for all of us to go spread this now to other people, this sort of love and affection and specificity in our appreciation for other people.  

Sarah [00:50:02] Specificity is the key to good appreciation.  

Beth [00:50:07] One hundred percent. I also wish for every person who listens to every episode of this podcast, the non casual listener, the committed listener. I wish for every one of you to get to come to a weekend like this at some point and meet the other people who are listening with you. Because watching people become fast friends and today watching them tag each other and just seeing, oh, they're already connected. You know what I mean? They already have plans for the future. Like, that is a phenomenal experience and such a gift and a blessing. And I want that for everybody. And if you are a casual listener, I just invite you to consider like--  

Sarah [00:50:48] Lean in.  

Beth [00:50:49] Yeah, increasing your time. Not with us necessarily, but with these people. It's a mind blowingly talented, smart, funny, generous community of people.  

Sarah [00:51:01] Yeah, the word I just keep using is special. I think it was just very, very special. And I think this community is special and I think the work we do here is special. And being with this community during these difficult moments, during moments of inflation, during times when the world seems like a dangerous place, it's everything. It's everything. And so to have time to feel that, to acknowledge that, to share that with listeners in person in Paducah was the absolute biggest gift. So thank you to every single one of you who came. Thank you to all the people who helped us make it happen. Thank you to Alise and Maggie who worked their buns off.  

Beth [00:51:49] Yes. We cannot say enough about Alise and Maggie, that this weekend happened when we are a team of four.  

Sarah [00:51:56] Four people. It's just four of us guys.  

Beth [00:51:58] And the two of us are mostly just following the news of it all and making the shows.  

Sarah [00:52:04] Learning about bond yields.  

Beth [00:52:07] So the level of work that Alise and Maggie do, the intention and spirit with which they do it, the professionalism that everyone who interacts with them witnesses, is just unmatched. They are at the absolute top of this field and we are so lucky to have them.  

Sarah [00:52:26] So, again, thank you. Thank you to everybody who came and thank you for all of you who listen and are a part of this community, both on Patreon and Apple in our DMs, on Instagram and the gathering place on Discord. It's just the absolute best place on the Internet. I truly believe that. We will be back in your ears on Friday. Until then, we're all going to close our eyes and manifest that you're listening to us on Friday. Everybody, this will work. Close your eyes and you're going to manifest me and Beth on Friday going, "Well, see. Look, it worked. We have a new speaker of the House." This community is powerful. We learned that this weekend. We maybe can manifest that. Okay. Throw in some calls to your representatives while you're at it. Couldn't hurt. Couldn't hurt. Until then, keep it nuanced y'all.  

[00:53:12] Music Interlude 

Sarah: Pantsuit Politics is produced by Studio D Podcast Production. 

Beth: Alise Napp is our managing director. Maggie Penton is our director of Community Engagement.

Sarah: Xander Singh is the composer of our theme music with inspiration from original work by Dante Lima. 

Beth: Our show is listener-supported. Special thanks to our executive producers. 

Executive Producers: Martha Bronitsky. Ali Edwards. Janice Elliott. Sarah Greenup. Julie Haller. Tiffany Hasler. Emily Holladay. Katie Johnson. Katina Zuganelis Kasling. Barry Kaufman. Molly Kohrs. Katherine Vollmer. Laurie LaDow. Lily McClure. Linda Daniel. Emily Neesley. The Pentons. Tracey Puthoff. Sarah Ralph. Jeremy Sequoia. Katie Stigers. Karin True. Onica Ulveling. Nick and Alysa Villeli. Amy Whited. Emily Helen Olson. Lee Chaix McDonough. Morgan McHugh. Jen Ross. Sabrina Drago. Becca Dorval. Christina Quartararo. The Lebo Family. 

Sarah: Jeff Davis. Melinda Johnston. Michelle Wood. Nichole Berklas. Paula Bremer and Tim Miller.

Alise NappComment