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“The Single Greatest Threat to the American Economy Is the American Government,” Says Justin Wolfers

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Last week, data showed that retail sales jumped in August and business activity rose in September, at its fastest pace in five years. THIS week, we’re set to get a few more economic reports that are predicted to point to even more rate hikes in October—right before the November midterms. What would another hike do to the election? What are we learning from the hikes earlier this month?
Guest: Wolfers

Podcast production by Rob Gunther, Evan Campbell, Madeline Thames-Ducharme and Patrick Fort. Video production by Paige Osburn.

Paige Osburn is the senior supervising producer of What Next and What Next TBD.

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20 Comments

@jiim252 20 hours ago

"once in a century events" get used to it happening twice a decade lol

@IbuKondo-r7h 1 day ago

Unemployment reads as low because it only factors in active job seekers who currently aren't employed. It does not factor in non-working adults who are not looking for a job. Therefore, unemployment in terms of the actual productivity of the working adult in the US is likely higher than what the stats suggest. To take the number the government is providing on its face shows an optimistic, but ultimately incomplete picture of events.

@BrandonBollinger-x4s 8 hours ago

I didn't get to go to college so watching your podcast is giving me a chance to learn economics from a professor later in life. Really enjoy your videos Justin. I feel a little smarter every time I watch. Thank you 👍

@peterscott7259 1 day ago

Justin, Warren Buffet has described interest rates like gravity. Young people, born with low interest are like astronauts living in space for years. When astronauts come back to earth, gravity is a huge problem for them.

@nancylangwiser9881 23 hours ago

The era of low interest rates is why we are in so much trouble today with bad debts and stupid investments like PE and private loans

@rachaelrobinson6252 20 hours ago

I remember 12% rates in Australia. I also know a 5% rate here is the histroical norm.
Only issue is houses dont cost $100k anymore and these hikes really hurt. 😊

@kurkoa 1 day ago

Explain one thing to me... how can unemployment rate be 4.1% when i know more people right now unemployed and those who found jobs took 50% paycut. I am 55, and there are no jobs, fyi. Its beyond frustrating to me that someone like you would not talk about people that have left workforce, or when unemployment runs out after 6 months. That no longer is counted as part of the national unemployment. Correct?

@LindaCochrane-q5k 1 day ago

Canadian senior here. I purchased my first home in 1976 and had a mortgage rate of 11-3/4%. When it came time to renew in a few years, mortgage rates had jumped to 21% and we were required to ration gas. We had two full time incomes, and the times were rough, but fortunately we managed to survive those tumultuous times.

@daddad8707 18 hours ago

The first mortgage I took out in the early 1970s was at 15% - but then we got 10%+ pay rises + cost of living rises each year to roughly match. The effect: first house was £2,000, sold for £5,000 18 months later, next house purchased for £7,500, sold 2.5 years later for £16,500. The moral of the story - interest rates , inflation rate, etc, rising or falling are not a good or bad thing. They only become bad or good when compared to what happens to your income + assets. Incidently, the same £2,000 house from 1973 is now valued at £263,000, which shows you why we have a generation that can't afford to buy houses - 13,050% rise in house prices compared to 2,437% rise in average earnings.

@MikeTevlin 5 hours ago

I think that the Envelope Theory can also be phrased as “if it ain’t broke don’t fix it”.

@jimschachtschneider7741 1 day ago

Trump is one thing. A salesman!! He really believes that he knows more than the "so called experts". He believes in his ability to change facts through force and will. Salesmanship.

@carolpeterson6756 1 day ago

KEEP VOTING 💙💙💙💙💙 🇺🇲

@adamjames3245 1 day ago

Even if there was an appetite to stomp on the brakes and jack interest rates to 20% like Volker did, the National debt in the early 80s was a fraction of what is in now. Government could absorb those higher borrowing costs then, it can't now. The solution used then wont work today unfortunately.

@nm15625 18 hours ago

You don’t understand, 1 American knows everything and 339999999 Americans knows nothing… They just have to follow the 1, this is real democracy 😂

@darthsirrius 20 hours ago

As a massive Ghostbusters fan, I will like to point out that the interest rate he says his 19% roflmao. "But at 19%, you didn't even bargain with the guy!"

@johnbarker419 26 minutes ago

"I believe policy errors are a bad idea" may be the most understated thing anyone has ever said about the Trump Administration.

@ohcanadaeh 1 day ago (edited)

Donald Trump has zero knowledge on how the US economy works. Those who voted him in have even less. Trump sweet talked the gullible American voters and they took it all in. All the economic problems in the US are self inflicted by choice. The blind is leading the blinds.

@ettaroo 1 day ago

Long term rates are what matters. Those are going up and will kill mortgage lending and corporate borrowing. So much of current economic growth, i.e. consumption, is a function of people spending their stock market wealth. The main stocks going up are from an unsustainable capex investment in AI infra. Unsustainable, because VC capital, Hylerscaler operating cash flows and pure debt are supporting the infra buildout, but cashflow generated from the buildout is piss poor. There is only so mucb dent available for AI buildout and its close to being tapped out.

@WaynePeacock 2 hours ago

I love the show, but I wish when an Economist professes that the ONLY reason we operate on a deficit is SPENDING, you’d correct them. There is another, equally important factor: REVENUE. The truly incompetent governments, like the current one, increase SPENDING and reduce REVENUE. Thanks!

@BonesDonahoe 1 day ago (edited)

1971 the Nixon Shock when the US left the gold standard to pay for Vietnam. Debt started going up up up. OPEC gave the world the finger with an embargo for supporting Israel. Carter inherited Nixons mess. Volcker hammered inflation with 20% interest rates.
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