Katie:

Welcome back to another Rich Girl Roundup on The Money with Katie Show, where today we are going to reveal how smart our listeners are who critically engaged with this material at a level that makes me a little intellectually uncomfortable to be honest.

I am, of course, Katie Gatti Tassin and every few episodes my executive producer Henah and I discuss all of your feedback, your questions, any new considerations that come up that weren't part of the original episode, and sometimes the mean stuff you send us…if it's funny and I'm in a good enough mood.

Henah, are you ready to go?

Henah:

I sure am, but before we do, we have some major life changes coming up. So Katie, it is your last week as a California resident.

Katie:

It is.

Henah:

How are you feeling?

Katie:

I'm stressed. Thanks for asking.

Henah:

Oh, good. Same. But I also hear that we have a surprise today.

Katie:

Yes, you will have to stay tuned for that. It's probably going to happen about halfway through the episode, but it's a good one.

Henah:

Yeah, I can't wait. But first let's dive into some recent reviews.

First, Matt Van S said, “Loving the modern monetary theory intro on Money with Katie would be great to hear both sides. Maybe Stephanie Kelton to unpack MMT'S case paired with someone like Lyn Alden to question it from a grounded finance angle. Could make for a balanced eye-opening chat.”

Katie:

Completely agree. That's actually exactly how I would want to cover a topic like that one because I don't know enough about it to debate it adequately and it is so abstract that I do think you need wonks on both sides of the table for that one.

Someone else, Thor Tyler, brought up government debt in the comments of one of our episodes, so I'm like, maybe this is kind of percolating. They basically said, yeah, we can't talk about social wealth funds until we figured out the deficit. So I think this is exactly what that conversation would kind of work to address.

Henah:

Then we heard from Emerald Blue 88 who said “Great info with snark,” which I snorted to read. They also asked about your experience as a victim of fraud. We did an episode back in November, 2023 on this. I'll include it in the show notes, but you can hear some great voiceover acting from me, which I mean to say is very bad, as well as what went down. So if you're curious about how Katie almost got scammed out of $15,000?

Katie:

Not almost, did get scammed.

Henah:

Was it $15k?

Katie:

It was $8,000.

Henah:

$8,000. And then we had a one-star review titled “Pretentious” where they wrote, “The host speaks about every topic like someone who has spent their entire life in academia.” And I got to say, give us at least three stars for that.

Katie:

Yeah, dude. Usually the mean reviews kind of hit on some niche personal insecurity of mine that then really bothers me for the next three weeks. But honestly this one just kind of made me feel smug because—I'm like, this really backfired guy. I have a bachelor's degree from a state school in communications and so I am literally fighting for my fucking life making sense of economic data for this show. You would not believe how often that I feel too dumb to be doing this job. The criticism that I sound too educated, I'm like, tucks hair behind ear. Thank you, thank you very much.

Henah:

Thank you. If you feel dumb, you can only imagine how I feel. Then we had someone who emailed us and said, “Social wealth fund? Wealth inequality? I think it's time we part ways.”

Katie:

Alright, bet. My bet here is that this person is either 70 years old and has a net worth of $10 million and is like, I don't want to hear it. Or it's like a 23-year-old Logan Paul acolyte with $12 and a Bitcoin wallet who is like, no man, my YouTube career is going to, I'm actually totally going to be fine. My generation's malaise is not something that I'm going to have to face. So no in between, I don't know what's going on there.

Henah:

Well, I'm actually 99% sure that it's the former because, like all angry men who email us, they included their full government name and work email. So they are definitely the 70-year-old.

Katie:

Was it sent from a Galaxy tab?

Henah:

I believe it was sent from a Hotmail account. To end on to end on a nice note, those were kind of brutal, we got a five star from Embot who said, “Pretty new here and have listened to a handful of episodes. I love the show and want to be friends, LOL. I have a near obsession with economics and history and your content is top notch. Keep up the great work.” Thanks Embot. And then a five star from Kristen who said, “I want to be Katie Gatti Tassin when I grow up.” Which, same.

Katie:

Oh, well thanks for ending us on a high note. Yeah, I needed that.

And I know that we said we weren't going to do this in an attempt to keep the Rich Girl Roundups narrow and focused on a finite number of episodes or writing, but I can't resist sharing this email. So if you'll please read this from Sarah.

Henah:

It says, “I was playing Monopoly Junior with my 8-year-old, and when she landed on free parking, she asked why she couldn't buy free parking or jail. It took everything in me to stop myself from jumping into lecture mode about how when the game was made, things like jails and parking were considered public services and not something one could own, but that now services like that are often privatized. So in the real world, one could technically own those. Fortunately for her, I just said, no, in this game you can't own those spaces. Maybe I'll hold off until she's at least 10 to explain privatization to her.”

Katie:

When your family game night is derailed by a lecture on private prisons.

Henah:

So we will start with the Social Wealth Fund episode feedback with Matt Bruenig, because that definitely generated the most questions right after a quick break.

Katie, let's start strong with a one-star review that said this episode made them unsubscribe.

Katie:

Let’s fucking go. Yeah, baby. Because you know what the opposite of love is, not hate it is apathy. So if I'm inspiring any sort of reaction in people, I guess that’s good.

Henah:

They said, “Just unsubscribed, just listen to the Social Wealth Fund episode; really just a show promoting the Northern European version of socialism.”

Katie:

Correct.

Henah:

They continued to say, “Huge assumptions with logic gaps and second and third order effects. Sounded like two young millennials trying to tell the rest of America they're behaving poorly. It's not so much that I'm mad, just disappointed.”

Katie:

I'm giggling, like, again, tucks hair behind ear, thank you. Too smart, too young. Thank you.

But okay, you got to love when I think someone says there are logic gaps, but then neglects to offer any specific complaint like okay, such as, can you please elaborate, what was the logic gap?

But here's the thing. What I don't understand about that specific pushback on that sort of episode and Matt's policy proposals is that suggesting that there are unexplored second and third order effects that went unmentioned implies that this is something that has never been tried before. That there is no way that we could possibly know what sort of consequences would be wrought by doing something like this.

When as this reviewer pointed out, there is an entire region of the world that has structured their societies this way and we know how it is going for them. I'm assuming the assumption is like, oh, that would hurt the economy. Everyone would just knock off and smoke weed and stop working. That's not really what we see in places where they use collectively owned wealth to build stronger social support systems.

I just looked up Norway in particular. Norway has a higher GDP per capita than the United States. It has an 80% employment rate that is 20 percentage points higher than the US where only 60% of the working age population works. I assume that the use of the word socialism implies that they have concerns about second and third order effects of, I don't know, employment, production, what have you, wealth generation. But the country in this discussion with the most socialism is kind of smoking us in both of those regards.

It sounds like they unsubscribed because of this episode, so they probably won't have a chance to follow up and let us know, but I'm like, I'm genuinely curious, what are the effects that you think we are not addressing? Because I would love to actually have a conversation about what those things are.

Henah:

Right, because he clearly said in the episode this is not a leap into the unknown. We know it's going to happen and it's actually happening in an American state. So I think maybe for them, maybe the question was about the level of scale, but we'll get to that.

Katie:

Yeah, I mean to be totally clear, it's not to say that this is some panacea policy is complicated. Every policy has unintended consequences, but I do think that there were a few emails from this episode that raised legitimate concerns or further considerations that I found really interesting. So I do want to talk through those.

Here's one from Janice. She said, “I found this week's episode especially interesting, I'm starting to think more about the transitions we need to make to prepare for a new economy with AI and automation increasingly replacing labor and the Sovereign Wealth Fund is an intriguing policy proposal.” Which, as a Katie sidebar, I actually think is a really interesting layer to add to this conversation of, if a lot of jobs are replaced by artificial intelligence, this might become relevant much more quickly in the public domain than we are currently thinking it will be.

She writes, “I'm curious whether examples like the Nordic wealth funds would actually translate to success in the US. I did a quick search and discovered that a large portion of Nordic fund holdings are actually in US companies, especially tech stocks. Does this mean the success of these other sovereign wealth funds relies on the US economy continuing to operate as it does with low taxes on capital and so on? Would the US be able to transition to such a model without sacrificing its successful industries and progress that power this sovereign wealth fund model here and elsewhere?”

Henah:

They're so smart.

Katie:

That's what I said. I was like, guys, you're starting to lap me. I'm getting uncomfortable with this. This is the point in going through my inbox that I was like, alright, I'm in over my head.

But I do think that this is really an interesting question because what it immediately made me think of was a part of the conversation we had last year with Grace Blakeley where she basically was like, okay, does this mean we're getting 5% average returns instead of 7% returns? Is that worth insert all these other benefits here? It is a valid question. Is the current level of return that we earn on the largest and highest performing US companies a) necessary and b) actually long-term sustainable? That I think is a question worth asking too because I think when you're comparing these two paths, there's probably a pretty solid argument to be made that in order to keep allowing all of these companies that are powering the majority of the returns in the stock market to continue operating as they have been, eventually you're going to run out of resources. Earth is not an infinite—

Henah:

It's a finite resource.

Katie:

Exactly. But I think to answer this question with a higher degree of satisfaction, we would have to know to what extent low corporate taxes in particular are boosting returns. And my hunch is that the government's relationship to boosting returns is less about low corporate taxation and more about regulatory capture and more about government contracts, more about bailouts, things of that nature, and the reality of the fact that the US government absorbs a lot of risk on behalf of these companies and enables them to take bigger swings, which is something that Kayla raised in another email.

Henah:

Kayla said, “The US government is already under pressure to bail out industries that are too big to fail and has repeatedly done so in the past. Is there any evidence that holding an invested wealth fund increases the incentive to support certain businesses and industries beyond what we already see? Is there a conflict of interest there between regulation and guaranteed returns?”

Katie:

So I love that these two kind of fit together, like little puzzle pieces. Again, a really good question as far as the element of is there any evidence of this to the earlier question, it's my understanding that a lot of, well the Nordic fund owns a lot of oil but does invest in US companies. So I'm not sure that there would be evidence of this in particular of the US government if it were to operate a Social Wealth Fund for people in America. If you would start to see this, I'm not sure, but I have been thinking about it and my initial reaction was, yeah, probably you would see that.

But then I was like, wait a second though. What is it about our current system that causes this to happen? Our government currently does this, so they're doing it without this incentive structure that Kayla is outlining, and I think the short answer is that the “too big to fail” companies already dominate the economy. And the government is scared of what would happen if that house of cards came crumbling down. Why don't you let a bank fail? Why don't you let an airline fail? Well, largely because it would be theoretically so economically disruptive that an investment in keeping it afloat is the risk calculus that they're making is that intervention is worthwhile.

That would be my most good faith assessment that I can offer barring any commentary about corruption or kickbacks or anything of that nature, which I fear are going to become more common under this administration. But the problem with this situation right now is that it ultimately ends up being socialism for the rich in many cases, with the 2008 bailouts being the most obvious example of this, because who owns the assets that are getting bailed out disproportionately?

Rich people. They're the ones that are benefiting the owners and I think that is the core of the issue with a poorly directed bailout. So when I got thinking about it, I was like, okay, fleshing this out a couple steps if that's the core of the problem with a bailout, is that problem solved if everybody owns the thing that's being bailed out, assuming we are still going to keep doing this version of American capitalism where genuine competition at the giant cap corporation level in the majority of sectors is a bit of a mirage anyway.

Well, maybe we actually don't care as much about government bailouts if they are not disproportionately benefiting a very small group of people who are taking on enormous risk knowing the government's going to save them. I don't know. That is kind of my, without having a crystal ball, that is the path that I went down inspired by this question.

Henah:

I feel like the math lady meme, this feels over my head now. But I feel like this relates to an observation that Bradley had and he said, “One thing that wasn't discussed in the episode is how the public having a stake in corporations could impact the behavior of the companies themselves. In business school, a stakeholder concept of business was presented to us. This is the idea that businesses need to consider other parties. For example, labor, the community the business operates in, the environment, in addition to the shareholders. This is a great idea and in the long term should be beneficial to a company. The incentive structure still favors the shareholders though, and it basically rests on a company's goodwill to enact. So it doesn't. If society at large had a meaningful stake in a corporation, those other stakeholders now are actual shareholders and need to be considered. Perhaps this could help prevent environmental destruction or labor exploitation. I find this to be another compelling argument in favor of the social wealth fund.”

Katie:

Yeah, I thought that was a really interesting flip side to the coin. Like, okay, we are rightly discussing how will a shifting ownership structure potentially lower returns or otherwise interfere with the assumptions that we can make about the apparatus as it exists today. But I liked this insight which is basically like, yes, it is going to interfere and that's kind of the point. The point is that you want the ownership to be more distributed and you want different decisions to be made.

Okay, here's another from Dan. He says, “Dynamite episode brought me back to when you had recommended Invisible Trillions and we were asking ourselves, okay, well if not a wealth tax, then what is the best mechanism for capturing and redistributing this wealth? Seems like you've been on a quest to get to the bottom of it and this episode just may have done it for me. I also feel like this discussion was so much more palatable to the neoliberal brain than a plain old UBI take. Can't wait for the roundup to hear the feedback. Paradigm shifting stuff.”

Henah:

Dan the man. Thank you for that.

Katie:

And then on the note of UBI, Kayla had one other question that I wanted to discuss. Kayla ship me whatever coffee you're drinking, like holy shit.

Henah:

Yeah. She said, “In other discussions of universal basic income, folks have mentioned that one downside of UBI is that without moving necessities out of private controls such as healthcare, it can actually serve as an accelerated wealth transfer from citizens to private companies. Without regulation, this would just increase the price of necessities. Long-term, have we seen examples of successful UBI/wealth fund distributions in areas that do not have socialized healthcare education, childcare, et cetera?”

Katie:

Really happy she brought this up. A great example of where you see this pretty predictably is housing vouchers. So typically what you see is that a voucher amount will be raised, but then the landlords in a given area that typically will specialize in that type of housing that accepts vouchers, they will just raise rent in lockstep.

Henah:

That reminds me too of something I read in Jacobin recently where they were discussing universal income and direct cash transfers. So they said, “Anton Jager and Daniel Zamora Vargas called basic income programs ‘welfare for markets’. Because the social and economic order is predicated on maintaining a certain level of consumer confidence, cash transfers are not threatening to the rulers of the age. Instead, they provide the means to shore up demand in a low wage economy.” So in essence, it's not doing much to address the problem with housing costs being too high or healthcare costs being too expensive.

Katie:

Yeah. Not to go all supply side, Ezra Klein, Abundance. I actually have quite, I think that there are some valid issues with that approach, but it is kind of that same thing of, yeah, if you're not increasing the supply of housing, if housing is still a private commodity that people are using to make money, then just giving more people money to pay into that market. It is just kind of a bandaid.

And I think that this is a worthy corollary because the alternative to universal basic income that we, I think we've discussed this a little bit, is universal basic services. Someone described it as the difference between increasing healthcare access, which tends to be a liberal talking point, and universal healthcare, which is more of a leftist perspective on the problem that says all people should have healthcare as a right. That's the goal. Increasing access is usually code for we're going to leave production to the private sector and we're going to leave the existing incentives in place. We're just going to put more government money into it as opposed to with something like universal healthcare, typically you are fundamentally changing the incentive structures at play. You're not going to have a UnitedHealthcare and their shareholders in a system like that, most likely if it's in a perfect world.

I think Kayla is accurately describing what can go wrong when that approach is taken and what we see go wrong all the time right now. This is why I am personally interested in advocating for full-fledged universal basic services. Though I do think to the earlier point about AI, we are going to be having a UBI conversation probably within the next decade.

Henah:

So she also asked about success stories, places without universal basic education, healthcare, et cetera. So would we consider Alaska a success story?

Katie:

I guess I would say I think Alaska is like a success story lite, in the sense that: number one, they're obviously an American state without universal healthcare childcare or higher education, and number two, their existence as an American state that has proven this is possible is extremely valuable, I think. But I do think that as an example of how you would maybe structure it on a larger scale has limited utility for a few reasons. Fortunately, we heard from some Alaskans who listened to the show, who enumerated some of those reasons for us.

Henah:

Didn't you take an Alaskan cruise when you were like five years old?

Katie:

I did. I've been to Alaska. I lost my first tooth in Alaska.

Henah:

Oh, well, I was going to say maybe your grandparents took you to the Alaska Fund office for a tour.

Katie:

No, but I do remember being really stressed out about was the Tooth Fairy going to find me on this boat?

Henah:

Did she find you?

Katie:

She did. She did. Fortunately I did, yes.

Henah:

Anyway, so we had someone, Olivia, write in who said, “Alaskan resident here, thanks for clueing folks into the PFD. There is so much more that could be covered about this and what works and what doesn't, but that's for a whole podcast season. Generally we love the PFD, but if giving it up meant a more robust education or healthcare system, I’d do it.” She also mentioned that they do still have to pay taxes on it and it can cause those boom and bust cycles you see in spending, which reminded me a little bit of how tax refunds work sometimes where getting a big tax refund is how Americans save and then subsequently spend.

Katie:

Yeah, I was really grateful for that insight because I think it highlights that capital redistribution is kind of just one piece of the puzzle. I think Bruenig would agree with that, by the way, but it is the reason why he approaches this idea for sustained American solidarity and flourishing through the three prongs: the capital, which is what the Social Wealth Fund is meant to work toward, labor, labor power, labor integrity, labor dignity, and the welfare state.

So I feel like we have maybe not done the best job today as we're reading through the feedback of ascertaining where the different comments ladder up to those three things. We've been kind of fluidly moving between them, but it's important to make sure that we're using the right tools for the right problems and critiquing the tools for the problems they're intended to solve.

Henah:

And that this is not the one comprehensive solution for every problem that we have here.

Katie:

Exactly. Yeah. Yeah. That a social wealth fund is not going to replace the need for universal healthcare.

Henah:

Right.

Katie:

Okay. Then you had Jacqueline who said, “Proud to be from Alaska, great episode and guest.”

Henah:

She's one of our most dedicated listeners, so thanks Jacqueline. Katie, you said that you thought the Alaska example had a more limited utility.

Katie:

Yes.

Henah:

Why is that?

Katie:

So there's actually a comment from Jeffrey B., who I think explains those limitations well, so I'm just going to read this comment. Jeffrey B. said, “In Alaska we have one of the most natural resource rich areas, whose landmass is 20% of the 48 mainland states. Then factor in they have a population of just 740,000. So that's 1/5 the land and 1/500 of the population.”

That I think kind of sums it up, in that respect, it's not exactly representative, so I think that's true, and to me, the value of using Alaska as an example is that it is American. The value is that it shows that it is already happening here in the United States already. Not that it's super indicative of the specific funding source, not that that's necessarily relevant for the mainland and not that the population level is even applicable, but I think that it gets us thinking differently and it's kind of like, oh yeah, it's already happening in the US. It's not like there's no precedent for this, which brings us to our largest piece of feedback that pertained to that specific point land from Claire.

Henah:

Okay, so Claire wrote, “This was definitely an interesting episode, but a large red flag was raised midway through it that had me shout, pump the brakes.” So then she pulls the transcript and included the section where Matt said that some of the land is owned by the federal government and it's just, “whatever, just random land,” and then she goes back to say, “Steps onto a metaphorical soapbox and turns on microphone. Let's talk about it. Matt's right. On average, about half of the Western US is public lands. Nevada is 80% public, but these lands aren't just desert, as Matt suggests. While we all know our national parks like Yosemite, Zion and Death Valley, the public lands in the West encompass so much more than those designated parks. There are over 400 national park sites, 560 national wildlife refuges, and 250 million acres of other public lands that encompass wilderness areas, national trails, and more, according to the now archived page on the Department of the Interior. Last year alone, the National Park—"

Katie:

I'm sorry, clown world. That page must have had the word “transition” on it or something.

Henah:

“Women” visit the park.

“Last year alone, the National Park sites saw record 331 million visitors, according to the Alt National Park Service, a group of rangers dedicated to resistance of the current administration. So here's why this raised a red flag. Trump has already signed an executive order for a sovereign wealth fund that would allow him to liquidate public lands for resource extraction quietly. Bergum's exact quote was that these lands are assets to ‘the nation's balance sheet’ with an estimated worth of $200 trillion. This is combined with other executive orders that expand timber production and increase mineral production. According to the Center for Biological Diversity, many areas that could see expanded resource mining are protected areas with critical ecological systems. One of those is Oak Creek Canyon, a stunning area in northern Arizona that I frequent as an outdoor enthusiast.

“In short, these executive orders basically give free reign to circumvent environmental review to expedite resource mining. This could wipe out incredibly delicate ecosystems, endanger wildlife, and put indigenous heritage sites and incredible risks.” So then she gets into some more detail about biodiversity in her area where she lives in Arizona, and she concludes with this: “It all raises the question of what can be plundered for profit. Much of your podcast is dedicated to inequity and pay, with conversations on fantastic books like Vulture Capitalism, a banger, The Privatization of Everything, also a banger, Poverty by America, another banger, Plunder: PEs Plan to Pillage America, on my TBR list and many more—

Katie:

Bangers only.

Henah:

“The short summation people should not be a source of profit. I argue that extends to our lands. Where does the tide turn on this to ensure that one source of profit doesn't replace another as an outdoor advocate and enthusiast, I truly believe that just like people, our public lands deserve better than being a positive line on the balance sheet of America.” Phew.

Katie:

Yeah, she cooked, absolutely cooked.

Yeah. I remember when we were recording that as the conversation was actually happening, it was around the same time that Bergum had made those comments, and so it kind of occurred to me, I think you had raised it at the time as well in the edit of, is this going to feel a little crass in this context? And maybe Bruenig would feel differently about this, but I think my perspective is that the amount of value in large American companies, not land, is where I would think you would start to begin capitalizing a fund like this, per the Meiner plan analogy made in the episode.

I know we talked about land, and I think it kind of raises the question of ownership profit more broadly, and I think profit in general is an inherently capitalist idea, right? It's surplus value above and beyond that the owner keeps, and so I kind of start going into this little ouroboros of: Public lands mean they're owned by the public. If they're owned by the public, then the public decides what to do with them. Could public lands be reappropriated for public use in a way that's not exploitative?

When I hear someone like Doug Bergum say they're worth $200 trillion, we want to capitalize them. I'm like, oh, he's going to sell them to a private equity firm. In my mind, you're talking about public ownership of these things, that the public retains the asset. and decides what happens to it. There might be things that the public would collectively choose to do with a piece of land that benefits everybody or is good for the land too, that is not as easily equated with private property and resource extraction.

Henah:

I'm actually thinking, I know many people in our audience have suggested Strong Towns to us and their number two principle of what a strong town means is, “Land is the based resource from which community prosperity is built and sustained. It must not be squandered,” and so it talks about how land is a finite resource and that it is the literal foundation of a community success. So it has to be stewarded well and productively by everybody involved in the community.

Katie:

Perfect. So one thing that came up with a few listeners was asking us to host what I'm going to call opposing viewpoints conversations. So Tony B. wrote, “Great episode. It would be great if you would get another person on the show who doesn't totally agree with the ideas put out in this episode. I think the best podcasts are ones where you get opposing views and then have a civil and respectful debate.” Sam S wrote in and shared an episode of Freakonomics that came out around the same time that had an economist from the Manhattan Institute, which is a conservative think tank. Obviously, Ked is a Democrat and is representing a more liberal economic perspective. [The economist] basically takes the opposite side of Keds on all of these issues in the Freakonomics episode, and Sam said it could be interesting to have somebody like that on and basically say, okay, I'm going to moderate you two. Talk to each other and debate these in real time.

Henah:

What was that podcast, Intelligent Squared, that used to do this? And then they would vote at the end?

Katie:

Oh, I dunno, I've never heard of that.

Henah:

It was when you were baby, it was like in the 2010s.

Katie:

It's like that Jubilee YouTube channel that'll be like, “Can one woke teen face off with 47 conservative congressmen?”

Henah:

We have not done debate style material before.

Katie:

Yeah, I think I personally just don't gravitate to that sort of stuff as a listener, which might be why it hasn't naturally happened in the last couple of years as we've produced this show. But I will say with respect, because that comment came up with respect to the Social Wealth Fund episode, I wanted to mention Bruenig has gone on shows with that intent before, and one of the more interesting conversations that I've watched with him was him debating the host or the host had him on because he disagreed with him. So we'll link that in particular in the show notes. It did make for a very interesting conversation.

Another version of this idea though not about this topic that I watched recently that I found really interesting was a 2022 episode of Lex Fridman, which is not a show that I really listened to, but he had Richard Wolff on and Richard Wolff is a Marxist professor and a Marxist economist, and I would assume Lex Fridman thinks of himself as a capitalist based on what I know about him. But they had a fascinating two and a half hour conversation that I found extremely interesting, and I was like, I really respect that Fridman platformed Richard Wolff and gave him an opportunity to talk about these ideas. And what I think you'll find when you listen to it, just sidebar between you and me, dear listener, is that a lot of the classic capitalist talking points that he hit him with, it was just like boom, deconstructed, boom deconstructed. It was very satisfying, and Lex had a pretty, I would say, good attitude about it.

So anyway, I was reflecting on this question more. I think after I read it. I thought about it for the rest of the day because I was like, why do I feel some resistance to this? Why hasn't this been something that we've tried in the past?

Henah:

The debate style, you mean?

Katie:

Yeah, yeah. Basically inviting somebody with the explicit intent of being like, this person thinks totally differently than me and we are going to—

Henah:

We could just invite your dad on.

Katie:

Literally. Actually, yeah, I could just truly start recording—

Henah:

Read your group chats.

Katie:

My Thanksgiving dinner. That would probably suffice.

But part of the reason that I have historically found this sort of debate style content challenging to make in the financial world is because oftentimes when you go to seek what we might call an opposing viewpoint, we don't just disagree about how to solve a given problem. Often we disagree that something even is a problem that should be solved.

There might be some wonk out there who agrees that we need to solve wealth inequality and believes that collectivizing wealth is a good thing and could poke worthwhile holes in the social wealth fund theory. But largely in the light oppo research that I did for that episode in prepping for that interview, the people who tend to have issues with that subject or who have critiqued it publicly often disagree or hand wave wealth inequality away as not that big of a deal.

One example of this, there was I think a Vox summary of it by Matt Iglesias who's like a popular liberal pundit, and I'm sure Matt Iglesias would admit that wealth inequality is a problem, but generally speaking, the pundits in that little group of popular liberal reporters are more or less happy to see capitalism continuing business as usual. I don't think that they would often say that there's that much fundamentally wrong, and so maybe that is worth debating on the merits to begin with.

But I guess I've always kind of felt okay with the fact that I tend to talk to people who, in my own reading or research I come across, I'm like, wow, I think they have really interesting ideas and I want to talk to them about those ideas on the air because it feels like all mainstream media is to varying degrees, very pro status quo. So it's always felt like you're probably constantly hearing the opposite side of the argument. But I am going to keep thinking about this because I do think that it's very important to subject your ideas and your beliefs to rigor. And I think something that I can commit to right now is pushing back more in good faith in the moment, essentially intentionally playing devil's advocate more in these interviews.

Henah:

I find that sometimes when I hear from other people, we just disagree on very basic human rights or the empathy of saying, I think that healthcare is a universal right, that all humans have. It's like if you disagree at a fundamental level, where's the conversation going to go from there? So I'm curious who's out there. I guess I would invite the readers or listeners of the show to say who is out there that would agree with the basic tenets that we have as a show, but have maybe different strategies or ideas on how to get there.

Katie:

Okay. I'm going to push back on that a little bit. I don't think that conservative economists lack empathy. I don't think somebody with a conservative worldview doesn't care about other people, I guess I don't think that that's necessarily true. I guess it's more of, it comes down to a little bit like those second and third order effects that Keds talked about in her episode, which is there are conservative economists who genuinely believe that, if you give people paid sick days, it will put them out of work. They think that they are doing the best thing for those people by not putting them out of work because they think that paid sick days will. I don't necessarily think that it's that people on the other sides of those issues lack empathy or care for other people.

Henah:

Well, I mean, I would push back to say there are all those people who say, don't have kids you can't afford, or like, oh, well that happened to you. You did it to yourself. And so I do think there is a level of this personal responsibility narrative that we hear a lot in the US, which I feel fundamentally at odds with because I see the reason that personal responsibility doesn't work out as a bigger problem indicative of a lack of social safety net.

So I think the problem for me is that we're just fundamentally coming at this from two different ways. And so my question would be how do we find people who do want to have the argument in good faith, do also care about people and agree on some things, but maybe have different ways or proposals on how we get there?

Katie:

Yeah, yeah, I hear you. That makes sense. Finding that fundamental common ground.

Henah:

Yeah.

We do have some rapid fire, but this one came from, I dunno how you pronounce this, Skawyo? They said, “Really informative. I'd never heard about this before. So it's very interesting to think about. I'd like to hear some kind of discussion about if it perpetuates some of the negative things we see from capitalism. Maybe now we're all on board to deregulate certain industries because it puts more money into the fund or keep workers' wages low because it puts more money into the fund. I don’t know if that's an imagined problem or something that's really a concern.”

Katie:

Yeah, it's kind of the opposite of the one that was like, well, if everybody owns it now, their shareholders and the companies will behave better. So it's actually kind of funny that two people will listen to the same episode and have opposite concerns about what might happen—

Henah:

But then my brain breaks because then I think, well then, which will happen?

Katie:

Yeah. Well, I mean, I guess I think not to be like, it could hardly get worse though, am I right? But it's kind of like, yeah, but if the workers are the ones that own it, then they're definitely not going to be incentivized to lower their own wages. But yeah, no, I think that we're thinking about.

Another one, Megan said, “This episode was so interesting and exciting. A social wealth fund makes so much sense. State investments should benefit the state, not enrich the private owners of the companies. The point that reducing inequality benefits all classes was excellent.” And she also said that she just generally loves the economic policy deep dives. So thank you Megan.

Henah:

I know that made your day. From Spyke, our MVP, they said, “Another great and informative episode with real solutions. It can feel very hopeless that we can't solve very obvious problems in this country, and the main one being income inequality. It's wild that Alaska has been doing this and no one's in an uproar about it, so why can't the rest of the states, it could potentially bring back jobs and manufacturing to places who might not have natural resources. I also really like the breakdown of how tax credits work and what actually caused inflation.”

Katie:

So just to tangentially derail us for like 30 seconds. So the point about manufacturing jobs, that made me think of last month's essay that we sent out on the newsletter. So if you're not subscribed to the newsletter, you know what to do, but we got this reflection on that essay from Caroline that loops into some of the bigger conversations that we've been having today. So I wanted to include it. Henah, if you can read this for us.

Henah:

Sure. She said, “I enjoyed reading your thought piece for this week. It's interesting to see that some people are concerned about the evening out of genders and higher education as a zoomer. It's weird to me to see that some people are blaming that on women seeking an education. From what I've seen amongst my peers, the main reason less men are pursuing college degrees has nothing to do with women. Because of uncertainty in many previous white collar jobs due to concerns of AI replacement,  college no longer appears to be the fast tracked wealth it once presented itself to be. It seems like more men are drawn to trades because they offer better job security, after factoring the cost of education, better pay and benefits in the long run. More men are choosing to be plumbers, welders, electricians, et cetera because in the face of AI, those jobs are more appealing right now. I guess the people that are arguing women are ruining higher education for men would probably say men are flocking to those fields because they're male dominated.”

Katie:

Bingo.

Henah:

“Thank you for being willing to voice your opinions about hot button topics. I always enjoy reading them.”

Katie:

So I love that she concluded where she did that is exactly what the full scope of that argument is. We actually thought about including it in that piece and then didn't. But it's that the reason that there's such a resurgence of excitement about the theory is like, yeah, because there aren't women doing those jobs or there's fewer women, you can either go to college where you're going to be outnumbered by women or you can go down this other path that is probably going to be less expensive. That does offer all these very real benefits that she's talking about, but it also happens to be more masculinized And to carry a more masculine perception and therefore is like a safer path, seems to be a safer path.

If you are a man, which as Celeste Davis writes in the piece that I quoted in the essay, what's the safest way to exist in this world? If you're a man, you avoid anything feminine and college is considered feminine or feminized now. So anyway, brief tangent, but thought it was interesting because I do think that that AI is coming up more and more in this feedback, and I do think that in this particular instance, white collar jobs worked by women are going to be just as impacted by AI as white collar jobs worked by men. So you would assume that if that's the reason you would see fewer people in general going to college, not just fewer men.

Henah:

Much to ponder. Well, we got a lot on this one, so I'm just going to wrap it up with one last piece that came in from Akshay. He said, “This was a great episode and I'm very intrigued by the concept of a sovereign wealth fund. Can it be applied at a micro level versus a national one? I have a diverse but very close group of 200 ish friends in a community with very diverse incomes.” Also a very close friend group of 200.

Katie:

I know. I was like, I don't think I could even name 200 people.

Henah:

He said, “There are 1% to 10% wealthy people and the rest are living paycheck to paycheck. I've been wanting to create a system within so that we can achieve some way for the balances to shift. How could I fund a sovereign wealth fund, but for a smaller set?”

Katie:

I think that's so dope. And I was like, there's got to be an app for that.

Henah:

There is, apparently!

Katie:

Yes. I think it was Jacob who emailed us last summer who told us about an app called Comingle, which works similarly, but at a way larger scale. It's not, in my understanding, designed for small groups or communities. Although 200 is not a small group. I'm like, damn, my friend. You've got a lot of friends. But for anyone curious, we'll link Comingle in the show notes.

That was a lot. We are going to talk about your thoughts on our other two episodes after a quick break.

Henah:

So welcome back. I don't think we've ever gotten so much positive feedback from an episode. So first we can share some exciting news. If you are a fan of Kathryn Edwards, she just launched her own podcast called Optimist Economy, and her hope is to bring a lot of what she experiences and how she sees economics straight to the audience, and it just went live, I think two weeks ago. So definitely check it out.

Katie:

Given the state of gestures that everything, I think we should plan to bring her back and soon maybe in a couple of weeks to talk about everything that's going on with the tariffs and help us kind of digest what this might mean. So let's start with some rapid fire this time and then we'll shift into the bigger stuff, the questions.

Henah:

Okay. So we basically heard from a lot of people fan-girling as much as we were, and I let Keds know about all of these kind words. And she said she “felt affirmed by life.” So we'll read a few.

A special shout out to Jon Long, who's commented before begging us to have Keds on the show. He said, “Outstanding conversation. Keds always brings it.”

Katie:

Okay, another regular listener, Leah said, “Beautiful episode. It didn't feel wide ranging as you warned. This deserves a re-listen.” Beck N. wrote, “As someone who leans conservative, this was an incredible podcast. I'm always willing to listen to others' opinions and expertise. My hope is voices and conversations like this can be elevated above the noise for actual productive conversations. Well done, Beck.” You know, that is my favorite feedback, so thank you.

Henah:

We heard from Clara L. who said, “This is one of the best episodes ever. Fantastic explanations, brilliant and thoughtful.” And Jessica M. who wrote, “Wow, that was inspiring. I feel tingly.”

Katie:

Okay. And then Jasmine wrote, “Whoa, this episode connected so many dots. I'm seeing the matrix. I will have to re-listen a few times. Please bring her back all the time. So many slam dunks.”

Henah:

What do you think Keds? You want to come and join us every week?

I think it's Hillen wrote, “Wow, this has been the pinnacle of my short Money with Katie Show journey. I have binged all your episodes over the past six weeks, and I want to thank you for softening my ‘ethnic kid who grew up in the hood to stop complaining and work harder if you want to succeed because capitalism has worked for me.’ Sincerely, your financial mista from another sista.” Which wow, what a binge. So thank you for that.

Katie:

Okay, and then Fallon D. said, “This episode was so good and that's saying something because I love all your episodes.” Thanks, Fallon. “Pretty pleased make Keds a regular guest. I would listen to you to talk about literally anything: pasta boiling techniques, ethical capitalism, unironically wearing white toenail polish.” Henah, dragged.

Henah:

I do unironically wear that. I'm confused. I don't get it.

Katie:

Fallon, report back. Henah wants to know why is it unironic? Is white toenail polish cheugy, are the Zoomers not doing that anymore?

Henah:

I guess not. I think black is what's in now.

Katie:

Oh, is it?

Henah:

I don't know. I just always ask for white. I didn't know that it was cheugy. I thought it looks nice.

Katie:

And then we'll end with Jaygos who pull quoted what Keds said at the end, and definitely bears repeating: “The only way to guarantee your voice doesn't matter is to stay silent. Your silence is their victory, your apathy is their victory. Your cynicism is the ultimate victory for them. So don't give them the satisfaction and certainly don't reward them with your silence.”

Henah:

It's so good.

There were a couple places to expand further. There was one general theme that came in and it pertained to the section in the episode about poverty. So Rebecca V. wrote and said, “Looking at these economic policies that target increased consumer spending—thinking about tax cuts as a bad example and targeting payments to staff families and single mothers is a better example—is there any difference in economic benefit if consumers spend their cut at mega corps versus medium versus local businesses? I was just reflecting and doubting whether spending your stimulus check as a contribution to the profits of big healthcare, Apple, Walmart, as many people probably do, has a generally positive impact on the national economy. This leads into a bigger but less relevant question for me about the real impact of shopping big versus small. Do you ever worry that a small business could just be a middleman between you and the mega corp anyway, since they would need to get their supplies from a cheaper vendor and at a profit margin? I've been disillusioned with the concept of ‘voting for your dollar’ for obvious reasons, but maybe state or federal economic policy should be doing more to achieve whatever these consumer targeted shop small campaigns are going for, if it's beneficial on a bigger scale.”

So we did have a soft debate on an old Rich Girl Roundup about this topic, I think maybe two years ago that will link in the show notes. So to the person who said, we don't debate, see, we can do it!

Katie:

Yeah, we just debate each other. We just argue with one another. You said you wanted a subject matter experts, but instead you're going to get two bitches going exactly. Except not.

Okay. Yes. So I think something potentially worth keeping in mind here, if we tease these issues apart and we set aside the big picture impact of shopping small for a moment, we focus only on, okay, where is a person using their EBT card to spend money? Half of the spending in our economy is driven by something like the top 10% of earners, those who are in the bottom 40% of the income distribution. So if we're talking people that are on SNAP, we're talking like bottom quartile 25%. I'm saying include it almost the whole bottom half, but bottom 40%, they are responsible for somewhere between 5% to 10% of all money spent in the economy. Very small fraction. So all that to say, I think you could probably double the spending power of somebody using SNAP benefits. And I don't think where they spend it would materially make really any difference to the overall economic picture.

But I guess I hesitate to say that definitively because I think the flip side of that coin is it's like the consumer side of the, it's like the people who work at large corporations and are paid low wages and who are on snap. It's almost like these corporations are double dipping. They might be benefiting from the low wage labor and then also benefiting from the spending of the benefits that the person they're employing is entitled to. Does that make sense?

Henah:

I think it's funny that you said they may be double dipping when I feel like that's very clearly what's happening because there's no regulation around—

Katie:

They're benefiting from it twice. And I think in that respect it is worth paying attention to. But if we are concerned about will the good that it does for those people be offset by the benefit to the mega corporation, I think keeping in perspective how relatively little money we're talking about in the grand scheme of things and how much more money is being spent, what a large portion of all spending is pretty much attributable to, I dunno, the top quartile. I don't think you're going to see, it's not going to be a needle mover, I guess I would say.

Henah:

Yeah. And then sort of relatedly, actually Jenney H. wrote in and said, “Loved it all, but one aspect got me thinking, isn't this enabling or entrenching systemic poverty? I understand this is a proven successful intervention, but doesn't this further perpetuate the problem as it doesn't fix the system and further subjugates poor people to the whims of when the government or other people decide it's time to give them a few extra dollars? Am I misunderstanding this?”

Katie:

Yeah, so I'm not sure what this is specifically in reference to when she says, isn't this enabling or entrenching systemic poverty? Because we obviously covered a ton of ground in that episode, but I'm going to assume that she's referring broadly to the idea of government intervention to alleviate poverty.

And first of all, I do think that there's actually a healthy amount of skepticism of government power in this question. I probably wouldn't have said that a year ago, but I have been reading a lot of David Graeber. He was an anarchist, and so he's kind of constantly being like, it's not really about you want to give power to another institution or offload all of your power to somebody else. I think sometimes the calls for the government to change existing programs or do more are conflated with the idea that we want the government to have even more control over our lives, even more power.

But what I think is important to say first is what we have now is a system that entrenches poverty. We did a deep dive into this years ago with the authors of a book called Getting Me Cheap, all about the benefits cliff.

Henah:

It was in 2022, I want to say.

Katie:

Yeah, it was kind of a mashup between Maid, which was a memoir that was made into a very famous Netflix show with a nonfiction book called Getting Me Cheap. So we'll put that in the show notes, but it kind of reminds me a little bit of the meme where someone tweeted a picture of a tent encampment and was like LOL, the housing plan under socialism, and someone quote tweets it and is like, dude, this is the current housing plan under capitalism, by the way.

So rather than diving into this question alone though, we figured we would just ask Keds herself. So Keds, welcome back to the Rich Girl Roundtable.

Keds:

Well, hey y'all, happy to be back.

Katie:

We figured with all the love that we owed it to our listeners to bring you back to answer this. So I guess off the bat, I'm curious if you have any thoughts about this question.

Keds:

I think what is lost on a lot of people is that there are two ways that the government decides to help people who are in trouble. And their defining feature is explained by whether or not the government finds those people worthy or unworthy.

So if you are a worthy person like a retiree, you will get the gold standard, you will get the best social program in the history of the world. You'll get a lifetime inflation adjusted benefit that reflects the amount of money you put into it, a social security. And if you are married to one of those people or if you are the dependent child of one of those people, you'll also get a good benefit. If you're the non-married partner of that person, you don't get anything. If you are not part of a marital family, it's less for you.

And when we think about ending poverty in the United States and truly eradicating it from our system, elderly poverty is the lowest poverty rate amongst anyone in the United States. And even at the height of the Great Recession, as the financial markets were crashing, Social Security was still reducing poverty among the elderly because it's a very high functioning program. So the question of are we helping people in poverty is really about who we're helping and how we value them in our society.

We can design amazing social programs when we want to, but if you're a single mom who doesn't want to work or who doesn't want to get married, you're not going to get anything nice. You're not going to get anything adequate and you're not going to treated that well. And if you want help for food, I'm going to give you a little voucher for food and then I'm going to make you work to get it. And then I'm going to audit you four times and every two months you have to tell me that you're working and that you're still in need. And I'm not going to treat you with that much respect.

So it's important to know that this idea of the government giving out a handout that is a choice that is not required when helping poor people. That's just how we help poor people who we don't value in our society.

Katie:

So maybe the most good faith interpretation, because I do think that this question was well intentioned. I think it gets to the heart of, Keds, we had talked about in the original episode, which was basically this idea that you're doing this thing that you think is going to help these people, but actually what you're really doing is hurting them and you just don't realize that you're hurting them because the hurting part is the second or third order effect. It feels like a cousin to that idea of will it entrench poverty? Will it make poverty a state that people are less likely to get out of themselves if the government makes poverty less painful for them?

And my thought when I first read the question was that oftentimes people who live in poverty, if they are met with a very targeted intervention, they are quickly lifted out and then they are on their way and they no longer require help. So there was a very poignant story in the New York Times a couple of years ago about a Seattle woman who, because of some medical debt, I think she may have defaulted on medical debt in the early two thousands, she basically had gone through a series of bad and some bad financial decisions in a pretty complex financial system that effectively meant she could no longer afford rent in Seattle on her income. She ended up living in her car and she lived in her car for quite a while. And the intervention that ended up allowing her to regain access to stable housing was about $2,000. It was $2,000 from a church that allowed her to pay a new security deposit. And once she got that little leg up out of that bad situation, she effectively regained stability and became, I'm using air quotes, but became self-sufficient again. I think that if we are more targeted with the intervention or we commit to a path that is actually good social programs, that somehow it will make people worse off. I think that sometimes stories like that can be illustrative of, in my mind, you're doing this, you're making the program better because it allows people to be in poverty less, not more. It's lifting them out. It's not keeping them in.

Keds:

Yeah. I mean, I also take her question in good faith and I read, I don't even want to tell you about the hundreds of pages of stuff I've read about how terrible some of these social programs are to the people on it and how it becomes almost like an administrative burden of a full-time job just to keep your food stamps when you fall on hard times.

 It's a good point to remember that most people have a very big misconception of what poverty is in the United States, and you think of poverty as the entrenched multi-generational poverty. I was born poor, my parents were poor, I'll always be poor. And how do I break this cycle that is reasonably maybe 2%, maybe 3% of the US population.

An additional 32 to 34% will be people who are not poor experience some type of economic shock fall into poverty and for the most part, come right back out. And poverty is not a state of the world that describes someone to their core. It is a risk that the bottom third of Americans face of having some type of shock. You miss your rent payment, you miss your car payment, you get in an accident, you lose your job, your paycheck is delayed, and it's just, there's cascading consequences as you go down. And the idea of people being entrenched in poverty is whether or not we add to this risk of lower income, a lack of well-designed and well thought out support so that people who fall down can't get back up.

And understanding that is an admission that a lot of people have fallen down. And I think that is really hard for people to get their head around because nobody wants to admit that that could happen to them. And it's easier to think of poverty as almost like a disease that someone suffers as opposed to a virus that someone can catch. And if it's a virus someone can catch, it could happen to you and you would think differently about it. And so I always thought there's a bit of self-preservation around the idea of poverty in the US to make sure that it's them, not me.

But to your point, that sometimes you just need a very effective leg up. I mean, that's exactly right. You have a fall, you need a lift, and the US doesn't always do that. So well, I think she hit on a concern that maybe she didn't express, which is we are adding risk into our economy for people who fall because we don't catch them well, as opposed to we're risking keeping people in poverty who were there in the first place.

And you have to think of, were they already at dinner or did they walk in the door? And who is affected what by each program? And I will say it's also worth noting that there are a set of people who kind of live in between these two, and this is the set of people who are earning low wages, and so they're not poor, poor because they have jobs, but they earn so little and have such unstable employment that they don't thrive and they're kind of stuck in this low wage trap. And again, that's a policy choice. The minimum wage is $7.25 cents an hour. So I'm with you on the government skepticism.

Katie:

Yeah, I mean there's that element of the question, which is to what extent might providing a larger social safety net paper over the lack of, we'll say labor power, and I think that that's where the targeted intervention comes in.

To me, the ideal outcome here is not everyone working at Walmart still makes $7 an hour and the government sends them a much larger check every month. It's that the government does something that says you can't pay people that little. You can't have however many hundreds of billions of dollars in profit and be the company with the largest amount of people receiving benefits. That type of intervention to me gets at the heart of that question of, but is this going to just enable a system to stay broken by putting a bigger bandaid on it?

Keds:

I mean, you want to have a well-designed social welfare system, but you have to know, the left hand has to know what the right hand is doing, and you don't want to give a get out of jail free card for bad employers that they're allowed to treat their workers terribly, pay them miserably and give them no benefits because the social welfare system will pick up the tab.

Or you do think that, and that's a price you're willing to pay, that the federal government and taxpayers are willing to subsidize very low wage, very low quality jobs because we'd rather have low wage, low quality jobs as a permanent fixture of our economy and help people on the backend, but we're basically in the worst timeline and that we don't help people that well, but we don't regulate the labor market that well. And so you end up with the worst of both worlds.

Henah:

Well, I think there's also somebody had written in once saying, “Yeah, but Tesla, they may not be great for Elon Musk's—whatever he wants to do on a whim, but people who work at Tesla are paid very well, and so isn't that a good thing?” And someone else started in saying,”Wwell, Amazon workers are actually paid fairly decently.” And I said, well, but if their working conditions that they're under are not, does that negate the fact that they're paid not minimum wage…

Keds:

Take it from someone who works with numbers; it's really easy to fudge statistics. So you include everyone who works in the factory, including the 10 engineers that make $400,000 a year with the people on the factory floor, and yeah, on average they're doing all right.

Katie:

Yeah, they included Musk's total comp in there too. They're like, would you believe how rich everyone who works here is?

Keds:

Yeah. I mean, it comes down to a broader question to me about public policy. Do you want to take these company's word on what they do or do you want to establish the floor that you think every worker deserves that's not on the whim of whatever their CEO or board decides is reasonable?

“I promise you, they're well paid and we take care of our staff and they like it here, and so you don't need to regulate me.” I mean, banks say the same thing, and so do mortgage lenders and so do credit cards. “Take it from us. You don't need to regulate us. We do good things and we want people to succeed.” And they were like—

Katie:

“Listen, mortgage-backed securities are so stable. You've never seen a more legitimate financial product.”

Keds:

“We can't exist without good workers, so we would never pay them low wages or put them in one of the highest injury warehouses in North America.” They're going to say that their intentions are aligned with treating their employees well and treating their workers well and having good working conditions. And on some level, that's simply not true. If it were true, we wouldn't have low wage workers, we wouldn't have warehouse accidents. We wouldn't have some firms be worse employers and have worse accidents than others. And so I think that you can take all these firms with a little bit of a grain of salt, but on some level, I need to hear what you have to say, but I want to set the floor for everyone, right?

Say I want to. I mean unfortunately am just like girl in a closet with a microphone—

Katie:

But you're a girl in a closet with a microphone who testifies before Congress. I'm actually a girl in a closet with a microphone.

Keds:

Well, you know what? This is what the economy needs. We need more girls in closets with microphones telling it like it is and calling out some big paid male CEOs that are like, we value all our employees. That's why they work.

Katie:

Well, and I was going to say, if you want to get—let's expand the boundaries of the conversation outside the US and what we're doing to the workers that we employ in other parts of the world where you're going to see really fucked up stuff.

Well, Keds, I appreciate you joining us again to answer that question and talk through that a little bit more, and I guess we'll see you again pretty soon to talk about tariffs, tariffs for hopefully another very wide ranging conversation. So thanks for joining us again.

Keds:

Thank you. Thanks for having me back, and I look forward to talking all about tariffs.

Katie:

So we also heard from Shannon, this actually came in literally four minutes before we started recording. So Shannon, right under the wire, excellent timing, who I think raised a really good point. She said, “This was an engaging and informative discussion. I did think, however, that the episode was surprisingly devoid of discussion on how racism and racial inequity informs wealth distribution and capitalism in the us, including the fact that free black labor was the main principle in practice that launched the US economy and helped it achieve its current scale. To the extent the podcast explores similar issues in the future, I recommend engaging in a more comprehensive discussion that acknowledges or at least explores how the wealthy use racism as a tool to exacerbate class divisions and wealth and equality in the us. Moreover, the discussion could explore how any reforms intended to correct for wealth inequality should aim to benefit the most disenfranchised among us to have any chance of being effective. The Whiteness of Wealth, How the Tax System Impoverishes Black Americans and How We Can Fix It, a 2021 book by Dorothy Brown is one of many resources that could inform this discussion.”

Henah:

Yeah, that's spot on too because I think I talked to a lot of people who say, well, my family would've had generational wealth if we weren't enslaved.

We've talked about this, even the way the towns are built are built in ways that are meant to divide class and race, and so I think there's a lot there worthy of exploring. Thank you, Shannon, for bringing that up.

Katie:

Yeah, I remember reading this book when it first came out, and it was pretty eyeopening. It would be interesting to interview Dorothy Brown. One of the more interesting factoids that I've learned in the last couple of years, I think we talked to Donald Cohen about, which is basically the degradation of public goods in America was basically because of racism. White people did not want to share public goods with black people, and so they thought, we want our own stuff that we can privately pay for that we have the power to exclude who we want from using it and public goods after the Civil Rights Act, that was not possible anymore, and I just thought that that was really interesting. I was like, of course. Of course. That's why we don't have high-speed rail.

Henah:

Well, Dorothy Brown also is the person who wrote the piece on, “Your Home’s Value is Based in Racism,” I think, and so I would love to bring her onto the show.

Katie:

Was that—the New York Times?

Henah:

I believe it was cross-posted there, yeah.

Katie:

Deep dive. Okay, so the TLDR is that, Shannon, you're spot on, and I think we should do a bigger episode about this.

Henah:

Agreed. One last piece of feedback that I think actually feels really pertinent to right now is Lisa who wrote, “I appreciated the positivity, but as a Canadian, boring long-term, rebalance, but don't worry investor, I'm seriously considering pulling my American holdings. I have Canadian index funds that hold us markets, and I'm worried you guys are not coming back from this and my money will be incinerated. It seems like you are all going the way of Russian and Hungarian economies. I never thought I'd feel this way, but I can see the billionaire class will be fine through this. Not sure about the rest of us.”

Katie:

Yeah, so I think I'm an optimistic person by nature, tempered by a crash course in leftist theory that makes me less optimistic. But I also realize that it's easy to be optimistic when you are personally comfortable and your needs are personally met, and I do not overlook the fact that my material existence and just the reality of my life makes it much easier for me to take a longer term view and be like, it'll be fine. We'll figure it out. So I'm actually not going to weigh in on that element of this yet today. I think that it would still be a little bit early at this point to be making predictions of that nature or trying to assess whether or not that concern is legitimate based on the implications of what just happened, which was two days ago. The tariffs were announced yesterday, the stock market started to crash. So things are changing rapidly and rapidly.

The one thing that I do think is worth noting, and I want to make sure we reflect back here, is just that, man, it is so crazy how fast things change because oh my gosh, in 2021, the euphoria about US markets was so extreme that even suggesting that people diversify outside of US holdings and own companies that are in other countries was like, okay, boomer, sure, yeah, yeah, I'll diversify internationally. Sure. I felt crazy every time we would encourage people to invest in diversified assets that held international stocks.

Henah:

I remember getting emails from people being like, “Well, why would I?”

Katie:

I'm like, okay, yeah. They're like, well, NVIDIA's going to the moon. It does really emphasize though the value of these companies is only as strong as the regulatory environment they exist within. If the rule of law breaks down in the United States, it kind of doesn't really matter what they're doing because that is the fundamental assumption that all of that wealth is built on, that laws are enforceable, that the SEC has power, that any of this matters. So you start shipping away those fundamental assumptions and it doesn't take much for stuff to start to crumble, and I still feel to some extent, like it's an unpopular position in US personal finance advice to talk about owning things outside of the US stock market.

It's just crazy to get messages like this from people in Canada a couple years later and have it be genuinely representative. I think of the sentiment about the direction that this country's heading in. So I guess we'll leave it there for now, but we should come back to this.

Henah:

So we'll see what happens with that. Let's switch gears and talk about our most recent episode.

Katie:

Okay, so this was Money, Fashion, and the Aesthetics of Class Politics, and I got one particularly long and really funny email from a listener about this, Amy, and I liked this insight because it felt like it actually hit on a bunch of the things that we've talked about on this show before if you want to read that for us.

Henah:

She said, “I'm a relatively new listener. To be honest, I can't even remember how your podcast found its way into my awareness, but you have absolutely been killing it with content that relates to my life. I'm a 40-year-old mom of one working remotely as an apparel designer. Today's episode with Véronique Hyland was so apropos. I was a designer for Abercrombie from 2008 to 2011,” and then uppercase ‘the stories’. Then she says, “At the same time, one of my college's alums was the head designer for the Row. After I got laid off from A&F, I moved to a smaller licensed apparel company run by an out of touch Porsche Cayenne driving deadhead. Sorry, Katie.

Katie:

Hey, there's nothing wrong with driving a Porsche SUV. Okay, continue.

Henah:

She said, “I also fully admit that in a moment of weakness, I got into an online argument with someone about the questionable quality and ethics of Evie's raw milkmaid dress.”

Katie:

Yes.

Henah:

“You could not have described my experience working in the world of fashion any more succinctly. Something that was not brought up in the episode that I think also plays into classism in fashion is access to getting a degree in fashion design. A majority of their renowned schools offering fashion education are private and located in expensive cities. I graduated from the University of Cincinnati, one of the few public schools with a well-known fashion school out-of-state tuition rates basically made it marginally more affordable than the private options for students outside of Ohio. The cost of school ices out most kids who do not come from means it just adds more fuel to the cycle of wealth, maintaining control of the aesthetics of status.” That's a brilliant line.

Then she says, “Additionally, access to apparel fabric yardage is becoming more challenging. When I was in school, we had multiple independent fabric stores within driving distance. Joann Fabrics killed the competition, and now they're closing.”

Katie:

I think they got private equity-ed.

Henah:

Who's surprised there?

Katie:

Yeah. Plundered.

Henah:

Isn't that like Walgreens and CVS now too?

Katie:

Yep. Yep.

Henah:

We’ll see what happens. “I don't know where students outside of New York and Los Angeles are going to get fabrics for school projects. I think we're going to see larger groups of creatives deconstructing thrifted garments to use the fabric in new ways, a new ground up movement akin to punk. I see maximalist design as a stealth way of trying to appear thrifty while being expensive. It's the same way the industry answered calls for sustainability by greenwashing. It's all cyclical, baby.

“Lastly, fashion design is an incredibly difficult field to be in for wealth accumulation. Sydney Sweeney was a great tie-in. Fashion designers also tend to be revered and at the same time seen as a luxury and not a necessity. Industrial design is the hard good counterpart to fashion and is much more lucrative. One theory I have is that fashion ties into domestic roles and historically draws women. There was only one guy in my graduating class in 2008. Industrial design is a traditionally male dominated field and is frequently seen as a more technology-based science. Personally, I could do without a technology advanced ergonomic toaster, I'll always need a high quality, great fitting pair of pants.”

Katie:

We also got this email from Meredith about this episode, which was extremely poetic, so we're going to read it in full. She wrote, “Excellent episode. I've been listening since the beginning, and as someone who also grew up in the Midwest and went to Catholic school, I just want to say thank you. You both have helped me deconstruct the world around me and offered a lens I didn't know I needed.

“I've been eagerly waiting for you to explore the topic of art more deeply, especially how it intersects with money and class politics. As an interior designer and a lover of all forms of creative expression, product design, event design, art, fashion, I wanted to share how your conversation resonated with me. Interior design, much like fashion, holds immense power. It shapes the way we feel, behave, and connect with our surroundings. It can bring joy, calm, beauty and dignity into our lives.

“But as your episode so insightfully pointed out with fashion that impact is often reserved for those who can afford it. In my experience, the vast majority of people who invest in thoughtful elevated interiors are the wealthy. Many developers and clients still see interior design as superficial or in nice to have, not essential, especially in projects aimed at the average person, but I see design as deeply human architectural details, materiality, scale, all of it frames the human experience. Design can signal safety, wellness, identity, and yes, class.

“There's a stark difference between the detail and care put into a custom luxury home. And what you find in affordable housing, I've designed both. One feels personal, artful, and intentional. The other often feels purely functional, stripped down, and cost-driven. In fact, I believe modern design is the architectural equivalent of fast fashion marketed as sleek minimalism, but often driven by cost, efficiency and mass production. It's why we're now seeing a resurgence of maximalism vintage collecting and detail rich interiors, visual cues that subtly mimic the aesthetics of wealth and authenticity.

“Think about the popularity of Magnolia, Studio McGee, or Chip and Joanna Gaines all sold a target. They reflect a high-end Midwest middle-class aesthetic, a curated comfort that's aspirational, yet accessible. Meanwhile, the truly wealthy are collecting one of a kind pieces, heirloom furniture and designer decor you would never find on a retail shelf or hiring these designers for their custom homes. It's the same dynamic you discussed with fashion, a trickle down of taste with the most exclusive styles remaining out of reach. I recently went through a creative transformation planning my wedding. It reminded me again that the more detailed and artful the experience, the more energy and intimacy it holds, and that level of care is often only achievable with financial privilege.

“Now living in a highly designed apartment in Denver”—what's up? Where are you? Email me. “I feel the impact every day. Better materials, natural light storage, a thoughtful layout, all of it has noticeably improved my mood. Our last apartment felt dark, cramped, and cheap by comparison. But the truth is, access to this kind of beauty and comfort comes at a price, and that is the core tension. I believe everyone deserves to live in spaces that elevate their lives, but not everyone can afford harmony, whether it's in their home, their clothing, or even their makeup. Ultimately, this episode affirmed to belief. I've long held interior design, like fashion is a visual language of class. It is art, it is identity, and it is political.”

Henah:

Can we actually talk about this for a second because—

Katie:

Absolutely, please.

Henah:

I actually had reached out to an interior designer the week before this email came in, and yeah, it was a very sobering experience because turns out this person that I had reached out to actually would've been my neighbor, but they ended up selling their house and moving a couple blocks away. But when I looked up their house, it was worth over a million dollars. And I was like, okay, well, we are operating on two different playing fields here.

But it reminded me when I was looking through her portfolio the way that vintage designers—and I was talking to a friend who's actually a set designer on movies, the way that those people will have agents or reps go to vintage flea markets, go get the thing on behalf of what they want, and then mark up the price as their work for finding the piece. But then the person who owns the home doesn't have to look for it.

And so it has been very eye-opening to be experiencing this. And at the same time, I think this, Katie, I've always wanted a home. The reason I'm buying a home is because I am so into interior design and aesthetics, and I work from home. And so for me, having a space that I felt very comfortable was worth its weight in gold, I would spend more money on that than a great fitting pair of pants as the other person wrote. So this email really connected a lot of the dots that I've been thinking about recently, and it was so well put together. I even looked into this person's email to be like, can I hire you? Because you seem to be very astute. But yeah, what do you think?

Katie:

It's so funny because yesterday I was with an older friend and mentor of mine, somebody who is later in her career and has done extremely well for herself, and she just moved into a home that she had custom designed, and she had a painter come in and paint the most beautiful interiors. You would not believe the art and the design in this house. I mean, it was unbelievable. It felt like a boutique hotel, but in a very intimate, authentic way, the dream gorgeous. And she was telling me about this friend of hers that she hired to do the interior design work, the painting and the art, and she was telling me that this woman is very clear on the fact that her clientele is the percent that's who she works with because that's who can afford to pay her team to come in and paint extremely intricate designs that almost look like wallpaper because they're just so detailed.

Henah:

We're going to have to get photos for the show notes and for my own use.

Katie:

Stunning. So it was wild though, because as I was thinking about it, I was like, yeah, I mean, what a hell of a business model. Even the top 1% is still like three and a half million people. So if you're working with people where money is no object, and they will fly you wherever, I mean, she has gigs all over the country. She's being flown everywhere to work in these people's homes doing the most detail oriented and elaborate design projects for them. So it did feel timely that this was the email that I was reading around the same time that I was having this conversation.

Yeah, I've never looked into hiring an interior designer in earnest, but from what I could tell the last times that I've even glanced at rates, you're talking like $15,000 or @20,000 just for the design element, not including any of the stuff that they're buying for you, that's just for their services. And I was like, oh, holy shit. That's wild.

Henah:

I should clarify. I was looking at someone who would help with design for a day and because I was looking at this one part of our new home that has a dining nook, and she was like, yeah, the full day is a couple of rooms. It'll be $1,500. And I was like, do you do half day?

Katie:

See, I think 1500 seems super, super reasonable.

Henah:

For sure, but she's going to just measure and tell me what the vibes are, but I can also do that myself. So the question is what is the expertise she's giving me that feels worth it? And so it's just something you have to weigh out for yourself.

But yeah, I went to a friend's sibling's home. It's worth like three or $4 million and the interior is so, so gorgeous, but obviously everything had been custom made everything. Also, there was also a binder when you walk in of how to maintain everything my, because you're owning such high-end stuff that you need to be aware of. So I don't know. I think I had always known that interior design was related to class and art, but it just feels much more relevant.

Katie:

It's like been driven home. Yeah.

Henah:

Litreally. Yeah.

Katie:

Okay. Well, you want to do a little rapid fire?

Henah:

Sure. So we have Evie Nichol who wrote, “Such a good episode. The role of aesthetics and politics is not talked about enough. I've also gone down a feudalism rabbit hole like you mentioned, and would love to hear more about that sometime.”

Katie:

Yeah. I also want to just tack on there. The role of aesthetics in politics has been super top of mind for me. After the Kristi Noem “sexy war, Lara Croft Tom Raider, the homeland security photo shoot,” which talk about a trip. I've read a really good piece on that that basically included images that were taken before the main picture was taken, and Henah, it shows her walking into the room of all the prisoners, all their shirts are on, they're all dressed, which means in order to get the picture of her standing in front of all those people, they told them to take their shirts off. Isn't that insane?

Henah:

That's disturbing and dehumanizing and pathetic that that's what you directed people to do.

Katie:

It just goes to show there's a lot of intention and a lot of subtext going into the images that are coming out that there is an intention to communicate a certain eroticization of power. Anyway, wild.

Henah:

Well, one thing I would say on that is Emily in Your Phone talks about this a lot, about how something that the GOP and the Trump campaign has done really well is leverage social and social reels and the way that they have high production reels and camera. So it's all very intentional.

You also had written an essay that kind of talked about this a little bit.

Katie:

Yeah. My most recent essay that was kind of a low key White Lotus season three synopsis. I mostly just wanted to talk about White Lotus. It dabbled in techno feudalism a little bit. We'll link it in the show notes. But basically it's this idea that the attention economy is an equal opportunity exploiter of your time. You can't really pay for a better, and by that I mean less addictive, less exploitative version of the attention economy as you become wealthier, which makes it a tremendously unique element of modern life that I find really interesting.

Henah:

Then we had Jess K. who wrote, “Curious if you came across anything while researching for this episode about how if a woman is dressed nice, she's more likely to be taken serious by her healthcare provider,” and I feel like that tracks.

Katie:

Yeah, that is an interesting rabbit hole. We could go down here with dressing in a way that let's just be honest, makes you blend in more easily with respectable upper class white people. Or if you want a more pretentious academic translation…

Henah:

Give us that one star review.

Katie:

Locates you in closer proximity to whiteness. Pushes glasses up. Yeah. I will say anecdotally, since I have been wearing normal clothes on a daily basis now and going to, I've had to go to a lot of appointments because we're about to move. So there's going to the vet, going to my own healthcare providers, working with movers. There's a lot of that sort of tying up loose end stuff that I've been doing over the last couple of weeks, and I do feel like people take me more seriously in public when I dress well from vets to car technicians. So that could totally be in my head, but I did actually independently have that thought of, I feel like I'm getting maybe marginally more respect than I typically do.

Henah:

That's who I felt in Paris when I actually dressed nicely. People acted like I could belong there, and I was like, “Je m’appelle Henah?” But people did take me more seriously.

Then we had Alma who wrote, “Wow, this was a banger of an episode, gave me so much to think about, especially the part about the tradwife aesthetic, and as Katie, it quote, making oppression look luxurious.”

Katie:

Yeah, dog. Nobody goes into that cage willingly. You got to do some interior design in that cage. Put some beautiful furniture in it. Give him a soft place to lie down. Yeah. Hannah B. wrote, “The idea that these small luxuries like the ice cream placate society into not striving for more or feeling angry that rich people will always have way more than we ever will really hits home in the current politics we're living in. Losing the ice cream may be what forces change.”

Henah:

I posted on my Insta that that was the one part of the episode I couldn't stop thinking about, and so many people messaged me to say that they agree. So whoever posted that TikTok and prompted that thought really cooked, I fear.

So we then heard from Rich T who said, “Katie and Company,” I guess I am end company, “really enjoyed the episode.”

Katie:

And Véronique.

Henah:

And Véronique. “Katie, Henah, and Véronique really enjoyed the episode. The degree of which presentation and branding play into our acceptance is more than worth review. Thank you.”

Katie:

And then Debi low-key flamed me. She said, “I always love how thoughtful and inquisitive Katie is throughout her life journey. I can't wait till her forties when she notices whatever she wants to wear by or think is totally fine. I wonder how her writing style will change what will get her fired up then.”

But I really appreciated this. I actually just got highlights around my face again and I feel like a traitor to cause. So thanks, Debi. I actually can't remember where I read it now, but there was a quote that I had read a while back about how part of the challenge that 2010s popular feminism introduced was that it sort of lost the material class considerations element and instead replaced it with this idea that feminism is something you are and not something you do. So in other words, you can be a good feminist by living out political ideals in your personal life, and I don't know, I think the shortcomings of that mentality when it's not paired with material change more broadly.

But I am going to toss out a book recommendation while we're at it. For anyone who's really into feminist theory, it is called Enemy Feminisms by Sophie Lewis. It is one of the most rigorous, yet extremely readable books I have come across in recent memory. I recommended it to my co-host of Diabolical Lies, Caro, and she texted me, she's like, I'm five pages in and I'm tingling. She was like, this is incredible. So definitely recommend that.

Henah:

I love that you said, “Feminist theory. It is rigorous.” Points glasses up nose.

Katie:

I have to have to live up to this burn.

Henah:

Finally, we got Jaxx who wrote relatedly, “One of the biggest takeaways for me in the past year of disorganized progressive politics is the tendency of progressives to punish any minor fault within one another and write each other off. The judgment passing absolutely starts at passion and surface presentation and can prevent us from forming meaningful connections with each other to get the real work done,” which I feel like is very true. But it also reminds me of how we'll often hear about the working class fighting over crumbs to keep us busy instead of, I don't know, the real change that needs to happen at higher levels, like we are so focused on nitpicking apart little things that we are losing the forest for the trees.

Katie:

Just the way that it undermines solidarity, and I don't know, sometimes it may be a little too theoretical for its own good. I think we talked about that with Chelsea and Berna at the end of last year. Chelsea went on a little rant about that, that I thought was pretty accurate.

But that is all for this edition of Rich Girl Roundup. Hope you enjoyed. We'll see you in two weeks when I'll be a Colorado resident once again. Our show is a production of Morning Brew and is produced by Henah Velez and me, Katie Gatti Tassin with audio engineering and sound design from Nick Torres. Devin Emery is president of Morning Brew content, and additional fact checking for the show comes from Scott Wilson.