Katie:

Jeannie wrote, “Another amazing episode. I at least feel a little uplifted and not as doom and gloom as per usual lately.”

Henah:

Well, the first half of this episode will put you back in the doom and gloom.

Katie:

Then do we have the show for you, Jeannie!

Welcome back to our new and improved Rich Girl Roundup, the postmortem style Rich Girl Roundup, at the Money with Katie Show. I have to say, I actually did not expect to be doing this again so soon after just three deep dives on childcare, climate change affecting the real estate market, and privatization. But there was so much feedback, especially about one of them—I'd say take your guesses, which one—that we decided, hey, it's best to debrief before our bye weeks, we can hit the ground running again with a new batch of material next time, and kind of close this out.

So I am of course, Katie Gatti Tassin. Every few episodes, my executive producer, Henah and I are going to discuss all of your feedback, questions, new considerations that we've heard from you about the last batch of episodes. So Henah, what do we have today?

Henah:

Well, it's been a vocal few weeks. I also did not expect to be doing these so quickly. So we have a lot of ground to cover on a wide breadth of topics. But first, if you reached out about the recent evolution of Rich Girl Roundup, thank you. It's always nerve wracking when we try a new format. We're not sure how it's going to be received, and so it's so great to hear from so many of you that you enjoyed it.

And then secondly, if you are a newsletter subscriber that we recently asked for feedback for Rich Gigs, which is the mini-job board that we have in the newsletter each week. And if you are one of the people who responded about that feedback, I just wanted to also verbally say thank you, and that feedback was invaluable.

Katie:

Yeah, definitely. And if you're not a subscriber, I would say, what are you doing? What are you doing with your life? So yes, Henah sources these curated jobs every week. Some of them are from you guys with referrals, so it's a good old Rich People community. So we'll put the link to become a newsletter subscriber in the show notes. But where do we want to start with feedback today?

Henah:

So last time we started with some episode agnostic feedback. So I'm going to start again this time because there was a review that I found really interesting, and so I don't intend for this to be us reading our own praise on the air, which I'm also happy to do…

Katie:

Oh, well, that's what I intended it to be.

Henah:

But I thought that these reviews kind of contradicted each other, so I wanted to talk about it. So first we have a very kind five star review from Scary Ari or Scary Ari. I don't know how you pronounce it, but either way, love you, girl. So she said, could not love this show more. She's been following people for seven or eight years now, and she found a reel of you, Katie, kind of explaining how we are forced to understand money and investing these days. And she kind of does this TLDR version of everything that you've said. And she was like, and I was sold. I am not explaining it as eloquently as Katie did, but I instantly subscribed and I've learned so much since and I appreciate the whole societal perspective so very much.

Katie:

Oh, well thank you. Yeah, that is amazing.

Henah:

So we also got this wonderful five star review from someone named Kate Morgan and they said “Phenomenal. The two part on weight loss drugs was so well researched, great interviews and perfect scope. Brava.” And Kate, the woman that you are. Thank you.

Katie:

“Perfect scope” makes my day. All right, well I know that you're definitely gearing up to something bitchy. So what's the other—shoe’s got to drop now?

Henah:

Well, this is followed by one star review from someone whose username was like, But First Cafe Cubano who wrote “Grifter.”

Katie:

Yes.

Henah:

That's the title. “Weight loss episode. The testimony of one person is used to vilify all health professionals, but neither you or the guest are health professionals. Maybe you should include some disclaimers that this is one person's experienced,” which I was like, huh?

Katie:

That confuses me on so many—grifter. Yes, because as we know, I am in fact selling my own GLP-1 supplement. Everybody, you can buy it moneywithkatie.com/thiswasallalongcon. And secondly, because we interviewed three people and one of them worked for a major medical association representing doctors, and the other was a physician. And thirdly, we did have disclaimers everywhere. Everywhere.

Henah:

I don't know.

Katie:

Whatever. I feel like people should have to take a listening comprehension quiz before they are allowed to leave a one star review, but whatever.

Henah:

It's fine. That's how I feel about voting.

Katie:

Clearly. I take negative feedback very well.

Henah:

In general though, I think maybe this is just how touchy this topic was for a lot of people. It unleashed a lot of feelings and so people are particularly sensitive about them. So I was like, maybe it's some sort of projection, but girl, drink your—whoever it was, drink your café Cubano. So sorry that we disappointed.

But anyway, we will dig into more of your specific thoughts after this short break.

So Katie, something that I really loved about this format as well is how it's encouraged a bit more back and forth in the comments themselves or in emails to us. So for example, we've heard from one of you in a follow-up that will say on the air and then that will inspire a thought that someone will email us or in some of the episode comments on Spotify, which I don't know if everyone knows, you can leave comments and engage with us in that way. Someone will ask a question or comment and then someone else will chime in to respond.

Katie:

Yeah, it's becoming kind of a never-ending thread where now I'm getting feedback to the feedback via email. So it's definitely a challenge not to extend everything from last time forward. I got a lot of emails about downsizing, about budget culture, about weight loss drugs. So please just know we have very much enjoyed reading them and we are resisting the urge to reopen all of those cans of worms right now. Truly.

We got the most feedback by far about the working parents episode. So that's where we're going to spend the bulk of our time today. And I'll say I was pleasantly surprised by the response to it. Most of it was what I would describe as general commiseration or hey, and here's another factor. Though there was one particular strain of feedback that I've characterized as “disappointed dads” that we're going to dig into more today. So Henah, why don't you start us off and we'll just go back and forth.

Henah:

So we're going to start off with one that comes from a username that I can't pronounce. I think they just smashed their keyboard, so apologies. But they said, “Don't forget the guilt that comes along with being a working mom, choosing that over staying home and feeling guilty for your work, being sort of a respite from childcare.”

Katie:

This one comes from Abracadaver, that's a great name: “God, this was bleak. I appreciate the tough medicine and find myself newly appreciative of the YMCA summer day camp that my working mom was able to cover.” And then relatedly on the camp front from Miles, “You should take a look at summer camps similar to daycare. You got to plan six months slash years in advance. The gift that keeps on giving.” And then finally, someone named G shared, “This last episode sent me as a new parent of a four-month-old. I literally did not even consider how the hell he would be entertained during summer months. As I grew up with stay-at-home mom, and my dad (they're divorced) would send us to sports camp when he had us for the summer.”

Henah:

I came out of it being really appreciative of summer camp because it also occurred to me that my parents were not making a lot of money and were still able to send me to 9am-1pm program. Then we got this message that was kind of sobering from Becky who said, “It's really nice to see acknowledge that childcare doesn't end at five years old. Now imagine that you have a disabled child. Their access to public school is protected by law, but the same protections don't exist for childcare,” which is something I didn't really realize, but it is so incredibly valid. And so I would say if you're a parent to a child with this disability or Becky, our hearts go out to you, that is really tough.

Katie:

And then Sam wrote, “Great episode. I'm childfree by choice. Childcare, work culture, gender roles, and pretty much everything mentioned in this episode is a piece of the puzzle as to why I made the decision I did. Mad love and respect all that are raising children and navigating the various systems that be.”

Henah:

Here. Here. So this was in response to your essay actually. So this was kind of released in tandem with the childcare episode a little bit removed. But basically you wrote this essay, Katie, on how large families are becoming a status symbol because of the expense of children. And we can link it in the show notes, but Lacey wrote in to say, “Please keep writing and talking about wealth and family size. This needs to be a national conversation. It makes me feel ill that creating the family you want, which is the most physical, spiritual and emotional choice you'll ever make, and in the long term, is becoming a class issue. So for context, I'm a mother of four in northern Minnesota, we comfortably raise our family with a mostly single income under $90,000. When I say comfortable, I mean that I work at a gift shop in the holiday season to pay for a modest annual vacation. Keep writing and thinking about this, hearing about this from a childless woman with a progressive viewpoint is so refreshing. We can't let the right take the issue of family size as their own.”

Katie:

The childfree people are the only ones that have time to make the podcast about it.

Henah:

Right? I'm like as two childless cat ladies. We'll continue to talk about this, but I really was blown away that she's a mother of four basically living on $90,000…

Katie:

The Minnesota of it all. I'm like, we need to be doing an episode about Minnesota. Is that the hack?

Henah:

I think we do.

Katie:

Okay. And then I also got this message from Amanda who was another currently child-free person was worth pointing out. She wrote, “Loved this episode. I was an au pair years ago and had such an amazing experience that I will absolutely be hiring au pairs for my children in the future.”

I don't have kids yet, but it made me think about just the other day I was talking to my friend because she listened to the episode, and she brought up the fact that she is this extremely wealthy family member. Both parents have multi six figure incomes, they have three children and they tried to do the au pair thing but could not get it right. That basically, because you have to host this person in your home, it can end up being kind of challenging to find somebody who's a good match for your family. And even if you have the money to pay for it or the space, it's just logistically a lot of work. And so her point was basically my family had the money and the wealth to accommodate this, but it was not enough to isolate them from these logistical challenges. And the children's mother ended up leaving her high paid high-powered job because the complexity just became too much.

Henah:

Right, which makes sense in some ways because essentially finding a defacto additional family member and that comes with its own challenges.

So then we had a little back and forth between Amelia and Amy, and so Amelia commented and asked,  “Realistically, what needs to change to make childcare more affordable? Does the government need to subsidize it? How could they do this raising income or corporate taxes? What if more local governments create a public private partnership with childcare centers? Would more of these create extra revenue for subsidizing these social services? Does the government provide tax breaks for childcare centers? Would it work if local governments ran their own childcare centers?”

Katie:

Okay, so basically what's happening here is that Amelia is giving more thought to this question than the government itself has given to. You're already a step ahead of them, Amelia.

Henah:

You're doing the work. So Amy then swooped in and responded on our behalf, and I fact checked this so I know that it's true, but we're going to read her response, which was “The US government subsidized universal childcare during World War II via the Lanham Act of 1940. And that allocated funds to build public infrastructure to communities with defense industries (because we were telling women they had to go to work). And so the per day cost was I think nine or $10 in today's dollars.” And Amy continues to say, “They were public private partnerships, but I think the strength was that it was a universal benefit available to all in those communities. If it's truly a priority, it will be made a line item in the congressional budget.”

Katie:

But let's dig in there for a second because I share Amelia's desire to wrap my head around how we could actually make this work. And as we've alluded to in the newsletter a couple of weeks ago, I wrote an essay that Lacey was referencing that concluded with a little breakdown of Norway's childcare system. And I basically did that just to show, hey, this isn't something that no one has figured out how to do. There are a lot of countries that have figured this out. Here is kind of the preeminent global example of a country that has done it the best.

So basically they guarantee—they being Norway—a spot in a public daycare. I believe they are supplemented with private centers as well to all kids over the age of one because one year is when paid parental leave in Norway ends. So they're assuming that parents will be home for the first year with a new child, but after that one year mark, every kid is guaranteed a spot. So it's not that dissimilar from the US public education system where all kids are guaranteed a spot in school or whatever, but at the high end we're talking about $287 a month at the cost to a family,

Henah:

Which is like 10% of what a lot of people are paying these days, right?

Katie:

Yes. It's a lot cheaper. And so I don't want to give too much away because the first episode that we're doing when we come back from the break is about how Norway funds this and what the actual ins and outs of providing something like that to a population are.

So I will put a pin in that for now, but I did want to highlight that in response to that essay and the fact that I was highlighting Norway's playbook as a positive example of what's possible when a society devotes wealth and energy and time and resources to this, Anthony wrote, “What's always left unsaid when people hold up Norway as the example we should follow is that their tax system taxes middle class people more than ours does. There are not enough rich people to tax to pay for social welfare. So you have to tax the middle class. We refuse to do that in the us sure we do, but not at the rates of successful social welfare countries, including Norway. Also left unsaid is that many of these same countries are extremely homogenous, but no one wants to discuss that as we can't have mature, rational conversations in this country.”

So I'll just say this is a topic that I would actually love to devote an entire episode to because I do think there is a mature, rational conversation worth having here about the differences between countries like Norway and the United States, but that I do not think that diversity or taxation preclude us from having similar rights to Norwegians. I actually reject that conclusion. I do think it's worth talking about to Anthony's point, but I don't think that that's like, oh yeah, because our country is less ethnically homogenous, this will never work. Or because they have higher tax rates for the middle class, this will never work.

Henah:

It's funny, I was talking to a friend last night and we were talking about if we left the US and my friend was like, oh, there's no, everyone thinks they're going to go somewhere, but where are you really going to go? And I was like, I don't know if you really want to go somewhere with great social safety nets Norway. And they were like, yeah, they would still be racist towards you though. So the homogeny of this is interesting to discuss. So I think that would be a worthwhile conversation for sure.

Katie:

I do think that it's a white person talking about, I'm going to go, if I said I'm going to go dye my hair blonde and move to Norway and be like, Norwegian passing learn Norwegian and no one's going to suspect a thing, it is going to be harder if you aren't white or white-passing. Like I said, I want to talk about it in another episode because I do think that these are common talking points that are worth engaging with in good faith, but that ultimately don't really stand up to scrutiny.

So I would say to me, the more interesting thing about questions like these of how do we pay for it is related to the question that I raised in the episode where I spoke with Donald Cohen, which was, it's really fascinating to consider this question through the lens of modern monetary theory from Stephanie Kelton.

So to just re-explain this quickly and poorly: Tax revenues do not actually functionally pay for the things that our government spends money on. The purpose of taxation is to create demand for fiat currency that has no inherent value as well as take some of that currency out of circulation. It's very abstract, it's very confusing. I think it kind of defies intuition, and like I said, it's just a theory, but Kelton's work focuses on the fact that it's not money we lack. It is productive capacity. So for example, it's not that we don't have the money for universal childcare, it's that we don't have care centers and care workers. So if that's the case, print the money, build the places, employ the people, create the jobs. And again, I'm way oversimplifying, but I just think it orients the question a little bit differently, not of who's going to pay for it, how are we going to pay for it, but who's going to do it? How are we going to structure it?

And there are obviously very valid critiques of MMT. One I heard the other day was the fact that when the government prince money or borrows money to engage in deficit spending, oftentimes that money is coming from wealthy people who the government isn't paying interest to. Ideally you would get that money from the public and then deploy it from the public. That way you're not getting into a borrowing situation with wealthy entities and paying interest to wealthy entities and making them richer. But I still think it's a useful reframing of how we solve these challenges and how to think about investment.

Henah:

Sure, because I think also the solutions we have right now are not working, as we can all very plainly see, considering the alternative feels worthwhile here. So Stephanie Kelton, if you are listening, we are trying to get you on the show, hit us up.

I wanted to include some of the longer emails that came in from moms because I think they lend us some texture and super cool with it. The first one I'm going to read came from their first initial M. They said, “I was working as a full-time dentist prior to having my child like many other high earning mothers. I found balancing work with parenting incredibly challenging. I decided to significantly scale back from dentistry to focus on parenting and managing our house. Sure enough, my husband's income and career skyrocketed while I scale back.

I a hundred percent empathize with the Redditor's post about whether or not to have a second child. While we can certainly afford a second child, I also hated being pregnant and all the challenges that came with having kids. We are at peace with our decision to have one child, but it is incredibly irritating and frustrating to have to explain to people why we're not having a second child. I've been accused of being lazy and depriving my child of a sibling.

I do want to mention that once parents with access to childcare are done working their day job around 5:00 PM they still have a second job called parenting, which is a thousand times harder than most day jobs. There's absolutely no break for parents.”

Then she basically recommends this book called We Need to Talk: A Memoir about Wealth, and she said that it really helped her work through her feelings of guilt about paying for childcare despite no longer working full time.

Katie:

Yeah, there's an interesting, I think it's France where every person including the stay at home parents use the childcare system because the whole point is yeah, nobody should be working constantly and parenting is a constant job. So even stay at home, parents should get a day off basically.

Henah:

I agree.

Katie:

Again, it's super cultural, but glad that we included that recommendation if anyone else kind of struggles with that.

This one came from another person who's first initial is M. She wrote, “One really amazing way some parents are affording daycare that wasn't mentioned is workplace childcare stipends or onsite care. Personally, the only reason I can afford to have my two children in daycare is because the company I work for opened a daycare two blocks from our office and we are provided subsidized rates. As it stands, I believe six of the eight infant spots are employees at our company. And also worth mentioning, our executive team is 66% female. While this doesn't completely shoulder the burden of being a working mom and in my situation often a solo working mom, while my husband travels six weeks at a time for work, it does allow me to provide my kids high quality care while I further my personal and professional goals. I guess I just wanted to highlight this because after hearing your episode, it made me remember how lucky I am to be able to be pregnant again and not be completely freaking out about childcare.

With all that being said, a question you posed is if people are able to save or tapping into savings during these times, and I can honestly say we are struggling to save and even have used up a good portion of our savings. We do not have family nearby and prior to a complete professional pivot, I was a teacher while my husband was just getting started in his career. We fast tracked it by having a kid, getting married, having another kid and getting pregnant before building up a solid financial foundation. All that aside, childcare and being a working parent ultimately feels like the wild west right now in terms of how everyone's situation is different.”

Damn. And then another one from J who said she wanted to share a rural perspective. She said, “A lack of available and affordable childcare was a major factor that led to my divorce last year. I live in the Midwest in an affluent suburb of one of the large metropolitan areas in my state. The childcare shortage is so extreme here that expecting parents need to put their child on a daycare waiting list before their kid is even born and then hope a spot is available when it's needed. The problem is so acute that there was a referendum in my suburb to extend school services to start at three years old instead of the traditional five. For unrelated reasons, the referendum did not pass. What daycare services are available are disproportionately expensive. What blows my mind is how little daycare workers make. My friend worked at a daycare and did not make a livable wage. Even though the annual cost of daycare for one child is close to half of my ex-husband's salary. Parents out here find ways to make it work. The aforementioned friend now has a child of her own and drives a school bus so her child can ride with her. And I know some parents that work split shifts. So one parent is always home. Many families hire retired women in the area and my family hired high schoolers for the summers once we were school aged, some stay at home mothers advertise on Facebook that they can watch a few children in addition to their own. One family even moved closer to be with grandparents after none of the daycare spots they had applied for were open by the time both parents had to return to work.

“My ex was willing to go broke to have children. He said if we wanted it bad enough, we would just make it work. I was uncomfortable going in without a plan, a solid budget and guarantees of solvency and retirement. So we decided to part ways. I have no regrets, but I'm certain we would've stayed together and had a family if the environment was conducive for us to thrive. I feel like these issues are more common in rural areas of the country than most people realize. And I share the sentiment of many in the heartland that we are overlooked by the government and the power brokers on the coasts.”

Henah:

Wow. Talk about trickle down effects that only happen here, whereas other high income countries, couples aren't really considering childcare as a major stressor. Thank you J, whoever you are, for sharing that experience. That's wild. I mean, I'd never made a connection between that and leading to divorce. That's powerful.

Katie:

Well, you're just facing choices in a high income advanced economy. It's just so backwards. We're going to get divorced because one of us is willing to risk it all to have kids and the like, I don't know. I would like an assurance that we're going to be able to survive.

Henah:

This is a very rational response, but there's no answer. So it's like you got to pick, I guess.

Moving on, I want to also thank Sarah who wrote in, she wrote, “As a mom of two and a financial coach who works with a lot of parents in the quote daycare years. I'll admit I was a bit nervous that as child-free, you're not yet parents. This episode might be lacking some critical insight. However, I was delighted with how it came out.” Thanks Sarah.

Katie:

Let's go. Let's go. Pats self on back.

Henah:

Well, to be fair, Eryn’s insights about childcare decisions were spot on.

Katie:

She said, you're a fucking idiot. You got nothing babe. But Eryn…

Henah:

Eryn's good. Eryn was great. “So one point that I wanted to add is the hesitancy to switch jobs when you're pregnant slash planning to get pregnant slash In the early parenthood years, I stayed in a role. I might've moved on from sooner because I had a decent amount of flexibility in my schedule and I already had an established reputation of being good at my job. Those qualities made it much easier to duck out the door for doctor's appointments, sick days, et cetera, without fearing about how those optics would look. If I had just started in a new role, I know I would've felt less comfortable doing those things and I opted for that flexibility over growing my salary. Similarly, I see many clients choosing to stay longer than planned in roles, also eliminating their income growth because they have better than average maternity leave or fertility benefits. This added level of career growth strategy is exhausting and limiting mother's ultimate earning potential.”

That was Sarah. But I was going to say, I know so many people in this position personally who've stayed, as I've shared on the show before, because of parental or family leave. And conversely, I just had a friend who landed a new job and got a big pay increase and they said, oh, well I actually never allowed myself to think about having a family before because it just wasn't something we could afford. And now I feel like I can and because of the parental leave benefits. So again, it is kind of influencing everybody in this society in one way or another.

Katie:

So that's kind of what I talked about in the essay is it's the difference between a society that believes it's a human right to have children, and a society that believes what America believes which is just, don't have kids you can't afford. That's your problem. That's on you, babe. That's what I love about the reproductive justice framework. The reproductive justice framework does focus on the right not to have children, but it's just as focused on the human to have children and to raise those children in a safe environment. It just feels so fiscally true to me, as a value, a societal value that is worth having.

Henah:

I don't want to give too much away, like we said about the episode we're doing coming up, but there was an interesting conversation you had with the guest about kids and free lunches at schools and just kind of the downstream effects of that, which is kind of reminding me of this conversation. So you'll have to look out for it.

Katie:

Yeah. So we talk a lot about the hard numbers around the socioeconomic considerations with children, but it is interesting to think about the “soft” stuff that might not be captured in the data and how earning potential might be limited because you're necessarily working fewer hours maybe. But also because you're just not making those cross company moves as often, which as we know in the way the American economy is set up now, you are really not rewarded for loyalty anymore. People don't stay at companies for 30 years to get a pension.

Henah:

That’s why I'm quitting, Katie.

Katie:

Incredible.

But that's kind of like a known thing is millennials are job hoppers because that's how you get increases in income. That's how you meaningfully increase your income. And so it is interesting to think about stuff that might not be captured in the data systemwide at an aggregate. How many people are sticking around in jobs they would leave if they had the stability of the childcare thing figured out?

So anyway, bigger picture, we also heard a couple things that I felt like were worth highlighting. The first is, yes, the costs are crazy, but kids don't stay little forever. There is an expiration date to these challenges and it rocks to see your kids develop into actual human beings too who will not always need constant supervision. So basically we heard from parents who have older kids to be like, yeah man, it's rough, but just remember this isn't a permanent feature of having children. Keep that in mind.

And I would say that that fit into a bigger theme in some of the feedback was people just being like, man, this really felt like a downer.

Henah:

And I hear you because I also felt that way. I messaged Katie being like, we got to have some more uplifting stuff soon. This is a downer. But when I thought about it, I was like, but ask ourselves why it feels like a downer. It's because the reality of the US is so bleak despite the fact that we sort of accept this as par for the course, but it doesn't have to be this way.

Katie:

And then one person who reached out who felt that way suggested the podcast Best of Both Worlds. So I wanted to include that. She said it's hosted by two working moms who share tactics and strategies for enjoying your career and your family.

And I want to be extremely conscious here of not veering into toxic positivity around this topic because I think it can feel pretty gaslighty coming from a person who does not have kids being like, don't worry babe, you're fine. Just go listen to this podcast with strategies for dealing with this untenable situation. But I am all for offering people strategies that can help. And this came from a working mom who was like, this podcast is great. So again, it's called Best of Both Worlds.

Henah:

We can link it in the show notes.

Katie:

And then next, another major theme was that several people mentioned that their FIRE journeys are actually directly related to this question of family formation as in they think about FIRE and having one or both parents retire early as very intimately connected with how they plan to deal with these challenges at the individual level or what got them into FIRE to begin with was their desire to have a family and for both parents to be able to be home with that family. So maybe they want to reach FIRE so they can just eliminate the need for childcare entirely or because they want to do all that front loading of the saving and investing before they have kids, so that they can work lower paid less demanding jobs and either save no money and pay for daycare or have one parent work in part having the shifts staggered, but that way they don't feel like they're losing out on all this valuable compounding time. They're like, oh, we started saving and investing really aggressively because we wanted to basically get to coast fire or just past it before we had kids so we would be set.

Henah:

Yeah, which makes sense. And I feel like there were a couple of people who wrote in and said that their FIRE goals had to completely change or become delayed just because of how expensive childcare can be, and we've obviously seen that in the wealth planner when people are adding their temporary expenses and how that really does kind of change the trajectory.

Katie:

They'll be like, so I got $3,000 a month going out for the next five years. What's that going to do?

Henah:

I'm like, oh, sorry. I'm so sorry. Finally, I want to transition to this last comment that's going to take us into this strain of what you call “disappointed dads” feedback that you noted. This is from Mr. Ranuel, I'm sorry if I mispronounced that, but they said, “As a man, very happy to listen to episodes like this. Very important to consider domestic workers in their role in the care economy.”

Katie:

Yes. I'm so happy that he brought this up because—it's interesting because when we look at the data, it is obvious that women are most affected socioeconomically by the current state of affairs. But in this episode, and oftentimes in these conversations, we basically just focus on the professional working women who are more likely to downshift at work when they cannot find or afford the level of care that they need and what are the economic and career consequences for women that are professionals, white collar jobs, but it's not just impacting women on the level of paying for care, but the women providing the care, which is what this comment is about. Nine in 10 childcare workers are female. Most of them are paid low wages if not poverty wages.

So I just think it's so fascinating that the financial consequences of this situation impacts the entire socioeconomic stratum albeit differently, but most of our conversations on personal finance shows are about middle and high income people spending thousands of dollars a month. We're not really talking about the thousands of women making $10 an hour who can't afford care for their own kids to do these jobs.

Henah:

Well, and that reminds me too of that POLITICO feature that you shared in the newsletter recently, which ultimately came out to say that nearly a quarter of Americans are underpaid to the point of being functionally unemployed despite working full time, which is 25% of Americans. That is bonkers to think about.

Katie:

It’s insane. Yeah, one in four, dude.

Okay, so yes, let's move on to the major strain of feedback, which I would classify as disappointed dads. So we're going to read a couple excerpts from these emails. I would say this feedback ran the gamut from one guy who was like, “I'm disappointed, but understand I was not the target audience for this” to another who said he found it “insulting and dismissive to fathers.” So, Henah, clock in for us as disappointed dad number one.

Henah:

Okay. They said, “During the first three years my daughter's life, my wife was not ready to go back yet. I absorbed more, not less, of the share of the household labor, and despite my long expressed desire to have my time as the primary childcare provider (I worked nights back then so it was a natural timeshare of duties), I was denied that role in service of my wife's desire to be a stay-at-home mother during those early years. I think a lot of men are probably silently experiencing similar circumstances, and I'm not really asking you to address them, just providing context. Ultimately, I think this episode was disappointing for me, because it wasn't for me.”

Katie:

That was actually representative of a lot of the feedback from dads, which we're going to read more of. But in the meantime, here is another one that I would love for you to read.

Henah:

“A man's experience with raising a family is almost certainly directly related to work. A working dad subreddit would likely only be called ‘dads’ as work and providing is so ingrained in our role. There are a number of reasons for this duality.” I'm not going to like where this is going. “First, of course, the patriarchy and all that entails. Men have traditionally been the providers for as long as humans have been around. They said this cultural norm is beginning to shift, yes, but the last 30 or so years doesn't undo our entire existence as a species. Us dads with young kids did not choose this system. It is pervasive in that it also leads men not talking about these issues as often as women.”

Katie:

So I want to be gentle when I say this because I'm genuinely not trying to nitpick, but I do hear things like this a lot in this conversation, and so I just want to mention this specific part saying that men have been the providers for all of human history is just not true.

We have so much recency bias in the way that we talk about the idea of providing for a family. I do think that it's probably outside the scope of the conversation today to get into the 10,000 years of whatever human history. But I do notice this implicit assumption whenever we talk about gendered roles in the home, that we're asking women and men to go against their nature in some way or go against historical precedent. And not that this person is necessarily saying that, but I think you get the point of what generally I'm referring to, and I just want to state plainly, all of this varies culturally over time to a vast, vast degree. Family structures throughout history and cultures are so much more complicated than “man leaves home and provides woman has babies and never leaves kitchen.” The 1950s era, Leave It to Beaver family, was such a cultural blip.

However, I do want to acknowledge the other element of the feedback that men didn't choose this. They are struggling too. They are just not talking about it as much as women Because that was a common thread in pretty much all of the other notes from dads. So my thing is cool, if everyone agrees that this is bad, that actually might be a really good sign. Think about how much worse it would've been if the dads were emailing in being like, we had no idea. So I think the fact that the ones we heard from were like, yeah, men are actually also struggling with this. It's not just a problem that affects women or we acknowledge it affects women more, but it also sucks for us. Okay, great. Then why don't we all just talk about it more and all agree it's completely untenable and go a little bit easier on each other too.

Henah:

For sure. I mean, yeah, we're all struggling, which is—

Katie:

Well, not us. We're fine.

Henah:

The childfree people aren’t.

Katie:

Actually, the other thing though that it made me think of is how damaging the idea is that women want to be or enjoy being parents more than men do is some gendered eventuality.

Henah:

This line of thinking always upsets me because also I was listening to your Diabolical Lies episode about sex work, and you and Caro talk about how often do we just accept conventional wisdom?

Katie:

Yeah. It's what do we not need evidence to believe?

Henah:

Yeah, and I know, man, I'm finding that a lot of my friends who are women who are also parents are like, I don't like this as much as I thought I did. Whereas the dads are like, I love every second of this.

Katie:

So it's like the expectations are being rerouted. It's like I was told that because I'm a woman, I will feel this way or I was told because I'm a man, I'll feel this way.

Henah:

I had a friend text me, “It's a scam. I wish I had not done this. I wish I had stayed child free.”

Katie:

Oh geez. Oh, that's so hard. Oh my God.

Henah:

And it's not to say that this person does not love their child, but it is just so exhausting and hard and isolating.

Katie:

We are like, hey, we hear you guys. We hear you. That you think that episode was a bummer…it's so hard and isolating.

Henah:

I'm just trying to keep it real.

Katie:

No, I know. I, I feel you. I mean, so I don't know. I just think reading through the dad's feedback to me kind of felt like proof or affirmation that gender norms are constrictive to human beings who are so much more than their biological sex. And so we talk all the time about how this hurts women, but yeah, and it's bad for men too. That's kind of the point about patriarchy is it's good for a very, very infinitesimally small group of men, but most men are hurt by it.

In the data it is clear. Like I said, I don't want to gloss over this. If we're looking at the economic data, it is worse for women in the sense that women end up with fewer material resources. As a result, women are 56% more likely to end up in poverty after divorce. They are twice as likely to leave paid work to care for a family member. They retire with lower social security payments. They have less in retirement savings, like socioeconomically women are more disadvantaged. That is not up for debate, but it might go further to help us make change if we can emphasize solidarity in trying to improve things.

Henah:

Definitely. I think the other thing that's interesting too is when you look at divorce, I found a stat that said, 80% of the time, mothers retain custody. So that's again, not to say that fathers don't or that there's not a fair share of effort, but it's that trickle-down effect of it still continues again to fall on women.

Katie:

So another person, another disappointed dad introduced herself in a way that made me laugh. He said, “I like your show even if it is a little lady centric, young professional. I'm not really your demo, and then in parentheses, blue collar libertarian, but your research and presentation is excellent.” And then he wrote a pretty long note, which I wanted to include because it does talk about how relying on work from home is not a solution that's realistic for large parts of the economy. And again, to me, this kind of gets into that difference between if you're approaching this from a professional white collar perspective and you're like, oh, I work for Deloitte and I need to be able to find childcare versus I'm a fucking carpenter, or I'm building roads. You know what I mean?

Henah:

You're not moving numbers on a spreadsheet around.

Katie:

Yeah, you're not an email monkey like me. Okay, go ahead.

Henah:

Okay. They wrote, “One thing I think is very important to consider is that most people do not labor in a position that can be done from home. For instance, I work as a carpenter often traveling, and my spouse works as a PA at a hospital with an advanced degree lab position. As you can see, considering the idea that work from home is a policy choice or has any real value is only for a small segment of the population. The workforce is primarily on site. We build the things, run the 24/7 operations, consider also the people who run schools, daycares, hospitals, and so on. They also need a solution for their children, and there is no easy solution. We demand our childcare and schools parallel the workday, but what about the kids of those people running the schools, they cannot work from 6:00 AM to 6:00 PM every day.

“So your guest is right on so many levels. Our daycare center, a Montessori school, costs us about $20,000 per year. This is middle of the road for our area, and we earn enough that this is only 10% of our pay. Two kids save you 5%. So it's $38,000 per year for two children. Yeah, it's insane. You gladly pay it though. But let me tell you why. We don't know who these people are that want to be stay-at-home parents. My wife and I both work because it is our life. It is our identity. Being a parent is important, but it is not everything. I think the intro to your show had some real insights into the broader struggle. Dig deeply into that.”

Katie:

Yeah. Then he said this, “This is difficult for dads as well as moms. It's as simple as that. Dad does not get to coast. I would feel like an asshole if I did. Every dad I know feels the same way. We often feel guilty for not being able to be more central in their daily lives.” Yeah.

Henah:

But I also wanted to clarify a point that came in the feedback emails because I think if one person misunderstood what you were saying, it's likely that others did too. So one of the dads said, “You joked that women could just ‘marry rich,’ but that would perpetuate other stereotypes. As a ‘rich business owner, doctor, lawyer, or other high achieving corporate employee’ would have to pour more energy into work than other normal partners.”

Katie:

Yes. Okay. So when I was referencing the women should marry rich joke, I was quoting Keds, economist Katherine Edwards, who said that “women should marry rich” is the Republican plan for motherhood. She was basically pointing out that neither major political party has a real solution for this beyond shrugging and suggesting that women marry rich enough men that will give them the money to allow them to stay home, thereby eliminating the need for childcare. I was not joking that that is actually a tenable solution. I was just quoting someone else joking that that is the implicit preference for family structure and the kind of like if you go talk to somebody about this problem, that's oftentimes what you'll hear is like, oh, well, you just need to find somebody that makes enough money so that you can stay home. And it's like, that's not a fucking solution. That's not an answer.

Anyway, all that to say, let's talk about patriarchy as an institution of class oppression. Our favorite. Because finally this same dad made the point that this is really a class issue. They said this is less about gender than it is about class at this point in a modern economy, and I actually couldn't agree more with that. On Diabolical Lies, we discussed this how men often point to the ways that patriarchy or capitalism are also bad for men and they go, see, it's not all roses for us either or in the extremes. If you're in one of these men's rights manosphere worlds, they'll basically say, because the world is also so hard for men, patriarchy isn't real. Right?

Henah:

Sure, Jan.

Katie:

My conception of this, the way that I've come to see this is like patriarchy uses gender hierarchy to enforce class hierarchy. It is true that capitalism is only good for a small subset of people. Everyone else is kind of challenged by capitalism, but there's a small subset of people in society for whom it fucking rocks. Something like 14 of the 15 richest people in the United States are white men, but that does not mean capitalism is good for all white men.

But the consolation prize that patriarchy promises, the men who are failed by capitalism is power and control within their own homes, or at least a sense of entitlement to that power and control. They might not get fair wages at work. They might not get dignity or respect from their labor, but they at least have dominion over their wife and kids. That's how capitalism and patriarchy are intertwined and uphold one another. That's the promise that is sold to men.

And I don't mean to say by any stretch that all people buy into that implicit promise or would say that that's functionally, subconsciously the premise they're operating under. But systemically, that's kind of how I see these things as being related to one another. And the reason why it's true that capitalism and patriarchy are both bad for men. They're just bad in a different way, and oftentimes power over women is like the consolation prize that you are granted when you are stripped of any real power.

Henah:

I think you just rewired my brain: “Power over women is the consolation prize when you were stripped of any real power” is so good. This is kind of like a Trojan horse into Diabolical Lies if you haven't noticed already.

But one non-disappointed dad reached out and echoed some of these thoughts on the class commentary of it all. So that felt worth sharing. They said, “Our companies both finally eliminated the remaining hybrid work options and mandated the a hundred percent return to office. Our companies both pay above market salary, so they had the leverage to force this policy change with a full return to office for both of us. And at the time, one child and daycare in our neighborhood. It was becoming a hectic choice to handle all of these demands. My wife also wanted a second child while I could not foresee adding another stressor to our current situation. Without including all the details, we decided that I would shift to part-time consulting work, which would free me up to handle the daycare drop-offs and pickups, also the spontaneous sick days and allow me more work flexibility. This came at a financial cost. My income went from almost $500,000 to a hundred thousand dollars. But had we not done this, I don't believe we would've been blessed with our second child a year after this decision.

“A recent article leaked a Jamie Dimon diatribe about why Chase returning to the office and the implications on employees does not matter to him. Listen to that if you haven't already. For an illustration of executive entitlement, corporate executives have incredible power to buy convenience that enables them to further advance their careers and increase their personal wealth. Perhaps you could call this the rich boomer hamster wheel. Their disconnectedness to their average employees allows for their policy decisions to be tone deaf. I believe this lack of empathy is exacerbated by the current political environment in which being insensitive asshole seems to be rewarded at the moment and sets the tone at the top in a profoundly negative way for the world.”

Katie:

Preach.

Jamie Dimon:

A lot of you were on the fucking Zoom and you were doing the following. Look at your mail, sending texts to each other about what an asshole. The other person is not paying attention, not reading your stuff. And if you don't think that slows down efficiency, creativity creates rudeness, and stuff, it does. And when I found out that people are doing that, you don't do that. In my goddamn meetings, you going to meet with me. You got my attention, you got my focus. I don't bring my goddamn phone. I'm not sending texts to people. It simply doesn't work. And it doesn't work for creativity. It slows down decision making and don't give me the that “work from home Friday works.” I call a lot of people on Friday. They're not a goddamn person to get ahold of.

Now you have a choice. You don't have to work at JPMorgan. So the people of you who don't want to work at the company, that's fine with me. I'm not mad at you. Don't be mad at me. It's a free country. You can walk with your feet. But this company's going to set our own standards and do it our own way. And I've had it with this kind of stuff. I've been working seven days of goddamn week since Covid, and I come in and I, where's everybody else, whether they're here or there. And the Zooms and the Zooms don't show up and people say they didn't get stuff. So that's not how you run a great company. We didn't build this great company by doing that, by doing the same semi diseased shit that everybody else does.”

Katie:

But I do think that J is totally onto something here. If you have enough money that you can buy convenience for every element of your life and work is your entire life, it becomes insanely easy to lose touch.

Henah:

I mean, Katie, how much could a banana cost? $10.

Katie:

Okay. Let's do some rapid fire. Hit us with the quick hits.

Henah:

Okay, so these are some quick comments from listeners. Hannah wrote, “I felt this episode in my core.” Anita then commented and said, “I'm with Hannah.”

Someone said, “I loved this episode. Resonated with me so much.” And this came from Megan, who is my best friend from childhood's wife. So I love a personal connection. Someone said, “As a young, financially independent woman coming into her career and loving it, I greatly appreciate episodes like these so I can gain more knowledge and better plan for the future.” That came from Ghost Empowered Queen.

And then we got two questions or comments, both well intended, but the first came from PringleYum. They said, “Great episode. This is the Money with Katie content that I love. I'm curious to know how Katie is approaching family planning after doing several episodes on this topic, though I know that's deeply personal.”

Katie:

Yeah, basically my plan is get as rich as possible, delay as much as possible. Hope for the best.

Henah:

Delay, deny…

Katie:

Delay, deny, defend, babe.

Henah:

Okay. And then Allie wrote, “Katie, your perspective as a military spouse would add a whole other layer to this conversation. I'm curious why you never add it.”

Katie:

That's a really good question. I guess I don't really identify as a military spouse, which I know is dumb. I am one. But because my husband only had a four year commitment and it was an officer position, I don't feel like my life has changed as a result of his employment by the Air Force. So it almost never even occurs to me to talk about that.

Henah:

I think that's so funny because you'll say stuff like, yes, we don't pay income tax because we're located here because they're taxes. Or you'll be like, yeah, so we just get first on planes because he is active military. And I'm like, oh, okay. Like writing the note. Okay, do I need to do this?

Katie:

Dude, yeah.

Henah:

Well, we could talk about that another time because we got lots of emails from readers recently being like, so I was illegally fired… if you want to talk. Yeah.

Katie:

We got so much tea in that inbox right now; that Gmail is smoking. Okay. We will talk about home insurance, climate change and more after this quick break.

All right, so we're transitioning to the “How Home Insurance and Climate Change are Upending the Real Estate Market” episode now. So we're going to do a little bit of back and forth. Janie wrote “Amazing, yet terrifying episode. I think it's hilarious that states insurance companies are suing the fossil fuel industry, yet not holding the federal government accountable for allowing themselves to be bought by big oil and failing to fulfill their obligations to protect the American people from worsening climate change.” And you know what?

Henah:

Scathing.

Katie:

Let’s go.

Henah:

She snapped. Lemount wrote, “I know many people don't move far from their home because of comfort and affordability, but I think those who can afford to move a thousand plus miles will do so in the coming decades for climate reasons. I don't think the government, state or federal is interested in managed retreat. So actuarial managed retreat will be the default for the foreseeable future until the problem is too big to ignore. I'm still on the fence if a bailout will happen or if economic Darwinism due to sheer cost will prevail.”

Katie:

Yeah. Similarly, someone named Spyke wrote, “I do think a migration will have to happen. I live in rural New England and a few years after the pandemic, we've had an influx of people moving here from the cities and the amount of cars I've seen with plates from Texas, the Carolinas and other states has been crazy. It's just that not everyone has the resources to move up north. It is expensive here.”

Henah:

So Kat wrote, “Outside the scope of this episode, but I wonder if we will eventually help ourselves by building homes differently. There are ways to build homes that are more resistant to flood damage or take advantage of natural cooling techniques.” Which came up quite a bit when there were a few houses that survived in the Palisades fire based on the way that they were built. So I do think it's a worthwhile conversation to be having.

Katie:

Yes. I wanted to share some similar feedback from someone named Brian who wrote, “In your recent episode regarding home insurance and climate change, I found myself saying, ‘yeah, but’ a few times. For context, I'm a Florida resident and an executive in the building products industry, currently running a manufacturing facility that produces hurricane resistant windows. I've been in building products for over 20 years. My ‘yeah, but’-ing was mostly about the fact that technology and building products is another factor in the conversation, whether it's hurricane-proof products or fireproof homes, innovation and technological progress plays a part in the conversation. It's clear that in the short term, this will cost more. In the long term, I'm betting on the God-given creativity and will to win that we have to offset the circumstances we come up against. The more frequent the circumstances, the more creativity we will apply.”

And to that I say totally valid critique and likely will be the path forward. How do we human ingenuity our way out of the problem, basically? Yeah, I think that that's a completely valid part of the conversation that the episode didn't really get into. Then we have Nikki who was wondering if recent rent spikes were indirectly related to fires. She said, “This episode made me wonder if the wildfires in Oregon have driven up insurance costs leading to higher rent in areas outside the big city. I moved in with my boyfriend who got lucky with a low interest rate in 2019 and only pays $1,600 a month for his mortgage. But if the fires keep moving closer to Portland, that might go up significantly over time.”

Henah:

That was a common thing that came up actually, because in a similar vein, Sydney wrote, “As someone who currently lives in Columbus, Ohio and is planning to settle down here”—I'm so sorry that we dunked on Ohio. Sydney wrote—

Katie:

I'm not, I apologize for nothing.

Henah:

Sydney wrote, “Do you think the climate is going to drive up housing prices here within the next five years or so? This episode made me rethink my strategy of prioritizing investing any access income over saving for a down payment for a house. Currently, my partner and I are placing a larger emphasis on investing for retirement even though we do want to own a home in Columbus within the next five years, give or take.” And I would note here what we say always, which is that we are not certified professionals and also we are not climate researchers, but…

Katie:

Definitely not the latter.

Henah:

Well, it did offer up a different kind of cost-benefit analysis than what we normally see when we ask the question about shine vest or should I say for down payment. And it seemed like from what Dr. Porter was saying is that these migrations will be kind of slow to occur. So I mean it's hard for either of us to actually say, but I would recommend trying to find a way to balance both goals if you can.

Katie:

Yeah, definitely.

Okay. We also got a note from Alex who offered up some useful advice on home insurance and emergency funds. She wrote, “The water heater in our attic had a pinhole leak, and in summary, after a few hours, water was coming through the ceiling of our upstairs bedroom that we had just finished transitioning to a nursery for our first child. Damages included paying for a new water heater and repairing drywall of basically the entire ceiling. The amount totaled to about $14,000, which was under our home insurance deductible of $15,000 or 5% of what we paid for our home as outlined in the policy. So this all came out of pocket. Luckily I had a liquid emergency fund. The moral of my story is you should look into your home insurance deductible and ensure that your liquid funds are adequate to cover that amount. Plus more bonus moral: If you hear a weird noise in your house, never neglect to check the attic. We heard the pinhole burst but could not figure out what the heck it was until it was too late.”

I guess I would say this kind of goes for all sorts of insurance. If you have an HSA fund and a high deductible health plan, it's wise to contribute at least enough to the HSA to meet the deductible, assuming the limit in the account is high enough. So my deductible is $2,500. I contribute the maximum anyway for tax reasons, but when I met my deductible last year, the money was there and the HSA if I needed it to pay for the out-of-pocket costs.

Henah:

Yeah, that's a great note.

Katie:

Just a wise note in general is like look at all the insurance you carry, look at the deductibles across all the plans, and that can be a good guide if you're kind of wondering how much should I have saved in cash to deal with last minute, things like that. I'd also say that I'm really surprised we didn't have any climate deniers in our inbox. I thought for sure we were going to get some flat earthers or someone like that.

Henah:

Well, we did have someone from the energy sector and they wanted to push back on something that we said…

Katie:

Yes. Okay, so at the very end of the episode, I quoted a Sally Rooney essay that I like because I think it ties the existence of private property and private wealth ownership more broadly back to that question of who has the right to destroy the earth. It felt really relevant too because earlier in the discussion we had talked about how home ownership is predicated on private gain, but that climate change is opening it up to questions about the public collectively bearing the risk and bearing the costs. So how do you balance private gain with public loss? You kind of can't. That's always going to be intention with one another

 In the essay, Rooney quotes a book called How to Blow Up a Pipeline. That book is by a climate activist; obviously from the name, if you've never read it, you can still kind of read between the lines about the mechanisms by which they protest climate change and this inspired an engineer and a natural gas transportation company to reach out. And she wrote this:

Henah:

“While energy generation and transportation has indeed contributed to climate change, and I do very much believe in climate change, we have a whole division in our company dedicated to exploring opportunities to make this process cleaner and greener. Our notable projects include carbon capture programs, which is called carbon sequestration and renewable energy generation such as solar to power our gas transportation facilities. I believe we deserve some merit for recognizing that we can in fact do better and are taking action to do so. Our transportation assets move over 30% of the natural gas used in the United States, and if we weren't supporting this infrastructure then there would be millions without power or heat. We're currently in an interesting time where AI technology is creating a huge increase in demand for power. It's been predicted that it will take everyone in the energy sector, oil, gas, nuclear, renewable at full speed ahead to meet this need.

This has really shifted my perspective from natural gas is best because it's affordable and abundant to we all need to work together as a team in order to get reliable energy for everyone. I was troubled when you closed with an essay containing a quote from the book, How to Blow up a Pipeline as the subject of a book is about a terrorist act. I know you're a proponent of understanding and expressing viewpoints from all angles, and I really felt that not identifying the dangerous content of the book was an oversight. Sabotage is not a logical form of climate activism and can hurt people very badly.”

Katie:

So I would say first of all, I actually haven't read that book so I'm not endorsing it. And I respect that this is a hard problem to solve and I respect that some energy companies and or energy professionals are trying to figure out how do we get energy reliably and sustainably, how do we move forward? It's not a question that is entirely about greed, right? I think that's important to say. We do need energy to live modern lives. So it's not as simple as saying anyone who works on energy production is evil. That's just silly.

At the same time, I don’t know that I agree with the assertion that sabotage is not a logical form of protest climate or otherwise, especially given how dire the situation is and how disproportionately little alarm there is about the problem. Does it fix anything? Well, no. But fixing things isn't really the point of sabotage or the point of that sort of activism.

The point is to call attention to it and to get people thinking urgently about the problem. And there's huge bodies of research about when and under what circumstances protests or violence or what have you are effective versus ineffective. I remember reading some discussion about an essay in New York Magazine about climate protestors who were destroying paintings a while back that basically said, yeah, these awareness raising techniques are not going to fix the decarbonization problem, but that's not the role that they're intended to serve. That's not the point. The point isn't to fix it with those tactics.

And it's funny that we talk about people throwing tomato sauce on paintings as being the irrational ones because if you really think about it, the most irrational thing you could do right now is be blase about the fact that we are imminently approaching planetary collapse or whatever. So that was kind of the discussion that was happening around this article and I remember somebody said, we're going to look back someday on those people throwing the paint as the only ones who were reacting with the correct level of alarm about what we were facing. Everyone else is going to look like the irrational dangerous ones in retrospect.

Henah:

Are you watching Paradise on Hulu, Katie?

Katie:

No.

Henah:

Well, I've been begging everyone I know to watch it because it's so good and it's not a political thriller in the way that you'd think. So I would say just go in without reading anything about it, but without spoiling too much, there's a scientist on there who was kind of sounding the alarm that they do these flashbacks over decades about a lot of this stuff and he's just dismissed because of how irrational it all seems. They're like, when do we have to start to worry? And he's like a while ago, we're already here.

So anyway, this reminds me of this last feedback piece that we got from Ashley who said, “Great episode I've been waiting for since the health insurance episode. Curious if you did any comparisons to our peer countries and what they're doing to address the same issue. Would love to learn and hear what we could potentially learn from that.”

And so for one, I would say other countries are not pulling out of the Paris agreement, but generally speaking there are—

Katie:

Very basic first step.

Henah:

Generally speaking, there are countries of course that are working towards net zero emissions, investing in renewable and energy efficient policies, et cetera. But I was able to find a couple innovative solutions that I came across, so I wanted to share them.

Katie:

Okay, cool.

Henah:

So the first is there was a typhoon that hit the Philippines in 2009 and after that the people living in those settlements, they actually worked with local leaders to build climate resilient housing, which is something that we had just talked about a couple minutes ago.

A community in Java, Indonesia who worked with locals to restore coastal mangroves, which now protects them from coastal flooding and there was a kind of similar project called the Zand Motor in the Netherlands and they spent $55 million on sand scaping and that's their means of protecting themselves from coastal flooding.

Katie:

So you're basically trying to block yourself from the floods or protect the communities from the floods. Cool.

Henah:

In Australia, I think they relocated 20,000 homes in this community called Yarra into new flood zones, but the problem is they haven't improved their storm water infrastructure yet. So again, we're not climate researchers but or move them out of flood zones. They relocated them out of the flood zones, but now they don't have the infrastructure to deal with stormwater that's coming there in the new place. So I think a lot of countries are trying to figure out what to do and I wanted to offer them up as inspiration.

Katie:

Yeah, cool. Okay. How about some rapid fire?

Henah:

Okay, this one is my favorite one that said, ‘As someone from Michigan, no one has ever made fun of my accent, but feel free to keep dragging Ohio. I think they're just used to it at this point. Great episode.”

Katie:

Alright, listen. Listen, I felt uniquely qualified to clown on everyone I clowned on because I was born in Michigan. My mom's Michigan accent goes absolutely crazy, and I grew up outside of Cincinnati, Ohio. I'm kind of like the perfect person to make an episode dunking on these things.

Henah:

Someone emailed us and they were like, “Wow, clowning on Michigan is a bold move.” And I was like, okay, but to be fair, whatever you just said—

Katie:

Michigan is beautiful. It is beautiful.

Henah:

And he was like, “Oh, okay, in that case continue go green.” And I was like, sure. Okay, so Lottie said “spot on,” and then Erin said, “When you said the line about private gain and public loss, wow, that line rewired my brain.”

Katie:

Let's go.

Henah:

In general, this is an amazing segue to a question that combined the material in this episode and the one about privatization of public goods with Donald Cohen. So we actually got this email, what like, 20 minutes before we were actually going to sit down to record this episode.

Katie:

Right under the wire.

Henah:

And I was like, Katie, I don't know if this is too soon, but let's see if we could address this. I think it's a great way to tie everything together. So this person whose name is also Katie wrote, “You and Dr. Porter discussed the California Fair Plan is two and a half to three times more expensive for customers and provides less coverage, which is absolutely true, having lived in SoCal area for several years. When I was comparing that to your more recent episode, I was confused. (So that's the privatization episode.) We're mostly clear that privatizing is costing us the taxpayer more money and why. So knowing that and reflecting back on the prior episode left me wondering why State Farm shouldn't be allowed to make a profit. Dr. Porter states that the Fair plan is more expensive for less coverage, so are private insurers theoretically doing it for cheaper.

“My questions are 1) How are companies like State Farm who use different underwriting entities in California working because of the risk? 2) We know they need to make a profit. So if the state is preventing rate increases and is no longer profitable, can we really fault them from wanting to get away from that market area? 3) Additionally, I now live in Texas, which is coincidentally also a separate State Farm underwriting group and I made the conscious decision to go with State Farm with that understanding. State Farm as a whole has a large surplus even though State Farm General California is basically broke and they're going have to pull funds from that larger entity to cover their losses. Which brings me to, say I lived in North Carolina, especially since they had the hurricane this past year. Those events are why the insurer has a surplus. What if an event hits this year and they're unable to cover the losses to other states because the surplus that was created with premiums outside of California is depleted because they had to pay the California claims where the customers aren't paying their fair share into this overall pot?

“I say ‘fair’ meaning the overall risk factors and severity slash cost of items to be damaged given that the government, which we agree shouldn't be operating with profit, can't provide near the same coverage yet charges up to three times the amount for what they do provide. I'm not even sure this all made sense or that I'm getting all of the State Farm data right. Additional supplemental listening came from the February 19th, 2025 episode of The Journal. I'm sorry if I rambled through it. Listening to these episodes back-to-back seemed like it was supposed to be related, but then they almost seem juxtaposed. I would love your two cents.

Katie:

Girl, Katie, I love this level of engagement with the material, A+. This is a childless woman folks. This is woman who was not stressed about childcare. I'll tell you that much.

Okay, I want to go piece by piece because I think this is great. So number one, how are companies like State Farm able to do this more cheaply, and if they can offer better coverage at a lower price, we just let them make a profit. The problem here comes down to the way that insurance works. So this is actually kind of a perfect example of a classic public/private split in which as Donald explained, the issue at hand is that the private market is allowed to exclude. You can go to State Farm, you can ask them to sell you insurance, they can look at your house in a flood zone and go, no. So the state's insurer of last resort cannot exclude. They do not have the power to say no. So what happens is you allow the private companies to get their first pick of all the customers. They choose all the low risk folks or they price the risk for the high risk folks appropriately, and then the state insurers have to come in and ensure everyone who the private companies have decided it would be unprofitable to insure that is simply not how insurance works, right? An effective insurance system has to mix high risk and low risk pays and then effectively pool all their risks together and distribute it equally among the system. So if you have a split where the private companies take all the low risk homes and then the state has to take all the high risk ones, you've effectively just eliminated the economics of how insurance functions.

So the problem is not that the state cannot provide a service more cheaply without a profit motive for taxpayers, it's that allowing the private company to have their first pick and then using the state as a backstop for all the denied homes doesn't work. That's why it costs more and why they can't provide coverage, that's as good. The reason in this instance that the government cannot provide the same coverage is that they are dealing with a fundamentally different risk pool.

The funny thing or the interesting thing about this is that the government is actually far better capitalized to absorb that type of risk than a private company. So in many cases, and I think what we're going to end up seeing in Florida eventually, I don't know when, but at some point I think this is kind of an inevitability based on the way their insurance system is set up with citizens being the biggest insurer. When push comes to shove and there is a big enough disaster, a lot of these areas are going to end up needing federal bailouts anyway because the insurance companies are not going to be able to pull through.

The State Farm of it all in particular is very interesting in this case with California because they effectively did the Amazon model in California for years and—

Henah:

We’ve got to come up with an Amazon drop the way we have a Reagan drop.

[Amazon drop]

Katie:

There is, I think in that episode that they referenced of the Journal, they probably covered it because the Wall Street Journal reporting on State Farm is how I learned about this. But basically State Farm drastically undercut their competition in California for years. They charged premiums that were far lower than what their actuaries were indicating actually, I don’t know if it's called an actuary in home insurance, but the equivalent of figuring out the risk, what their models were indicating they needed to charge in California in order to protect their downside. They were way undercharging in order to gain market share and beat out all their competition. Then, in I think it was 2023, there was a leadership change and the new CEO was like, guys, what are we doing here? We are way overexposed. We have taken on an overwhelming amount of risk and we have not taken in enough premiums to cover it if there is actually a disaster in one of these places. And so they dropped the coverage on tens of thousands of homes. So part of the reason they were so cheap to begin with is because the business model for a long time was actually not sustainable. It was just like, let's get as many insured as we can.

And then that's why they ended up having to drop so much coverage is because they sat back and were like, oh shit, wait, this actually is not going to work. To the question of whether or not you can fault a private company for denying coverage if they aren't going to profit, I mean no, under this paradigm, you absolutely cannot fault a company for doing that. Literally what private business is for, to make money.

The better question is now becoming thanks to climate change, is insurance something that we should leave to private markets? Is a private market the best way to deal with this? Some things are fine if left to private markets, but what we're learning in the case of insurance is that this public private split is creating issues in areas that are very high risk and it's opening this interesting question in my mind and why I wanted to explore it in the episode, which is what is the best way to manage this climate disaster?

Do you leave it to a private market and people are just going to have to move, they're not going to be able to afford it? Do you ocialize the risk? Do you nationalize insurance companies? The point is that we're going to have to find solutions to this. And so I guess that's kind of where Brian's feedback or that other person who wrote in about technology and the role of innovation in building differently, it's possible that we could get that figured out and it won't matter. But I think at the pace we're going and what we've already seen, these questions are going to become more and more unavoidable.

Henah:

Well, Katie, I don't know if you know, but, “privatization is actually really good for the poor because due to the incentives due to this is”—I'm quoting someone who wrote in and was very angry about us calling out privatization.

Katie:

Yeah, famously good for the impoverished, for-profit people running into the SNAP program, famously great for those who are on SNAP.

Henah:

Well, either way, I think this is a great segue into our conversation with Donald Cohen, the book that he wrote, The Privatization of Everything, is something that you've long talked about. So it was great to have him on the show and I wanted to start the feedback with Cameron who brought up a really thoughtful question who said, “Is there a way for a niche sub-sector to be created around the concept of educating the public on the individualistic versus citizen considerations of policy? I think inherently people value being decent humans, at least hopefully. But there's a huge disconnect in understanding. The assumption is that politicians should be educating the public, but that's clearly not the case. I imagine educators slash consultants who deeply understand could make this a full-time career and start to move the needle.”

Katie:

That's on podcasters baby. That's on the role of the podcaster.

Henah:

Well I was like not to toot our own horn, but I think there are quite a few people doing this work now. Honestly, I was thinking of Emily in Your Phone comes to mind for me as someone who has a ton of experience in that world and is sort of translating it for the rest of us, letting us know what we could do. So if you're not following Emily in Your Phone on Instagram, I think she's a great resource.

Katie:

She has a Substack, too. Yeah,

And I mean it's funny because honestly, this isn't really the role of politicians. A politician's job is to boil things down, make them very simple and get elected and ideally be good at making policy. But the education thing is hard. I think that's actually why I'm going to go just on a brief aside.

Someone like Hillary Clinton lost to somebody like Donald Trump. Hillary Clinton was asked at some town hall, will you commit to the decarbonization effort? Will you commit to zero? I mean, it was some question that you could tell the question was intended to get to the bottom of whether or not she was going to prioritize policy that would address climate change. And she gave some sort of like, well, it's more complicated than that because the complexity of this and there's this thing to consider and whatever. Whereas Donald Trump will get on stage and be like, I'm going to fix it. I'm going to build the wall. What about babies? And he'll be like, I'm going to make IVF free. So it's like the role of an effective politician unfortunately is not nuance, it's not complexity. It's just having the right priorities and communicating them very simply. And so I think in an ideal world you would have politicians who can educate around these things. I think Buttigieg does a good job of this.

Henah:

I think AOC also does a great job.

Katie:

AOC. Yeah, very digital savvy. I think we're moving in that direction, but generally speaking, yeah, it's very hard to be an educator and a policymaker at the same time. At least that seems to be like how things have played out. The simpler the message, the better.

Henah:

Yeah, and I think it's disappointing. I guess that someone who actually answers the question with nuance is then dinged for it versus just being like, I'm going to fix it.

Katie:

So Spyke, who is clearly a dedicated listener, this is the second Spyke comment, said, “This was a really good episode. I never thought about how processing fees on EBT cards work or that they even existed. It's theft from us as well as those who actually need the help. Wild how billionaires will yell at us for wanting handouts, yet they're the ones constantly dipping into that themselves.”

Henah:

That's what I wanted to say. This actually kind of led to a bit of a theme in some of the feedback, which felt like people really appreciated the distillation of everything that's been going on. So I wanted to read a little back and forth of the comments there. Although I will say, Katie, you keep laughing me off every time I say this, but if you're going to talk about politicians who can explain things, Katie Gatti Tassin in 2032.

Katie:

Oh please.

Henah:

Jaja wrote, “A true work of art integrating all these layers together. So thankful for your work.” Josh said, “This puts words to so many fears and frustrations I felt in the last month that I've had a hard time articulating. Thank you.” And Manuel wrote “Excellent show. Really dig when you do deep dives on the invisible systems around us and how much they impact our lives.”

Katie:

Thanks for liking it. I like making them.

Jeannie wrote, “Super interesting take at the end there. I don't think predatory loans and allowing health insurance companies to control the game is the way to get more doctors. Someone in government is clearly not paying attention. Another amazing episode. I at least feel a little uplifted and not as doom and gloom as per usual lately.”

Henah:

Well, the first half of this episode will put you back in the doom and gloom.

Katie:

Then do we have the show for you, Jeannie?

Henah:

Someone else who's also named Katie said something which I wish I could also do. They said, “I wish I could pipe this podcast through my whole town. I ordered The Privatization of Everything, Thrift Books has it yesterday (a pro tip), and so I squealed when I clicked on the episode. So fascinating and informative.”

Katie:

Someone whose username looks like Geechee. It's like G33ch33 said, “DOGE isn't about cutting wasteful spending. It's about deregulation.” Yes, a hundred percent. That's why I'm getting so annoyed at the sane washing in media right now being like they just want to stop the waste. That's not what's happening.

Henah:

Finally, Amy shared this and I think there's something that's kind of worth clarifying here. She said, “I learned so much every episode, can't wait to pick up this book. Also, it has never been more clear to me that government contractors need to go, let's cancel all of Elon's contracts. I wonder how much that would save us.” Which, LOL about Elon’s contracts.

Katie:

$10 billion?

Henah:

I think he's benefited up to like $15 billion at this point between his two companies. So I do think we need to be careful about saying that all government contractors need to go because to Donald's point, contractors are a lot of how these projects and work in the US get done. And so I don't think it's that we're saying that all government contractors are bad, but more that we need to look more critically at them and what they are contracted to do and to follow the money. So what do you think, Katie?

Katie:

Yeah, for sure. I mean I think the useful framework here is it's the difference between employing a contractor to execute a service versus selling them control of that service.

Henah:

For sure.

Katie:

And I wanted to share a longer message from a listener who I'm going to call Jake. He wrote this, Henah, if you will do the honors.

Henah:

“I'm an assistant VP of corporate strategy at a DataOps technology resell company that primarily sells into the federal government and really enjoyed the episode this week on federal spending, contracting and privatization. This have brought to light a number of issues that have been troubling me and I encounter in my day to day.

In the contracts we hold, there are usually at least three players involved, which is pretty standard across industry. There's a technology vendor, a distributor, and a reseller, and often a fourth player called a systems integrator. So each deal is usually three plus contracts deep, and with each contract comes not only one layer of removal from the problem to be solved and the people we are solving it for, but also a profit margin. So what you end up with is three plus companies making some sort of profit off of one deal all paid for by the government, and that is just the tech side of the picture.

Most deals require services to implement or service the technologies, and they have further contracts and subcontracts. Smaller and midsize businesses that contract with the federal government often do not have the same profit bloat of some of the larger discussed on the episode. And in all fairness, the government does put limits around how much profit you can make for certain contract types, but the reality is what Donald shared bidders underbid regardless of contract type and profit controls and need more money, which if you have ever experienced government contracting, is a whole different level of bureaucracy and expense in itself. Not only that, but small and mid-sized businesses also often need to work with larger system integrators. Think Northrop Grumman, Booz Allen, Deloitte, GDIT, Maximus, CGI, SAIC, Lockheed Martin, CACI, and the like and distributors—think Carasoft, Immix—to win contracts. So it truly is an ecosystem where the larger companies feed not only off of the government, but also off of the small and midsize businesses they work with.

And in some cases take on the function of banks to both other businesses and the government when financing terms and strategies don't line up. Outside of that, there are also sorts of highly questionable activities around manipulating the three bid requirement for government contracting, buying business, and operating at a loss until it is time to renew when you need to make up the loss, moving people and money around to make a business a certain set aside or size status and numerous forms of financial witchery. Ultimately, it comes down to this, if we want a more agile, efficient, responsive, value driven government, why don't we take the time and investment to get it right with the government we have rather than using public money to make individuals rich and reward poor behavior.”

Katie:

Every time you said “systems integrator’, I wanted to be like macro data refinement.

Henah:

That's what I was thinking of too, Severance.

Katie:

Brittany wrote in to say, “It's strange to me when people think that they can be extremely individualistic and then avoid the consequences of living with a hungry, impoverished, undereducated, youth cohort that leads to a society with more corruption, higher crime, less elder care support. They'll be in jail or worse, not your future nurse. It's often middle class people who are definitely not rich enough to avoid those consequences and never will be.” Amen. Brittany, I mean bars, honestly.

Henah:

Brittany is also a frequent commenter, so I'm just going to shout her out. I know she listens to every episode. Hey, Brittany.

And then I wanted to close with this longer email from Ashley, which I found really insightful and illustrative though at first all I could think about was how, I think this was Tony Soprano's job as a waste management profession.

Katie:

Yeah, consultant. Yes. Waste management baby.

Henah:

So Ashley wrote, “I was so excited to listen to this week's episode, especially because I've also been listening to Donald's book. I work in local government and sustainability and solid waste, and boy does it not feel like an awesome time to be here, but also like the most important time ever, I'm in the middle of a project that is exactly the situation right now.

The city owns solid waste infrastructure like the landfill or drop off for recycling centers, et cetera. But collection is done entirely by 17 private haulers. Our citizens have complained for years about poor service and incredibly high prices as compared to our surrounding communities. Effectively, citizens in a city of nearly 200,000 people are paying three times more than our surrounding communities with city run, our franchise waste collection, our franchise agreements with one hauler. I run the numbers in every way possible and the best solution for our citizens is for the city to come in and municipalize collections so that we could offer standardized services at one rate, which would be inevitably far cheaper because we own the infrastructure and we don't have to make a profit. And I just keep getting hit with the argument from our haulers and some council people that say, no, no, no, the free market will give us the best price.”

Katie:

Those people are also in our inbox.

Henah:

I just feel like those are the people that are tapping her on the head being like, sure, of course. And then she continues on to say, “But it isn't not to mention that our incredibly inefficient system is impacting roadways at greater rates because more big heavy trucks on roads means we have to repair them more often. Environmental quality is less because of increased emissions, et cetera. So what I'm interested in, how do we continue to make the argument that government's first priority, and especially I would argue local government is first and foremost to our citizens and giving them the best services, not the corporations who are profiting off of our mismanagement and how do we start to have real conversations about what our citizens have a right to clean water housing somewhere to throw their trash, et cetera?”

Katie:

For sure. I mean, I think that this just comes down to teaching people over time. It's like undoing the damage of neoliberalism and the idea that you are entitled to nothing and that the goal should be a society where everyone's on their own individually trying to solve these problems with their own money and low taxes. It's like guys look around. That hasn't really gotten us anywhere good. And it's obviously true that the higher income you are, the more insulated you are from it, but you have to be pretty exceedingly high income these days to not face those types of problems.

I mean, think about this example, trash collection. What are you going to do? Hire your own private? I mean, no. So I think that it comes down to inculcating a sense of entitlement. Entitlement to effective government services. This is something that I've been thinking about a lot with this obsession with efficiency. We need to stop talking about efficiency and we need to start talking about efficacy.

Henah:

The role of the government should not be reducing spending, reducing waste. That doesn't make any sense because the person on the other end of that transaction is society. So if they're wasting money, they're money into our society. They're spending it into existence with us. So what we should really be talking about is efficacy. How can we make these programs as effective as possible and teach people that they do, not only do they owe something to society, but they are owed something.

Henah:

I think the other piece of this too is you kind of said this, the government is not a business. The bottom line is not for them to make a profit, it is to serve their citizens. And so I think part of the issue that you also just mentioned is there's this opaqueness of not understanding how government works, not understanding how contracts work, not understanding where the government waste is happening. And I think as people dig into it more and learn more, it's hard to unsee that. So I'm hoping that these deep dives that we do lend some color and texture into these problems or these examples that we're sharing in a way that people can wrap their head around it more than just hearing “Trash is ineffective. We should be working with this.”

Katie:

Yeah, I think it's encouraging to me that we reach a large enough audience that people who work in local government are hearing this because I think my hope is that it feels vindicating to them and might arm them with the talking points or stats or one-liners so that the next time that they face off with somebody who's a free market purist or thinks they're a free market purist, as we've discussed on this show, there aren't really free markets in the United States. That's not really what we're dealing with here. I don't know. You have the opposite talking points. You have the thing to be like, well, no, let's actually push back on that assumption a little bit.

Why would you want the government to run a business? The point of a business is to make money. That's not the point of a government. So I think that the more that you can be armed with those types of ideas, when faced with that pushback, it can be helpful. But it's slow going. I mean, this is not going to be, it took us 40 years of propagandizing to get everybody to believe that low taxes and deregulation were the best. It's going to take another couple decades to unwind that, but I do think that it's worthwhile. So to close us out, you want to give us the rapid fire?

Henah:

Sure. Someone said, “And re-listening immediately.” Steph, thank you. That always helps when you listen to it multiple times the first week, when the episode drops

Katie:

For our downloads.

Henah:

Thank you. Someone else whose name is also Stephanie with the same last name said, “This was such an excellent episode, I really enjoyed the guest.” So maybe you are the same person, but if not, maybe you have a named twin either way. Thank you both.

Katie:

Very cute.

Henah:

This one made me laugh. CathStan said, “Love that he fangirls you for reading 10Ks. Keep killing it, Katie.” Sarah wrote, “Great discussion picking up a copy of the book from my public good library today.”

Katie:

Hell yeah, let's go.

Henah:

John Long wrote, “I loved Keds!” And at first for a split second, I was like, what do the shoes have to do with this? Until I realized he was referring to the economist, Katherine Edwards that we quoted. Brooke simply left a fire emoji. So thank you Brooke. And Ohogren, I think is how you say this username, but they said “Best episode yet. Excellent examples and shared definitions from both you and Donald, which is a great place to end.”

Katie:

Beautiful. Thank you all so much for listening to the original episodes as well as our little postmortem, our after-action report, as they say. That's what Thomas calls it, and I guess that's what they call it in the military. Anytime I fuck something up in our house, he's like, I think we need to have an after-action report on this. And I'm like, yeah, probably.

But we will see you all in two weeks from now to talk with a lawyer and policy expert who has a brilliant and practical, importantly practical plan for how we might actually begin socializing wealth and ownership in the United States. So, for all of you who have been begging us to stop talking about depressing shit, it is your time to shine.

Our show is a production of Morning Brew. It is produced by Henah Velez and me, Katie Gatti Tassin with audio engineering and sound design from the one and only Nick Torres. Devin Emery is the president of Morning Brew Content and additional fact checking for the show comes from Scott Wilson.