WEBVTT - Economic Carnage in Wealthiest Zip Codes 0:00:00.040 --> 0:00:02.759 I'm Carol Masser and I'm Jason Kelly. Let's get into 0:00:02.840 --> 0:00:06.760 this week's feature story in the magazine, Harvard economist Raj Chetty. 0:00:06.840 --> 0:00:09.440 He's built a real time data tracker that gives a 0:00:09.480 --> 0:00:13.600 god's eye view of the pandemics lopsided impact. The mapping 0:00:13.640 --> 0:00:16.919 tool on his tracker allows you to visualize the divergence 0:00:16.960 --> 0:00:20.320 as it's played out, even in prosperous Manhattan and San 0:00:20.400 --> 0:00:24.960 Francisco neighborhoods. And Chetty's base of operations, it is Opportunity Insights. 0:00:24.960 --> 0:00:27.600 That's a venture based at Harvard that is part think tank, 0:00:27.720 --> 0:00:30.840 part research lab, and there his team of about forty 0:00:30.880 --> 0:00:35.560 researchers and policy specialists are using private data to study economics. Well, 0:00:35.760 --> 0:00:37.920 not a new idea, we know that, but the COVID 0:00:37.960 --> 0:00:40.440 crisis gave Jetty the confidence that he might be able 0:00:40.479 --> 0:00:45.080 to pull off something unprecedented. Chetty has become alarmed, Carol 0:00:45.159 --> 0:00:47.559 by what his troph of data is telling him. The 0:00:47.600 --> 0:00:51.599 recovery has stalled and the inequality is soaring. Those left 0:00:51.640 --> 0:00:54.080 behind by the economic changes of the past few decades 0:00:54.160 --> 0:00:57.760 could be robbed of any remaining opportunities to get ahead. 0:00:57.880 --> 0:01:00.160 And Jason Chetti's goal in diagnosing the source of the 0:01:00.200 --> 0:01:03.480 economic pain is to help find ways to cure it. 0:01:03.520 --> 0:01:06.600 But he also isn't pretending to have any simple solutions 0:01:06.680 --> 0:01:10.240 to the COVID recession or to America's worsening inequality gap. 0:01:10.520 --> 0:01:14.560 His ultimate message get the virus under control at all costs. 0:01:14.640 --> 0:01:17.040 This podcast is brought to you by t D A 0:01:17.120 --> 0:01:21.039 Merry Trade meet their newest trading platform, Think or swim web. 0:01:21.200 --> 0:01:23.600 It has all the essential tools and strategies in a 0:01:23.680 --> 0:01:27.640 streamlined interface, no download necessary. Visit t d A Merry 0:01:27.680 --> 0:01:31.160 Trade dot Com, slash Think or swim web to get started. 0:01:31.440 --> 0:01:36.160 His numbers don't lie. Harvard economist raj Chetty has a 0:01:36.160 --> 0:01:40.240 god's eye view of the pandemics damage. By Ben Steverman, 0:01:43.680 --> 0:01:47.319 raj Chetty hasn't eaten at a restaurant in months. In fact, 0:01:47.360 --> 0:01:49.960 he's barely left his home near Harvard, where he is 0:01:50.000 --> 0:01:54.200 an economics professor. The MacArthur Genius Grant recipient has been 0:01:54.240 --> 0:01:57.880 getting his haircuts from a stem cell biologist his wife. 0:01:58.840 --> 0:02:01.960 If you want to understand what really wrong with the economy, 0:02:02.120 --> 0:02:05.760 this is a telling symptom. Chetti used to travel widely 0:02:05.840 --> 0:02:08.920 sharing insights from his work which minds data to paint 0:02:08.919 --> 0:02:13.000 a vividly detailed picture of inequality in the US. Now, he, 0:02:13.280 --> 0:02:17.160 like millions of other affluent Americans, is at home. That 0:02:17.280 --> 0:02:20.920 might seem harmless. Chetti and his wife enjoy cooking together 0:02:21.080 --> 0:02:24.040 and spending time with their five year old daughter until 0:02:24.120 --> 0:02:27.760 you confront the effects on the already precarious livelihoods of 0:02:27.800 --> 0:02:31.880 the people who fed, clothed, and pampered this professional class. 0:02:32.960 --> 0:02:36.519 When COVID nineteen, hit Chetty and his team of about 0:02:36.560 --> 0:02:41.520 forty researchers and policy specialists dropped everything, including work on 0:02:41.639 --> 0:02:46.040 inequality in housing, higher education, and longevity to document the 0:02:46.040 --> 0:02:50.000 pandemics lopsided impact. The result is a data tracker that 0:02:50.080 --> 0:02:53.000 gives a day by day, state by state, and even 0:02:53.080 --> 0:02:58.080 neighborhood by neighborhood view of the coronavirus economy. First uploaded 0:02:58.120 --> 0:03:01.760 in May and frequently expanded sense it relies on non 0:03:01.800 --> 0:03:06.240 public proprietary data supplied by some of America's largest corporations 0:03:06.560 --> 0:03:09.440 to give a level of detail in real time that 0:03:09.560 --> 0:03:14.200 traditional economic indicators can't match. Last month, a couple of 0:03:14.280 --> 0:03:18.280 days after former Vice President Joe Biden selected California Senator 0:03:18.360 --> 0:03:21.640 Kamala Harris as his running mate. Chetty briefed the pair 0:03:21.680 --> 0:03:25.880 over video, presenting data that demonstrated lower income workers were 0:03:25.919 --> 0:03:29.480 bearing the brunt of the COVID recession. His chart showed 0:03:29.520 --> 0:03:32.640 that by April, the bottom quarter of wage earners, those 0:03:32.720 --> 0:03:35.720 making less than twenty seven thousand dollars a year, had 0:03:35.760 --> 0:03:39.440 lost almost eleven million jobs, more than three times the 0:03:39.520 --> 0:03:42.200 number lost by the top quarter, which earned more than 0:03:42.240 --> 0:03:46.040 sixty thou dollars annually. By late June, the gap had 0:03:46.080 --> 0:03:50.280 widened further, even though many businesses had reopened. In fact, 0:03:50.400 --> 0:03:53.520 the segment of Americans who were paid best had recovered 0:03:53.560 --> 0:03:56.360 almost all the jobs lost since the start of the pandemic. 0:03:57.200 --> 0:04:00.480 The recession has essentially ended for high income into visuals, 0:04:00.880 --> 0:04:04.520 Chetti told Biden and Harris. Meanwhile, the bottom half of 0:04:04.560 --> 0:04:08.680 American workers represented almost eight of the jobs still missing. 0:04:09.920 --> 0:04:12.560 Even as the better off watched employment rebound and the 0:04:12.600 --> 0:04:16.160 stock market surge. The virus is economic devastation was all 0:04:16.200 --> 0:04:20.520 around them. In shuttered restaurants, hair salons, and gems. It 0:04:20.560 --> 0:04:23.680 was no longer possible to ignore the economic chasms that 0:04:23.760 --> 0:04:27.240 separated people who used to live and work alongside one another. 0:04:28.279 --> 0:04:31.599 That creates this very local feel to the recession. Chetty 0:04:31.680 --> 0:04:35.120 says the mapping tool on his tracker allows you to 0:04:35.200 --> 0:04:38.760 visualize the divergence as it's played out in prosperous places 0:04:38.839 --> 0:04:42.520 from Manhattan's Upper East Side to San Francisco's Pacific Heights. 0:04:43.240 --> 0:04:46.000 The shock is most severe actually in the richest parts 0:04:46.040 --> 0:04:48.520 of the country and the richest neighborhoods in the country, 0:04:48.600 --> 0:04:51.800 he says. It's literally the people you were interacting with 0:04:51.839 --> 0:04:55.000 who I think are suffering the most. Chetty has been 0:04:55.000 --> 0:04:59.400 described as arguably the best applied microeconomist of his generation 0:05:00.120 --> 0:05:03.880 the American Economic Association which awarded him the Clark Medal, 0:05:04.040 --> 0:05:06.800 often described as the second most prestigious prize in the 0:05:06.800 --> 0:05:12.200 profession after the Nobel In. Like many of his contemporaries, 0:05:12.480 --> 0:05:16.040 Chetty largely issues theory and ideology in favor of data. 0:05:16.440 --> 0:05:19.799 The more the better. His goal in diagnosing the source 0:05:19.800 --> 0:05:22.520 of the economic pain is to help find ways to 0:05:22.560 --> 0:05:25.839 cure it. It's really done from the perspective of science, 0:05:26.160 --> 0:05:29.600 says Heather Boushey, a Biden adviser who heads the Washington 0:05:29.640 --> 0:05:33.280 Center for Equitable Growth. Chetty and his team have been 0:05:33.279 --> 0:05:36.159 talking about their newest project to any politician who will 0:05:36.200 --> 0:05:40.279 listen on video calls with dozens of Democrats and Republicans 0:05:40.279 --> 0:05:43.440 in Congress, as well as Treasury officials and state and 0:05:43.560 --> 0:05:47.839 local policymakers. His message has been consistent, get the virus 0:05:47.920 --> 0:05:51.200 under control at all costs, a task the US has 0:05:51.240 --> 0:05:54.960 so far failed at pitifully. No matter how many businesses 0:05:55.000 --> 0:05:58.440 are allowed to reopen, normal economic life will not resume 0:05:58.520 --> 0:06:01.560 until their customers feel the no longer at risk of contagion. 0:06:02.080 --> 0:06:05.919 In the meantime, he tells them, target assistance to the people, businesses, 0:06:05.960 --> 0:06:09.120 and places that need it. There's no use sending stimulus 0:06:09.200 --> 0:06:11.760 checks to households making a hundred and fifty thousand dollars 0:06:11.760 --> 0:06:15.560 a year or cutting their payroll taxes. They have plenty 0:06:15.600 --> 0:06:18.880 of money. What they lack is places to safely spend it. 0:06:19.800 --> 0:06:22.200 In the weeks before the US government's first jolt of 0:06:22.240 --> 0:06:26.040 stimulus ran out, Chetty was optimistic that both parties in 0:06:26.120 --> 0:06:30.120 Washington seemed to be getting the message. I've consistently found 0:06:30.120 --> 0:06:32.880 an appreciation for what the data have to say, even 0:06:32.920 --> 0:06:36.839 in these polarized times, he said. Then. But with infection 0:06:36.960 --> 0:06:40.080 rates spiking in a dozen states and Congress and the 0:06:40.080 --> 0:06:42.240 White House at an impasse over what should take the 0:06:42.279 --> 0:06:44.960 place of the now lapsed six d dollar a week 0:06:44.960 --> 0:06:49.159 pandemic unemployment benefit and other assistance furnished through the Cares Act. 0:06:49.520 --> 0:06:52.159 Chetty has become alarmed by what his trove of data 0:06:52.240 --> 0:06:56.640 is telling him. The recovery has stalled. Until recently, the 0:06:56.720 --> 0:07:00.320 COVID crisis of looked nothing like the Great recept of 0:07:00.320 --> 0:07:03.680 two thousand and eight or any other slump. With American 0:07:03.720 --> 0:07:07.440 businesses and workers held aloft by trillions of dollars in stimulus, 0:07:07.800 --> 0:07:11.000 the worst damage had been limited to certain sectors and 0:07:11.080 --> 0:07:15.760 had even started to heal. Now the economy's woes could metastasize, 0:07:16.160 --> 0:07:20.040 taking down industries and workers that were untouched before. All 0:07:20.160 --> 0:07:23.400 this threatens to make Chetti's work much more difficult. The 0:07:23.400 --> 0:07:27.080 American dream is dead, as he'd proved with exhaustive government 0:07:27.160 --> 0:07:30.040 data showing today's workers can no longer expect to earn 0:07:30.120 --> 0:07:33.480 more than their parents did. Now, those left behind by 0:07:33.480 --> 0:07:36.320 the economic changes of the past few decades could be 0:07:36.440 --> 0:07:42.960 robbed of any remaining opportunities to get ahead. One of 0:07:43.040 --> 0:07:46.480 Chetty's most stunning findings was rendered in twenty eighteen by 0:07:46.520 --> 0:07:49.800 the New York Times website in blue and yellow pixels 0:07:49.800 --> 0:07:54.160 that swarmed across the screen. It's beautiful, almost soothing, if 0:07:54.200 --> 0:07:57.960 you can forget you're watching a tragedy unfold. Each tiny 0:07:58.040 --> 0:08:01.400 square represents the life trajector of one of ten thousand 0:08:01.440 --> 0:08:04.840 American men born into a family at the top of 0:08:04.880 --> 0:08:08.680 the income spectrum. They fall or rise based on the 0:08:08.720 --> 0:08:11.160 extent to which they were able to match their parents 0:08:11.160 --> 0:08:15.200 comfortable incomes in adulthood. Those yellow pixels that keep bouncing 0:08:15.320 --> 0:08:17.560 up at the top of the screen are white men 0:08:17.640 --> 0:08:20.320 in the sample. The blue ones that keep tumbling to 0:08:20.320 --> 0:08:23.960 the bottom, they're black men. The animation is a simple, 0:08:24.120 --> 0:08:27.920 elegant illustration of the pernicious effects of racism on even 0:08:27.920 --> 0:08:32.240 the most privileged Black Americans. Many of Chetty's slides and 0:08:32.320 --> 0:08:36.040 charts tell similarly grim stories, even if the mild mattered 0:08:36.080 --> 0:08:39.600 forty one year old himself rarely shows much emotion. He 0:08:39.760 --> 0:08:42.400 presents the data in the most detached and remote way, 0:08:42.800 --> 0:08:47.720 says Ford Foundation President Darren Walker. Yet he visualizes suffering 0:08:47.760 --> 0:08:51.160 in this country in really profound ways. As a black man, 0:08:51.400 --> 0:08:54.480 when I see that data, I am emotionally disturbed and 0:08:54.600 --> 0:09:00.400 profoundly impacted. Chetty space of operations is Opportunity Insights, a 0:09:00.480 --> 0:09:03.640 venture based at Harvard that is part think tank, part 0:09:03.720 --> 0:09:08.080 research lab. Started in twenty eighteen with thirty six million dollars, 0:09:08.360 --> 0:09:12.120 including fifteen million dollars each from Facebook founder Mark Zuckerberg 0:09:12.280 --> 0:09:15.240 and the Bill and Melinda Gates Foundation. O I was 0:09:15.360 --> 0:09:19.320 co founded by Chetty, Harvard colleague Nathaniel Hendron, and Brown 0:09:19.440 --> 0:09:23.320 University professor John Friedman. Its mission, as spelled out on 0:09:23.360 --> 0:09:27.679 its website, is to identify barriers to economic opportunity and 0:09:27.720 --> 0:09:31.200 develop scalable solutions that will empower people throughout the United 0:09:31.200 --> 0:09:35.040 States to rise out of poverty and achieve better life outcomes, 0:09:35.800 --> 0:09:41.120 translation to improve economic mobility in the US. The center's 0:09:41.160 --> 0:09:44.760 staff includes more than a dozen recent college graduates trained 0:09:44.760 --> 0:09:47.720 in the art of sifting through data, with some sets 0:09:47.800 --> 0:09:49.960 so large they can take a computer a day or 0:09:50.000 --> 0:09:54.400 more to analyze. Chetty and his colleagues don't just identify problems, 0:09:54.720 --> 0:09:58.120 they suggest ways to fix them. A twenty fourteen study 0:09:58.240 --> 0:10:00.920 found that the best teachers can help each student to 0:10:00.920 --> 0:10:04.560 earn an additional fifty thousand dollars over their careers, which 0:10:04.559 --> 0:10:08.040 works out to one point four million dollars per home room. 0:10:08.120 --> 0:10:11.720 Chetty has suggested school districts hold on to skilled teachers 0:10:11.760 --> 0:10:16.320 by tying pay or bonuses to performance, Improving education for 0:10:16.360 --> 0:10:20.239 poor kids wouldn't just help them personally, Chetti's research suggests 0:10:20.679 --> 0:10:24.360 it should also boost the economy overall. An analysis of 0:10:24.400 --> 0:10:27.640 the patents filed by one point to million Americans found 0:10:27.720 --> 0:10:30.199 children of the top one percent are ten times more 0:10:30.280 --> 0:10:34.240 likely to be inventors than equally smart kids from other backgrounds. 0:10:34.920 --> 0:10:38.360 If talented women, minorities, and children from low income families 0:10:38.440 --> 0:10:40.880 could invent at the same rate as well off white men, 0:10:41.400 --> 0:10:45.280 Chetty and his co authors estimated these lost Einstein's could 0:10:45.400 --> 0:10:52.560 quadruple innovation in the US. An opportunity atlas on the 0:10:52.559 --> 0:10:56.600 Center's website maps income mobility across the US, down to 0:10:56.640 --> 0:11:00.559 the city, neighborhood and even block. The interact IF tool, 0:11:00.880 --> 0:11:03.680 built using anonymized data from the Census Bureau and the 0:11:03.720 --> 0:11:08.679 Internal Revenue Service, also pulls statistics on factors like teen pregnancy, 0:11:08.800 --> 0:11:14.040 incarceration rates, education levels, and commute times. The atlas, which 0:11:14.080 --> 0:11:17.079 went live in twenty eighteen, revealed but moving a child 0:11:17.120 --> 0:11:19.640 from a neighborhood with the low average mobility to one 0:11:19.679 --> 0:11:23.079 with above average mobility could boost his or her lifetime 0:11:23.080 --> 0:11:27.120 earnings by about two hundred thousand dollars. The project became 0:11:27.160 --> 0:11:30.680 the foundation for a Seattle area experiment in which families 0:11:30.720 --> 0:11:35.240 eligible for federal housing assistance received relocation advice and support. 0:11:35.960 --> 0:11:39.440 U S Senator Todd Young, a Republican, has co sponsored 0:11:39.480 --> 0:11:42.600 to buy partisan bill to take the Seattle program nationwide. 0:11:43.200 --> 0:11:46.760 Back home in Indiana, he borrows Chetty's charts to explain 0:11:46.800 --> 0:11:50.680 the issue to rooms full of constituents. Chetty goes to 0:11:50.720 --> 0:11:53.880 great lengths to make his research accessible. He's not just 0:11:53.960 --> 0:11:58.080 speaking to other researchers, Young says, he's presenting information in 0:11:58.160 --> 0:12:00.679 plain language in a visual for met that one can 0:12:00.800 --> 0:12:05.640 understand within seconds. Wealthy donors have also embraced Chetti's research. 0:12:06.080 --> 0:12:08.240 When he was lured back to Harvard two years ago 0:12:08.360 --> 0:12:12.240 from Stanford, billionaire hedge fund manager Bill Ackman endowed a 0:12:12.320 --> 0:12:16.040 chair in the Economics department for him. Gates, Zuckerberg, and 0:12:16.080 --> 0:12:20.640 other donors, including Bloomberg LP founder Mike Bloomberg, have given 0:12:20.679 --> 0:12:24.480 oh I resources that few academic labs can match. The 0:12:24.559 --> 0:12:27.880 center can hire not just research assistance to crunch data, 0:12:28.200 --> 0:12:32.079 but also experienced policy experts who turned findings into advice 0:12:32.400 --> 0:12:35.440 for decision makers at all levels of government and web 0:12:35.480 --> 0:12:40.200 designers who create ambitious data visualizations. He created a new 0:12:40.240 --> 0:12:43.680 business model for how to do economics, says Princeton professor 0:12:43.800 --> 0:12:48.200 Marcus Brundermeyer. Even for Chetty, whose work has documented in 0:12:48.280 --> 0:12:52.480 damning detail the many obstacles Black Americans face in this country. 0:12:52.960 --> 0:12:56.200 The murder of George Floyd by Minneapolis police in May 0:12:56.480 --> 0:12:59.840 inspired a reaction of horror about how different people's lives 0:13:00.000 --> 0:13:03.120 and be given just the color of their skin. He says, 0:13:03.800 --> 0:13:07.040 those differences are on full display on olies new tracker, 0:13:07.400 --> 0:13:10.080 which shows that as their jobs have disappeared and their 0:13:10.160 --> 0:13:14.440 children's education stalled, minorities and low income Americans have been 0:13:14.480 --> 0:13:18.640 bearing a disproportionate burden from the virus itself. It also 0:13:18.720 --> 0:13:21.920 won't help these groups that the disease is depriving governments 0:13:21.920 --> 0:13:25.600 of tax revenue and putting extreme strains on nonprofits and 0:13:25.760 --> 0:13:29.880 educational institutions. Many of the policies Chetty and his colleagues 0:13:29.880 --> 0:13:33.840 have suggested to battle inequality, such as more inclusive college 0:13:33.840 --> 0:13:38.120 admissions and housing desegregation, will require money to move forward. 0:13:38.800 --> 0:13:41.280 All of this is going to get tougher, says Friedman, 0:13:41.679 --> 0:13:46.840 Chetty's frequent collaborator, Ford's Walker is more optimistic. For the 0:13:46.880 --> 0:13:49.840 first time in my lifetime, we are reckoning with the 0:13:49.880 --> 0:13:53.880 issues of race and class in America. He says, Americans 0:13:53.880 --> 0:13:57.320 have deluded ourselves for years that we are a meritocracy. 0:13:57.800 --> 0:14:00.760 Now they're waking up to the often insurmountable barriers to 0:14:00.800 --> 0:14:05.560 equal opportunity. Jetty has spent his career identifying that makes 0:14:05.640 --> 0:14:08.960 him the economist for this moment of reckoning. Walker says 0:14:09.600 --> 0:14:13.679 he understands that growing inequality asphyxiates hope and makes it 0:14:13.720 --> 0:14:16.800 impossible for people to dream and believe that their children 0:14:16.800 --> 0:14:24.160 will have better lives. When COVID nineteen first reached the US, 0:14:24.560 --> 0:14:27.640 no one Chetty included had much idea of what it 0:14:27.720 --> 0:14:31.800 was doing to the economy. Government statistics like monthly unemployment 0:14:31.880 --> 0:14:35.680 numbers or the quarterly gross domestic products series couldn't keep up. 0:14:36.320 --> 0:14:38.440 Oh I had started the year with a full plate 0:14:38.480 --> 0:14:42.200 of projects, including Chetti's most ambitious data effort yet, a 0:14:42.280 --> 0:14:45.760 collaboration with the Census to document the economic trajectory of 0:14:45.880 --> 0:14:50.440 every American alive over the past seventy years. Suddenly, most 0:14:50.480 --> 0:14:53.280 of the lab's work ground to a halt as government 0:14:53.320 --> 0:14:56.320 offices shut down with little else to keep their young 0:14:56.400 --> 0:14:59.800 researchers busy, Chetty and his team started playing around with 0:14:59.840 --> 0:15:02.720 the few real time measures of the economy that were available. 0:15:03.320 --> 0:15:06.800 Home Base, a company that makes small business software, was 0:15:06.920 --> 0:15:11.560 offering researchers access to daily internal numbers, for example. During 0:15:11.600 --> 0:15:15.080 a meeting in early April, Chetty, Friedman, and others struck 0:15:15.120 --> 0:15:18.240 on an idea. What if they pulled together data from 0:15:18.240 --> 0:15:20.920 several private sources, then put it all up on the 0:15:20.920 --> 0:15:24.400 web so anyone could access it an economic counterpart to 0:15:24.520 --> 0:15:28.520 Johns Hopkins University's coronavirus tracker, which has become one of 0:15:28.520 --> 0:15:32.160 the go to sources for health statistics. We didn't realize 0:15:32.200 --> 0:15:34.640 just how big a project we were getting ourselves into, 0:15:34.840 --> 0:15:37.920 says Michael Stepner, a post doctoral fellow at oh I. 0:15:38.560 --> 0:15:41.040 At first, he planned to devote ten hours a week 0:15:41.080 --> 0:15:44.560 to the effort, but eventually it sucked in the entire staff, 0:15:44.920 --> 0:15:47.720 with work progressing pretty much around the clock as night 0:15:47.760 --> 0:15:51.360 owls overlapped with early birds. This just took over the lab, 0:15:51.440 --> 0:15:54.240 and it took over my life, says Stepner, who will 0:15:54.280 --> 0:15:56.840 DeCamp for a teaching job at the University of Toronto 0:15:56.920 --> 0:16:00.280 next year. The team initially vetted a Hodge ledge of 0:16:00.360 --> 0:16:03.920 data that might show COVID's effects on inequality, such as 0:16:03.960 --> 0:16:07.800 food pantry usage. Soon, though, they focused on building only 0:16:07.800 --> 0:16:12.000 the most rigorous and comprehensive metrics. Frequently cited as their 0:16:12.000 --> 0:16:16.480 inspiration is Simon Kuznets, the Nobel Prize winning economist who, 0:16:16.520 --> 0:16:19.200 in the depths of the Great Depression developed ways to 0:16:19.280 --> 0:16:23.440 quantify gross domestic product and other metrics. His pioneering work 0:16:23.520 --> 0:16:26.400 supplied the foundation for how the US and countries around 0:16:26.400 --> 0:16:30.800 the world measure their economies. Chetti set a similarly ambitious 0:16:30.800 --> 0:16:34.360 goal for his project, bring economic measurement into the age 0:16:34.360 --> 0:16:39.080 of big data. In today's world, almost every economic transaction, 0:16:39.440 --> 0:16:42.640 a debit card swipe, a direct deposit from an employer, 0:16:43.000 --> 0:16:45.600 an electronic bill of lading for a shipment of steel, 0:16:46.000 --> 0:16:49.680 has a digital fingerprint that's captured and stored somewhere. Pull 0:16:49.880 --> 0:16:52.600 enough of this data together, and in theory, you have 0:16:52.680 --> 0:16:56.160 a god's eye view of the economy. Imagine how useful 0:16:56.240 --> 0:16:59.280 that could be during a recession like this one. In 0:16:59.360 --> 0:17:02.080 place of the in size fits most policies and the 0:17:02.080 --> 0:17:05.520 Cares Act, lawmakers would be able to target stimulus with 0:17:05.600 --> 0:17:08.879 precision to the industries and sectors of the population that 0:17:09.000 --> 0:17:12.520 need it most and get nearly instantaneous feedback on whether 0:17:12.560 --> 0:17:16.480 it's working. And of course, there are applications beyond this pandemic. 0:17:17.000 --> 0:17:19.880 Using the tracker, a state hit by a natural disaster 0:17:20.000 --> 0:17:23.560 could pinpoint which communities were lagging in the recovery. A 0:17:23.680 --> 0:17:26.600 city trying to revive its downtown could get a rapid 0:17:26.640 --> 0:17:30.959 read on retail spending. Using private data to study economics 0:17:31.000 --> 0:17:34.119 isn't a new idea, but the COVID crisis gave Chetty 0:17:34.200 --> 0:17:36.359 the confidence that he might be able to pull off 0:17:36.480 --> 0:17:41.480 something unprecedented. Oh Eyes, major donors were enthusiastic. We see 0:17:41.520 --> 0:17:43.560 it as something that has a great deal of potential 0:17:43.600 --> 0:17:47.199 for the future, well beyond the current crisis, says Ryan Ripple, 0:17:47.560 --> 0:17:52.000 who oversees the Gates Foundation's work on economic mobility and opportunity. 0:17:52.320 --> 0:17:55.400 The first hurdle was persuading companies to part with as 0:17:55.400 --> 0:17:59.240 precious a possession as their internal data. Normally, I wouldn't 0:17:59.240 --> 0:18:02.399 have thought of approach big companies like into It or MasterCard, 0:18:02.520 --> 0:18:05.560 Chetti says, but the virus made them much more willing 0:18:05.640 --> 0:18:08.040 to help if we can figure out how to revive 0:18:08.040 --> 0:18:12.639 the economy. Obviously, that's good for everyone. Chetti's reputation and 0:18:12.760 --> 0:18:16.040 his years of experience in handling super secret government records 0:18:16.440 --> 0:18:20.840 reassured providers that their data would be properly aggregated, anonymized, 0:18:20.880 --> 0:18:24.400 and blended with other sets in ways that fully protected privacy. 0:18:25.200 --> 0:18:29.360 Raj's group is pretty advanced, says ram Polaniapin, chief executive 0:18:29.400 --> 0:18:32.560 officer of Ernin, which makes a financial app that's supplying 0:18:32.600 --> 0:18:36.560 information on wages of lower income workers. Ensuring that the 0:18:36.600 --> 0:18:39.360 individual streams of data could be pooled to render an 0:18:39.359 --> 0:18:42.800 accurate picture of the larger economy was its own challenge. 0:18:43.440 --> 0:18:45.760 The main issue when you get data from these private 0:18:45.760 --> 0:18:49.280 companies is that you're learning something about their business and 0:18:49.359 --> 0:18:52.200 not something about the economy as a whole, says Friedman, 0:18:52.520 --> 0:18:56.119 a co director of the Center. Some sources a debit 0:18:56.240 --> 0:19:01.040 card issuer, for example, were rejected as unrepresentative. Sometimes it 0:19:01.080 --> 0:19:03.600 worked and sometimes it didn't, and we tried to be 0:19:03.640 --> 0:19:05.840 creative about how to fill in the holes we needed. 0:19:06.359 --> 0:19:09.879 In May, after a five week marathon, o I launched 0:19:09.920 --> 0:19:13.160 the tracker, and the world got to see how jobs, spending, 0:19:13.280 --> 0:19:16.800 small business revenue, and other metrics responded to the onset 0:19:16.840 --> 0:19:20.679 of the pandemic in the US, Other academics started pouring 0:19:20.720 --> 0:19:24.199 through the rich data sets freely available for download to 0:19:24.280 --> 0:19:28.720 study everything from inflation to partisanship. States and local governments 0:19:28.760 --> 0:19:32.200 started consulting the Tracker to see which industries needed help. 0:19:32.760 --> 0:19:36.000 We literally use it every single day, says Rob Dixon, 0:19:36.359 --> 0:19:40.240 director of the Missouri Department of Economic Development. On the tracker, 0:19:40.480 --> 0:19:43.440 you can see that back in March when the lockdowns started, 0:19:43.720 --> 0:19:47.560 almost every household in America was reeling, with overall consumer 0:19:47.640 --> 0:19:52.879 spending plunging thirty three percent. Then around April fifteenth, spending surges, 0:19:53.200 --> 0:19:56.600 with bigger jumps in low income neighborhoods. That's the first 0:19:56.720 --> 0:20:00.680 round of stimulus payments landing in people's wallets as jobless 0:20:00.680 --> 0:20:04.400 benefits kick in, including the six dollars per week Pandemic 0:20:04.480 --> 0:20:06.800 top up that left many workers with more than they 0:20:06.800 --> 0:20:11.800 were earning before. Spending kept rising. By late June, residents 0:20:11.840 --> 0:20:14.200 of low income neighborhoods were spending a bit more than 0:20:14.240 --> 0:20:17.680 they had before the crisis, displayed on a map, though 0:20:18.040 --> 0:20:22.199 the Tracker data revealed some troubling patterns. In March and April, 0:20:22.280 --> 0:20:26.120 small businesses and affluent big city neighborhoods saw their revenue 0:20:26.200 --> 0:20:29.760 drop sev more than twice the decline in the least 0:20:29.760 --> 0:20:34.760 affluent areas saddled with high rents. Many of these shops, restaurants, 0:20:34.760 --> 0:20:38.600 and bars shut their doors for good. Because high income 0:20:38.640 --> 0:20:41.760 Americans make up such a large share of overall spending, 0:20:42.200 --> 0:20:45.000 the effects of their caution lingered even as cities and 0:20:45.080 --> 0:20:49.240 states allowed businesses to reopen. Using the tracker, you can 0:20:49.240 --> 0:20:52.880 compare neighboring states that reopened at different times, such as 0:20:52.960 --> 0:20:56.399 Colorado on May one and New Mexico on May sixte 0:20:56.960 --> 0:20:59.960 and see there's almost no difference in employment or consumers 0:21:00.080 --> 0:21:07.080 ending trajectories. Chetty grew even more alarmed as the summer 0:21:07.119 --> 0:21:10.720 wore on. His conversations with senators about the best ways 0:21:10.760 --> 0:21:14.119 to do another round of stimulus hadn't born fruit, with 0:21:14.200 --> 0:21:18.360 Congressional democrats insisting the economy needs far more support than 0:21:18.440 --> 0:21:23.240 Trump or Republicans have proposed. His conversations with senators about 0:21:23.240 --> 0:21:26.000 the best ways to do another round of stimulus hadn't 0:21:26.000 --> 0:21:30.240 born fruit, with congressional democrats insisting the economy needs far 0:21:30.280 --> 0:21:35.120 more support than Trump and Republicans have proposed. In early August, 0:21:35.400 --> 0:21:38.840 unemployed Americans stopped getting their extra six dollars a week. 0:21:39.280 --> 0:21:42.800 The tracker didn't show activity plummeting right away, as Chetty 0:21:42.880 --> 0:21:47.080 worried it might. Instead, measures like spending and small business 0:21:47.080 --> 0:21:52.879 revenue flatlined. We're basically stalled, he says. After the tracker's debut, 0:21:53.320 --> 0:21:55.880 oh I continued to sign up companies willing to share 0:21:55.880 --> 0:22:00.000 their data. There are eleven in total. Now what immerged 0:22:00.000 --> 0:22:02.840 it was an even clearer picture of the gaps opening 0:22:02.880 --> 0:22:06.920 between the most privileged Americans and everyone else. In August, 0:22:07.080 --> 0:22:12.080 payroll provider Paychecks offered data that, combined with info from Intuit, Urnin, 0:22:12.200 --> 0:22:16.120 and Chronos, revealed that high income workers had regained almost 0:22:16.160 --> 0:22:19.800 all the jobs lost in March and April. The findings 0:22:19.840 --> 0:22:23.320 Chetty shared with Biden and Harris that all the more 0:22:23.359 --> 0:22:27.359 heightens the need for targeted unemployment benefits. He says, the 0:22:27.440 --> 0:22:30.320 virus is spread, and the lack of a national strategy 0:22:30.359 --> 0:22:34.080 to fight it hobbled the economy in ways Chetty hadn't expected. 0:22:34.640 --> 0:22:37.880 After cases and deaths rose in places such as Florida 0:22:37.920 --> 0:22:42.000 and Arizona, key indicators like consumer spending and small business 0:22:42.040 --> 0:22:47.480 revenue dipped but didn't plunge. Why. Chetti's working theory is 0:22:47.520 --> 0:22:51.119 that Sunbelt states, economic resilience might be a sign that 0:22:51.160 --> 0:22:53.639 they're not taking the disease seriously enough to get it 0:22:53.720 --> 0:22:57.000 under control. Trying to keep the economy humming while the 0:22:57.040 --> 0:23:00.240 virus runs rampant is a short termist to prospect TV 0:23:00.520 --> 0:23:04.240 with long term costs. He says. A scenario in which 0:23:04.320 --> 0:23:06.800 COVID is never corralled the way it has been in 0:23:06.840 --> 0:23:10.720 some countries in Europe and Asia haunts Chetty. It's not 0:23:10.800 --> 0:23:13.600 going to be a sustained recovery. There's just no way, 0:23:13.720 --> 0:23:16.679 he says, We're going to be stuck trying to go 0:23:16.720 --> 0:23:19.679 along and accept a fair number of COVID infections and 0:23:19.760 --> 0:23:23.840 deaths and muddle our way through until finally there's a vaccine. 0:23:24.400 --> 0:23:28.960 This would be especially damaging for disadvantaged groups children, in particular, 0:23:29.560 --> 0:23:33.240 If schools can't reopen safely for in person learning, low 0:23:33.320 --> 0:23:37.240 income kids will fall even further behind their peers. The 0:23:37.280 --> 0:23:41.040 tracker includes one bit of non economic data from Zerne, 0:23:41.320 --> 0:23:46.200 a nonprofit online math platform, showing overall usage dropped when 0:23:46.240 --> 0:23:50.679 schools closed in March. Then, however, kids in high income 0:23:50.720 --> 0:23:54.160 areas product by well educated parents who were working from 0:23:54.160 --> 0:23:58.080 home started logging on again, completing more lessons in early 0:23:58.160 --> 0:24:02.080 May than they had before the crisis. By contrast, over 0:24:02.119 --> 0:24:06.040 all participation on ZERNE had dropped almost thirty percent, and 0:24:06.119 --> 0:24:08.920 by more than half for children in low income areas, 0:24:09.359 --> 0:24:12.040 possibly because they were in households where parents were more 0:24:12.080 --> 0:24:16.840 likely to be essential employees working outside the home. Public 0:24:16.880 --> 0:24:20.080 schools were to some extent, serving to level the playing 0:24:20.119 --> 0:24:24.159 field and increased social mobility. Chetty says, with the shift 0:24:24.200 --> 0:24:27.680 to mostly or only remote learning in many school districts, 0:24:27.920 --> 0:24:32.320 you're going to have massive impacts on inequality. Chetty doesn't 0:24:32.320 --> 0:24:35.520 pretend to have simple solusions to the COVID recession or 0:24:35.560 --> 0:24:39.399 to America's worsening inequality gap. What he has to offer 0:24:39.440 --> 0:24:42.919 are smaller, but often easier to implement fixes like the 0:24:42.920 --> 0:24:47.200 program in Seattle. Because of his scientific bent, he likes 0:24:47.200 --> 0:24:50.199 to see policies tested in one particular locale before they 0:24:50.320 --> 0:24:53.040 rolled out more widely. A lot of the solutions that 0:24:53.080 --> 0:24:55.119