Speaker 1: Pushkin. Welcome back to Risky Business, a show about making
Speaker 1: better decisions. I'm Maria Kanakova.
Speaker 2: And I'm Nate Silver.
Speaker 1: So today on the show, we're going to be talking
Speaker 1: about the DNC and what's happening with Kamala Harrison, talk
Speaker 1: a little bit about economics and some of the economic
Speaker 1: questions of the campaign. But Nate, we are taping this.
Speaker 1: You are currently this is Monday, August nineteenth. You're in Chicago.
Speaker 2: I'm in Chicago kind of not for the DNC.
Speaker 3: I'm here for a book tour event, which is yes, indirectly,
Speaker 3: but yeah, I'm getting out of here in twenty four
Speaker 3: hours basically.
Speaker 1: But when you were arriving to Chicago, Welcome to the
Speaker 1: world of podcasting. You were stopped by the TSA and
Speaker 1: they asked you about all of the audio equipment that
Speaker 1: you were carrying with you and what you were planning
Speaker 1: to do with it. And Nate is so embarrassing. What
Speaker 1: did you have to tell them?
Speaker 3: I had this is in LaGuardia, by the way, on
Speaker 3: the on the way out, I had to admit to
Speaker 3: being a podcaster.
Speaker 2: And it's a busy time of day.
Speaker 3: There are all these people around and now I'm openly
Speaker 3: admitting to being a podcaster.
Speaker 2: The scarlet pee.
Speaker 1: What happened? Did they detain you immediately?
Speaker 3: And they were like, oh, no podcaster and a podcaster here,
Speaker 3: all right, okay, mister being shot right on through, mister
Speaker 3: podcast that's not quit.
Speaker 2: What happened.
Speaker 1: It was.
Speaker 2: A very friendly yeah woman, not like a guy.
Speaker 3: But yeah, if you're a podcaster, always budget an extra
Speaker 3: fifteen minutes to get through security.
Speaker 1: I'm just telling you then, see, this is very good
Speaker 1: risk communication strategy. We've already talked about when you have
Speaker 1: to arrive at the airport, but if you're a podcaster,
Speaker 1: please add fifteen minutes. This is our public service announcement
Speaker 1: for today. So let's move on to slightly more serious things,
Speaker 1: even though podcasting is serious business and traveling while podcasting
Speaker 1: as here, Yes, let's talk about Kamala Harris. Do you
Speaker 1: want to give us just a quick update on what
Speaker 1: your models have been saying, because they, you know, in
Speaker 1: the past few times that we've spoken the past few weeks,
Speaker 1: every single time there has been positive momentum, and the
Speaker 1: last few model updates have been actually going slightly in
Speaker 1: the other direction, if I recall correctly, do you want
Speaker 1: to talk us through this a little bit.
Speaker 3: Yeah, so this is Monday. There are some polls from
Speaker 3: late Sunday night we haven't entered yet, but Harris was
Speaker 3: a fifty four forty six favorite. Look, it's a poker show,
Speaker 3: so I think our listeners can handle fifty four to
Speaker 3: forty six. You'd rather have the fifty four than the
Speaker 3: forty six. But it's basically a toss up Emrie, as
Speaker 3: you mentioned, she's lost a little bit of the momentum
Speaker 3: that she had kind of a week ago, in particular Pennsylvania,
Speaker 3: a state where you know, I would have urged her
Speaker 3: to pick Joshapiro.
Speaker 2: You've seen Poles showing a tie there.
Speaker 3: On the other hand, these other new pathways, like she's
Speaker 3: actually you know, a slight favorite in our forecast in Arizona,
Speaker 3: for example, which not a huge shock. I mean, Democrats
Speaker 3: won Arizona in twenty twenty, but that's a state where
Speaker 3: Biden had been way behind. And you know, Nevadas a
Speaker 3: toss up Georgia, and perhaps.
Speaker 2: More surprisably pronounce that state might Nevada. We no, I
Speaker 2: use good job Nevada. It's like I get psyched out,
Speaker 2: you know, like I used to.
Speaker 3: Have an employee work with named Meghan, right, but like
Speaker 3: I always know is Megan or Megan and then and
Speaker 3: by the way, I think like people's pronunciation, like Sarah
Speaker 3: sr a h and Sarah sa ra are different names.
Speaker 2: By the way, I think people shouldn't Anyway, She's.
Speaker 3: Also actually quite close in Georgia and perhaps more surprisingly,
Speaker 3: North Carolina. I mean, some of this is the fact
Speaker 3: that she's doing better with voters of color, with younger
Speaker 3: voters groups that mister Biden. Why am I saying, mister Biden,
Speaker 3: I'm saying, mister Bidens just filed a New York Times story.
Speaker 2: This is the first.
Speaker 4: Yeah, yeah, she's doing better than Biden among like young
Speaker 4: voters of color, and those are plentiful in North Carolina
Speaker 4: and Georgia, young black voters, young Asian voters at TETRA.
Speaker 3: So she, you know, maybe is less dependent on Pennsylvania
Speaker 3: than Biden was. But yeah, look, I think people can
Speaker 3: make the mistake of when the chart is going up,
Speaker 3: they assume it's going to keep going up, when in
Speaker 3: fact it's something I would call a random walk more
Speaker 3: or less. Right, you know, clearly it seems like there
Speaker 3: was some something that wasn't priced into Harris as pulling
Speaker 3: at first, people getting used to the idea of her
Speaker 3: being the nominee, and she kind of reverted from being
Speaker 3: three points behind to three points ahead two and a
Speaker 3: half points ahead, which in some ways is a typical
Speaker 3: number for Democrats. I mean, Hillary Clinton won the popular
Speaker 3: vote by by two points, lost the Electoral College.
Speaker 2: Of course, Joe Biden won it by four and a
Speaker 2: half points.
Speaker 3: So if she's in the two and a half to
Speaker 3: three point range, and that's pretty normal for a Democrat. However,
Speaker 3: our model is expecting that she will continue to rise
Speaker 3: in the polls after the DNC. That's what we call
Speaker 3: a convention bumper convention bounce. Typically this lasts for you know,
Speaker 3: the day after the convention, you've had four days of
Speaker 3: free television advertising on every network. You tend to see
Speaker 3: your polls rise. It's like buying a lot of free airtime.
Speaker 3: Then that fades over about three weeks. So we would
Speaker 3: expect her to get to maybe four or five point
Speaker 3: lead in national polls and be ahead in the large
Speaker 3: majority of swing state poles, and then it resets by
Speaker 3: the time we get to the second debate on September
Speaker 3: tenth or her first debate second debate of the campaign
Speaker 3: on September tenth in Harrisburg, Pennsylvania.
Speaker 2: So that's kind of the basic lay of the land,
Speaker 2: I think.
Speaker 1: Yeah, so there are a few things in there. One,
Speaker 1: I do think that there is this psychological phenomenon that
Speaker 1: has been documented everywhere. When you know, charts are going
Speaker 1: up or down, people just expect that to continue. So
Speaker 1: this is true like in the stock market, this is
Speaker 1: true like pretty universally right when when things are going up,
Speaker 1: like you just think that it's going to constantly go up.
Speaker 1: And that's why it's so ridiculously difficult to like, you know,
Speaker 1: sell the sell the top right. People usually miss that
Speaker 1: because they just think, you know, or the housing bubble
Speaker 1: right like, it's going to just keep keep getting better,
Speaker 1: It's going to keep going up. This is psychologically just
Speaker 1: very very very prevalent, and human psychology doesn't want to
Speaker 1: think that the body like, oh shit, you know, it
Speaker 1: might start going in the other direction. And so the
Speaker 1: funny thing is, like all of the research that I've
Speaker 1: seen and that I've done has been in just given
Speaker 1: the fact that you know, I did my dissertation on
Speaker 1: risky decision making but looked at stock markets. So that's
Speaker 1: kind of the the box that I've always seen it in.
Speaker 1: But it makes so much sense that with pulling it
Speaker 1: would be it would be something similar where like you
Speaker 1: expect those trajectories to continue, and if they don't, you're like,
Speaker 1: oh my god, you know, oops, what happened? And it's
Speaker 1: obviously much more important to get it right in these
Speaker 1: particular arenas.
Speaker 3: No, And in poker, one thing I always say is
Speaker 3: the chips have no memory of the previous hands, right
Speaker 3: the other place a table might. But if you go
Speaker 3: from twenty five K to fifty k, it's the same
Speaker 3: as going from one hundred k taking bad be going
Speaker 3: to fifty k, and you have to, if anything, you
Speaker 3: might want to resist the urge. I mean, I think
Speaker 3: there's winners tilt when you've been on a winning streak
Speaker 3: and you start making rash decisions, and there's losers tilt
Speaker 3: when you lose a big stack and then blow the
Speaker 3: bush of it off. We talked before about the analogies
Speaker 3: of Trump potentially being on tilt, but yeah, I mean, look,
Speaker 3: it's still a tough campaign. If you want to make
Speaker 3: the slightly contrarian bullish argument for Trump. Right then you'd say, Okay, well,
Speaker 3: number one, maybe she already got her convention bounce. You
Speaker 3: had very positive press coverage and the very exciting story
Speaker 3: which you won the nomination. So maybe that was her
Speaker 3: high water market came a week ago, and then and
Speaker 3: then she'll stall out and it'll be close. But remember
Speaker 3: Republicans have an advantage to the electoral college still on
Speaker 3: our map, although it's narrower. Actually this is important. We
Speaker 3: have an edge is being narrower than in twenty sixteen
Speaker 3: and twenty twenty. If she wins by one and a
Speaker 3: half points in the popular vote, we would have the
Speaker 3: election then as a toss up. So it's less than
Speaker 3: Hillary Clinton won by. We could talk about the reasons
Speaker 3: for that maybe or not. But yeah, and you'd say, look,
Speaker 3: and Trump has been very unfocused, but he's eventually, i mean,
Speaker 3: a presidential election is something that's you want to win, right,
Speaker 3: He'll eventually figure out better messaging about the economy and
Speaker 3: the border. We're going to talk about Harrison the economy
Speaker 3: in a minute. But yeah, there's still a pretty decent
Speaker 3: case for Trump that her momentum has stalled out now
Speaker 3: and that this should be a very strong period for her,
Speaker 3: and she's in the lead, but not by much. And
Speaker 3: they have a lot of ammunition that they still have
Speaker 3: opportunities to fire.
Speaker 1: Yeah, and so one other thing that you said, which
Speaker 1: I think is interesting that we should should talk about
Speaker 1: for a little bit. You had said that that initial momentum,
Speaker 1: it seemed like maybe things weren't priced in right correctly
Speaker 1: at the beginning where people were Kamala Harris was basically
Speaker 1: outperforming expectations because expectations were set too low. And I
Speaker 1: think that there are if you look at the psychology
Speaker 1: literature of women who reach positions of power, right of
Speaker 1: females in leadership, I think there are a lot of
Speaker 1: good reasons why this would be the case, because oftentimes
Speaker 1: the expectations are kind of people don't even realize it,
Speaker 1: but the way that they kind of see someone. And
Speaker 1: all of these studies, by the way, are not on
Speaker 1: presidential candidates because there's you know, there's an end of
Speaker 1: two now, but they're in you know, CEOs, CFOs kind
Speaker 1: of women in those types of leadership roles, and you
Speaker 1: find that over and over there are these expectations that
Speaker 1: they're not quite gonna they're not quite going to hack it,
Speaker 1: and their expectations are lower going in, and they're kind
Speaker 1: of seen differently, and a lot of the same personality
Speaker 1: traits and characteristics that help them get there then start
Speaker 1: being seen in a negative light, and people start predicting
Speaker 1: that they're not going to do as well because they
Speaker 1: don't think that they're Oh they're not as charismatic, or
Speaker 1: you know, you know, she's too cold, or she's to this,
Speaker 1: or she's to that. So people aren't going to like her,
Speaker 1: and they project that onto them, and so the kind
Speaker 1: of the projections end up being incorrect. And I think
Speaker 1: we're probably seeing that some of that had happened with
Speaker 1: Kamala and that people didn't realize, oh wait, you know,
Speaker 1: this might be some bias at play and not actually
Speaker 1: how she's going to be performing.
Speaker 3: There's an old Gerald Ford cliff where some student asks
Speaker 3: him do you think a woman could ever be president?
Speaker 3: And the answers in a way that I'm sure he
Speaker 3: thought at the time was quite progressive. Right, He's like, well,
Speaker 3: you know, I could imagine a woman being vice president
Speaker 3: and then something happens to the president and she takes
Speaker 3: over and she's quite competent, right, So it wasn't quite
Speaker 3: willing to, and then he said, and then maybe that
Speaker 3: would open the door for it, right, But just kind
Speaker 3: of in stages here. I do think that, like, you know,
Speaker 3: maybe partly for gender and race related reasons and the
Speaker 3: fact that you know, Biden had been losing to Trump,
Speaker 3: and that like anything seemed you know, a thirty five
Speaker 3: percent chance, which is what I thought she'd have before
Speaker 3: we before we saw this polling surge is comparably better
Speaker 3: than Biden's odds. So she benefited from low expectations, from
Speaker 3: softer media coverage. And look, she's doing fine. But I
Speaker 3: agree Maria that, like you know, if she's perceived as
Speaker 3: the front runner, it's now her race to lose again.
Speaker 2: That can be tougher.
Speaker 1: Absolutely, it's in some ways the underdog story, especially when
Speaker 1: we're talking about the United States, has so much power.
Speaker 1: People love the underdog, whether it's in sports teams or
Speaker 1: or in political stories or or anything else. And you know,
Speaker 1: you love the You love to hear it, right, you
Speaker 1: love to see it. And if she flips and is
Speaker 1: no longer the underdog for enough time, people's memory is
Speaker 1: also short. Right at this point, we're like, oh yeah,
Speaker 1: they're like Oh yeah, Kamala Harris is a candidate, right,
Speaker 1: you forget that just you know, a month ago we
Speaker 1: were talking about Biden has to step down. People's memories
Speaker 1: are short.
Speaker 3: I mean, look, partly I think the media has not
Speaker 3: covered the Joe Biden age beat. Well, they covered it
Speaker 3: as a beat when it affected the horse race, whether
Speaker 3: Biden or Harris someone else be the candy.
Speaker 2: But it's also a governance story. Yeah. I look.
Speaker 3: I these people on the left who think like the
Speaker 3: media is biased, the mainstream media is biased against the
Speaker 3: Democratic Party are fucking crazy. But leaving that aside for now,
Speaker 3: I do think that, like Harris has this weird thing
Speaker 3: where she's kind of running in some ways against the
Speaker 3: incumbent party a little bit, right, I mean, what's it's like,
Speaker 3: We're going forward, not back, even though she is technically
Speaker 3: the incumbent parties carrenate. In fact, I made a mistake
Speaker 3: the other day. We ran our model and I was tired,
Speaker 3: and I just double checked the numbers before we publish, right,
Speaker 3: and basically I conflated in my head the incumbent and
Speaker 3: the challenger because in our model, the candidates are not
Speaker 3: labeled Harris, Trump or even Democrat Republican and their incumbent challenger,
Speaker 3: and I'm like, why is the incumbent party's numbers going up?
Speaker 3: I thought it's just gonna be good for Harris and
Speaker 3: Trump's numbers are going up or whatever, right when in fact,
Speaker 3: so I somehow thought of Trump, who has the president before,
Speaker 3: as the incumbent, and Harris, who hasn't, as the challenger.
Speaker 3: But of course, you know, she is the vice presidential
Speaker 3: incumbent right now. So it's a little bit it's a
Speaker 3: little bit confusing, I'd say.
Speaker 2: Maria, it is.
Speaker 1: It is confusing, and I'm actually curious, Like from I
Speaker 1: think it's an interesting question when it comes to kind
Speaker 1: of the polling, the statistics, all of that, because it
Speaker 1: is something that people don't really think about when we
Speaker 1: talk about kind of the psychology of the underdog narrative
Speaker 1: incumbent challenger Trump was, you know, President Trump. And it's
Speaker 1: an unprecedented kind of situation where we've switched where you
Speaker 1: had one person running. It's literally unprecedented, right, this has
Speaker 1: never happened in the United States before, where all of
Speaker 1: a sudden.
Speaker 3: At this stage, I mean, so we only have the
Speaker 3: current primary system since nineteen sixty eight or seventy two roughly,
Speaker 3: you know, you did have LBJ get his clock cleaned
Speaker 3: in the New Hampshire primary or underperform expectations is the
Speaker 3: more proper framing of that. And then withdraw and in fact,
Speaker 3: throughout American history, I mean, Wilson Truman, these people, old
Speaker 3: men are stubborn and kind of had to be like
Speaker 3: pushed off stage. And before the party had complete power
Speaker 3: to do that, and now it has very limited powers,
Speaker 3: has to work through persuasion. And then if had things
Speaker 3: had gotten messy at the convention, then we would have seen.
Speaker 3: But yeah, I mean, I think I think she's been
Speaker 3: lucky that, like the Trump campaign hasn't been able to
Speaker 3: tie here to Biden more so far. Maybe they will
Speaker 3: be maybe you say, look, this whole mess is her mess,
Speaker 3: and she's responsible for it. In fact, she's to his
Speaker 3: left and things like that. But they, like I said,
Speaker 3: they seem to be not on their a game right now.
Speaker 2: Trump.
Speaker 1: Yeah, I think that's very true, and I think that
Speaker 1: she is trying to book that narrative a little bit.
Speaker 1: But like I said, in terms of prediction, it is
Speaker 1: very very difficult because she's incumbent but not incumbent, and
Speaker 1: I don't think she wants to be identified as incumbent
Speaker 1: so so far, so you know, in her choice of walls,
Speaker 1: and because if they're really trying to say, like you know,
Speaker 1: we're we're bringing something fresh and new and we're not
Speaker 1: responsible for a lot of the bad stuff and trying
Speaker 1: to shed that and trying to have this nice and
Speaker 1: shiny new image, which has been helpful so far. But
Speaker 1: I wonder if that is if they're going to be
Speaker 1: able to hold it, because is the Trump campaign was
Speaker 1: really unprepared for this. I think that's very clear. And
Speaker 1: we were talking about this before and so they didn't
Speaker 1: have their shit together, and so far as it.
Speaker 3: Comes to we've made this point before, she wanted to
Speaker 3: underscore one more time, like, how can you not prep
Speaker 3: for this if you have like a team, you're an
Speaker 3: NFL team, and the team's starting quarterback is questionable and
Speaker 3: the backups totally different style, he's like a scrambler or
Speaker 3: something like, how do you not fucking prepare a game
Speaker 3: plan for both eventualities? But maybe we should start to
Speaker 3: move on a little bit to policy, and we don't
Speaker 3: do a lot of policy stuff. I do want to
Speaker 3: ask you one more question than Maria. Yeah, on the
Speaker 3: incumbency thing. Just get your intuition or expertise or whatever.
Speaker 3: Suppose that tomorrow Joe Biden has some medical missap. I
Speaker 3: don't want to speculate, Okay, which it is doesn't kill him,
Speaker 3: but he can't be president anymore. And Harris inherits the presidency,
Speaker 3: do you have any sense for that would help her
Speaker 3: or hurt her?
Speaker 1: I think that given her story right now, and given
Speaker 1: what she's going for, if I had to guess, and
Speaker 1: this is pure speculation based on kind of what I
Speaker 1: know of kind of human psychology and what we've been
Speaker 1: talking about with momentum and that sort of thing, I
Speaker 1: think that it might actually hurt her if she had
Speaker 1: to assume the presidency for a few months, because what
Speaker 1: happens if there has to be a very unpopular policy decision,
Speaker 1: like what if something happens in the Middle East and
Speaker 1: she has to make a very unpopular policy choice, and
Speaker 1: it's one hundred percent on her because she's the acting president,
Speaker 1: you know, I think that there's a lot of potential
Speaker 1: downside there, and not a lot of potential upside because
Speaker 1: it's not like she's going to get presidential experience that
Speaker 1: she doesn't have now in two months, So I think
Speaker 1: that people can then have very very specific things to
Speaker 1: pin on her that she won't be able to talk
Speaker 1: around or kind of shrug off. And I think it
Speaker 1: will make it easier for the Trump campaign to get
Speaker 1: their shit together. But who knows.
Speaker 3: All right, So instance, it's kind of the Kamala Show.
Speaker 3: We're gonna also the Kamala Kamala edition. I guess I
Speaker 3: received business Kamala.
Speaker 2: Addition, we're going to.
Speaker 3: Talk more about her economic policies, which walks, like me,
Speaker 3: neoliberal economics walks think are very dubious. Uh, but we'll
Speaker 3: talk about that more after this commercial break.
Speaker 1: One of the things that people have been I think
Speaker 1: the most upset about is rising prices everywhere, especially when
Speaker 1: you go to the store, right and you look at
Speaker 1: your and you look at the bottom line on your check,
Speaker 1: and you're like, holy shit, how did this happen? It
Speaker 1: happens to me too, right when I when I go
Speaker 1: to like Whole Foods, or to Union Market, which is
Speaker 1: my local grocery store here in New York, or Sprouts
Speaker 1: when I'm in Vegas and I look at the bottom
Speaker 1: and I'm like wait, wait, what did I buy? You know,
Speaker 1: and and how how did how did this happen? Like
Speaker 1: how much did things cost? Because I don't usually look
Speaker 1: and then and then I have sticker shock, and I
Speaker 1: think a lot of people are seeing that, and it's
Speaker 1: given rise to one of Kamala Harris's first proposals, you know,
Speaker 1: first actual policy proposals. Nate, do you want to talk
Speaker 1: a little bit about what the Harris campaign has proposed
Speaker 1: when it comes to what they've termed price gouging.
Speaker 3: Yeah, it's actually a little bit vague what they proposed,
Speaker 3: which maybe is a reason to take it a bit
Speaker 3: less seriously. Some states have bans on price gouging, the
Speaker 3: federal government doesn't. They're hard to enforce in any eventuality.
Speaker 3: If it's happening, it's kind of very local level.
Speaker 2: I mean.
Speaker 3: The classic economist response is to say that price gouging
Speaker 3: is they shouldn't be called price gouging. It's an economically
Speaker 3: rational response to limited supply, and that charging higher prices
Speaker 3: encourages suppliers to produce or goods. That if you don't
Speaker 3: have price couching, then all that actually happens is you
Speaker 3: have more queuing people. Wait, in line for longer to
Speaker 3: purchase these items that they want. So yeah, the economist
Speaker 3: braining part of me really thinks this is kind of icky.
Speaker 1: Just to say, the reason that I was talking about
Speaker 1: being in grocery stores is Kamala Harris is talking specifically
Speaker 1: about price gouging when it comes to groceries, so not
Speaker 1: not price grouching more broadly.
Speaker 3: Yeah, I mean, and you hear it, and I mean
Speaker 3: you don't hear about price gouging of like medical services
Speaker 3: as much. Right, it's the things where you literally see
Speaker 3: literal sticker shock right in the grocery store and gas
Speaker 3: prices of the two where it's most often becomes an issue.
Speaker 1: And at the World Series this is not technically price gouging.
Speaker 1: But I have to ask you, Nate, can you so
Speaker 1: I had to buy a banana during the World Series
Speaker 1: of Poker. You did not have to buy a banana
Speaker 1: at the World Series of Poker as far as I know,
Speaker 1: did you.
Speaker 2: I'm not really into bananas.
Speaker 1: Yeah, okay, So well, bananas are really good food for
Speaker 1: eating at the poker table because you know, it's it's
Speaker 1: really like, it's healthy, nice energy, so you don't have
Speaker 1: to touch it. You don't have to touch it.
Speaker 3: The banana lobby is not gotten to me, Maria, like
Speaker 3: they have to you, I know the hyghe potassium, all.
Speaker 1: Right, all right, So I had to buy a banana.
Speaker 1: Do you want to guess how much my banana cost?
Speaker 2: Nine bucks?
Speaker 1: It's a really, really good guess. It cost eight dollars.
Speaker 3: Because you set me up to think it's some absurdly
Speaker 3: high number. But really, they charged eight dollars for banana.
Speaker 3: I thought it was going to say they charged no.
Speaker 1: No, they charged eight dollars for a banana, which is
Speaker 1: heartbreaking and it makes me want to just throw the
Speaker 1: banana in their face. But I had to pay because
Speaker 1: I really wanted that damn banana and they knew it.
Speaker 1: So once again, technically, I know this is not price gouging.
Speaker 1: This is very different. They have a monopoly. They're the
Speaker 1: only vendors who are allowed to to kind of sell
Speaker 1: at the World Series of Poker. But to me, like,
Speaker 1: that's that's what I think about, and I think that
Speaker 1: a lot of people are going to make faulty leafs
Speaker 1: like that, right, And to say, oh, like, yeah, I'm
Speaker 1: anti price gouge, so yeah, I don't want to pay
Speaker 1: eight dollars for a banana, And I think that that's
Speaker 1: sort of miss miss comprehension, misco miss, Yeah, what's what's
Speaker 1: the word I'm looking for?
Speaker 3: Misunderstanding can conflate that monopoly situation right in the situation
Speaker 3: where you have one seller who's also the only supplier
Speaker 3: of goods, there's no illegal banana.
Speaker 2: Market outside the horseshoe or whatever, then.
Speaker 3: It purely is you have. You know, it's just a
Speaker 3: matter of how much profit they're taking. Right You're gonna
Speaker 3: sell one hundred bananas. You can either sell them at
Speaker 3: nine bucks or at eight bucks or at three bucks
Speaker 3: to make a profit either way, and it's just money
Speaker 3: coming out of of you know, the world series Pokers
Speaker 3: pockets versus poker players prockets pockets. But this is now
Speaker 3: a monopoly situation, and you know, you know, there are
Speaker 3: multiple suppliers of every good that you buy at Sprouts
Speaker 3: or Whole Foods, whichever other, whichever other's store were giving
Speaker 3: free advertising to you right now.
Speaker 1: Yeah, absolutely, But but I do think it's it's interesting that,
Speaker 1: you know, brains do conflate things like that all the time.
Speaker 1: The policies themselves are vague. This area is vague. There's
Speaker 1: a lot of kind of lack of understanding around this,
Speaker 1: and I think that politicians tend to take advantage of
Speaker 1: that by creating policies that seem to pander to kind
Speaker 1: of this general feeling of malaise and oh my god,
Speaker 1: you know, banana shouldn't cost that much, and look at
Speaker 1: my grocery bill and blah blah blah, and create policies
Speaker 1: that might not be optimal, but that satisfy people at
Speaker 1: least in the moment. And by the way, when we're
Speaker 1: looking at the election cycle and we're not actually enacting
Speaker 1: these policies and these policies are very vague, it's not
Speaker 1: a bad strategy, right, you want to tell people nice things.
Speaker 1: I've talked about Donald Trump as a con artist. I
Speaker 1: don't think that the Democratic Party is a con artist.
Speaker 1: I don't think that Republican Party is a con artist.
Speaker 1: I think he's one very specific con artist. But that's
Speaker 1: a that's a con artist strategy, right, Promise people can
Speaker 1: give them what they want and then you don't actually
Speaker 1: have to deliver. That's where con artistry and politics crossover.
Speaker 3: It's pandering, for sure. She's proposed another category is not
Speaker 3: taxing tipped.
Speaker 1: Yeah, this is this is this is something that both
Speaker 1: the Trump campaign and the Harris campaign have proposed that
Speaker 1: if you're a worker who receives a lot of your
Speaker 1: compensation and tips, then your tips will not be taxed.
Speaker 1: And this is obviously very popular. It got the culinary
Speaker 1: union in Las Vegas, which is the biggest union, absolutely
Speaker 1: huge to get their support, but they threw it behind
Speaker 1: the Democrats, which is important because Nevada is a swing state.
Speaker 1: But that was right off the back of her saying
Speaker 1: that tipped workers will not be taxed.
Speaker 3: So what if instead of having a subscription to my
Speaker 3: sub stack, I offer people to let me leave, to
Speaker 3: leave a tip for me, which is then not tax
Speaker 3: the roughly fifty five percent marginal rates I pay in
Speaker 3: New York City as a high income taxpayer. Right, Like,
Speaker 3: what I mean is that that's the problem too, is
Speaker 3: that like this can easily be exploited or manipulated if
Speaker 3: the policy isn't designed very well. But it's you know,
Speaker 3: it's considered pretty inefficient to have things that can be
Speaker 3: exploited in that way.
Speaker 1: Yes, And in other economic news, you know, we have
Speaker 1: Donald Trump who's proposing ten to twenty percent tariffs on goods.
Speaker 1: So let's talk about tariffs for a second.
Speaker 3: Yeah, this is another one where people's intuitions go away
Speaker 3: against I mean, you know, the teriffs basically become a
Speaker 3: tax on consumers that you know, and by the way,
Speaker 3: people like I like going to the little market and
Speaker 3: being able to get whatever goods I can from whichever
Speaker 3: country produces them. I mean, it's one of the most
Speaker 3: amazing things about the global economy. And if I want
Speaker 3: my little you know, German wafer cookies or something like that,
Speaker 3: or avocados from Mexico, where avocados from Peru somewhere.
Speaker 1: In there are some from Mexico. Yeah, there are some
Speaker 1: from California and Florida. There are avocados from lots of places,
Speaker 1: but yes, Mexico is our is our friend when it
Speaker 1: comes to avocado.
Speaker 3: Imports my Fiji water, right, Like, I don't fucking tell
Speaker 3: me what I have to pay more so, Yeah, So
Speaker 3: tariffs are considered to be a dead weight loss, right,
Speaker 3: They just make everything more expensive. I guess it is
Speaker 3: a way to raise revenues, but a way to raise
Speaker 3: revenues that destimulates the economy and is harmful for consumers
Speaker 3: and but like, you know, both parties have moved a
Speaker 3: little bit more toward protectionism and like another category two.
Speaker 3: I mean, you know, subsidizing housing. Purchasing of housing is
Speaker 3: also considered maybe not the best. Like housing does not
Speaker 3: appreciate to the same extent that investment in the stock
Speaker 3: market does, and people have this fetish I think sometimes
Speaker 3: for home ownership that the government encourages. And maybe it's understandable.
Speaker 3: I mean, but like, so you have a whole sweetened by
Speaker 3: the way one last one. That's why I'm on my
Speaker 3: little It's not really rant. It's pretty pretty low key mood.
Speaker 3: The student loan relief policy that the Biden administration passed
Speaker 3: was struck down by the courts, and they've tried to
Speaker 3: piecemeal some of it back. I mean, that's pretty dubious
Speaker 3: policy too. That creates moral hazard where now you spend
Speaker 3: more because you think your debt might be forgiven later on. Right,
Speaker 3: you know, why should why should college students? By the way,
Speaker 3: most people who have student debt are like actually it's
Speaker 3: often in graduate school, so it's often not poor college
Speaker 3: students with people who are going to expensive medical schools,
Speaker 3: law schools and are pretty well off. So why they
Speaker 3: do it. Well, the answer is that most colleges can
Speaker 3: people are Democrats. They're giving a solid to their party.
Speaker 3: But like, that's another in the suite of policies that
Speaker 3: are not considered economically optimal but are politically convenient or smart. Right, So,
Speaker 3: how do you feel about all this stuff? Because you
Speaker 3: are the one, Maria, the two of us, you openly
Speaker 3: root for Democrats. I am planning of voting for Kamala Harris, right,
Speaker 3: but I'm I'm you know, I would say not call
Speaker 3: myself a partisan. But what do you think? Are you
Speaker 3: okay with this? As someone who's both like a policy
Speaker 3: and now, I.
Speaker 1: Mean, I think that a lot of these policies are
Speaker 1: actually quite bad. So let's just give a little bit
Speaker 1: of you know, personal background in the sense that my
Speaker 1: family grew up in the Soviet Union so many many generations,
Speaker 1: and you know, I have an allergic reaction to a
Speaker 1: lot of things that involve central planning, price controls, trying
Speaker 1: to kind of create something where you say, this is
Speaker 1: how much these things need to you know, how much
Speaker 1: these things need to cost?
Speaker 4: Right?
Speaker 1: Where there was the end result was there was nothing.
Speaker 1: You had to wait in horrible lines to get that nothing.
Speaker 1: There was a huge black market. People who had like
Speaker 1: ends with the party or with someone could get goods
Speaker 1: that other people couldn't get. There was a lot of
Speaker 1: trying to kind of skirt around it, and a lot
Speaker 1: of people were just hungry and died of hunger. Right,
Speaker 1: So it doesn't central planning in no way works well.
Speaker 1: And I know I've gone to like an extreme right.
Speaker 1: That's not what we were talking about, but I just
Speaker 1: wanted to set the stage with kind of why I'm
Speaker 1: allergic to some policies that smell of that in any
Speaker 1: in any way we're talking about price controls.
Speaker 2: I do think the fading of the memory of the
Speaker 2: Soviet Union, right.
Speaker 3: I mean, I'm forty six, so I can still remember
Speaker 3: the Cold War, right, although it's a long time ago.
Speaker 3: And if you're like thirty six, maybe you don't or younger,
Speaker 3: you know that fading may increase support for certain types
Speaker 3: of left wing economic policies. Oh again here it's like
Speaker 3: not so much left wing, it's just inefficiently designed policies.
Speaker 3: I'm actually I'm actually more forgiving as the nonpartisan pundit right,
Speaker 3: in part because like I don't actually think that Democrats would.
Speaker 2: Do very much of this stuff. Right.
Speaker 3: Sure, they might have pretty narrow majorities, if they have
Speaker 3: majorities at all in Congress. And you know, as much
Speaker 3: as I can be skeptical of the expert class, sometimes
Speaker 3: I do think that there's generally a higher caliber of
Speaker 3: like policy wonks in the Democratic Party than the GUP.
Speaker 3: Although again, you know, the Biden administration did do some
Speaker 3: things that were you know, the student loan thing, I
Speaker 3: think in certain ways is pretty and they did that,
Speaker 3: and they spent a lot of money, more money than
Speaker 3: some economists thought they should spend. Trump stood a lot
Speaker 3: of money too, by the way, So it's kind of
Speaker 3: bipartisan blame for inflation. So maybe I'm talking to myself
Speaker 3: into being more worried about it. Maybe I think that
Speaker 3: actually too many Democrats drink the kool aid and actually
Speaker 3: could do some dumb stuff.
Speaker 2: But at the.
Speaker 3: Same time, like from a strictly campaigning decision, like I
Speaker 3: don't think the annoyed huff huff calls from like neoliberal
Speaker 3: economists is going to hurt her electorally speaking all that much. Right,
Speaker 3: And you're you're trying Trump does lots of things that
Speaker 3: are pandering. Also, I mean, who knows what Trump actually
Speaker 3: believes deep down, so I'm not that bothered by it.
Speaker 1: I guess what about the no tips no tip tax,
Speaker 1: because you know, I actually think that you made a
Speaker 1: very good point where it does create an opportunity to
Speaker 1: classify a lot of things as tips, especially for people
Speaker 1: like you and me who are freelancers, right who piece
Speaker 1: together are income from you know, speaking and writing and
Speaker 1: you know and substack and podcasting and all of these things.
Speaker 1: You know, what if we reclassify some of that as
Speaker 1: you know, well, my real fee for giving a talk
Speaker 1: is you know, one hundred dollars and then I take
Speaker 1: you know, a thousand dollars tip on that, right.
Speaker 2: Yeah.
Speaker 3: I literally used to work in tax law. I was
Speaker 3: a consultant for KPMG in something primarily called the transfer
Speaker 3: pricing UH protocol or not protocol, the transfer prising practice.
Speaker 3: Transfer pricing is extremely boring. Is what happens when the
Speaker 3: company has like multiple worldwide entities like Motorola is manufacturing
Speaker 3: cell phones and Singapore and they get semiconductor chips from Taiwan.
Speaker 3: How do you divide the profit up between Taiwan and Singapore?
Speaker 2: Basically extremely boring.
Speaker 3: That's why I was deadly bored and starf playing poker
Speaker 3: and lots of other things that weren't as healthy as poker.
Speaker 3: And but like you know, if you create eccentricities in
Speaker 3: the tax code, then you'll have billions of dollars in
Speaker 3: industry trying to figure out how to exploit those loopholes.
Speaker 3: Maybe you get away for a year or so without it,
Speaker 3: but like every loophole will be exploited. And believe me,
Speaker 3: if there is some way to structure my incomes that
Speaker 3: I pay less taxes by calling substack subscriptions a tip,
Speaker 3: then I will do it. I have no moral qualms about,
Speaker 3: you know, working my way around a badly designed policy.
Speaker 1: Sure, and sometimes when you have rules, they they actually
Speaker 1: just end up reinforcing things that already you know people basically,
Speaker 1: the people who know how to get around them are
Speaker 1: the people who are going to profit the most. Because
Speaker 1: if you think about even tips right now, how many
Speaker 1: service workers report one of their cash tips and then
Speaker 1: pay taxes on them already right in the current status quo.
Speaker 1: So so just think about that, right and then and
Speaker 1: then think about kind of what we do by creating
Speaker 1: these new potential loopholes where now you have more people
Speaker 1: who are willing to skirt them in different ways. I'll
Speaker 1: be curious to see what ends up happening with these
Speaker 1: policies in reality, if Kamala Harris does get elected, We're.
Speaker 3: Going to take another short break and then have a
Speaker 3: quick wrap up about what we're looking for at the DNC.
Speaker 1: Any personal updates in terms of in terms of what
Speaker 1: you're doing right now. I'm about to leave for Spain,
Speaker 1: where I have a many vacation, and then we'll be
Speaker 1: playing in the European Poker Tour, so we're going to
Speaker 1: have some more some more poker related possibilities. I hope
Speaker 1: that I will run better in Spain than I did
Speaker 1: at the World Series.
Speaker 2: We haven't.
Speaker 1: We never actually presented our listeners with the full results
Speaker 1: of our bet. But I did not run well as
Speaker 1: we as we all.
Speaker 2: I don't remember well out of Maria.
Speaker 3: I think I'm a little overconfident in that I don't
Speaker 3: know I and yeah, by the end, it was just
Speaker 3: campaign crush, right, I was kind of all on a
Speaker 3: Google document somewhere. Well, I don't know, we'll figure out.
Speaker 3: We'll reconcile it at some point, Yeah, we will. I'm
Speaker 3: here in Chicago now, By the way, there are concerns
Speaker 3: about are you going to have you know, pro Palestine
Speaker 3: or other protests or things like that. There's a big
Speaker 3: police presence here. I mean I was walking around last
Speaker 3: night and you see like squads of like six police officer.
Speaker 3: They're friendly and they don't like menacing or anything like that. Right,
Speaker 3: But but you know, it's a democratic run city in
Speaker 3: a democratic run state, and Democrats want to put out
Speaker 3: a good show. And you know, unlike in twenty I
Speaker 3: don't think you have as much kind of police tension
Speaker 3: as you had with the old mayor Lloyd Lightfoot in Chicago.
Speaker 3: So I would be mildly surprised if there are protests
Speaker 3: that get two out of hand. Of course, Chicago has
Speaker 3: a reputation for violence at the convention, you know. I
Speaker 3: so Harris's speech is on Thursday night after you're here. This,
Speaker 3: by the way, the fact they're putting Biden and Hillary
Speaker 3: Clinton and Kathy hokel. You know, the game like Chinese poker.
Speaker 3: They're basically various poker games where you're dealt some large
Speaker 3: number of cards, like eleven cards or thirteen cards, and
Speaker 3: you have to divide them into two or three hands, Right, Yeah,
Speaker 3: basically Chinese poker, sometimes you have to take all your
Speaker 3: shit and put it in one hand and guarantee that
Speaker 3: hand will lose to maximize.
Speaker 2: Your chances of winning the other hands.
Speaker 3: Right, They've got to taking all their fucking shit. Kathy Okele,
Speaker 3: thirty eight percent of people riding Joe Biden, Hillary fucking
Speaker 3: Clinton putting it on Monday night, they probably hope there's
Speaker 3: gonna be some giant internet outage or something on Monday,
Speaker 3: and then having three pretty good nights for the convention. Murray,
Speaker 3: Actually you're having we're both having internet issues. That might
Speaker 3: be the slow burned Democrat strategy to make sure that
Speaker 3: nobody watches Joe Biden's speech to night or whatever. But
Speaker 3: they will have compelling days of programming Tuesday, Wednesday, Thursday.
Speaker 3: You know, I think Harris has to resist the temptation
Speaker 3: to be to be too cautious and too triangulating. I think,
Speaker 3: you know, if she acts like she has an eighty
Speaker 3: percent chance of winning instead of fifty three percent or whatever,
Speaker 3: that might be a mistake. And by the way, we
Speaker 3: haven't talked about it much in this program recently. But
Speaker 3: of course Trump overperformed his polls in twenty sixteen and
Speaker 3: twenty twenty, so I think she is a better candate
Speaker 3: when she's running like she's three points down and not
Speaker 3: three points ahead.
Speaker 2: So I'll be I'll be watching that. What are you
Speaker 2: gonna be like, are you gonna be watching? I might?
Speaker 3: I mean I'm doing some book tour event in Seattle
Speaker 3: or something, so I'm not sure I'm actually gonna be
Speaker 3: watching it live, but I will have a little bit
Speaker 3: of plenty of rescue business and silver bulletin content.
Speaker 1: Absolutely absolutely I will try to watch live. I'm gonna
Speaker 1: be in Europe, so the timing might be difficult for
Speaker 1: me to watch live, but I plan on catching up.
Speaker 1: And I actually also think it's very funny when you
Speaker 1: don't see some of these things live to see what
Speaker 1: the reaction is, because I sure I'm going to see
Speaker 1: it on my Twitter feed when I opened my phone
Speaker 1: before before I actually watch it, So it'll be it'll
Speaker 1: be interesting to see what those what those moments are, right,
Speaker 1: what those me moments are, what those kind of little
Speaker 1: nuggets that get that get exerted look like, as opposed
Speaker 1: to the impression of watching the real thing. Because it's
Speaker 1: funny when we when we were talking about the debates,
Speaker 1: right that that first absolutely train wreck of a debate
Speaker 1: with Biden and Trump. The impressions were very different from
Speaker 1: people who watched the whole thing versus people who'd just
Speaker 1: seen clips, versus people who turned it on and off
Speaker 1: at different times. And I think that that's actually that
Speaker 1: that tells you something very interesting too, And I'll be
Speaker 1: curious to see that.
Speaker 3: We both have a busy day ahead, so I think
Speaker 3: we're going to leave it at that. Thank you for listening,
Speaker 3: and tune in next time, and.
Speaker 1: Good luck with the rest of your book.
Speaker 3: Tourning Risky Business is hosted by me Nate Silber and
Speaker 3: me Maria Kanakova. The show was a co production of
Speaker 3: Pushkin Industries and iHeartMedia. This episode was produced by Isabel Carter.
Speaker 3: Our associate producer is Gabriel Hunter Cheen. Our engineer is
Speaker 3: Sarah Bruger. Our executive producer is Jacob Goldstein.
Speaker 1: If you want to listen to an ad free version,
Speaker 1: sign up for Pushkin Plus. For six ninety nine a month.
Speaker 1: You get access to ad free listening. Thanks for tuning in.
Speaker 3: By the way, we think our listeners are pretty attentive.
Speaker 3: The detailed level of feedback positive and negative. We get
Speaker 3: reveals that if you were being attentive earlier, you might
Speaker 3: have heard a reference to a Gerald Ford comment about
Speaker 3: women ascending to the presidency. We're going to just play
Speaker 3: the clip for you as a little easter egg here
Speaker 3: as naudro see you next week.
Speaker 5: I hope we do have a young lady at some
Speaker 5: point become president of the United States. I can tell
Speaker 5: you how I think it will happen, because it won't
Speaker 5: happen in the normal course of events. Either the Republican
Speaker 5: or Democrat political party will nominate a man for president
Speaker 5: and a woman for vice president, and the woman and
Speaker 5: man will win. So you'll end up with president a
Speaker 5: male and a vice president a female, and in that
Speaker 5: term of office of the president, the president will die
Speaker 5: and the woman will become president under the law or constitution.
Speaker 5: And once that barrier is broken, from then on, man
Speaker 5: better be careful because they'll have a hard hard time
Speaker 5: ever even getting a nomination in the future. But that's
Speaker 5: the way it's going to happen, and I think it'll
Speaker 5: probably come sometime in the next four or eight years.