Affordability vs. the Poverty Line

It was so hard.

“It was so hard and we didn't even do it.”

Oh man. Oh, man.

Hello and welcome to Optimistic Economy.

I'm Katherine Ann Edwards, economist. I'm Robert Razzie, editor. On this show, we believe the U.S. economy can be better, and we talked about how to get there, one problem in solution at a time.

Today, on Optimistic Economy, we're going to talk about an essay that made the rounds while we were on hiatus, suggesting that the new "Poverty Line" is $140,000. Katherine has thoughts. Boy, it's not, it's not. This is if I answer boy, it's not, but it was not about why.

At the top of our show, a couple of announcements, big announcement, which is I'm in Houston, with Katherine. But after much prevails, we're in two separate rooms trying to record this podcast. Family wanted to be in the same room talking to each other. It did not work.

“I'm at many levels, it didn't work, and luckily, we didn't do it because I think at some”

point, one of us would have died when we tripped over all the courts, so we're going to mix it. So this is a safer, better way to podcast is to have a conversation when you're actually like 25 feet away in the next room, over, this is better.

The future is never more natural, but that's not more natural.

So instead, we're just going to get beers after the show together and not record it. Exactly. But you can trust. It's happening this time. So this is going to be our first five minute episode.

And thanks for coming. Okay, so in summary, announcement one is that Robin and I are hanging out without you. Announcement number two is, I forgot to say last week, we had four people become spiritual sponsors of optimistic economy while we were on hiatus. Which was so amazing.

So amazing and so sweet. So specifically this week, we want to shout out Rebecca from Hillsboro Oregon, who is one of them. And YouTube can sponsor our show at the spiritual level or any level that you're comfortable

with at optimistaconemy.com.

Our next segment is retcon.

“It's only our second episode of the season, do we have retcon?”

We don't have retcon. I actually don't think I have a retcon. I mean, I could definitely try to think of one if I want to, but I don't think we have anything to apologize for at the moment, except for the thing we're going to retract that we haven't retracted.

Yeah. Yeah. Okay. Charms and conditions. Did you look anything up this week, Catherine?

I actually took a very small, some would say maybe a little bit dumb, how short of a vacation I took to London, but I was across the pond. Oh. So, look at you. Just said.

I like to really simple stuff like words that are in English, but I didn't know what they were meant because I was in another country, but we don't need to go over that. Now I'm just bragging about being in London, you are, you are. I looked up hedonic adjustments because it was in this essay, and he used it as the hedonic lie, so it took me a while to figure out that he was referring to hedonic adjustments.

As far as I can tell, this is an adjustment that the BLS makes to how much something costs related to how much more valuable it is and how much more value or usefulness it provides. And he called it a lie. Yeah. Maybe you can explain it better than I did.

hedonic is, it's a really cool concept that's hidden behind economics language that makes it so inaccessible, but you absolutely understand. So if you think of a house, that house has a price. Let's say this house is $500,000. $500,000 in compasses, what we would call many differentiated characteristics of the house.

hedonic pricing is the idea that there is a price component of the quality that is not necessarily just the overall price. hedonic pricing would be the price component of a house that comes down to how nice the park is at the end of the street or if it's next to like a power plant. And we think of hedonic pricing as a way to discuss the implicit prices that make up the

overall price. It is the quality that makes up a big price. I'm willing to pay for a good school. I'm willing to pay for a nice street. I'm willing to pay for lots of windows.

And all of those are the components of this overall sticker price. And so those are the, you can think of them as implicit prices, component prices, hedonic prices. They're all kind of different, but they get at the same idea that each aspect of the house that you buy has its own price.

But this is so, I mean, in the definition, I was looking up related to CPI, which is a consumer price index. I mean, the house is something you buy one time. I think for the CPI, I don't think I just think, I don't know, a car, a just for inflation

And all these additional features, there's more value to the vehicle. Yeah. So the hedonic pricing adjustments to the consumer price index are getting at this idea that the components of the overall price has changed.

So the way that I always thought about it is that most the time when you go shopping,

you're actually shopping on a hedonic price. And then the price tag is almost like an afterthought.

“Doesn't match, does the price tag match where your hedonic pricing in your head is?”

Today one word to testify in front of Congress and wanted a new suit, right? I'm going to go shopping for a suit. I'm shopping for components, right? I'm shopping for a color that's really just going to bang on camera. And I'm shopping for a fit and quality that, like, if I get something on it, it won't show.

I'm shopping for all of those components. And you can think of each of those components as having an implicit price, right? I would pay 20 bucks extra for a really good color versus I'm shopping for a suit that costs $99. You shop hedonically, you're buying on that margin.

But when it comes to aggregates statistics of prices, I mean, this is so hard.

In my mind, this is one of the hardest things the BLS has to do is somehow put into statistical terms the quality adjustments that we know and see in our everyday life and have that make sense over time. There's lots of ways that they go about doing it, but it's not perfect. And of course, being the BLS, when they think they've missed, they'll go back and they'll

say we think we were wrong and they'll issue a correction. All right. We're going to take a quick break and then we'll be back with our centerpiece discussion or the big Bill Crow. The big Bill Crow.

The big is Bill Crow. Okay, we're back for our centerpiece discussion today, which is about this essay that appeared during our hiatus and we both were asked about and I think Catherine has a lot to say about.

I actually stumbled on this piece on Substack before it blew up.

I was Googling something, for something else I was editing, one thing led to another and I somebody in another substack said, if you haven't read this and you should, I was like, oh, okay, I'll read it. But then my mother sent it to me in a text and said, I want to know what Catherine thinks about this.

“So the original essay on Substack was called, my life is a lie, I think.”

Yep, part one, my life is a lie. This is where I'm going to say the subhead is how a broken benchmark quietly broke America and this is when, that's like when I started to get a little pissed off. But yeah. And you weren't alone.

You know, it went a little viral in sort of finance broke kind of social media circles and it got picked up by the free press. The original version was like 3,000 words long. They did an edited version and I think the headline on that was something like the Valley of Death, why $100,000 is the new poverty.

So it was written by this guy named Michael Green and he's a strategist at a financial advisory firm. I think that gives him a particular point of view that comes through in this piece, this idea of trying to look beyond something to try to find something that's not obvious to people. So it wound up not just shared kind of virally, but it also wound up the Washington Post

wrote an article about what economists thought about what he said, which was mostly he doesn't understand the poverty line, but he's touching on something that clearly touched the nerve.

“And that's what I'm going to hand it to you.”

Well, you sent me this article because you were like, hey, my mom and I like moms come first. So you said your mom wants to know what I thought and so I, at some point during some maternity leave Hayes had like clicked on it and started to read it. And I just, I had a really hard time getting through it because like the opening salvo is

the broken measure where he, he's both right and wrong and that he correctly describes the genesis of the poverty measure. But he incorrectly describes what's been done since the logic behind it. And the kind of genesis since it was a little too like poverty is three times food, I felt sick to my stomach.

I was like, come on, like get it together. So I kind of read through the rest of the essay and I was like, okay, this is what this guy's doing. And then by the time I got to the end, I was like, well, he's still going and I, and I skipped.

So then separately, many of y'all are money with Katie listeners and she just ended her show. She's taken a break of an indefinite hiatus and on her last episode, she had a bunch of people back as like kind of a best of conversation. And I was incredibly honored to be among one of these best of.

And she was like, I wanted to know what you think of this essay. And I was just honest, like I had a hard time finishing it, I didn't really like it. And I tried to explain in this interview of like what my hesitations were. And I got one of the more personal and nastiest DMs I have ever gotten, where I was

That's interesting.

“I underestimated how much this essay resonated with people.”

We don't have to repeat the conversation I have with money with Katie. Like y'all go listen, that was my like kind of formal introduction to it is that I didn't take it seriously enough and I wasn't like respectful enough of it. And someone was just like, you are an awful person for ignoring Americans. Like just like this nasty screen about how people like me are what's wrong with America.

So, second verse same as the first, let's talk about it this time and see if I can be

as you dismissive, but not give people mad at me. So if you haven't listened to or what you don't understand about poverty episode, that might be a really good background. You can just hit pause and go listen to that come back. I did explain how Molly or Shanski came up with the poverty line as a as the idea of

what deprivation looks like. You know, keep in mind that like she's doing this without a computer. She doesn't have regular survey data. She has very little at her disposal, not even a good measure of income in the United States.

She has two pieces of data.

One that says Americans spend about a third of their money on food.

And one that is an estimate from the U.S. Department of Agriculture of how much food cost for family sizes. The logic is if people need this much food to live, say it's like I need a hundred dollars to buy food, and people spend a third of their money on food, then three hundred dollars a month is the poverty line or three hundred dollars a month is a measure of adequacy.

Peter, Johnson's kind of brain trust within the White House that is directing the war on poverty adopts this measure and calls it the poverty line.

“What I think is the most interesting part, which this guy totally missed, is that if you”

go back and think about the Great Depression and unemployment, we didn't episode about this, we didn't have a measure of unemployment going into the Great Depression. We didn't have a reliable and uniformly and consistently measured of measure of unemployment until the late 1930s. Really at the earliest, you could claim it's the late 1930s.

We have tried to piece together how many people were unemployed, but we don't really know. Same thing when the U.S. decides it's going to clear war on poverty. We don't have a measure of poverty. It's not adopted, it's not accepted, we don't have a way of doing it, we kind of find

one and take it, and both of these measures have trade-offs, they have advantages and disadvantages, but it's like we recognize the problem before we measured it, and then we went back to trying to find a measure that worked.

“I think the era that we're in now is we're in this affordability crisis and we can't”

measure it because we don't have a measure of affordability, that is the more interesting notion that we're seeing these massive turning points, these huge, like,

impacts in the U.S. economy of the problem is mounting and part of the problem is that

we can't measure the problem and people feel like they're not seen or that what's going on doesn't matter, which is suggestive of like, we are at a focal point, right? To me, the fact that people are so mad at the poverty measure, as like not measuring affordability, which is not supposed to do, that is the interesting part. I didn't convey that before, but like it looking back on this essay and how people

responded and how mad people got after my money with KDSA and kind of trashed me. I think I didn't say what I wanted to say, which is kind of shocking, given how much I talk, but I didn't say what I really wanted to say, which is like, he was so close, but he just kind of wasn't there. Yeah.

The big picture is affordability. This is what the U.S. like the average American is circling around is that they cannot afford their life and they can't prove that they can't afford it. It's like they have to convince politicians that they can't afford it and we don't have a way of measuring it.

Yeah. And that's kind of what he attempts to do in the second half of this essay. He makes some obviously really bad leaps, one of which is going from a measure of deprivation right of bare sustainability and then saying, okay, now I'm just going to look at averages. I'm just going to look at the national averages and then try to call the national average

if you're below the national average that you're poor, which you're just like, okay, not an economist, famously not an economist and even I can tell you, that doesn't math. I thought there was a little bit of irony here of like, oh, so you're going to trash a woman in the 1950s who didn't have a computer and came up with one of the first measures of inadequacy and deprivation and how hard that was for her and then you're going to

put together your own measure and you're going to get trashed for it and you're like, oh,

not so easy to find a married doesn't suck. I'm like, oh, not so easy to put together a number that describes a primary fee early in the U.S. economy that people are going to get really mad at you for. For people who haven't read this, I do worry that this is going to be hard to understand. If you haven't read this, he feels like three times food does not adequately reflect our

current reality because people don't spend a third of their income anymore on food.

So then he tries to reverse engineer or shanskees system, which makes zero sense and many, many of the critiques of his piece are like, that part of what he does in this essay makes zero, zero sense. He then though goes on to basically tally up what it takes for a family of four to get by right now.

That's the part that really resonated with people. And he says, like, look, you can't just have a landline phone anymore. You have to have a cell phone.

“You have to have broadband access because you need it to communicate with your child's”

school. You need it to do your job and he calls this, what does he call it like the price of full participation in the economy or something like that? Yeah. And with his guide does, he takes the average price of various goods and services that

he deems his necessities and he adds them up. And whatever they come up to for a family of four, that's poverty. It's $140,000. I'm going to give you two numbers to put into context why, you know, kind of, let's say flabbergasting that often, but I was flabbergasted by 140,000.

The first number is that if you were to line up all households in the US from richest to poorest, inclusion in the top 25% starts at $150,000 a year. So $140,000 is going to be more than what probably 70% of American households make. Another way to think about it is, okay, so lots of households might have, you know, young

“people, you know, old people, people who are tired, just have one person, maybe it's not”

the same. He thinks it's just a family. So another way to think about it is that if you were to take just look at workers, not everybody, just workers and look at the median full time workers. So this is someone who works 40 hours a week, 52 weeks a year, the middle person of that

group of workers earns $63,000 a year. So by his metric to median full time workers would not make enough money to be out of his measure of poverty. That's how high this number is. Now the problems in our economy can be high enough so that people making that much money

can be a struggle, but it is describing well over 60 to 70% of Americans, whether you look at workers, whether you look at households, whether you look at families. I mean, that's it's a really high number and I had this like really, like really, really, really, really. I mean, I just got mad when I read it because my first kind of reaction was this is a guy

who doesn't understand the income distribution to say that $140,000 is poor.

$150,000 is the top 25% is someone who has never met someone who makes less money than

him and only knows richer people. So he thinks like he's barely getting by. It was the first reaction, but the second reaction less about him and more about the response was this kind of conflation that people have that if they're struggling, they're poor. If they have problems with rent, if they're having problems with their cell phone, that

is poverty. poverty is not not being able to afford things. poverty is poverty and we have a categorically cruel social welfare system in the U.S. that helps very few people. We either push benefits through the tax system where you're more likely to get it if

you're high income or we have a poultry, mainly distributed social welfare system to only the very poorest of the poor and then we do a lot of things to sabotage them, even getting it if they're eligible. That's how we help people. That leaves out a bunch of people in the middle.

The answer is not, let's make all those people poor and so then we can help them.

That's just do a better job managing our economy and not reward poverty like a little letterjacket that people get to say, "I'm poor. I get to have help now." Our economy has problems. The answer isn't, "Let's all be in poverty."

It's really messed up for people who are an actual poverty to say, "I make $100,000 a year and I'm poor."

“There's a whole section in this essay that he calls, "I think the value of death, which”

is where he's talking about how, as you're trying to climb from $40,000 to $100,000 that you hit these tiers of income where you begin to lose these benefits." When this piece came out, we were having a lot of that discussion around the Affordable

I think that it also fed into that narrative in the political moment about people potentially

“who didn't have their health insurance through their job, but had to buy it on the market”

place potentially looking at this really big jump in monthly premium costs and that this government helped that they've been getting would go away. He also suggests that people are getting huge child care subsidies and I was like, "In what, plan it."

Basically, suggesting that you earn another $10,000, but because you essentially step

beyond the subsidy level of some sort of government assistance that you actually wind up taking on all that expense and then some, all of which seemed like pretty, pretty far-fetched. There's a very large part of the poverty and social benefits literature that looks at this, they call it the marginal tax on income, the marginal tax on labor, that the idea that if you moved up and income and you lose benefits, the value of the extra income is worth

less than the value of the benefit that you'll lose. And this is why a lot of public programs have been redesigned so that benefits phase out. So, you know, if you have ever applied for food stamps, the amount that you get is a function of your income so that if you have your income can rise and your benefit kind of falls accordingly so that there's no cliff of benefits that you fall off of.

The one that's very hard to price this way is Medicaid because there's no way to phase out Medicaid, the way that you can phase out a weekly or monthly food benefit, the way that you could phase out cash if we had it. But this idea that you lose benefits and that you have this disincentive to earn extra income has been a part of the economics literature for decades and there's a poverty

research or there's a economist at Johns Hopkins who was like pioneering in this field. And I heard him gave a talk a few summers ago where he said that he thought that the

“research had been quite effective and that this idea that you have to phase out benefits”

and be careful about five benefits all phasing out the same time. Those benefits cliffs like we now have programs that take these into account.

Things like the earned income tax credit, you know, basically kicks in to boost the return

to earned income as program eligibility is phasing out. And so they're basically coming up with a work bonus through the tax system so that if you are losing benefits, you're losing food stamps on the right hand but your left hand is getting more and money from work because you're going to get a work bonus from the government. I mean, they did try to think of these things thoughtfully.

It's a lot harder at the bottom when there's up to six programs or seven programs that you could have a family be eligible for but where this research lives now is the understanding that the vast majority of people will not collect a benefit for everything that they're eligible for. So like in theory, if I am making $10,000 a year and I have a kid, I should be, I mean,

like food subsidies, health subsidies, housing subsidies, energy subsidies, I mean, I should be eligible for all of those things. And I should like arguably maybe even get cash from the government, like it is actually rare that someone will get all of the benefits that all the programs that they're eligible for.

All right, like housing subsidies are because they just don't know about all of them, they don't apply for all of them, they're just not, they don't get qualified. Yeah, it's a combination. So housing subsidies aren't an entitlement. You can have the income low enough to get housing help from the government, but they

don't have enough money to go around so you don't get it. You can have income low enough to get child care help from the government, but they don't have enough to go around so you don't get it. So there's that problem.

“Then there's the problem that you have to know to apply, you have to fill out the application”

and that process has to be something that you can navigate. Some states have been really active at trying to come up with almost like a common application, or when you apply for food stamps, you're automatically applying for Medicaid and just trying to get you all the benefits you can. Other states will make it as hard as evenly possible so that you get deterred from applying

and don't actually finish it. So this came up a ton in the pandemic when unemployment insurance claims spiked and some states had so cruelly designed their application process with the intention of getting people to quit before finishing the application that now all this federal money is on

the table and states are basically now desperate to keep people of getting it.

So Florida was the case where they had just paid millions of dollars for someone to redo their online application for unemployment insurance, but they had done it in a way to make it harder to apply. And the way that it really broke down was that every time you answered a question, you had to go to a new page so the number of times you could crash was tight.

So Florida ended up having parking lots where they printed out applications and handed

Greg, you couldn't come inside and get the application.

All of this was a way we call this administrative burden. Yeah. We're going to make it hard for you to go get the benefits. So the point that he brings up about the idea that you could lose a benefit as you make more money is a universal problem in any program that you design in any place.

But in some ways, it's almost like it's like a really early 90s problem. You know, the problems that we have now is getting people connected to the benefits that they're eligible for and getting them enrolled. And knowing that in some ways, the people who deliver those benefits are actively operating in a way to make sure that you don't get them.

So a great example is work requirements. Work requirements are a paperwork administrative burden that is designed to get people to drop out of public programs. We also have an episode on this from season one. You can go.

We do have a new requirement. You can go back and listen to it. It's called Work requirements don't work. Yeah. But work requirements, like the state of Michigan added work requirements to temporary assistance

to needy families, which is the cash benefit that replaced welfare that is not as generous, doesn't go to as many people in has a time limitation. They put work requirements on TANF during the great recession because they needed to get people off of it. If people have to reapply and re-certify and fill out their paperwork, you lose people every

certification. And the harder you make the certification, the more you lose people. Not harder like the income test has changed. I mean harder like it's 30 pieces of paper. And if they mess up, they lose the benefit.

That is the problem that we have in benefit delivery for the very poor. So yes, if you earn more money, you could lose assistance. And he brought up the case of subsidies.

“But there was this real like, is it forced for the trees?”

Yeah. He couldn't see the forest for the trees. Yeah. Couldn't see the forest for the trees. I think he was missing the whole picture.

The problem isn't that the poverty line is too low. Or that we don't count poverty is $140,000.

The problem is that we have mismanaged our economy for the past five decades to ignore

market failures that make it very hard for people to afford their life. And a healthcare subsidy phasing out at around $100,000 that someone's going to lose if they earn more money is very different from, we should not be selling healthcare for profit. And that's hurting a bunch of people. Like it was a very privileged focus on like, look at this family with $100,000 who's losing

their health insurance subsidy. Very hard for that family, but it was like making the wrong conclusions like picking a part of the problem that hits a privileged set of people and then says, maybe not a privileged set of people. It was a privileged point of view.

This is a person who works in finance and who's clients or people who have financial advisors. He's talking to people who are well off. He used the language that they speak and they could maybe understand it, right? And there's a usefulness to that part of what he was doing.

When I went back to read this for a second time before we recorded this, I realized at the

very beginning of the SSA, he says that he wanted to figure out why people are struggling to make ends meet when we've had strong economic and GDP growth and low unemployment.

“And I got a paper you should read, and in fact, somebody linked to the time-exing article about”

the study that you did about why household income, taxable household income has not kept up with GDP growth. I mean, at the end of the day, that's the question he's trying to interrogate and he winds up down this other rabbit hole about benefits and things that are, that's not the source of the problem.

I almost didn't want to do an episode on this because I feel like it's gotten so much attention and not that piling on is what we're all doing because I think it's good to have a conversation. But I almost didn't want to give too much attention to what was in fact not a great essay.

It misses the mark on a couple levels, but I guess if so many people were interested and it hit a nerve in some way, it's worth talking about, but I almost thought like the essays the least interesting part. This big question of like GDP is growing, but incomes aren't, that's been a problem for a long time.

“I think he's sort of obsessed with how much our economic outlays cost.”

He's forgetting in this piece about the invoice, which are income, right, and that that's what's not good. Yeah, and I, if you're interested in social policy, deciding that the poverty line is poorly constructed is like a pretty easy port of entry, and I think it opens up the door to have these conversations about like, you know, well, how do we measure struggle?

And there was a bit of just like not keeping your eye on the ball kind of in the whole reaction

on some level that we have made policy choices and we are reaping what we sow and we need to make different choices. Well, he also, he really hammers on economists, like he blames economists for saying everything's fine when it's not.

“He sort of misses the entire definition of that that I think actually you said, you know,”

last week, which is what we were feeling in this post-COVID period is struggle of the middle class, like that the middle class is the one that got really suddenly squeezed, and his kind of conclusion is the middle class isn't middle class. Yeah, so we can put in context that the conservative economists are who like really hated this piece.

They really hated it and they, I mean, they like really piled on and they took it down. Someone who wants to trash a economist, I'm like, shoot your shot.

I don't think we're like a lovable profession.

I think there's just pretty loads some people who have the same title that I do. Open that. Yeah, I do. I feel like the post article, you know, you had some liberal economists who were like, you know, he's trying to understand this poverty thing and he's conservative economists.

What an idiot. This guy doesn't know what the hell he's talking about. I mean, conservatives were so mad at this because the conservative, I would say the central conservative argument over the past 30 years has been income inequality is not that bad. Poverty is not that bad and that actually wages and incomes are growing sufficiently for

America to be a prosperous place and this feeling that people can't afford enough or that

“their life is hard or that poverty is rising that none of that is true and that if you”

looked at other ways to think about poverty, like poverty and what you consume versus poverty versus what you bring in, poverty's closer to like 3%. That is their central, you know, in very consistent over numerous decades arguments, America is not poor. Americans are doing well.

We don't have deep income inequality. It is exaggerated. We don't have wage stagnation. That is exaggerated. We don't have mass poverty.

That is exaggerated. And that if you actually measure correctly, we are doing great. They have to just measure correctly. If you just measure correctly, we're doing great.

“This is like Kato and the American Enterprise Institute.”

And a whole set of conservative economists. Like a conservative think tanks and conservative economists. This is like very fundamental to the conservative economics point of view is that all the complaints of wage stagnation and income inequality and poverty are exaggerated. They are misrepresenting what is actually going on.

In some ways, they have to, because we are in the fifth decade of a deeply conservative era in American economic policy. We are fighting unions and not protecting them. We are letting them in a one way to road. We are passing tax cuts in almost no social policy.

We are not intervening in any type of market failure in a significant way. If something is wrong, we'll throw a tax credit at it in some market regulation, but we will not grossly interfere. I mean, we passed five tax cuts this century. They have to say America is doing awesome because they are the ones with the advantage.

They got what they wanted. Yeah. So the vote to say that Americans are struggling is to be liberal in some kind of fundamental way in the US economy or in the economic space because you are saying that the ruling policy agenda is failing.

So to say that people are struggling is a liberal argument, which is why this guy got so dumped on by so many conservative economists of like this is ridiculous. And the liberals were like, but Molly Oshanski, but the liberals were like me and they're like, you get Molly Oshanski's name out of your mouth, sir. And please, do not further misrepresent what this pioneering woman did.

It is one of the most misrepresented things I hear talk about in some ways in the poverty space is what Oshanski did. And I'm sure I'm culpable in that in some degree because I feel the need to defend someone who's set out to try to help children and poverty in any way that she could and didn't like how much she gets piled on over the years as if she endorsed how we went about things.

You know, his essay is basically saying we have these massive economic structural economic

problems that need fixing. And I guess on some level, I just thought he didn't say it very well. But resonated with other people, I didn't resonate with me, and I have a visceral reaction to the casual way in which people will claim that they're in poverty. So there's this really fundamental moment for me in my economic journey where this really

So I'm studying at the University of California Davis and I take a break from Wisconsin in the middle of my PhD to go to the poverty center at Davis to do a poverty fellowship and to get exposed to different poverty researchers. And one of the professors there explained to me that they had this problem of not necessarily problem, but like in Davis, California, they were trying to set aside money for the local

school district for schools that were in high poverty areas and schools that needed help. And one of the schools that showed up as being kind of high poverty wasn't high poverty per se. It had a lot of grad students and grad students don't make that much money. In fact, most grad students would have low enough income to be at or near the poverty level.

And so they were like resident in the neighborhood. Like it was like a neighborhood that lots of PhD students live in. And they have no income really. And they have really low income. So if you're a PhD student, I mean, $15 to $20,000 a year is your stipend, and they

said it's $15 when I went to school, which does put you below the poverty level. I was like, well, if they have, if they're low income, if they meet the measure, right? Like they should get the money and she was like, Katherine, they are not poor. They have low income that is not the same thing as being poor.

And I, it always struck me of what she was trying to say, right?

Like these were students who were taking a temporary vacation into the land of very, very low income. They were going to finish and have a high job. If they ever needed more money in a desperate way, they could immediately get it. And there was a ticking clock to their low income status.

And that was very different from being stuck there. And I think that I kind of have that same reaction when I read something like this of like, struggle is not poverty. And we don't just have to channel solutions in our economy through poor people. Like y'all, our mindset is so broken.

Yeah.

“I remember that you've been in five decades of conservatism.”

So you are desperate to show that you're poor because you're desperate to get help from the government because you think that the only people who are allowed to get help by the government are the very, very poor. Your mindset is totally broken. We can have universal child care right now.

And you shouldn't have to be poor to have a benefit from an investment in children. To get it or to do it, yeah, to deserve it. Yeah. In some ways, his logic and what took off represents what is broken about how we view the economy in some way that we don't understand that there's a, it's not paradigm shift.

It's not sea change. It's something transformation. I mean, I think we're, we're at, I don't know if it was COVID or two Trump administrations. I don't know, but we're at a pivot point where we really have people who are really saying that can this continue to go on like this and I can't.

And these are the big questions. I mean, we're going to try to wrestle with on this show. It can't, it can't go on.

“And I think what's been happening over time is that the number of people who are feeling”

like they can't make it is just creeping up the income distribution. And I hate to say it, but like, it's finally hurting people who matter because the difference

between $140,000 in poverty is that people who are in poverty have struggled always.

And $140,000 is not good enough today. $20,000 has never been good enough. Is it even near good enough? They don't have near enough to get by what the people who are struggling with affordability. It's just, you see it go higher and higher than as goods become in services, become higher

and necessities get out of reach that it's more and more people who feel the squeeze. But it's worth remembering that there's an order to who matters in our economy and who matters in our society and like we're starting to see affordability, hit some heavy hitters who have some sway and how we do things. I mean, I think that we've had this problem with pathways to the middle class and middle class

affordability for a while and it's manifesting in different ways and people's political response to it manifests in a lot of different ways, a lot of different frustrations, different anger. So you feel like it's just it's climbing up out of the middle class and upper middle class.

Is that what you're saying when you say it's beginning to affect people who have some sway or some power? Yeah.

“I mean, this guy is a finance bro in the post is titled "My Life is a lie."”

And he's saying that the affordability and the struggle to make it and the posity of government meaningful government help to put the thumb on the scale for you is $140,000. I mean, that's well above median income. That's well above average income for a family.

He wrote an essay saying that the average American can't afford a life basically for child

care for two children. He's talking about a family of four. Yeah. Yeah. But I mean, this problem is seeping into many more Americans' lives than are comfortable

Yeah. Yeah.

No, I think that's right.

“I think the thing that he's happening into is the difference between, I pretty much always”

have enough money. I just have to decide how to allocate it. And now I actually can't, I don't have any slack to allocate. Yeah. Can I afford to car payments if I need to get a new car?

No. I can't. And we need to worry about how much it's going to cost to ensure my car if I get a new car. I mean, how's it cost people to talk about insurance costs and all of these things have

added up and added up and added up. Yeah. I mean, just to make sure there's going to be someone who listens and they're going to be like, man, f her, so it's just for, like, this, like, final caveat of just because I didn't like this essay doesn't mean I don't think people are struggling or that people

could be at $140,000 in struggle. I think that they're absolutely struggling and I think they're struggling much higher than that. It's not about the people's experience that I didn't like or saying that it's not true. Um, it's not just not poverty, yeah, it's that it's the poverty thing that really, it's

like, you know, once you've said it, I'll never be able to look away.

I'm just, yeah, but I, we always try to end on an optimistic note and, you know, really we say one problem in solution at time, well, this was like the problem. Yeah. This is the big problem, but I guess the optimistic thing is it's kind of what it was last week, which is that the more people that recognize it, the better that we'll be able to

address it, not through like shitty subsidies. I mean, like actually address it, like do something bold, do something big. And I guess the bigger the problem gets and the bigger that the problem feels, the bolder the action gets to be. I'm going to think about healthcare reform 15 years ago versus the healthcare reform today.

I mean, our society has transformed in how it views private health insurance, employer sponsored health insurance, health insurance in general, you know, the problem didn't feel as big back then. Now it feels insurmountable and on so many levels, things that might have been a problem 15 years ago feel like a battle that will never win.

And that means that the solution gets to be that much bigger.

“If we ask for it, if we fight for it, if we take advantage of this boldness, so I, I think”

that the common parlance of affordability, I think it's only going to be for the best that it's broad. It refers to a lot of things. It could mean housing. It could be transportation.

It could mean healthcare. It could be childcare. Because that means we get to do a ton of stuff in response. And everything can affect affordability. So let's do it.

I don't even actually like affordability as a, as like a, as a, as a, as a continuity. Now, not even a, like as a motivator, yeah, that we have to be able to afford more or just have a better economy. I don't know. I don't know if I really like affordability is like the umbrella term, but it's the one that's

out there. And it does lead us to the same place, which is big bold action. So that is great. Yeah. All right.

We're going to take a little break and then we'll be back with executive orders and spiritual sponsors. Okay, okay, come there. Yeah, yeah, yeah, you come in here. Okay.

Wait, can you roll in one more time, can we get a roll ready in one, two, I want to catch you. I need a rug, we need a rug, we definitely need a rug. This is, it's a little dicey. Okay.

We couldn't record the whole episode here because you're going to see just how close our faces have to get. I know, it's like we're going to sing a duet in the thirties in the thirties, it's really close. So both in Houston, we're both in Houston and we're going to do executive orders and we'll

“just like pass them like a little bit because you probably would do you have to get closer.”

I won't have an executive order. Okay, it's all you. Executive orders. I'll do two. Okay.

So my executive order is twofold. I'm taking Robins order today, executive order one is that several members of the cast have been to like Beckham need Oscars. Both of the moms absolutely need an Oscar for that performance because it's two very different moms with very different struggles with their daughters and they're not one dimensional.

They have journeys as they go through and they're both, it's played to perfection, especially especially Jess's mom. She's so good. Yeah, the dad definitely needs an Oscar to retroactive that Oscars. I just think it's a movie that it's a retroactive, you know, like we need to do an apology

Oscar for a bend it like Beckham y'all made a sports movie that was also a movie about community and identity and so many other things.

I just watched it again, going to London.

“And then he went, I liked to watch movies that are themed for the destination.”

So I was going to London, I watched it. It is the first time I have watched Bennett like Beckham since becoming a mom.

I think it's probably the key thing.

And so I now kind of see it more through the parents' perspectives, not that I have teenagers. But I, their characterization, I'm like, "Oh man, that's actually like an amazing portrayal of moms on film." One of the cast members, I don't know other names, comes to the Angel City football club, games all the time, and they always show her on the big screen.

And everybody goes wild. Yeah. Really okay, anyway, I need to move on from the bend it like Beckham show, which is what we're not going to be now.

My second executive order is that we need to remake bend it like Beckham on the regular.

“Like why is this movie not set in America Hollywood?”

You could do it with so many immigrant communities in the US, you could do it with like the Birchney National Mensoir League, you could do it. There's just, I mean, like, because that movie has been clearly used to be a series. Like a Netflix, like eight-part series. Yeah, every year, every year, new, new situation, new in the community.

It's also a movie about class, and there's lots of ways to explore class in the US. So that is the executive orders. Now we can do spiritual sponsors. My spiritual sponsor this week is Carmen Maria Machado, who's a novelist and short storywriter.

And I went to see her give her reading last week, and she's amazing.

“And if you haven't read a work, you should.”

Okay, rolling on in. My spiritual sponsors are British biscuits. Okay, cookies. Yeah, they're cookies for us because we're normal, and they're shortbread cookies, but they call them biscuits.

And I was brought some and gave them to me in my wife. Yes, I brought biscuits, I brought biscuits home from London, from London. Where she was. Oh, man. The title is episodes going to be gathered in London.

Yeah. And a fortability. We like pattington too. Our show is edited by Sophie Leland. Our video production for social media is by Andy Robertson video consulting.

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