Optimist Economy

Economist Kathryn Anne Edwards is a Social Security fan girl. Would it be possible for her to love it even more? Yes, if the old-age insurance program got some updates to handle the messy, gradual and interrupted way that retirement truly transpires. Her four blue-sky pitches: changing benefit calculations for caregivers, taking benefits temporarily, a sliding “full” retirement age based on years worked, and a tax on companies that abuse 1099 non-employee compensation. Plus: A big retcon segment including details from a new study by the Federal Reserve Bank of San Francisco that further explains why "more supply" isn't the whole answer to the housing affordability crisis. Support Optimist Economy by donating: https://optimisteconomy.com Video clips are on the Optimist Economy YouTube channel⁠⁠. Follow us on Instagram at ⁠⁠@optimist_economy or TikTok at ⁠⁠@optimist_economy. Or meet other Optimists on our Substack chat. Optimist merch provides great utility: https://merch.ambientinks.com/collections/optimisteconomy Send your economic questions, concerns, or executive orders to optimist.economy@gmail.com

The Federal Reserve is in the news constantly these days. Beyond the regular will-they-or-won’t-they question on interest rates, there are multiple legal battles with implications for the central bank’s independence, President Trump’s nominee for chairman may (or may not) get a hearing in the Senate soon, and Jerome Powell's may (or may not) leave when his term as chair ends in May. So let’s try to demystify the Fed. How does it stop bank panics? How did it make the Great Depression worse? What is a Fed Note exactly? And is the discount window a metaphor? From Glass-Steagall to the dual mandate to quantitative easing, here’s a crash course. Watch video clips from this episode at the Optimist Economy YouTube channel⁠⁠. Follow us on Instagram at ⁠⁠@optimist_economy. Follow us on TikTok at ⁠⁠@optimist_economy. Chat with Optimists on our Substack chat. Consume leisure in an Optimist hat or shirt: https://merch.ambientinks.com/collections/optimisteconomy Support us and our tireless editors and producers by donating: https://optimisteconomy.com And send your economic questions, concerns, or executive orders to optimist.economy@gmail.com

Recent polls show 54% now consider housing unaffordable and the cost of homeownership dominates Americans’ economic anxieties. The popular “abundance” narrative says there’s a housing shortage and suggests cutting zoning or environmental rules will let us build our way out of it. But we don’t have  a simple net shortage of units—we have a deep mismatch between what gets built and what workers get paid. After 50 years of wage stagnation, the median mortgage payment is over $2,200 while median weekly earnings are $1,200. That’s a gap deregulation or more luxury condos won’t close. The solution isn’t to just build more. It’s also to pay people more.END NOTES: To be considered affordable (30% of income) the median mortgage of $2,259 would require weekly earnings of $1,737. But the median weekly wage for full-time workers is $1214.  Where is the Housing Shortage? Of the nation’s 381 metropolitan areas, only four experienced a housing shortage between 2000 and 2020. (Op-ed from the author in Barron’s here.) The US Housing Crisis is Really About Low-Wage Jobs. Kathryn’s take from 2024 in Bloomberg Opinion. Rate of U.S. homeownership has been climbing since bottoming out in 2016 (Federal Reserve Bank of St. Louis). Mortgage Debt Service Payments as a Percent of Disposable Personal Income is about what it was in 2019 (Federal Reserve Bank of St. Louis). Median Sales Price of Houses Sold for the United States shot up about $90,000 from 2019 to 2025 (Federal Reserve Bank of St. Louis). Housing Affordability and Housing Demand (Federal Reserve Bank of San Francisco) Watch video clips from this episode at the Optimist Economy YouTube channel⁠⁠.Follow us on Instagram at ⁠⁠@optimist_economy.Follow us on TikTok at ⁠⁠@optimist_economy.Read some stuff on our Substack.Consume leisure in an O.E. hat or shirt: https://merch.ambientinks.com/collections/optimisteconomySupport us and our tireless editors and producers by donating: https://optimisteconomy.comAnd send your economic questions, concerns, or executive orders: optimist.economy@gmail.com

An essay went viral by claiming that $140,000 is what a family of four needs to just get by — a number higher than what 70% of American households earn. Conservative economists called it idiotic. Kathryn dismissed it and got a nasty DM. What’s the real controversy? It’s not that the poverty line is misleading. It's that we have no measure for our current affordability crisis. And the American mindset has been so warped by decades of bad economic policy that we think the only way to get help is to prove that we’re poor.END NOTES: The essay in question: Part 1: My Life Is a Lie - by Michael W. Green, What economists thought: Viral essay says $140,000 should be the new poverty line - The Washington Post ; Cato: The $140,000 ‘Poverty Line’ Is Laughably Wrong, So Why Does It Feel Right? ; AEI: How Not to Redefine Poverty How U.S. poverty measures actually work: Two Ways the U.S. Census Bureau Measures Poverty to Capture Clearer Picture of Poverty in America  Kathryn on Money with Katie (at min. 35) Watch video clips from this episode at the Optimist Economy YouTube channel⁠⁠.Follow us on Instagram at ⁠⁠@optimist_economy.Follow us on TikTok at ⁠⁠@optimist_economy.Read some stuff on our Substack.Consume leisure in an O.E. hat or shirt: https://merch.ambientinks.com/collections/optimisteconomySupport us and our tireless editors and producers by donating: https://optimisteconomy.comAnd send your economic questions, concerns, or executive orders: optimist.economy@gmail.com

Our own optimist economist Kathryn Anne Edwards worked on a research project several years ago to measure income inequality. Its massive headline number has taken on a life of its own in columns, talking points, memes. We explain how Kathryn and co-author Carter Price managed to answer this question: What would have happened to Americans’ incomes if they’d grown at the same rate as the U.S. economy overall? Spoiler alert: 90% of us would be a lot better off.Read the working paper Kathryn co-wrote in 2020: Trends in Income From 1975 to 2018 and Carter Price’s update going through 2023.Watch video clips from this episode at the Optimist Economy YouTube channel⁠⁠.Follow us on Instagram at ⁠⁠@optimist_economy.Follow us on TikTok at ⁠⁠@optimist_economy.Read some stuff on our Substack.Consume leisure in an O.E. hat or shirt: https://merch.ambientinks.com/collections/optimisteconomySupport us and our tireless editors and producers by donating at https://optimisteconomy.comSend your economic questions or executive orders to optimist.economy@gmail.com

Hey optimists! Season two of Optimist Economy is finally here. New episodes coming on Tuesdays starting January 27. More at www.optimisteconomy.com

Listener Max did his grad thesis on pay transparency laws in Colorado and found that they narrowed the gender wage gap by 8 cents on the dollar. But some big-name economists reported that such laws can actually reduce wages. So what’s the deal? Kathryn’s answer during our October Q&A was so overlong and multipart that we jokingly called it, “The Max Show.” So here it is, as a mini-episode. Holiday shopping for the optimists in your life? Check out our shirts and hats at optimisteconomy.com

Your drunk uncle calls Social Security a Ponzi scheme. Your crypto-bro cousin thinks tariffs make China pay. Your grandfather blames working women for tanking wage growth. Economist Kathryn Edwards takes on a dozen hostile dinner-table challenges to help optimists everywhere prepare for dinner table debate. Robin plays every annoying relative you've ever argued with. Pass the [expletive] gravy. Ready to rep Optimist Economy with a shirt, hat or tote bag? Hit up our new website and merch store at optimisteconomy.com Take the listener survey first to get a code for a free Original Optimist sticker: https://tinyurl.com/op-econ-survey

Optimist Economy got its start almost exactly one year ago with a phone call that began, "Hear me out…" Thirty-two episodes later we ask, “What have we done?” Mostly we conditioned ourselves to keep our eye on the ball – the better U.S. economy and future that are possible – through a lot of very bad news days. In the background, we both moved. Kathryn kept a lot of pregnancy symptoms hidden. We incorporated a nonprofit. And somehow, we managed to drop a new episode every Tuesday. Thanks to all our listeners for being our spiritual sponsors on this journey. Take Our Listener Survey!https://tinyurl.com/op-econ-survey

Why is anyone’s health insurance tied to their job? It's because of a superintendent in Dallas, World War II wage freezes, a 1953 tax code quirk, and decades of inertia. This accident of history costs America $384 billion a year in tax breaks to corporations for providing coverage. And what do we get for that? A system that locks people in jobs they'd otherwise leave, suppresses wages of those who look "expensive to insure," and disadvantages small businesses that can't afford gold-level health plans. In a different historical timeline, President Harry S. Truman’s 1945 national health plan would've given us universal coverage, paid medical leave, and government-funded medical schools. But of course we’re not living in that timeline.Take Our Listener Survey!https://tinyurl.com/op-econ-survey

In the final Q&A of the season, economist Kathryn Edwards answers listener questions on recent universal basic income experiments, legislative budgeting tricks, and the value of more aggressive IRS auditing. She also explains what eradicating the minimum wage exemption might mean, particularly for disabled and incarcerated workers. We also discuss what people actually do for money when they stop job hunting. Fair warning: this one runs long and the keeping it f-bomb free resolution lasted about five minutes.Take Our Listener Survey! Help us plan for Season 2: https://tinyurl.com/op-econ-survey

Just how broken is Unemployment Insurance? Consider this: During every recession since the 1950s, the federal government has had to step in and prop it up. Of people looking for work, only half qualify for Unemployment Insurance. And just half of those actually receive benefits. That’s what you get from a system designed mostly for factory workers nearly a century ago and then left to the heedless care of states. Benefits vary wildly by state — $235 a week in some, over $800 in others. Most states have — understandably — taken the lesson that they don’t have to fix anything because Washington will step in if the economy gets really bad. This is a scrap-it-and-start-over situation. Many solutions would be better, including a system focused on re-employment that keeps workerbots attached to the labor market, helping businesses prevent layoffs during downturns, and making job-hunting less awful.

The economic pain that Americans experienced in 2022-23 was dubbed the “vibesession,” suggesting that negative public sentiment was out of sync with a healthy economy. But what we were truly experiencing was more like a “ghost recession.” As the Fed squeezed the economy by raising interest rates from zero to above 5% to get inflation under control, only the extraordinary circumstances of the post-pandemic economy kept unemployment low and the economy growing. But if we had a ghost recession, that also means that the nascent 2024 “ghost recovery” screeched to a halt with the radical changes to economic policy this year. Also in this episode: What it means that 911,000 fewer jobs were created from spring 2024-2025, and many metaphor try-outs.Revenge of the Vibecession | The New Yorker Birth-Death Model FAQTHE THIN END OF THE WEDGE definition in American English | Collins English DictionaryEconomists’ models of inflation are letting them down [The Economist 2019]

You might have heard recently that a years-long poverty study “found” that giving $333 monthly to kids with poor parents didn’t make a difference. But here's why that’s the wrong takeaway: The "Baby's First Years" study wasn't designed to test cash payments. It is multi-year, ongoing scientific research into how poverty affects child development. Researchers found "selective impacts on preschoolers' brain activity with possibly different impacts across brain frequency bands" — which roughly translates to "this is incredibly complicated and we're still figuring it out," not "money is useless." And yet this rigorous research got reduced to a talking point amid an ongoing policy debate on child tax credits and what it means to lift kids out of poverty.

Paid family and medical leave is a confusing mess: only 27% of private-sector workers get paid leave from their employer. Some others are covered by state programs, but those vary. The rest of us scramble to patch together short-term disability with other paid time off, if we have it. Meanwhile, the United States instead has a federal Family Medical Leave Act that protects unpaid time off. Truth is, sooner or later, nearly everyone needs time away from work to care for a sick spouse, a new baby, a dying parent, or to recover from one’s own illness or injury. And they shouldn’t have to go broke to do it. An idea this popular — supported by about 80% of Americans in polls — shouldn’t be this hard. If paid family and medical leave were added to Social Security, that would give every worker benefits that follow them across jobs and states. The infrastructure already exists. But there’s a lot of heel-dragging in Congress because expanding Social Security can’t be done before dealing with its long-term funding. Read more: Paid Leave Works: Evidence from State Programs [National Partnership for Women & Families 2023] — A good primer on paid family and medical leave. Economic Effects of Offering a Federal Paid Family and Medical Leave Program [Congressional Budget Office 2021] — CBO analysis of a version of paid leave that was proposed in the Build Back Better Act, but that died in the Senate. A National Paid Leave Program Would Help Workers, Families [Center on Budget and Policy Priorities 2021] — Outline of what would be in a comprehensive program. New parents aren’t the only people who need paid family leave [Urban Institute 2018] — Pretty self-explanatory. Paid Leave for Illness, Medical Needs, and Disabilities: Issues and Answers [Brookings and the American Enterprise Institute 2020] — Chapter on how this could be implemented from a joint Brookings-AEI project. Paid Leave Working Group Request for Information Response [Urban Institute 2024] — Response to Congressional working group’s request for input on paid family leave.

Free breakfast and lunch for every public school student — an idea associated more with countries like Sweden and Finland — should instead be viewed as a truly American policy that liberals and conservatives can both love. Want complete meritocracy? Then you should be furious that some kids can't focus in class or during tests because they're hungry. Want to compete globally? Eating better raises student test scores. Want to make America healthy again? Professional kitchen staff serving nutritionally balanced meals to everyone actually beats harried parents trying to cobble together a lunch sack. Want less government interference? Universal programs eliminate the invasive bureaucratic hassle of asking every student’s family about their income. School meal programs have even been found to lower grocery prices in local communities. Nine states have made free meals universal, and others have expanded access, so this ball is rolling. Read more: Solutions: Free School Meals - by Kathryn Anne Edwards [2024] How Free School Meals Went Mainstream - The New York Times [2024] School Lunch Debt Statistics: Total + Costs per Student [2025] Brown paper bags and ketchup as a Vegetable A story too good to check: Paul Ryan and the tale of the brown paper bag - The Washington Post [2014] Why Michelle Obama Is Wrong on School Lunches | The Heritage Foundation [2014] U.S. Holds The Ketchup In Schools - The Washington Post [1981] U.S. Federal Register from 1981 [see page 49]

The unemployment rate has been hovering around 4.2%. But in today’s highly unsettled economy, many people feel this headline number from the Bureau of Labor Statistics doesn’t capture their economic struggles — from slow hiring to working two part-time jobs to recent graduates unable to find work in their fields. But as economist Kathryn Edwards points out, the U.S. Bureau of Labor Statistics also measures underemployment (currently 7.9%) as well as discouraged workers and many other indicators of labor market slack. But there’s one thing the government probably should not measure, and that’s skills mismatch, or being “overqualified” for the job you have. In this episode, we also go way, way back to the Great Depression, when social workers and advocates for the unemployed fought to get the government to measure joblessness at all.Read more: True Rate of Unemployment [Ludwig Institute for Shared Economic Prosperity July 2025] Origins of the Unemployment Rate: The Lasting Legacy of Measurement without Theory. [David Card, UC Berkeley and NBER, February 2011] THE PHILADELPHIA NEGRO A Social Study — W. E. B. DuBOIS Case studies of unemployment, compiled by the Unemployment Committee of the National Federation of Settlements Table A-15. Alternative measures of labor underutilization - 2025 M07 Results [U.S. Bureau of Labor Statistics] Table A-11. Unemployed people by reason for unemployment - 2025 M07 Results [U.S. Bureau of Labor Statistics] Table A-12. Unemployed people by duration of unemployment - 2025 M07 Results [U.S. Bureau of Labor Statistics]

Gross Domestic Product is the big dog of economic numbers. But this measure of the economy’s size has massive blind spots. It ignores income inequality and citizens’ wellbeing. It rewards consumption and thus environmental degradation. Yes, it is vital to know if your economy is growing or shrinking and why. And yet maybe GDP shouldn’t be the lodestar. In fact, as economist Kathryn Edwards relays, the person who invented GDP warned us of its limitations.

The "boys and men crisis" conversation set in motion following the 2024 election is now shooting off in erratic directions, leading to a lot of hand-wringing about college enrollment, long-gone factory jobs, and “loss of purpose.” Still, men’s workforce participation has been on a long, slow slide for seven decades, and it is reaching a worrying level. To address that, though, we need to have harder conversations about what truly affects young men disproportionately – things like substance abuse disorders, other addictions like gambling and video games, and criminal records. Support the Optimist Economy podcast by becoming a paid subscriber on Substack, or donating at https://buymeacoffee.com/optimisteconomy

About 11% of Americans have a household income that puts them below the official government threshold for poverty. Is poverty a state of being, or a risk? Are the poor people themselves the root cause of poverty? Or are they the outcome of a low-wage labor market that churns people in and out of work? Because how you diagnose the problem matters if you’re looking for solutions. Economist Kathryn Anne Edwards tackles three major misconceptions about poverty.Support the Optimist Economy podcast by becoming a paid subscriber on Substack, or donating at https://buymeacoffee.com/optimisteconomy