Episode 419: Taylor Swift, Helium, A Jelly-Like Mass and The Price Of Gas : Planet Money On today's show: Four Planet Money stories that aired on the radio but haven't yet made it into the podcast.
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Episode 419: Taylor Swift, Helium, A Jelly-Like Mass and The Price Of Gas

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Episode 419: Taylor Swift, Helium, A Jelly-Like Mass and The Price Of Gas

Episode 419: Taylor Swift, Helium, A Jelly-Like Mass and The Price Of Gas

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  • <iframe src="https://www.npr.org/player/embed/166007471/166014154" width="100%" height="290" frameborder="0" scrolling="no" title="NPR embedded audio player">
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I'm Robert Smith.


And I'm Chana Joffe-Walt. And today's show - we're going to look at stories behind news stories. So basically, when you cover economics for a while, you start reading the news and seeing things all around you. And you start seeing these little hidden narratives behind news stories, and things start to make you mad that you read in the news. And today, we have four stories all along these lines - the hidden stories behind the news.

SMITH: So for instance, the fiscal cliff - and I'm sure you've heard this term over and over again - fiscal cliff this, fiscal cliff that. Congress has to decide all these things before the end of the year. Now, when David Kestenbaum heard this, he thought, well, wait a minute, where did that term come from? And he found out that it came from a surprising, surprising person.

JOFFE-WALT: We have a story about helium. So a lot of you might've watched the Macy's Thanksgiving Day Parade this past weekend, as I did. And when you see all those helium balloons as an economist does, you just think there is a huge, complicated and interesting market behind all those huge things moving through Manhattan.

SMITH: And during the recent election, candidates were always talking about energy independence. And we have a story that simply asks, is that a good thing? You know, as someone who buys gasoline, do I really want to live in an energy-independent country? We'll have four stories, four stories in one show, all coming up.


C+C MUSIC FACTORY: (Singing) Things that make you go, hmmmm. It's the things that make you go, hm, hm, hm, hm. Robi-Rob, break it down.

SMITH: First up - a story about the words we use and how those words can actually shape politics and the economy. The words are fiscal cliff. And if you're a listener of PLANET MONEY, you know we have talked about this a lot. In fact, when we did an entire show on the fiscal cliff, we thought it was a very clever term, and we used it over and over again, made all sorts of jokes about the cliff. This was six months ago.

By now you're probably tired of hearing those words. In fact, there's a whole debate out there about whether those words actually bias the whole debate about politics one way or the other. Well, David Kestenbaum hear these words, and he thought, where did they come from? They don't seem to match in any way what is actually happening at the end of the year in politics. And so he spoke with NPR's Scott Simon.

SCOTT SIMON, BYLINE: Let's start with the so-called fiscal cliff. There's been a lot of talk about whether or not that phrase is just a little dramatic. Where's it come from?

DAVID KESTENBAUM, BYLINE: Weirdly, it was popularized by a guy who's not known for being quotable. In fact, his job is to not say anything very exciting. I'm talking, of course, about Ben Bernanke, the chairman of the Federal Reserve.


BEN BERNANKE: As we had expected, however, these factors proved transitory.

KESTENBAUM: So Scott, let me just paint the scene for you. This is the House Financial Services Committee back in February - members of Congress looking totally zoned out, some of them clutching cups of coffee, and then this just kind of tumbles out of Ben Bernanke's mouth.


BERNANKE: I think you also have to protect the recovery in the near term. Under current law, on January 1, 2013, there's going to be a massive fiscal cliff.

KESTENBAUM: So he says the words fiscal cliff, and so...

SIMON: I - as soon as I heard it, I was about to yell.

KESTENBAUM: It's like, oh, that's a concrete thing. He said the word cliff. So some member of the press somewhere was awake. There are headlines saying, Bernanke warns of fiscal cliff. Now, apparently, the term fiscal cliff had been circulating around Capitol Hill. But this - this really puts it out there. I should say the Congressional Budget Office, it's been writing reports about this, and they call it the fiscal tightening or fiscal restraint. And some people have said, you know, it's really a fiscal slope. But once you say fiscal cliff, there's sort of no going back.

SIMON: Yeah. Let me ask you about phrases like loopholes and deductions. And put it this way - are one man's loophole another man's lawful deduction, a reasonable tax incentive?

KESTENBAUM: Yeah, they're exactly the same thing. I mean, if it benefits you, if it - it's a deduction. If it benefits someone else, it's a loophole. Do you own a home, Scott? I think you do, right?

SIMON: I own an apartment, yes.

KESTENBAUM: OK. So you get to deduct your interest payments. So to you, that's...

SIMON: A tax incentive for strengthening our community is...

KESTENBAUM: See, but I'm a renter.

SIMON: ...I believe, what you meant to say, yes.

KESTENBAUM: So I'm a renter. To me, that's a loophole. You have a kid, right?

SIMON: Two, as a matter - and - but believe you me, they are anything but loopholes. (Laughter)

KESTENBAUM: I have one too. That's a great tax credit, I like to call it. You got solar panels and you got a jet plane - you bet.

SIMON: All right, a money-suck but a tax credit - OK then.

KESTENBAUM: I mean, if you're a politician looking to eliminate something, it is definitely a loophole.

SIMON: You've got a special affection for this phrase doc-fix - doc-hyphen-fix - which is...

KESTENBAUM: All right. Let's take this in pieces, Scott. Doc, the first half, you might guess is for doctor. Fix - fix implies you've got a problem. This relates to one of the spending cuts that's in the fiscal cliff. And it's a scheduled cut to the amount of money that Medicare pays for doctors. And I - when you think of the fiscal cliff, we often think of, you know, oh, it's all a result of this gridlock earlier this year. This is a fiscal cliff that happens every single year. It - this - the cut to doctor pay, it was supposed to be a way to keep medical costs under control.

But every year, Congress had said, not this year, not this year. Let's not cut the payments to doctors. So they put it off for so long now that if the cut does happen this year, it would cut physicians' payments from Medicare by, like, 30 percent, which would be gigantic. So the question is, are they going to put it off again? Are they going to fix it? And that's the doc-fix.

SIMON: Speaking of doctors, Dr. Kestenbaum, I think I'm suffering from sequestration.

KESTENBAUM: (Laughter).

SIMON: And I - is there a pill to clear it up? What is it, exactly?

KESTENBAUM: This always seemed like a really weird phrase to me. So it is basically - it refers to the bulk of the automatic spending cuts that will happen unless Congress does something. And I looked up sequester in the dictionary, and it doesn't really seem to match up, except for, you know, if you think of it as, like, setting aside money that you don't want to be spent. There is one definition I will share with you. It's the last one listed in the Oxford...

SIMON: This is when we give a timeout to our children. We're sequestering them, right?

KESTENBAUM: (Laughter) Or if a - or something mean you do to a horse, a male horse.

SIMON: Oh, yes. I get (laughter) - I get it now, right. Beg your pardon, yes.

KESTENBAUM: I will share with you the last entry in the Oxford English Dictionary definition of sequester - a jelly-like mass gradually hardens and becomes ossified, surrounds like a sheath the necrotic bone, which is then called the sequester.

SIMON: That's it.


KESTENBAUM: I think that's what they're talking about.

SIMON: PLANET MONEY's David Kestenbaum - thanks so much.

KESTENBAUM: You're welcome.


TAYLOR SWIFT: (Singing) I'm telling you, I'm telling you. We are never, ever, ever getting back together. We are never, ever, ever getting back together. You go talk to your friends...

JOFFE-WALT: That is Taylor Swift. She is singing on an album that sold more than a million copies in the first week of its release - so a million copies.

SMITH: That's amazing.

JOFFE-WALT: Is - right now, that is amazing. A while ago, that wouldn't have been such a big deal. But right now, to sell a million copies is pretty much unheard of. So Zoe Chace wondered, how does that happen? And here she is.

ZOE CHACE, BYLINE: Meet someone behind the blockbuster success of Taylor Swift.

LINDSEY FEINSTEIN: My name is Lindsey Feinstein. I'm 17 years old. I'm a senior in high school, and I'm a huge Taylor Swift fan. She's just so nice. I mean, her music is amazing, and it's sort of all I listen to.

CHACE: Fans like Lindsey spend money on something unusual for a 17-year-old.

LINDSEY: All the CDs are over there.

CHACE: Those are the only CDs that you appear to have.

LINDSEY: I have hers because I want them when I'm older to show my kids that CDs were a thing.

CHACE: CDs are a thing these days only when it comes to the likes of Taylor Swift. There are so many ways to release your music right now - iTunes, Amazon, radio, Walmart, Starbucks, concerts, streaming sites like Spotify, Rdio. Each artist picks from this toolbox in pursuit of one thing - making money, something that is very hard to do when it's so easy to get music for free right now. And Taylor Swift picked expertly. The strategy for releasing this album was maybe the best ever.


SWIFT: Like, ever.

CHACE: She's picked off the shelf only the outlets that would give her the most money for every album sold.

LINDSEY: So iTunes, clearly - and then Target has a deluxe edition. Walmart has it. She has this new thing with Walgreens. Papa John's - this is a new thing. You can order a Taylor Swift pizza box, and with it comes the album.


SWIFT: (Singing) This time, I'm telling you, I'm telling you. We are never...

CHACE: I called another Taylor Swift expert, the editor of Digital Music News, Paul Resnikoff. He confirmed everything the 17-year-old said.

PAUL RESNIKOFF: They have to have it.

CHACE: But the tools Taylor Swift didn't choose are almost savvier than the ones she did. To be the first one at school to hear the new album, you had to pay full price for the privilege because Taylor Swift did not release her singles on Spotify or any other streaming site. Spotify pays pennies on the dollar. Taylor Swift skipped it.

RESNIKOFF: Doesn't necessarily make sense to release on something like Spotify because...

CHACE: You know what? We'll just let Lindsey take this one.

LINDSEY: Taylor already has so many fans that she doesn't need to have that, like, incentive. Like, oh, listen to this, and then you'll like it, and then you'll buy it. I feel like she's past that level. People will literally just buy it.

CHACE: Streaming music is more like an advertisement for the artist. Streaming is a process of music discovery, not necessarily music fandom. You build brand loyalty to the artist through streaming. Taylor Swift does not have a problem with brand loyalty.

LINDSEY: She's kind of past that.

CHACE: So most people, when they bought the album that first week, had to pay full price. That is so rare these days. I asked Lindsey, what song should we go out on?

LINDSEY: I think we should do "22" because it's fun, and everyone will like it. It's everyone's, like, song from the album.


SWIFT: (Singing) Oh, I don't know about you, but I'm feeling 22.

CHACE: A big part of Taylor Swift's genius is knowing exactly what 17-year-old girls want to hear. Zoe Chace, NPR News.


SWIFT: (Singing) Everything will be all right if we just keep dancing like we're 22, 22.

SMITH: So one of the first lessons in economics is about inelastic goods, as they call it. And an inelastic good are the things that people will buy no matter what. No matter how expensive they become, people will buy them - things like milk or gasoline - as we saw during Hurricane Sandy, people were willing to line up just to get it - and oddly enough, something else you may not expect - helium.

JOFFE-WALT: So helium is one of those things that covering economics has really changed the way that I see birthday party balloons. Every time I walk by a toy store in my neighborhood that strings up balloons out front, I think about this whole market behind helium. The price of helium has shot up recently, and there's a really interesting story behind why. Our producer Jess Jiang has it right here.

JESS JIANG, BYLINE: To get to the bottom of why helium is so essential, I asked some balloon experts.

WILLA HANSEN-KOHN: (Screaming). I want to get a blue balloon. I want to get that balloon.

JIANG: This is 4-year-old Willa Hansen-Kohn (ph) at a birthday party in a place called ConstructionKids. The owner is Deb Winsor. Part of her business - hosting children's birthday parties.

DEB WINSOR: Starting my birthday season, and I'm pretty sure I haven't budgeted enough for helium.

JIANG: Last year, a tank of helium cost Deb $100. This year? $150, which means...


JIANG: She has to be very careful when she's tying the balloon.

WINSOR: Ooh, there goes a dollar. Poof - a dollar.

JIANG: But it's not just balloons that are going up in price. Helium is critical for making lots of things - cellphones, computers, plasma TVs, anything with a chip. So what's going on here? Why is the price of helium skyrocketing? Experts say that there's not a shortage of helium. They say that part of the problem is a government helium program that most people have never heard of - the Federal Helium Reserve. The U.S. government stores vast amounts of helium deep underground in the Texas Panhandle.

SAM BURTON: It has lots of wildlife, some mesquite scrub brush, and it's very remote.

JIANG: Sam Burton is the field manager for the Federal Helium Reserve. The U.S. government started producing helium in the 1920s, you know, for dirigibles in case of a global blimp war. Over the decades, the government has been stockpiling helium in these tiny holes underground just outside Amarillo.

BURTON: One of the objectives of the helium operations is to provide a stable helium market.

JIANG: The problem is, the government has decided, we don't need a strategic reserve of helium anymore. There are many private companies that make the U.S. the largest helium producer in the world. So the government is selling off almost all the helium it has stored. Now, you might think the U.S. government flooding the market with helium would drive prices down, but Janie Chermak, a natural resource economist from the University of New Mexico - she says it's having the exact opposite effect. If you're a private helium producer, and you see all that government helium on the market...

JANIE CHERMAK: It provides incentives to not put in a new facility or to delay a new facility.

JIANG: In other words, these private companies say to themselves, why should we dig up our own helium when the government is such a big producer? These days, the government is releasing just enough helium to keep some private companies on the sidelines, but just not enough to drive prices down. But Chermak says, if the price continues to rise, private companies will start producing helium.

CHERMAK: If the price is higher, basically, that says the value of the good is higher. And so a typical reaction would be for increased supply to be put into the market.

JIANG: But for now, companies that have to use helium, they're stuck, whether it's big global manufacturers making computer chips or party planners like Deb Winsor. On her last trip to her helium supplier, she asked about her other options.

WINSOR: Is there anything else we can use? Is there any other...

UNIDENTIFIED MAN: You can use nitrogen, but it's going to stay on the floor.

WINSOR: Well, that's not very festive.

JIANG: For a lot of things, there's just no substitute for helium. Jess Jiang, NPR News.


SWIFT: (Singing) Oh, I knew you were trouble when you walked in, so shame on me now. Flew me to places I'd never been - now I'm lying on the cold, hard ground. Oh...

SMITH: We're going to end this show the way we began it - with David Kestenbaum explaining something in the news that was driving him nuts. And it started during the presidential campaign, when - anytime someone complained about gas prices, they said, oh, no, the answer is energy independence. Now, David Kestenbaum saw this, and he's like, no, no, no, no, no, no, no, energy independence does not do what you think it does.

KESTENBAUM: There is a magical place that has achieved this holy grail of energy independence. It's just north of us - Canada, where this guy lives.

STEPHEN GORDON: I'm Stephen Gordon. I'm a professor of economics at Laval University in Quebec City.

KESTENBAUM: And in Canada, you are energy independent.

GORDON: And we have been for as long as I can remember, anyway. It's not really that big a deal.

KESTENBAUM: Canada produces far more oil than it needs. There are huge reserves in the oil sands of Alberta. And to Americans, this may sound great - no longer dependent on the Middle East. You've got all the oil you need at home. So what does this do for the average Canadian? What does this do for Stephen Gordon? Let's call his gas station.

What's your gas station? Where do you fill up your tank?

GORDON: Oh, dear. It's called the Ultramar, at the corner of Saint Olivier and Saint Jean Baptiste.


KESTENBAUM: They only speak French, he warned.


UNIDENTIFIED WOMAN: (Speaking French).

KESTENBAUM: Fortunately, so does my colleague Dina Temple-Raston. She asked the price of gas.


WOMAN: (Speaking French).

KESTENBAUM: $1.37 Canadian per liter. How does that compare to the United States? If you do the conversion, correct for taxes, it's around $4 a gallon, roughly what we pay in the United States these days. Energy independence does not mean cheaper gas. It doesn't even mean stability. Gas prices in Canada went up this summer, just like they did in the United States. Canada is just as sensitive to conflict in the Middle East or increased demand from China. Here's Jeff Rubin, another Canadian economist.

JEFF RUBIN: We're energy independent. You're a big net importer, the world's biggest net importer. But guess what? I'm not driving around in Toronto any cheaper than you're driving around in New York.

KESTENBAUM: The reason energy independence doesn't help Canada, he says, is that oil is a global market. Oil can be shipped all over the world. There's basically one price for oil. That's why, on the news, when they talk about the price of oil, they talk about the price of oil.


UNIDENTIFIED REPORTER #1: Price of oil - look at this - down ever so slightly this morning.


UNIDENTIFIED REPORTER #2: ...Because the price of oil actually hit a seven-month low.


UNIDENTIFIED REPORTER #3: Oil prices are down over 3 percent. Just look at the...


UNIDENTIFIED REPORTER #4: In commodities, oil prices nosedive. Saudi...

KESTENBAUM: The main benefit Canada gets from having so much oil, these economists say, is just that it's great for the Canadian economy to have a lot of valuable oil to sell. It means jobs. It creates wealth. It's money sitting there in the ground. More oil is better, whether you're technically independent or not. Canada has oil. The United States has things Canada needs, like fruit.

GORDON: We're very happy to get that stuff trucked in from California, Mexico.

KESTENBAUM: Does anyone ever talk about fresh fruit independence up there?

GORDON: Only economists, when we're getting cranky.

KESTENBAUM: David Kestenbaum, NPR News.


C+C MUSIC FACTORY: (Singing) Give it to me, give it to me, give it to me, give it to me, give it to me, give it to me, give it to me, give it to me, give it to me.

SMITH: As always, we'd love to hear what you thought of the program, especially if there are things in the news that make you cranky, that make you go, hmm. We would love to hear your questions so that we can get upset too and answer them for the radio audience.

JOFFE-WALT: And you can complain about our music choices at planetmoney@npr.org. You can find us online - npr.org/money. I'm Chana Joffe-Walt.

SMITH: Nobody complains about Taylor Swift. I'm Robert Smith. Thanks for listening.


C+C MUSIC FACTORY: (Singing) Things that make you go hm. It's the things that make you go hm, hm, hm, hm, hm, hm, hm, things that make you go hm.

Things that make you go hm.

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