#859: You Asked For Even More You have a lot of questions... about tariffs, unemployment rates, and RV dealerships, to name a few. We have answers.
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#859: You Asked For Even More

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#859: You Asked For Even More

#859: You Asked For Even More

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SALLY HELM, HOST:

There are some people in this world who do not take half measures. One of those people is Acia Brasu (ph).

ACIA BRASU: I listened to all the Beatles' albums because I liked the first one, so I had to finish all of them.

HELM: She also does this with books.

BRASU: And read all "Sherlock Holmes" novels and short stories.

HELM: And just last week, Acia completed something that to me sounds a little alarming. She decided to listen to every single episode of PLANET MONEY ever made. We occasionally hear from other people who have done this. For the record, no one on our team has.

I guess my first question that I have to ask is, like, are you OK? That's so much PLANET MONEY to listen to.

BRASU: You know, six months ago, I gave up.

HELM: (Laughter).

BRASU: And after doing that, I saw - how many episodes I have left was 300, and I said to myself, I can do it, and I will do it.

HELM: We've done just about 900 episodes here at PLANET MONEY. And honestly, sometimes it feels like there is nothing left to make a show about. So I wanted to ask Acia in all of that time, all of those episodes, what are some things that we have never talked about?

BRASU: I don't know. I don't think there is any episode about theme parks.

HELM: Theme parks - we've missed theme parks.

BRASU: What about the cost of moving?

HELM: Good one.

BRASU: Submarines - no, I don't think submarines.

(SOUNDBITE OF FREDERIC AUGER SONG, "FUTURE SATISFACTION")

HELM: So I guess there are still a few things left to cover.

BRASU: There's always something to cover - always.

HELM: Acia is right. There is always something left to cover, and sometimes we ask you, the listeners, to help us find it. Hello, and welcome to PLANET MONEY. I'm Sally Helm. Today on the show, we take your questions - your questions about RVs, airplane life vests and a whole different system for paying rent; still no submarines, though. We're saving them for later.

(SOUNDBITE OF FREDERIC AUGER SONG, "FUTURE SATISFACTION")

HELM: All right, Sarah Gonzalez, I had to bring you into the studio to imagine a world that is really kind of unimaginable.

SARAH GONZALEZ, BYLINE: A world where everyone who wants a job has a job.

HELM: Yes. We got a question about this from Chris Jeffries (ph) on Twitter, and he said, hey, what would it be like if we had zero percent unemployment in the U.S. for a few years? And, Sarah, this sounds like a great world.

GONZALEZ: It sounds good.

HEIDI SHIERHOLZ: Just no - it's no. There's - it's - it's not - oh, man, I just can't even wrap my head around it.

GONZALEZ: This is Heidi Shierholz. She's a labor economist at the Economic Policy Institute in D.C., and she used to be the chief economist at the Department of Labor under President Obama.

So let's say hypothetically - like, hypothetically, if the United States did have zero percent unemployment, what would happen to the economy?

SHIERHOLZ: That's hard to imagine. I can't - can we do it more, like, if it went very low?

GONZALEZ: (Laughter).

SHIERHOLZ: Like (laughter) I can't - I can't even wrap my brain around what...

HELM: All right. True zero - impossible to even picture.

SHIERHOLZ: If you got an unemployment rate down anywhere near zero percent, you're going to see dangerous effects of just an overheated economy.

GONZALEZ: So right now, the unemployment rate is 3.9 percent, and if we got close to zero percent, here's what that would mean. The minute you wanted a job, you just had one. No one would be unemployed - not even for a little while. And if you're an employer and you need to hire someone for a job opening, that would make things complicated because you'd have to lure away someone else's employee. And in order to keep your own workers and lure someone else's, you'd have to increase wages, which would be a good thing - more money. But if employers are constantly giving everyone in the country pay raises...

SHIERHOLZ: That employer may have to start increasing prices to cover the cost of those increasing wages, and those increases in prices, if it happens en masse, can lead to accelerating inflation.

HELM: Inflation - rising prices across the economy, and a little bit of inflation is OK. But in this world that we're talking about, it could be out of control inflation.

GONZALEZ: Right. Economists say we have to balance employment and inflation, and the perfect, ideal balance is called full employment. No one actually knows what the unemployment rate would be in that scenario. But Heidi says that full employment is when everyone who wants a job can find a job, but you may be unemployed for a little bit of time. So there is some unemployment but the kind we're OK with.

HELM: So maybe we can tell Chris that full employment is kind of like economist zero unemployment.

GONZALEZ: And also that, Chris, you should not want the United States to achieve true zero percent unemployment. That would not be a good thing for any of us.

HELM: Don't do it, Chris.

GONZALEZ: (Laughter).

HELM: Thanks, Sarah.

GONZALEZ: Thanks, Sally.

(SOUNDBITE OF ANDREW MICHAEL BRITTON AND DAVID STEPHEN GOLDSMITH'S "COWBOY CASANOVAS")

HELM: All right. Next up in the studio, we have Kenny Malone drinking tea.

KENNY MALONE, BYLINE: I'm a little sick.

HELM: You're a little bit sick.

MALONE: I'm so sorry for anyone who has to listen to this, but I think it will be worth your time.

HELM: OK. What do you have for us?

MALONE: Well, in the United States, Sally, you are aware that there are essentially two ways of getting housing. You buy property or you rent it.

HELM: Yup.

MALONE: But our listener, Richard Lionars (ph), was in South Korea recently and was interested in a potential third option - a system known as Jeonse.

HELM: Jeonse.

MALONE: That's right.

JONGSUNG KIM: So Jeonse say can be translated as key money deposit.

MALONE: Key money deposit.

KIM: Yes, key money deposit.

MALONE: This is professor Jongsung Kim, who was born in South Korea and is now an economics professor at Bryant University in Rhode Island. And he told me Jeonse is kind of like a giant security deposit. If I want to live in your house, I hand over some lump sum of money. I move in - usually for two years. I don't pay you any monthly payments - nothing. It's just that lump sum at the beginning. And then at the end of the two years, I move out, and you give me my money back.

HELM: OK, but what if I, like, lost your money?

MALONE: Well, luckily, I am living in collateral. Like, I'm living in your house, so there are protections. Maybe there's insurance or a lien or, worst-case scenario, maybe I get a cut of the sale of your house. But hopefully you will not lose my key money deposit.

HELM: OK. So it ends up being, like, an interest-free loan from you, the renter, to me, the homeowner, with the house as the collateral.

MALONE: Exactly. And it can be a lot of money up front.

KIM: Anywhere from 50 percent to 80 percent for the market value of the real estate.

MALONE: Almost buying the apartment.

KIM: Right.

MALONE: But without buying the apartment.

KIM: No. It sounds a little ridiculous, but there are reasons for this.

MALONE: Jongsung says this system made a lot more sense in the 1960s. When home prices in South Korea were skyrocketing and banks weren't really giving out mortgages, Jeonse developed this middle ground for people who couldn't afford to buy but didn't want to throw their money away in rent. And landlords loved this because they could take this key money deposit and then invest it. There were these insanely high interest rates at the time, like 25 to 30 percent.

KIM: It's the perfect match between the homeowners' needs and then the renters' needs.

MALONE: One of the questions our listener had is whether or not this kind of a system would translate well into the United States.

KIM: I am a little skeptical.

MALONE: Because, he says, for starters, Americans just aren't familiar with it. It would probably be too weird. But if we could get over that, there's - like, where are you going to put the money if you're a landlord? Where are you going to get a good investment? You can't go get those 25 percent interest rates anywhere. So it's just too risky. Like, it's better just to get the surefire rent money. And, by the way, this is true in South Korea as well. The Jeonse does not make nearly as much sense as it did in the 1960s, and Jongsung suspects that it is probably on its way out - still, good to know about.

HELM: Kenny Malone, thank you.

MALONE: You're welcome.

(SOUNDBITE OF MUSIC)

HELM: OK, but I actually need you to stay here in the studio.

MALONE: But I'm sick with tea.

HELM: I know you're sick, but I need you because we're going to be doing a lot of math. I know you were a math major. It's going to be good. OK, so...

MALONE: OK, OK. Let's do it. Let's do it. I'm in.

HELM: We got a two-part question from a listener named Ryan Heitner (ph). Have airline life vests ever saved a single life in the history of aviation? And how much do they cost?

MALONE: Oh, I see. He's - wants to know is it, like, worth it to be paying for these vests and then flying them all over the world.

HELM: Oh, yeah. He told me that he thinks it's not worth it. That's his suspicion.

MALONE: OK.

HELM: So I looked into this for him, and I talked to this guy named Harro Ranter. He runs this big database of plane crashes. And he sent me a list of times when passenger planes have had to land on water in a sort of controlled way. It's called a ditching. And theoretically, that's when your life vest could come in handy - right? - because you might have some time to grab it.

MALONE: Yeah.

HELM: So on this list, there are 43 cases of this in the last 50 years.

MALONE: Whoa.

HELM: All kinds of planes - like, small ones, only a few big commercial jets.

MALONE: OK.

HELM: But Harro said, yeah, life vests have almost certainly saved lives in at least some of these cases. Now, if you're just talking about big commercial planes, it's more complicated. But history of aviation - definitely yes.

MALONE: OK, good.

HELM: OK. So now - yeah, good.

MALONE: Good. We're not carrying them around for nothing.

HELM: All right, now cost. This is - this turned out to be very complicated. Now, I talked to one major airline who told me that they get their life vests for 40 bucks a pop, and they last for 10 years.

MALONE: So that is, like, a penny a day. That's 100 percent worth it.

HELM: OK. Whoa, whoa, whoa - there is a lot more to get through here.

MALONE: OK.

HELM: So I got in touch with Robin Riedel, who is a partner at McKinsey who is an airline expert. He was like, you got to think about the fuel cost.

MALONE: Right, the fuel costs.

HELM: Because the more an airplane weighs, the more fuel it uses.

MALONE: But how much does a life vest even weigh. That, like, barely weighs anything.

HELM: 0.8 pounds roughly, according to Robin.

MALONE: (Laughter) OK.

HELM: And so he calculates this, taking into account a bunch of stuff, including the density of jet fuel, which I thought was kind of cool. And it comes out to about 0.4 cents per vest per hour of flight.

MALONE: OK.

HELM: So then you multiply that by the average number of hours that a plane is in the air per day, which I got from MIT.

MALONE: Of course, of course.

HELM: And then you do that over 10 years, and you get about $133.59.

MALONE: One hundred thirty-three dollars and 59 cents is the amount spent on fuel flying one vest around the world for 10 years.

HELM: Yeah, like, typically on average for a commercial plane.

MALONE: (Laughter) That is such a delightful number to know.

HELM: Yeah. So you add that to the $40 that you spent on the vests initially, do some division - it comes out to about five cents per vest per day.

MALONE: Five cents - five cents to have a vest on my flight.

HELM: There is, like, some labor cost associated with it, too, because flight attendants have to check them because apparently sometimes people steal them, which I did not know.

MALONE: That is preposterous.

HELM: I know.

MALONE: I'm so happy to be subsidizing even saving one life in history. And even if it were zero, I'm pretty happy to pay a nickel just to have the theoretical life-saving device with me. Listener Ryan, do your own cost-benefit analysis based on that, but this is a no-brainer for me.

HELM: Yeah. I guess. I don't know. It's pretty unlikely you're going to use it on a normal flight. There's a lot of planes out there, but I guess...

MALONE: Sally, five cents.

HELM: Five cents - it's comforting to have a life vest for five cents. I think - I think that's probably right. I don't know.

MALONE: This is madness.

HELM: OK. Kenny Malone, ladies and gentlemen.

MALONE: Can I leave now...

HELM: Yeah.

MALONE: ...With my tea?

HELM: Get out of here.

MALONE: All right.

(SOUNDBITE OF MARK NIEDZWIEDZ'S "BUTTERFLY BOOTS")

HELM: OK. That was a lot of numbers. We need a break. After the break, we get existential. Where is the tariff?

(SOUNDBITE OF MARK NIEDZWIEDZ'S "BUTTERFLY BOOTS")

HELM: Tariffs are something that we have covered on PLANET MONEY many, many times. But we have never, to my knowledge, touched a tariff, and we got a question from listener Steve Whitworth (ph) that basically asked us when someone pays a tariff, where does the money go? And that got us thinking just, like, where is the tariff in the most concrete possible way? And Stacey Vanek Smith is here with us.

STACEY VANEK SMITH, BYLINE: Hi, Sally.

HELM: Co-host of The Indicator, PLANET MONEY's daily economics podcast. And, Stacey, I hear that you found the tariffs. You touched them.

VANEK SMITH: This is true. I found them, and I touched them. If you want to do this, you go to Newark, N.J., to the U.S. Customs and Border Protection building in Newark. And there in this building, you will find a massive book.

(SOUNDBITE OF PAPER STACK THUDDING)

VANEK SMITH: It is the Harmonized Tariff Schedule of the United States.

HELM: We love the Harmonized Tariff Schedule. It lists all the tariffs. It's more than 3,000 pages. It has everything you could import into the United States.

VANEK SMITH: Yes. The woman who showed us all of this information, by the way, was a woman named Linda Birck, and she took us through the tariff book from moon rocks to purses to shoes - the works.

HELM: OK. So you saw the tariffs on paper, but, you know, we wanted more than just paper. We wanted to get closer to the money.

VANEK SMITH: Where does the tariff happen? Like, let's say there's, like, a 20 percent tariff on sandals from China. Who pays that, and when do they pay it? Like, how does that even happen?

LINDA BIRCK: After the merchandise is accepted into our commerce, the broker has 10 days...

VANEK SMITH: So Linda explained the tariff actually happens once the item has already arrived in the United States. The people on the hook for tariffs, the people who have to pay the government, are American importers who often pay through a broker. And they get something that is kind of like a credit card bill.

So if it's, like, Sandals Inc. based in Tacoma, then Sandals Inc. will pay the import fee.

BIRCK: Correct.

VANEK SMITH: And then how do they - who do they pay?

BIRCK: They pay the National Finance Center CBP. Typically, it's done electronically. Very - we see less and less checks every year. Cash is almost unheard of nowadays.

VANEK SMITH: But it still happens.

BIRCK: Rarely. If - I would be surprised once or twice a year.

VANEK SMITH: Tariffs in cash.

HELM: Oh, man, but it sounds like we didn't get to touch bags of cash at Customs.

VANEK SMITH: There was no bags of cash that they let us see, but they did say that they are electronically bringing in a ton of money. After the IRS, the CBP - the Customs and Border Protection - is the country's biggest revenue-generating agency. It collected more than $40 billion worth of tariffs last year.

HELM: That is a lot. To be fair, the IRS did bring in more than $3 trillion but still a lot. And, OK, for the last part of Steve's question, where does that tariff money go?

VANEK SMITH: That is an excellent question. It could basically go anywhere. It just gets put into the U.S. Treasury and becomes part of the money that the government uses to pay its bills.

HELM: So in a way, it's all around us.

VANEK SMITH: In a way, it's everywhere.

HELM: Thank you, Stacey.

VANEK SMITH: You're so welcome.

HELM: And, listeners, to hear more of Stacey, please listen to The Indicator. Stacey hosts it with Cardiff Garcia. It is excellent, excellent, excellent.

VANEK SMITH: Oh.

HELM: Go check it out.

VANEK SMITH: Sally Helm, you're making me blush.

HELM: (Laughter).

(SOUNDBITE OF KENNY RAY MORON AND MARC FERRARI SONG, "STILL ABOUT U")

HELM: Now, here with our last topic for the day, we have Bryant Urstadt, our editor. Bryant, hello.

BRYANT URSTADT, BYLINE: Hi, Sally.

HELM: So shoot. What do you got on your mind?

URSTADT: Meg Larson (ph) sent us an email about a drive she took through Minnesota. And on the way, she notices something. There are all these huge, huge, huge RV - recreational vehicle - dealerships. And she wants to know, can there possibly be this many people buying RVs? Why are they so big? And it was something I'd been wondering about, too. I've been driving by the same dealer in Massachusetts for literally decades, and I've always been amazed at how enormous it seemed. You'd drive from miles, there's nothing, and then there's just a field filled with RVs.

HELM: OK, so massive RV dealerships across the country - what did you find out?

URSTADT: Well, it was pretty easy to find a person who knew the answer.

KEVIN BROOM: Yeah. I'm Kevin Broom. I'm the director of media relations for the RV Industry Association.

HELM: There's always an association when you need one.

URSTADT: And he said something that surprised me. He said, yeah, RV dealers really aren't that big. He says what Meg is experiencing is actually magic.

BROOM: There's a little bit of an optical illusion effect.

URSTADT: And the dealers - they're kind of David Copperfields.

HELM: David Copperfield - is he a magician (laughter)? I thought David Copperfield was, like, a Dickens character.

URSTADT: Yeah, who later became a magician and had a huge television show in the '80s. Can the generations never talk to one another?

HELM: (Laughter) I mean, we're talking now. We're just not understanding each other.

URSTADT: Anyway, these dealers - they're a bunch of David Copperfields.

BROOM: They put their biggest and highest-end RVs toward the front of the lot. And so as you're driving by, it looks like there are a lot of them, but there aren't necessarily as many as you think.

URSTADT: So this is like the fake Western town in the - in Hollywood.

BROOM: Yeah, a little bit.

URSTADT: And I googled that place in Massachusetts and, sure enough, right there on satellite view on maps, I could see it. There were not hundreds and hundreds of RVs as I had thought but just, like, dozens strategically positioned so that from the road it looked like an endless field.

HELM: It's all a lie.

URSTADT: It's mostly a lie.

HELM: Thank you so much, Bryant Urstadt.

URSTADT: You're welcome, Sally.

(SOUNDBITE OF ANDREW PETER KINGSLOW'S "FRENCH QUARTER BOOGALOO")

HELM: Send us more questions. We are planetmoney@npr.org. We are @planetmoney on Twitter and Facebook. And I want to ask go follow us on Instagram. I'm posting a lot of new stuff there. It's looking really good. Check it out. Today's show was produced by Taylor Haney and Aviva DeKornfeld. Our editor is Bryant Urstadt, and Alex Goldmark is our supervising producer. I'm Sally Helm. Thanks for listening.

(SOUNDBITE OF ANDREW PETER KINGSLOW'S "FRENCH QUARTER BOOGALOO")

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