Two Spring Indicators : Planet Money The Indicator from Planet Money explores trade wars, peanuts, hurricanes, and happiness.

Two Spring Indicators

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The trade war with China was one of the biggest economic stories of 2018. Import taxes on goods that were sold from China into the U.S. cost American businesses billions of dollars last year. And these tariffs could also be part of why China experienced its lowest level of economic growth in nearly 30 years.


Yeah. Because trade is global, when tariffs are put in place between two giant economies, like the U.S. and China, the economic impacts ripple all over the world, and the effects can be enormous. But also, tariffs end up affecting a lot of people on a very individual level.

DAVID REED: Hello. I'm David Reed. I'm a peanut and cotton farmer from Dooly County, Ga. - Pinehurst. I've farmed here for 50 years.

GARCIA: Peanuts, peanut butter and cotton - these are goods that were all hit by retaliatory tariffs that China put on the U.S. And people like David Reed, who sell peanuts to China, have been some of the hardest hit because China was one of the biggest buyers of both U.S. cotton and peanuts.

VANEK SMITH: David and his fellow farmers ended up in this kind of bizarre and unfortunate situation that appeared to put them outside the normal laws of supply and demand.

REED: '18 was a very unusual year all the way around from start to finish.


VANEK SMITH: Hello, and welcome to PLANET MONEY. I'm Stacey Vanek Smith.

GARCIA: And I'm Cardiff Garcia. And Stacey and I are the hosts of The Indicator from PLANET MONEY.

VANEK SMITH: If you don't know it, it's PLANET MONEY's short daily podcast about the economic ideas in the news - 10 minutes or less, every weekday.

GARCIA: We like to say that PLANET MONEY is The Indicator's twice-a-week...

VANEK SMITH: (Laughter).

GARCIA: ...Podcast about the economic ideas in the news.

VANEK SMITH: It's way longer.

GARCIA: It's longer.

VANEK SMITH: It's true.

Anyway, today we have two spring indicators for you. You might recall, you know, last summer, we also brought you two summer indicators.

GARCIA: Yeah. We're making it a seasonal thing.

VANEK SMITH: Absolutely. Like allergies.

GARCIA: Allergies and The Indicator.

VANEK SMITH: (Laughter).

GARCIA: Yeah. That's the association we want here. Right.

VANEK SMITH: If you have allergies, you should subscribe to The Indicator. And if you don't, you should definitely subscribe to The Indicator.

Anyway, our first spring indicator is about tariffs on American goods and the personal impacts they've had - what it's been like for farmers who've found themselves in the crosshair of a global political storm, and then, quite terribly, an actual storm.

GARCIA: And in the second story, we are going to cheer up - or in some cases, cheer down?

VANEK SMITH: Yeah. Cheer down.



GARCIA: Depending on...

VANEK SMITH: ...Sideways.

GARCIA: ...Where you're from. We're going to look at happiness, the latest rankings of happiness by country, the relationship between GDP and happiness in 2018.

VANEK SMITH: Does having more money make you happier? Stick around.


VANEK SMITH: David Reed looks a little like Santa, but with this very neatly trimmed white hair and this tidy little mustache. He had on a blue button-down shirt tucked into his jeans, brown leather belt.

You have peanuts on your belt.

REED: Oh, yeah. Yeah. Peanut Commission has these peanut belts.

VANEK SMITH: Those are great.

REED: Just a novelty that we sell.

VANEK SMITH: David has been farming peanuts and cotton on this land for 50 years. His grandfather farmed it before him. It is just this beautiful area - flat and green, low pine trees, and fields stretch out in every direction. But the reason David's family settled here has more to do with what's under the ground - the sandy soil.

REED: It's just good peanut dirt.

GARCIA: Georgia grows more than 40% of the nation's peanuts. This area specializes in runner peanuts, which are mostly used to make peanut butter. Jif gets a lot of its peanuts from here. Also, some of the peanuts in your Peanut M&M's are from this area.

VANEK SMITH: Which are excellent peanuts.

GARCIA: (Laughter) The best.

VANEK SMITH: David Reed farms more than 2,000 acres of peanuts and cotton with his wife, Beverly. And when his crop started coming in last year, he says, it was pretty glorious.

REED: Yeah. We had the best crop we've ever had in 50 years. And we were harvesting the best crop of my lifetime.

VANEK SMITH: Of peanuts?

REED: Peanuts and cotton.

VANEK SMITH: And then, starting over the summer, a couple things happened.


UNIDENTIFIED REPORTER #1: The trade war with China continues to escalate, the Chinese government this morning announcing it's going to impose new tariffs on $16 billion worth of U.S. goods.

GARCIA: Among the U.S. goods that China started taxing were peanut butter and cotton - basically everything they grow in this part of Georgia. And then, a couple of months later, this happened.


BROOKE BALDWIN: Hi there. I'm Brooke Baldwin, live here in Destin, Fla., where we are covering the official landfall of Hurricane Michael.

UNIDENTIFIED REPORTER #2: You can feel the ferocity. I'm sorry. I'm walking around here very gingerly trying to make sure that there is no flying debris coming my way.

UNIDENTIFIED REPORTER #3: ...Where they're getting sustained Category 4 hurricane winds coming in. This is epic.

REED: Me and Beverly got up that morning before daylight. And I was going around with a spotlight, looking at my - looking to see what was left around here and looking at the cotton. And we went in some fields, and it just looked like it was devastated.

GARCIA: David lost about a third of his cotton crop and a couple of fields of peanuts, too.

REED: I'll show you where the peanuts - you know.

VANEK SMITH: Oh, it is sandy. This is sandy soil.

REED: Yeah, it's sandy soil. You get on out here. You see the peanuts on the ground there? That's what was left.

VANEK SMITH: Left after the storm. Peanuts grow underground, like potatoes, and this field has peanuts all over the dirt. David picked a couple up, but they were rotten from all the water from the storm. The shell was kind of soft, came apart in his hands.

REED: See, that was a good peanut when it came out. But it just somehow - it didn't - we lost some after the storm hit. This was the field that got hurt.

GARCIA: The peanuts and cotton that did survive walked straight out of a storm and into a trade war. U.S.-grown cotton and peanut butter were all hit by tariffs. And China is one of the biggest importers of American peanut butter and cotton. And suddenly, China was taxing those imports by as much as 25%.

VANEK SMITH: That's a lot.

REED: Yeah. Oh, yeah. That hurts. That hurts.

VANEK SMITH: Well, you've - I imagine - you've said you've been farming for 50 years. You've definitely seen difficult periods before. Have you ever dealt with tariffs before?

REED: No, I've never had to deal with tariffs, you know, as far as affecting us like this has, in my 50 years of farming.

VANEK SMITH: Oh, so this is new.

REED: Yeah. This is all new to me.

GARCIA: China's peanut butter and cotton orders from the U.S. collapsed overnight. And the price that David was getting for his peanuts and cotton both fell by about 30%.

VANEK SMITH: So because of the storm, you lost quite a bit of your cotton crop and some of your peanut crop. But then, also, because of tariffs, the amount of money that you're getting for the crop that had - that is left was, like, not as high.

REED: See, it hurt both ways.

VANEK SMITH: David and his fellow farmers ended up in this weird situation that put them kind of outside of the typical laws of supply and demand because normally, when the supply of something goes down, the price of that product goes up. So there are fewer peanuts in the world because of the storm, but people still want their peanut butter. So the price of peanut butter goes up, and the price that farmers get for their peanuts goes up.

GARCIA: But this was not a normal situation. The storm hit around the same time that the trade war took effect, so U.S.-made peanut butter was suddenly way more expensive for Chinese buyers. So demand from those buyers went down, and the price of peanuts also went down instead of up.

VANEK SMITH: Chinese imports of U.S.-made peanut butter, peanuts and cotton tanked. And what had been shaping up to be one of the best years in David's entire farming career turned into one of the worst years he'd ever seen.

REED: You know, we had planned to make a lot of money this year, but Lord didn't see fit for it. But maybe next year, he's going to bless us better. But hopefully, we're going to break even.

VANEK SMITH: Break even. And David says he is one of the lucky ones.

REED: There's some farmers just worried. You know, I've heard them talk and say, I don't know if I'm going to survive this or not. And, you know, it's heartbreaking.

GARCIA: And David says that the economic effects of the storm and the tariffs haven't just hit the farmers. They've hit the whole area.

REED: It's hurting the whole community and the equipment dealers and the guy down the street with the hardware store. I mean, we're not going to buy and spend money as we did - as freely as we did - because we don't have it. And everybody suffers.

GARCIA: In spite of everything, though, David actually supports the tariffs.

REED: I thought, well, that's not good for the farmer right now. But I think it's the right thing to do, you know, because the trade balance was so unfair, you know? And I think President Trump done the right thing. In my opinion, I think he did a good thing. It hurt us right now. But I think, in the long run, it'll help us.

VANEK SMITH: David thinks the macroeconomic issues between the U.S. and China are important enough that the sacrifice feels worth it to him. He says most of the farmers he's talked to feel the same way.

GARCIA: Now, the government is providing millions of dollars in aid to cotton farmers and supplementing a lot of the peanut losses. But David says it doesn't make up for everything. It doesn't make up for all the losses.

At the start of this month, a bill that would've provided disaster relief to farmers affected by Hurricane Michael failed to pass the Senate. And on top of that, nobody knows how long the tariffs will continue. And while they're going on, China could just lock down peanut and cotton supplies from other parts of the world. So even if the trade war ends soon, the Chinese market for U.S. peanuts and peanut butter and cotton might never come back to where it was before.

But David says he is not going to switch to another crop. Neither is anybody he knows. They're going to continue growing cotton and peanuts, just like always.

VANEK SMITH: Why is that?

REED: It's in their blood. You know, it's what they've always done. And peanuts is a good crop to grow, you know? And there's usually money in them if you make a good yield. And I just like to see them grow. I enjoy seeing good peanuts. It just does something to your heart.


GARCIA: After the break, our next indicator - happiness.


VANEK SMITH: Happiness - it is the thing we are all striving for in life, right? I mean, it is how you achieve the good life.

GARCIA: Yes, but it can be so elusive. What makes you happy? Is it relationships? Is it your job?

VANEK SMITH: Money? Maybe a coffee.

GARCIA: Absolutely.

VANEK SMITH: (Laughter) Definitely in there for me.

GARCIA: I had a stronger reaction to coffee...

VANEK SMITH: (Laughter).

GARCIA: ...Than to money, which is a little odd. But seriously, it is hard to know. And it can feel even harder to know, precisely because it is so difficult to measure.

JOHN HELLIWELL: (Laughter) That's - it's - the fact that people are uneasy about how you might measure it may have been why economics became narrower than it should've been a couple of centuries ago.

GARCIA: This is economist John Helliwell. John is with the Vancouver School of Economics at the University of British Columbia.

HELLIWELL: I'm one of the editors of the World Happiness Report.

VANEK SMITH: The World Happiness Report - John and his team released the first one back in 2012. Among other things, it uses six measures to help gauge and rank the happiness of different countries. And the one for 2018 just came out.

Today's indicator is 19. The Happiness Report rated all the countries in the world in terms of their happiness. And, of course, I immediately just looked at the list to see where the U.S. was in this ranking. And it was at No. 19.

GARCIA: But behind Belgium, which was No. 18, Israel at 13 and Australia at No. 11. Yes, we were also behind Iceland, which is in fourth place. In third place is Norway. And in second place is Denmark.

VANEK SMITH: Of course, John Helliwell told me that not obsessing about rankings was actually one of the secrets for the country that came in at No. 1.

GARCIA: And isn't it ironic?

VANEK SMITH: The happiest country on Earth - Finland.

GARCIA: Darn you, Finland.


HELLIWELL: There's things called the Jones Effect. This is the idea that people think of their rank as being important.

VANEK SMITH: Oh, is this like keeping up with the Joneses?

HELLIWELL: It's exactly what it's like.

VANEK SMITH: OK (laughter) - the Jones Effect.

HELLIWELL: That's exactly what it's like.

GARCIA: Does this mean one of the reasons that Finland is so happy is because they don't care about how much happier they are than everybody else?

VANEK SMITH: John said...

GARCIA: Probably.

VANEK SMITH: ...Yes - exactly, yes.

HELLIWELL: When we've talked to Finns - is this as much a problem there as elsewhere? They say, no, actually, we don't think it is. And the reason is that there's kind of a social norm in Finland that you don't display your wealth. You don't talk about your income. And you don't ostentatiously consume. And they then said, well, that means these comparator effects are more or less absent there.

VANEK SMITH: So Finland for the win - happiest place on Earth.

GARCIA: Not that they're bothering to rub it in.


GARCIA: They're too busy dealing with six months of darkness.

VANEK SMITH: (Laughter).

GARCIA: That's right. That's right.

VANEK SMITH: Take that, Finland.

GARCIA: #USAStillWinningInTheLight.

VANEK SMITH: (Laughter) Exactly.

All right. All right. OK. But now to the economics of the whole thing - how do you measure happiness? John Helliwell says there are six measures that they use to help determine a country's rank in the Happiness Report. Some of them are pretty standard economic measures, and some of them are a little squishier.

GARCIA: Squishy is the right word, yeah?

VANEK SMITH: Yeah, it's a little squishy.

HELLIWELL: Two of them are standard development indicators, which is GDP per capita and healthy life expectancy.

GARCIA: The life expectancy one - that's pretty straightforward.

VANEK SMITH: Gross domestic product per capita - so gross domestic product is basically the sum total of all the goods and services a country produces in a year. And per capita, per person is meant to basically give a rough idea of how wealthy people are in a particular country.

GARCIA: Measure No. 3 has to do with how much people trust the government and businesses inside their country.

HELLIWELL: Do you think corruption is a problem in your country in business, and then - a second one - in government? And then we take the average of those two.

VANEK SMITH: So life expectancy, GDP per capita, corruption and the fourth happiness indicator - something called social support.

HELLIWELL: Particular Gallup question is, do you have somebody to count on in times of trouble?

VANEK SMITH: And No. 5, generosity.

HELLIWELL: The national average is based on, have you been generous in the last 30 days to others?

GARCIA: And finally, No. 6, freedom.

HELLIWELL: Did you feel a sense of freedom to make your key life decisions? It turns out that's very important across countries.

GARCIA: So in sum, to measure happiness, John and his team used measures of GDP per capita, life expectancy, corruption, social support, generosity and freedom. And the reason that he used these six measures is because they had been found to be highly correlated with people's overall happiness.

VANEK SMITH: But John says there are two that seem especially powerfully correlated with people's happiness. No. 1, social support - that is, do you have people you can count on in times of trouble? No. 2, GDP per capita.

GARCIA: Yep - money. For the most part, the higher a country's GDP per capita, the happier its people tend to be.

VANEK SMITH: But John points out there are a few notable exceptions to this - China, India and the U.S.


VANEK SMITH: I know. I know. In all three countries, GDP per capita was up between 2017 and 2018, but happiness levels, as John and his team measured them, were down.

GARCIA: And this is something that economists refer to as the Easterlin Paradox. It's the idea that wealth adds to people's happiness only up to a point. And at some point, for some reason, getting richer stops making you happier.

VANEK SMITH: Now, John thinks this paradox is happening for different reasons in China and India versus the U.S. In China and India, John thinks they're experiencing a kind of, you know, disruptive effect that often comes along with an economy that's evolving really fast.

HELLIWELL: The decline of the extended family and the elimination of a lot of these social ties and social supports and the huge movements away from the countryside towards the cities have posed problems for happiness even if income per capita rose a lot.

GARCIA: In the U.S., John says, he thinks the paradox is being caused by something else entirely.

HELLIWELL: People overestimate the happiness they're going to get from more income or a bigger house. And they underestimate the happiness they would get from more time with the family and less time spent commuting. So they end up finding themselves in circumstances where they've chosen to go for too high an income, too much consumption, not enough time to spend with family and friends. And they end up being anxious, harried, stressed.

VANEK SMITH: So that's John's theory. There are other ideas about why the Easterlin Paradox exists in the U.S. One of them could be that GDP is growing, so GDP per capita is going up, but that it's less evenly spread throughout the population than it used to be. And so people are unhappy about growing inequality in the U.S.

GARCIA: And some economists say that the Easterlin Paradox isn't really a thing - that it all depends on how happiness is measured because, as we said before, it's a really, really tricky thing to nail down.

VANEK SMITH: Nonetheless, John says, as humans, our priorities do seem to play a major role in our happiness. In fact, he says, researching happiness has changed his own priorities.

HELLIWELL: I used to be more desk-bound, more solitary and more inclined to read the elevator's safety certificate rather than talk to the other people in the elevator.

VANEK SMITH: (Laughter).

HELLIWELL: And what I've learned in these years is that that's simply bad psychology - that to start conversations with strangers, to smile at people in the streets, to assume the best rather than the worst about them is a win-win situation. And so I do it more than I used to. And that's improved my happiness. And I hope it's improved somebody else's, as well. But that was...

VANEK SMITH: But that's easy for you to say. You're in Canada. You guys are No. 9.

HELLIWELL: Well, I mean...


VANEK SMITH: Come on, America. We can do this.


VANEK SMITH: Be generous. Be there for your friends.

GARCIA: Yeah. We are going to climb the happiness rankings even if it makes us miserable. All right?

VANEK SMITH: Yes, we are.

GARCIA: So talk to people in elevators. Your country's happiness depends on it.



VANEK SMITH: We're No. 1 - not that we - not that we care...


VANEK SMITH: ...Not that we're looking.

GARCIA: No, I'm checked out. I don't even know where we are in the rankings.

VANEK SMITH: No. Were we No. 1?

GARCIA: Totally disinterested.

VANEK SMITH: 'Cause I didn't even - oh, you know, I'm just...

GARCIA: Whatever.

VANEK SMITH: I don't pay a lot of attention...


VANEK SMITH: ...To how other people rank me. It's more about, like, me feeling like I'm improving.

GARCIA: Yeah. Finland, you're going down in 2019.

VANEK SMITH: We're crushing them.


VANEK SMITH: If you enjoyed today's show and want to hear more, you can have more. Search for The Indicator from PLANET MONEY wherever you get your podcasts.

GARCIA: We post a new episode every weekday afternoon at around 5 o'clock. It's always 10 minutes or less. And very often, it's something you won't have heard about in other places.

VANEK SMITH: Or something you have heard about and read about in other places, but we do our own take on it. For instance, the monthly jobs report.


GARCIA: Yeah, the air horn is ours at this point.

VANEK SMITH: (Laughter).

GARCIA: It belongs to us.

VANEK SMITH: We own the air horn.

GARCIA: Yeah. The Indicator is produced by Constanza Gallardo and Darius Rafieyan. It's edited by Paddy Hirsch. Today's mashup was mixed by Rachel Cohn.

VANEK SMITH: And also, I think this deserves an air horn, but we'll just tell you. PLANET MONEY has a new newsletter, and we like to think of it as just the right amount of economics to fit in your email box. It's a good way to keep up with the podcast and, you know, some of the other big ideas in economics. For instance, do bans on plastic bags help or hurt the environment? And the wealth tax - Europe tried it and killed the idea. Why?

GARCIA: To subscribe to the rejuvenated PLANET MONEY newsletter, go to That's all one word -

VANEK SMITH: I'm Stacey Vanek Smith.

GARCIA: And I'm Cardiff Garcia. Thanks for listening.

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