Scary Stories From The Eek-conomy: Part II : Planet Money In our second episode on scary stories on the economy we ask Tim Harford and Jared Bernstein what keeps them up at night. Also, has anxiety about the economy spooked off the Halloween spirit?
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Scary Stories From The Eek-conomy: Part II

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Scary Stories From The Eek-conomy: Part II

Scary Stories From The Eek-conomy: Part II

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Welcome to THE INDICATOR FROM PLANET MONEY. It's Hallowee (ph).


Today on the show, we explore the dark side of the economy. What is scaring economists right now?

GARCIA: And what is scaring us? Listen at your own risk.

VANEK SMITH: So Cardiff Garcia, happy Halloween.

GARCIA: And to you.

VANEK SMITH: Today we are exploring some of our darkest economic fears.

GARCIA: And our first fear comes from economist and Financial Times columnist Tim Harford.

VANEK SMITH: What are some things in the economy that scare you right now?

TIM HARFORD: Well, it's going to sound a little bit strange, but I'm slightly worried about aliens.

VANEK SMITH: (Laughter) Like, from outer space - really?

HARFORD: Yeah, I should probably explain that.

VANEK SMITH: Explain this.

HARFORD: I'm not going to win the answer by explaining it. So OK - so let me take you back to December 1954. In December 1954, there were a whole bunch of people in Chicago who convinced themselves that the world was going to be destroyed. And they, this cult of believers, were going to be rescued by aliens, and the aliens are going to take them to the planet Clarion.

GARCIA: So this group was called the Seekers, and they got a ton of media attention at the time. But then, of course, the date of world destruction came and went. We're still here.

VANEK SMITH: Yes, we're still here. And so the media went back to the Seekers, and they were like, so guys, looks like, you know - looks like you were wrong.

HARFORD: In fact, what they did was - they were like, oh, we believed so strongly in the aliens that the aliens saved the world. And so the fact that nothing happened the way we predicted it proves beyond a shadow of a doubt that people convince themselves of something; the facts prove them wrong, and they just double down.

VANEK SMITH: You're afraid of this part of the human psyche.

HARFORD: I'm super afraid of it, and...

VANEK SMITH: Why? Why specifically?

HARFORD: What we see right now in political discourse is a lot of people becoming convinced of certain political points of view who - it just doesn't matter what evidence comes up. And so I'm really afraid that the cognitive dissonance is kicking in and that we've splintered into a whole bunch of different UFO cults when it comes to politics.


VANEK SMITH: The monster inside of us.

GARCIA: Oh, that's very nice. Yeah.

VANEK SMITH: I know. It's very poetic.

GARCIA: Next up, Jared Bernstein, old friend of the show and an economist with the Center on Budget and Policy Priorities. Jared says Europe is what's scaring him right now.

JARED BERNSTEIN: So in Europe, some of the big, important economies - Germany in particular seems to be slowing down. And those folks, especially the Germans, never do enough fiscal policy to offset economic kinds of contractions. And this is...

VANEK SMITH: And they're more hands-off.


VANEK SMITH: They're like, the markets will take care of themselves.

BERNSTEIN: Yeah. I mean, they're historically very worried about overheating, about inflation. And the tendency of European economies - particularly those in the north and particularly Germany - to do too little on the fiscal policy side to offset slowing economies is a way to really entrench these downturns or slow growth periods. And that does keep me up at night.

VANEK SMITH: So it's basically a situation sort of - what is it? - the - an ounce of prevention is worth a pound of cure. And you feel like the ounce of prevention is not happening.

BERNSTEIN: Exactly. Not only do you need an ounce of prevention for the cure, but if you don't do that ounce of prevention, the sickness gets worse.

VANEK SMITH: So Europe and space aliens - two big economic fears. But Cardiff, you and I brought our own economic fears. In fact, we also brought costumes.

GARCIA: Yeah, kind of.

VANEK SMITH: And you're wearing yours right now (laughter).

GARCIA: Yes. Mine's pretty straightforward.

VANEK SMITH: It is a T-shirt. You should describe it.

GARCIA: Yeah. It's a T-shirt, and it's a picture of an inverted yield curve.

VANEK SMITH: 'Cause people make yield curve T-shirts (laughter).

GARCIA: Yes. And it's not just a picture of an inverted yield curve, which historically has been a forewarning of recessions to come - right? - but also upside down words saying, because I was inverted.

VANEK SMITH: And so this is a joke about the inverted yield curve.


VANEK SMITH: This is your economic monster.

GARCIA: Yeah, kind of. I think so.

VANEK SMITH: So why does this scare you?

GARCIA: Because the inverted yield curve does have a good track record of coming ahead of recessions, and the yield curve was inverted earlier this year. I should say it doesn't guarantee that a recession is on the way.


GARCIA: But because it has such a strong track record, it is a monster to me. It is something that makes me worried.

VANEK SMITH: OK. So now my costume.


VANEK SMITH: And here it is.

GARCIA: I'm looking at it right now.


GARCIA: So you're wearing an orange shirt...


GARCIA: ...With black pants...


GARCIA: ...And a kind of greenish jacket.


GARCIA: OK. There's nothing - there's no bells and whistles here. You're not wearing a funny hat.


GARCIA: You're not wearing a shirt that says anything.

VANEK SMITH: Do you notice anything different about me? I'm just kidding.


GARCIA: I don't.

VANEK SMITH: OK. So this isn't one of those, like, explanation costumes. So initially, I was going to dress up like animal spirits.


VANEK SMITH: That was going to be my costume. Animal spirits is a term invented by the economist John Maynard Keynes to explain the role of emotions in the economy. I thought, you know, that would be an easy costume, right? You know, you just get some, like, ears and, like, a ghostly cape or something like that. And so I was just going to, like, run into a costume shop because there are always, like, a billion costume places in New York that go into, like, any empty retail space, right...

GARCIA: Right.

VANEK SMITH: ...Millions of pop-up places. But I couldn't find any. And I walked around for, like, an hour, and I could not find any. And then I got onto the subway this morning. And you know, this is New York. The Halloween subway in New York is always kind of a spectacle, right? Like, everybody...

GARCIA: Everybody's in costume.

VANEK SMITH: Everybody loves the - you know New Yorkers like to, you know, do something to get a little attention. Nobody was dressed up on the subway. Nobody was dressed up on the sidewalk when I was walking here. Nobody was dressed up in the office. And I thought, like, what is going on? Where's Halloween? Where did it go? And so I started to look around, and as it turns out, Halloween is on the decline.


VANEK SMITH: So two years ago, we spent almost $90 per household on Halloween. This year, it's about $86. And there are a bunch of people who are worried that this could actually be a sign that people are feeling a little, like, meh - like, not wanting to dress up and not wanting to spend extra money on a costume.

And then, of course, if people are pulling back on their Halloween spending, maybe it means they're going to - they're not feeling so great about things, and they might pull back on their spending in other areas. That is, of course, always super bad news for the economy. But it's not even just the spending part. Like, the National Retail Federation reported that fewer people are celebrating Halloween at all. Like, the Halloween spirit is down. Like, consumer sentiment...

GARCIA: Oh no.

VANEK SMITH: ...Is down. I mean, in our office - like, you know, this is NPR. People are a little nutty and love to dress up. Nobody's dressed up. And I found out that Devin Mellor, you know, our office manager...


VANEK SMITH: ...Like, the sweetest, most upbeat person in the world, came to work dressed up, and then he just took his costume off because he was just feeling so...

GARCIA: Oh, that's sad.

VANEK SMITH: ...Sad about things. And in fact - so I thought I would, like, bring him into the studio and ask him, like, what happened.


VANEK SMITH: So Devin, welcome. Thanks for coming to talk with us.

DEVIN MELLOR, BYLINE: Thank you, Stacey. Thank you, Cardiff.

VANEK SMITH: I heard that you had a Halloween costume on, that you came to work dressed up, and then you, like, became discouraged and, like, just took off the costume.

MELLOR: That is correct.

VANEK SMITH: 'Cause you're now just, like, in a button-down shirt and, like, your normal outfit.

MELLOR: Yeah. I keep a backup pair of clothes here, so I just changed into that.



VANEK SMITH: OK. So first of all, what were you, and then what happened?

MELLOR: OK. So this morning, I dressed up as a lumberjack. I had the flannel shirt, the suspenders, boots, hat - had the whole thing.

GARCIA: And when you got to work, what did you do?

MELLOR: You know, I just kind of set about my normal routine, getting the place ready for the day. But it just - I don't know. I just wasn't feeling the spirit of Halloween.

VANEK SMITH: See? I feel like this is an indicator. I feel like the spirit of Halloween is a new indicator of consumer sentiment. And I feel like if Devin can't muster Halloween spirit, like, that's a bad sign. Like, I feel like Devin's always the one who's, like, rallying all of us. We're, like, all - we all come in cranky and late and undercaffeinated. And Devin's always the one that makes us all feel better.

MELLOR: Well, and you know, I've had a bowl of candy out at my desk all week, like, in a jack-o'-lantern, ready to go.

VANEK SMITH: Devin, will you be our indicator (laughter) today - our Halloween indicator?

MELLOR: That would be the honor of a lifetime.

VANEK SMITH: Well, yes, Devin Mellor in plain clothes is our indicator for this Halloween. I think it speaks a lot about the economy and where consumers are right now.

GARCIA: Yeah. A good effort, my friend.

MELLOR: Thank you.

VANEK SMITH: I know. You look wonderful in the button-down shirt, but I am a little sad about the lumberjack costume.

This episode of THE INDICATOR was produced by Leena Sanzgiri. Our intern is Nadia Lewis. Our editor is Paddy Hirsch, and THE INDICATOR is a production of NPR.


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