The Coronavirus Housing Market, The Coronavirus Pigs, And Other Questions : Planet Money When the economy tanks, does money just vanish? Why are home prices still so high? You asked these and other questions. We try to answer. | Subscribe to our weekly newsletter here.

Where'd The Money Go, And Other Questions

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DARIAN WOODS, BYLINE: The other day, Alexi Horowitz-Ghazi, PLANET MONEY producer, called his aunt Vovi (ph) for a special socially distanced birthday present.


VOVI: Hi, my sweetie. Yeah.

WOODS: Once Alexi had Aunt Vovi on the phone, he told her to check her email for a surprise video message.

VOVI: Oh, here we go.


VOVI: Oh, one attachment. OK.


LARRY THOMAS: (As the Soup Nazi) Happy birthday, Vovi.

VOVI: What's this?


THOMAS: (As the Soup Nazi) It's the Soup Nazi from "Seinfeld." Remember me? No soup for you.

VOVI: Oh, my God.

WOODS: Vovi's watching this video. And in it, there's the Seinfeld character the Soup Nazi sitting on his couch at home looking straight at Vovi.


THOMAS: (As the Soup Nazi) So today on your birthday - no work for you.

VOVI: (Laughter) Oh, my God. Lexi, that's such a cute birthday. That is unbelievable.

HOROWITZ-GHAZI: Do you remember that guy?

VOVI: Of course. How did you find this guy?

WOODS: How did he find this guy? Well, Alexi was on a journey to answer a listener question, this one from PLANET MONEY listener Joe Zimmerman (ph), who was wondering how performers are going to survive during the lockdowns.


WOODS: So many of you PLANET MONEY listeners, you've been writing in with all kinds of questions. And today, we're answering a few.

Hello, and welcome to PLANET MONEY. I'm Darian Woods. It's our mailbag, our listener questions hotline. You ask; we answer.


WOODS: The questions you've asked us for this episode, they've forced us to stare at gravity-defying house prices. They've led us to the parrot from "Aladdin," and they've got us to reckon with the economics of beef flavor. We've heard all about the economic mysteries in your life, and we've been gathering clues. Today on the show, we dive into the PLANET MONEY inbox. And we try to solve what might be the most asked about financial mystery of the current moment - where did all the money go?


WOODS: We've been getting a lot of emails from listeners with some version of this question, which comes from Sudi Powers (ph) in Washington state.

SUDI POWERS: In the past several months of the pandemic, we've lost hundreds of millions of dollars. And I'm curious where all of that money goes. It can't just disappear. Where does the money go?

WOODS: Like, take this line in a report from Cambridge University saying the world economy could, quote, "take a hit of some $82 trillion" in a worst-case scenario. Like, where does that money go?


WOODS: Hello. Is this Martha?

To answer this...

OLNEY: Yes, it is.

WOODS: ...I called up Martha Olney. Martha is a teaching professor of economics at UC Berkeley. She runs the first-year economics class there, so she gets this question a lot.

OLNEY: So I think Ms. Powers has a really good question. Part of the question comes from using the word money to mean more than one thing.

WOODS: Money can make you rich in two ways - you could have a lot of money sitting there in your bank accounts, or you could have a lot of money flowing to you every month in your paycheck or whatever. Those are actually two quite different types of money.

OLNEY: I do drill with the students on being careful in the use of the word money. Are we talking about wealth, or are we talking about income? In the pandemic, what's gone is income.

WOODS: Losing income is like the plumbing getting clogged up and slowing down the water.

OLNEY: In a normal time, one person will spend money, and that becomes the income of the next person, and their spending becomes the income of the next person. And so we have this flow of funds through the economy, and that's what generates income for a person.

WOODS: Essentially, you're saying what we think of as our general standard of living is a flow measure.

OLNEY: That's exactly right. So for instance, if I take my car to my mechanic who lives across the street and I pay him for his service, that becomes income for my mechanic. The mechanic then goes to the grocery store and buys groceries at the grocery store. His spending becomes income for the grocer. The grocer goes to the drugstore and buys some medicine, and the grocer's spending becomes income for the people at the drugstore.

WOODS: This is money flowing around the economy. The faster it flows, the more times the dollar gets passed around, the richer everyone is.

OLNEY: It's those activities of one person spending which becomes another person's income which have been eliminated or very heavily slowed during the shelter-in-place and the social distancing parts of the pandemic.

WOODS: It's a great reminder that the economy is this moving, dynamic, constantly flowing thing. It's not just like a vault with gold bars in it. So the money didn't disappear really, did it? Or did it?

OLNEY: No, the money didn't disappear. The $20 bills still exist in that sense. What doesn't exist anymore is the income that we would have received in March and April and into May as a result of other people buying the things that we produce.

WOODS: There are still plenty of $20 bills in the world. They just get passed around less. And Martha adds that during the pandemic, many people are saving more than they usually would. People who kept their jobs and the businesses that did stay afloat are, on average, holding onto more cash. And wealth, like those gold bars in the vault or the value of your car, is getting affected - but in this almost counterintuitive way.

OLNEY: So our wealth is the value of the assets that we own. And so the gold bar in the vault is an asset that we own.

WOODS: And so to be clear, the physical wealth - like the mechanic's garage, the mechanic's tools...

OLNEY: Right.

WOODS: ...You know, your whiteboard markers and white boards - you know, everything we all use to do our jobs - my microphone - it's still there.

OLNEY: That's right.

WOODS: Like, that has not been destroyed.

OLNEY: The physical wealth is still there. So the garage is still there. The tools are still there. My computer is still here. And my office, I believe, is still there, although we haven't been allowed on campus for two months. And so those things still exist, and they still have value.

WOODS: Those $20 bills, they're still there, too - ready to be put to use as soon as people get their incomes back and get ready to buy again.


WOODS: That's actually really clarified my thinking on this. So thanks very much, and I'll send your answer through to Sudi Powers. And hopefully, she finds that as clarifying as I did.

OLNEY: Thank you very much, Darian, for calling. I really appreciate the opportunity to help y'all out.

WOODS: Yeah. All right. Bye.

OLNEY: Bye-bye.

WOODS: There is one kind of wealth we've been getting extra questions on - houses. And you'd think with everyone out of work and incomes drying up that house values would come down. But Sarah Gonzalez found the story wasn't so simple.

Sarah Gonzalez, how you doing?


WOODS: What do you have today?

GONZALEZ: All right. So we've gotten emails from listeners like Leo Susser (ph) who are all asking, why in the world are home prices still so high during the pandemic? Like, the economy is at a standstill, but home prices are not dropping. They're actually going up.

MICHAEL NEAL: No, I mean, we've been getting the same questions.

GONZALEZ: Michael Neal is a housing economist in the housing finance policy center at the Urban Institute. He studies housing market trends. And he says that if you think about home prices falling, a lot of people think of the Great Recession.

WOODS: Like, they fell then. Why isn't it happening now?

GONZALEZ: Exactly. A lot of people lost their jobs in the Great Recession, so they couldn't buy a home. Demand was down, so prices fell.

WOODS: Supply and demand.

GONZALEZ: Right. And unemployment is high today, too. It's actually higher than it was during the peak of the Great Recession. It's roughly 15% today. And back then, the peak was about 10%.

NEAL: And that is real cause for why one might think that house prices should fall.

GONZALEZ: So why isn't this happening?

NEAL: My short answer is that there are some key ways in which today is a lot different from that period.

GONZALEZ: Yeah, like supply. There were just, like, a ton of homes for sale during the Great Recession - right? - because it had been really easy to get a home loan. Companies were building a lot. And then when unemployment went up, there was this huge collapse in demand. There was just, like, way too many homes for sale.

NEAL: Exactly.

GONZALEZ: But they're not enough homes today. For example, in November of 2007, just before the Great Recession, there were more than 4 million new and existing homes for sale. In December of 2019, just before the pandemic, there were less than 2 million for sale. So about half as many. This is all according to the Urban Institute. And Michael says that the way some sellers have been responding to the pandemic right now might actually be reducing the supply of homes more.

NEAL: The way that potential sellers are responding to this crisis is not by making price cuts but actually by pulling their homes off the market.

GONZALEZ: Oh. So they're saying, like, I'm not going - I want to sell this house for $800,000. I'm not going to drop the price. I'm just going to put it on the market later, when we come out of this.

NEAL: I'm going to wait it out. Yep, I'm going to wait it out.

GONZALEZ: So that's even less supply. And the government has done a bunch of things to keep people from getting their homes foreclosed on right now, even if they miss a mortgage payment. Right? So we probably won't see the spike in foreclosures the way that we did during the Great Recession. And if we did, I mean, that would add more homes to the market - right? - if a bunch of homes got foreclosed on? And more supply of homes would lower home prices. But remember this is about supply and demand. And there's a lot of demand from one group of people in particular.

Who is buying a lot of homes right now?

NEAL: Uh, uh, uh, uh - millennials.

GONZALEZ: Yeah, try it one more time with feeling.

NEAL: I'm sorry. The economist in me - I'm sorry - just answers the question. So we're seeing strong demand for housing from millennials.

GONZALEZ: There's just a ton of babies born in the '80s that are buying houses now?

NEAL: Yep.


NEAL: People need to remember that, like, millennials are 40 now. The oldest millennials are 40.

GONZALEZ: And the millennial generation is a big one. So there are just a ton of millennials who want to buy homes right now, and there are not enough homes for them. This is why prices are high. And Michael says it's important to keep in mind that the people who were planning to buy a home before the pandemic hit, had the money ready to go, they're less likely to change their home-buying plans because of the pandemic because they're less likely to be badly affected by it. They can work from home, keep their jobs. The crisis is more likely to affect lower-income people - people who don't have office jobs, renters who had no plans to buy a home. So there is still demand for homes during the crisis.

NEAL: My personal view is that home prices will continue to rise but that they will rise at a much slower pace.

GONZALEZ: But there is one force that is pushing against all of this - perception.

NEAL: This gets a little wonky, but there is also evidence that consumers actually expect house prices to fall. And you know, one reading might be that - they expect house prices to fall; they might actually operate in a way that causes them to fall.

GONZALEZ: If everyone thinks home prices will fall, then they will fall. So part of the story is supply and demand, and another part of the story is expectations about the future. And if you think home prices will fall in the future, then you're going to wait to buy today. And sellers are going to have to drop their prices to convince you to buy.

WOODS: I'm happy to know that my life as a millennial renter is not going to be disrupted by the burdens of homeownership anytime soon, Sarah.

GONZALEZ: We're so lucky.

WOODS: Thanks, Sarah.

GONZALEZ: Of course.


WOODS: Our third mystery is, you could say, a murder mystery. It involves blood, knives and choice cuts of pork chop. We ask, does piggy have to die? And if so, why? After the break.


WOODS: Lauren Hodges, you are the PLANET MONEY producer joining us this summer. Welcome.


WOODS: Tell us about your question today.

HODGES: Yeah, the question I looked at was about meat. Slaughterhouses are closing or just being slowed down by COVID-19 and dangerous working conditions. And there have been all these news reports about animals being killed by the thousands and then not being turned into meat. So why? Listeners are asking, why is this even a problem? Why can't the animals just chill out for a while?

WOODS: Yeah. I mean, like, the slaughterhouses closed. Isn't this good news for the animals?

HODGES: Yeah. Do they really need to be slaughtered? They're not like fruits and veggies. Right? They can't spoil in the field.

WOODS: So tell me what you found.

HODGES: So I called Gretchen Mafi, professor of meat science at Oklahoma State University. And she told me animals do have a kind of expiration date. There's a kind of deliciousness arc to an animal's life.

GRETCHEN MAFI: When we think about older animals, there is quite a bit of difference in taste and quality of that product because they're going to be tougher. They're not going to be as tender. Older animals aren't cattle. For their entire lives, they're just on grass, on pasture. And so that's not a flavor that we're accustomed to because that...

HODGES: Wait. Animals taste differently as they get older, like grass and corn?

MAFI: Yeah 'cause that - what an animal is fed kind of determines the flavor that the meat tastes like. So that can make some big differences as well.

HODGES: So as the animals - the chickens, the cows, the pigs - they get older, they start tasting like whatever the farmers are feeding them. That is not the meat flavor people pay for. People don't want grassy steaks. So farmers and ranchers are in this situation where they're staring out at more and more animals that are worth less and less to sell as meat. But it still costs money to store them - to feed them, to house them, to pay people to take care of them. So the economic thing to do is to kill the animals, even if nobody's going to get to eat them.

WOODS: It turns out, the murderer was the invisible hand of the market.

HODGES: Sure (laughter).

WOODS: Thanks very much, Lauren. Great to have you here.

HODGES: You're welcome.


WOODS: For our final question, Alexi Horowitz-Ghazi is here.

HOROWITZ-GHAZI: Hello, Darian.

WOODS: Let's hear about your question.

HOROWITZ-GHAZI: OK. So this one comes from listener Joe Zimmerman. He's wondering about how comedians and musicians and performers who rely on, like, live audiences and film sets and that sort of stuff are going to get by over the next year as things continue to be shut down.

WOODS: Right. And I mean, I assume you started off looking at all those Zoom concerts and those Instagram Live performances.

HOROWITZ-GHAZI: That's where I started, but then I found out about this other thing that a lot of performers are doing right now, which was honestly just way more fun and way weirder.


HOROWITZ-GHAZI: OK. So there's this group of performers who, right at this moment, have realized that they've kind of been sitting on an untapped resource. These aren't, like, open mic-level performers. These are people who have somebody out there in the world who knows their name.

WOODS: Famous people - you're talking about famous people.

HOROWITZ-GHAZI: Well, fame-ish (ph).

WOODS: Fame-ish.

HOROWITZ-GHAZI: And that is what led me to order that surprise birthday message to my aunt Vovi you heard at the top of the show.


THOMAS: (As the Soup Nazi) It's the soup Nazi from "Seinfeld." Remember me? No soup for you.

VOVI: Oh, my God. How did you find this guy?

HOROWITZ-GHAZI: I explained to her that there's this website called It's been around for a few years, but it is booming right now during the pandemic. It's basically a marketplace where celebrities can make a little extra money by recording personalized video messages. And it monetizes fame in this way that feels kind of custom-built for life in lockdown because this allows celebrities to put out new material through these weird, like, bespoke encounters. And nobody on either side ever has to leave the couch, including me and my aunt Vovi. That's where we were sitting, on our respective couches, when we started scrolling through the Cameo website together, taking a look at which celebrities were for sale these days.

VOVI: I don't even know a lot of these people. I'd have to - oh, Lance Bass. No way (laughter). Oh, my God.

WOODS: Lance Bass, the second-most famous member of the boy band NSYNC.

HOROWITZ-GHAZI: Yeah, definitely No. 2.

He may be one of the bigger fish in the Cameo pond.

VOVI: I mean, that's a huge thing. I mean, that guy was big.

HOROWITZ-GHAZI: That's a big bass.

VOVI: Yeah (laughter).

HOROWITZ-GHAZI: Going to this website is kind of like being plopped into the hot tub at the biggest, like, B, C, D-list reality TV show you've ever seen.

WOODS: So like a celebrity alphabet soup.



SEAN PAUL: Ay yo, what's up, peeps (ph)? This is Sean Paul.

LINDSAY LOHAN: I'm Lindsay Lohan.

JAMES VAN DER BEEK: It's James Van Der Beek.

STORMY DANIELS: Hi, everybody. Stormy Daniels here.

SEAN SPICER: Hey, Ida (ph). It's Sean Spicer.

ROD BLAGOJEVICH: Hey. It's Rod Blagojevich.

JON LOVITZ: Hey, Alyssa (ph). Jon Lovitz here. I want to congratulate you on graduating college.

HOROWITZ-GHAZI: The site has seen more than a 400% increase in business since the lockdown's began. That's according to the CEO of Cameo Steven Galanis. People are still apparently willing to pay for the thrill of being close to somebody famous - even during a recession.

STEVEN GALANIS: And our average video's $45, so the price point - yeah, we're certainly not selling Clorox or toilet paper. But you know, we're also not selling Birkin bags either.

HOROWITZ-GHAZI: Cameo takes a 25% cut of proceeds, but they let the celebrities set their own price. And the celebrities have to walk this tricky economic line between ego and income. And Steven told me, the celebrities who make the most money have found this kind of pricing sweet spot for their level of fame. Like, one of the highest-earning celebrities on the platform isn't necessarily even a household name.

GILBERT GOTTFRIED: You might know me from - I was the voice of the parrot in "Aladdin." I was in "Beverly Hills Cop II," "Hollywood Squares," loads of stuff.

HOROWITZ-GHAZI: This is comedian Gilbert Gottfried. He told me that when he first encountered the site a couple of years ago, deciding whether to join involved a dilemma that will be familiar to anybody in the almost-famous set.

GOTTFRIED: When reality TV first started, I would get calls to do it. And I was turning them all down 'cause I thought this is horrible - reality TV. And then after a while, you figure - well, this is TV now.

HOROWITZ-GHAZI: These days, he might wake up to eight or nine requests with more trickling in throughout the day. He charges $150 per video, which means that even after paying a 25% commission to Cameo, Gilbert can still clear over $1,000 a day for less than 20 minutes of talking into his cellphone. Gilbert told me that for the time being, his Cameo gigs have become a major part of his income. He says he does worry about the risk of devaluing his celebrity mystique by becoming too accessible. And he admits the idea of doing on-demand birthday shout outs for fans might have horrified previous generations of celebrities.

GOTTFRIED: Like, years ago, people couldn't get in touch with Humphrey Bogart and say, hey, we thought "Casablanca" sucked. You know? So...


HOROWITZ-GHAZI: Hey, Humphrey. Tell my kid here's looking at him.

GOTTFRIED: Yes. Yeah (laughter).

WOODS: Thanks, Alexi.

HOROWITZ-GHAZI: Thank you, Darian.


PAUL: Bless them, and there ain't no stress. Ain't no second-guessing. A man can't test him. See me now. It's Sean Paul. The girls, they move around. All of us standing tall. And I would like to say, hey (ph). You don't know - PLANET MONEY loves answering your questions, see? So big up PLANET MONEY anytime. We read them all, so keep sending them right there at - dot. Bless them.

(Singing) Well, woman, the way the time cold, I want to be keeping you warm. I got the right temperature for shelter you from the sun. Oh, Lord.

WOODS: Thank you, Sean Paul. And check out PLANET MONEY on Instagram, Facebook, Twitter and now TikTok - all @planetmoney. The PLANET MONEY TikTok, by the way, is ridiculous and amazing. They're like these suburban infomercials edited by a maniac but with lessons about the economy.

I produced today's episode with Liza Yeager, Alexi Horowitz-Ghazi and Nick Fountain. Alex Goldmark is our supervising producer, and Bryant Urstadt edits the show. I'm Darian Woods. This is NPR. Thanks for listening.

As we were recording this show we've seen protests erupt throughout the country over the death of George Floyd, racism and police brutality. PLANET MONEY's daily podcast The Indicator put out two episodes this week about racism, inequality and police violence, which are really worth a listen. And we welcome your questions and suggestions on what you want to hear about in future episodes.

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