Central Air - This Podcast Is Affordable

Episode Date: February 12, 2026

On this week's show: everyone loves to talk about affordability these days, or more specifically, they love to complain about unaffordability. But what are they actually complaining about? At least four things, we think: inflation, interest rates, real incomes, and income distribution — or, basically, the whole economy. We invited Natasha Sarin, a professor at Yale Law School who co-directs The Budget Lab there, and who previously served as an economic official at the Treasury Department under President Biden, to join us for this conversation. Plus: interest rates, and what might happen to them if President Trump gets his way on monetary policy, grading Fed Chair nominee Kevin Warsh on a curve, and “white people tacos."Sign up for updates from Central Air at www.centralairpodcast.com. This is a public episode. If you'd like to discuss this with other subscribers or get access to bonus episodes, visit www.centralairpodcast.com/subscribe

Welcome to Central Air, the show where the temperature is always just right. I'm Josh Barrow. I'm here with Megan McArdle, columnist at The Washington Post. Megan, it was good to seeing you this weekend. Megan and I were on the Hill Sunday on News Nation together. It was excellent. We also had a very nice breakfast. A delicious green and poached egg bowl. Yeah. So all in all, a good time was had. Yeah, we had breakfast at the restaurant in the Hamilton Hotel in D.C., which is now officially a centrist Mecca in Washington, because that's where they hold the annual welcome. Fest conference. So it was, it was good to be back home. And then it was good to get the hell out of Washington and get back to New York. I beg your pardon. Washington is the best city.

Do you agree with that? Ben Dreyfus is also here. He writes the sub-sac newsletter, calm down. And he's also just fled Washington. Yeah. Oh, no, I love Washington as a great place to leave. It's a great place to see in that rear view mirror. You are never having a cocktail in our basement again, Ben. That's it. I mean, you guys do have a beautiful cocktail basement, but it's the rest, it's the above ground of the city I didn't like. We're also joined this week by Natasha Seren. Natasha is a professor at Yale Law School and co-director of the budget lab there.

In the Biden administration, she served as deputy assistant secretary for economic policy and also as counselor to Secretary Janet Yellen. So you, I guess, have also fled Washington, right? I guess so. I live in New York now. But talking to you all is making me both Miss Washington and Hungary. So that's where I am. Ben, what is that giant thing you have? It's a mason jar filled with cold brew iced tea.

I thought that was hot tea in there, which was slightly, I was envisioning something slightly more deranged than what you actually have. No, you can't drink boiling hot tea out of a mason jar, Josh. That's insane. There's a lot of things you do that I would say one shouldn't do. Listeners should not be picturing some like modest little cute influencer. Mason jar. No.

This is basically like what your grandmother used to put watermelon pickles in and you would eat that jar all winter. He has like 90 fluid ounces of tea

and six tea bags. It's not like hot tea where you can just put one in and make it in a second. This is cold brew. So you need to have a lot and make it before you go to bed, put it in the fridge,

and then when you wake up in the morning you've got a nice, cold, gallon of... And you're going to drink that gallon while doing this podcast, you must have like the bladder of power, Ben. I mean, I've been an alcoholic for way too long, Megan. I can hold peeing for with the best of all. Oh, my God. Now that Ben is middle-aged, he's taken the skills he developed as an alcoholic and is using them to chug cold brew tea. So Natasha's here this week and we're going to have like an economics fest this week, which is, you know, obviously a favorite thing for all of us here at Central Air.

Love it. And we're going to talk about the Federal Reserve. We're going to talk about Trump's pick of Kevin Warsh to lead the Federal Reserve and what a Warsh Fed might look like. But I kind of want to start broad because everyone loves to talk about affordability these days. And one of the reasons everyone loves to talk about it is you can make an affordability pitch from any place on the ideological spectrum, who doesn't want to be able to afford things. The problem comes when you try to turn that urge for affordability into public policy. You know, what do you even do and will it work and will it make voters happy? that's been a pitfall for several administrations, including the Biden and Trump administrations.

And so I guess first, to start, I think we should define a little bit what affordability even is, what people are talking about when they talk about affordability. And I see like four complaints that are all wrapped up in here. The first is like the oldest story in politics, which is that people want higher real incomes, bigger houses, bigger cars, sending their kids to the preferred schools, etc. So just, you know, more stuff, more income. The second is inflation. People are mad when nominal prices go up. They're mad even if they're nominal income. incomes go up. They feel poorer when there's inflation. There's been elevated inflation now, especially elevated inflation a few years ago. The third thing is interest rates, which I think is under-discust because interest rates are not included in measures of inflation, but there are a very real cost burden for households, and I think that's been an undertold political story the last few years. And then the fourth is like a distribution story, people feeling that they personally should

be able to afford more stuff. And that gets you, there's Republican and Democratic versions of this, rent control, student debt forgiveness, no tax on tips. you know, billionaire identity politics stuff, you can sort of have that anywhere. But there are certain things about like things should be more personally affordable for me. Natasha, does that sound right to you? I mean, as someone who was recently working on making economic policy and administration, when people say things aren't affordable enough, is that the list of things that one thinks about? I think that's roughly the list.

And I think about this through a bit of a different type of categorization, Josh, because if you think about the last year, it feels like this term affordability. crisis, you are hearing it and seeing it really everywhere. And it's been kind of puzzling for economists because if you look at any measure of people's wages and inflation and any people, so people anywhere on the income distribution, it actually looks like they are, the world is becoming more affordable, not less affordable, because their wages are going up faster than the cost of the goods that they are buying at the grocery store. or the costs of goods that they are trying to purchase from their mall or whatever.

And that's, like, really interesting because, like, I've been kind of struggling with these facts. Like, on the one hand, like, the world is getting more affordable, at least over this horizon when we've all been talking about affordability is kind of this really organizing principle for how we think about economic policy. But on the other hand, like, something very real is happening. Like, people are feeling something. And I think that something has to do with a mix of the factors that you've, been talking about. Turns out like when people's wages go up, they think of that as like something

that is they've earned. You know, they're, they are getting promoted at work. They're sort of being rewarded for the fact that they're working very hard. But inflation, you think of as something that's happening to you. But on the other hand, they're like the flip sides of the same coin, right? So if the costs of paying your workers goes up, the costs of the goods goes up too. But people don't make that connectivity. And I think the salience of affordability has to do it. bit with what you're describing. It's like the prices of groceries have gone up, but also all of these other things, like kind of our basic needs, like the cost of housing, the cost of health care, the cost of education, the cost of childcare. That's been going up for some time, but we're kind of

focused on it because we're feeling and seeing these like very visible price increases over the most, over a very relatively short horizon. I guess that's a money illusion story. It's basically that, you know, the people focus on the nominal prices and they don't notice that their real incomes are going up. We've had both Republicans telling this story now, Democrats telling the story a few years ago. It feels very unsatisfying, even if it's true. I mean, you know, more broadly in politics, like telling voters that, you know, the thing they're upset about they shouldn't be upset about or that, you know, they just misunderstand the situation. It just never seems to work. But, I mean, I guess sometimes it's true is the problem. I've been trying to think about, like, how to explain

this, because as you know, like, we're all sort of trying to think through it. Those of us who are involved in thinking about economic policy and academics who are thinking about how to understand the economics of and how economics has evolved over this recent moment when we've experienced inflation really for the first time in my lifetime, right? I feel like it's a mistake to tell people like what you're feeling isn't real. But also there is something like real that is underpinning this, right? I rent my apartment in New York. I'm sure you, I don't actually know whether you guys are renters or owners. But if you do rent your apartment, one has, half of renters spend more than 30% of their income on housing. A quarter of people in this

country spend more than 50% of what they make on just housing costs. And so something is happening. It's just, I think it conflates a lot of different pieces. It's like inflation is happening and the costs of the prices that you see have gone up. But also these like other underlying, all the 22 million Americans are seeing healthcare costs premiums double this year, right? Stuff is going on, but I feel like it's this like basic needs are getting more expensive over time. And what inflation has done is kind of focus the mind on that fact. And people are upset about it, kind of understandably. I also think you have to think about kind of expectations, right? Is it seems in some sense irrational that people would see their wages go up more than price.

and react badly to that. But there's a couple things going on there. I mean, number one is just that not everyone's wages go up, right? That's an average. There are some people whose wages are going up more, but often in a lot of industries, the way you get a raise is by switching jobs, and right now, labor turnover is quite low.

People aren't getting fired, but they're also not getting hired. And so if you're in an industry like journalism, where that's true, you know, you've just seen your paycheck eaten and you didn't get the compensating wage, But the other thing is people really like to be able to plan. And so when they get a raise, right, they figure, they think about the things they could do with that raise. And then they go to the grocery store, and it turns out that because prices went up, they can't do all the things that they were thinking about when they got the raise. And if you go back even further to the end of the pandemic, right, the story I tell about a lot of people, unemployment benefits for 60% of the population were more than they had made working.

And that, I think, was an appropriate response to the pandemic emergency. I supported it. I'm willing to debate whether it was a good idea. But it wasn't crazy. I expected inflation from this. I was, I think, an outlier was like, well, there's just going to be more money chasing the same goods and services. And in fact, it turned out fewer goods and services.

So, of course, inflation's going to rise. But those people weren't thinking that way. And at the end of the pandemic, people come out and they've got these giant dragon hordes of cash. they're very excited, and a lot of them are telling reporters like, I'm not going back to my crappy hospitality job. I'm going to go do something different. I'm going to start a business, or I'm going to go back to school, or I'm going to do something. And then it turned out that actually most of that just got eaten by the fact that there was the same amount of stuff in the economy or a little less stuff and a whole lot of money, and it just dissolved into inflation.

And so even though those people aren't necessarily worse off than they were in 2019, they're a lot worse off than they expected to be in 2021. And that story, I think, is driving, like, people just want to get back to the expectations they had in 2021. And that's not possible to deliver. But you are not definitely not going to get anywhere politically by having an economics seminar on inflation dynamics and why that's not a real, a lot of possibility. So all of that really resonates with me. And I'd just say, like, one more thing about it, which is, I think partly this afforded, the way we think about affordability, I've almost been calling it like an

economic stability crisis. Like a lot about the world right now just feels inherently uncertain. And it's, we live through the pandemic and that was a thing we never expected we would have to live through and we did. And now, like, there's this potential like of artificial intelligence. Is it going to take everyone's jobs such that we're going to be in a moment again when we're going to be relying on an unemployment insurance system for potentially swaths of the population, which might not be ready to meet that moment. And also, if you ask Gen Zian millennials, do they think they're going to get a dollar of social security benefits into a program that they've paid into as they've been working their whole lives? Over 50% of them tell you the answer to that is no. And so then there's this

expectation or question about how am I going to plan for my retirement and is sort of this social safety net that has existed for generations before me going to exist for me as well. So I wonder if all of this is a bit of like, it's like a catch-all phrase. for a totally real thing that is happening, which is it feels like almost the threads of the social safety net, the threads of the way the economy is historically worked. Like, all of that is fraying. And that uncertainty is resulting in like an understandable economic angst and an understandable sort of demand from policymakers to like meet the moment. And I'm not sure their ideas like quite have yet. This is probably the first time in our lifetimes that we've sort of gone through one of these inflationary spikes.

You know, right? Where things changed so much. So that I can hear people complaining about, you know, ground beef going up to $8 or whatever it is. And you actually can see it in this visible way that really you've never seen before in my lifetime. And it reminds me sort of like my parents when I moved to New York or when I moved to Los Angeles. And they said, oh, you got an apartment. And I said, it's $1,600 a month, Mom. And she said, oh, you know, in 1973, that was $200.

And you then have to explain like, oh, well, you know, that's just nominal prices. Everything's gone up and it's all different now. You know, I make more and we can all live like that. But she's got it locked in her head because she was 22 years old at that time. She was 22 years old and she lives in West Hollywood. She'll never not see $300 as like the things, things are supposed to cost them. And I just wonder like how many people have this number stuck in their head from 2019 or 2012 where it's just that's when they were 22 and they entered the world, you know? Or like that's like whatever it was that that is what it is so that no matter what happens after it, you know, DoorDash is always supposed to operate at a loss.

Like there's always supposed to be cheaper because that's what things were in the 2010s. Well, and also the people who do know that you have to kind of, when inflation ends, you don't go back to the old prices. Those are the people who lived through the 1970s inflation as adults, right? Right. Those people are now in their 70s and 80s. Everyone else just expects that inflation. Like, I vaguely remember inflation. Like, I remember my mother being at the grocery store and not.

having quite enough money and having to put stuff back because they'd raised prices on stuff, and she hadn't noticed until she got to the register. And I remember when the price of subway tokens went up and there was huge arbitrage. But I was five, right? And so most people, for most, for my entire life, inflation was not a real thing. And that's one way in which I think inflation was allowed to get out of hand. Because I would have arguments with people about inflation who were younger than me and hadn't, and didn't remember it at all because they were not worn when it happened. And they were just treating inflation in the same way that I heard people treating housing prices dropping nationwide right before the financial crisis is I would say, like,

what happens if prices drop on all this debt? And they would say everyone had exactly the same answer, which was the nation has not had a sustained nationwide decrease in housing prices since the Great Depression. And factually, that is true. But in their minds, saying it hadn't happened since the Great Depression was the same thing as saying it was not possible. And it turned out it was possible. And I think a lot of people who were 50 and younger going into the pandemic had that same mental model, that it just wasn't really possible, even though people like Jason Furman, Larry Summers, and so forth, were saying it was. Well, and the other thing there, and this is something that I definitely got wrong going into this last crisis, is that when you have a

severe economic crisis and you're trying to stimulate your way out of it, there's something of a tradeoff between inflation and shrinking real GDP. You can understimulate the economy and you don't get a substantial inflation, but you get high unemployment. It takes years to crawl out. This was sort of the experience we had after the financial crisis. And, you know, from the center through to the left, one of the key lessons people took from the financial crisis was we under did the stimulus. We need to not make that mistake next time. And I think my view in a lot of people's view was, you know, like a bit of inflation is sort of like a more equitable way of spreading the than having 8% of the population end up unemployed who otherwise wouldn't be.

And I think what we learned politically was that people absolutely hated that. I mean, you know, the recovery worked and that we recovered very quickly out of COVID. You also got a certain amount of wage compression, which I think was a goal for a lot of Democrats, that you wanted wages to rise faster at the bottom end of the spectrum. That would make the economy fairer. A lot of people just experienced that as restaurants got way more expensive because all the hospitality employees had to be paid a lot more. Were you surprised by the way that that played out, Natasha?

I mean, I guess were you surprised by the volume of the inflation and were you surprised by the extreme negative reaction to the inflation, even though we did avoid the version of what happened after 2008? So I think you're absolutely right about the tradeoffs. And it's interesting. It's like you are in a moment where I think on one hand, you totally, the sort of economist version of this question about how you navigate these tradeoffs is, and again, and both bad outcomes, but it's almost like unemployment spells, we know that, you know, if you graduate into a labor market that is in a downturn, you never recover from that fact. You know, we know there's like a lot of evidence, like long bouts of unemployment are like incredibly bad, not just for the people that experience them, but also for children in those families who are living with the fact that,

you know, there's a really difficult moment that they're navigating through. I wrote my senior thesis. I was an intern at the National Economic Council in 2010, and that was right around the aftermath of navigating through the financial crisis. It's so weird for me, by the way, now getting experts on the show who are substantially younger than me, because in my head, I'm still 30. It will continue to get weirder for the rest of your life, Josh. Well, with that mush test, Josh, you look just not a day over. I make pop culture references from the 90s to my students who now. look at me with blank stairs or I asked them where they were when Lehman fell. And they say, you know, I was in, I was five years old. And so it's all very off-putting. It all just like

happens really fast. At least they're not saying what's Lehman. Yeah. That's true. Anyway, sorry, I interrupted. No, I wrote my thesis as an undergraduate inspired by an Atlantic piece that Don Pack had written at the time where he cited a statistic that was truly crazy, which was that in the year following the failure of Lehman, calls to the National Domestic Violence Hotline had more than doubled. And I, so there was this, like, there are really bad social consequences associated with downturns and downturns in the labor market and long spells of unemployment.

And so you kind of understand that you don't make the same mistakes you made last time. You understand that in the aftermath of the pandemic, we really worked very hard to try to not have that same type of relatively slow or stalled or not as speedy, I would say, of a labor market recovery. But the flip side is that, as you were describing, like, inflation is kind of felt by everyone. You know, it's not actually, and that has its own set of consequences. And you can kind of debate, like lesser of two evils, worse of two evils. Like, I'm not entirely sure how to think about those things.

Politically, you all are really the experts. But I think that Ben said really resonated very deeply with me, which is, in part, the challenge for this moment is, like, you all, we all remember what the prices were in 2019. And so we're kind of anchored to this difference in this change that has happened relatively quickly. And so on some level, like, from a policy perspective, is the right, what is the response to that fact? You can tell people about their wages and how fast they've grown and all the stuff. But in reality, like, getting de-anchored from that is probably a thing that is going to take time. Like, it is just going to, and over time, our memories will fade and these will become the prices that are the new normal prices. But that is very unsatisfying.

And so you understand why there is this whole push to try to think about ways in which you can tackle what is kind of nebulous, this like affordability or economic security type of moment. Yeah, Megan, I've been wondering about what the timeline is for that because clearly we went through the 70s and the price level never went back down and people, maybe in 1974, people had an expectation that the price level was eventually going to come back down. And at some point, they learned that that was not true. By 1984, you had Ronald Reagan running for re-election with, you know, the famous morning in America ad brags that like they brought down interest rates by half. They brought down inflation by half. Inflation was still substantially higher than it is today. that was apparently considered a success by the electorate by 1984. I mean, part of the problem is you had Donald Trump out there saying that he was going to lower the price level.

You probably shouldn't have promised that. But I'm wondering, you know, people eventually will have to come to terms with the fact that the price level is not going back to 2019 levels. I just don't know how long that's going to take. Yeah, but it takes a long time. And also you have to remember about the 80s. There's an old – I was in IT before I went to business school. And there's an old joke they used to tell about a programmer who, who's really struggling with a problem

and they've been trying to crack it for months and he finally gives up, he goes outside to have a cigarette because it was the 90s and he finds one of his colleagues rhythmically hitting his head against a brick wall. And he says, why are you doing that? And he says, because it feels so good when you stop. And that was where the American public was

by 1982, 1983. They'd had a decade of terrible inflation, they'd had oil shocks, they'd had this deep, horrible reshors, recession. And at that point, you're like, whoa, inflation's only 4%. This is fantastic. Like, I am living good. But you don't really want to go through the process that makes you grateful to get inflation down to like 3.5%. Right? You would much rather live in a society where things have not gotten that bad. And so people are still anchored on the old prices. But that has a political cost. And I

I think broadly, one thing that we have learned about this whole experience, which I don't think I thought through either. Look, I've always been a supporter of the broad economic consensus that you should have 2 to 3% inflation because it's much better than unemployment. Because unemployment is terrible and lifetime damaging. You know, it's one of the few things people don't even psychologically recover from. I was long-term unemployed for two years after business school because 2001 recession. And a data point I picked up is that, you know, people who get divorced, people who become widowed, people who have all of these terrible life events, if you look at their kind of happiness, they recover within about 18 months and they get back to where roughly their baseline happiness was.

The only thing where that's not true is long-term unemployment. And so I thought, yeah, you know, spread the pain, right? Everyone has a little bit of pain much better than the sharp, terrible pain of the people who are unemployed. And I think, again, rationally, logically true. But the problem politically with that is, instead of having a small group of voters who had something very bad happen, you now have a huge group of voters, all of them, who had something mildly bad happen. And politically, that tradeoff might be not so great. By the way, can I say one thing as like one econ thing, which is, and I would be remiss as an economist, not to point it out, you actually do not want the price. level to go down. Right. We actually, that happens when there is a economic crisis. So like that is,

so in part like a little bit, maybe the mistake is like going out saying prices on day one are going to go down because that's a ridiculous statement. That means we're going to be in a recessionary moment. You don't want that. Like, none of, no one does. And so I worry we're a bit in this like affordability doom loop at the moment where like you keep making these promises that are actually like fundamentally bad for the economy and then you are get you're elected. And it turns out like you can't actually do anything to accomplish what you set out to do because doing so would actually undermine the economy's strength, not like boost it. Can I take us back to like 2022, 2023? Because I mean, this is before affordability was the buzzword that people were using,

but that's sort of the point where it's becoming clear that like the dominant economic story is not about the rapid recovery out of COVID, but is about. people's anger over inflation and costs. And there was a suite of things that the Biden administration was doing to try to be responsive to this. I was broadly pretty unimpressed with, and I think that voters were as well. But there were a lot of little things, whereas like, we're going to fight consolidation in the meatpacking industry, and that that's the reason that beef has gotten so expensive. We're going to cancel a bunch of student debts. You know, we're going to do these big expansions of government spending programs trying to do a big, you know, national child care benefit,

basically saying, well, specific things that are expensive for you, the government's going to start paying for them. We're going to ban junk fees so that a hotel can't charge you a resort fee anymore. Interestingly, some of these things are things the Trump administration has subsequently picked up with a similar lack of political success. But I guess my first question for Natasha is like, was the sense inside the building that this stuff was going to work? Because it seems like inflation is a macroeconomic problem. It needs a matter. You can't go around and push down one individual price and another individual price because if there's too much money chasing a limited amount of resources in the economy, then that has to push up the price level somewhere. So it's interesting, Josh, as you're describing it, because the reality is, and this is something that, you know, economists of all stripes will tell you, like, there really isn't like a magic wand.

There's no, like, check you can send or interest rate you can demand to be lowered or. rent you can freeze that is going to solve the fact that we were in an inflationary moment, that we are still, frankly. And by the way, there's a deep irony and a perversity in all of this because Trump could actually do something to instantaneously relieve pressure on prices. And that something would be to get rid of the tariffs that are at the highest levels that we've seen in the last century, which are incredibly inflationary. So, like, in some sense, like, he's actually well equipped to be able to do something tangible,

and yet the ideas that you've seen, and I've been kind of struck by the ideas that you're seeing things that are actually not just like they're orthogonal to this set of issues. In many cases, they actually make the problems worse. So if you think about something that sounds attractive, let's cap credit card interest rates. The reality is that by capping credit card interest rates, even if you could do that, sort of from the executive's perspective, unilaterally, without Congress, which I don't entirely know how you would do. But let's say you could, that's actually going to raise the cost of credit for Americans, because it turns out they're going to be priced out of the credit card market,

and the result is they're going to have to go to more expensive alternatives, things like payday lenders or overdrafting on their debit account. And so I think it's hard. I think this is a hard thing. It's hard because you want there to be and you want to have economic policymakers around you who are able to produce solutions. And it's a place where there aren't as many, a lot, and it's not that there aren't solutions. It's that a lot of the solutions require you to take a longer-term lens. They require you to say,

why are housing costs so expensive in this country, in part because we have a crisis of housing supply, so we need to build. That doesn't happen overnight. It takes time. And I think that there's like a deep sort of something that's unsatisfying for myopic politicians about the fact that a lot of the solutions to the problems, we need more child care supply, we need more people working in this industry. Like, how do you do that?

And how do you bring people in or to retrain people who are working in other sectors of the economy where jobs aren't growing as quickly? Like, that stuff has a long tail. And I think that is a bit of a challenge. So what are the solutions? Is it just that you need deficit reduction? And the, I mean, Well, I mean, one other thing, and we'll talk about interest rates, the Fed can raise interest rates, and that does fight inflation, but then you have higher interest rates and people are mad about that. But is it, is the menu that's short. Well, and then I guess the third thing that you were alluding to there is you can do things that raise real economic growth, which is always nice. But if that was easy, then people would just do it. Yeah. I mean, so two sort of things that feel important to grapple with. One is that you can raise interest rates to tame inflation. And in fact, you're hearing, by the way, it's been kind of as we've been watching the nature of various attacks on central bank independence that have been like really disheartening to those of us who have studied the history of what happens when you try to politicize central banks. Like,

something that's been kind of heartening to watch is you've been seeing pretty robust debate among the people currently on the board of governors at the Federal Reserve about what exactly to do in this economic moment, right? Because on the one hand, inflation is, still elevated relative to the Federal Reserve's 2% inflation target. And you have policies like tariffs that are inflationary. And so you're kind of like worried about the fact that inflation might again start to take up. On the flip side, you also have a labor market, as Megan was describing earlier, which is kind of is starting to weaken. And it feels this like it's not just weakening. We're in this kind of like no higher, no fire moment basically across like wide swaths of the

economy where it feels like workers are almost like unable or unwilling to kind of take the kind of risks that you would expect in a robust labor market because they're worried that will a job sit ready for me, especially at a moment where you might have this like massive tectonic shift in the way the economy works on the horizon with AI. And then there's like the third thing, which is like, what are the right policies? Do you just try to boost growth? Boosting growth does a lot. But again, what does boosting growth really mean? I think it's possible that you might find yourself with like a massive productivity boom from technology like AI, but it's hard to predict when or what shape exactly that's going to take

or what it's going to mean for the labor market on the flip side. And so all of that like feels like very plausible, but not super, it's not like you want to bank on the idea that over the course of the next year or the next three years, you're going to see this massive productivity boom. And so I guess my answer to you, which is going to feel a little bit, I hope feel somewhat satisfactory, but won't feel fully satisfactory, is that I don't think there are, like, quick fix solutions.

I think some of the stuff you described, by the way, is, like, generally good. Like, no, junk fees are bad, even if getting rid of the junk fee, all that does is it sort of brings clarity about what the true price of your ticket for your concert or checking into your hotel staying overnight actually is, because consumers make more informed decisions when costs aren't hidden from them. So, like, some of that stuff is, like, good policy. the like solutions for this set of problems about the fact that housing costs are too high in this country and we dedicate too much of our budget to housing or the fact that you have a labor market that is aging such that it is hard to find people who are able to work in certain sectors of the economy where there is real need like elder care like child care like those types of solutions are not actually like fixed tomorrow solutions there are solutions but they

require more time and dedicated investment from policymakers. And also, you said deficit reduction, that's a big piece of this, too, because part of the reason why borrowing costs are high or rising in this country has to do with the fact that we're on an unsustainable fiscal trajectory. And like, we should grapple with that. And Social Security Trust Fund is going to be extinguished in 2032. Like, we need to grapple with that. And this was central in our politics 35 years ago. I mean, if you look at the 1992 presidential debates, they're talking about the need to reduce the deficit, not for some like eat your vegetables, like abstract moral reason the way that politicians can talk about it now. They're saying you need to cut the deficits and mortgage rates will be lower.

Totally. Like there was this sense in our politics that when the government borrows money, that costs you money as someone who also wants to borrow. Ross Perot's entire presidential campaign, right, was about fiscal responsibility. Like something I'm really interested in. I think we talked about this a little bit, Josh, in the past is like, what has happened? Why has that shift occurred, right? because it did feel like deficit reduction was like central.

Because we went through 30 years when it didn't really matter. Yeah. We went through 30 years when the government could borrow as much money as it wanted and interest rates were still low and you could get a 3% mortgage. And, you know, in addition to like the inflation not being in memory for most people, this, you know, these interest rate tradeoffs are not in memory for most people, but they're back. I want to take a quick break and then I want to come back and talk about the Fed with Natasha Surin. So we talked some about interest rates and how people are, you know, that's one of the key reasons that people are upset. The president understands that in his solution is the Fed should cut interest rates, which seems pretty straightforward. And then he's also doing other stuff.

He's having Fannie and Freddie go out and buy mortgage bonds in the market, the intention of which is that that will basically cause mortgage rates to go down. And so I guess my first question is, you know, if people want the 4% mortgage back, Can we get it back? Is there a policy solution that we'll bring it back? And does the president's approach of, you know, just lower rates, will that get it back? So the president's approach won't get it back, and it won't get it back because it runs real risks of making economic problems in this country worse, not better. And the reason I know that is because we have sort of here in the United States run this exact rodeo before. We have a central bank that is intended to be insulated from political pressure because it's important that it focuses on its dual mandate. It's dual mandate is to care about what's happening in employment and to care about what's happening to the price level. And that's how it makes decisions about what interest rates should be. If instead it makes interest rate decisions because of the whims of the executive, well, then the market loses faith that it's focused on its sort of dual mandate of inflation and employment

and starts to anticipate that in the future, we're going to have runaway problems with inflation. And so you kind of get into this situation and we did it in the 70s when President Nixon put pressure and Arthur Burns, who was chairman of the Federal Reserve, to lower interest rates in advance of a presidential election that he got his lower interest rates, but we also saw inflation increased from 3 to 13 percent over the course of two years. And so I actually think that I'm really nervous about these threats to central bank independence that you've seen time and time again over the course of the last year, because I think that they indicate that we might be moving in a direction or we could potentially, if the president has his way,

be moving in a direction or the Federal Reserve is not focused on its sort of central stability of the economy role, but instead trying to manipulate what the interest rate is so that people feel like, oh, interest rates have gone down. But that's actually not even going to work with respect to the interest rates that are tangible to like real people. You know, the interest rates the Federal Reserve sets is like the rate at which banks borrow from one another. It is not going to translate, even if he got his 1% interest rate. rate that he is sort of advocated for, which literally no one on the Federal Reserve Board thinks makes any sense. The debate is about whether we marginally cut rates or marginally keep rates where they

are. Even if we got that, mortgage rates aren't coming down to 4% or anything like it. Because people will understand that this is kind of like, it's like, this isn't actually a statement about what economic conditions are. It's instead like political pressures being applied, such that interest rates are going to have to come way back up very quickly in order to deal with the inflation that will follow. So I understand why it is bad for, to when you have like a, when you go buy a car, that you can buy a car, you take a car loan out. And like you can take it way too long, right? You can take like a nine-year car loan out that looks.

And I get that like why it's bad is you end up paying so much more over the course of that thing. America is totally used to like a 30-year mortgage. So I was a little shocked last year that when Trump's little buddy proposed the 50-year mortgage with like nominally lower rates that would obviously be more expensive in the end. that people didn't like it. Like, I understand why it's bad, and I understand why economists didn't like it. But I was a little worried that Americans would be like, great, it's given me the lower number.

And it says it's just 50 years, at which point I'll be dead. Like, do you guys have a theory of like why, for some reason, this one time Americans didn't fall for the old longer term lower rate trick? I mean, the 30-year mortgage is a creation of public policy. And the U.S. is actually fairly unusual in having this 30-year fixed-rate mortgage, and it's, you know, part of our politics of homeownership.

But I think part of how people anchor around 30 years is that it's, you know, it's a little bit shorter than a typical career. And so the idea is that you could buy a home and live in it for 30 years and then it's paid off by the time you retire. Of course, in practice, people move. It's not typical to be in the home with the same loan on it for 30 years. But I think part of the reaction people had to 50 years is that obviously the loan will not be paid off by the time you reach retirement. and that that's sort of like, it's actually, and it's related to some other bad political phenomenon we have right now where there's this idea around the country that basically elderly people shouldn't have to pay property taxes and that it's unfair that they should pay for schools because they don't have kids even though they had kids, et cetera. But I think that's part of what it is. It's this life cycle idea of like a home that you're in until you die and 50 years feels like too long for that to work.

I think that's part of where that reaction came from. I don't know. Natasha, what do you think? That makes good sense. I will say another thing that I think is really interesting. and you were just making this generational point, I think it's really interesting that you, if you want to fix the fundamental problem of housing affordability, we kind of like know the solution,

which is like build more houses. And yet you have like a really interesting set of politics around these questions, right? You even saw the president, like I forget if it was in a cabinet meeting like last week or a few weeks ago, he kind of wasn't sure whether he wanted housing prices to go up or down, right? Because, like, a lot of people's wealth is, and particularly older generations, like, wealth is tied up in their housing. And so, like, as housing prices rights, it's actually on some level, like, good for them. And it's pricing out younger people from the market and it costs their chances of homeownership. They view as, like, very unlikely to be able to attain this tenant of the American dream. No, what we need is, is low prices for buyers and high prices for sellers. Yes, exactly. Exactly.

Yeah. But that is kind of what the politics of it is. I mean, Trump is actually. just a little bit more explicit than other people in like trying to manage to that tradeoff. Yeah, totally. You know, when you have a sudden drop in home prices, it's a problem, even though it is on some level, like, increased affordability. Yeah, I mean, we're working through that problem in much of the U.S. now where basically because so many people like me, I am a homeowner, Josh, you're a homeowner. Yes. I am sitting on a 1.75% mortgage. You will carry me out of this house feet first. And so that actually created this weird situation in the market, right, where prices are nominally

high because also no one wants to take a loss, right? Like for people to sell now, they're selling for less than it was worth in 2022. And also they then have to refinance at a higher rate to buy another house. And those two things meant that like inventories collapsed, which did keep prices kind of high, but also meant no sales happened. And it's a little bit like the job market, right? where, like, wages haven't fallen, but also you kind of can't move anywhere. You're just stuck wherever you are. And we stopped building after the financial crisis. We stopped. There's, like,

and by the way, I mean, we're all sitting in, like, we're in Washington, we're in New York, where we're sitting in, like, massive metropolitan areas. Like, this isn't a story just about Manhattan and San Francisco, you know, median rents have risen faster than median income in, like, 90% of U.S. counties in the last 25 years. So like this is everyone is experiencing this. And I think it's something that is really, this is a place where there are policy solutions. It's just there are real tradeoffs between like the populations who benefit and who are disadvantaged from some of the policy solutions. But so I've been trying to figure out, you know, what is what is the centrist affordability agenda look like? Because we can see, you know, we, we can see what Zoran Mondani

runs on, which is, you know, eliminate junk fees, tighter rent controls. There's also some more market-friendly components of what he says. He wants to upzone. He wants to eliminate caps on certain kinds of business licenses, reducing fees and fines. But there's this version of the agenda, and there's a significant, there are two significant problems with it. One is that it involves a huge amount of public expenditure that you have to finance in some way, which is challenging in New York and impossible in a lot of other jurisdictions with less fiscal capacity than New York. And then the other is that he sort of wants, you know, he wants to attract private developers to build a bunch of housing while also expropriating the owners of the old buildings through new

rent controls. And I think that's challenging for attracting the capital. And he's trying to do it in this unfavorable interest rate environment, which he has no control over. But I mean, one of the key reasons that people aren't building housing right now is that it's way more expensive to finance it than it was a few years ago. You have the Trump version, which is, you know, no tax on tips, trying to actively manage interest rates, credit card interest rate caps. We've talked some about what the challenges are there. A centrist agenda, I think, sort of looks like, like deficit reduction to bring down interest rates in a way that is not inflationary, which has this unfortunate, you know, eat your vegetables vibe to it. And when you want to get

specific about it, you have to raise taxes on certain people or, you know, the, and, you know, cut entitlement programs and that sort of thing. And that's all unpopular. I'd also note, by the way, that the tariffs, which are terrible, also bring in a lot of revenue. So if you, if you get rid of those, that is a fiscal expansion. So that could be, you know, I think that the effect there on inflation is a little bit ambiguous and you need to find some other tax to raise, which is hard. And then there's certain deregulatory things. I think, you know, you want to make it easier to build natural gas infrastructure in addition to renewable energy infrastructure. There are certain other policies that can, you know, that might foster business investment. But it's,

you know, these things all involve difficult tradeoffs. And most of them, you know, produce benefits on relatively long time horizons. It's, it's kind of awful for a bumper sticker. But I don't know, am I missing something? What else belongs on that pitch? I think that's a good pitch. I mean, another version of things that belong in your pitch, by the way, is that part of the problem with the approach to immigration that we are taking in this country at the moment is we are an aging population such that prime age labor force is set to shrink over the course of the years ahead, if not for the expected influx of people coming into this country. And so something that I like really worry about is that a bunch of what is baked into our growth expectations over the course of the

next decade. And our growth expectations aren't exceptionally high over the course the next decade. That might be understated because of some of the stuff we've talked about around AI. But a bunch of what's baked in is an expectation that you're going to have a lot of potential new labor entrance into this country through immigration as you've had in recent years past. And so if you're kind of cutting that off and discouraging people from coming here, I worry that you're also going to have real labor supply problems that are going to impede some of the areas in which you actually want investment, not divestment over the course of the next many years. Let's take another break and then come back.

I want to talk specifically about Kevin Warsh and how the Fed might look in coming years. This is central error. So Donald Trump has made a choice for a new chairman of the Federal Reserve. Kevin Warsh a couple of weeks ago came down as the nominee. This is a guy who was a George W. Bush appointee to the Federal Reserve Board. He's also a veteran of the finance industry. sort of had a long history as an inflation hawk, someone who was worried that, you know, if the Fed cut interest rates too much, that that might spike inflation. Views have changed on that a little bit, which I think is related to Trump wanting to put him in that position.

Is he a good choice, Natasha? I mean, I think we kind of don't know everything you would want to know at this point, and we're going to learn some from the confirmation process. Let me give you like what, let me give you some sort of positive indicators and some less positive indicators. some positive indicators, he is someone who knows the Federal Reserve, right? He has been there. He was on the board of governors, youngest ever governor appointed to the board of governors and was on the board of governors during the financial crisis where he kind of like witnessed firsthand the importance of the central bank and the role that it plays in stabilizing an economy in a moment of downturn. And frankly, he is an extensive history and has sort of been on the record many times about

the importance of central bank independence, about, the importance about the Federal Reserve being insulated from whatever the particular political whims are of any moment. He said that in his speech at Jackson Hole just last year. There's a big annual conference at the Federal Reserve hosts in Jackson Hole every August where people give these sorts of speeches. Sorry, continue. So if you're, it's on some level, if you're kind of like watching those types of indicators and especially relative to other names that had been floated for this role as this and President Trump's appointment, you're kind of feeling relatively good, that this is like a Federal Reserve person who understands the institution

and its importance. The sort of flip side of that, though, as you were starting to describe Josh, is like you have also, especially of recent, especially since November of 2024, heard from Kevin Warsh a bit of a different tone relative, not just to his stance on interest rates, where, you know, after sort of a long career of being concerned that interest rates were going to be, were too low. He's now worried that interest rates are too high. But you've also heard a particular tone with respect to the institution itself. You've heard him talking about breaking heads. You've heard him talking about the need for regime change at the Federal Reserve. And I just worry that he's going to feel like he is sort of trying to navigate a really complicated tightrope.

You know, it's like on the one hand, you kind of like are beholden to the president who appointed you in this role. On the other hand, you're trying to safeguard institutional independence in a way that allows for economic stability. And I think that's, even in the best of intentions, that is a really hard thing to do well. And I just worry that you're at a moment where there's just real political risk to the institution. Megan, what do you make of this choice? I think it is better than the alternative. I mean, no, look. Yeah, that's also my view. Right. He could have appointed Kevin Hassett, who would have been much more pliant, or at least I can't. Kevin Hassett runs the National Economic Council in the White House

is one of the president's closest economic advisors and is, in my view, a total hack. I am not going to cast dispersions. I cannot see into Kevin Hassett's heart. But he was signaling and had been signaling for a long time that he would be more pliant. Look, one thing to remember is that the Fed ultimately protects the president more than it harms him.

if Donald Trump got the Fed to inflate, that would cost him because there would be inflation. And as we have just seen, people hate it. And so having this independent institution, it may be annoying, like, right before an election when you would really like a little burst of inflation just to get across the finish line. But Trump's not standing for re-election again. And he would suffer and Republicans would suffer if they inflated and brought on more of something that people get very upset about. Well, that's the thing, though, isn't it?

He isn't running again? Like, I mean, not to say that this would happen, but he has nothing to worry about it. Republicans do. And maybe J.D. Vance does or whoever the next president is. I think his obsession with naming things suggests that Donald Trump actually is really worried about being remembered well. And going out with five or six percent inflation is not how he's going to be remembered well. I am not going to remember him well. I suspect many people will not.

But he hopes. And we're all entitled to hope. And so, like, it would be bad for him to put someone who would give in to his real estate dude fixation on low interest rates where, like, it's like act's body spray. If some is good, more must be better. Yeah. At least if you're a teenage boy, which is often how our president thinks. And so, like, I think this is actually a sign, first of all, that maybe he understands that, although, look, I never bet on Trump understanding things. But also that he is sufficiently afraid of markets, that he has chosen the more disciplined candidate.

And I guess I think that's good. I mean, you know, this is, this is an extra credit when you're getting a zero situation. But, like, you know, if you can push that above a 50. he's going to get the gentleman's sea and glide on to the next year. One thing that should make you all feel pretty good at the moment is that the nature of how the Federal Reserve is structured, right? There are 12 voting members who set interest rates

and Kevin Warsh is one of potentially, if he has confirmed one of 12 votes. Like, there is just a limit. If he walks in saying, I want interest rates to be 1% because the president said so, like he will have 11 descents from his view, right? And his voice will not carry the day.

So I think there's some limits, frankly. I'm actually more... I mean, Bill Pulte does have a plan for that. Yes, that is true. That is true. As you mentioned, the 12 members of the Federal Reserve Board, I actually like... No, it's 12 members of the Federal Open Market Committee. The Federal Reserve Board is seven members.

As the 12 members of one of these thingy-imajis that we're talking about, I understand the Fed at the level of, like, the dual mandate, and I get it at that top level. But I have basically no idea what the Fed does beneath that. And, you know, when we talk about the individual Federal Reserve banks, like in St. Louis and San Francisco and Dallas, the only thing I know about those places is that they're occasionally robbed in movies. And the St. Louis Fed, I think, seems to operate a website that you can get data from. That's the other thing I know about it. But, like, what else do, what do these people do with the lower ones? I love this question because it actually relates to one of my concerns about what?

what you might see happen at the Federal Reserve over the course the next many years, right? So people, we talk a lot about the Federal Reserve and interest rates. And, you know, and it's a fluctuation of, like, monetary policy. So how it does that, it, like, circulates money in the economy. It votes on what the interest rate should be. That's, like, a piece of the Fed's portfolio. Another really important piece of the Fed's portfolio has to do with the supervision and regulation of financial institutions in this country. And there, at all of those Federal Reserve banks, what they're doing, frankly, is they're monitoring the nature of the financial system in their regional economy, and they're being responsive to what they view as

potential risk. They're going in and sending people in supervisory capacities to look at those institutions. They're monitoring data about what's happening in their regional economy and reporting back about that information to, like, the broader Federal Reserve ecosystem and publishing reports about it. And it's interesting, like, in some sense that the stance that you decide to take to, with respect to the supervisory and regulatory aspects of the work that the Federal Reserve does, is something where I think the chair can leave a real imprimatur. And so there, you've heard Kevin Morse say versions of, sure, it's important to have this independence of monetary policy and, like, you know, the interest rate setting is the job of the fed,

and the Fed alone, and it looks at the employment and inflation. But in these other aspects of policy, as we think about how to regulate financial institutions, for example, that's closer to policymaking at, like, the Treasury Department. And there we don't need to think about independence in exactly the same way. And I'm, like, very worried about trying to break apart which pieces of the Fed should be independent and which pieces of the Fed, there can be more of an executive imprint because I worry kind of like it's like genie out of bottle stuff. like once you start to take away aspects of what makes the central bank independent, you kind of can't disentangle its functions in that way and you run real risks institutionally.

The other thing about the regional Fed banks is that the Federal Open Market Committee, that 12-member committee that sets interest rates, all seven members of the Federal Reserve Board sit on that and those people are nominated by the President, confirmed by the Senate. The other five seats are held by regional presidents of the Federal Reserve Banks, which are chosen through this sort of, bizarre quasi-private process. They represent the interests of the banks in the in the regions. But it's part of what makes the Fed politically independent. There's five members on the on the FOMC who are not even named by the by the president at all. And so one of the things I've been worried about, I wrote about this last week, is you have Senator Tom Tillis who's saying that he's going to block any Trump nominees to the Fed unless and until they call off the dogs on this DOJ nonsense they've been doing with like pretextual criminal investigation into Jay Powell for comments that he made before Congress.

So you could conceivably have this situation where Jay Powell's term as chair ends in May. He would no longer be the chair of the Federal Reserve Board, but he would still be a member of the Federal Reserve Board. The Federal Reserve Board is full now. It has all seven of its members. And so the president would likely try to designate an acting chair. He could try to designate one of his own appointees who might be more, you know, inclined to listen to. to him about what policy should be. Then you have the Federal Open Market Committee, which gets to elect its own chair. By convention, if you are the Federal Reserve chair, if you're

Jay Powell or Janet Yellen, et cetera, then you also chair the FOMC, but they don't have to do that. They can choose their own chair. You could have a weird power struggle over monetary policy, where the president is trying to assert more direct control over the Fed. The Senate won't give him his nominee there. And then you have this big public fight. I think that could end up being a huge mess in a couple of ways. I think it would rattle the markets. It would. be unclear what monetary policy is going to be. It would really raise the political salience of Fed independence in a way that I think would not be good for the Fed. You'd have, you know, a lot more Republicans put in a position of having to choose between Fed independence and the president. I think a lot of

them would make bad choices. And so I'm hopeful that they will reach a deal so that we don't go through that. But I think that I, some Democrats seem eager to be like, you know, let's blockade the president on the Fed. Let's, you know, deny him any. And I understand the impulse. But I worry, I think the Fed is best when people pay relatively less attention to it. And I don't really want this like big political fight over Fed independence where among other things, those five regional Fed Bank presidents would become a lot more famous than they are right now. Sorry. So to be clear, the Democrats want to make it a political thing because they think like if Tom Tillis just like, you know, delays it up until the election,

then like maybe they'll have the Senate and be able to be like, you can't have Joey the clown or whatever. And they can force some more moderate prison. Well, yes, and also, I mean, if the, if the president doesn't get to pick a Fed chair, then in theory, you know, the FOMC can come together and they could, I mean, I don't think Jay Powell would want to stick, would be act, would want to be acting chair. That's a little bit too much of a fuck you to the president. But they could pick like one of the normal people who sits on the Federal Reserve Board, maybe Christopher Waller to run the FOMC. And the idea would be, you know, the president has wacky, stupid ideas about monetary policy to deny him the ability to make these appointments so that the Fed would continue with roughly its regime. And I, and I get the, the. there, both from protecting the Fed independence and from having a more appropriate monetary policy, I just worry that, you know, the very visible struggle would undermine the Fed's ability to do its job and undermine the political support for the idea that the Fed should be insulated from the president. And by the way, it's very visible struggle at a time when you were also having the Supreme Court weigh in on Federal Reserve Independence because the case with respect to Lisa Cook's Federal Reserve Board seat is ongoing, right?

And so it's like, I think there's a lot of, I too am worried. This is the Fed board member that the president has tried to fire. I too am worried about like the, I share your view that it is sort of best for the world when the Federal Reserve is doing its work without the sort of lens of a lot of focus on it from the public. And so I'm worried about that as well. Yeah. Finally this week, I want to talk about DoorDash. And I want to talk about it in the context of affordability because, I mean, there's a fifth theory of affordability beyond the fore that I laid out at the beginning. And this is sort of the curmudgeon theory of affordability, which is that the affordability problem is that young people are lazy.

And they have come to believe that a burrito should be delivered to their door. And they see that that now costs $35 and they're angry. And that the solution is not, you know, it's not deficit reduction. It's not rent control. And it's, you know, it's not whoever's at the Fed. It's the people should get off their ass and leave the house and go get their own goddamn burrito. And you can even make burritos. It is legal in these 50, you know.

United States to hand-instruct. There's also the far left people who were like, we should subsidize DoorDash. DoorDash for everyone. It should be state-owned. Do you guys think every generation does this about the next generation? I wonder if there is some sort of. Yeah. But so, I mean, the one of the things that this has brought about is charts. And Mike Conchell, who's like an interesting lefty economic thinker. I was with him yesterday. He came to Yale. That was great. he's very sharp.

And so one of the things he was showing was that actually, you know, in the last few years, the people have shifted their budgets away from food away from home, which is a term of art that actually includes food that is delivered to your home. But basically that's how the Bureau of Labor Statistics counts food that's made in a restaurant, whether you actually eat it in the restaurant or it's delivered to you. Spending has been shifting relatively away from that toward groceries. Groceries are getting more expensive and then people are reacting to that by cutting back. So it doesn't appear that people are like in the aggregate more profit. I think what is happening is there definitely is a boost in DoorDash spending, but a lot of that is coming at the expense of actually going out and dining in restaurants. So in addition to being lazy, people are failing to socialize with other people. So this is another set of social problems. I don't know. I mean, I think there's a couple of things we're seeing here. One is the part of why things felt affordable in the 2010s was this venture capital subsidy of the millennial lifestyle where you had companies like DoorDash operating at a loss. And people got used to the idea that there was going to be this transfer of wealth. to them from investors and that that has gone away.

And then the other is, you know, you can argue with people about their preferences and what they want, but that's going back to, you know, the beginning of the show. I think that's sort of like a, that's a dead end, just tell people, you know, like stop buying that $7 coffee. You can have that opinion, but I don't know what good it does to express it. And it's definitely consistent with, some of the data that I've been wrestling with as I've been thinking about affordability is you've had fast food service providers like McDonald's, like in their earnings calls, say that.

low-income people are actually no longer or shifting away from consumption at some of these restaurants that you think of as like budget low-cost options. And so again, I am like very sympathetic with the idea that there is something going on in the economy that is very real. I just think that we are, I frankly think all of us who comment on this data and I set a version of this to Mike, like, we're all very focused on like, you know, groceries, food, cut, like, as opposed to some of these like longer running trends and interest rates and what's happening with housing and what's happening with health care and child care that are also like very much a part of this affordability story but are less, you know, resonant for this particular moment for whatever reason online. But this also somehow had people talking about white people tacos. Right. Right. Well, Brianna Joy Gray, who is a left, far left, internet person who used to work for Bernie Sanders and then Richard even.

further left. She was going off on, you know, because, you know, people hear about this and then they go, oh, these lazy bums, they all just want DoorDash and whatever. And she said, it's not just the lazy people. It's people who lack executive function and are very stressed out about the world and have a neurodivergent. They just can't, they can't cook. They can't, cooking is too hard. You know, most cooking, they're told it's too complicated. And people said, what are you talking about? You nut job. And she said, it's one thing if you just said cooking had one in, ingredient, you know, easy to do, which is like an apple or something like that. Yeah, what has one ingredient dishes?

As a mom of toddlers, please tell me the one ingredient dishes. Yeah. You can scramble eggs with no additions. You're not putting salt and pepper in your eggs? Well, I mean, I am, but not everyone does. Well, now that's three. It's too much for Brie. But then what she was trying to say was that, like, people need to explain to these stupid people who think

they can only door dash that there's another type of cooking that you can do normal cooking, normal American cooking, take some chicken thighs and just throw them in the air fryer. And she said, but the key is to stop telling people to do complicated ethnic cooking like these Asian foods that no normal person can make. You need to leave them to these Asians. And the Asians said, what the hell are you talking about? And gave her all these recipes with four things. She said, sunflower oil?

You're going to ask people to do sunflower oil? What are they? Superman? And eventually this stuff. Lent ended to a point where she said, look, my mother was trying to make some white people tacos yesterday for work. And we were having a party and she was going to make some white people tacos. And I said, Ma, we can't make white people tacos. What do I? I don't have time to decant some olives and get some refried beans. And a lot of white people like myself said, the fuck are you

talking about? We don't decant our olive. People are like, we're acting like, what is this food? know exactly what she's talking about. So, apparently, some people didn't, what are you talking about? With the, with the crappy shredded cheese and the sliced black olives. No. Bad, it's not,

it's not all white people. I'm with you until you said the olive thing, of course. I love me. Josh, I thought you. Yeah. No, no, I don't make the white people tacos. I'm just saying that this is, this is a phenomenon.

When she says it, it's not, I'm not like, what could that possibly. I know exactly what she's talking about. I would never make it myself. Well, I don't understand this. I am, I am extremely white. I am so white that my Albedo meaningfully contributes to global, to evading global warming.

Okay? My mother grew up in a small town in western New York, which is culinaryly the Midwest. I have voluntarily eaten and enjoyed jello molds. All right. I have impeccably white credentials here. And I actually, in fact, I love the crappy tacos with like the terrible seasoning and the shredded cheese and the iceberg lettuce and these crispy, perhaps slightly stale Taco chout, right?

At no point in my 53 years of unabated whiteness have I ever experienced anyone putting an olive off a lot of these tacos, Josh. It's like what you would put in a taco salad. But that's the thing, a salad, we're not,

a taco salad, that's a salad. Why is it called a taco salad? Because it is a salad that is of the nature of a taco. Because, no. But of the nature of a white people taco. There's like, there's a reason that President Trump posed with the Taco Bowl from Trump Tower with the two thumbs up. That's like he didn't say, look at these.

That's a white people taco in salad form. First off. Were there olives in that taco bowl? First off. Let me just, let me just, let me just say that I can take, take all these arguments apart now because I spent a long time looking at this, sir. Okay. One, what happened with the taco salad lie thing with these olives is that people in the 1960s and 70s were stupid. only Mexican things that they knew led to a seven-layered dip, which does have a layer of black olives in it because at the time, all of these things were in the ethnic aisle and dumb, dumb Americans were like black olives, old fancy that. And they put it in there.

Actually, also, though, because in the 70s, thanks to the California black olive marketing board, well done, guys. Like, people were just putting olives in everything. If you go back to cookbooks from that era, they're like, have you thought about dressing up your creme brule with some delicious olives? Have you thought about olives on toast? It's like anchovies now. Antovies are very popular. And I suspect that it was just that the olives perhaps leaked in to one. Well, that's the thing is that it's one. And the thing that you're doing, Josh, you're trying to say like taco salad, that's the same as tacos is bullshit.

Okay? Because let me explain something to you. Everyone understands that spiritually, like the white person Mexican food thing that we are talking about, whether like it's that coin term or not, is the father of that is Taco Bell, right? Glenn Bell, who introduced all these things. as I introduced the hard shell taco. Wait, Taco Bell was founded by a guy named Bell. Yeah, Glenn Bell. Are you making that up? Is that like Epcot Center founded by Robert Allen Etcott? Yeah. No, no, no. He's right. It's Glenn Bell. Sorry, I fact checked you. Yeah. But, um, okay, so Glenn Bell, who is the spiritual father of white people tacos,

did have like Taco Bell in the 70s. After this all started going, I went to look. And they did have some black olives on their menu then. They were on a thing that sounds disgusting, called the Mexican pizza and they were on some salad thing and they were on on on some and chorito they were never in a taco ever and all of these things were gotten rid of in 1992 when they were like what is this this is disgusting let's get rid of these black tacos black olives wow and so the simple fact is is that then my our friend from the internet ryan radia went and found the book of the man who like was in charge of taco bell's menu and where they got all their recipes from, and they list the original flavors.

It does not include black olives. And he found the original commercials from the 70s that listed all of their and it doesn't have black olives. And so what happened? But he did find one recipe that did have the black olives. But there is. So he did find one, one box of one, like, hard shell tacos from the 90s that on the back did include black olives, along with all the other things that we consider canon in

these. So while I confess that there are people who in history have done this, it is not standard. It was never standard. It's disgusting also because it doesn't even make any sense. Like the flavors don't even match up. And that if, if Brie or anyone is too lazy to decant their olives, as a white person, I would just say, feel free to make it without those. Was decant her word or yours? Hers.

Hers. She said that was the other thing. That's why I just went tomorrow was, she was like, I don't, what am I going to decant some olives? So, by the way, I have gotten the famous photo of Donald Trump with the Taco Bowl at his desk and Trump Tower. And I've zoomed in, the photo's not very high-res. I think, I don't think there are any tacos in this bowl, although there's a lot of ground beef. So it, like, you know, they could be hiding in there. Wait, there's no tacos in the Taco Bowl?

I don't think there's any olives in this Taco Bowl. Although there is, there's a lot of ground beef, so it's possible that the black olives are hiding. The other thing I would say about black olives and taco, the crappy canned sliced black olives are basically flavorless. They're just a way of adding salt. No matter how long you decant them, it's not going to get better. If you chopped up some catamala olives and put them in a taco, that would be bizarre tasting. But the thing is that the black olives, because they have so little flavor, the canned ones, they can sort of, they can go in. And again, I'm not, I don't do this. I'm not saying you should put them in, but I'm trying to explain the white people of the white

people tacos, why they might have done this. I think it's just a vehicle for salt. I just don't think that white people, in general, anyone, any large group ever did this. It's It's a couple of lunatics did it in places where they don't know how to eat food no good. And then they're trying to say it's America. This is in America. People will do crazy things, but you cannot blame the lone work of a madman on white people. We are more diverse than that. I think we can leave that there this week.

Natasha Serend, thank you so much for joining us to talk about the Fed and tacos. Thanks. I'm hungry. They've started hungry now and more hungry. Me too. Can I go make some white people talk? tacos right now. Yes.

Yeah, Megan, Ben, go have lunch. We'll talk soon. Thanks, Natasha. Cheers, guys. Central Air is created by me, Josh Barrow, and Sarah Fay. We're a production of very serious media. Amy Keen produced and edited this episode.

Jennifer Swannick mixed this episode. Our theme music is by Joshua Mosher. Thanks for listening and stay cool out there.