Stimulus, Economics, and How to Think About It All | BRIght & Early, BRI’s Student Web Series

0:03 hello young people of the internet welcome to another episode of Bri sweb series bright and early where we talk about the news and history and philosophy and just everything that’s striking us and inspiring us and getting us to think about the news this week so I’m here as always my name’s Rachel Davison Humphries I’m director of outreach up Bri and I’m here with my

0:25 colleagues Kirk and Gary hi how are you hey so guys it’s the beginning of another week how are we doing what are you thinking about you know I’m a little by little sort of understanding a number of weeks have passed since we’ve been home and I’ve had time to really start taking a look at you know the news and

0:47 I’m particularly struck by what working from home is like but also the whole idea of like how our economy keeps going through all of this that’s what’s been on my mind lately what about you all yeah same for me especially I feel like this week there’s been more more conversations about what what things are going to look like on the other side of this crisis so and as

1:10 significantly how much this crisis is impacting the economy and and how hard that is on many families across the country and it that being a motivating factor for wanting to get things open when we can and when it’s safe right and I think the other both of those have been shrinking me and then also I since

1:30 my like big outing every week is going to the grocery store I noticed that I’ve just been paying more attention to like what’s in stock or news articles about like restrictions or like breaks in the production of different products there was some concern about bacon last week and so I went out and bought a bunch of bacon because there’s all this

1:51 information about different products and their availability or lack of availability as this like continues and then I was also noticing I was trying to make masks and I couldn’t find any elastic anywhere so I’ve been thinking a lot about what what the what the supply chain which is a fancy term for how

2:13 things are made and get to get to me as consumer of them what what that looks like and how it all works and how I should be thinking about it and what research I have to do and so the things I want to be able to have access to so that’s kind of whirling around in my head as I look at news and and think about what we’re doing in our homes and and

2:36 how we can make our homes more a place we want to be and so I but I know you guys also think about that so Gary you and I talked a lot about the news actually when we get on calls together did you a little bit about kind of what our processes and how we should be thinking about that yeah I mean you made

2:57 a really good point about the grocery store that I I had the same experience too I went the first time two days ago the first time about two or three weeks I hadn’t been there and the same kind of thing where you consider the products that are in there very differently you know I had to check ahead of time like where would most likely have a place that had tissues right which like you

3:19 said kind of got me thinking about like what were all the decisions that lead to tissues getting to that grocery store by me and I can go there and get it because I can’t make tissues I I have tried I’ve got piles of just loose leaf here that just doesn’t work and so that that’s a

3:39 supply chain you’re talking about is super-important so I really got to thinking about that you know how we get our information and how we understand it so I sort of put this together a little bit the idea of economics is massive and there’s the concept of it there’s a reason you have entire courses entire

4:01 majors PhD programs about this massive thing so I am NOT going to tackle economics in three minutes yes here but I think there’s a really interesting part of what you’re talking about which is a key part of that is decisions that

4:21 are made that lead to our ability to to get to the products and services that we need or contribute to it and so so the term fiscal policies I’m gonna refer to you just basic fiscal is just the decisions being made about money and these decisions influence output the the tissues being out there employment

4:44 people’s ability to to to have a job to the paper things or to do the things that get the stuff to your to your stores and also the prices of those things I was going to buy tissues online I am NOT going to spend seventy four dollars on a box of tissues but so so it’s really it’s really important and so

5:04 I actually turned to a Bri resource to understand this a little bit better and we have a big resource called media and American democracy and that one really focuses on how we get our information and share information and within that is an interesting part of a public policy so my getting tissues I’m just one person economics is millions of people that

5:26 we’re talking about here and really the global economy you know right so there are pieces coming from all over the place so wrapping your head around that take some certain steps one of the important ones is just getting historical context what is it today compared to the way it was in the past and a shout-out to those who watched our futurism episode what trends may lead to

5:47 the future because those decisions are going to impact the future and you have to kind of envision what what are the different probabilities and possibilities that are going to happen there and so that requires gathering facts but that’s a big question right how do you get your facts about the economy probably lots of different places and and sometimes they may seem

6:08 to even counter each other so that’s a really important thing is data you know information over time you can really drill down and really pay attention to those those things you may even decide what day of the week to go to the store based on facts and data and then decisions you know are important to consider who is affected and how they’re

6:29 affected and the fact that there’s not just one thing to do or not but rather economics are based on many many people making many many choices among many many actions see how complex it gets so it’s it’s even overwhelming but it’s a question that of course for I encourage you as you are observing your

6:49 world and perhaps still keeping your journal to say to ask yourself do stay updated about the economy where are you getting your information from and and how are you drilling down into that information for yourself and then the idea of public policy kind of goes beyond not only yourself but into your community and and the people around you

7:10 and your local in your state and even though even the national governments what are the responsibilities of us and others related to the economy and the government itself but then even more specifically what economic decisions are most impacting you and those around you it could be you know the the whether or not checks are coming or the like we

7:33 mentioned the groceries or just what you plan on doing next year what decisions that are being made how are they impacting you or just really important things to consider so something to think about for now well I think that that’s that’s absolutely where we should be when thinking about are how do how do

7:56 how to get into all of this conversation that’s happening the first bullet point on your first slide though was all about historical context and unfortunately this is not the first time nor will it likely be the last that America has disruptions in her in the economy right so just we were talking about this the

8:18 other day just in just in my lifetime right we had the 2000 2000 2001 crash because there was a dot-com bubble then we had 9/11 which threw the economy into a tailspin that we had the 2008 recession and now we have the 2020 disruption and but there’s even more context than that and I know Kirk has

8:38 been thinking about all of the context and kind of where does this particular episode fit into the history of economic disruption in the US so Kirk why don’t you take it away absolutely and I think I just really want to underline as well you know Gary’s point which was economics is really complex we’re not gonna try to cover everything

8:59 about economics in just a few minutes that we have here but it is interesting to look at historic context and then also just to take a look at how it is that we assess some of these moments in history where the economy has faltered and had trouble so Rachel mentioned two of them one of the big ones that I’m sure you’ve all talked about in your classes is the Great Depression which

9:20 started in October of 1929 and lasted for about a decade it’s measured by high unemployment and a sharp decline in the GDP and it lasts until about the second world war and it’s during that time that we get obviously all the New Deal and all the the alphabet soup of programs that I’m sure you’ve heard about there’s

9:40 lots of historical debates about what caused the what caused the depression in the first place why it lasts in a decade what actually brought us out of it when it actually ended is even something that’s up for debate and I think that all points towards two things one is that historical interpretation is always wide open it takes us being critical consumers of information to really dig

10:00 into and figure out but it also shows that economics is really complex and even when we have all the data that we could possibly want we still struggle to figure out what causes these downturns obviously the challenges that we’re facing now aren’t strictly economic their economic because we’ve chosen as a society that that isolating now is a

10:23 cost that we’re willing to have in order to have long term benefits to put it in economic terms of a lower number of infections and deaths and so thinking about the Great Depression another one more recently which Rachel mentioned was the Great Recession which happened in 2008 as a result of the subprime

10:45 mortgage crisis again these strange terms that actually all mean very significant things and recently there’s been a lot of talk about tarp which you might see in the news which is the Troubled Asset Relief Program it was the last time that the government invested directly into the private economy at the level that we’re doing now during this

11:08 crisis and so I want to just take a couple seconds here to talk about our ah well that’s not what I wanted to do but to talk about our the the different definitions that were working on and so Rachel’s gonna talk about a couple different ways you can find out more information about these but but I

11:29 think it’s important to note what we’re talking about we’re talking about unemployment we’re talking about gross domestic products or terms like inflation and deflation which we’re gonna be coming up to an unemployment when they when we say the unemployment number what economists are really talking about are the number of people who in the way within the labor force

11:49 are out of work so that seems like ok I get it people aren’t working they’re unemployed well what economists really mean are people who are in the labor force meaning people who would ordinarily be working so not younger people who are too young to enter in the labor force or retirees for example people who are beyond the age of of

12:09 normal employment those people wouldn’t count in that overall numbers this is looking specifically at the number of people within the labor force who are out of work and then GDP is another one we’ll probably hear a lot in the news and that is the the market value of all finished goods and services produced within a country in a year again okay so

12:29 it’s the stuff that we make but it’s actually more nuanced than that so you notice that it’s finished goods and services which means it’s things that consumers are purchasing after they’ve been created so for example if you go to the grocery store as a consumer like Gary was talking about and he buys his eggs for his breakfast in the morning or maybe his honey nut cheerios you know me

12:50 that is a yeah that is a that is a finished product that’s being purchased now if it were a baker who’s buying eggs and butter and milk those purchases don’t count toward the GDP but if he makes those into a cake and that cake is sold to me for my birthday for example then that would be counting toward the GDP so again this just points towards

13:12 how complicated these terms are and in that economist when they’re throwing these things out there they mean very particular things and it’s important to listen closely to what it is they’re saying and to research some of these definitions yourself because owing them it helps you to better understand what is actually being talked about and so when numbers are thrown at you it can seem overwhelming but when

13:33 you get a better handle on these definitions it can start to paint a more clear picture and so inflation and deflation are that two so they’re not saying that prices are going up and prices are going down even though inflation is a measure of prices going up I mean deflation is a measure of prices going down but packed within those words are actually even

13:53 more complex things that economists used to to forecast and predict what might be happening and to help us better understand how it is that we’re working within that supply chain and ultimately coming to the question of how do I know that when I go to the grocery store I’m gonna be able to buy the things that I need or if I will be able to and so it’s

14:15 important for us to really nail down these definitions in order to really understand it the big thing to think about is that while all of this is very complex and we keep saying that and yes it is a field there are ways to go out and figure stuff out right there are there are ways to you as young people as

14:38 young people who will eventually be entering the labor market right who are planning to go out and provide a service that other people want to pay you for at some point in your in your careers really understanding the complexity is part of it right and and I think something I often stand in awe of is the

14:59 fact that as Gary mentioned that when I go to the grocery store there are tissues they didn’t know I was coming I don’t know how to make tissues no one at the grocery store knows how to make tissues and yet when I go to the grocery store 99.9 percent of the time their tissues I think this is the first time in my life I’ve ever gone to a grocery store where there weren’t tissues right

15:21 or toilet paper or paper towels or whatever paper good I was looking for there are lots of reasons why that happened and that could be its whole other episode well I got really into toilet paper crises and turns out that there have been a number of them and Carson was involved at one point there’s a story there historical context yes that’s true that’s very different time

15:42 but just that that things like even things like GDP when you when you think about the fact that GDP is a signal of what goods and services goods are available to the consumer right it’s it it it going up and down signals to us

16:03 what goods are available by looking at all that data it tells us the overall health of an economy because it tells us the overall availability of certain goods right and again the goods getting to market are this incredibly complex process so I’m gonna share my screen

16:25 here now but we have this we have this this notion that well why can’t people just get the why can’t live why can’t the farmers just get their stuff to the market there’s such there’s so many steps in something very simple that I think it it helps to really think about

16:45 try to think about all those steps one of my favorite examples of this is a movie called I pencil you can find it on YouTube if you just type in I pencil and if you go to if you go to youtube and watch eyepencil there’s also a video they are an essay that you can respond to but this movie it’s only six minutes

17:07 long it’s really about the fact that no single person knows how to make a pencil right because there are so many pieces right the graphite the fur all of them they’re eraser the paint the wood and then you have to think about all the complex processes that get all of those pieces to you and all the conference processes that get all those pieces like the factory like the the the machine

17:29 that takes down the trees that makes the particular type of wood that this particular type of pencil needs right and so when you think about all that complexity it really is on inspiring for me than anything ever gets to market especially when there’s a crisis right like this is incredibly powerfully inspiring that so many people

17:52 coordinate peacefully together to bring the things that I want and they don’t even know me right now all that said knowing that usually when I go to the grocery store they’re everything that I want is there and then seeing that it’s not can be a little concerning right and can be a little scary and a lot of

18:13 people have real concerns especially if you have you don’t always have the money to be able to go to the grocery store at the same time so you don’t have the time to be able to like shop around or you don’t have access to multiple grocery stores so I know Kirk has friends up in Michigan northern Michigan I think it was you have restrictions on what they could buy because they just didn’t get

18:34 deliveries very often is that right Kirk yeah no that’s right especially in more rural areas and maybe many of you watching this now are experiencing this but really slide where the supply chain is is really you know extended and it just because of distance and lower population those calculations change on who’s

18:55 producing what buying what and so it can it can lead to two shortages so when we see stories like this maybe we get frustrated ogre we get angry or we get concerned because why dairy farmers across the chimeric RW milk that’s a that’s a complex question turns out that milk is a daily product and if there’s any disruption in the supply chain for

19:16 milk you have to be they can’t they can’t hold on to the milk because you have to milk cows every day so milk in particular is particularly fragile when it comes to disruptions and people if there aren’t enough truckers to move the milk they can’t store it and they have to keep producing it it’s not like they

19:36 can just stop the machines you can’t stop a cow for producing milk so but then you see things like this to where I don’t worth because coronaviruses hurt demand there’s an Idaho farm that’s just asking people to come take their potatoes why would they be doing that well that and this where

19:56 restaurants are transforming into grocery stores I didn’t know this because I wasn’t as concerned of grocery store supply chains as I am right now so I was curious why am I seeing stores like this and I learned that there are two different grocery markets in the United States that are really quite separate when it comes to the supply chain and how they get their

20:17 goods there’s the restaurant market which is a wholesale market and then there’s the consumer market which is the grocery store market and they have very different processes for getting things to the people who are buying the goods things as simple as nutritional labels so like when you go to a grocery store you always see nutritional labels on stuff well the farmers that sell to the

20:37 wholesale and restaurants don’t have the data for the nutritional labels so they’re actually not allowed to sell to the grocery stores and all the processes the years of relationships and trucking systems that go into getting things to restaurants take time and resources to be able to try and transition them and so you have these this gap where you see

21:00 things like grocery stores just becoming restaurants just becoming grocery stores because that’s what the the farmers can do or you see kind of this this lack of ability to get things to market so all of this for me but I wouldn’t have known that had I not been interested right now and what’s happening right now I

21:20 wouldn’t have discovered that and that’s the incredible opportunity for you so I think one of the one of the things that are called action right now is to become consumed to become citizens who who who are able to make their way in I think I’m sharing that everyone I shared we

21:43 have a chat that goes on in the background and I wanted to make sure that Kirk who has to leave was able keeping him longer but I think that we have an incredible opportunity to to share our our space and our knowledge

22:05 with those around us so there are amazing organizations who are able to who are able to help you understand what’s happening one of our favorites and a good friend of ours is called M you marginal revolution University if you haven’t been to their website I highly recommend it their YouTube videos are fantastic and they can be actually really fun they play with different themes but they

22:26 also explain principles really clearly so if you’re if you’re interested in any of these concepts or topics highly recommend our friends over at mru martial revolution university and then lastly again this is about you and your a your your role in society right now to be an informed citizen and an informed

22:48 consumer able to make good choices based on good information as you grow into being a member of this economy a contributor to the economy a contributor to your communities so there’s a lot to learn when it comes to the field of economics right but start with just one story and really dig down why is it that

23:10 those potato farmers couldn’t giving their potatoes to market why is it that that my local restaurant wasn’t able to or my local distillery wasn’t able to make hand sanitizer and ask those really really interesting questions and dig down and I think you’ll be pleasantly surprised at the complexity and how much you can learn so with that we’re gonna

23:30 let curtain go cuz he has to leave but gentlemen what are your final thoughts no I think you’re exactly right there’s complexity shouldn’t to to me complexity doesn’t mean stay away from it it just means dig down further into it and I think I think cultivating or fostering that feeling of curiosity into this

23:50 complexity bring this a little closer rather than distances us and I think that’s interesting yeah I agree it becomes sort of like a it’s an investigation right it’s complex in the sense there’s a lot going on but it means there’s a lot of stories to follow and there’s a lot of trails to go down and a lot of things to dig into and and it can it can turn out to be really really interesting and the YouTube hole

24:12 for economics is very deep if you want to know about economics on YouTube there’s a lot out there some of its better than others so make sure that you think nothing through what Gary was saying about analyzing policy and being a critical sumer on the internet of the resources out there but on that note thank you so

24:33 much for joining us for another episode of bright and early we are so grateful that you take the time to listen to us and join us and we always want to hear what you’re interested in what you have to say we we know what excites us but we’re here for you the young people on the Internet so please comment send us tweets Facebook let us know what are you thinking about how does this risk how do

24:53 you respond to this if you’re watching this with a class let us know we’d love to hear from your class we may even give you a shout out or if you’ve been doing anything interesting you’d like to be a guest let us know we’d love to have you so on that note thank you be well take care and we’ll see you next time

25:18 you