When you speak the language of economics and finance every day, it’s easy to forget that to your non-business-class friends and family, you might as well be speaking Greek.
Coming to your rescue is Planet Money, National Public Radio’s team of economic translators, which will present at UC Santa Barbara on Wednesday, Oct. 26. The team has been airing plain-English explanations of the housing bubble, toxic assets and the banking bailouts, and correspondents David Kestenbaum and Alex Blumberg will be on hand to present “The Economy, Explained.”
Blumberg said the crew at “This American Life,” the popular Chicago Public Radio show, decided to craft a program about the housing bubble. The first hour-long installment was called “The Giant Pool of Money.”
“It ended up being one of the most popular hours of ‘This American Life’ we had ever aired. We got hundreds and hundreds of emails,” Blumberg told the Business Times. “There was this hunger for economic news told in a way for an audience that didn’t normally tune into that stuff.”
Blumberg said that when times are good, the business class is mostly talking with itself. But when the economy goes awry, economic and financial literacy goes up, such as when the Federal Reserve Board’s decisions on interest rates became a staple of news reports during the stag-flation era of the 1970s. Today, even firefighters and schoolteachers have a direct stake in what happens on Wall Street through their pension funds.
“Back in the ’30s and ’40s, nobody had a 401(k). The era of the retail investor in the stock market is relatively recent,” Blumberg said. “Our fates are intertwined.”
To distill the concepts from the buzzwords, the Planet Money team tried to make their stories as concrete as possible. They talked to a Brazilian woman who would race the man in the supermarket whose job it was to put new price stickers on food as the country battled inflation.
They adopted “Toxie,” a pet toxic asset, in early 2010 for $1,000. By fall of that year, Toxie had passed away, and the team had recovered less than half its money. (No word on whether Planet Money told its children that Toxie had been taken to a farm to run free with the other aging toxic assets.)
Blumberg said the most surprising thing he learned was that our currency – the dollar – is basically a fiction supported by the markets’ faith in the U.S. economy rather than a marker for something more concrete. He said the team’s deep dive on the economy and the financial system has made him understand the awesome complexity of unpopular decisions such as the bank bailouts started under President Bush and continued by President Obama.
“Macroeconomics is tricky in general because it’s based on everybody’s behavior in the aggregate. It’s really abstract, and it’s really hard to explain and get your head around,” Blumberg said. “And the debates aren’t resolvable because there’s no way to do macroeconomic experiments. You can’t run the U.S. economy for a decade and then go back and run it a different way.”
Planet Money will come to Campbell Hall at UCSB at 8 p.m. on Oct. 26. Tickets are $20. For more details, click here.