Pod Insights The Moneywise Guys 8/19/25 Jackson Hole, Tariffs, and Tax Changes: Economic Insights with Dr. Richard Gearhart About this episode The Moneywise Radio Show and Podcast Tuesday, August 19th BE MONEYWISE. Moneywise Wealth Management I "The Moneywise Guys" podcast call: 661-847-1000 text in anytime: 661-396-1000 website: www. MoneywiseGuys.com facebook: Moneywise_Wealth_Management LinkedIn: Moneywise_Wealth_Management Guest: Dr. Richard Gearhart, Professor of Economics at CSU-Bakersfield website
Transcript 0:00 Speaker 00 From the Garo Ellis padded radio room off Stockdale Highway, here is Money Wise. Call or text into the show 24/7 at 396-1000.
0:39 Speaker 00 Here is Money Wise. Money, money, money, money.
0:43 Speaker 01 Welcome to the Money Wise Show. We are live from the Garo Ellis padded radio room off Stockdale Highway on ESPN Bakersfield, 1230 a.m., 101.1 FM, and always streaming at MoneyWiseGuys.com. You can call or text into the show 24 hours a day at 661-396-1000. Today, we are your hosts. I'm Sharad Waite and...
1:02 Speaker 02 Frank Lee.
1:03 Speaker 01 Frank Lee. How you doing, man?
1:04 Speaker 02 I'm doing great.
1:05 Speaker 01 You said you're sleeping more.
1:06 Speaker 02 I am sleeping more, yeah.
1:07 Speaker 01 Thank you. That's good news.
1:08 Speaker 02 Yeah.
1:09 Speaker 01 That's a good sign. You got a seven, eight-month-old baby now.
1:13 Speaker 02 Almost eight months.
1:13 Speaker 01 Almost eight months.
1:14 Speaker 02 It's crazy. It's so crazy. He's standing up? Well, not really, but we're just propping him.
1:18 Speaker 01 Sitting up, standing up.
1:20 Speaker 02 And he's just like, he's just like a little mini, mini-human, you know?
1:23 Speaker 01 Yeah, when they, it's all over, you know, and they start walking.
1:26 Speaker 02 Yeah, yeah, yeah. But it's funny because like, you know, his arms aren't as long and his head is still like...
1:32 Speaker 01 Oh, yeah.
1:33 Speaker 02 So when we do the little heart sign, his hands, his fingers can't touch you.
1:37 Speaker 01 Can't reach above his head.
1:38 Speaker 02 It's just like, it's funny.
1:40 Speaker 01 It's a little side note, you know, one reason why humans are, have been so successful as a species is because we're born with enormous brains.
1:51 Speaker 02 Oh, yeah.
1:52 Speaker 01 But it's also, you know, very, you know, with these big heads, the big skulls, like disproportionately, especially when they're young and developing. And, but it also has that, that consequence of make it very hard to deliver a baby. Number one killer of females like 100 years ago was childbirth.
2:13 Speaker 02 Oh, yeah. Yeah, I couldn't imagine.
2:15 Speaker 01 Oh, yeah.
2:16 Speaker 00 That's why my grandpa always called me Mr. Magoo when I was little.
2:19 Speaker 01 What?
2:19 Speaker 00 Because I had a big head and I ran into everything.
2:24 Speaker 01 You still need some glasses, Mr. Mugu.
2:25 Speaker 00 What?
2:26 Speaker 01 That's why I'm gonna call you Mr. Mugu. Yeah. Mr.
2:29 Speaker 00 I can't pull them off like you do, so.
2:31 Speaker 01 Well, yes, you can. Yes, you can. And it will be better than your size 40 font that you have on your phone. I can read your phone from here and you're 20 feet away.
2:42 Speaker 00 I'm not hiding anything.
2:43 Speaker 02 Size 40 font. Oh, my God.
2:45 Speaker 01 Have you seen his font?
2:46 Speaker 02 No, I haven't.
2:47 Speaker 01 It's, it's, he needs glasses.
2:49 Speaker 02 Yeah.
2:50 Speaker 01 Let's just say that.
2:50 Speaker 00 I'm sure I do.
2:51 Speaker 01 Well, we got a couple messages. Do you have them, Frank?
2:54 Speaker 02 Yeah, yeah, I got them.
2:55 Speaker 01 Let's go for it.
2:56 Speaker 02 Let's go. First one, okay, first message is, when can I go into the Woolworths to get my steak burger and fries? Me too, man, me too.
3:04 Speaker 01 Honestly, we get, we get a few of these a week, asking about the Woolworths and when the luncheonette is gonna open. We're really close to opening up. It'll be, oh, mid-September.
3:17 Speaker 02 Mm-hmm.
3:17 Speaker 01 About a month. We're about a month away from, from opening up. Construction is very close to being done, but you know, with construction and with permitting and occupancy, you can't open up a business until it's pretty much done.
3:34 Speaker 02 Yeah.
3:35 Speaker 01 Like, there's too many codes and things involved.
3:39 Speaker 02 Cause any, any one thing can just set it back.
3:41 Speaker 01 That's right.
3:42 Speaker 02 And it's like, it's, that's, that's the main issue with a lot of these major constructions and, and commercial. It's like, you have everything up to code, but then just that one small thing, you gotta...
3:52 Speaker 01 And you're like, but everything else is working, everything else is good, let's just go. Yeah, who cares about that? You know, whatever that thing is. But we're working on it, really excited. So, yeah, come get your burger and fries. It's gonna be amazing. It's gonna be a really, really good... You got to taste one of the, did you give him one of the tastings?
4:06 Speaker 02 Yeah, two, two, one of them, yeah.
4:08 Speaker 01 Yeah, or like our, our secret menu tasting session?
4:11 Speaker 02 Yeah. I'm excited. I just, I just request, uh, protein burgers, you know?
4:15 Speaker 01 Oh.
4:15 Speaker 02 Protein style burgers.
4:16 Speaker 01 Oh, yeah. No bun?
4:18 Speaker 02 No bun.
4:18 Speaker 01 Wrapped in a lettuce?
4:19 Speaker 02 Yeah.
4:20 Speaker 01 Well, that's easy to do.
4:23 Speaker 02 Yeah. No, it is. I can't, I can't wait.
4:26 Speaker 01 We've got another message here, a little, little bit different than Woolworth, but let's, let's read the next question.
4:32 Speaker 02 All right. With the new tax legislation reinstating 100% bonus depreciation for qualified assets starting January 20th, 2025, let me ask you this. For local business owners who've been holding off on purchasing that new truck or equipment, is now the smart time to move forward? And what's the most common mistake you see people make when trying to take advantage of this incentive? Thank you, guys.
4:57 Speaker 01 I, I love this question. It might sound really technical, but I'll, I'll break down how I read the question.
5:02 Speaker 02 Yeah.
5:02 Speaker 01 Which is the big, beautiful bill. I can't, every time I say that, I kept a chuckle and said, it's so dumb. Such a terrible name. But the, the most recent bill that, that was passed and went into effect, a lot of these things went into effect the beginning of the year, but it was signed on July 4th of this year. And part of that bill was making permanent or permanently restoring 100% bonus depreciation. So think of this in terms of as a business owner, when you, it's just because you buy something, you buy whatever it is, doesn't mean that you can expense it or depreciate it
5:43 Speaker 01 or, or categorize it as a business expense and, and deduct it from your income taxes. It depends on what you're buying. And it also depends on how much that, that thing was. And it was already as part of the Tax Cuts and Jobs Act in 2017. They, this was, this allowed businesses to deduct 100% of the cost of these qualifying assets.
6:11 Speaker 01 And but it was set to change and sort of reduce and it was going to phase down the amount of money that a business could depreciate or write off. And it was going to go down by 20% a year and started, basically started phasing out. And so, and it was going to vanish by 2027. But this one big beautiful bill act and part of it that was signed into law is eliminating that planned phase out so that a business can essentially, as long as it's a qualified expense, can deduct 100% of that, of that thing. So let's, let's use, for example, just, just as an example, let's say a business is looking
6:56 Speaker 01 to buy a car, like, you know, for delivery, like a delivery car.
7:01 Speaker 02 I could use a new truck.
7:02 Speaker 01 There you go, you can use a truck. And so, right now, if you bought, the business bought it, you could depreciate, do 100% bonus depreciation, you could write off the entire cost of that truck. Whereas if this wasn't passed, then you would only be allowed to write off a certain amount of the, of the cost of the, of the truck over a period of time. So, the question then is, you know, what, how do, how do business owners maybe misuse this, or what are the mistakes that they make with this depreciation? One that comes right to the top of my mind is somebody taking that bonus depreciation, I mean, they're going to deduct the whole thing, but they don't have really an income tax situation.
7:44 Speaker 01 Maybe they're, maybe they're already in a scenario where they have, have had expenses or lost income and so they, they don't, they wouldn't benefit from depreciating all of it. They, they would want to just go to like, just the standard sort of.
8:05 Speaker 02 Deduction.
8:06 Speaker 01 Deduction, yeah. And not, not, you know, bonus depreciate it, but just, you know, take it out over time. And then they can use that depreciation in future years where they're anticipating making more money. So I can, I can see that potentially being one of the mistakes.
8:21 Speaker 02 So you can, technically, if this, this person, this individual were to buy the truck this year, they don't have to depreciate it this year, they can hold it off until next year.
8:31 Speaker 01 That's right. Yeah, they can, they can kind of, they can wait and, you know, do a smaller.
8:39 Speaker 01 Kind of, you know, more phased or
8:42 Speaker 00 Right.
8:43 Speaker 01 Scheduled depreciation rather than just that, you know, that bonus one time.
8:48 Speaker 00 Yeah.
8:48 Speaker 01 So, but the other thing that I see, business owners, not just business owners, but consumers in general will make this mistake. It's a common, like, logical fallacy. And that is, they will, they will spend money to get a savings. They will spend money to get a deduction. You might have heard this, as a financial advisor, you might have heard somebody say something like, well, I want to buy the house because I want to be able to write off my mortgage interest. You know, and it's like, well, buy a house because you need to buy a house. Don't buy the house because you want to get a tax deduction.
9:24 Speaker 00 Yeah.
9:24 Speaker 01 You know, you buy a house because you need a house, you know, you're not, you're not buying it because you need to, you know, you need, you need the write-off.
9:33 Speaker 01 And that's a very common thing that businesses will do. They'll essentially, they'll essentially spend money on something that they don't need to get that. Because in their mind, they think that they're getting a tax refund. Instead of thinking about whether you need it at all, and then if it happens to be a tax deduction or, you know, benefit from it, then okay, you know, then, then do that.
9:59 Speaker 00 Yeah.
10:00 Speaker 01 But don't like, just spend money so that you can get a discount. You see it with consumers where they'll, they'll, they'll say, oh, you know, I went and bought this TV that was on sale because it was on sale and look, I saved 30% on it.
10:16 Speaker 00 It's like what I had to explain to my son when we went to Vons the other night to get one 12-pack. But they said, if you buy three 12-packs, you get the fourth one for free.
10:24 Speaker 01 Uh huh.
10:25 Speaker 00 Well, we don't need three more 12-packs.
10:28 Speaker 01 Yeah.
10:29 Speaker 00 But you can get the X one free.
10:30 Speaker 01 Yeah. That, that's a perfect example. Now, you'd probably drink that eventually. Is it soda? No?
10:37 Speaker 00 Yeah, not me.
10:38 Speaker 01 No, somebody would. But if you're not, you're right, if you're not going to use it, don't like, why you spend just a little bit more to get that discount? Well, you wouldn't, this happens in grocery stores all the time. You just spend a little bit more and then you get it. Well, if you don't ever end up eating or you're spending money where you wouldn't spend money, you're not saving anything.
10:57 Speaker 00 That's true. You guys, you guys ever seen that?
11:00 Speaker 02 Netflix series, I think, I think it's Netflix or who the Schitt's Creek.
11:06 Speaker 01 Oh, yeah.
11:07 Speaker 02 Yeah. It's a write off. It's like, who writes it off? It's like, I don't know. It's a write off. You write it off. And like, he's trying to teach us something. Yeah, but who writes it off?
11:17 Speaker 01 That's funny. Yeah. Like, who really understands what that means anyways? Yeah. Well, it's a, it's a, it's a write off. So I'm gonna, I'm gonna spend, I've actually used that as a joke if somebody like, we're arguing about who's gonna pay for the meal. And I'll be, I'll pay for it. Well, no, no, let me pay. No, that's it. Let me pay for it. I can write it off. And almost always like, oh, oh, really?
11:38 Speaker 01 Who understands what that means?
11:39 Speaker 02 Yeah.
11:40 Speaker 01 Who's gonna write it off?
11:41 Speaker 02 It's, it's, it's complicated for a reason, but you know, that's why there's people like us.
11:46 Speaker 01 Yeah, that's right. That's right. So don't take a tax to Dushkin for an unneeded expense. It would be like, it would be like lighting a $10 bill on fire because someone's gonna promise you $3 afterwards. You know, don't, don't do that.
12:01 Speaker 02 That's a good one.
12:02 Speaker 01 So I don't know. Do you have any other, any thoughts about that question, Frank?
12:05 Speaker 02 No, I mean.
12:06 Speaker 01 Bonus depreciation?
12:07 Speaker 02 Yeah, no, I, I think you've, you've touched on it pretty well. This isn't something I'm pretty familiar in. So it's like all new, taking it in, learning, but it's just like, yeah, it, it, if it doesn't make sense, if it doesn't play into your cards, it's like, why take the, the depreciation, you know?
12:24 Speaker 01 Yeah.
12:25 Speaker 02 So yeah, don't just put it off and say it's a write off.
12:28 Speaker 01 Right. The other thing in the state of California, people might forget is that the California does not conform to the federal bonus depreciation. And so you, you might get the federal tax deduction, but you, it's still gonna account towards your, your state in some cases.
12:44 Speaker 02 Yeah, that's always a good one. Cause I think people tend to forget that there's federal and state and some apply only for federal and some are only states.
12:52 Speaker 01 Yeah.
12:53 Speaker 02 So you'll have to, you know, consider both.
12:55 Speaker 01 Yep. Yep. Especially in California where we've got a lot of tax stuff, a lot of tax rules. Oh, yeah. It's a blast.
13:01 Speaker 02 Yeah.
13:01 Speaker 01 It's super fun. Well, I want to do this. I want to take our first break of the day and we have with us Dr. Richard Gearhart, economist from Cal State Bakersfield. There's a bunch of items that we have to talk to Dr. Gearhart, a lot of economic news that's coming out and that is coming out towards the end of the week. So we're going to pick Dr. Gearhart's brain on that. We're Money Wise. Don't go anywhere.
13:29 Speaker 01 Welcome to Money Wise. Well, your host today, I'm Sherrod, that's Frank. We're joined now by Dr. Richard Gearhart, economist from Cal State Bakersfield, professor over there, and friend of the show and regular guest, Dr. Gearhart, welcome.
13:42 Speaker 03 Thank you for having me.
13:43 Speaker 01 It's great having you. There is a lot happening this week in terms of the economic news. On Friday, there is the annual Jackson Hole Summit. What do they, it's the, what do they call that? It's Economic Summit, I guess. It's put on by the Fed, and we talked about this yesterday a little bit, Paul Volcker. This, this started back in like the late 70s or the early 30s, early, early 80s, and they started having it at Jackson Hole. Have you heard this before? Because Paul Volcker was a fly fishing fictionator. They wanted to bring him over?
14:25 Speaker 03 Yeah, one of my professors in grad school would go to the Jackson Hole meeting every year, and that was one of the main like highlights is just the nature and going out to do all these things. And that was the urban legend back then, too, was that Volcker loved fly fishing and...
14:45 Speaker 01 So they wanted to entice him to come?
14:47 Speaker 03 Absolutely.
14:47 Speaker 01 I was, yesterday, just doing a little research on that, I was surprised to hear how much economic policy has sort of been unveiled at the, at Jackson Hole. And it surprised me to learn that, oh, this, this could be, this could be significant, especially since this is Jerome Powell's last, probably his last year, probably his last time coming here. And also, every five years, the Fed
15:13 Speaker 01 kind of revamps and upgrades their mandates, or at least their, I don't know, I guess their mandates. I think they basically adjust their mandates. So the last time that this happened was just before COVID?
15:27 Speaker 03 Yes.
15:27 Speaker 01 Or around that time, I guess? And they, they did adjust it. They adjusted, they, they made it so that the... The 2% target inflation was a little more flexible, you know, like, oh, it's give or take. I don't know what the exact words that they used, but they were like, okay, it's roughly 2%. And so, have you, you have any thoughts about what could happen in Jackson Hole?
15:50 Speaker 03 Yeah, so this is kind of the premier economic event for monetary policy in the world. So leaders from around the world, you know, head of the European Central Bank.
16:01 Speaker 01 Right.
16:02 Speaker 03 Usually shows up and.
16:03 Speaker 01 Bank of England, Bank of Japan, like the central bankers show up.
16:06 Speaker 03 Yeah, this is like monetary policy 101. It's one of the most fun events if you can get an invite to it. But yeah, they do try to outline the next several years of where they think monetary policy is headed, where they think the economy is headed, all sorts of projections and forecasts. And that's when, you know, the heads of the central bank get together and figure out, well, why are you lowering rates or why are you keeping rates constant? So it really is one of the premier economic events that's held annually.
16:45 Speaker 01 Yeah. What does it take, do you know what it takes to get invited? I mean, you gotta be.
16:51 Speaker 03 I think you've got to have a lot of money, which I don't have.
16:55 Speaker 01 Or power.
16:56 Speaker 03 Or be at like the top of, you know, the economics field, which I'm not. So, you know, I just keep telling people my invitation just continuously gets lost in the mail.
17:06 Speaker 01 It would be, I would get a kick out of going. I mean, just to, I don't care about what, just to be able to see any like central bankers walking around.
17:15 Speaker 03 I wouldn't say a word. I just wouldn't say a word. I'd just listen the whole time.
17:18 Speaker 01 Totally. I mean, it would be, it would be so fascinating.
17:20 Speaker 03 I could nerd out for several days on that.
17:23 Speaker 01 Oh, yeah, you know, and then get out and go fly fish or whatever, but it would be, it would be amazing. So Jerome Powell, you know, it, I'm, you were not a fan of Jerome Powell when he started.
17:36 Speaker 03 Hated him.
17:36 Speaker 01 And, but he kind of won you over?
17:38 Speaker 03 He, you know.
17:41 Speaker 03 I don't necessarily think he's been the greatest Fed Chair ever. I think he's probably going to be considered above average.
17:49 Speaker 01 Oh, really?
17:49 Speaker 03 Fed Chair. But what I do think he did is, I think he tackled the COVID inflation phenomenally well.
17:58 Speaker 01 Yeah.
17:58 Speaker 03 I mean, that had the chance to quickly spiral out of control with how much money governments were pumping into the system, with the supply chain shocks we were seeing, with various social lockdowns, and he tamped that down pretty quick. And you have to give kudos because inflation is sticky. Once you see an inflationary period, it's really hard to get out of because it just becomes the expectation that, well, if, you know, inflation was 5% this year, well, I'm going to ask for a 5% raise to make sure I'm not worse off. Well, businesses know that, and then they bake into account 5% raise, raise their
18:38 Speaker 03 prices 5%, and so it's, you know, recently, I think that there are good faith discussions we can have on whether Jerome not cutting rates the past few months is the correct move, but I think everything he does is data-driven, and really can't fault a person for looking at the data and...
19:01 Speaker 01 Yeah, and following that.
19:03 Speaker 03 And following the data.
19:04 Speaker 01 There is a CEO, his name is James Fishback, he's a CEO of a hedge fund, and I read a quote in an article that said, basically saying that it's a mistake of the Fed to use average inflation targeting, and he likened it to rushing into the emergency room with 110-degree fever and being told the doctors won't treat you because for the past two weeks, your average body temperature was a healthy 98 degrees. You know, so the argument is, and this is, this is the problem with inflation with the general public, they don't recognize how the inflation numbers is telling, like, the
19:45 Speaker 01 current inflation number is called 3%. It doesn't, it doesn't tell you anything about what inflation was, you know, a few years ago.
19:54 Speaker 03 Yes.
19:54 Speaker 01 What tells you that is how much you're paying for those groceries and how much you're buying things for, and you're like, why is everything still expensive? So it gives you this impression that inflation is still high, even though it's not. It's like, we're down to, like, where it should be.
20:07 Speaker 03 Yes.
20:08 Speaker 01 But it doesn't feel that way, which is just like fodder for politicians.
20:12 Speaker 03 Yeah, yeah, it's, um, yeah, you, part of the problem is just with the data collection process. Inflation's a messy statistic to capture, because what happens is the Bureau of Labor Statistics actually hires people to go out to stores and look at price changes.
20:33 Speaker 01 Oh, really? Yeah, look at retail prices.
20:35 Speaker 03 Look at retail prices.
20:36 Speaker 01 Yeah.
20:37 Speaker 03 And so, the problem is, is that over time, the Bureau of Labor Statistics, their budget hasn't changed in real terms, so they've had to hire fewer people. So now, about a third of the BLS inflation numbers are estimated from other areas or historical data.
20:56 Speaker 01 Yeah.
20:56 Speaker 03 So, there's an issue with how timely we can get out inflation data, but yeah, looking back at the past and going, yeah, 3% is a little bit on the high side of where we're comfortable with, but yeah, 3% is nothing historically.
21:15 Speaker 01 Right.
21:15 Speaker 03 3% would be considered, pretty much before World War II, if you had 3% inflation, people would be celebrating.
21:23 Speaker 01 Yeah, yeah, it seems like, you know, we've just been spoiled with such low interest rate environment for decades, that now it's like, well, so the Fed, you know, it would be nice if the Fed could adjust that policy, be a little bit more loose on that 2% mandate that they have.
21:38 Speaker 03 Yeah, and especially, yeah, I think they are a little bit worried about what we saw from kind of the end of the financial, the great financial, what's the name of the 2007?
21:50 Speaker 01 Yeah, the Great Recession.
21:52 Speaker 03 Yeah, whatever.
21:52 Speaker 01 Financial crisis. Financial crisis.
21:54 Speaker 03 Whatever they, whatever term they call it now, where they were... Really loose with rates and then you saw you saw mild if any inflation, you saw inflation less than 1% for several years.
22:07 Speaker 01 Right.
22:08 Speaker 03 And I think they're probably a little bit worried about going significantly under target because then people, you know, oh, there's no inflation and then when you get these little blips, the 3%, which isn't bad.
22:23 Speaker 01 Yeah.
22:24 Speaker 03 People panic.
22:25 Speaker 01 I see. You mentioned the estimate, estimate, estimated numbers that the Bureau of.
22:33 Speaker 03 BLS.
22:35 Speaker 01 BLS has to come up with and they've been in the news lately. President Trump has talked about firing or maybe he did fire.
22:42 Speaker 03 He did, he did stupidly fire her.
22:46 Speaker 01 I know as an economist, that's got to be nails on a chalkboard. I was just like, why, like, don't meddle, like monetary policy and fiscal policy should be kind of like separate.
22:57 Speaker 03 Well, the thing is, the head of the BLS doesn't get the job reports numbers until the Wednesday of the week it's released. She has, she has no part in calculating the numbers. She's just reporting them and just signing off on the final document. Like whoever you put in there can't fudge the numbers.
23:13 Speaker 01 Right.
23:13 Speaker 03 Otherwise, you're going to get the Sharpie of the hurricane again.
23:16 Speaker 01 Right. Well, is it, is it, why are the numbers, the numbers do get revised?
23:22 Speaker 03 So, yeah, the numbers get revised and so really the key thing is you should never look at the labor market numbers when they first come out. It's, it's something called a selection issue where basically the BLS gives businesses about three months to return the survey. They ask for it within a month, but they know that people are going to turn it in late. Well, within a month, the only businesses that are really filling out these business surveys are the ones that are doing really well. Because they're the ones who aren't, don't have to worry about, am I going to be closed next week? Do I really need to do this? So the best businesses, the businesses in the best shape are the ones who fill out the initial surveys. Second month, you get businesses that are like, yeah, now I have a little bit of time
24:07 Speaker 03 because I finally caught up on everything. It gets revised downwards usually. By the third month, you're getting the businesses that are failing like, no, I didn't hire people, I fired nine billion. Individuals and so the third month after the initial numbers come out is when most policymakers use those numbers.
24:30 Speaker 01 Yeah.
24:30 Speaker 03 But everyone jumps on those initial estimates that get revised downwards.
24:34 Speaker 01 Right.
24:34 Speaker 03 But even then, let's take a look at the most recent month. They were, they basically downward revised two months by 238,000 jobs. There are 170 million people in the US in the labor force. That is a 0.1% error rate. That's great.
24:55 Speaker 01 Wow.
24:56 Speaker 03 That's phenomenal.
24:57 Speaker 01 Right.
24:57 Speaker 03 And so, yeah, it looks bad in absolute values, but again, you're comparing it to 170 million people.
25:04 Speaker 01 Right.
25:04 Speaker 03 So it really isn't this issue. It's just general economic illiteracy and the EJ Antoni guy is basically the crackhead of the economics discipline, along with Peter Navarro, so.
25:16 Speaker 01 Oh, yeah. Yeah, I know you're not a fan of Peter Navarro. Look at Stevens cracking up in there.
25:21 Speaker 03 I guess I should have asked if I could say that before I said it.
25:23 Speaker 01 The, so the, um, obviously politicians would prefer interest rates to be low while they're in power because it can spur economic activity before it hits the fan, right? Before you, before you're pouring too much fuel into the fire. You know, I can see why politicians, they're in office four years, let's call it. Why, why not, right? Why not put pressure on the Fed to lower rates? But that's why I think the administration was upset about it was because it wasn't favorable towards, the data was not favorable towards reducing rates sooner than later.
26:01 Speaker 03 Yeah. Well, so interestingly enough, if, if Trump had said, no, we believe in these BLS numbers, these massive downward revisions, so that in May and June, there's basically been no employment growth, that puts more pressure on Powell to lower rates.
26:19 Speaker 01 Right.
26:19 Speaker 03 That I just didn't get why he was attacking those numbers. The revisions worked in his favor for monetary policy.
26:26 Speaker 01 Oh, I see. Yeah, it's more about maybe just trying to make an issue out of it. Most, most people aren't going to understand monetary policy, you know.
26:33 Speaker 03 Yeah.
26:34 Speaker 01 What, what, you know, why decision, what, why are there, what make, what goes into the decision of lowering rates?
26:40 Speaker 03 Yeah, and you know, again, there's lots of data points. So just like if anyone's ever taken one of those intro to economics courses and you're taking intro to macro. The common rule of thumb for a recession is two consecutive quarters of negative real GDP growth. That is not the rule.
27:00 Speaker 01 Right.
27:00 Speaker 03 For a recession, a recession's based on the National Bureau of Economic Research dating a recession after the fact. But they look at GDP, they look at labor force, they look at inflation, they look at a whole host of numbers.
27:13 Speaker 01 Yeah.
27:14 Speaker 03 And so I think that's where politicians get it a little bit wrong is they're looking at one number as this indicator.
27:21 Speaker 01 Right.
27:21 Speaker 03 When there's a lot that the Fed and that all these agencies look at.
27:27 Speaker 01 So one, one issue that's, that's, you know, hot right now are tariffs and the impact of tariffs on the economy. And it seems to be an enormous amount of confusion there. A lot of people still don't really understand who pays for the tariff. But we're starting to get some of the money that's coming in. The government is now starting to collect some of this tariff money. It might sound like a lot, but so far since April, there's been about a hundred billion dollars of tariff revenue that's come in. I haven't looked into it, but I can almost guarantee there's been a lot more than that lost in economic activity. Like a hundred billion seems like nothing.
28:08 Speaker 03 Yeah.
28:08 Speaker 01 In the, in the global market.
28:11 Speaker 03 This is what I don't get. If you went to any person and said taxes increase economic growth, pretty much everyone would say no.
28:18 Speaker 01 No, right.
28:19 Speaker 03 That's incorrect.
28:20 Speaker 01 Yeah.
28:21 Speaker 03 That's what the tariff is. A tariff is a tax.
28:24 Speaker 01 Yeah.
28:24 Speaker 03 And so, we're expecting it to incre... That's the one thing. Taxes, in any and every form, reduce economic growth.
28:33 Speaker 01 Right.
28:33 Speaker 03 And it's just called the inefficiency of a tax. We know we have to have it to fund the government. So yeah, we are reducing economic output and, you know, yeah, $300 billion in additional tariff revenue annually is nice.
28:48 Speaker 01 Yeah.
28:50 Speaker 03 You know?
28:51 Speaker 01 But it's not much.
28:52 Speaker 03 It's not much.
28:53 Speaker 01 I mean, we have...
28:54 Speaker 03 Six trillion a year in revenues?
28:57 Speaker 01 Apple alone is worth more than 300 billion, right? Like, what is... You know, what is... I don't get it. Part of the argument was President Trump saying that the American citizens are going to get tariff rebate checks. They're going to come, you know, we're going to send out money to taxpayers. And what was thrown out was $600 per adult and dependent child. So a family of four would end up with $2,400 bucks from the federal government. Today, Treasury Secretary Scott Bessant says that they're actually going to take this money and use it to pay off national debt. Go towards national debt.
29:39 Speaker 03 You mean the $5 trillion we've increased it?
29:42 Speaker 01 That's what I'm getting at. It's like, okay, so if you're going to get $300 billion this year in tariff revenue, how is that... What... That's not going to do anything to the national debt.
29:52 Speaker 03 It makes no dent. It's basically a rounding error for the defense budget.
29:57 Speaker 01 It's a rounding error. Yeah, that's exactly what it is. But it again, comes back to, I think, the misunderstanding of the general population of the difference between a billion and a million.
30:08 Speaker 03 Yeah.
30:09 Speaker 01 Or a billion and a trillion. It's like, what is the difference? I don't know, the way it sounds. But really, conceptually, I don't... I just know there's a... It's a big difference.
30:18 Speaker 03 There's a lot of zeros.
30:19 Speaker 01 A lot of zeros. My mind can't comprehend how many more... What that means because of those extra zeros. But it's enormous. It's just... It's a huge difference. There's a big difference between a million and a billion.
30:30 Speaker 03 Yeah, a billion dollars would be if someone gave you $1,000 a day for the next three years. That would be just a billion.
30:37 Speaker 01 Wow.
30:37 Speaker 03 A trillion is, I think, for the next 300 years.
30:40 Speaker 01 Yeah, yeah, something crazy.
30:42 Speaker 03 Yeah, it's... Yeah, it's just... My calculator doesn't even go that far.
30:47 Speaker 01 Oh, it's just so crazy, all of these, these numbers and, um, you know, it's, it's so frustrating because it, I don't know, we're not fans, we're not fans of tariffs.
30:58 Speaker 03 No, well, I saw, um, I saw a business this weekend, uh, doing a Labor Day sale and was like, this is the last time to get tariff-free products.
31:08 Speaker 01 What?
31:09 Speaker 03 And I was just sitting there, I was like, but I thought we don't pay it.
31:12 Speaker 01 Right.
31:13 Speaker 03 It's just one of those where, you know, it's starting to show up in wholesale price indices. The wholesale price index spiked this past month.
31:23 Speaker 01 Oh, boy.
31:23 Speaker 03 That was 3.3 or 3.4% increase.
31:27 Speaker 01 Right.
31:27 Speaker 03 Which means that businesses right now are absorbing it because there's a lot of uncertainty as to where tariffs will actually end up, since we gave China another 90 days.
31:38 Speaker 01 Yeah, so many have been extended and some have been reduced and, and yet it seems prime for the businesses to just take advantage of the consumer and be like, oh, it's a tariff.
31:48 Speaker 03 And that's what I think is probably going to end up happening. Um, if you look, there's something called Harvard Pricing Lab, and what they do is they do like a real-time estimate of how retail prices at major retailers are changing, um.
32:04 Speaker 01 Oh, interesting.
32:05 Speaker 03 Almost daily from all these different changing tariff rates.
32:08 Speaker 01 Oh, wow.
32:09 Speaker 03 And, uh, basically clothing's up 10%, uh, furniture's up 10%, uh, flooring's up 40%.
32:18 Speaker 01 This is retail prices?
32:20 Speaker 03 This is retail prices.
32:21 Speaker 01 Again, it seems like, how is that, like, I don't know, it doesn't seem possible that the tariffs alone can account for that.
32:29 Speaker 03 It's.
32:29 Speaker 01 Seems like an excuse for the corporations to just increase their prices.
32:32 Speaker 03 I think so, but I think there's just, like, I don't, like, I know we tariffed the penguins on an uninhabited island 10% initially.
32:42 Speaker 01 Oh, that'll, that'll work.
32:44 Speaker 03 One of the islands we tariffed, like, literally has zero people.
32:47 Speaker 01 Oh, my gosh.
32:48 Speaker 03 On, on the, um, the little.
32:50 Speaker 01 The chart?
32:50 Speaker 03 Yeah, the chart that he brought out, that Liberation Day chart, one of the islands has zero people, only penguins. It was like a 15% tariff.
32:59 Speaker 01 Hey, pay, pay, pay, they've got to pay taxes.
33:01 Speaker 02 Yeah, their pillows are worth something.
33:03 Speaker 03 Yeah, no, it's like, it's like taxing the movie of Madagascar.
33:07 Speaker 01 Right.
33:08 Speaker 03 But it's just, it changes every day and I, I don't know how anyone can plan in this economic environment.
33:16 Speaker 01 Right.
33:17 Speaker 03 And...
33:18 Speaker 01 It's, the uncertainty is frustrating and that's the hardest, that's the hardest part.
33:23 Speaker 02 So it, it almost seems like companies are taking advantage of this by increasing their prices.
33:28 Speaker 03 Absolutely.
33:29 Speaker 02 Yet we don't know what the final say is in all this.
33:32 Speaker 03 What the final numbers will be and if you actually look, what they find is that goods that are domestically produced have also increased their prices.
33:41 Speaker 01 Sure.
33:42 Speaker 02 Yeah, yeah.
33:43 Speaker 01 Right on that train.
33:44 Speaker 03 Yes.
33:45 Speaker 02 If they're doing it, why can't I do it?
33:46 Speaker 03 Yeah, and so it's, it's problematic and it's starting to hit. Go to a local Home Depot and Home Depot finally admitted today, yeah, we raised prices. Yeah, I know every time I go in there, screws have increased by about three bucks.
33:58 Speaker 01 That's right. I'm, I'm real fascinated and we're joined by Dr. Richard Gearhart, economist from Cal State Bakersfield. There are a lot of these unofficial unconventional economic indicators. I read an article today in Bloomberg about cardboard boxes. And the, the, you know, unconventional economic indicator of cardboard box, that cardboard box in, you know, industry or globally. Roughly 80% of all durable goods are shipped inside a cardboard box. So if you, and the theory is if you can track the, the, the, the supplier demand of cardboard boxes, you can kind of get an indication of which direction the economy might be going.
34:43 Speaker 03 Yes.
34:43 Speaker 01 Have you heard this before?
34:44 Speaker 03 So, uh, there are two other fun ones.
34:46 Speaker 01 Oh, good.
34:47 Speaker 03 There's a strip club and brothel index.
34:49 Speaker 01 That's what Frank was talking about.
34:52 Speaker 03 Absolutely. There is a strip club and brothel index that you can use. There's also a male underwear index.
34:58 Speaker 01 Oh, I've heard of that. That's interesting.
35:00 Speaker 03 Yeah.
35:01 Speaker 02 Male underwear.
35:01 Speaker 03 Yeah, because, you know, we replace our clothes when our wives throw it out.
35:06 Speaker 01 Yes.
35:07 Speaker 03 And so during bad economic times, wives, wives tend to throw stuff out less and so then the price of underwear falls.
35:15 Speaker 01 Yeah, you hang on to those clothes a little bit longer. There's also a lipstick index.
35:20 Speaker 03 Yes.
35:20 Speaker 01 So apparently sales of lipstick go, um, tend to rise during downturns.
35:26 Speaker 01 And trade down to more affordable like things. You mentioned the men's underwear index. The strip club index. This is Frank was saying it's like.
35:39 Speaker 02 In the beginning.
35:39 Speaker 01 Yeah. How did you describe it?
35:41 Speaker 02 It's like strip clubs. It's a main indicator because finance bros aren't going to strip clubs.
35:46 Speaker 01 Absolutely. Tracking finance bros that are walking in a strip club.
35:50 Speaker 02 Yeah, yeah. All the, all the strippers know it's like, oh, it must be a recession. Cause they're not getting many clients.
35:55 Speaker 03 Yeah, they stop coming in suits and they start coming in sweatpants. That's when you know you've hit the rock bottom of the clientele.
36:03 Speaker 01 So there's some legitimacy to some of these unofficial.
36:06 Speaker 03 Oh, absolutely. Yeah. Oh, yeah. I mean, every, every economist has their favorite little indicator. Railroad bearings are one. So the little wheel bearings on railroads, the more freight traffic there is, the more frequent they're replacing.
36:25 Speaker 01 The bearing.
36:25 Speaker 03 The bearings. And so some people use that.
36:28 Speaker 01 Uh huh.
36:28 Speaker 03 That's, um, that's what actually a lot of economists are using to look at Russia. The economic impact of sanctions in Russia.
36:36 Speaker 01 Right.
36:36 Speaker 03 Because most of their country is connected via rail from World War II. And so that's why a lot of people are saying, no, these Russian statistics are way over inflated because rail traffic's down 45, 50%.
36:49 Speaker 01 Yeah. And the governments may be, and some of those, those governments, they're, they're hiding. Like they're hiding data.
36:55 Speaker 03 Oh, absolutely.
36:56 Speaker 01 To get out.
36:57 Speaker 03 Oh, yeah. Oh, no. Yeah.
37:00 Speaker 01 And but they've got these interesting way workarounds. I remember during COVID, there were so many people that weren't working. So they were having trouble coming up with some of the normal economic data. And so they were using, um, cell, cell phone activity, basically. They can track where cell phone activity was happening, like on a map to determine how much economic activity may have been happening.
37:23 Speaker 03 Oh, yeah. We, like, um, there are data sets out there that are available for purchase from private companies where you can track individual cell phone users within a three meter by three meter square. Tracks them throughout the entire day and at night. So you know their home look, it's.
37:37 Speaker 01 That's wild.
37:38 Speaker 03 It's wild. It's a little scary.
37:40 Speaker 01 Yes. Yeah, definitely scary. You got economists watching you.
37:45 Speaker 02 Yeah.
37:46 Speaker 03 Yeah, you know, like.
37:48 Speaker 02 Dr. Gearhart's like, oh, sure, where have you been?
37:50 Speaker 03 We're the ones who are too stupid to monetize this. It's like, eh, we're gonna use it for research. It's like, no way, what could I use this money actually for?
37:57 Speaker 02 Yeah, yeah.
37:59 Speaker 03 It's why I'm an academic, I'm not smart enough to be an entrepreneur.
38:04 Speaker 01 Hey, we need academics. We need them, we need them for sure. Well, thank you so much, Dr. Gearhart, we really appreciate your time. Thank you for coming on the show. Good luck as the next semester starts up.
38:16 Speaker 03 Monday, Monday is my first class, so I get to terrorize a new batch of freshmen.
38:21 Speaker 01 Give them hell, give them hell out there. What are you teaching? What are you teaching this semester?
38:25 Speaker 03 I'm teaching an intro class, and then I'm teaching the economics of labor market discrimination.
38:30 Speaker 01 What? Oh, interesting.
38:31 Speaker 03 Yeah, and so, you know.
38:32 Speaker 01 Labor market discrimination?
38:34 Speaker 03 Yeah, so it can, so there's two types of discrimination. The first is kind of the biased discrimination, I don't like you because you have brown hair.
38:42 Speaker 01 Yeah.
38:43 Speaker 03 The second is statistical discrimination. Statistical discrimination is, I go to college because, on average, college people are paid more than high school educated people because, on average, businesses think we're more productive.
38:55 Speaker 01 Right.
38:56 Speaker 03 Well, is that bad discrimination? Is that good discrimination? Should we encourage it? There's a beauty premium.
39:03 Speaker 01 Oh, yeah. Oh, I've been paying that price forever.
39:06 Speaker 03 Yeah.
39:09 Speaker 03 I know, I have yet to see a beauty premium line item in my paycheck, and I'm offended.
39:15 Speaker 01 Right, I'm looking for that ugly discount.
39:17 Speaker 03 The ugly tax?
39:20 Speaker 01 Well, that's, so are you happy about?
39:22 Speaker 03 I love those classes.
39:23 Speaker 01 And the intro also, you like teaching the intro?
39:25 Speaker 03 Yeah, because I get to teach them like, hey, this is why, like, vote intelligently.
39:31 Speaker 01 Yeah, yeah.
39:32 Speaker 03 Yeah, just I give them tools so that, you know.
39:35 Speaker 01 They can understand what economically, at least if you're gonna vote based off of economic, hoping for economic results, understand what those are.
39:43 Speaker 03 Yeah, they're not voting based on who trolls other people better.
39:48 Speaker 01 See, there's hope. There's hope for our youth. Not that all your students are young, but most of them, I'm sure.
39:54 Speaker 02 Gee, I would attend his class.
39:55 Speaker 01 Yeah, me too. Me too. You streaming?
39:57 Speaker 02 That sounds like fun.
39:58 Speaker 01 Your class streams?
39:59 Speaker 03 I can barely figure out how to turn on my computer. I'm giving, I'm giving literally pop quizzes in pencil and paper because I can't figure out how to do the clickers.
40:07 Speaker 01 Oh, that's what I'm talking about.
40:08 Speaker 02 You can do slide-o. There's like apps, web apps.
40:11 Speaker 03 Yeah, it's like, yeah, it's one of those where like I've left it way too late. I started looking. I was like, nope, this is a future. This is a problem for future, Richard.
40:19 Speaker 02 Yeah. Have one of your students help you.
40:22 Speaker 01 You have?
40:22 Speaker 03 Ooh, extra credit. I like that.
40:23 Speaker 02 Yeah, yeah. See, there you go.
40:25 Speaker 01 Do you use the transparent overhead projector?
40:27 Speaker 03 No, they didn't have any of, any available, so I just have to write on the chalkboard.
40:31 Speaker 01 Oh, that's boring. Yeah, that's boring. Well, thank you again. Dr. Gearhart, really appreciate it. Good luck over there at Cal State. We're Money Wise. We'll be right back.
40:46 Speaker 01 Welcome to Money Wise. We're your hosts today. I'm Sherid Wait. That's Frank Lee. Is that Nate Dog? Happy birthday, Nate Dog. R.I.P.
40:56 Speaker 01 I hope there's a ghetto in heaven.
40:58 Speaker 02 I'm sure there is.
41:01 Speaker 01 We have a listener question and, uh, do you have it, Frank?
41:05 Speaker 02 Yeah, I got it right here.
41:06 Speaker 01 Let's go for it. I want to tackle this.
41:08 Speaker 02 Uh, great show, guys. I know there are always chances to invest locally, but with the stock market all over the place, how do you find the right opportunities without putting too much on the line? Money Wise has been around for a long time and figured it would be best to ask you. Almost forgot about the steak burgers.
41:25 Speaker 01 Oh, that's nice. Um, so this is an interesting question. A lot of people, which I really appreciate, are interested in helping their local economy. And, you know, one way I guess would be to investing in companies that are local. The easiest way to do that, I think, is by using their services, hiring them, buying their products, eating their burgers. That stuff. That's a great way to invest. Support local. There's a lot, a lot to be said about supporting local. And it doesn't make sense all the time. I'm not, I'm not a fan of just buying local just because it's local. If it's not, if it's not a good product, if it's, you know, the service isn't good.
42:10 Speaker 01 You know, I guess I can give an example of the Woolworths building. We really made an intention to hire local and hire local subcontractors and local vendors. We did our very, very best to do that, but there were a couple of cases. There were a few different cases where it's like, we just cannot do this locally. It's just not going to work out. One example would be our historic architect consultant. We didn't have an architect in town that had extensive experience in getting a building put on the National Historic Building Registration and working with the National Parks and having that. It's like, it hasn't happened in 40 years. Like, there's not going to be an architect in town that's going to be able to help us navigate that.
42:54 Speaker 01 So we had to go up to hire, through our local architect and designer, get in touch with a out-of-town architect firm that could help us with that process. So this is kind of one example. Like, you know, you want to try to buy local when you can, but you can't always, you can't always do that. But I think that is a great way to support local businesses and in a way to invest. I mean, I'm not talking about investing in like, but there are some publicly traded companies that are headquartered here in Bakersfield, quite a few, probably more than people realize. It used to be in the paper in the Bakersfield, California, there would be a section in the
43:37 Speaker 01 stock market section that would show local companies or local interests or something like CRC. On the market? On the market, yeah, ones that are on the market, ones that are trading publicly. Yeah. And, and so, you know, there are ways that you can, you know, look into what companies are located here, but a lot of the companies that are located here, it's like, well, I mean, they're doing business out. Yeah. You know? Yeah, yeah. And so what benefit does that have? But, you know, I think that...
44:06 Speaker 01 Small and private businesses make up a huge percentage of the economy.
44:12 Speaker 02 Yeah.
44:12 Speaker 01 And so, you know, one way of investing is, you know, starting up your business here and doing, doing business in Kern County.
44:20 Speaker 02 Yeah.
44:20 Speaker 01 I think is a great way to invest.
44:22 Speaker 02 Yeah, I mean, small businesses are the backbone of the economy, so you, you want to support them however you can.
44:28 Speaker 01 Right.
44:28 Speaker 02 Um, I, I was a little confused with the, the question as far as like, should they be investing locally? Or were they interested in putting in some in the stock market and, and how much? So I was, I, I thought that's where like,
44:43 Speaker 01 I see.
44:44 Speaker 02 The question was going, but I, yeah, it's, you, you want to be careful of not going all in, obviously. Uh, you know, you want to invest incrementally, uh, uh, for a certain percentage of your salary. Uh, and then, you know, go from there, grow your investments, grow your retirement plan. But it seems like, uh, he's asking, or they're asking for a different advice? I'm not sure.
45:12 Speaker 01 Yeah, that, that's a good point. Like if you, if your choice is to invest locally or invest, like you're, you're, say you're investing for the long term.
45:20 Speaker 02 Yeah, yeah.
45:21 Speaker 01 And, and you're looking for, you know, but, you know,
45:26 Speaker 01 some assurances, not, not total risk, but you want to, you want to make, take a measured risk in your investments. Then you want to, you want to look at, you want to look to the broader stock market and not just American stock market. You want to look globally.
45:40 Speaker 02 Yeah.
45:41 Speaker 01 And they're international and have that as a percentage of your portfolio. You want to be well diversified and spread out across different sectors and geographically and all of that stuff.
45:51 Speaker 02 Mm-hmm.
45:51 Speaker 01 And so it might make sense for you to not invest, you know, locally in terms of that. It's hard to know what the word, you know, what the listener means by invest.
46:00 Speaker 02 Yeah.
46:00 Speaker 01 If you've got discretion, you've got like your long-term savings, you've got your retirement, you've got everything kind of like saved up. You've just got a little cash on the side and you're like, huh, how could I, how could I invest in something, you know, locally?
46:11 Speaker 02 Yeah.
46:12 Speaker 01 Um, you know, there's, there's ways to do that.
46:14 Speaker 02 Yeah, as, as like. Average Joe myself, it's like just going to these businesses, buying their products, their services. Um, obviously if, if it's a great product or service, then yeah, that's how, that's how you can support them.
46:27 Speaker 01 Right.
46:28 Speaker 02 So I know, I know my wife and I like to go to those farmers market and then try to support those, those local businesses by buying those. Uh, pastries or the, the coffee or.
46:40 Speaker 01 Yeah.
46:40 Speaker 02 Whatever it is, whatever service that they're providing.
46:42 Speaker 01 Yeah.
46:43 Speaker 02 I mean, that's, that's a great way to, to in- invest in your local business.
46:48 Speaker 01 Yes. Yeah, I agree. I agree. So, um, Frank, there was a lottery winner, Michigan man here just recently within the last week.
46:57 Speaker 02 Was it the Powerball?
46:58 Speaker 01 Yes, it was. It was a lottery. It was, well, at first he used, he won three hundred dollars. On, uh, uh, to play a scratcher, you know, like the.
47:10 Speaker 02 Oh, okay, okay. Yeah, yeah.
47:12 Speaker 01 So he bought, um, uh, yeah, he won a scratcher and then he took that money. Uh, he spent thirty dollars on that and ended up winning three hundred dollars. He took twenty dollars from that win and put it into the, another lottery. Uh, the Michigan lottery and then won seven hundred and fourteen thousand dollars.
47:41 Speaker 02 Woo.
47:42 Speaker 01 So it's like, you won the lottery, you took the money, put it into the lottery and won again.
47:48 Speaker 02 Hey, keep it going.
47:49 Speaker 01 Time. I know, that's what you said, like, I'd go again.
47:51 Speaker 02 Yeah, yeah. Keep it going.
47:53 Speaker 01 Uh, one of my favorite subjects is talking about the similarities to winning a lottery and other chances that are equal. So, cause it's roughly one in three hundred million are your chances of, of winning, at least the mega millions.
48:06 Speaker 02 Yeah.
48:06 Speaker 01 So that would be like flipping heads twenty-eight times in a row.
48:12 Speaker 01 Imagine that, 28 times in a row. Or rolling a six on a single die 11 times in a row. That's a 1 in 360 million chance. How about being dealt a specific ordered five-card sequence in a 52-card deck? It's about the same. I mean, that'd be like getting, you know, ace, one, two, three, four, kind of thing. How about picking the exact second in a randomly chosen 10-year span? Can you imagine? Now, that's insane. You go 10 years, now you gotta go pick the date and down to the second. You have to nail that. That's about a 1 in a 300 million chance.
48:55 Speaker 02 Holy crap.
48:56 Speaker 01 And yet, you wouldn't think that the odds are that low by the headlines that you see of people winning and these numbers getting so big. So, it's like, ah, yeah, this is like, this happens all the time.
49:08 Speaker 02 Yeah, yeah. I mean, I guess the news, they make it up so big in a sense where like, oh, it can happen, right?
49:15 Speaker 01 Yes.
49:15 Speaker 02 And that's the thing that drives a lot of these consumers, the people, is like, it's hope.
49:20 Speaker 01 That's it. That's it. It's, which is so, I think, not fair to take advantage of people who don't understand the odds. If they really understood the odds, they wouldn't do it. Or as they call it, a dumb tax for a reason. You know, it's like, come on, it's so... But it doesn't mean that some people aren't gonna win. But they've also gotten, the lottery numbers have gotten bigger. The jackpots have gotten bigger by design because it brings more, it brings more attraction to the, to the whole process. So, yeah, I've got a beef with lottery, in case you can't know. Just a little. I wanted to thank all of our listeners for tuning in. We will be back tomorrow. Don't want to miss the show. If you missed us, go to MoneyWiseGuys.com, find out more about us there. In the meantime, be smart, be safe, and always be money wise.
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