Pod Insights Optimist Economy The Invisible Hand Doesn’t Want to Change Diapers About this episode Child care is exhibit A that not everything can be solved by private marketplaces. It is too expensive and too scarce — and as Kathryn Edwards points out, nothing will change that fact. (Maybe you’ve heard someone say that preschool costs more than state university tuition? True in 38 states.) Even among those who think that there’s a role for the government to play in early childhood care, there are still very strong disagreements about what public support should look like and who it should go to. This is a sequel of sorts to our conversation last week about U. S. birth rates last week and the demographics that might force big policy changes in the years to come.
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Transcript 11,162 words · 4 speakers
Speaker names marked ? are inferred from speaking time and the show’s known hosts — they are not voice-verified.
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0:30 Speaker 02 All right, we're doing this, fam?
0:31 Robin Rauzi? Let's do it.
0:32 Speaker 02 Let's do it.
0:33 Robin Rauzi? Let's do it. We're sounding so excited, let's do it.
0:37 Speaker 02 Ghost podcast, Optimist.
0:39 Robin Rauzi? Let's podcast.
0:48 Speaker 02 Hello and welcome to Optimist Economy. I'm Catherine.
0:51 Robin Rauzi? I'm Robin.
0:52 Speaker 02 On this show, we believe the US economy can be better, and we talk about how to get there, one problem and solution at a time.
1:05 Speaker 02 All right, I think we have a couple announcements. Robin, what's yours?
1:08 Robin Rauzi? Well, first, I want to say we've gotten some really, really nice reviews on Apple Podcasts. And if you like the show and you want us to keep doing it, it'd be great if you would review us there. But this review came in last week that said, "I enjoy the, quote, 'in the beginning creatures emerged from the slime' answers. I sometimes am accused of explaining, but I feel the history of a thing is very important. My only critique is that the show could be longer. I normally listen at one and a quarter speed, and the current-length format flies by." To which I'm like, first of all, fella, just slow it down if you want it to be longer. Second of all, do not encourage her.
1:46 Speaker 02 Oh, my god.
1:47 Robin Rauzi? Be here for four hours.
1:48 Speaker 02 I just, I feel the wind beneath my wings.
1:51 Robin Rauzi? You feel seen.
1:53 Speaker 02 I feel so seen. Oh, man, I can't wait for our four-hour podcast session. Thank you for those very kind words from that reviewer and everyone who has reviewed and said nice things. If you reviewed and said not-nice things, like, okay.
2:09 Robin Rauzi? I think that that keeps us real, yeah.
2:11 Speaker 02 It keeps, yeah. A 5-0 average is gonna look like you are inflating it.
2:15 Robin Rauzi? Yeah, you've gamed it. Anyway, leave us a review. We'd love it. Thanks.
2:18 Speaker 02 We would love it. My announcement was, is actually another shout-out to our listener base, which is that, yeah, Optimist family, you've heard Robin and I struggle in our awkwardness in trying to ask you to give us money. And I just want to particularly shout out the number of you who wrote in to encourage us.
2:36 Robin Rauzi? To get better at it.
2:37 Speaker 02 To get better at it. The people who gave us advice, like detailed advice, was, I was so touched of like, listen, you can do this.
2:46 Speaker 02 Now, am I gonna listen to that advice right now? I don't have it in front of me. But they were encouraging, you know, if you believe in us, we will take a donation. We have two ways of doing that, through our newsletter and through Buy Me a Coffee. We've received donations from it. It could be $10. We would love it. It supports the production of the show. It supports paying Sophie and Andy primarily, which-
3:07 Robin Rauzi? Is why this show is audible.
3:10 Speaker 02 Which is why you can listen, because Sophie makes us sound good. So that is what we use the money for. And we are, you know, it is one part in Ask for Money, but another part to join our community online at optimist economy dot com. And we try to share morsels and tidbits and our thoughts in between what will now be a four-and-a-half-hour-long podcast.
3:31 Robin Rauzi? Also, we're posting letters to the editor. And if you would like to send a letter in response to a specific episode on thoughts you have, we've gotten really nice, thoughtful letters. Send them to optimist dot economy at gmail dot com.
3:44 Speaker 02 Okay, well, let's dive right into retcon.
3:47 Robin Rauzi? Retroactive continuity. So thoughts on our previous episode?
3:50 Speaker 02 Our previous episode was on fertility, which we said at the start was a bit of a weird topic for us, because it's not necessarily a problem, or something that we should consider being solved, as it involves the choices of families and whether to have children. But that doesn't mean we do it right, or that we can't make it easier. So that is what we talked about last time. And I, I think I, how do I say this? I think I accidentally frinked some people out, that unless the population grows to infinity-
4:20 Speaker 02 We won't get to have an economy. And that's certainly not true. That's on me, and that's my bad. You don't need to worry about that. The US population is actually projected to start declining in absolute terms in about 15 to 20 years. Population boost is a tailwind to economic growth, but it's not the only tailwind that we have. So, no, it is not meant to instill panic. It will require kind of different economic policies and different economic environments, but not insurmountable. It doesn't mean doom. We can have a smaller or shrinking population and still have a very strong economy. And given that we're the US, the US has the best economic management system in the world, and that's the Federal Reserve.
5:02 Speaker 02 And we have the best independent bank of all of them. So, we have aces up our sleeves. I would put all my money on us having, even in a world with a shrinking population, the strongest economy still.
5:15 Robin Rauzi? I was looking through the notes that I had taken before our fertility episode, and I just thought I would throw out there that women without children, on average, earn $4,232 versus $3,407 per month. I mean, that's...
5:32 Speaker 02 Over women who do have children.
5:33 Robin Rauzi? Yeah, yeah. So, it's not, you know, it's whatever that is, 20... Don't make me do math live on the air.
5:40 Speaker 02 Never.
5:40 Robin Rauzi? But 25% more or something.
5:43 Speaker 02 It's a sizable amount. And again, that's a two-way street of women pulling back from the labor market and commitments to career, as well as career pushing women out. What I would always stress is that we have constraints, we have preferences, and then we have kind of realized outcomes. And we have this tendency to conflate what women do with what women want. And we know enough from the constraints and barriers that women face that that's not a reasonable assumption in the slightest. Even if you know what women are currently doing, that's still not going to be an indication of what women necessarily want to do, because if you're backed into a corner, it's not like you really ever had a choice.
6:24 Robin Rauzi? Yeah. I realize that this is, in some ways, it's like our third episode in a row about children. We did child labor and then fertility and now childcare here in a minute. But before we do that, let's do terms and conditions. Looks like you have a term.
6:40 Speaker 02 I looked up one that I've heard really only ever used in the podcast world, which is over-indexed. And I've heard it a lot. And the way that I've heard it in conversation is people saying, I'm like, I'm over-indexed on podcasts, or I'm over-indexed on this thing. And it kind of felt like it meant that they're in really deep, or that they over-consume something of like, I'm over-indexed on this.
7:04 Robin Rauzi? I take that to be like, you know, oversubscribed.
7:07 Speaker 02 Oversubscribed.
7:08 Robin Rauzi? If you have subscribed to too many podcasts. By the way, you can always add one more.
7:11 Speaker 02 You can always add one more. You can always add this one. Yeah, absolutely.
7:13 Robin Rauzi? Exactly.
7:14 Speaker 02 Rob, that's a great point. You can't become over-indexed on podcasts about the economy.
7:18 Robin Rauzi? Or optimism.
7:19 Speaker 02 That are co-hosted by two women that have an optimistic bent. You can't become over-indexed about that. That's what every dictionary said. But what I thought was interesting is that I tried to look up what over-indexed meant, and it was a lot of definitions, and none of them were really consistent.
7:33 Robin Rauzi? Thanks for bringing clarity to our listeners on this.
7:38 Speaker 02 Yeah. And that's it. That's all I got. No, I mean, like, there was an-
7:43 Robin Rauzi? Is this not like from indexed, index funds, that kind of thing? Like, where you've got too many stocks and too not enough bonds or something?
7:50 Speaker 02 Yeah. So apparently, I mean, it has its own Urban Dictionary definition, which is where I knew I was like, oh, I'm in too deep here. So it has like a technical term that comes from finance. And then they said economics. And I was like, well, hell, don't tell people you had to look it up if apparently it's an economic thing. But yeah, it has to do with like how things are valued in a composite index. And the example that they brought up was the change in the big thing was actually caused by a small change that was overweighted. I don't know, like if you're shopping for an apartment, like you over-index on windows.
8:23 Robin Rauzi? Or floors, yeah.
8:24 Speaker 02 Or wood floors and lighting. And you're not over-indexing on like how loud the neighbors are, or something like that. So you're putting too much emphasis on one variable. But this, I was just, how this came from, it's a way that you have constructed a composite and an index like the Consumer Price Index, to how you weight things to decision-making, to this own kind of podcast terminology of, I'm over-indexed on something means I, almost like I could consume too much of it.
8:51 Robin Rauzi? Yeah, no, I can see that. It's like, it's like, that's how I'm ingesting my news or whatever, and I do it too much in this one form, instead of reading newspapers like a good American citizen should.
9:03 Robin Rauzi? Or watching the CBS Sunday Morning like everyone in my family but me does.
9:09 Robin Rauzi? No one in my family understands why I don't love and watch CBS Sunday Morning.
9:12 Speaker 02 Really? You're a CBS... My, I come from a Meet the Press family. Big time.
9:17 Robin Rauzi? It's like, they think I'm adopted because I don't watch CBS Sunday Morning. But they like it for the optimism, which is also hilarious, in that I'm the one that doesn't watch it.
9:26 Speaker 02 Okay, well, that's actually fair. I don't know if I'm taking your family's side. I'm just saying, I see them. But it's kind of fun to watch a world, a word evolve in real time, as it's co-opted by this, like, it's clearly a podcast user thing. Anyway, this is my attempt, as an economist who looks things up, to connect with all of you podcast listeners.
9:45 Speaker 02 I hope it went well. You should see me at dinner parties. I'm great.
9:52 Robin Rauzi? Speaking of you and your word play, because you said that you, your nickname on your debate team was W for George W. Bush, who was known for his malapropisms, I looked at malapropisms because I, I thought that it came from the French, right, meaning inappropriate. Malaprop, apropos. My French is not good.
10:13 Speaker 02 So, that's, that's interesting that you say that, because I have always pronounced it malapropism.
10:18 Robin Rauzi? Maybe it is. Again, I'm a person who learned words by reading them, which is a bit of a problem on a podcast.
10:24 Speaker 02 And I learned them in Texas. We are not in a good place.
10:31 Robin Rauzi? But it comes from a play, and there was a character who used the wrong word, often a word that would sound sort of like the real, the right word, but would be particularly funny. And the character's name was Mrs. Malaprop. And that is where the term comes from. It's from a play.
10:48 Speaker 02 I usually think if I had to weigh high school nicknames, W probably beats Mrs. Malaprop. So I'm gonna, I'm gonna stay grateful for W, even though at the time it was, it could be-
10:56 Robin Rauzi? It was a devastating burn, I bet.
10:58 Speaker 02 Yeah, it was a great burn. Um, I'm trying to think of what my, what the best one. I remember a few of them. The one that really got me in trouble was when I was debating in front of the class and I said obla duties instead of obligations and duties. And I put them together and like a forced incorrect-
11:12 Robin Rauzi? Bing pot.
11:13 Speaker 02 Yeah, bing pot. It's very much a bing pot moment, but I said obla duties. I actually think in the same speech, I also said studies instead of students duties. So duties was clearly a word that I've really never said since.
11:28 Robin Rauzi? You know, it's because your, your brain is moving faster than your tongue can. It's just, it happens.
11:33 Speaker 02 So to our listener who wants more of this. If you want me at full speed, brother, you gotta prepare yourself.
11:43 Speaker 02 Oh, yeah. So our, our centerpiece from today's show, as, as Robin already hinted at, is we are gonna talk about childcare.
11:51 Robin Rauzi? Yeah.
11:52 Speaker 02 It would be helpful to do some basic landscaping.
11:55 Robin Rauzi? Especially for people who don't, haven't faced the market recently.
11:59 Speaker 02 Who haven't sold their soul to the local childcare provider down the street, like, like my family has.
12:03 Robin Rauzi? Yeah.
12:05 Speaker 02 I, I think of that child, I think of this childcare center where I've had a kid for five years now. And I, I think of the hot dog guy that follows Homer Simpson around. And like throughout episodes, he'll just show up with hot dogs and Homer will buy them. And Marge is like, do you follow him? And he's like, lady, he's putting my kids through college. So, right now, we have the private provision of childcare. Where if you would like childcare, you go and buy it on the open market. And the people who provide childcare, physically provide it to you where they charge you enough to cover their costs and meet your needs. We would say that this market is in failure because there aren't enough childcare spots in the US.
12:50 Speaker 02 And the ones that we have are too expensive. So it's neither adequately provided or accessible and affordable. And the other reason why we know the childcare market is in failure is because nothing about that will change. Like AI is not going to do anything for childcare.
13:07 Robin Rauzi? Automation.
13:07 Speaker 02 Automation, you know, economies of scale, just-in-time delivery, like new supply chains, nothing will change childcare. It's going in one direction, which has become more expensive and less affordable. So childcare in the US spans zero to five, because you have to be five to start kindergarten, the cutoff's in the fall. So from zero to before kindergarten, you are in childcare.
13:30 Robin Rauzi? Right.
13:30 Speaker 02 If you have care. The US has some very light-touch intervention into childcare. It's got Head Start, which is a federally funded provider. It skips right over state governments and goes straight to the provider for childcare for a set of very low-income kids. And then it has, for some low-income families, not all of the ones who are eligible, some get a voucher that's distributed to state governments for them to distribute to families, and the voucher helps defray the cost of childcare. But for the most part, it is a pure market. You pay someone to look after your kids, they are selling care to you. What I would say, it is in market failure.
14:14 Speaker 02 This is a failed, not necessarily experiment, but we have a lot of data and evidence to say that the private provision of childcare is a market failure.
14:24 Robin Rauzi? Do you have any sense of how many kids are in what kinds of care? Or like what the rough ratios are?
14:29 Speaker 02 Yeah, the data isn't great, but the types of childcare providers we have in the paid space is we have kind of the center-based care. So this is in a facility, could be in the ground floor of an apartment building, you know, in an employer's office. You are at a center and we have center-based care. You have home-based care, where it's someone in their house operates a daycare center, often in like one floor or on a basement, you have a home-based care. Those are typically licensed, and they have to meet regulatory requirements that's set by the locality and state. And those licensing requirements are mostly about staffing levels.
15:09 Robin Rauzi? You can't have 20 kids and like two adults.
15:12 Speaker 02 Yeah, it's called the ratios. You've got to meet the ratios, they've got to have enough adults to little people. And the adults to little people changes with the age of the little people. So I think for most places, it's like four to one for infants, but you could be like eight to one for a five-year-old. It's just for safety. You just, kids cannot keep themselves alive if left to their own devices. And you've got to have an adult there watching them and you, and they can't be watching too many. So they have stricter ratio requirements than they do education requirements. I will say that for most localities.
15:43 Robin Rauzi? Just keep them safe. If they learn something, great.
15:45 Speaker 02 Yeah, that, a lot of them is like, please keep them safe. So then, on the other side, you have informally provided care. So this would be external to the family, like a friend or neighbor.
15:57 Robin Rauzi? Sure.
15:57 Speaker 02 That watches your kids. And then you have the family provided care, that's like a grandma, and then you have, right, you'd have the mom or the dad staying home. Most people are going to consume often more than one type of care.
16:11 Robin Rauzi? Sure.
16:11 Speaker 02 So like, you have your kid in childcare, but you also have like a neighbor pick them up and watch them. In the evening, kids are in a lot of different situations because there's a lot of need to be met and you can't afford to pay for all of it. So the evidence on childcare, I think, we don't have to spend that much time on it. It's not necessarily that interesting, but the more expensive the childcare, the less likely the mom will work. The cheaper the childcare, or the freer the childcare, the more likely the mom will work. It makes a huge difference to family income and earnings to have a working parent. And I mean, what's really sad about it is that if you look at studies of the quality of care from whatever type, from center, from family, because there's also nannies and friend or family, you know, the really, the underlying trend is the more education
16:56 Speaker 02 and income that the mom has, the better situation for the kid, no matter what type of provider or situation that the kid is in.
17:03 Robin Rauzi? Oh, interesting.
17:04 Speaker 02 You know, so if I have a center-based care and I'm rich, or if I have home-based, or if I have a nanny, or if I'm leaving them with a neighbor, like, I will have enough resources to guarantee that it's the highest quality possible, but it is a luxury to have that. So I think there's like a cultural argument about childcare that's, I find to be more of a distraction and also uninteresting.
17:25 Robin Rauzi? Oh, just that, what, that mothers should stay home with their kids? Like, that's, yeah.
17:28 Speaker 02 Yeah, like, should mothers stay home? Like, yeah, two-thirds of women with kids under six are working. Like, it's not really, it's a distraction. Oh, my god, a straw man?
17:37 Robin Rauzi? It's a straw man!
17:38 Speaker 02 Yes, oh my god, yes. It's a straw man. We did it, Robin.
17:47 Speaker 02 Oh my god, and it is, yes, oh my god, wow, what a full circle moment. It's a straw man.
17:52 Robin Rauzi? Yeah.
17:53 Speaker 02 And I think the real tension behind what is stopping this failed market that the government doesn't really necessarily prop up, but did in the pandemic, the real argument is less about like, should mothers be working? And it's much more like, it's like a step deeper than that.
18:12 Robin Rauzi? Yeah.
18:13 Speaker 02 That's like kind of superficial and from the 50s. Like this, it's really a step deeper. And if I could characterize, say, what is the fight on childcare, kind of like inside the family versus outside the family? But outside the family, you think it's about like JD Vance doesn't think women should work. I mean, inside the childcare space, there are a couple fights. First, I think of kids from age zero to five.
18:36 Robin Rauzi? Sure.
18:36 Speaker 02 Zero, one, two, three, four, and five are actually dramatically different ages.
18:40 Robin Rauzi? Yeah, no kidding.
18:41 Speaker 02 And there is, yeah, there's big consensus that preschool, which would start at age three and go from age three to four and four to five, that preschool is great. People love preschool.
18:51 Robin Rauzi? Yeah.
18:52 Speaker 02 Yeah, it was super popular. It has like incredible evidence behind it. Early literacy, early numeracy. A lot of localities are moving into the preschool space, led by Washington DC, which has two years of free preschool for every kid in the city. Preschool is popular.
19:07 Robin Rauzi? Drives up property values, I'm just gonna say, like in, like the suburbs of LA where they have free preschool, like.
19:13 Speaker 02 Oh, yeah. Well, if childcare costs two grand a month.
19:17 Robin Rauzi? Yeah.
19:18 Speaker 02 And you're saving families $50,000 by offering free preschool. Like, I'd pay, you know, $50,000 more for a house because I could and I'd get free preschool. Yeah, it's, it's a, it's a huge, it's a huge mover for families. But the, that creates a problem. It's like a little bit of a domino or a house, not House of Cards, don't, save it for next time. Whatever metaphor I just fucking struggle to get around. If you just took all the three and four year olds in the US and put them in high quality free preschool,
19:48 Robin Rauzi? Right.
19:48 Speaker 02 the zero to three childcare market would collapse.
19:50 Robin Rauzi? Right.
19:51 Speaker 02 Because many providers span zero to five and infant care is so expensive and five year old care is relatively cheap that they cross subsidize tuition, you know, across the age group. So if you take off the cheapest kids, they'd have to dramatically increase the price of childcare. And in fact, that did happen in Washington DC to the point that the city is now continuing to intervene in the childcare market.
20:13 Robin Rauzi? And even though childcare centers, I mean, they already charge more for infants, right?
20:17 Speaker 02 They already charge more for infants.
20:18 Robin Rauzi? But it would be even more.
20:20 Speaker 02 Yeah, it would be even higher. So that's, that's the first problem is that if you move for preschool, you're accelerating the like market failure decline of zero to three. Well, then you enter this other problem, which is that zero to three is something that we have less consensus on where kids should be.
20:38 Robin Rauzi? Right.
20:39 Speaker 02 On like the early side, on the zero year olds, we don't have paid family leave. A quarter of private sector workers have paid family leave and some of them, it's only for four to six weeks. So if you were going to like fix childcare, you actually have to do a bunch of things at the same time. Like you have to go in and create preschool. That's one. You have to go in and create universal paid family leave for the zero year olds, but then you end up with this big question mark in the middle of when paid family leave should end.
21:07 Robin Rauzi? Right.
21:07 Speaker 02 And what care should look like until three. And it's this like zero to question mark, question mark to three. This is where so much of the tension is on childcare.
21:17 Robin Rauzi? It seems like a, like a Rubik's cube or something. If, you know, if you can't, you can't get childcare until you get everybody to agree on paid family leave.
21:24 Speaker 02 Yeah, you can't get childcare until you get everybody to agree on preschool and paid family leave and you'd have to basically do all three at the same time.
21:30 Robin Rauzi? Right. This will be in the big family bill we talked about.
21:33 Speaker 02 Yeah, in our big family bill, but not at exactly the same time, but like you couldn't, you know, paid sick days, I said, you could drop that into the labor market and you'd be fine.
21:41 Robin Rauzi? Yeah.
21:41 Speaker 02 This other stuff you really couldn't drop in.
21:44 Robin Rauzi? Yeah, well, and also because you have to like, build the capacity. Which isn't necessarily there yet.
21:50 Speaker 02 That's a whole other thing. I mean, that's like, we'd have to agree on what we want to do, and then we'd have to build the capacity. So the, I think the real fight is in the friend and family space of you aren't a licensed center, you aren't a licensed home provider, but you are watching children. Should you be paid by the federal government? Like, in this new world where the federal government is paying for everyone's childcare, because the market's a failure, so they're going to pay for the provision, is the federal government going to pay unlicensed friend and family care providers for looking at kids?
22:21 Robin Rauzi? Can I, can I just, sorry, I don't want to derail this.
22:24 Speaker 02 Uh-uh. Good derail it, girlfriend.
22:26 Robin Rauzi? Okay. I know that there are, I mean, so your daycare center in, you know, that's fairly sizable as multiple employees, they have to be licensed. You're hiring, you know, a retired lady down the street to be the, you know, childcare provider, not licensed. But there's this gray zone in between, like, the federal government doesn't say you have to be licensed, is it states that are insisting you be licensed?
22:51 Speaker 02 I'm pretty sure that-
22:53 Robin Rauzi? Or localities?
22:54 Speaker 02 It's states and localities that do the licensing. It might be that to get child development block grant funds, which is the federal money that the states get to support childcare, they might have some licensing strings attached. But like, most things federal, the federal government floor is going to be a floor, and it's states and localities that are putting these in. So, some states do have voucher spending on grandma care.
23:20 Speaker 02 Like, if you are having a hard time finding it, or in certain situations, like, there is already a mechanism from public dollars going to friend or family care.
23:28 Robin Rauzi? Okay.
23:28 Speaker 02 It's just how widespread and uniform that should be, I think.
23:33 Robin Rauzi? So it's interesting that, like, even in the group of people who would advocate for more childcare being available, and it agrees that this is a good thing, that the fights are sort of so vicious.
23:47 Robin Rauzi? About exactly what it should look like and who should get paid how much and.
23:52 Speaker 02 Yeah, and the paid family leave people don't agree on the length of paid family leave. Like, should it be 12 weeks? Should it be a year? And then the.
23:59 Robin Rauzi? I mean, that's a big span.
24:00 Speaker 02 It's a huge span. And the childcare people don't agree if friend or family should be paid. And if it's paid, should it be paid to the same level of a licensed care center? I will say I get in trouble a lot about this. Because I'm a heartless economist. And what I point out is that incentives matter a ton. I don't actually have a lot of friends necessarily in the childcare space for this reason. But if you were to have a dollar amount that was attached to the care of a kid. That was equal across licensed and unlicensed care. You cannot be blind to the fact that low income moms do not have the same autonomy as high income moms.
24:44 Speaker 02 What I point out in the incentives problem is, one, if you pay unlicensed and licensed care the same, you disincentivize licensed care.
24:53 Robin Rauzi? Yeah.
24:53 Speaker 02 So like, I want to start a childcare business, but I have to follow a bunch of licensing. And then they're going to check the outcomes of the kid to make sure I'm doing a good job. Or I just tell everyone to say I'm their family and friend and I get paid just as much. So you'd basically be like cannibalizing the licensed space. By equally endorsing friend or family. So it certainly shouldn't be as much money from that perspective. And then the other problem is that if you put a dollar amount on it, you could be pressured to keep that money in the family. And not put the kid in care. It's like, well, I get 500 bucks a month for watching your kid. So don't put them in care or keep the kid with me. Because 500 bucks a month, a thousand bucks a month, that's a lot of money.
25:35 Robin Rauzi? Yeah.
25:35 Speaker 02 I think I'm the bad guy in the room because I point out like however much we want to make, like all care paid and all care is equal and every type of care should be treated the same way. The federal government shouldn't decide the best type of care. Not all care has the same really problematic incentive problems as paying friend or family care.
25:54 Speaker 02 Like, so this is, this is not an easy question. I luckily get to hide behind being an economist, so I get to have just this like one opinion about it based on incentives and design.
26:03 Robin Rauzi? Yeah.
26:03 Speaker 02 But I mean, the same thing happens on the paid family leave side. Well, you'll have people who are like, look, paid family leave needs to be a year. It's gotta be a year. Infants need a year with their parents. We can have some backup for people who can't do it, or maybe something happens, but like, you know, paid family leave needs to be a year. What happens to their health insurance?
26:21 Robin Rauzi? Yeah.
26:21 Speaker 02 Are you gonna have employers pay for health insurance for a year for someone who's not working for them? If you say yes, I'm telling you, you're gonna see massive discrimination against women of childbearing age. And you'll see it in their wages and their hiring. Why would I hire a 35-year-old woman? I'm gonna have to subsidize her for years. She has three kids. That's three years of health insurance I have to pay for. I mean, this gets, this gets really rough. And then
26:46 Robin Rauzi? Yeah.
26:46 Speaker 02 A friend of mine who works in health insurance and is very good at it told me, you and your employer both buy a new car every year.
26:53 Robin Rauzi? Oh, easily.
26:54 Speaker 02 I mean, it's just, it's just the amount of money that you spend on private health insurance premiums, even in an employer-sponsored plan.
26:59 Robin Rauzi? Yeah.
27:00 Speaker 02 It's so much money. And so even paid family leave, like, having an employer keep your job for 12 weeks is different than six months, and that's different than a year.
27:09 Robin Rauzi? Yeah.
27:10 Speaker 02 I will say, paid family leave will likely be paid for in a social insurance model that's like social security, where like you, everybody in the US contributes part of their paycheck to paid family leave, and then you make a claim on it. So employers aren't necessarily paying for your wage, but you're, you're making paid family leave costly to them by protecting the job and demanding health insurance.
27:30 Robin Rauzi? The health insurance. And I don't know that, you know, health insurance is so expensive. We have no, I mean, we're gonna probably get into this more in future episodes.
27:38 Speaker 02 Another market failure that's gonna collapse.
27:40 Robin Rauzi? For sure, right?
27:42 Speaker 02 Yeah.
27:43 Robin Rauzi? And we got a really nice letter that I'm gonna post later today about how the lack of paid sick days contributes to overburdening the, the healthcare system, because when people don't have the ability to take a day off, like, how that ripples through. It ripples through that they have to go, she's saying, go to get a note from a doctor that says they were really sick. And so they have to go to urgent care to get this note so they don't get fired from their job. But the same thing is true with with health insurance and childcare that you have to really pay attention to how much your employer is putting in on behalf of your health insurance because, I mean, they used to say, like, you know, overhead was 30%? I bet it's higher.
28:24 Speaker 02 Yeah, so this is where, like, sure, straw man cultural argument, but really, we have so many different types of care, who should the federal government pay for?
28:37 Robin Rauzi? Yeah.
28:38 Speaker 02 That is the ultimate question. It's not, it's not, should we have childcare? We should. Do we need childcare? We do. Can anyone else afford childcare by the federal government? Not really. So I think this is the question that's, that's behind the question of childcare is this fight. I wouldn't say it's necessarily the whole fight, but it's, it's definitely there. People have super strong opinions. And it's the reason why I would say maybe the childcare advocacy space is not perfectly united.
29:05 Robin Rauzi? Right. In fact, it sounds like bitterly dividing.
29:08 Speaker 02 I think for some people, it's bitter. I was, I have been called out for having this opinion on incentives before. And actually, this, it was in a group conversation at a conference. And one woman, she was so nice. She was trying so hard to defend me as people were getting enraged by what I said. And she goes, listen, you have to understand, she's an economist. And I was like, I just burst out laughing. And she was like, no, I mean, but I mean it in a nice way. And I was like, yeah, yeah. But I, I think the optimism here, like, this is a tough question.
29:42 Robin Rauzi? Yeah.
29:42 Speaker 02 And I don't, and this is a question where I would go back and say, like, childcare advocates don't necessarily have an answer. I don't know if America has an answer.
29:49 Robin Rauzi? Yeah.
29:50 Speaker 02 Like, it's, this is something, in polling, people tend to be really torn on, like, well, yeah, children do best with parents at home, but also, I'm not paying someone to stay there. So like, we don't have necessarily policy coherent views on childcare, because it's like, yeah, on a survey or poll, Americans are like queens of having their cake and eating it, too.
30:12 Robin Rauzi? Yeah.
30:13 Speaker 02 Like, stay home, I'm not paying for you. Also, if you don't have a husband, get a job. So like, you make those three things work.
30:23 Speaker 02 But I think the good news is because of our experience in the pandemic with the federal government coming in, because of, you know, how much experience states got in propping up their childcare centers and playing around with a lot of federal money, y'all, this is like, talk about shovel-ready. Like, we are ready for a universal childcare system. States are ready, localities are ready. That doesn't mean there won't be problems, but it's like there are some problems that we would much prefer having.
30:53 Robin Rauzi? Than the ones we have?
30:54 Speaker 02 Than the one we have now.
30:55 Robin Rauzi? Tell me about what do you mean by when you say that these programs are shovel-ready? Like, what do you, I mean, explain that.
31:00 Speaker 02 Okay, so this is actually kind of fun for me. This was a client project that I did as I actually wrote a blue-sky report about how to have, I called it the Child Development System, and it is a universal federally-funded childcare after-school summer system called the Child Development System. And it's basically the, like, zero-to-five-years-old, three-to-five PM, June, July, August program for children that they all go to, and would be free for them.
31:34 Robin Rauzi? So it fills the gaps of all of these...
31:37 Speaker 02 Yeah, so I think of it as like, the public school system is an immovable object, and the labor market is an unstoppable force, and they will never meet
31:46 Robin Rauzi? Right.
31:47 Speaker 02 to have kids in school year-round from 8:30 to 5:30, right? Like, something, like, parents have to make up the difference between these two places, and it's the early ages, the after-school in the summer, and so we should just have federally-funded child development system that takes these three things and put it into a coherent system that focuses on enrichment, development, child-led growth, like, mental health and well-being, kind of like a non-academic. So academics does a lot of that stuff. After-school, summer, and early childhood would be kind of like the complement, where like, it can do some academics, but it's focusing more on development and growth. And so I put them all together in a system, and then the whole report is me trying to convince people that this would be easy. So, and like, your laughter...
32:32 Robin Rauzi? Go look at that.
32:33 Speaker 02 Your laughter is, I think, telling me a lot, but...
32:41 Speaker 02 I don't think it's as hard as people think it is because we have this like smattering of private providers in every one of these spaces, including early childhood.
32:51 Robin Rauzi? Mm-hmm.
32:52 Speaker 02 Where you've got providers distributed throughout the country, serving local communities, but we don't have enough of them.
32:57 Robin Rauzi? Right.
32:58 Speaker 02 And you have federal mechanisms for giving states and localities money for childcare. All of them are underfunded.
33:07 Robin Rauzi? Right.
33:08 Speaker 02 So we have, we have dollars going.
33:10 Robin Rauzi? Yeah.
33:11 Speaker 02 Yeah, they're there. The money's there. They have people they talk to. And then, at the same time, you have, for the past 10 years, a practitioner space in estimating the reimbursement rate of care.
33:24 Robin Rauzi? Okay.
33:25 Speaker 02 So if you were to tell me, like, forget what the market charges.
33:29 Robin Rauzi? Mm-hmm.
33:30 Speaker 02 How much does it cost to take care of a four-year-old in a center in DC versus how much does it cost to take care of a two-year-old in a home-based care in Idaho? We actually have a ton of research and work on how to estimate that. So you, you put these three things together.
33:49 Robin Rauzi? So we don't have the estimates, we just have the methods?
33:50 Speaker 02 Oh, no, we have tons of estimates.
33:52 Robin Rauzi? Okay.
33:53 Speaker 02 The federal government estimates it. A lot of states have kind of started to estimate it. And then you have a ton of advocates who are estimating it, using this, it's called the Provider Cost of Quality, PCOQ, ABI. But they use this method to advocate in their states to be like, look, the Provider Cost of Quality says it costs $35,000 to put an infant in care in our state.
34:16 Robin Rauzi? Right.
34:17 Speaker 02 And this is how much your childcare voucher is. And so they, because it's become such a useful advocacy tool, it's gotten a lot of people use it. And yes, there are lots of dollar amounts attached. And I think DC has the longest-running official estimates of how much the Provider Cost of Quality is. So we've got providers.
34:35 Robin Rauzi? Mm-hmm.
34:36 Speaker 02 We've got federal dollars.
34:37 Robin Rauzi? We know how much it should cost. We have wire transfer ability to get money from one to the other.
34:43 Speaker 02 Yeah, the wire transfer setup. We know how much we should be paying per age, per type of provider, and we have a bunch of providers. So what I argue is that we don't need to Build a system, we need to assemble it and augment it. Like, we've got to just link these pieces together through a broad, comprehensive federal funds. And I would, I mean, you know, you would be surprised if the federal government's like, hey, we're going to pay for all your childcare. You'd be surprised how fast states could act. But I, it's a lot closer than you think, because you think of this, like, broken market that's not serving anyone that well, that cost a fortune, but the infrastructure is there to have, basically, a distributed childcare system in which anyone who meets licensing
35:27 Speaker 02 and has kids gets reimbursed by the federal government for the care they provide, based on the number of kids they watch and their ages. And all of it is regulated by states and localities.
35:37 Robin Rauzi? Right. It's interesting. I mean, it reminds me a little bit of the fight over Medicare expansion and the Affordable Care Act, which is that, you know, states might drag their feet on it because they have an objection to federal intervention in private markets, or whatever their objection would be, but the people are going to demand it. I mean, and you just saw that again and again in unexpected states where
36:02 Speaker 02 Yeah.
36:02 Robin Rauzi? where voters said to their state leaders, we want Medicare expansion.
36:07 Speaker 02 Medicaid.
36:07 Robin Rauzi? Medicaid expansion.
36:08 Speaker 02 Yeah, yeah. I think that this one would have a much broader constituent base than Medicaid, because this is something where, like, employers could get reimbursed.
36:20 Robin Rauzi? For providing care onsite.
36:21 Speaker 02 For providing care onsite.
36:23 Robin Rauzi? Yeah.
36:23 Speaker 02 Right?
36:24 Robin Rauzi? What a game changer.
36:25 Speaker 02 Yeah, forget nine to five office employers. I mean, think if you run a police department.
36:29 Robin Rauzi? Yeah.
36:29 Speaker 02 You run emergency services, you have a factory that runs overnight.
36:33 Robin Rauzi? 24/7, yeah.
36:34 Speaker 02 I mean, like, think of how hard it is to find care nine to five. What do you do at 5:45, when there's basically no childcare in the United States? So, I mean, it, so what I did say, kind of snuck this in there, on the, kind of thinking of the Medicaid expansion, is that if the locality is big enough or wants to, they should get the federal grants directly. And I was thinking of principal cities like New York and LA and Chicago, that are basically, like, they are larger than their state. At least in, you know, New York's case. And so like they, they're their own small country. Don't send money to Albany to send to New York City, like send money directly to New York City. Same thing with Chicago because the needs of big cities are very different than the needs of like a geography of rural areas.
37:19 Speaker 02 And the state of Colorado is actually doing this where they're probably, other than New Mexico, the state farthest along and most aggressive about expanding childcare. And they're going, they passed a bill to expand childcare and they had a bunch of people basically like meet and talk about what they wanted it to look like. And one of the decisions they came to is that they would like to have like self-identified localities basically oversee care in their space. And their locality could be like five rural counties or it could be like South Denver. It's just like, it's such a small community level problem that they wanted community level control. And so the way that I kind of put it into the paper or to this idea was you should let certain localities go directly to the federal government
38:03 Speaker 02 if they're large enough and they want to have non-state control.
38:07 Robin Rauzi? I mean, that makes a lot of sense too, because the patterns by which people move between where they live and where they work. I mean, it's the same thing with the transit, right? That you don't have just, the bus line in LA doesn't stop at the border of Pasadena or Glendale, right? Like you have region, there are regional problems or sometimes there are sub-regional solutions. That's interesting.
38:26 Speaker 02 Yeah. I mean, I think about this a lot with Houston that, I mean, it's a city that has a lot of ideas. And yeah, the governor hates it.
38:36 Robin Rauzi? Yeah.
38:37 Speaker 02 You know, we just, he really does. I mean, we just had an active takeover of the school system. He doesn't like the county executor. It's a lot of conflict, you know, and it's, if you were going to have universal childcare in the city of Houston, like, does that need to go through a state government that has been actively attacking it? Like, does Houston and Dallas and El Paso need the same thing? And do they need the same thing as Corpus? Like, it's just, it's, this is such a small intimate problem of, you know, having...
39:09 Robin Rauzi? The right care in the right place, the right time.
39:11 Speaker 02 Well, I mean, the idea is that you want to build up an ecosystem of like, it's not just... Establishing care providers, but like building this development system for the kids in your community, like who provides aftercare, who provides summer care. And so one of the examples, you know, that they talked about in this space was like, you could imagine like an immigrant community center.
39:32 Robin Rauzi? Yeah.
39:32 Speaker 02 Or a church where like they would love to have an early childhood center and then open up for after school and like host kids for the summer or like, you know, an immigrant kind of community center that like they one day a week provide after school where they teach the, you know, kind of like mother tongue.
39:49 Robin Rauzi? Mm hmm.
39:50 Speaker 02 If that's, I mean, I hope that's not offensive to say.
39:51 Robin Rauzi? I have no idea.
39:53 Speaker 02 I have no idea. But like you can learn the foreign language and like, or you you learn, like it's a cooking class that all has to do with like the traditional cooking of the immigrant community. Like you, you know, you get to be really creative when you're not hung up on how much should grandmas get paid, right? Like you get to think like so much more creatively of like, yes, that is a hard question and I'm not trying to minimize that. But like, we could have a much better set of problems of like, you know, how many churches are in this space? And I mean, I think a lot of institutions like churches and community centers and immigrant groups. I mean, I think that they would love to be
40:31 Speaker 02 a participant in what is essentially a community around children as opposed to a for-profit care space.
40:40 Robin Rauzi? Yeah, that's a really, I mean, you know, I was.
40:43 Speaker 02 It's a different world. I mean, the thing is, is that it's, I think what's so hard about it is like, yeah, there's these, all these like, small questions about what we have now and how we transition out of it. But like, we are building a different world for children. That is the goal.
40:57 Robin Rauzi? Right.
40:57 Speaker 02 I mean, yes, I'm a heartless economist, as I've said many times on this program. But like, yeah, I want my little worker bots at their desk earning money and moving their family income above public program participation and paying taxes at the end of the year. I want all of those things, but that doesn't transform the economy. What transforms the economy is changing childhood for the better and giving kids throughout their childhood, stability and community.
41:27 Robin Rauzi? Yeah.
41:28 Speaker 02 We can do that. And I know some people would be like, federal government can't do that. Um, you know what? I give them a lot of money and I bet they could.
41:36 Robin Rauzi? Yeah. Yeah, you know, granted, not an expert, not even an economist.
41:43 Robin Rauzi? But I did serve on the, on the sort of governing board of my local church here. And there was a lot of people who really wanted us to have a preschool at that location. And it was, you know, it is complicated, but if there is money, but also a force within the, whether it's the city or the state or the region, to encourage it and to show people the path through it, there would be a preschool.
42:09 Speaker 02 Yeah, I think a lot of churches feel that way, a lot of, a lot of institutions feel that way. And it's beneficial to have early childhood development, but there are needs of older children too. And there's this evidence-based practice here called positive youth development. And positive youth development is basically kind of like the research summary of like things that we think help kids become resilient adults. And one of the things that they stress is the importance of community and non-parent mentors.
42:46 Robin Rauzi? Right, yeah.
42:47 Speaker 02 And that a lot of kids really struggle to find either a sense of community, you know, they, they struggle to find a sense of place and they, they don't necessarily feel like they belong somewhere. And so that this, the idea of having like a through line through your life of institutions that you go to outside of school that focus on things like development enrichment is a way to incorporate this idea of positive youth development into kind of the regularity of every child's life in America.
43:19 Speaker 02 So it's, I mean, it's really, the possibilities get really, they get really big and they get really hopeful. And I'm like, oh, my God, that's gonna be awesome.
43:26 Robin Rauzi? I know, I'm suddenly remembering, like, we had YABCs.
43:29 Speaker 02 YABCs, no, tell me about it.
43:31 Robin Rauzi? YABCs was at the local YMCA when I was a kid. And it was, yeah, it was like a preschool program, part day, among other things, we learned to swim, which was really useful. But there was also games and I, I still have friends who I went to YABCs with. And then also a fondness for the YMCA, you know?
43:51 Speaker 02 Yeah, and the summer camp people talk about this a lot. And I mean, it was actually, I shouldn't call them the people, but people who are in the after-school space or the summer space will tell you that it's also nice to have kids have a space to try things out that they can't fail.
44:08 Robin Rauzi? Yeah.
44:08 Speaker 02 Right, like you can fail school, but you can fail a standardized test, but like you can't fail summer camp.
44:14 Robin Rauzi? Yeah.
44:15 Speaker 02 You can't fail after-school, you can't fail childcare for that matter. And that the idea is that it's a balance of, yeah, we want to make sure the kids are developing, but we also want to balance out the increasingly high-stakes world of education and testing. And so my thought was that if you bridge all these together, you can start to create kind of like vertical community institutions around children to help bridge a sense of community. I can be really dismissive of like all the early childhood stuff. I'm like, yo, you give them money per kid, like how hard is this? The state government says you're licensed, they inspect you, the federal government writes you a check, you take the kids, like bada boom bada bing, what are we waiting on?
44:55 Speaker 02 Like on some level, like this is so clear in my mind that I know that I'm being stupid about it because I'm like, phew, this seems actually quite easy. I mean, the hard parts would be building up the number of providers, but again, one of those problems that money is really good at solving.
45:11 Robin Rauzi? Yeah.
45:11 Speaker 02 So I kind of envisioned it as you have childcare money for reimbursement and then you have, then you basically have like a startup fund that states get to apportion out, or localities apportion out that they're like, all right, well, we need like five more centers here. And like they help construct it and they get money to help build it. And we basically build up this infrastructure that already exists, but we just kind of do it.
45:34 Robin Rauzi? Build it out as needed.
45:35 Speaker 02 Build it out.
45:36 Robin Rauzi? And I think people don't necessarily think about, but we know we screw it up sometimes. But schools know how many kindergartners they're going to get usually, and therefore they know the three and four-year-olds in their community. So in terms of projecting the population, the capacity, the need, like it seems like it would be hard, but it's not that hard.
45:56 Speaker 02 I don't think it would be that hard. I think, yeah, I mean, I think we've got. A lot of straw men in the conversation. But if the focus was can we build something better for children? The answer would come really quickly. And it would be like, yep, and we would do this and we would do this. And like, sure, I don't think there's going to ever be consensus on when paid family leave should end.
46:17 Robin Rauzi? Do you think that could vary from state to state?
46:20 Speaker 02 It shouldn't. I would not want it to vary state to state. I think what would be more likely is you would have a two tiered system. So you would have the paid family leave that's covered where like wages are covered at, you know, close to 100%. You keep your health insurance, you keep your job. And when that ends, you can go into a two tiered system. That's like a much lower wage replacement that you can have for longer. And that would have different job protections. Well, there is a family act, actually. It's for paid family leave. The current proposal would be 12 weeks, federal, universal. The replacement rates in the current legislation are too low. I would be like, get those numbers up. Those are rookie numbers. But it would be a 12 week system. I think 16 is probably more appropriate.
47:03 Speaker 02 But I think it's a two tiered system would probably serve Americans well. I mean, at the end of the day, like Americans have pretty diverse preferences about things.
47:12 Robin Rauzi? Yeah.
47:13 Speaker 02 And so the thing I don't like about Head Start for All is that not all want Head Start. Some people like home based care. You know, some people want to stay home. Some people don't like a center. You know, they, they want to be in a different environment. And so I think the same thing with paid family leave, like, yeah, establish some minimum. Like, we all get 16 weeks. You know, you and your partner can hopscotch it, you know, so that extends it out to 32. But the problem with having like a uniformly long one is that it would put a lot of pressure on what people want to do. And some people would want to go back to work, moms and dads.
47:45 Robin Rauzi? Right. Did you sketch out how much universal childcare would cost in your proposal?
47:52 Speaker 02 We have a pretty good idea. So Biden proposed in Build Back Better. The part that didn't get passed was all the stuff that would go to families and children.
48:00 Robin Rauzi? Nobody's bitter about that.
48:01 Speaker 02 Nobody's bitter about that, not me.
48:05 Speaker 02 Anyway.
48:08 Robin Rauzi? This is when we need a video editor.
48:09 Speaker 02 Uh huh, uh huh. Yeah, yeah, don't ask me about Joe Manchin and paid family leave because he said we shouldn't have it because they'd go hunting instead.
48:20 Robin Rauzi? What?
48:20 Speaker 02 Yeah, Joe Manchin is why the Build Back Bettering didn't get passed. They were going to push the whole thing through reconciliation, but he was like the Democrat that refused to vote for anything that went to women or children. And his reasoning, he said on the record of like, well, you have paid family leave. Like, how you know they're going to watch the kid? They could just go hunt. And I was like, what if that's actually good for their mental health? Like, if someone's watching the baby, like, what is wrong with you? Like, there's a hunter who needs to be kept from hunting on paid family leave and therefore we don't get to have paid family leave. I mean, that's the type of person where I'm like, man, I really hope I never meet you because either I'm going to do something I'll really regret.
48:55 Robin Rauzi? I can't even process that.
48:57 Speaker 02 I walk up and slap you and regret it for being rude, or I'll say nothing and hate myself even more. So I just hope I never meet you. Oh.
49:04 Robin Rauzi? Okay, so optimism, optimism.
49:07 Speaker 02 Optimism, optimism. So how much did it cost? Sorry, so after that whole, like, Joe Manchin thing. Build Back Better's universal preschool and childcare, zero to three, that was like capped as a share of income, that was projected to cost $350 billion over the 10-year window. So if you just assume that we want to pay more for universal childcare, you could assume it is as much as $500 billion over the 10-year window. So now the real question is, it's the government, that's monopoly money. Does that mean anything?
49:37 Robin Rauzi? Yeah.
49:39 Speaker 02 All right, well, let's, uh, let's give you some carefully selected alternatives to $500 billion for universal childcare. For the record, universal paid family leave would be like $200 billion.
49:50 Robin Rauzi? And that would be part of this.
49:51 Speaker 02 I think it should be.
49:53 Robin Rauzi? Right, so now, so now we're, so are we going to, are we adding those?
49:56 Speaker 02 If we add those up, that would be about $700.
49:58 Robin Rauzi? So 700 billion.
49:59 Speaker 02 Yeah, I mean, and that's like giving a generous amount. Like, 700 billion over 10 years, it's $70 billion a year. That's probably an overestimate, but, you know, advocates can, you know, we've got to defend the right space. So the 2017 Tax Cut and Jobs Act cost $1.9 trillion.
50:19 Robin Rauzi? $1.9 trillion?
50:21 Speaker 02 Yes.
50:21 Robin Rauzi? So it would be more than twice as much as having both paid family leave and universal healthcare, or universal childcare.
50:27 Speaker 02 You could have universal paid leave and universal childcare two and a half times over for the cost of that tax bill. Just giving you a sense of scope.
50:36 Robin Rauzi? Again, we could have nice things.
50:38 Speaker 02 We can have nice things. Now, that bill had a lot of expirations in a lot of its components, and right now, Republicans would like to extend the part of the Tax Cut and Jobs Act that is going to expire. And the Congressional Budget Office has estimated that were they to go through with that, it would cost $4.6 trillion. The 2012 American Tax Relief Act cost $3.6 trillion. So they're not afraid to throw this type of money around when it comes for tax cuts. So $4.6 trillion, I mean, we're talking like, solid five universal childcare, getting on six universal childcare systems, and universal paid family leaves, and stacking them on top of each other, and it would cost
51:22 Speaker 02 less than this tax cut that they're probably going to pass within the next month.
51:26 Robin Rauzi? And we know that this pays off. We know that, you know, kids do better, that they graduate at higher rates, they they go to college at higher rates, they earn more. I mean, like, we haven't even talked about the economic benefits of the outcomes of having kids who are going to school ready to learn.
51:42 Speaker 02 Yeah, I mean, it's it's, there's lots of ways that you can make this argument because it is so beneficial. Like, you can make the little worker bot argument, which that's immediate tax dollar increase, program participation decrease, worker bots in the economy makes for a larger economy, as we've talked about before. So like, you can make that worker bot argument. You can make the child investment argument. And I think for me, like, it's often put in terms of the test scores that people, that kids can get, and that if you're more prepared for school, you will do better throughout school, not just kindergarten, but it lasts for a long time. And I'm pretty sure any public school teacher would be like, yeah, no, durr.
52:18 Robin Rauzi? And please do that.
52:19 Speaker 02 Yeah, yeah. And if you're a public school teacher and you think I'm right, by all means, chime on in at [email protected] . But for me, the argument comes down to the principle of the matter, that if you were to take today's crop of five-year-olds, you know, they're going to show up to kindergarten in the fall, economic inequality between rich and poor has already been imprinted on these kids. It's been imprinted on the type of early childhood investment they got, and you can see it in what's called the kindergarten readiness gap. Of how prepared they are for kindergarten and things like early literacy, early numeracy, can they count to 10? Do they know their ABCs?
53:00 Speaker 02 The gulf between how kids show up to kindergarten is so wide. To me, it's a gross economic failure that we would not shield kids more than we do from the inequalities of their parents.
53:14 Robin Rauzi? Yeah.
53:15 Speaker 02 And so, yeah, like worker bots, great. Kids do better in school, also good. But for me, it's like, this is like one of these like base performance measures of the economy that it is reaching down as far as five and picking out the people that are going to be more likely to succeed. No, fuck that. I hate that. And of all the arguments, this is the one that I think I get like the most upset about of like, well, how fucking worse off do you need a five-year-old to be? To feel like you've treated their parents fairly because they went hunting?
53:49 Speaker 02 I get it. So this is the thing with Manchin in this argument of like, you know what? Just assume that that parent sucks. You're better than them. You work hard and pay taxes and they don't. They don't invest enough in their kid. Like you win, but like you, the kid loses. So can't you be smug and invest in the kid at the same time? Can I get you a little jacket that says taxpayer and better parent? And then we still get to invest in the children and like make this early childhood investment? Like, I'm not telling you not to hate their parents. I'm not telling you to feel like you can't feel better than them. Like feel is better than what you want. I will get you a little sash and tiara that says better than poor parents. I will hand stitch it. If you would invest in children like through a universal childcare system that makes all of them equally ready to thrive at school.
54:34 Speaker 02 I would happily do it. Happily do it. But I, that's, oh, yeah. Even if they went hunting, I would do it.
54:44 Speaker 02 All right, so executive orders.
54:46 Robin Rauzi? Executive orders.
54:47 Speaker 02 For our new listeners, you might not know that we like to end every show by talking about the Republic of Rousey and the Edwards Republic of executive orders that we would put through in our little fiefdoms, rules that you can't break.
54:59 Robin Rauzi? That's right. And that we get to just sign into law.
55:02 Speaker 02 We just sign into law whatever I feel like. So my executive order is that every company that has a customer service line, one, they're required to have them, and two, it has to go to a person. And if you make people go through like an AI red voice or computer voice through a touch tone system, every number I have to press to get to a person, I get to charge you like an extra 10% in taxes. And it doubles. So if I have to press, it's like one number, I charge you 10% extra in corporate taxes. Two numbers, 20. Three, 40. You're like tennis rules. We're going way, way, way up. Like if you want to have market agglomeration, you go right on ahead, but you're going to have to have a fleet of customer service providers, and I will require it by law, and
55:46 Speaker 02 I will tax you to death if you don't. I hate going through those things.
55:51 Robin Rauzi? My executive order is much simpler, which is if you're a band and you go on a farewell tour, you only get to do that once. You don't get to double dip on farewell tours, and your ticket sales will be garnished if you do a repeat farewell tour.
56:05 Speaker 02 What if they do a farewell tour, a reunion tour? Can they get around it without trying to reunite?
56:10 Robin Rauzi? No.
56:10 Speaker 02 It's just one farewell.
56:11 Robin Rauzi? It's one and done, people.
56:14 Speaker 02 I, oh, I love this.
56:17 Robin Rauzi? Okay.
56:18 Speaker 02 All right. We also do not have any financial sponsors as of yet, although we do have many supporters who have given us their money to support the production of the show. But we do have spiritual sponsors of the things and people we need to thank that help us get along with our day, our week, our life, and of course, this show. My spiritual sponsor for the week, in line with the show's theme, is traveling without children. Once you've traveled with children, it's really hard to go back. And then you get to travel without children, and you're like, oh, my God.
56:51 Robin Rauzi? Life is so easy.
56:53 Speaker 02 This is amazing. What am I gonna do? Go to the bathroom? Sit at a restaurant? Put on headphones? Maybe I'll just randomly walk around the bookstore and touch every book but not buy anything. I can do whatever I want. Whatever I want.
57:05 Robin Rauzi? I could just read a book.
57:06 Speaker 02 I could just read a book. I could just sit there and read a book. I could stare into the middle distance and miss my flight. I'm so zoned out. And it doesn't matter. Because I'm traveling without children. Traveling without children, I can't endorse enough. If you have children, you need to find a way to travel without them. It's, oh god, it's like, it's the sweet release of like, I'm just on an airplane right now, listening to headphones, and I don't have to do anything.
57:29 Robin Rauzi? So good.
57:30 Speaker 02 Wow, that's, that's life. So, fun childcare and free trips without kids.
57:35 Robin Rauzi? That's good. My spiritual sponsor this week was this great vending machine I saw that sells gelato in like, little cups. I couldn't resist it. And it was banging good. It was excellent. It was excellent. Yeah, I'm, I'm all for more sort of creative Japanese-style vending machines, so that if it's after hours, it's Monday afternoon and the gelato shop isn't open yet, I can still get it.
58:03 Speaker 02 I would, I mean, think about all the cigarette vending machines there used to be.
58:07 Robin Rauzi? Yeah, they're just sitting around unused. Kind of like all those photomat booths that became, you know, espresso, drive-through espresso, at least here in Spokane. Not Spokane, Spokane.
58:18 Speaker 02 Spokane like beer can.
58:19 Robin Rauzi? Spokane like beer can. Yeah, we got a lot of drive-through espresso here.
58:23 Speaker 02 Again, endorse. I mean, endorse all of this.
58:31 Speaker 02 This has been a, this has been a great show. I think it's, you know what's optimism? Having different problems in the future. That's optimism.
58:39 Robin Rauzi? Exactly. We would just like to have better problems.
58:41 Speaker 02 I just want a better set of problems, and frankly, that is what we deserve.
58:47 Speaker 02 As we end our show, we would like to snap out our production team, which consists of Sophie, our audio engineer and producer, and Andy, our video engineer and producer, that help us produce the show, make the show, and of course, advertise the show to you. So, thank you very much.
59:01 Robin Rauzi? Thank you both.
59:02 Speaker 02 Snaps out.
Previous A Family Bill for a Shrinking U.S. Next OE Lightning Round: Kathryn Edwards Takes Your Economy Questions Page updated November 3, 2026 · transcript and summary are machine-generated