Brazil’s Far-Right Is Surging — Investors Love It

Ed Elson is joined by Monica de Bolle to unpack her takeaways from the Brazil election results, how the market reacted, and why the runoff could mark a major turning point for the country. Then, Kathryn Anne Edwards returns to break down the September jobs report and the warning signs she sees in the data. Finally, Ed shares his take on the SEC’s decision to change its quorum law. Monica de Bolle is a Senior Fellow at the Peterson Institute for International Economics. Kathryn Anne Edwards is a labor economist and host of the Optimist Economy Podcast. Vote for Prof G Markets at the Signal Awards here Subscribe to the Prof G Markets Youtube Channel Follow Prof G Markets on Instagram Follow Ed on Instagram, X and Substack Follow Scott on Instagram Send us your questions or comments by emailing [email protected] Learn more about your ad choices. Visit podcastchoices.com/adchoices

Speaker names marked ? are inferred from speaking time and the show’s known hosts — they are not voice-verified.

• 0:00Speaker 00

  Companies shouldn't have to choose between speed and control. Amex Corporate connects cards with flexible spending controls and real time visibility to help teams adapt faster. Built to simplify, designed to scale. This is Amex Corporate. Get started at go.amex slash Amex Corporate. Terms apply.

• 0:23Speaker 01

  This Monday.com ad was created by a team of people and AI agents. Reese, our content agent, wrote the copy based on our best practices, like mentioning Monday.com three times. That was the second. Johnny, our coordination agent, built the timeline and kept everyone aligned. Olivia, our human creative director, stayed in the loop. Because agents are great, but they don't always know when a joke lands. She had one note. Tell listeners it only takes minutes to build an agent. So minutes. Create your own AI agent today on Monday.com.

• 0:55Ed Elson?

  Support for the show comes from Alpha Space by Yahoo Finance. Alpha Space by Yahoo Finance is the advanced investing platform you've been waiting for. My co-host Scott Galloway is a fan of the platform. Here is what he had to say.

• 1:09Scott Galloway?

  So I have been using Yahoo Finance as my portal for finance for, I'm not exaggerating, about 30 years. I think they do a great job.

• 1:17Ed Elson?

  You can explore Alpha Space with a Yahoo Finance Gold subscription and right now your first year is 50% off. Head to yahoo finance dot com slash prof G. That's yahoo finance dot com slash prof G. Bill, there's $239.70 for the first year, then $479.40 thereafter. Offer valid for new subscribers in the US. Offer ends October 31st, 2026.

• 1:50Speaker 04

  Money markets. If money is evil, then that building is hell.

• 2:01Ed Elson?

  Welcome to Prof G Markets. I'm Ed Elson. It is October 6th. Let's check in on yesterday's market vitals. A rally in big tech drove the NASDAQ to a record high. The S and P 500 and the Dow also climbed. The yield on 10-year treasuries hit its highest level since 2002. Brent crude dipped below $100 per barrel. And finally, Nvidia shares rose more than 2% to hit a record high.

• 2:29Ed Elson?

  Okay. What else is happening? Brazil's election just sent its stock market to a record high. The Iber Vesper, Brazil's main stock index, jumped as much as 9% yesterday, making it the index's biggest intraday gain since April 2020. The real also rose more than 4% against the dollar, and it's now trading below five reals per dollar for the first time in about a year and a half. Now, what were they actually reacting to? Well, Lula, Brazil's left wing incumbent, was projected to finish first, and every final poll had him ahead. Instead, Senator Flavio Bolsonaro, the right wing candidate, who is the son of former President Jair Bolsonaro, won 47% of the vote on Sunday.

• 3:13Ed Elson?

  Lula won 45. Neither candidate cleared 50%, though, meaning the two will now face each other in another election on October 25th. At the same time, the far right also achieved major victories in congressional and gubernatorial elections across the country. So here to break down what happened, we are speaking with Monica DeBol, senior fellow at the Peterson Institute for International Economics. Monica, great to see you. Thank you for joining us on the show. Let's just start from the very basics here because we haven't talked about Brazil in a long time. I guess the first question is, what happened in this election? What are the important things to be aware of?

• 3:58Ed Elson?

  And then maybe we can get into the market's reaction.

• 4:00Speaker 05

  There are three things that are very important about these elections. So first of all, yeah, it was a presidential election. But more than that, it was also an election for governors in Brazil and an election for Congress. So really, it's an election with a three-part story. So there's the story of the presidential election. There's the story of what happened to the gubernatorial races. And there's the story of what happened to the congressional races. And all three stories are very compelling. The least compelling of them is actually the presidential race. Because the presidential race, there's nothing there that we didn't already kind of foresee.

• 4:40Ed Elson?

  Yeah, tell us a little bit more about this, the presidential race here, because we obviously know the name Bolsonaro. His father is obviously pretty controversial. What did we, what did we learn about the presidential race so far?

• 4:55Speaker 05

  Both of those candidates, so both the current president, Lula, who's running for reelection, as well as Flavio Bolsonaro, who's former president Jair Bolsonaro's son, both of them had very, very high rejection rates from the outset, at about 45%. So about 45% of voters who had been polled throughout the campaign were saying, we're not going to vote for either one of those candidates. So it's not really an election about who is favored or who the public likes the most. It's actually an election about who the electorate can stomach at this point, or who do they dislike the least?

• 5:38Speaker 05

  So it's important to contextualize that because then, when you look at the actual numbers and what happened, one important story here is that Brazil had, in the first round of the elections yesterday, the highest abstention rate that it has ever had in an election. It was at about 21 point something percent. So let's say 21%. That's one fifth of the country that did not vote. And in Brazil, that's very high because voting and elections are mandatory. People have to vote. They do not have the option to opt out. And yet, a fifth of the country did. So that already tells you a lot about what's going on in terms of voter sentiment in the country and how

• 6:23Speaker 05

  people actually feel about these candidates individually.

• 6:27Ed Elson?

  How did Brazil end up in a place where the two options to be president are two people that a fifth of the nation have decided that they hate? That's pretty wild.

• 6:37Speaker 05

  So this comes back to the extreme, really extreme, I don't even know if the word polarization fits anymore, but let's use it for now. So this all comes down to the extreme polarization that Brazil's been under. It's been like this for the last, well, this being the third, the last three elections. So back in 2018, we had an election between, not Lula, because Lula was in jail at the time, but his, the person who he appointed to be his successor, against Jair Bolsonaro. And Jair Bolsonaro won that election. Then in 2022, Lula had been released from jail, and there was an election between Lula and Jair Bolsonaro.

• 7:22Speaker 05

  And Lula won that election. And now we're back to the same situation, a different Bolsonaro, but the same Lula, running against each other. So it's almost like people have seen this movie over and over again, and it's kind of running on replay. And the reason is, Brazilian politics at this moment does not have the bandwidth, because of polarization, to offer up any other candidate. The other options that came out and that, you know, ran in the first round of the elections, they were broadly rejected as well because they didn't even come to 3% of the total vote, the other candidates who were in the running. So at the, at the end of the day, the only two

• 8:04Speaker 05

  recognizable names in Brazilian politics are Lula and Bolsonaro. And so it's yet another election that pits the two names against each other.

• 8:14Ed Elson?

  I mean, the situation sounds pretty terrible. You've got both of these candidates who have both of their own ties to corruption. You've got Lula, who has his own history, and of course, he went to jail himself. You've got Bolsonaro, who's the son of the guy who plotted a coup and got a 27-year sentencing. But at the same time, investors are pretty happy about this. They're reacting to something. The, the stock market is up. It's actually been doing really well. The index is up 30% year to date. It's up 45% in the past year. So I guess we'll get into what's happened over the past year, but what exactly are they reacting to? Are they reacting to something better in terms of

• 8:57Ed Elson?

  those gubernatorial races and that congressional race?

• 9:00Speaker 05

  So exactly, yeah. This is where the story is much less about the presidential election than it is about what happened in the gubernatorial races, as well as in the congressional ones. And there, there was a very clear story. So whereas in the presidential elections, you know, the, the story is the same as it's been in the past several years, the story for Congress and governors is completely different. And there, what we saw was a very clear win, practically a landslide by the Brazilian far right, represented by a party called the PL. That's the, the acronym. It stands for Liberal Party, but do not understand liberal in any terms that are recognizable to a US

• 9:45Speaker 05

  audience or even to a European audience. Liberal has a completely different connotation in Brazil. That is the far right party. They were able to elect 121 deputies to the lower house. That's the most any party has ever had in Brazil's democratic history. The House has 573 deputies, so they have quite a big chunk of that now, a little over 20%. In the Senate, they were able to grab a lot of seats. So currently, they, they represent the PL, the far right party, represents about a third of the Brazilian Congress. And they also managed to elect, in the first round,

• 10:27Speaker 05

  five governors, and two more are likely to win in the runoff. So they'll have seven governors out of 20-plus of little big states in, in, in Brazil. So it's a lot. It's a huge sweep. And it's a far right with, the, the, the far right doesn't properly have, or they don't really have an economic plan as such for the country. But what they have been saying is that they will toe the same line that Milley has toed in Argentina. So they're, they're positioning themselves as libertarians, so to speak, as free marketeers, so to speak, and as people who simply do not like big government, whatever that means.

• 11:10Speaker 05

  And this is why I think we can, we can say to some extent that markets are happy today. I don't think that happiness is going to last, to be honest.

• 11:20Ed Elson?

  Yeah, talk more about why the happiness weren't lost. I mean, it sounds like investors are saying, hooray, no regulation. But I guess our view on this podcast is that isn't necessarily always a good thing for business. Maybe you agree. Why do you think this weren't lost?

• 11:35Speaker 05

  So, hooray, no regulation is not a good thing, especially in a country like Brazil. And, and hooray, you know, we have the far right, and who's going to do all of these wonderful things and reform the country. Wait a minute, that's not exactly what's happening. Because what's really happening here is that this party, the PL, the far-right party, that has now conquered, you know, the Congress in this way, as well as the gubernatorial races, they are just beginning their power consolidation. So, the process by which they're going to consolidate themselves in power. A party in the process of consolidating itself, especially one that has a kind of authoritarian

• 12:19Speaker 05

  bent, if not an outright authoritarian bent, is a party that is going to spend to be able to stay in power in the way that they intend. So, any plans for fiscal adjustment, you know, bringing down the debt to GDP ratio, which in Brazil is very high, everything that the market imagines is going to be possible now, is really not a priority for these people, because they've just come to power, and the first thing that they're going to want to do is to consolidate that power. And consolidation, power consolidation involves spending, not less spending, more spending.

• 12:56Ed Elson?

  Do you think that might be also what is being priced in, at least in the short term, as investors know that we're about to see this massive injection of spending from the fiscal side in Brazil, and those dollars have to go with those reals, excuse me, have to go somewhere. Presumably, it's going to go into Brazilian businesses. Of course, that's going to cause problems later down the line when it comes to fiscal sustainability and their debt to GDP, but at least in the short term, free money.

• 13:24Speaker 05

  There could be some of that going on, but I suspect it's much more a story of overt speculation at this point, when what markets are doing is much more speculative than anything else. Because in reality, this has been a campaign where there's been absolutely no discussion of major economic themes. It's almost as if Brazil had no economic problems whatsoever, which is certainly not true. And therefore, you know, everybody is pretty much in the dark with respect to what Flávio Bolsonaro will do, but also with respect to what a re-elected Lula would do. So, there's really no reason for enthusiasm at this point. There's a, there's a great reason for caution on both sides.

• 14:08Speaker 05

  So, I, I'm reading this movement that we're seeing as much more speculative than anything else.

• 14:15Ed Elson?

  What was the, the election? What is the, the national debate in Brazil really about at this point? What have we fought, what are the different factions fighting over? And to what extent does it map onto the national conversation in the US?

• 14:31Speaker 05

  So, it maps somewhat, but we need to be careful about these readings of Brazil as following in the steps of the US, because the contexts are completely different. Yeah? I mean, they may sound kind of similar, and when you, when you just look at them at a glance, but profoundly, the context is not the same. And I think what is important to, to realize here is that the conversation in Brazil has really been all over the place, because the country is in a major institutional crisis. There was just a massive, massive corruption scandal coming out of a financial institution that was closed by the central bank last year, was liquidated by the Brazilian central

• 15:16Speaker 05

  bank last year. And that particular scandal has had ramifications all over the place. In fact, it does affect Flávio Bolsonaro, the candidate, who seems to have some involvement with this scandal, and he is under investigation. But what's happened recently is that the scandal reached the Supreme Court. There are some Supreme Court justices who have allegedly been involved with the banker, the, the owner of the bank that failed, and who is currently in jail and serving time for his financial crimes, and he's, he's also under investigation for a bunch of other things. So, really, the conversation in the country has been about this massive institutional

• 15:58Speaker 05

  crisis, and a constitutional one at that, given that it involves the Supreme Court. And really, very little time has been devoted to thinking about what each of these candidates is going to do, what they're proposing to do, and how they're going to resolve this institutional crisis.

• 16:16Ed Elson?

  It seems as though you would argue that the nation of Brazil is headed into pretty dangerous territory at this point. We have the, the runoff election taking place in a little less than three weeks. I'd be interested to just get, as we wrap here, your prediction on what might happen there, but also just your thoughts on the future of Brazil, because your description is actually pretty concerning.

• 16:43Speaker 05

  I'm very worried. The country is, is in an existential place, so to speak. The, the runoff is sort of an existential election in a lot of ways, because the Brazilian far-right, especially the postsonarista far-right, does have a project, let's put it like that, for the country, which has nothing to do with the institutions and the current constitution of Brazil, which today completes only 38 years. So, just as a reminder, this is a really young democracy. It's less than 40 years old.

• 17:23Speaker 05

  And yet, the constitution is being contested, the Supreme Court is being contested, its powers are being contested. All of this is coming from the extreme right. So, the runoff vote between Lula and Flávio Bolsonaro, who represents that worldview, is really about where, what, what the country is going to be. What is Brazil going to be? Is it going to go back to its authoritarian roots, back to a style of dictatorship that's not going to be too dissimilar from the military dictatorship that we had for 20-plus years and ended in 1985? Or is Brazil going to continue to be a democracy with weak institutions, yes, but a democracy nonetheless, for some time yet?

• 18:08Speaker 05

  That is really what the runoff is going to be about. It's about two different projects, an authoritarian one versus a democratic one for the country at large. And this is not even making any judgments about what we think in terms of what the right does, what the left does. It's not about that. It's really about different, completely different worldviews, and completely different, I would say, opposing even, ways to think about Brazil going forward and going into the future.

• 18:37Ed Elson?

  Monica DeBol is Senior Fellow at the Peterson Institute for International Economics. Monica, this was fascinating. Thank you.

• 18:45Speaker 05

  Thank you very much.

• 18:46Ed Elson?

  After the break, warning signs in the labor market. And by the way, we have been nominated for three Signal Awards, so please go vote for us at vote.signalaward.com. Type in Prof G Markets, you'll find us, and we'll leave a link in the description, too. Thank you.

• 19:03Speaker 06

  You know that feeling when too many things fall through the cracks? Monday.com was built for that gap. The AI work platform where people and agents work side by side to deliver more together. Create your first Monday agent today at monday.com.

• 19:23Ed Elson?

  Support for the show comes from Alphaspace by Yahoo Finance. Instead of bouncing between countless tools and tabs to manage your portfolio, Alphaspace by Yahoo Finance brings your entire investment workflow into one easy-to-use platform. Alphaspace by Yahoo Finance utilizes a Yahoo Scout-powered assistant to build a personalized view around exactly what you want to analyze, then syncs it with your portfolio for real-time tracking. You can compare multiple tickers, explore everything from candlestick and line charts to fundamental data, and layer in indicators like moving averages, Bollinger Bands, RSI, MACD, and more. My co-host, Scott Galloway, is a fan of the platform. What did you think of it, Scott?

• 20:05Scott Galloway?

  I have been using Yahoo Finance as my homepage for finance, or for the web, actually, for 30 years. And as someone who has advised hedge funds, run my own money, prides themselves on being good at investing, and it takes up a big part of my life, I think they do a fantastic job.

• 20:25Ed Elson?

  You can explore Alphaspace with 50% off your first year of Yahoo Finance Gold at yahoofinance.com/profg. That's yahoofinance.com/profg. Bill is $239.70 for the first year, then $479.40 thereafter. Offer valid for new subscribers in the US. Offer ends October 31, 2026.

• 20:50Speaker 00

  Real innovation is powered by real people. This is Amex Corporate. Trusted experts, smarter technology, 24/7 dedicated support from day one to answer questions, help set up policies and approvals, and consult on spend capacity as your business needs evolve. Plus, on-demand resources help level up operations at every stage. That's the trusted service you've come to expect, built to simplify, designed to scale. This is Amex Corporate.

• 21:28Ed Elson?

  We're back with Prof G Markets. The September jobs report showed a labor market on shaky ground. The economy added just 29,000 jobs and the unemployment rate rose to 4.2%. July and August were both revised down, pushing July's totals into the red. And wages grew just 3% from a year ago, the slowest pace since 2021. Meanwhile, US companies announced the fewest September job cuts since 2022, but they are not hiring either. Employers announced plans to hire just 90,000 workers in September, which is the weakest hiring intentions in 15 years.

• 22:08Ed Elson?

  Uncouth odds of a Fed rate hike fell from 65% to 21% after the jobs report was released. Here to discuss the state of the labor market, we are joined by Catherine Ann Edwards, labor economist and host of the Optimist Economy Podcast. Catherine, thank you for joining us on the show. Let's get into the jobs report here. 29,000 jobs lower than expected. The unemployment rate went up. Overall, not a great report, it seems. What did you make of what we saw?

• 22:42Kathryn Anne Edwards?

  Pretty weak report. Definitely not a report that anyone wanted to get of a certain side heading into the midterms. It's not news that families wanted to hear. It's not news that companies wanted to hear. It's certainly not news that leaders wanted to hear.

• 22:54Ed Elson?

  When you look at some of the trends here, I mean Chair Walsh says that he cares about trends, not data points. This is his whole notion of let's not get too into the numbers. I mean, what are you seeing in terms of trends right now when we look at the labor market?

• 23:07Kathryn Anne Edwards?

  You know, I've said before on your's program, I mean, this is an economy that in some ways is treading water. You know, we're not really expanding rapidly. You know, it's so hard to see a trend when it's noise around a stable mean, right? If we were growing 5%, if we were, if you saw job growth that was quite steady, these types of corrections around the monthly job numbers of up, you know, up 20, down 20, they wouldn't push you from red to black. They wouldn't make it from a bad month to a good month because if you're adding 150,000 jobs every month, you know, moving up and down 10 or 20 on either side, you can still pull out the trend. I think what is so bewitching about our current labor market is that you can't pull out a trend because we're not moving.

• 23:49Kathryn Anne Edwards?

  We're not falling into recession, but we're not growing in, you know, really the ultimate test of how strong the labor market is, is how much workers are getting paid. And the answer is not enough.

• 24:00Ed Elson?

  What do you make of the hiring plans number that we're seeing at the economy's employers are planning to hire just 90,000 workers, weakest we've seen in 15 years? This seems to align with what I hear anecdotally, which is this kind of no fire, no hire policy that we're seeing across a lot of companies. What do you make of that? And does that concern you at all?

• 24:23Kathryn Anne Edwards?

  It's horribly concerning because we, you know, the labor market is built on movement. And that's, you know, you can immediately interpret not hiring lots of people in the fall as a blow to young workers because this is when a lot of them would be starting their first jobs. You finish school in May, you have the summer and then you start in the fall. But really, all workers suffer from a lack of mobility and that comes from being able to move jobs, take, take different employers, different cities. And we are seeing such a slowdown of mobility, very evident in the data that people aren't switching jobs. You see it through hires, through quits. That is concerning because one, that's typically how people get pay raises is by getting an outside offer or taking an outside offer.

• 25:08Kathryn Anne Edwards?

  And two, it means a lot of people are stuck in jobs that they have either outgrown or would like to outgrow but can't move. So it's not just a performance measure of the labor market. It's also a interpretation of how people feel in the labor market. I mean, if you feel stuck, you don't feel good.

• 25:26Ed Elson?

  One thing that's been really fascinating to track is, one, we've been talking about this a lot, the fact that healthcare and social assistance work, those are the two sectors that are really powering the labor market right now. That continued once again, we've talked about that a lot. But the other thing that is quite fascinating is the extent to which men specifically are not benefiting in the labor market. 8% of the job growth during Trump's second term has gone to men. Women have gained about 711,000 jobs, men 65,000. Striking considering that it seemed like a lot of the platform, Trump's platform was about, you know, up leveling young men.

• 26:09Ed Elson?

  It seemed to be a very young men targeted platform. What do you make of sort of the gender differences that we're seeing in the labor market? Has it surprised you at all?

• 26:18Kathryn Anne Edwards?

  Not really, which I say like really smugly, but not because I don't care. I mean, the, look, it was, it was a lie. You know, you had a campaign that was built on the notion that what is holding back men are other people, whether it's immigrants taking jobs or, or women taking jobs, the idea that there was some fixed number of jobs that other people took them. And if you held back parts of the population, men, and in particular, white men would thrive. That was the lie that was sold to so many people. It was never true and now we, we basically have proof in hand, right? That you could have years in which the US has been losing immigrants, which we will probably lose this year as well as last, and it's not helping native workers.

• 27:02Kathryn Anne Edwards?

  You're, you're seeing that even if you have lip service to the idea that well, maybe we'll pay married women to stay at home or if they have a kid and well, we're going to gut childcare services provided by the federal government, that doesn't translate to jobs. This notion that if you attack certain people in our economy, that you will singularly benefit, it's just not true. That's not the way our economy works. And I think that this exposing this lie and naming it for what it is is important because the truth of it was you had a Democrat president who, you know, once under questioning, when asked how many genders there were, shrugged and said at least three. He spent a lot of money on construction and manufacturing projects that the next administration pulled back.

• 27:43Kathryn Anne Edwards?

  It's really comes down to money and not some, the success of others doesn't hold you back in our economy, but the pullback of federal funds, that certainly can.

• 27:52Ed Elson?

  How do we exactly describe why that is happening? Is it basically just that healthcare is growing and that's a sector that a lot more women are employed in? Like, is that the story here?

• 28:04Kathryn Anne Edwards?

  Well, I think that Trump's economic, the Trump administration's economic policies has really taken aim at manufacturers and construction in general, right? We're going to, you know, target work sites for deportation. We're going to have shortages within the industry that slows down construction for everybody, even if you're only missing a certain type of worker, that the job doesn't move as quickly. At the same time, you know, manufacturing is dependent on so many things, but supply chains are one of them. And if you, you know, take the supply chain and decide you're going to make four parts more expensive, that manufacturers feel that. So simply, you know, giving this notion that we want to make America great again and,

• 28:46Kathryn Anne Edwards?

  you know, have male breadwinners and that's what we want is not the same thing as coherent economic policy that's, you know, targeted towards maximizing the sectors that have male dominant employment like construction and manufacturing. I always thought it was really interesting that when, you know, throughout the campaign and even early days of tariff policy and so on, you didn't really have a lot of manufacturers or construction companies lined up to say, yeah, please deport people and have tariffs, that'll help us a ton. The added kind of layer to this is that it's all done under a guise of unpredictability. Which policy will be struck down by the Supreme Court? Which tariff will actually be in place? You know, hard to plan attacking supply chains, attacking workers, that does not help.

• 29:27Ed Elson?

  The other thing that was quite interesting or notable is the fact that we have average hourly earnings growth up 3% year over year, which sounds good, but then you remember that is lower than inflation. So actual real earning power, real wage growth is down. Do you, what do you make of that number? Do we have any sense for how long this might continue? I mean, it seems like this is becoming a pretty structural theme, which is that prices are rising faster than wages.

• 30:03Kathryn Anne Edwards?

  Yeah, there's two things going on. One is that the war on is pushing up prices in general. So that's, you know, it's, it's a moving target and you moved the target up. The, the second is, is that wage growth is driven by people switching jobs. So as the labor market slows down and all that mobility kind of starts to, that churn goes from a healthy clip to a really slow crawl, people move jobs less. And that's one of the leaders of pushing wage growth forward are the people who take new jobs or switch employers. So it's here, both the mechanism to increase wages is slowing down as the bar as it, that it needs to meet is going up and it doesn't, you know, it's a jumping number. So there could be a month, you know, next month, it could be that, you know, PCE didn't

• 30:44Kathryn Anne Edwards?

  come in as high as we think it did and wages had a good month, but you are not going to see in this report or the next report, or probably within this year, consistent wage growth that beats prices. And that means that every American took a haircut.

• 30:58Ed Elson?

  Something you wrote about recently is health insurance, which is one of these topics that we always try to understand in this show and then can barely wrap our heads around because the industry is so complex. And I think that's all intentional. It's designed to be so complex that no one can understand it and therefore change it. But you wrote about employer sponsored health insurance, which you said was rapidly deteriorating. You talked about the health insurance premiums, which are set to jump this year. Could you talk a little bit about your thoughts on health insurance right now and why it's so important in this moment?

• 31:33Kathryn Anne Edwards?

  You know, if you look at the past 25 years of employer sponsored health insurance premiums and just use that to predict the next 25 years, health insurance for employer sponsored premiums, it'll reach $120,000 by 2050. So to say that it's not tenable is not an attack on people's value systems or what you think government should do or be organized within a market. I mean, it is not tenable to continue to have employer sponsored health insurance. And we are paying a fortune for it through the tax preferences given to employer plans. You don't pay income tax or payroll tax on the value of your health insurance, which is rapidly climbing. So there's no, there's no defendable aspect of this system other than people don't like

• 32:18Kathryn Anne Edwards?

  government. So what I've tried to kind of use to soften this is to say, you know, we've had two federal health insurance systems for 61 years and counting through Medicaid and Medicare. We've learned a lot from them. You could think of them as an extended pilot program and it's time to stop collecting data and move on to a universal system in which I think private plans will have a role and they'll be supplemental, but they have. Failed at what is probably one of the most important jobs from a private system built off of the idea that they could deliver on competitiveness is that they would be able to deliver on prices and they haven't. And so the price competition through employer plans, through different provider networks, leading to lower prices for Americans has absolutely failed.

• 33:02Kathryn Anne Edwards?

  And now we need a big government negotiator to get those prices down, which is what works in most other countries. So I don't hold that up because I think universal public health insurance is perfect. But I do think we need a better set of problems when it comes to health insurance and an 11% year-over-year increase in your health insurance premium, coming on the cusp of a year in which wage growth has lagged beyond price growth in general. I mean, this is a punch to a lot of Americans' bottom line. I don't know when we hit that breaking point of like, we shouldn't keep doing this obviously bad thing anymore. That part I don't know, but I know what comes next can be well organized and well thought out.

• 33:41Ed Elson?

  I mean, when you think about the American worker right now, I mean, unemployment rate isn't terrible. So we'll give, we'll give them that. But beyond that, I mean, when you look at wage growth, as you say, wages are on a real growth basis, wages are in decline. Health insurance premiums are exploding up 11%. They're expected to jump 11%. It does seem as though the American worker is kind of getting screwed right now, I think would be probably a fair statement. And I guess the question, I mean, you talk a lot about policy proposals and right there is, is a proposal right there.

• 34:25Ed Elson?

  Universal public health insurance with private supplemental plans. Is there anything that you recommend people do on an individual level? Like, is this a moment where people look at this report and they say, okay, I need to go to my employer and I need to figure out how to negotiate better pay, or I need to figure out how to negotiate better health insurance? Like, are these, are there strategies that you're aware of that workers can employ to better their situation and their prospects?

• 34:52Kathryn Anne Edwards?

  Yeah, I wouldn't put it on them. I think there's probably someone who would be sitting here and tell you, like, you know, you could do this. My, my somewhat cynical outlook is you could go to your employer to try to negotiate premiums, but you'll probably just end up with a worse plan. And that they'll try to, you know, that premiums won't go up 11% because they're going to downgrade plans in order to save money and you'll just have worse, worse health insurance with costs, not on the premium side, but on the out-of-pocket side when you go to the doctor. I, I don't, I can't fault the American worker for having, you know, systemic structural issues holding them back. And so if you want to go do something, go vote. Because there are a lot of problems that we could solve with better economic policy. And none of it's even really that radical or that much of a departure, but it's putting

• 35:35Kathryn Anne Edwards?

  your thumb on the scale for workers or, you know, or children over taxpayers. I mean, we, we've got to make some different choices in our economy if we want our economy to look any different. And we've been making the same choice kind of over and over again. So I, I try to tell people, you know, the, the, the policy that you want is not going to come from your work effort. You might be able to get a raise, but it's, it's kind of like a market failure. You can out-earn a market failure, but no individual's earnings will end one. So maybe you can get on the right side of failure so it doesn't hold you back, but it's still going to hold our economy back. And we're going to end up with a worse economy because we make so many people say, go through a market failure in order to purchase essential services or essential goods.

• 36:21Ed Elson?

  My final question, midterms coming up very soon. Do you think that these frustrations and these problems will be reflected in the vote? Do you have any thoughts or predictions for the midterms?

• 36:32Kathryn Anne Edwards?

  I spent the last few days really deep in the consumer sentiment data at the University of Michigan. And this data has been, you know, under attack recently, especially on the conservative side, because it shows that people are unhappy. And they're like, well, that's a lie.

• 36:44Ed Elson?

  The numbers are wrong.

• 36:45Kathryn Anne Edwards?

  That's clearly a lie. The numbers are wrong. But it has, it has some, some very fascinating findings. One of them is that sentiment in the US has really deteriorated around two key moments. The announcement of tariffs in April of last year and the war in Iran in the spring of this year. And consumers immediately internalized this as bad news. And they knew that it was going to mean higher prices in the future. Those are, those are so far from bipartisan. They're so far from even being congressional. I mean, that's just one, one man without a plan doing a lot of damage. And I think that American consumers, even to the extent that they view things from their own political perspective, there's not a lot of other places to put blame.

• 37:30Kathryn Anne Edwards?

  I mean, you've got a Congress that has done almost nothing. I mean, they're not even at work anymore. The, you've got a very individually-driven economic policy right now that is very much performing poorly for all of us individuals. And so I think the sentiment data, I didn't realize how much deterior, has had deterioration, even amongst Republicans. It's like a 20-point drop this year in terms of sentiment. So I think for me that I, it's hard to look at that and think that they'll get out vote in high rates, that people will feel enthused about going to the polls, even if they're committed Republicans. It's just, it's very hard to feel good right now. And so if you map sentiment onto voter behavior, it's hard to see Republicans doing well.

• 38:10Ed Elson?

  Catherine Ann Edwards is a labor columnist and host of the Optimist Economy Podcast. Catherine, always appreciate your time.

• 38:17Kathryn Anne Edwards?

  Thank you so much.

• 38:23Ed Elson?

  America's financial regulator, the SEC, is bending its own rules again. On Friday, the agency amended its quorum law. The old law said that you needed three commissioners to participate in all regulatory decisions at the SEC. Three commissioners formed a quorum and the idea was to keep things balanced, democratic, and bipartisan. But the new rule gets rid of all that. Now, to form a quorum at the SEC, all you need is one commissioner. In other words, one person can legally act as the entire commission. Now, usually I wouldn't care that much about something like this. Rules get changed all the time.

• 39:05Ed Elson?

  But knowing what's been happening lately at the SEC, all I can tell you is that this is bad. It's not just the fact that the SEC's headcount has fallen nearly 20% since Trump took office, or the fact that the SEC now has no commissioners from the minority party, i.e. the Democrats, and that is for the first time ever, or the fact that the new SEC chair, Paul Atkins, has bragged about this exodus publicly and stated openly that he expects more employees to continue to leave. Yes, those details are relevant, but the most important thing to know is that the SEC is no longer doing its job. In the first half of this fiscal year, enforcement actions against public companies by the SEC

• 39:50Ed Elson?

  fell by roughly 90%. It was the fewest enforcement actions on record. And in addition, last year, the SEC collected just $0.8 billion in monetary relief, which was also the lowest amount in over a decade. And that's not because financial crime magically stopped happening overnight. In fact, we have every reason to believe that more financial crime is occurring. The president, for example, has already made more than 28,000 stock trades since taking office, more than all of Congress combined. Mind you, he also manipulated many of those stocks just days after buying them. He bought Nvidia, for example, right before he approved selling their chips to China.

• 40:31Ed Elson?

  He also bought Intel right before announcing that the US government would take a stake in the company. To be clear, Trump would have been investigated for this by the SEC if it weren't for the mysterious disappearance of the SEC's enforcement director, Margaret Ryan, who left the agency right after she expressed interest in pursuing action against Trump and his family. So you put the pieces together and you start to realize what is happening here. America's financial regulator is being dismantled limb from limb. And the reasoning is quite obvious. They want to make it easier to commit financial crime. And that would have been pretty difficult to accomplish back in the day when the SEC

• 41:14Ed Elson?

  was well-staffed and it was run by a democratic quorum of bipartisan commissioners. But those days are over. The agency has been depleted and as of this week, the power to regulate now lies with one individual. As Jim Chanos once put it to us, "The golden age of fraud has arrived." The only difference is that the cops are no longer just inept. Now, the cops don't exist at all.

• 41:44Ed Elson?

  Okay, that's it for today. This episode was produced by Claire Miller and Alison Weiss and engineered by Benjamin Spencer. Our video editor is Brad Williams. Our research team is Dan Shalon, Kristin O'Donoghue, and Mia Silverio. And our social producer is Jake McPherson. Thank you for listening to Prof G Markets from Prof G Media. If you liked what you heard, give us a follow. I'm Ed Elson. I will see you tomorrow.

• 42:12Speaker 08

  In this life, you can't win.

• 42:14Speaker 09

  When the world gets you down.

• 42:15Speaker 08

  No!

• 42:16Speaker 09

  Escape to Pluto TV.

• 42:17Speaker 08

  This is objectively fantastic.

• 42:19Speaker 09

  Relax into the movies and shows you already know and love, all for free.

• 42:23Speaker 08

  Shwing!

• 42:24Speaker 09

  Even our news is uplifting.

• 42:25Speaker 10

  You stay classy, San Diego.

• 42:27Speaker 09

  Watch School of Rock, Crazy Ex Girlfriend, Anchorman: The Legend of Ron Burgundy, The X-Files, Wayne's World, and so much more.

• 42:33Speaker 04

  We're not worthy!

• 42:34Speaker 09

  The best things on TV really are free. You just have to know where to look. Escape to Pluto TV. Stream now, pay never.

• 42:43Speaker 11

  Dev Experts has over 20 years of experience in fintech development, with more than 800 engineers, and a physical presence in 11 countries. Supporting some of the largest institutions in finance with trading platforms, order management systems, matching engines, and more, Dev Experts is here to help your financial business succeed. Learn more.

• 43:03Speaker 10

  This fall, discover why there are two sides to every pancake story at Cracker Barrel. The edgy side, created by the golden crispy edges. And the softer side, made up of those warm fluffy centers. So slow down, make time to bring in the family, day or night, and try the new Sweet Cream Caramel Apple Pancakes. Three of the world's best buttermilk pancakes topped with fried cinnamon apples, caramel drizzle, and sweet vanilla cream. Then dig in and write your own breakfast story. Welcome home to Cracker Barrel.