Think Like An Economist

Everyone's talking about the bond market, and Justin Wolfers is here to explain what's actually going on — without the panic. In this episode of Diving In, he strips the fancy words away: the bond market is just supply and demand for loans, and right now a lot of people want to borrow. When demand for loans goes up, the price of loans — the interest rate — goes up too.Justin walks through the three forces pushing long-term interest rates higher.Subscribe — it's the one rate that won't rise no matter what the bond market does:on YouTube 👉 https://youtube.com/platypuseconomicson Substack 👉 https://newsletter.platypuseconomics.comFollow on Social Media @PlatypusEconomics and @JustinWolfers

In this episode of the Professor Is In, Justin answers your questions about "Operation Economic Outcast," the White House plan to squeeze Iran by threatening its trading partners with sanctions and loss of dollar access. The catch: the US already has roughly 6,000 sanctions on Iran and a naval blockade, so most of the country is severed already. New pressure only bites if third countries actually fall in line — and the biggest one, China, buys most of Iran's oil. Justin calls China the Andre the Giant of this fight: to move it, the US would have to start a trade war with a third party country like China, Russia, or Turkey. That would inflict real pain on Americans. If Washington isn't willing to do that, the threat is bravado, not policy. Diving In on "Economic D-Day": https://youtu.be/tOu7yQD9lAI?si=qtV0qp2FN8wD6i0v Chapters: 1:19 Is today’s threat to Iran more powerful than the 1960’s threat to Cuba? 6:49 What happens if China doesn’t go along with it? 10:33 What are the economic benefits to countries that go along with this plan? 13:21 How seriously should we take the risk of dollar dominance ending? This is an episode of The Professor Is In, where producer Augusta brings Justin your questions. Want your question answered next time? Subscribe and comment: on YouTube 👉 https://youtube.com/platypuseconomics on Substack 👉 https://newsletter.platypuseconomics.com Follow on Social Media @PlatypusEconomics and @JustinWolfers

In this episode of the Professor Is In, Justin answers your questions from his earlier episode debunking the Census Bureau’s claim that 24,000 noncitizens voted in the 2020 election.He starts by addressing the elephant in the room: even if the faulty claim were true – it couldn’t have swung anything. Biden won the popular vote by seven million. As for the decisive states: he won Arizona by 10,000 (the report alleges 1,100 fraudulent votes), Georgia by 12,000 (400 alleged), and Wisconsin by 21,000 (500 alleged). The math never gets close.But the stakes here are far greater than any one report. The Census decides how many congressional representatives your state gets and underpins nearly every official number you rely on. When a statistical agency starts producing propaganda, Justin argues, you're on the same road as Argentina, Greece, and Russia — and your trust in every government figure, from inflation to your representation in Congress, is on the line. Subscribe — it's one number around here nobody's fudging:on YouTube 👉 https://youtube.com/platypuseconomicson Substack 👉 https://newsletter.platypuseconomics.comFollow on Social Media @PlatypusEconomics and @JustinWolfers

Do sanctions on Iran actually work? Sixty years of the Cuba embargo say probably not. Treasury Secretary Scott Bessent just announced what he's calling an "economic D-Day" against Iran — a threat aimed not just at Tehran but at every foreign firm, bank, trader, and shipper that does business with it: choose Iran, or choose access to the U.S. dollar. Justin Wolfers walks you through what was actually announced and then rewinds to 1963, where the Kennedy administration used almost identical language to "tighten the noose" around Cuba. Same playbook, six decades apart. Here's the problem: the CIA studied the Cuba embargo for 20 years and concluded the sanctions "have not met any of their objectives." Castro stayed in power until 2008; the regime is still there today. Broader research is just as sobering — even optimistic studies find sanctions produce political change only about a third of the time, and almost never regime change against an entrenched authoritarian. One study of Iranian influencers found broad sanctions actually increased pro-government sentiment. Why should you care? Because sanctions don't stop at the missile factory. There's no border checkpoint that lets in baby formula but not weapons. When you choke an economy, food, medicine, and family remittances get squeezed too — and every time America uses dollar access as an ultimatum, other countries get one more reason to build a system that doesn't need us, quietly eroding the financial leverage that makes your dollar so powerful in the first place. Subscribe — it's the one economic lifeline we promise never to sever:on YouTube 👉 https://youtube.com/platypuseconomicson Substack 👉 https://newsletter.platypuseconomics.com Follow on Social Media @PlatypusEconomics and @JustinWolfers

Bond yields have jumped from a little over 1% just after COVID to more than 5%, and Justin Wolfers walks you through why that matters at your kitchen table. The short version: the U.S. government is borrowing an enormous amount of money, lining up at the bank ahead of you and me, and that pushes the price of borrowing — the interest rate — up for everyone. Justin sorts the story into three parts: why everyone's suddenly talking about the bond market, what Treasury Secretary Scott Bessent is actually doing, and what it all signals. Two forces are driving yields up — heavy borrowing for the AI buildout, and a federal deficit at post-war highs outside of COVID and the Great Recession, even as the economy is doing okay. Markets are quietly asking whether the government is serious about paying them back. Here's what's at stake for you: when the government crowds the credit line, the rate on your next mortgage, car loan, and credit card goes up, and a bigger interest bill each month means less cash to get by. Then there's Bessent's move to double a bond-buying program from $2 billion to $4 billion a day — routine plumbing, or an attempt to muffle the warning the bond market is sending? Justin's honest answer: right now, nobody knows. Subscribe on YouTube 👉 https://youtube.com/platypuseconomicsSubscribe on Substack 👉 https://newsletter.platypuseconomics.com Follow on Social Media @PlatypusEconomics and @JustinWolfers

Justin Wolfers and Bloomberg's Stacey Vanek Smith pick through a week of confusing economic news on the latest episode of Off the Clock.  First up, inflation. Inflation came in at 3.4% — not great, not terrible — but here's the part that stings: prices are still rising faster than wages and the average American paycheck buys less than it did a year ago. They also dig into the July jobs report and why it was a real jolt: the economy lost 23,000 jobs when forecasters expected a gain of 80,000, and earlier months got revised down too.  Then Stacey talks to Justin about how lab-grown diamonds have absolutely crushed prices in this luxury industry (a $6,000 stone now sells for $10 at Walmart). This prompted a fascinating discussion on the diamond-water paradox, thinking at the margin, and why the AI shock to "cognitive work" may be the labor market's version of the same thing.  Finally, Justin and Stacey cap off the episode with another round of Chart versus Chart. Be sure to vote for your favorite on the channel homepage for Platypus Economics. Subscribe on YouTube https://youtube.com/platypuseconomics Subscribe on Substack 👉 https://newsletter.platypuseconomics.com Follow on Social Media @PlatypusEconomics and @JustinWolfersFollow Stacey @svankesmith

The stock market keeps breaking records, but your paycheck doesn't feel like it. In this episode of Diving In, Justin Wolfers explains that disconnect with one number: labor's share of income has fallen to 54.4 cents on the dollar, the lowest share on record. And it’s significantly less than the two-thirds that was common for most of the last century. Justin fires up the actual data to stress-test the claim — accounting for depreciation and tax-driven accounting tricks. But the decline is real and still stands. Then he sizes what it means for you: a five-point drop in labor's share works out to about $10,000 a year in lost wages for the average worker — while the gains flow overwhelmingly to the very top, where the richest households collect over half of all capital income. Why is this happening? Giant firms that grow sales faster than payroll, weaker worker bargaining power, and globalization that lets your job move elsewhere. And now AI could either make you more productive and better paid — or automate your job and hand the upside to owners. How we slice that pie is up to us. Subscribe on YouTube 👉 https://youtube.com/platypuseconomicsSubscribe on Substack 👉 https://newsletter.platypuseconomics.com Follow on Social Media @PlatypusEconomics and @JustinWolfers Cited Research:The Rise of Pass-Throughs and the Decline of the Labor Share: https://zidar.princeton.edu/sites/g/files/toruqf3371/files/syzz2022.pdfNot a Typical Firm: Capital–Labor Substitution and Firms’ Labor Shares: https://www.econ.queensu.ca/sites/econ.queensu.ca/files/HubmerRestrepo_NotTypicalFirm_Oct2023.pdfAutomation and New Tasks: How Technology Displaces and Reinstates Labor: https://shapingwork.mit.edu/wp-content/uploads/2023/10/acemoglu-restrepo-2019-automation-and-new-tasks-how-technology-displaces-and-reinstates-labor.pdf One more thing: When I create these videos, I often crunch a few numbers in Stata, with whom I’ve got a paid partnership. Today, I used it to compare labor's share of income with and without depreciation. You can follow along with me here: https://platypuseconomics.com/stata/labor_share_worksheet.pdf

In this bonus-sized episode of The Professor Is In, Justin Wolfers uses a strange, wonderful case study — the collapse of artisanal bootmaking in 1850s England — to think through what AI will do to your work, your wages, and maybe even where you live. Economic historian Hillary Vipond found that even though a new technology let each worker produce four times as much, total bootmaking jobs barely budged. But two-thirds of the old occupations vanished and were replaced by new ones. The cordswainer disappeared; the factory foreman, machinist, and riveter arrived. In our moment, that's the translator seeing wages fall and the "prompt engineer" rising in their place. The good news: a bigger pie usually means bigger servings for workers — China's incomes rose more than tenfold as it industrialized. The catch is pace. If AI really replaces half of white-collar work in five years, as some tech CEOs claim, that's a disruption bigger than COVID or the financial crisis. ustin's plain advice: become the most AI-savvy person in your workplace, keep your skills broad rather than narrow, and double down on the basics — because AI will not take your job, but someone using AI might.  Link to Hillary Vipond's original research: https://github.com/HillaryVipond/JMP/blob/main/Technological_Unemployment_in_Victorian_Britain_VipondH.pdf Subscribe — it's a broad, diversified skill set for your feed, and it never gets automated away:on YouTube 👉 https://youtube.com/platypuseconomicson Substack 👉 https://newsletter.platypuseconomics.com Follow on Social Media @PlatypusEconomics and @JustinWolfers

Justin unpacks the new $100,000-a-year Truth Social API—a special "pipe" that will allow the president's posts to hit Wall Street computers a second or so before the rest of us see them. In this episode of Diving In, he explains why one second is an eternity for a high-frequency trading computer: it can read a post announcing a strike on Iran, figure out what it means for markets, and sell before the news reaches your phone. Justin lays out three problems. It's bad for democracy — a decision your taxes paid for gets sold to whoever writes a six-figure check, to a company in which President Trump is a major shareholder. It's corrupt on its face — the president is monetizing information he holds only because he works for you. And it's bad economics: once you know some traders have paid for an edge (remember teleprompter guy?), you stop wanting to trade at all, and markets that run on trust start to wither. At the end of the day, those Wall Street firms will get rich, and that money has to come from somewhere. And if you're not the one with the early feed, it's probably coming from your retirement account. (A confession: I think that I said that users pay the President's company $100,000 per year. I've subsequently read the price is $100,000 per month. So it's still a problem, but 12 times larger.) Subscribe on YouTube 👉 https://youtube.com/platypuseconomicsSubscribe on Substack 👉 https://newsletter.platypuseconomics.com Follow on Social Media @PlatypusEconomics and @JustinWolfers

This is a conversation between Justin and Larry Kotlikoff, fellow economist and host of the Economics Matters podcast. And it was a fun one, in which Larry encouraged Justin to look both backwards and forwards. Backward at some of the work he's most proud of, and forward at the growing challenges we face as an economy and a nation. In the process, Justin and Larry philosophized over the role of economics and the duty of economists in helping tackle some of the most pressing issues of our time. This was the kind of conversation that reminded Justin why he fell in love with economics: it’s not the models or the math, but the chance to make sense of the lives we actually live. Subscribe on YouTube https://youtube.com/platypuseconomics Subscribe on Substack 👉 https://newsletter.platypuseconomics.com Follow on Social Media @PlatypusEconomics and @JustinWolfers Larry's Substack: https://larrykotlikoff.substack.com/

Recent changes to SNAP quietly cut food assistance from 4 million Americans — 1.5 million of them children (plus elderly, disabled, and other eligible recipients who were never the intended target). In this follow-up to his earlier video Diving In to SNAP cuts, Justin Wolfers answers follow-up questions and explains how the policy actually plays out for real people. Justin walks through why administrative burdens do so much damage: when it's harder to apply, appeal, or bring in paperwork, the people who fall off are often the ones who need help the most. He unpacks the state incentives too: tell caseworkers to reduce payment errors but say nothing about wrongful denials, states get cautious and just boot folks off. And because states run balanced budgets, shifting SNAP costs to them breaks its role as an automatic stabilizer — in the next recession, when more people need food, spending will fall exactly when it should rise. The stakes are personal. That $6-a-day benefit is groceries for a neighbor, a kid at your child's school, a friend going through a divorce whose income just cratered. And Justin's argues that if Americans understood who's losing help and why, they might feel differently about it. Six Dollars a Day Is Disappearing For Millions: https://omny.fm/shows/platypus-economics/the-biggest-economic-story-nobodys-talking-about-diving-in 🔒 Get 20% off DeleteMe by going to https://joindeleteme.com/WOLFERS and use code WOLFERS to protect your privacy! 🙌 Subscribe on YouTube 👉 https://youtube.com/platypuseconomicsSubscribe on Substack 👉 https://newsletter.platypuseconomics.com Follow on Social Media @PlatypusEconomics and @JustinWolfers

In this episode of The Professor Is In, Justin Wolfers digs into the latest tariffs on Canada, answering subscriber questions and responding to comments from his earlier Diving In He addresses the suspicious timing of these new tariffs, break down the confusing dairy tariff-rate quota, and argues that total US-Canada dairy trade — about a billion dollars against hundreds of billions in overall trade — isn't worth blowing up either economy over. On whether Canada should retaliate, Justin borrows Joan Robinson's "rocks in the harbour" metaphor: most of a tariff's cost lands on the country imposing it, so matching Trump would mostly hurt Canadians. Finally, Justin discusses the biggest issue: trust. Once a president tears up a deal he signed, the value of his next signature is zero — and that discourages the deep, long-run cross-border investment that has defined North American trade over the past several decades. Canadian Tariffs Diving In: https://omny.fm/shows/platypus-economics/the-biggest-economic-story-nobodys-talking-about-diving-in Subscribe on YouTube 👉 https://youtube.com/platypuseconomicsSubscribe on Substack 👉 https://newsletter.platypuseconomics.com Follow on Social Media @PlatypusEconomics and @JustinWolfers

Trump's new 50% tariffs on Canada bypass USMCA — here's what it really means for you. President Trump just hit a limited set of Canadian goods with 50% tariffs, and he did it by dusting off Section 338 of the Tariff Act of 1930 — a law last used when Herbert Hoover was in the building. Justin Wolfers walks you through what actually happened, why it's stranger than it sounds, and why the direct cost to the U.S. is smaller than the message behind it. Here's the twist: throughout the earlier trade wars, being compliant with the USMCA free trade agreement was your escape hatch — roughly 90% of Canadian goods came in duty-free. These new proclamations ignore that agreement entirely. Justin's quick-and-dirty math says the tariffs cover a bit more than $20 billion of imports, about 5% of what we buy from Canada — meaning maybe $50 to $150 a year on your household, plus higher prices from American firms that now face less competition. For Canada it's a real hit: close to 1% of GDP. But the bigger story is confidence. If a signed trade deal only holds until the next presidential mood swing, it's not really a rule. Justin argues Canada is the test case — a warning to the roughly 60 countries facing new tariffs any week now: retaliate, and your trade deal may not save you. Subscribe on YouTube 👉 https://youtube.com/platypuseconomicsSubscribe on Substack 👉 https://newsletter.platypuseconomics.com Follow on Social Media @PlatypusEconomics and @JustinWolfers