00:00Alison, I want to bring you into the conversation because you recently had a column on how Americans are richer
00:04than ever before, but they're also angrier than ever before as well.
00:08The top 1% is richer or is everyone getting richer? Because you wonder how much of this is, you
00:13know, kind of relative gains.
00:14Well, everyone is getting richer. The top 1% has gotten way, way richer.
00:19Even if you look at the income distribution, it's true the middle class is smaller, but because more people have
00:24entered the upper middle class.
00:25But even lower income people are, by most metrics, better off than they used to be.
00:31But it's sort of extraordinary because all we hear is people feel like the economy is not working for them.
00:37So, you know, there's a lot of reasons why that could be. It could be some like necessary services are
00:41still expensive.
00:42It could be relative gains are what matters.
00:45You know, I wonder whether how much of this is tied to fundamental misunderstandings about how investing or financial markets
00:51work.
00:52You think about Gen Z and they've really adopted this financial nihilism where they bet the house on crypto prediction
00:57markets, all these other things.
00:58And, you know, because why not? Everything's everything doesn't look good for them anyway.
01:02They feel like everything's rigged regardless.
01:05Yeah, it's there is more of this feeling that success is sort of randomly rather than, you know, or I'm
01:10also seeing the sort of disconnect and understanding risk.
01:13That risk comes from taking, you know, from risking more, like you get higher rewards for more taking more risk.
01:18And I don't think this of that relationship has been well understood.
01:23Also, I feel like there's a dearth of risk taking in a lot of their lives in other ways.
01:28So I feel like it's expressing themselves through taking sort of outside risks in other ways.
01:32Like maybe they won't invest in the S&P 500, but they'll invest in, you know, the, you know, Kelshi
01:38or whatever.
01:39So it might be so I've also a lack of financial literacy or a lack of good risk training.
01:44Well, you mentioned financial literacy.
01:46You own the high ground on this with your book and with your academics as well.
01:50We're going to have the former vice chairman of the Fed on.
01:52And with your heritage to Manhattan Institute and all that, what did you think of the press conference?
01:59You know, there's two things I've changed my mind about in the last five years.
02:04One is drug legalization and the other is monetary policy transparency, which I was like a big fan of.
02:11You know, actually, Rich was chair of the department when I was at Columbia.
02:14So I learned all this stuff from him.
02:16And it's just I feel like the Fed sort of started to box itself in a little bit too much
02:21with forward guidance.
02:22OK.
02:23So to some degree, I think, you know, well, maybe worse, it's not communicating so well right now.
02:29OK.
02:30You know, maybe a little mystery and a little like, hey, we think inflation.
02:34I used that word the other day, the mystery or how does he pull away from too much mystery?
02:39Well, you want a clear reaction function.
02:42You want clear rules.
02:44But you also don't want to say, hey, we're going to probably increase rates in five years or in five
02:50years.
02:51So you kind of want to strike that balance.
02:52The Bloomberg money angle on this is the yield.
02:54I'm sorry, where are mortgage rates in two weeks?
02:57The 30-year fixed rate mortgage is now at 6.66 percent.
02:59That's a one-year high.
03:01Seven percent?
03:01You're going to love it.
03:02We're not at seven percent yet, but it does make home ownership a lot more expensive.
03:05And, David, there's a lot of talk about the affordability crisis.
03:09Has D.C. come up with any solutions that will, I don't know, resonate with voters before the midterm elections?
03:15No, not really.
03:16I mean, there was this housing bill that the president liked until he didn't like.
03:19And so I think that there's been some lip service to it.
03:21But we're at a point now as we approach the midterms where I think the prospect of there being any
03:24kind of real landmark legislation coming together seems pretty unlikely.
03:29Right.
03:29Right.
03:29Right.
03:29Right.
03:29Right.
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