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Brian: It's The Brian Lehrer Show on WNYC. Good morning again, everyone. Later this hour, we're going to have a pre-Mother's Day call-in on two questions. We're going to try to have some fun with this. The main question is going to be, when did you first notice yourself turning into your mother? Yes, you're already starting to think about those moments, right? This will be in a little while. When did you first notice that you were turning into your mother? Then we'll also invite you to call in with a mom joke.

We always talk about dad jokes. Does anybody have mom jokes? Is there a joke that you associate with your mother? That's coming up, but first, the US pandemic emergency officially ended yesterday. We all know that by now. We know that does not mean the pandemic is over. A thousand Americans a week are still dying from the virus, and some pace like that is considered pretty likely to be the new normal, making COVID permanently one of the leading causes of death in the United States, perhaps. What about money?

Back with us now, Felix Salmon, Chief Financial Correspondent for Axios and host of the Slate Money Podcast. Felix has a new book about the ongoing economic impact of the pandemic called The Phoenix Economy: Work, Life, and Money in the New Not Normal. In a nutshell, his premise is that the pandemic has made the economy weird in all kinds of ways, some for better, though a lot for worse. We'll talk about all of this and we'll touch on some economy news of the week, especially the April inflation numbers just out. Hi, Felix, always great to have you. Welcome back to WNYC.

Felix: Thanks so much, Brian. Great to be here.

Brian: Your book is called The Phoenix Economy, but that doesn't mean it's about Arizona, right?

Felix: There's a little chapter at the beginning, but no, it's about the world, really. It's about the way that the world came to a screeching halt in March, 2020, in a way that was really unprecedented, an incredible act of global collective action. We all just stopped moving. We broke the economy, we broke all of the supply chains, all in the service of bending the curve and buying some time to get the virus under control. Then once we broke it, we had to rebuild it. The thing that we've rebuilt is significantly different to the thing that existed before.

Brian: One thing you identify about people's economic behavior in the pandemic and maybe now, "post-pandemic" is that they became both much riskier and more risk-averse. What ways are both things true?

Felix: You've been out on the streets of Manhattan, right? New York City is younger than ever. It's more vibrant than ever, we have all of this outdoor dining. The boomers who didn't really want to live here left. The zoomers who wanted to live here, even if they didn't have jobs, have come in, so we can see a bunch of activity going on.

What we can't see is the people who are never getting on the subway again, the people who are still staying at home, the people who are still scared of the virus, the people who maybe actually quite liked the way that the virus kept them isolated at home, and they're introverted and they don't like going out. There's a large, invisible number of Americans who have really retreated from society. We don't see that risk aversion. It's not visible, but it's there.

Brian: Let me follow up on a piece of what you just said. Do you think that sorts essentially by age?

Felix: No, I don't. I think, really, it's more psychographic than demographic. We all have different risk appetites. One interesting thing that happened is if you look at the number of people wearing seatbelts, there was this increase in risk appetite in the early days of the pandemic and through 2021 where a lot of people stopped wearing seatbelts. They were like, "If I'm going to risk my life just by going out into a COVID-ridden world, why do I care about seatbelts?"

That resulted in a large number of extra road deaths, and that large number of extra road deaths was overwhelmingly men. It was young men, really. Young women kept on wearing their seatbelts, and in fact, their seatbelt usage seemed to go up. It was young men who stopped wearing seatbelts, so yes, there are weird demographic differences going.

Brian: What I guess a lot of people heard is we didn't participate in all that road racing that was going on at the beginning of the pandemic with gunning the engines and everything. Maybe that was the only outlet for a number of young men, but it was certainly an increase in that particular kind of risky behavior, I think as a lot of us saw it.

Felix: There was a lot of other outlets. We had opioid deaths going up, gun deaths going up, the amount of smoking went up for the first time ever. It was crazy.

Brian: You pegged 2021 as the year of YOLO, You Only Live Once. Was that the impetus for the great resignation, as it came to be called?

Felix: Absolutely, and it's not just 2021, it's ongoing. We are living in a YOLO world now. People are not willing to put up with unhappy situations in the way that they seemingly were pre-pandemic. We just saw yesterday a really fascinating poll come out that was reported by the Wall Street Journal saying that people are happier in their jobs than they've ever been because the people who weren't happy in their jobs just quit.

Brian: I wonder, and this is a tangent into the news of this week, if you thought about YOLO intersecting with the migrant surge, do you have an opinion about the real economics of the surge as Chief Financial Correspondent for Axios? If there's a labor shortage in a lot of relatively low-skilled jobs, "undesirable" jobs, could these be an economic plus, all these thousands of migrants after some initial outlay for helping with resettlement?

Felix: One of the really bad things for the American economy, and indeed the global economy during COVID was the way that it cut international migration and immigration basically down to zero. We still have in this country much, much lower levels of immigration than we had pre-pandemic and much lower levels than are economically optimal. The number of zoomers entering the workforce is smaller than the number of boomers who are retiring from the workforce, so the workforce is shrinking without immigration. We need immigrants to make up for that. We need workers in especially the agricultural fields of California who are often undocumented, but we need them in order to just feed ourselves.

Those big economic disparities between the amount of money that you can make in the United States versus the amount of money you can make in Guatemala or Venezuela or somewhere like that are part of the reason why we are seeing this migrant surge. Economically speaking, just letting those migrants in and letting them work here would be great for the economy, but politically, it's much more fraught.

Brian: Listeners, what's a long-lasting economic impact of the pandemic that you see in your life or your business? 212-433-WNYC, or what's a unique economic effect of the pandemic that you think you saw or that touched you personally even if short-lived? 212-⁠433-⁠9692, or your questions for Felix Salmon, Chief Financial Correspondent for Axios and host of the Slate Money podcast, who has a new book about the economic impact of the pandemic called The Phoenix Economy: Work, Life, and Money in the New, Not Normal. 212-433-WNYC. 212-⁠433-⁠9692.

You assert that fiscal policy, especially in the US, worked amazingly well. Fiscal policy for the non-economy walks in the audience is not raising interest rates, that's monetary policy, so what do you mean by fiscal policy worked amazingly well?

Felix: $5 trillion of government stimulus, starting with those famous stimulus checks that we got, those $1,400 checks that just appeared in our bank accounts that we could do anything we wanted with and did, and all manner of weird and wonderful things wound up getting bought up with that money, the thing which I would urge you to do is just compare what happened in 2020 to what happened in 2008/2009. The 2020 recession was much deeper, much worse than the 2008 financial crisis in terms of the amount that unemployment spiked, in terms of the amount that GDP fell.

It was a once-in-a-generation, once-in-100-year financial crisis for the American economy, and yet we managed to bounce back out of it much faster and much stronger than we ever recovered from the 2008 crisis. The difference is that in 2008/2009, we didn't have much in the way of fiscal policy. Even under Obama, we couldn't spend that much. We didn't have the political will to spend that much to get us out of the crisis.

With COVID, both Trump and Biden had the political will to spend trillions of dollars to get the economy moving again, and that's exactly what they did, and it worked.

Brian: Does any COVID fiscal policy remain? We've talked on the show about how economists think that temporary child tax credit expansion cut child poverty in half, a remarkable humanitarian accomplishment that probably doesn't get enough press to this day, but Republicans in Congress blocked an attempt to make it permanent. Does anything remain a pandemic fiscal policy?

Felix: Very little, to be honest. That was the one that a huge number of people really hoped would become permanent that people would like it so much that Republicans couldn't abolish it, basically. Yes, you're right. It has now ended. Obviously, programs like PPP have all ended. There is one positive result of this which is that the deficit has shrunk enormously. We're not borrowing nearly as much as we were.

Other than that, the big fiscal policy to get us up out of the crisis is over, as it should be, because we are, economically speaking, out of the crisis now. Employment, I should say, has recovered. Unemployment is at an all-time low. We don't need fiscal policy to boost the economy. In fact, there is an argument to be made that there was too much fiscal policy. We stimulated the economy too much, and that was why we had that really nasty inflation last year.

Brian: Yes, that's certainly what Republicans say. They'll be running on that against Biden next year in 2024 no matter who the Republican presidential nominee is. To be sure, how much do you think that's true per your reporting as a Chief Financial Correspondent for Axios?

Felix: It's really hard to disaggregate all of the different causes of inflation. A lot of the inflation was caused by international energy prices, which were a function of Russia invading Ukraine, a lot of the inflation was caused by supply chain problems that were caused by the pandemic. For sure, some of it we can probably attribute to fiscal policy as well. The Biden administration, when they pushed through their last round of stimulus were very, very explicit. They said the risk of doing too much is smaller than the risk of doing too little.

If we wind up doing too much, then maybe we'll have some inflation, and then we can have the Fed raise interest rates, and we'll bring inflation back down again. That would be bad, but it would be not nearly as bad as if we do too little and we wind up in that kind of situation that we were in from 2009, '10, '11, '12, where the economy just remained depressed for years because there wasn't enough stimulus in the economy.

Brian: Jim in Spring Lake, New Jersey, you're on WNYC. Hi, Jim.

Jim: Hi, Brian, how are you?

Brian: Doing all right. I see you're a tavern owner, and you've got a report from the economic frontlines from behind the bar, huh?

Jim: Yes. I can appreciate the macroeconomics that are being talked about by the guest. This is part of the challenge that I think we had both during COVID and post-COVID. We talk about these giant macro trends, and our elected officials in DC, there are so few small business owners on Capitol Hill that the interests and the issues that would pop up behind a bar in Waretown, New Jersey, just aren't in the conversation.

What I wanted to share was that people are drinking differently, and they're going out differently than they did. COVID forced people because of the curfews to go home earlier. I think what people learned is, "Hey, if I don't stay out till 2:00 in the morning, I'd feel okay the next day." Also, for my tavern which has a demographic of people that are in their 30s to their 60s, they learned, "If I don't go out three, four, five nights a week, I can save money and make an extra mortgage payment," or "I can redo the fire pit in the backyard."

It's taken a lot for myself and our staff to adjust and figure out ways of how do we get people in earlier, how do we increase our clientele, just grow that pie of customers so that we can meet the numbers that we had pre-COVID. I'm still not open. I was open seven days a week from 9:00 AM to 2:00 AM. Now I am open five days a week from 12:00 PM to usually 1:00 AM. If we have a crowd that wants to stay later, we'll stay later.

There are things that I think can be done from a government standpoint and from businesses working together to continue to address this. I do think the conversation that's been happening so far, it's so much at the macro level. A lot of the issues that small business owners are dealing with and continue to have to deal with, it's just not in the conversation of the policymakers nor the policy [unintelligible 00:14:58].

Brian: Wow. What do you think, Felix? Does this one story reflect a larger thing that you're seeing?

Felix: Obviously during lockdown, there was a massive move from drinking out in taverns to drinking at home because we weren't allowed into taverns. People got used to buying-- the liquor stores were doing incredibly well. Then that became a new habit. People were slow to go back to buying drinks out of the tavern rather than drinking at home. That became a big shift which is going to take a long time to reverse.

I do think in terms of small businesses, one of the big surprises was how many small businesses were created over the past three years there. Again, part of this YOLO thing was people had this dream in the back of their head, "One day, maybe I'd like to start up my own business," and then they never quite got around to it. Then the pandemic shocked them into saying, "You only live once. Let's do this thing."

Even while we were still under pretty serious lockdown restrictions here in New York City, we were about indoor dining and stuff like that, people were opening up new restaurants, quite a lot of them. The rate of new business formation and small business formation has really been an inch in driving the economy. It's one of the reasons why unemployment is so low and why the economy is doing so well. We've seen big layoffs from the big tech companies. It's small businesses which are actually hiring right now.

Brian: Let's talk to another business owner. Shawn in Belmar, you're on WNYC. Hi, Shawn.

Shawn: Thank you so much. It's an honor to be on the air with you. I'm also a small business owner on the Jersey shore, actually located very close to your last caller. I've experienced somewhat of the opposite, but something that goes very much with what you've been talking about. I run a surf school and I teach people how to surf. Our primary focus is on children. We do summer camping during the school holidays.

We became extremely popular and had a surge like never before over the pandemic because of our outdoor nature. People deemed it a safe thing to bring their children to. We had this incredible surge of popularity by being one of the only outlets that was open and available when a lot of sleepaway camps and other types of recreation programs were closed.

Now, the thing that I wanted to bring up was that when people are forced into changing their lifestyle and maybe trying something new that resonates with them, that they like, they might stick with it and then decide, "You know what, this is actually the direction that we're going to go with our lifestyle." That's something that for us has been great.

Now that sleepaway camps and a lot of other options are back, we're not quite as sold out as we were approaching season because of the last few years, but it was great for our business because it brought a lot of people through our door. Then with surfing, a lot of people tried and then they realized how fun-- they want to stick around with it.

Brian: So interesting. Shawn, thank you very much. That's the opposite of the bar story, right, Felix?

Felix: Right. It's also the same. The people discover new things, whether it's surfing or whether it's drinking wine at home, and then they often like those new things and stick with them.

Brian: Right. I said in the intro that part of the premise of your book, correct me if I'm overinterpreting it, is that the pandemic has been good for the economy longer-term as well as bad for the economy. Is there an unbalanced judgment that you make?

Felix: The overall balance is basically that we have fatter tails, more unexpected events, more volatility. We have more upside and more downside at the same time. What we don't have is-- to your first caller's point, you can try and make macroeconomic generalizations, but those generalizations hide a massive and widen ever range of facts on the ground. We have risk going up and risk going down at the same time. We have businesses doing well and businesses doing badly at the same time.

We are going to have much more in the way of chaos and unexpected weird stuff. A lot of that is going to be good and a lot of that is going to be bad. That's what I call the new not normal. I'm congenitally an optimist, so I have hope that ultimately the good will outweigh the bad because upside is unlimited. There's no limit to how great an upside shot can be, whereas the downside is always just limited to what you already have. You're going to have to be very nimble to be able to keep up with all of the ways the economy is changing over the next 10 to 20 years.

Brian: Tech giants are coming out of this in worse shape it seems. That's one of the big stories, certainly in the New York area economy and a lot of places around the country that have a lot of tech jobs. Some of those mega tech companies that people might have thought were the safest places in the world to work because they're trillion-dollar companies and things like that have been laying off thousands of workers. Is that pandemic-related?

Felix: Yes. They actually hired way too aggressively during the pandemic because the pandemic was ultimately good for them. One of the unexpected success stories that I write about in the book is Microsoft Teams. Microsoft had to suddenly go all remote during the pandemic. They weren't used to that. It's this big, lumbering company, and we all know how we expect Microsoft to take decades to develop anything. Then suddenly, in almost no time, it creates this product, Microsoft Teams, which basically kills both Slack and Zoom, which were these big early pandemic winners. You're like, "Wow. That's really impressive for a company that big to move that quickly." No one thought that was possible.

But then a lot of other companies like Google and Facebook and Netflix, they all started over-extrapolating in terms of how much those trends would continue. They massively overhired, and then they realized they were literally hiring people to just sit around and do nothing in the expectation that they would grow into needing those people in the future and that's crazy. Yes, they had to scale back a lot of that.

Brian: Let me get in a couple of last callers real quick. Noora in Manhattan has a corner of the economy affected by the pandemic that people may not think about much. Noora, you're on WNYC. Hi, there, and I apologize. We have about 30 seconds for you.

Noora: Hi there. Can you hear me?

Brian: I can.

Noora: Hi. I'm a home birth midwife, and during the pandemic, during the surge, we had a huge increase in people calling us to have home birth when their partners and doulas were not allowed into the hospitals. That surge has plateaued, but we're definitely seeing more people wanting to have more home births simply because they're taking more autonomy and making better choices around their house.

From an economic point of view, if insurance companies would realize, it's actually much cheaper to have a baby at home with a midwife than being in a hospital, and overall, for low-risk women, it's significantly safer to have your baby at home. Your chances of getting COVID at home are much smaller. It's safer for you and baby and the family all around. I think from an economic point of view, hopefully, this will be something that people realize is really beneficial for all. Thank you so much.

Brian: Thank you so much. I want to apologize to caller Angelique in Brooklyn, who I thought we were going to get to, but we're not going to have time. To Noora's point, or extrapolating from Noora's point to a larger question, did the pandemic exacerbate inequality because lots of professional class workers got to keep their jobs and work from home, and not spend much money. A lot of people in retail, in the arts, and elsewhere lost their jobs, and also suffered more from the actual virus, and that ran along the usual racially-disparate lines as well. Was inequality exacerbated?

Felix: It was for the first, say, three or four months, but then it rapidly went the other way. In fact, inequality went down during the pandemic. The lowest-paid and poorest Americans saw their circumstances improve more rapidly than the richest Americans did. This was an amazing silver lining for the pandemic. Part of that YOLO thing was people in retail and service industry jobs that they didn't like quit their jobs, and when we had that reopening, there was massive demand for experiences for restaurants, for travel.

What that ultimately resulted in along with the stimulus checks and various minimum wage laws was basically the minimum wage effectively doubling over the course of the pandemic from roughly $7 to roughly $15. It's very rare to find jobs paying less than $15 now. The pandemic was great for inequality, and to Noora's point, it was great for finding new ways of doing things. We invented new ways of doing things. We used to not think about, "Can I have my baby at home?" Now we think about it. Now we do it. We think it's safer because of COVID. It saves us money. It improves the economy. There's a lot of these stories floating around.

Brian: Felix Salmon, Chief Financial Correspondent for Axios and host of the Slate Money podcast, who has a new book about the economic impact of the pandemic called The Phoenix Economy: Work, Life, and Money in the New Not Normal. Always great to have you, Felix. Really interesting. Thank you.

Felix: A great pleasure.

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