SYLVIE DOUGLIS, BYLINE: NPR.
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ANGEL CARRERAS, HOST:
This is THE INDICATOR FROM PLANET MONEY. I'm Angel Carreras. I'm an INDICATOR producer. And this week, we're doing something just a little bit different. You see, it's Indicators of the Week. But as a nod to last night's presidential debate, this time, it's debate style.
DARIAN WOODS, BYLINE: Woo-woo (ph).
CARRERAS: I'm your moderator. And your candidates vying for the best indicator of this week are Darian Woods...
WOODS: Good evening.
CARRERAS: ...Adrian Ma...
ADRIAN MA, BYLINE: What's up?
CARRERAS: ...And Planet Money's Sally Helm. Welcome, Sally.
SALLY HELM, BYLINE: Hello. Dark horse, third-party candidate...
CARRERAS: (Laughter).
HELM: ...Coming in from left field.
WOODS: Don't bet on it.
CARRERAS: And what platforms are the candidates defending today?
WOODS: New links discovered between health care and layoffs.
MA: A big exam that tests whether banks could collapse in a crisis.
HELM: Cow burps.
(LAUGHTER)
CARRERAS: Let the debate start.
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CARRERAS: Who has the best Indicator of the Week? Up first, Darian Woods. You have 60 seconds to make your case.
WOODS: Thank you, Angel. Well, I want to talk about something rotten at the core of two issues close to every American.
MA: OK. That's a bit strong.
WOODS: Hey, let me finish, Adrian. These two issues are health care and jobs. My indicator is 0.4%, which is how much employers across the country reduce their staff numbers on average when hospital prices increase by 1%. Basically, higher health costs means more layoffs. This is from a new working paper out this week at the National Bureau of Economic Research.
You see, in America, a majority of workers are eligible for employer-sponsored insurance for health care. And so when hospital prices go up, that increases the insurance premiums that employers pay. And that means the employer decides to hire fewer people. This study shows unemployment rates increased by 0.1% on average. So let's say unemployment is 4%. It would jump to 4.1%. Rising health care costs and good jobs are two massive issues facing America. And that's why I think this should be the Indicator of the...
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WOODS: ...Week.
CARRERAS: And time. Do any other candidates have a response?
HELM: I have a response, which is that I think there is a blind spot here because Darian is talking about employer-sponsored health insurance, but that, to me, would seem to leave out waiters, casual construction workers - just the many workers of America who do not have employer-sponsored health care. Are you forgetting about them?
WOODS: You have hit something I would love to talk more about. This link between health care prices and jobs is a disaster primarily for those earning between $20 and $100,000 a year. Those at the bottom don't tend to have employer-sponsored health care to begin with, as you mentioned.
HELM: Exactly.
WOODS: Also, for those at the top, well, that 1% in insurance premiums isn't as much in the scheme of their total compensation package. This is really about a squeezed middle class.
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CARRERAS: And that was candidate Darian Woods. Adrian Ma, you have an exam and big banks.
MA: If I can address THE INDICATOR nation for a moment - imagine we live in a world with a global recession, where unemployment has soared to 10%, where home prices have plunged by a third and the markets are in turmoil. In that world, would the country's biggest banks survive? That's a question asked by the federal bank regulators in their annual stress test, which they released this week.
And stress tests are what regulators do to analyze a bank's balance sheet to see, will it survive? Does it have enough financial cushion to weather a big economic downturn? And under this year's scenario, all 31 banks subject to the test passed. And that is my indicator, not just my Indicator of the Week, though. Thirty-one is the Indicator of the Week because, you know, the economy might be strong now. But if, suddenly, things took a major downturn, this year's stress test suggests...
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MA: ...The pillars...
CARRERAS: Ding, ding, ding, Adrian.
MA: ...Of our financial system...
CARRERAS: One minute. One minute. Your minute's up.
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MA: ...The pillars of our financial system might shatter...
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CARRERAS: All right, all right, all right.
CARRERAS: Hurry. Hurry.
WOODS: Time is up.
MA: ...But they would hold.
WOODS: Time is up.
MA: I yield back my time.
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WOODS: (Laughter) I have a question for you. These tests have been happening almost every year since the financial crisis of the late 2000s, and the big banks hardly ever fail. So what's new here?
MA: OK. That is true, and this has led some people to question the value of these stress tests. But I would say the purpose of this is to look to the future and try to make sure banks don't become too big to fail.
HELM: I have to jump in and agree with my fellow candidate, Darian, and just say does the name Silicon Valley Bank ring a bell to our candidate Adrian Ma or Signature Bank or First Republic, which all failed within weeks or days of each other last year? And I would just say that the stress test did not stop that from happening. So why are we even talking about it?
MA: Well, none of those banks actually - for a variety of technical reasons - were actually required to face stress testing. But I would say even if they were, bank regulators did not really imagine the scenario that brought down those banks.
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CARRERAS: Thank you, Adrian Ma. Sally, you have information for America about cow burps.
HELM: Yes, indeed. My Indicator of the Week is about cow burps, which I will agree burps are generally a silly topic. But, as I am sure you know, cow burps are a serious climate issue because burping cows release methane, and that is an intense greenhouse gas. It contributes to a warming climate, therefore contributes to increased extreme weather, sea level rise - all of these things. And Denmark this week recognized the importance of cow burps.
On Monday night, agricultural groups and the center-right government - they came to an agreement about taxing the methane emitted by cows. The average Danish cow emits the methane equivalent of 6.6 tons of CO2 per year - that is my indicator, 6.6 - and this tax is expected to bring in around $100 per cow. And if approved by the Danish Parliament...
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HELM: ...It will be the first tax of its kind.
WOODS: All right. Sally, I have a bit of an objection that this is going to catch on. In my home country of New Zealand, they passed a law that was going to take effect next year. It got revoked this week because, you know, everybody loves farmers. I don't think this is actually a very politically feasible policy.
HELM: You're right, Darian, that this kind of intervention has been quite controversial because, obviously, it is bad for farmers.
WOODS: (Inaudible) those farmers (laughter).
HELM: Yeah, and - yeah. Environmental regulations have contributed to recent farmer protests in Europe. Those have been really intense - like, blocking roads with tractors, egging the European Parliament. But I will say farmers were in on these negotiations. And the Danish plan does seem likely to be approved.
MA: Here's my rebuttal. You didn't talk about cow farts.
HELM: Farts - I knew someone was going to bring them up.
MA: (Laughter).
HELM: But Adrian, I have to tell you, it's a common misconception that farts are the thing. It's really the cow burps that are responsible for most of the methane.
MA: Will a tax really do any good anyway?
HELM: Adrian Ma, as a host of THE INDICATOR, you know...
MA: Do I?
HELM: ...Carbon taxes are generally economists' favorite solution to climate change. Obviously, they're not people's favorite. People sort of hate them. But the carbon tax - it's simple, efficient. It incentivizes people to emit less carbon. I will add - just because I think it's fun - that there are other ways that people are trying to reduce cow methane emissions. You can do, like, feed additives. And my favorite is that you can put little masks on the cows...
MA: (Laughter).
HELM: ...Which capture the burp and transform the methane before it is released. According to one company that makes these masks, they can cut methane emissions by 50%.
MA: I mean, I'm all for solving climate change, but, like, the masking of the cows seems a little extreme.
WOODS: Anti-masker Adrian Ma...
(LAUGHTER)
WOODS: ...For cows, for cows.
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CARRERAS: That was a very civil debate. Thank you all candidates for just such informational topics today.
WOODS: Thank you, Angel.
HELM: Great moderating.
WOODS: And thank you to my fellow candidates and for the graciousness when I win the Indicator of the Week (laughter).
HELM: I would like to thank you, too.
(LAUGHTER)
MA: I would just like to say how smart and attractive all of our listeners are, especially those who believe that stress testing really...
HELM: Blatant pandering.
MA: ...Was the Indicator of the Week.
HELM: Moderator, cut off his mic.
CARRERAS: He has a point.
MA: I - can I finish? Can I finish? OK. That's all I have to say.
(LAUGHTER)
CARRERAS: So who won today's debate? We'll let the people decide - or not.
WOODS: This episode was produced and moderated by Angel Carreras. It was engineered by Neal Rauch. It was fact-checked by Sierra Juarez. Kate Concannon is our editor, and THE INDICATOR is a production of NPR.
MA: Angel, could I just get some more time? I have some more pandering to do.
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