Kyla Scanlon — Is the State of the Economy Really that Bad? | Prof G Conversations

you coin this great term Vibe session what is it and are we experiencing it A vibe session is a disconnect between consumer sentiment and economic data the stock market is up 12% on the year unemployment is at a record low we're not in a recession I do think we are in a Vibe session um just because it's a rather tense time there's a lot of uncertainty we're going into an election like it's really hard to have quote unquote Good Vibes during [Music] that KY where does this park find you um I'm in New York City right now and you're at a wework with a fan in the background where's Adam Newman yeah oh he's not involved anymore he's focused on real estate now right yeah I've heard he's doing flow or something right right about this okay so we're making an effort to bring in young influencers I have a tendency to find people my age Boomers who are on CNBC and I'm so you're you're one of our first Outreach to someone we found I think we found you on Tik Tok anyways your new book in this economy explores how money and markets really work walk us through what you believe are the biggest misconceptions about the US economy yeah I mean I think that's the issue is that a lot of everything's kind of misconception right now um I think a lot of people have a frustration with how the economy is functioning like the labor market inflation Etc a lot of people think that inflation going down means that prices should go down but we've been dealing with the pressure cooker of inflation so everybody wants prices to go down um there's rolling recessions in Tech and finance so people extrapolate that to the broader labor market as well so I think there's like a lot of misconceptions and the goal of the book is just to be a toolbox to understand the economy um everything that you need to know about inflation GDP like all the terminology and how it applies to you uh without you know all the theory that goes into it what do most people get wrong about money in the markets one of my favorite charts is the chart from the Federal Reserve it's called the distribution of financial assets and it shows that the bottom 50% have all of their wealth inside of real estate and the top 10% have their wealth in side of um stocks and business ownership and so I think a lot of people think that home ownership is sort of the path to wealth and I think historically it could have been um but we kind of need to rethink what home ownership means right it's very confusing to a house be both a speculative investment and then also a place that you need to live and so I think that's kind of it's not necessarily what people get wrong about the economy but I think it's the thing that is most harmful is we View housing as the way to wealth when maybe it really shouldn't be but it's in housing to a certain extent I've been thinking a lot about how to build wealth and one of the features of observations I would have is that it is very difficult for people to build wealth with anything they can get their hands on what do I mean by that 99% of people I believe will spend everything within their grasp and that that's why these for savings programs or options where you get one big lumpy hit or you sell a company but big hits you weren't expecting cuz regular cash in your hand is very hard to hold on to given all the The Temptations that's offered by in a capital Society to a certain extent isn't housing sort of force savings because people don't want to be evicted so it forces them to make that kind of investment some of which goes into equity in the home yeah yeah I mean I think housing has definitely went pth for that I think if you look at that chart though like the clear answer to how to build wealth if you just are following the path of like what people have already done is some form of stock ownership in some form of building business whether that be employee stock option programs or just actually building your own business um so I think housing is is great in terms of like the force savings aspect as you've mentioned um but we have this expectation that house prices always go up but like it from 1860 to 1960 home prices went up by like 0.06% um and so I think I think we just kind of have a messy conception and then it creates a lot of economic for boting when people feel like they can't achieve quote unquote American Dream because it's the only way they know how to build we I think that's a great Point actually Philip Schiller the K Schiller index says if you take into account maintenance that the housing market has not been nearly nearly the asset class that it's that people claim it is in the book you write people are not static entities but Dynamic beings with evolving needs and aspirations and growing economy should reflect that when you look at our economy what areas do you think need the most attention right now I mean I think that we've done a really really good job at focusing on Manufacturing the chips sack the IRA the ija all of those have really invested in American manufacturing and have enabled like you know Fab factories to be built in Arizona but I I think like the big thing and you you've done a very good job talking about this is like sort of putting young people on a path I I think that a lot of people feel stuck in their jobs or feel like they're not able to pursue um as as you would say their talent but um I think that's kind of where we need help is that we have a whole generation of people that are are stuck um and the labor market is sort of funny like there are these rolling recessions in Tech and finance and and so I think it's just it's a real allocation of capital that'll enable new jobs to to come out I think that's what needs to be done um yeah you coin this great term Vibe session what is it and are we experiencing it A vibe session is a disconnect between consumer sentiment and economic data and I wrote this piece back in July 2022 and it turned into times opinion pie and everybody kind of latched on to it because you know the economic data was really good during that time like GDP was improving uh the labor market was strong inflation was going down but people were still feeling really bad if you looked at some metrics and so that term is meant to capture that idea in inance then it's evolved to recognize like structural affordability issues like we have a housing prices child care costs have gone up like you know 32% since 2019 or something like that Elder Care sent ,000 a month um Education costs are Skyhigh and so like there are reasons that people feel bad but then there's this poll that came out um sort of detailing you know that 55% of people think that we're in our recession 49% of people think that the stock market is at alltime lows um or is down on the year and that 49% also think that unemployment is at all-time lows and so like there's this aspect of the vibe session where okay yes there is an actual disconnect between consumer sentiment and economic data and some of that can be explained by structal affordability and then I think another component of it is explained by a lack of media literacy like the stock market is up 12% on the year unemployment is at a record low we're not in a recession I do think we are in a Vibe session um just because it's a rather tense time there's a lot of uncertainty we're going into an election like it's really hard to have quote unquote Good Vibes during that I think another thing that I've been sort of thinking about is like there's this gap between online discourse and then offline discourse so like air travel hit an alltime High over Memorial Day weekend like everybody's flying everywhere people are out there spending money you can see it in the consumer spending metrics um but if you go online the discourse is negative people are feeling very bad and that's kind of the other thing too is like there's this bifurcation between actual reality and then perceived reality through the online sphere there really is a disconnect and then I look people posting America you know lowest inflation biggest growth the factors are are strongest growth and some of the factors that you talked about do you think our discourse has become more coarse or do you think as someone who's just understands um of your generation what do you think is causing this is it is it a move to online where we have Bots trolls a lack of Civility do you think it's kids are more prone to I don't know being depressed or anxious because of helicopter parenting and and social media but what what has created a situation where 55% of people my age feel very proud to be American but it's only 18% of people uh under the age of 25 it's really sad and I think that that poll and of course you have to take all surveys with a grain of salt but that poll where you know people think we're in a recession we're not they think the stock market is down when it's not they think unemployment is really high when it's not um it's just like like what's happening and so I think a big part of it is the media that people consume so younger people get a lot of their news from Tik Tok there's a lot of surveys pointing that out a lot of data sources and like Tik Tok the algorithm totally incentivizes you to post negative things like if you are saying that the world is ending you're much more likely to get a million views than if you're like everything's perfect and good and you should be fine um I also think there's a pressure to uh be anxious and I think like anxious is anxiousness is very normal like we do have a lot of information flow but um if you're not freaking out it means that you don't care right and so like there's almost this performative anxiety that comes up and that's a loaded term but I do think that's what it is is like because I get yelled at in my comments too for for not caring about the State of Affairs but like there's an element of truth that you have to recognize when you talk about the economy like you can't say the the stock market is down and it's not but if you're saying that things are good people are like well you just don't care about anything like you're just lying to us um and it it really creates this this strange environment so I think it's media the consumption of certain types of media and then um how you have to be perceived in the online world is in a state anxiety what you're talking about I I'm naturally fits me like a glove because I'm a glass half empty kind of guy and you know suffer from anger and depression so I feed right into this Z guys but whenever I talk about you know just the exceptional performance of a stock or the markets touching alltime highs it's was like well typical Boomer who you know most the real economy most of us got don't don't get to invest in stocks it's like you get shamed and you're sort of perceived as non-empathetic if you're not cast vising all the time and talking about the worst possible outcome for everybody speaking of this type of I don't know looking through the world with gray color glasses talk a little bit about dollar doomeris yeah I mean a lot of people think that the US dollar is no longer going to be the reserve currency um that discourse hasn't been as popular over the past few months since the US is kind of be in traction and many back tring and um has been able to pass legislation finally but um yeah people are kind of like betting on the downfall of the US by saying that the US dollar won't be reserved currency anymore um so you saw a lot of that kind of like postco the the few first few years after the pandemic um there was a paper from the IMF that refuted that and was like no like you know it's not going to switch over to China or Russia as being the reserved currency of the world it's probably just going to be if anything a basket of mixed currencies um but yeah I mean it's sort of going back to like what you asked about with like why do young people feel so bad about like why are they not proud to be American like you can kind of see that through people being like the dollar is not going to be the res currency like that's a bet against the United States you brought up something or you're aware of something that we talk a lot about here and that is inflation and a lack of prosperity um we believe can be reverse engineered partially to concentration and the sort of olop isation of our economy four companies control 85% of the US beef Market four companies control 80% of the soy Market three companies 78% of pasta three companies 72% of the cial market I mean this is more a comment than a question I think you agree but it appears that people aren't focusing enough on this how else should we be thinking about this as it relates to inflation yeah I mean is a Dr Isabella Weber has written a really great research paper on this sort of like how compan is um might be press passing cost off to Consumers through higher prices and uh monopolies are like the key way to do that right like if you don't have any competition it's much easier to push prices through and I think like to counter that example we're kind of seeing that um you know McDonald's is lowering the prices on their food like they're finally offering a $5 meal because companies like Domino's have had reward programs that people have been flocking to and so that shows that if you do have competition within the corporate space like companies are going to respond and therefore lower their prices but I think a lot of the pain of the consumer has been through um companies like craft Hines raising prices just putting a lot like Nestle raising prices because they're able to people have to buy the things that like Nestle and K more or less have to buy um PNG they have to buy like paper towels and toothpaste and so those companies I do think are are responsible for some elements of inflation that we're experiencing and then I think they're also responsible for the quote unquote bad vibes like when you like I go to the grocery store and I'm like whoa okay like that was an expensive trip and I don't feel great about that and it sucks um and that like the grocery bill that you get and then the gas price that you pay are the two main ways that consumers interact with the economy and so corporations are able to you know raise prices and do it without any thought other than profit um it can be very harmful to the consumer I'm just I love just as we wrap up here we're trying to be we're purposely or I would say I'm personally trying to be a little bit more optimistic and I write a lot about the challenges facing young people and how it wants more attention and more investment but also believe that as kids come out of you know commencement that they do have agency and I want to bring out more people like yourself that that have demonstrated that type of agency when I was getting out of college I knew I was interested in finance and economics you could either go to an investment bank and get into an analyst program which is exceptionally competitive you could become a stock broker I got my Series 7 and basically being a stock broker was calling all of your friends parents and asking them to buy stocks through your ridiculous fees or you could go back to graduate school and try and become an economist I mean there really weren't that many onramps to having influence in the markets can you talk a little bit about how you kind of your path and how you found agency and became I hate to use the word influencer became someone who is a strong voice in this and appears to be making a nice living and and has developed a rewarding career talk about your backstory and your path to to how you got where you are now yeah um I grew up in Kentucky and I thought I'd be stuck in Kentucky forever uh and it's not a bad place to be it just you know there wasn't the opportunities that I wanted there um and so I went to school in Kentucky uh for the scholarship program that I was on and all throughout College you know I'm tutored in economics and had a Blog talking about my options trading and so I always been sort of in the online sphere and then I went out to Capital group in Los Angeles and and worked on the buy side for about a year and a half um but six months after I graduated Co happened and so like the way that I I thought about work was um it changed quite a bit because you know all of a sudden you're fa with death and you're like oh well what do I really want to be doing and for me it was um education specifically economics education and so I started making videos around GameStop and you know a lot of things sort of influen like why I wanted to focus on economics education number one is because I don't think we give people a fair shake at all when it comes to understanding the economy like it's something that we all exist in like I you know I bought a coffee this morning like that's an economic transaction the jobs that we have or economic uh you know interfaces everything that we do is tied to the economy somehow but we pretend that we don't need to understand it we pretend we don't need to know what the FED does and how it influences interest rates and we don't need to know the depth of it but we need to at least understand how it could impact us I think that it creates a lot of um confusion and a lot of anger when people live in a system that they don't understand and so I kind of set off um you know partly because I felt like I wanted younger Kyla to have access to this stuff and you know if there's younger Kyla out there I want to help her but then I I just think it's really important that we understand how the economy works and functions and that's why I wrote the book and and make the videos is because I I think it's just I think it's super important so what advice would you have for someone whether it's in economics or another domain they want to get kind of this flywheel going that you have books videos what has surprised you to the upside if you were advising yourself two or three years ago you leave the capital group you're not working for a corporation you're trying to build your own brand your own small media company if you will what advice hacks would you give to somebody who says all right I really want to get into I I want to be an influencer or make money in child psychology and what what hacks what advice can you give uh to people I mean I think the biggest hack is caring a lot that sounds so silly but like you have to you have to care um I actually get stopped by my friends if I talk about the economy too much because it's like it's something that I'm really passionate about and so like if we're out to dinner I'll just be like did you all see the FED today and they're like not right now um and so I do think you have to have like a deep care for what you're talking about and you have to really want uh like you know it's really bumpy starting your own business and it's really scary like if this didn't work out for me there you know I would have failed and like there was nowhere to go um and so I think there's an element of drive that you have to have and you have yeah yeah yeah fear is a big part of it I was scared I was scared silly I mean it's like funny now looking back on it because everything worked out but I can think of exact moments where I could have quit and like could have stopped and and could have given up and you just have to push through that and I I would say that that would be the biggest advice is like caring a lot and um working through fear the best you can what about tactically what platforms have made money for you where have you gotten the greatest return on investment in terms of raising awareness which platforms have had the lowest Roi um so Twitter previous Twitter before uh the new owner came in was where I got a lot of traction um because there's a lot of amazing finance and economics people on there and uh Instagram has been very good with real and Discovery I'm really known for Tik toks but I actually don't have that big of a platform on on Tik Tok and I think that Tik Tok is dying um and then I have a newsletter you think Tik Tok is dying yeah I think it's get yeah well I think it's just gonna be legislated away I think somebody's gonna buy it maybe um but I think that you know we're slapping tariffs on China there's no way they're going to let that app continue to exist I think it'll be a post elction thing like depending on who gets elected but yeah yeah I think that that's go way so I'm off of Twitter just because I don't I don't want to paint that guy's fence what has happened for you at Twitter um it's been sad I I really loved Twitter and I still learn a lot on there but I work more than I post now um there's still like really amazing economists and like really great thinkers but you you can see the influence of uh Elon on on the platform and you know the algorithmic incentives are toward dorismond where people are you know questioning reality and um painting all sorts of colors on stuff that maybe shouldn't be painted whatever but um yeah I think that's a it's been sad to watch the decay of a platform but it makes sense in the internet age everything turns over so quickly the good times can only last for so long on certain places it's interesting I I tell people I would have naturally gone to Tik Tok as a place to over invest and you it's interesting to hear your perspective if someone was going to pick one platform to over invest in right now to try and build a big brand footprint what platform would you suggest I mean I think Tik Tok still has to discoverability but reals is now trying to compete with Tik Tok in a really big way and I think their discoverability has improved tremendously so I think Instagram actually has has become a very good app to build a following one what about YouTube YouTube's hard um I haven't even really figured out YouTube actually I think that you have to kind of play to the rules to the algorithm Mr Beast is like very good at this um which is why you has such a big platform but you have to have like the right titles and the right thumbnail and um I think that long form is just very hard to capture people within and you like they are investing a lot in YouTube shorts and you can post shorts and I think do pretty well um but yeah I think long form is just hard to get discovered on so Kylie you know why we invited you on this podcast why was that cuz you're very impressive and oh thanks I I thought to myself have all these Financial experts on and they all are the same goddamn person they're all old guys on CNBC and I think it's great that you've manage to establish this following and when I hear you speak I'm like gosh this person just gets it so uh we're hoping that you're going to come back on and be a regular guest but you really are I was really inspired when I saw your content I just thought it was so puncturing and I don't know down toe and relatable so well done thank you yeah that's the whole goal is to make accessible content like that was the goal of the book like there illustrations in there like it doesn't need to be as complicated as we make it and I think that makes it so scary is like we we make it so scary um and it is really just like nice I think to have somebody talking at you I guess about like economy there there isn't a lot of that because there's a lot of gatekeeping as you know and uh yeah I'm glad that it is helping people well I think it is Kyla scandin is a writer Video Creator and podcaster who focuses on educating our audience about the economy and the financial markets her debut book in this economy how money and markets really work is out now she joins us from a we work in are you in New York or you in Brooklyn where are you no I'm in New York City Manhattan yeah oh nice well it's great to be here and thanks for your good work K yeah thank you so much [Music]

Channel: The Prof G Show – Scott Galloway

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Id: T6WxitWk2NU

Length: 22min 4sec (1324 seconds)

Published: Sat Jun 15 2024