Season 3, Episode 11: WTF is the “Fed”?

Consumer protection, something about inflation and hopefully sending checks to us

Did you listen to Season 3, Episode 1 where Caitlin grilled Sara about whether anybody ever knows if we’re in a recession or not, and Sara said we do because a brilliant economist named Claudia Sahm invented a rule called the Sahm Rule and male economists are always mansplaining the Sahm rule to Sahm?

If yes, then oh my god, you’ll never believe who our special guest is this week: Claudia Fucking Sahm! The economist who invented the Sahm rule!!!

Claudia Sahm, Chief Economist of New Century Advisors and former Federal Reserve economist, came on Women on the Verge of a Financial Breakthrough to answer our (Caitlin’s) dumb questions about her job and the economy.

Like, for instance, what is the Federal Reserve again? And, just to review for people that missed the last class: What is “economics” again? Hmmm. This is tricky.

Come listen in to Sara resisting the urge to ask all of her high-level fancy-pants-finance questions with every fiber in her body so Caitlin can complain about the price of Cheerios!

Here is Claudia’s Substack to get all of her research and thoughts into your inbox.

Ask us your dumb investing and finance questions for Season 3 on our Ask Us page!

We have the social medias!! Here’s our Instagram and Facebook and LinkedIn.

This episode was edited by our co-producer Kelly West. Music by Bad Bad Hats and Devmo.

Transcript for Season 3, Episode 11: WTF is the “Fed”?

S3_Claudia Sahm.mp3

Caitlin [00:00:07] Welcome to women on the verge of a Financial Breakthrough, a podcast where we're figuring out finance. One dumb question at a time. I'm the dummy. Caitlin Meredith, a coach and mediator based in the Bay area.

Sara [00:00:20] And I'm Sara Glakas. I'm an investor, advisor and founder of Black Barn Financial and the Austin Women's Investing Group, which can be found on Meetup and Facebook.

Caitlin [00:00:30] Before we start, do you know a woman who might be on the verge of a financial breakthrough? Will you text her a link to our show and maybe two other friends while you're at it? Also, if you can, please leave us a review. This helps other women on the verge find us and we read all of them and they make us happy. Cry like this one from a listener who said, I never thought I would look forward to listening to a podcast about financial help. I usually find this kind of information overwhelming, but I feel like I'm getting it now. Oh my god, I relate so much the overwhelm. Thank you so much for leaving this review, and thank you to all of our listeners. Well, let's get started. Sara, do you want to introduce our guest?

Sara [00:01:19] Oh my gosh, yes. I'm so excited. So we have, Claudia Sahm here with us today. Claudia is the chief economist at New Century Advisors and the founder of Sahm Consulting. She is a former Federal Reserve economist and was senior economist at the Council of Economic Advisers in 2015 2016. And she is the creator of the Sahm rule, which I think is going to be super, well, fun. I think it'll be fun to discuss, right. But at the very least, like really illuminating. So I am so very excited to have Claudia on our podcast.

Caitlin [00:01:58] Claudia, will let you speak in a second, but I think that I'm going to give Sara's introduction just a B-plus because you.

Speaker 3 [00:02:06] Did introduction.

Caitlin [00:02:08] Mention the thing that makes her so famous for us. Well, I guess it's just for me and our listeners, which is on our first episode of this season, Sara started talking. It must have been about the bull market. And so Sara was talking and I was saying like, how do we even know if we're in a recession? Well, we just learn about it in the textbooks later. Did they know in the time? And she started to go into something that I view still is somewhat esoteric for the personal finance side of this, which was the Sahme rule and talked about Claudia, Sahm and how she invented this rule. And actually, she's kind of a badass. Then I got really sidetracked on how Sara could meet her and what conferences we could, like, set up. Like, that would be totally normal for Sara to go. And how would she approach Claudia? I got really into that angle. 24 hours later, we were in touch with Claudia and it. Now she is actually on our podcast. So it is really it's like maybe one of the most exciting things that's happened to have you on. So you are an incredibly welcome, celebrated guest here. And I will say a good sport, to go to some check yourself to the lower echelon of questions that you might not have to answer on a day to day level. So welcome, welcome.

Claudia [00:03:30] Well thank you. What a absolute warm welcome. And when I heard the podcast and heard praises being sung of my work and the way I do my work, it was, total joy, right? And so I was, you know, of course, I was going to reach out and be like, hey, you know, praise me on your podcast. I want to be on your podcast. This would be fun to meet you all. So yeah. No, it's been it has certainly been a wild ride. That's been the case for all of us. All of us who are experts, all of us who are trying to help people understand. Just regular people understand what's going on. So I appreciate anyone who's out there, as you all are, trying to educate and give you help. People get their questions answered.

Caitlin [00:04:11] Well, Sara already introduced one of the things that I think is it has been a longstanding tension and confusion for me, which is the difference between like what's in my checking account and what's going to determine how much I'm paying for things at the grocery store and what I can afford to do on my leisure time, versus like much higher level decisions that I hear as headlines. And I don't know if they have anything to do with how what's going to show up in my personal life. So I wonder, Sara, if you'd be okay if I ask her some lower level, normal person questions. I know this is a real test of you having that opportunity to actually talk to someone who speaks your language. But I promise I won't take up the whole thing. But just something as basic is what is. The fed would be real help for me to be able to listen in on y'all's talk. So I understand what you're talking about.

Sara [00:05:09] I mean, and I am going to just chime in here a second. Katelyn, I'll let you take it away. But I have as my first question, how would you explain economics to a regular person? So I think we're on season three. We got a mind meld now.

Caitlin [00:05:25] Okay, Claudia.

Claudia [00:05:27] First I say about the economy, the economy. There's a lot going on. Right? So you have you do have to have some you kind of have to have some focus to make any, you know, meaningful statement. And I will often get admonished, oh, you economists, you don't think about people. It's just these big numbers. And it's like, well, actually, most of the statistics that I will focus on there are from surveys of people, of businesses. So there is a tension of anything this Caitlin, what you were saying, there's a tension between what we are living individually and then what we hear projected back to us about the economy. And it is absolutely the case that there will be differences, unfortunately. What happens if. If you stop with just like some big number, like GDP is 1.3% or, the unemployment rate is 4%. If you start with that and don't dig in more then like it won't draw out some particular problems, that are there or trends that are starting.

Caitlin [00:06:37] So if I've just been laid off, but then I hear on the news that the unemployment rate is at an all time low, it might feel pretty disconnected from my personal reality and therefore make me think like, not that it's wrong, but that it has nothing to do with actually my life and the things that are happening.

Claudia [00:06:56] If someone has lost their job and are struggling to find a job and this can, this can happen in all like it is, it is easier now to find a job than if we were in a deep recession. But that is cold comfort to someone who is living now, right? Like now you need a job, now is not, you know, these comparisons. What I've come across more recently that has been searing. I'm going to get dragged down into this, this hole right from the start. This disconnect between how people tell us if you ask people on their own, how is the national economy, they tend to be much more negative than if I go to a bunch of surveys of people, all well done and roll up those individual, like, how are you doing? It's not just I'm going through bad things that I don't see in the numbers. I know other people who are like, you told me, the labor market is great, but I keep reading all these news articles about homeless people, so it really can't be that great right at the end of it. None of the decisions that we make individually can affect decisions that are made by an institution like the Federal Reserve.

Caitlin [00:08:10] Which is a great segue to what the hell is the Federal Reserve, which we were like the fed, right?

Claudia [00:08:16] Pivoting out of this, I like this is tough. Any exposure to business news or investing new the fed comes up these days and it's all about when are they gonna cut interest rates. Interest rate is interest. The fed is was created to step in during times of financial panic. So when we saw and the example last year being the Silicon Valley Bank and some of the regional banks, that went into distress and the fed stepped in, went to other federal regulators and got it under control and really fast.

Caitlin [00:08:48] We did an episode about the Silicon Valley bank called what is a Bank? Because it made me question, like, I thought everybody put their money in a cubby in the back of the bank. And Sara spent a lot of time straightening out what actually how a modern bank functions, which was eye opening. And I'm sure we talked about the Fed's role then, coming into stabilize.

Claudia [00:09:13] One of the last banking crises before the fed started in the early 1900s, it was J.P. Morgan, the man. So the banker who stepped into the financial crisis and decided who failed and who made it through, it was decided, and very much rightly so, that you should not have you should not be depending on private individuals to determine whether the banking sector or the financial sector keeps going. And you they should absolutely not be choosing the winners and losers. So that's the reason we have the Federal Reserve is, is this lender of last resort. And we have seen that repeatedly, whether it was in the global financial crisis in 2008, we saw it again in 2020. And honestly, that is how the fed earns is keep. We talk endlessly about what falls under, you know, quote unquote, monetary policy with their interest rates. It is their stepping in in times of crisis that's absolutely crucial. And they spend a lot of time making sure they don't need to use those powers. And that is by overseeing the banks. Okay. And of course, they also have over time developed this, you know, the monetary policy. But it is a job that comes from Congress, the fed officials that are in Washington, DC, they are, nominated by the president. They're confirmed by the Senate. Essentially, they're elected. But there is a level of accountability.

Caitlin [00:10:39] Claudia, can I make sure I get this up to this point because I relate to the story part of it. So there's this really like in the early 1900s when a lot of the current the modern American economy, that's where the roots of what we see now and a lot of it. And one very rich businessman, J.P. Morgan, was calling the shots.

Claudia [00:11:00] With his buddies, with his rich with it.

Caitlin [00:11:03] Was.

Claudia [00:11:03] Literally just him, but it was.

Caitlin [00:11:05] Scratching each other's backs to create the economy that worked best for those businesses. And they had no reason other than their own personal goodwill. To have an outlook that would would benefit people that didn't directly benefit them, and they didn't have the public interest necessarily in mind. They had their own enrichment, perhaps front and center. And so the fed was a government mechanism that was thought of to take the power out of a private individuals hand and bring it to a government hand that could have sort of a, a disinterested I mean, their interest in advocacy was for the general public and not for any individual or individual company.

Claudia [00:11:50] And then we can put guardrails in place. So we're not just putting out fires. Obviously, a private citizen is not going to be regulating or overseeing things. Right. Like that's not an expected bank to oversee itself.

Caitlin [00:12:03] Like that's not so part of the mandate of the fed then, is to set rules for the banks and other financial institutions to operate by, to, to avoid crises and to protect the rights of the individuals contributing their money to them. Is that an emperor?

Claudia [00:12:20] Yeah. Particularly the the part of the Fed in Washington, DC where they call safety and soundness. You don't really think about it until there's a stress. Like, I suspect more people heard about deposit insurance and what the levels were for deposit insurance at banks in the spring of 2023 than had for decades.

Caitlin [00:12:46] Okay, Sara.

Sara [00:12:47] Okay. All right.

Caitlin [00:12:48] I feel like I have a working knowledge, at least not totally zoned out when I hear fed now.

Claudia [00:12:55] But just just for the banking part, right? We haven't I? Okay. And I've explained the part that like doesn't get talked about as much but is very important.

Caitlin [00:13:04] Okay. So I understand the 16th the fed right now.

Sara [00:13:10] I mean, so one of the things I kind of like to pivot to that I think is related, thinking about monetary policy, right. Which you can talk about a little bit, fiscal policy and your indicator, the central indicator, which tries in real time to tell us if we're in recession. So I was hoping you could spend a little bit of time, a kind of describing to us, either in an economist terms or in Layperson's term, like what a recession is, and then the Sahme rule that you came up with through your research to try to tell us in real time, yes, we are in recession instead of just guessing or doing like the vibe session thing, like we did the last couple of years, where people just felt like it was a recession and it wasn't. And then what happens when, like, for example, the Sahme rule gets triggered? Like what? What could we do to mitigate the effects of a recession? So that's like a really long multi-part question.

Claudia [00:14:11] So first, in terms of what is a recession? It's a broad based contraction in economic activity. oh. Right. Which is about is.

Caitlin [00:14:22] Is that broad based contraction means slowing down or minimizing.

Claudia [00:14:27] Yeah. I mean, there's enough there that's like pretty vague, right? So I'm not sure that I'm not stopping there and keep going. Okay. We experienced recessions across the country. So right now, someone who is trying to buy a home. All right, interest rates are high. House prices have gone up. There's not enough. Building this economy now feels worse than a year ago. Two years ago. Right. Like things have just continued to become more and more challenging in the housing space. Okay, so you could have a part of the economy that's struggling, that is contracting in the like, construction would decline.

Caitlin [00:15:11] So fewer new houses are being built. Is an example of a contraction.

Claudia [00:15:16] Yeah. If you're new houses are being built because there's less demand for housing. For it to be a recession, you'd need to see it basically everywhere. It starts to show up in different parts of the economy. It's affecting different kinds of households. I mean, never, never fear. Well, if people are generally well-off, always if they don't.

Caitlin [00:15:42] Well, that's a relief.

Claudia [00:15:43] Yes, I know we were all worried about this, that they were going to have a tough time in the, in the contraction. But they, but they would be less doing less. Well, recessions tend to have unique causes, whether it's a financial crisis, whether it's a pandemic and.com.

Caitlin [00:16:04] Do you mean unique? Like they only happen once in a lifetime or unique like a specific causes?

Sara [00:16:13] Or like the causes don't. Repeat themselves because I think.

Claudia [00:16:17] Or they don't have to. The pandemic was the first recession in a very long time. Where the recession hit. That was not economics. It came at us. Or you don't. It created economic disruptions. It created a very severe economic recession. There are parts of recessions and dynamics that are going to be varied. There are pieces of recessions that all of the Sahme people spending less, businesses investing less. Well, then some of those businesses don't need as many workers. The workers get laid off, those laid off workers don't spend as much. And when a particular event happens, they can move fast. So the Great Recession started at the end of 2007. By the time the financial crisis broke in the fall of 2008, it was all all the way down. Can I ask you a follow.

Sara [00:17:14] Up on that, that I'm really curious. I think especially in financial media or even in the financial markets or amongst investors, there's this idea that recessions are necessary and healthy. They're like a resetting of something that's gotten out of balance. Do you agree with that?

Claudia [00:17:36] I certainly did not agree with that in this cycle.

Sara [00:17:41] Meaning the pandemic cycle.

Claudia [00:17:42] The pandemic cycle. Right. So my my interpretation of the inflation that we have had is that we trace it back to Covid. We had some very fundamental and rapid shifts in the way we are just living our lives. And the whole the way consumers switched from, services to goods. And it happened very quickly. When people are afraid to be out spending and then in early 2021 is, oh, we have we have this wonderful vaccine and you can go out and you can be around people and you've got all this money socked away because you haven't been spending. It's not a surprise you got this like blast of extra demand. But is the answer here really that you need a recession to get this all under control, or do you need these disruptions to unwind? The unwinding of the disruptions has largely been the passage of time, with the fed kind of standing by, raised interest rates diligently watching with the rest of us. And they have not taken they have not been of the view. They need that you need a recession to bring, this inflation down. This wasn't a quote unquote, overheated economy. This is an economy that had just profoundly twisted.

Sara [00:19:03] I mean, I think I remember even in late 2019, going into early 2020, I think it was Jerome Powell said, said something to the effect of maybe we're like beyond recessions. Maybe we know enough about monetary policy and fiscal policy, where recessions don't have to be a thing anymore, or we can keep economic expansions happening longer than they had historically. And it really it really made me think that. And, you know, listening to a podcast you did on, lots in March 2020, which was saying something to the effect of, like, we know how to combat recessions. And my takeaway was like, what if you just give people money? And that's always kind of sloshed around in my head, like all of those things together. Can you use a combination of monetary and fiscal policy to prevent recessions and should you?

Claudia [00:19:57] It's a really complicated. And there's certainly big debates over the monetary policy, the fiscal policy. There was a lot of money and relief that went to to families and workers. I was at the time and still remain a proponent of that. And yet we needed something for the inflation and paring back. I, I am open to the idea that the checks could have been smaller or they could have been more targeted. That's not going to cut it. The problem was not fundamentally that we did too much. You can look across our peer countries around the world. The U.S. was really far out there in terms of the the relief. And we all got the inflation. This is bad, right? I stand firm in being correct that we we could get inflation down. We would get inflation down without a recession. But to a person it makes a difference if those prices were rising fast for one year versus two for the passage of time, is not an ideal policy approach. We look to the fed and this is a this is a big mistake and I hope we will learn. This is it. When inflation shows up we don't say, oh the Fed's got this because it's not all the Sahme. Like if we really talked about in terms of housing affordability would you be like hey Jay Jay Powell get on it. Like what is he supposed to do? We didn't have enough affordable housing before the crisis and interest rates were rock bottom low. So don't don't think that interest rates are going to are going to fix this. I will say since we're talking about definitions of recessions, inflation being high is not a recession. Actually, you still see surveys of people like half of adults say we're in a recession.

Sara [00:21:55] Way, like thinking about surveys, how people feel. And, you know, people like you looking at surveys, the survey data, which I think I think I just saw a chart in your newsletter, right, showing like the survey data so bad. Yes. Right. Like we're we're taking inflation, which is one thing. And in our mind it's just it feels bad. So and recessions are also bad. So things must be very bad. Like we must be in recession.

Caitlin [00:22:21] Normal person here. If both of you asked me right now on this podcast, are we in a recession? And I'd look to your faces to say like, yes or no, we are not in a. Recession, I feel like I don't. I would not be able to say, and I know enough to know, that whatever's going on in my personal life isn't the dictator of that, but I feel like I don't. I would not have a secure answer. I'm the person they're surveying that's causing this confusion.

Claudia [00:22:55] Yeah.

Sara [00:22:56] No. One times 100 million. Yes.

Claudia [00:22:58] At the end of the day, it's. Can you get what you need? Right. Like that is a first order. And then it's like, oh, you're getting more than you got before. This recovery was remarkable in some of the best gains. Full stop. We're at the bottom. Low wage workers. We're the ones I mean, they were not paid enough before, right? Like levels mattered a lot, obviously, but they were ones because the labor shortages that got big wage increases, their wages made up for and surpassed inflation far sooner than other workers. So so I look out and it's like, okay, I get it. You're angry when you look at the label on the apple, but could you buy it.

Caitlin [00:23:46] For like a $7 box of Cheerios? What I can't figure out with some of the and I'm in Northern California, so I don't know if that dictates this, but with some of the price increases for what I what isn't Whole Foods isn't, you know, is like your standard issue grocery store. I'm like, are we finally paying what things are worth? Like all of the production, all of the labor that went into this, are we just finally having to to do that? Or are corporations getting even more greedy because of the supply, because of the misperception of the public that like, oh my God, supply chain, they have to charge more. And in the end, I am not buying. I cannot buy for the products that used to be the cheap, easy ones. I refuse to buy a box of Cheerios for 759 that won't even give five breakfasts to my daughter. I'm like on principle.

Claudia [00:24:47] You're not alone. Okay, so podcast is hard to tell because it's clear that companies are facing more pushback from consumers and that enough is enough, right? I mean, McDonald's was basically shamed online into getting some lower prices. The best cure for inflation is often inflation.

Caitlin [00:25:14] Because I get so fed up as like, mom who's just not going to do it anymore. And so they are punished essentially because I'm like, forget you. And then they're forced to do some self reckoning.

Claudia [00:25:28] And then they have to start competing again. Jay Powell will never say this. Yeah I on some level the fed in particular first. No. It's like I want you to do the rogue press conference. The fed blames inflation on consumers.

Sara [00:25:46] Because they keep buying.

Claudia [00:25:49] Yeah. The thing that you should have in the very like elegant, clean models of monetary theory, the fed raises interest rates. And then what happens? People save because you know all your bank account interest rates go up. Right. So like in theory. And so that's you save because it's worth more to wait and consume later.

Caitlin [00:26:15] Yeah. Which as like working parents you know you're not like breakfast will be in 2025.

Claudia [00:26:21] You know.

Caitlin [00:26:22] Look at these interest rates like the Sahme.

Claudia [00:26:25] As with almost all models. They they slam into reality. Before the pandemic, inflation was low because businesses had a hard time passing on any kind of price increase. Now during Covid, the tables turned and businesses were able to push prices through and is relevant now for. Are we going back to the way it was? Businesses are the ones who set prices. A lot of times in our abstract debate about inflation, it's like who is inflation? And it's like, no, no, no, I this isn't it. I'm not blaming businesses. It's just.

Sara [00:27:03] They they put the price tag on the apple like they are the ones they.

Claudia [00:27:06] Made the decision. Yeah.

Caitlin [00:27:09] Okay. But wait, Sara asked you about the rule. That was me. After you and I have completely.

Sara [00:27:14] Do we have time for the real Claudia? Like, for. Yeah.

Claudia [00:27:17] We're so cool. Okay. Yeah. Yeah. Of course. Yeah.

Caitlin [00:27:19] Okay, good. So I'm gonna dumb it down as much as possible. You as an economist started studying recessions and you got all your data points together. And this is my assumption based on zero research or knowledge. And you looked for patterns. And as you compare to all of the different instances of recession that you deem to be worthy of sort of studying to look for patterns, you noticed sort of a criteria or a screening. Test that all of them fit. And you you described this as a rule. If this happens, this happens and this happens, then it's a recession. Sort of looking at history, what had been true so far for each recession. And that could then turn into a useful tool in real time for people to look like, oh, this is happening right now. This is happening. Oh, but this third one isn't happening. So not a recession. And we can check again in six months. And when all three of these imagined criteria that I don't even know what they are, and I don't know if there's three of them, but to simplify. Oh, all three of those are checked off are happening now. Then we can officially call this recession. And what's different about that than had been happening before is a god. I'm really just making stuff up. So I know.

Sara [00:28:46] But I know Katelyn. Oh.

Caitlin [00:28:48] Oh she's going to put something up.

Sara [00:28:50] That's been it's the real time some real recession indicator on the Saint Louis Fed. What Saint Louis Fed okay.

Caitlin [00:28:57] So there is a website we'll put it on in the show notes, along with all of Claudia stuff that shows when all these recessions are. But what I'm assuming is that the sort of went to responded to the question I had for Sara, which was, do we only know that it happened in retrospect, like, oh, yep, that was a recession. And she said, well, that's the sum rule allows us to see in real time. So was that aside from the criteria that you chose, was that one of the things that made this get its own, name and rule was that before this, people hadn't had a unified way to measure real time recession.

Claudia [00:29:41] It really it's so embarrassing, this.

Sara [00:29:44] This there's so much to come on here and brag. Claudia, I.

Claudia [00:29:48] Know it's not a very specific purpose to begin relief. Fiscal relief at the beginning of recession. Specifically send out the checks.

Caitlin [00:30:02] So it had a real at home for me benefit, which was like, now activate like, press the button, send them the checks. We are a recession and the government has to help people.

Sara [00:30:15] Now you asked about that, Caitlin, when we talked about recessions, you said like when, you know, whoever says we're in a recession when that happens, does. Yeah. For me, it happens like. And I said nothing necessarily. Right.

Claudia [00:30:30] Yeah. That's right. I started the Federal Reserve in the summer of 2007. So right before the great Great Recession. And I just was like, it was horrible. I mean, the devastation that a slow and painful recovery caused Purdue the young adults Purdue March I think is just it's only a loss a decade. But it wasn't that much. Far from it. Right. So and then watching how fiscal policy really struggled to get it right. So I had worked on okay. What something on this like the we can do to prepare for the next recession that will make sure this does not happen again as soon as we know it's a recession. Somebody says somewhere hit go. And Congress has already said ahead of time we will hit go. So this thing was not supposed to lead a three year long discussion of are we in a recession or not? Or in what is coming? It's let's go look, the yield curve has been telling us about a recession since time immemorial. It's like using market indicators, but they're all forecasts. Everybody's is a forecast. It's a forecast. We want to get ahead. I don't even want to forecast this thing. I wanted to be able to say with a high degree of certainty is here and isn't like I invented labor market dynamics that go with recessions.

Caitlin [00:31:50] No, by the way, a tool to analyze them that turned into real time response.

Claudia [00:31:56] Yeah, yeah, I don't know. And I'm happy. It's like I'm here to be helpful. I became an economist, especially the policy work, to be helpful. It's just I didn't think of it in quite this way. When I'm asked about where's the economy? Where's it's headed, what should policymakers do? I'm not going to just focus all of my thinking on some rule.

Caitlin [00:32:20] No, you're a you're a multi-layered, multifaceted person. I have many things to be on the side. Yeah. And then I'm just curious. We've a. Sara, I know you probably have another one, but. Claudia, I've talked to Sara about this a lot. She used to work in the bond market, and as being a female in the bond market had was really difficult. I mean, I'm not going to overstep, but I think we can all imagine, like, a very much an old boys network and who wanted a new boys network and. And a lot of women that I have talked to since starting this podcast, who had worked in the financial industry, decided not to. A lot of it had to do with being the only woman in the room and not having the respect of their peers, they're just not having the accessibility of a growth career profession and getting mentors and people to make them feel, I'm going to use the word safe, and that could be in a million different things, but feel like this is my place and I'm going to have the support I need to grow here. I wonder, and you don't have to talk about this at all. But as someone who this is a podcast for women who have felt really excluded from intimidated by the financial world, I wonder if you could just talk about your personal experience, about being interested in economics in a space that has not had women in it? As far as I understand, because I've been so far away for it, it's definitely not had me in it. I wonder if you could tell us a little bit about your experience.

Claudia [00:33:53] So economics absolutely continues to have a narrowness. Of who who's there? And women are underrepresented. When you look at persons of color, this is much, much.

Caitlin [00:34:10] More.

Claudia [00:34:10] The case. You want to have the perspectives in the room, particularly if individuals are working on policy as, as I have at the voter, the white House. Regular people are blessed not to be in a lot of those meetings. They're not terribly interesting. And yet their interests and what they are dealing with should be represented. And and it is very hard to do that like to carry that of like whole group that you are not a part of a huge fraction of individuals coming out with economic PhDs now have parents who have PhDs. First generation college students are almost just entirely not represented. For many economists, the attitude, well, this is just the way it is. So it's not even just that like, oh, you walk in a room and you don't see yourself. It's like, well, because you shouldn't see yourself, right? And often again as you. Well, if there are not women here, it's because women do not want to be economists. I tend and like to focus a lot on inclusion when I work with especially younger people, and meaning that we are to create an environment that is supportive and friendly with everyone in their different ways. I've worked in rooms where there are no women or very few, and I've walked into rooms where in other ways I'm different and keep doing it. It is hard and I do whenever I have an opportunity. I did again recently talking with Higher up and leaders in firms. Or like that's who sets the rules. And so you cannot expect people to advocate up for a better, more supportive environment. It has to come from the top and it's not that hard. I think there are some very basic things we can do to be more respectful.

Caitlin [00:36:10] Sara, did you have any?

Sara [00:36:11] I have a million other things that I will lead up for our next discussion. Because this Claudia was so interesting and, just. We cannot thank you enough.

Claudia [00:36:23] Great. Well, thank you. I very much appreciated the chance to be here. Yes. Very fun.

Caitlin [00:36:27] And we'll write down our questions and email them as the as they come. So you could consider it a new job.

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Sara Did you have a question about finance or investing? Send it to us in an email or voice memo on our website. Womenontheverge.com.

Caitlin Hey, we want our listeners to know that economic abuse can be subtle, but it's a serious form of control. Watch out for partners who limit your access to money. Sabotage your job or rack up debt in your name. If this sounds familiar, know you're not alone and there's help available. Please learn more at the hotline.org or call 800 799 safe.

Sara This episode was edited by our co-producer Kelly West, with music by Bad Bad Hats and Devmo.

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Devmo I know the first thing you notice is that I'm covered in gold, the flick of the wrist it could turn a hot bitch cold, to get what you want in life girl you gotta be bold. Now Imma die rich, and I know...

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