Should We Cherish the Ultra-Wealthy? (a.k.a. ‘The Cornfield’)

Kathryn: Hello, and welcome to Optimist Economy. I’m economist Kathryn Anne Edwards.

Robin: I’m editor Robin Rauzi.

Kathryn: On this show, we believe the U.S. economy can be better, and we talk about how to get there, one problem and solution at a time.

Well, so today on Optimist Economy, we’re only both about 30% sure about what we’re talking about, but we’re pretty sure it’s about rich people.

Robin: It’s definitely about rich people. What we’re going to say about them is a little bit up in the air.

Kathryn: You know what? Part of the conversation is that we don’t know how to talk about them. All right, first, announcements.

ANNOUNCEMENTS 00:01:00

Robin: We’ve gotten a lot of great questions so far for our next Q&A episode. I think that we will be recording it in two weeks, which means I need your questions in the next week. So if you’re hearing this and you’ve still got a burning question, send it to optimist.economy@gmail.com.

RETCON — 00:01:30

Kathryn: Moving on to retroactive continuity, AKA retcon. We have a retcon that comes via the internets, which is: we put a clip of Robin explaining the origin of 86 on TikTok and Instagram, and apparently there’s not a user on either platform that agrees with your genesis.

It was such a wellspring of personal stories of like, “I worked in a restaurant. We never 86’d anybody. Things were 86’d.” No one agreed with your assessment of 86. And I was like, “Y’all, I wouldn’t question Robin,” but…

Robin: You can question me. That’s fine. I don’t think that there’s a settled case. We also got emails about this. One person said that they had taken a food tour of New York and gone to a bar, a Prohibition-era bar called Chumley’s in New York City, and it had an entrance that was on 86 Bedford Street, but that wasn’t the main entrance.

And supposedly, it was the one that got the call saying, “86 your customers.” So during Prohibition, people could sneak out this back door.

Kathryn: I thought it was kind of beautiful that it has so many potential origins, and also that we’ll never have a definitive “it’s this one.”

Robin: Yeah, apparently somebody wrote a magazine article with 18 different origin stories of 86.

Kathryn: I love that. I just really appreciated people’s “I know what 86 comes from” and contributing to the 86 discussion.

Robin: Okay. Also in retcon?

Kathryn: Also in retcon, last time I gave a quote about FDR, and I realize that it’s actually a truncated quote where he talks about calamity howling executives, and it’s from a fireside chat. And so I thought I could read the full quote, so I will not be accused of, I don’t know, cherry-picking the language.

So the full quote from the fireside chat is, “Do not let any calamity howling executive with an income of $1,000 a day who has been turning his employees over to the government relief rolls in order to preserve his company’s undistributed reserves tell you, using his stockholders’ money to pay the postage for his personal opinions, tell you that a wage of $11 a week is going to have a disastrous effect on all American industry.”

It’s actually much more biting in the full quote. It’s not just that they’re crying wolf, it’s…

Robin: The postage for his personal opinions.

Kathryn: Yeah, that he’s using the company for his personal opinions, or that they’re paying people so low that they’re on government relief rolls.

Robin: Sounds familiar.

Kathryn: It does sound familiar, actually.

Robin: I thought of this quote a couple of times reading the news this week, including reading a Howard Schultz op-ed in the Wall Street Journal today about how Washington is being ruined and how entrepreneurs know how to run things. I was like, “Howard Schultz, take your money, go to Florida, stop talking.”

Kathryn: It does remind me of that now-famed billboard of, “Will the last person to leave Seattle please turn out the lights?”

Robin: I don’t…

Kathryn: Have you seen it? A real estate agent took up a monthly billboard lease, and it was on the way to the airport, and it said, “Will the last person leaving Seattle please turn out the lights?” Because Seattle’s economy in the ‘70s was not…

Robin: Not good.

Kathryn: Not good. And it was meant to be tongue in cheek, but people got really upset, and so they took it down after a couple of weeks.

But I found an interview with a guy relatively recently. He was like, “Yeah, so that really stuck.”

I’m feeling like, if there are any people with an entrepreneurial spirit in Seattle who want to rent out a billboard, you could take out a very similar ad that’s something like, “Will the last billionaire leaving Seattle…”

Robin: Trying to…

Kathryn: “Turn off the space launchpad?” “Will the last billionaire leaving Seattle, please be sure to pay your household support staff. Take your private jet with you. What else could you do?”

Listeners, I know you can nail this. Optimists will nail our now, “Will the last billionaire leaving Seattle please turn out the blank.” I know you’re going to get this.

Robin: I like it. I like it.

TERMS & CONDITIONS — 00:05:30

Robin: I have suggested a term and condition for you, but I don’t know if you want to use it.

Kathryn: Yeah, I can do it.

Robin: Okay.

Kathryn: So “wealth effect” in economics can have a couple of different meanings based on the context. I think the one most people are talking about is the idea that you will increase your consumption, which is how much you spend on goods or services or whatever, when you get wealthier.

So your income hasn’t changed, but because the assets that you hold are more valuable, you will go out and spend more money.

It’s a behavioral change based on how rich you feel, based on unrealized gains on things, and it can include the stock market. Home prices are a pretty obvious place it gets measured, it seems like.

It’s a really fascinating question, too, of how do people internalize the assets they hold that they haven’t converted to cash. This is just like, I’m holding an asset that is illiquid, and I’m spending more money because of it.

The rule of thumb is $1 of wealth equals 2 cents of consumption in the short term. So if I found out tomorrow that my house went up by $10,000, I might spend 200 more.

Robin: But just one time.

Kathryn: Or in the short…

Robin: In the short term.

Kathryn: In the long term, if I think that I’m worth more money, it could lead to more consumption as I use that to borrow, to invest, or to do other things.

So in the 1980s and ‘90s, you saw a run-up of people who were getting access to the stock market, which has typically been a relatively elite-held asset.

So if people in the middle class are able to get assets in the stock market, is their spending different than people who are, you know, say, traditionally holding it? Does it have the same consumption effect? It doesn’t. People tend to know that their value in the stock market could very well go down again, and they don’t respond the same way.

So the wealth effect is not just based on the amount of wealth that you get, but also where that wealth is coming from. Housing, people tend to spend housing. They don’t necessarily spend the stock market at the same rate.

Robin: Right. And housing wealth, I mean, people can tap that with things like home equity lines of credit in a way that, for most of us, would require selling assets and paying capital gains and all sorts of things if you were trying to do that in the stock market.

Kathryn: Yeah. In our economy, as we all remember from the GDP episode, around two-thirds of the U.S. economy is the spending of households. That means a portion of our economy is maintained via people feeling wealthy and spending money.

And so is the wealth effect from these assets.

Robin: Your term is weird-looking.

Kathryn: It is. It’s zugzwang, and it’s German. I’m sure if you’re German, it sounds something like zutzvung. It’s a word from chess, actually. It means that you are forced to move, but every move you make is actually going to make things worse for you.

Robin: Oh, this sounds German.

Kathryn: Yeah, doesn’t it?

Robin: I’ve heard the definition. This feels very German.

Kathryn: But it gets used a lot in daily life, and I read it in an article about the situation that Vladimir Putin is in vis-à-vis the war in Ukraine.

It also reminded me a little bit of the position that our president finds himself in in Iran. Anyway, it seems like it was a good word, good German word.

Robin: All right. Well, I feel like this is a little bit of an ominous beginning for our episode. FDR’s calling out executives that got employees on the dole fighting labor law, consumption is being converted from assets like stocks, and in the meantime, we’re all backed into a corner, and every time we move, it gets worse.

We’ll be back with the optimism right after this, coming up on the Big Pilcrow.

BIG PILCROW — 00:09:45

Kathryn: All right, we’re back. Yeah, we’re back. We’re back. We are now 40% sure what we’re going to talk about. Let’s see if we can make it to 75 by the end. I like those odds.

Robin: All right.

Kathryn: So here’s the hook. There are movements across the country, as we’ve talked about in our tax episode, to somehow raise revenue from high income, high net wealth households. And I was reading a Wall Street Journal article about what is becoming quite popular, which is the second home higher property tax.

Robin: Right. They proposed this in New York.

Kathryn: I think it’s New York City. It’s the… Oh, I’m not going to say this word correctly. Pied-à-terre?

Robin: Pied-à-terre?

Kathryn: Okay, pied-à-terre. All right. So Mamdani is proposing a pied-à-terre tax in New York City, and the idea is that if you own a residence that is worth a certain amount of money and you don’t live in it, they’re going to tax you more for it.

They’re talking about doing this in San Diego, which has, just to be clear, like a lot of the West Coast, a really big housing affordability problem, and a housing shortage problem, and a burgeoning homeless population.

Robin: I don’t think it’s burgeoning.

Kathryn: It’s just been here a long time. Been there a long time.

Robin: Yeah.

Kathryn: So this woman, who owns a second property in San Diego, says, “Cities should cherish someone like me because they own property and pay taxes but don’t use city services.” And I don’t know anything about this woman.

I’m not trying to pass judgment on her. What I thought it evoked was this entitlement that if you are rich, you do more for the economy, and so you are more important.

Robin: Oh, yeah. That’s exactly what it did.

Kathryn: I don’t know her situation. Maybe she’s really trying hard to get by, but that is what she’s appealing to when she says, “Cities should cherish someone like me because I don’t use services but pay taxes.” And I thought we could just kind of amble around this point of: optimists, should we be grateful to rich people for the economy?

Robin: Our producer Sofi also shared an article about the same thing from the Financial Times, and I’m just looking for it. Let me see if I can…

Here’s a quote: “Can I afford the tax? Yes. Is it going to deter me? No. But I think it’s shameful. I provide a lot of money to people who are blue-collar workers who work for me, servers in restaurants. If we’re not there, there are going to be less people being paid.”

The entire piece was built around that. But one that I was stunned by was further down, and it’s from a wealth advisor, and he says, “The progressive movement is the most dangerous thing for the upper middle class professional that’s ever happened in these big cities. When these people are successful and they become a managing director after working 100 hours a week and they’re making real money, these governments are going to crush that person.”

Kathryn: Where do you think those people came from? You think they… What the hell? What the hell?

Robin: Yeah. So I just, everything about that just distilled so much, this idea that if we do something to the super rich, who it’s really going to hurt is the upper middle class professional.

Bullshit.

Who’s working 100 hours a week? Because that’s great. They’re not making real money until they’re a managing director, but they’re going to be crushed by the government.

Kathryn: So I just want to talk about where this argument comes from, how it has been seen, and why it is total bullshit.

Robin: I don’t know about you, but some of this started to bubble up in my consciousness, like, last year when this report came out from Moody’s Analytics, claiming that the top 10% of earners in the United States accounted for nearly 50% of consumer spending. And this got picked up.

There are many stories about this, including the one in The Washington Post, including one in The Wall Street Journal, that basically all said: the strength of rich people’s spending is entirely what’s propping up our economy right now. Like Kathryn said, consumer spending is nearly 70% of GDP.

And so that would mean basically that rich people’s spending is responsible for a third of our entire nation’s GDP, which seems a little scary.

I did kind of a deep dive on some of this, and it sounds like a lot of that Moody’s Analytics is, let’s just say, not widely accepted.

Kathryn: No. I mean, one of the best things I read about that was from the Federal Reserve Bank of Minneapolis that just said, we’re going to review the data.

Moody’s came out swinging: 10% of Americans drive half of consumption, which means that they are almost a third of our economy.

And then separately, Bank of America came out with a point where they’re like, “Oh, it’s not K, it’s E. We have an E-shaped economy.” If they are driving spending, it’s been like this for a while. It’s not a part of the recent recovery.

The New York Fed has been much more measured, like, “Uh, we don’t often see wealth and income in the same dataset with consumption, so we can’t necessarily attribute this to just some top percent.” Their assessment is that the consumption patterns of households by income have not changed for a long time.

So kind of closer to what Bank of America was saying of, if this is the case, it’s not drastically pulling apart.

Robin: Can you explain a little bit what we mean by consumption? And then you dropped in K-shaped or K, and I think we should just explain that.

Kathryn: Yeah. So the K, I mean, just think of the shape of a capital K. It was initially kind of in contemporary times brought up in the pandemic that we would have a K-shaped recovery, which means that basically the top half takes off and recovers quickly, and the bottom half slides kind of into its own recession.

It was then applied to inflation. Inflation is taking off, prices are going up, families are feeling the squeeze, and if you’re at the top, you’re fine and you’re still spending as you normally would.

The E shape is meant to point out that they don’t have differing fates from some starting point being the pandemic or the starting point being inflation.

These are just two very unequal groups that have different kind of experiences in any aspect of our economy. In any economic event, you have one group that’s at the top and elites, and another group that’s big and at the bottom and has a different fate because of their household economic security.

Robin: So the E shape, the visual they’re going for is it’s a capital E with three bars, where you’ve essentially divided, in this case, consumers into three wealth groups or three income bands.

I’m not quite sure which one. And the top spends this way, the middle class spends this way, low-income people spend this way. And what Bank of America was certainly saying was that those trend lines are very consistent.

Kathryn: Yeah. So to give you a sense here, to be in the top 10% of American households, this is based on income tax data, you need to be, I would say, at about 200K.

Robin: Yeah, maybe even more, right?

Kathryn: According to IRS statistics, the income floor to be in the top 10% in 2023, which was their most recent year of data, was 187. So around 200K annual income. This does not look at assets. So 200K of income puts you in the top 10%. The top 5% is around 300.

Robin: Mm-hmm.

Kathryn: The top 1% is around 700,000.

Robin: Hmm.

Kathryn: And the top 0.1% is closer to 100 million.

Robin: Okay.

Kathryn: So kind of the basis of K-shaped economy was, these households that have more than $200,000 a year in income, they spend a third of our economy, and we’re being maintained on them.

What people have tried to point out since then is that above 200,000 up to the people who are pulling down a minimum of $80 million a year, you have some really high variation.

And part of that comes from, there are lots of people who make above $200,000 who are sitting on millions in wealth, and people who make $200,000 who do not have as many assets to their name, and they have very different consumption.

And so what they were trying to point out is that the income and wealth, they’re not a perfect map.

Robin: One of the other things that I read suggested that that analysis, first of all, used basically disposable income as a proxy for consumption, but that that was a mistake, that wealthy households save much more. They don’t spend it.

Kathryn: Yeah. Okay. So I think the reason why we don’t have a great answer to this question is that observing consumption, income, and wealth in the same dataset is very, very hard.

Because wealth gets really complicated when you’re really wealthy, and they have all kinds of assets, and where are they held, and do you have a trust?

So the big surveys that we rely on are the Consumer Expenditure Survey, the Current Population Survey, and the Survey of Consumer Finances. The first two are from the Census Bureau, the last one’s from the Fed.

Robin: So these don’t all line up. They’re just different data sets.

Kathryn: Yeah, they’re different data sets. We keep things different for privacy reasons. But how much households spend relative to what they earn, relative to what they own, is not a straightforward question, and it would vary a lot going up and down various parts of the income and wealth distribution.

One thing that the Minneapolis Fed pointed out is that we have over 1,000 billionaires, and we don’t know how they spend their money. There’s not enough of them to be captured in surveys, but they have more money than God, so what do they do with it?

Collectively, the wealthiest 1,135 billionaires are of a net worth of $5.7 trillion. To give you a sense, our economy is roughly $30 trillion.

Robin: Yeah.

Kathryn: So all getting back to…

Robin: Okay. Pull it back. Great. Thanks.

Kathryn: Pull it back is, when you hear something like, “You need to cherish me because I am paying taxes,” it is pulling on this idea that these wealthy people, that the concentration of wealth, is to our benefit because they’re consuming.

Robin: It’s not blackmail? Which is what it always sounds like to me.

Kathryn: Or extortion, because they’re also our employers. But I think there’s this aspect of coming up with a narrative that suits the wealthy and the rich by saying, “We do more for the economy.”

And I don’t think that that’s new. I think that this is today’s version in the gross inequality that we have. “I’m carrying the economy” is almost what these people are saying. That’s the narrative.

Robin: Not almost. It’s literally what they’re saying.

Kathryn: I mean, so sorry that Financial Times article is paywalled, but it is hilarious. At some level I’m like, “I don’t like this,” but it is also hilarious.

Robin: Yeah, it really is.

Kathryn: We’ve said it before on the show that rich people are going to rich. So I think what I want to do is take this narrative, if we can, seriously, and then say why this is not the case. You do not need to feel beholden or grateful that people have so much money that they’re keeping the economy afloat.

Robin: Okay.

Kathryn: I think one thing to do is context. We are at an incredible historical place when it comes to inequality, and the amount of income that the top 1% and the top 10% are taking home…

Well, no, let me start before that. We have wages that you earn from your job, and you sum all that up, and you have your total wage income. And then we have total household income, and then we have wealth.

These are three different metrics, and they all three have similar but different inequality trends. So when people talk about inequality, they tend to be picking the one…

Robin: That most suits their narrative.

Kathryn: That most suits their narrative. So, wealth inequality worst is in the 1920s, and we’ll never pass that because even with the billionaires now, they did not have middle-class homeownership, which we still kind of have.

So the fact that upwards of 60% of Americans own their own home tilts wealth inequality. Even if it’s just a dent, it’s a significant enough dent that we are not as unequal in terms of wealth as we were then, depending on how you measure it.

Then it’s income inequality, and where we are now is worse…

Robin: Worse than the 1920s.

Kathryn: Yeah. And then wages, it’s hard to tell because consistent wage series before… I mean, even wages before the 1970s are hard to be reliable.

Robin: You mean the measures of them are hard to…

Kathryn: Yeah. If I were to track the average hourly wage of the American worker, I could probably come up with the average back to the ‘20s or ‘30s, but distributions of knowing what the 10th percent and 20th percent, 30th percent, that gets a lot harder. You need to have better data for it.

So that’s the context.

The claim is that I don’t even know if… do they say this bluntly of, “I carry the economy, so inequality is okay”? Or do you think it’s just, “I carry the economy,” and they don’t make a comment on how they’re carrying the economy because of inequality?

Robin: Yeah, they make the claim that rich people are carrying the economy. I think they don’t care about the other half of that. Either they don’t see it or they don’t care.

But I also think some of what I respond to, of course, is not necessarily the individual quotes in pieces, but the fact that newspapers are writing about it in this way too.

Kathryn: Yeah. I think the idea that we need to be grateful for the spending power of people with very high incomes, that’s total bullshit.

I think we are reliant on the spending of rich people, and our economy is much worse for it. We have a weaker economy because we have such a concentration of wealth and income.

Robin: I don’t disagree that we have a weaker economy. I’m not an economist. But I do feel like we’re made afraid that rich people will get spooked, and there’s something really unpleasant about that. Like, rich people could punish us as an economy, as a country, as non-rich people by pulling back.

Even if I don’t have money in the stock market, I need to worry about the stock market because what if rich people get spooked? Even if I’m not going to sell my house, I have to worry about home values because what if rich people get spooked?

Kathryn: It’s like that Twilight Zone episode with the little girl who everyone is afraid to say… Do you know this episode?

Robin: Not yet. Keep talking.

Kathryn: All right, well, this is worth a mid-record Google. Maybe it’s the little boy.

Yeah, “Six-year-old Anthony Fremont has godlike mental powers, including mind reading. He has isolated his town of Peaksville, Ohio, from the rest of the universe. The people must grow their own food. The people live in fear of Anthony, constantly telling him how everything he does is good since he banishes anyone thinking unhappy thoughts forever to a place that he calls ‘the cornfield.’

“Having never experienced any form of discipline, he does not understand that his actions are harmful. He is confused when his father tells him that neighbors are reluctant to let their children play with him after he has sent several of his playmates to the cornfield.”

So the end of the episode, his dad is trying to instill some discipline and rebukes him. But everybody else is just looking at the kid, smiling, and they’re saying, “Tomorrow’s going to be a real good day,” placating the boy with mental powers who sends people to the cornfield.

So, long metaphor, took us a minute to get there, but yes, the wealthy are kind of like that. Like, who’s that guy in New York who’s like, “I’m going to leave, and I’m a billionaire, and I create these jobs.” And like Schultz is in the Wall Street Journal, and he’s like, “I’m a billionaire, and I make all these jobs, and I’m going to leave.” And it’s like, “I’m going to…”

Robin: Schultz already lives in Florida, I think, for other reasons, but still feels like he needs to go back and talk about Washington and Seattle.

Kathryn: But they’re the little boy from…

Robin: I know. There they are. The little…

Kathryn: Who’s holding the town hostage of, “If you make me upset, I’ll send you to the cornfield because I have all the power.”

Robin: Exactly. Well, and he talks about moving hundreds of executive jobs from Starbucks from Seattle to Tennessee. I’m not saying Tennessee’s the cornfield, but yeah, they do. They threaten all the time that they’re going to move their companies, they’re going to move their headquarters.

And don’t get me wrong, I think that companies actually are headquartered where their CEOs want to live, and their CEOs often make those decisions based on places that want to placate them in one way or another.

Kathryn: It seems obvious to say, but this does make our economy worse.

Robin: Oh yeah.

Kathryn: And one of the reasons why we wanted to have this somewhat vague, themeless episode was to pull together a lot of what we had talked about so far this season. The corporate income tax rate is at record lows, and they’re taking home profits, and it’s generating untold wealth amongst a very small set of people.

And then at the same time, you’ve got people who are unincorporated into the financial system and are on a path to be left behind by society because they want to use cash and not have to pay to have money like the rest of us do.

You’ve got people working in salary jobs who are white collar, who are not getting overtime and are working long hours, because this is the expectation of jobs now. And I think that at the end of these lies some pretty simple legislation that’s not the redistribution of wealth, it’s the redistribution of rules.

Robin: What do you mean? You mean like rules need to apply to the rich people?

Kathryn: I don’t fucking need Ellison’s wealth or Schultz’s wealth. I don’t need it to make a better economy. I need them to follow a better set of rules, and then they wouldn’t exist or have the power that they have.

I don’t see it as a post hoc of, “Let’s punish the billionaires that we have.” I see it as: they are a policy failure. To have that much income and wealth concentrated in so few people means that the rules are not working. And that in some ways to me is optimistic. We’re never going to bring Ellison to the table.

We don’t need to bring him to the table. We just need to change the Fair Labor Standards Act so the middle class has its overtime. We need to update the Fair Labor Standards Act so we have a minimum wage and have a corporate tax rate again.

And the thing about all this legislation that is meant to empower workers is that it disempowers them.

Robin: I know. I was thinking that about Howard Schultz. Has anybody done more for screwing people’s schedules than Starbucks? Has anybody fought unions more strongly than Starbucks?

Kathryn: Amazon.

Robin: Yeah, Amazon.

Kathryn: Yeah. I say this, fact checkers out there, because collectively they have so many National Labor Relations Board violations, meaning that it’s not just that they’re fighting unions, but they’re violating what meager labor law we have in order to do so. So that’s why I think they win.

Some of this narrative is making us afraid to touch them, and it kind of goes back to AI in the same way. You have this concentrated wealth and power, and because we’re all supposed to be afraid of it, we’re afraid to tackle it. They’re telling us that you need to be afraid so that we’ll keep you in your state of livelihood.

But really, they are just afraid of legislation that could absolutely tilt power away from them.

Robin: Well, you certainly see there have been corporate leaders who can remain unnamed, but who are clearly so afraid of legislation. Look at the donations that they’ve made, look at the contributions they’ve made, look at the political alliances that they have been very eager to create suddenly in 2025.

They’re not doing that out of some sort of goodness of their heart, and they’re not doing it because they’re poor. They’re doing it because they are afraid of legislation.

Kathryn: Some calamity howling executive.

Robin: Exactly.

Kathryn: This is why, okay, like, the Massachusetts millionaires tax, that is the first one, and so you have to fight that one as hard as humanly possible, right? The pied-à-terre tax in New York City, they’re going to tax second homes that are worth a certain amount of money in cities.

If New York City does it, is it going to stop there?

The state of Massachusetts’ economy doesn’t collapse after they’ve taxed wealthy people. Like, what’s next?

Robin: Are they afraid we’re going to make them all move to Tennessee, to the cornfields, to Iowa? If they don’t like it, they threaten to leave. And especially in California, when we go, “Well, go,” you know, they get even more angry.

I don’t want businesses not to be started in California. It’s been one of the strengths of this state, that people could come here and start businesses. But when billionaires start flexing, they’re like, “Well, I’m just going to go to Florida.”

I feel bad for Florida. I just feel bad. I know there are normal people who live there, and they should not be subject to this influx of assholes.

Kathryn: So to bring it back to consumption, right? No, no, no, I’m with you. But to bring it back to consumption, the point that they’re trying to make of them leaving in response to these progressive taxes that are coming up, that’s kind of spiritually linked to the narrative that we need to cherish all of them and the economy being at their mercy because of their spending.

You’re right. Our economy is more fragile because we have more eggs in one basket, and that is not an inevitability.

Robin: Yeah.

Kathryn: A stronger economy would have less concentrated consumption.

I don’t know the degree to which it’s concentrated because it’s really hard to measure. But in some ways, I don’t need to know to know that it’s really skewed, and our economy is far too dependent on extremely wealthy people who have the most to spend.

One thing you hear kind of on-the-ground reporting is that businesses find that they basically have to cater to much higher income households who have high price points, very high quality standards, or you have to go, like, down the…

Robin: Family Dollar Store.

Kathryn: Yeah, and make it as cheap as humanly possible because that’s all families can afford.

Retail shops in places that serve consumers will tell you that’s how they’re seeing the bifurcation, and they’re losing the middle consumer.

Robin: It makes participating in the economy less fun when it’s now kind of pulling between two poles of, you either buy for poor people or you buy for the wealthy people. I think it contributes to the idea of being left behind, because we are a consumer economy, so if you feel left behind, it’s because…

Kathryn: For a lot of reasons, but one of them is because you can’t afford what you want to afford.

I think that these wealth taxes and these income taxes and pied-à-terre taxes are good because they’re showing us that rich people aren’t untouchable.

Robin: I don’t know if they’re the solution to the problem writ large.

Kathryn: They’re not the solution. I think long term they’re not the solution.

The solution is, have better labor law and have better tax policy, and we don’t end up in this situation again. The solution isn’t to somehow walk back the wealth that they’ve accrued. The solution is to make sure we don’t produce any more of these bastards. Sorry, Americans that uphold our spending and create jobs that I don’t create.

I didn’t mean it, sir. Sorry, don’t send me to the cornfield. I hold them up in my mind as, “This is how you know our current economic policy regime is a failure.” So the louder they are, I’m like, “I get it. We messed up. You exist.”

Robin: Yeah, you exist and you think it’s okay to say these things.

Kathryn: This savior talk that they have in our economy, I want every optimist to feel comfortable to push back on and say, “You make our economy weaker,” and, “We are not held hostage by you.” The reason why they’re holding us hostage is to prevent policy that will actually make a difference.

This wealth tax on second homes, it’s not going to make a big difference. We need…

Robin: Our one-time billionaire tax in California is not going to make a…

Kathryn: It’s not going to make a difference. No. What will make a lasting difference is a true investment in a fair economy, right? We need to raise the corporate income tax rate, simplify the personal income tax code, like zhuzh up the Fair Labor Standards Act, zhuzh up the National Labor Relations Act so people can have a decent job and unionize or organize in whatever way they want to, and then just make sure that our safety net system is prepared for job loss.

There’s not that much we have to do. It’s just slightly different things, and we start tilting the economy and power our way, because it all rests at power.

Who has power in our economy? Them.

What to do about billionaires, I think, is a both hard and fun question. But what to do to make sure we don’t have billionaires again — billionaires in the sense of the elite class that holds power over us and says that we’re indebted to them for having an economy at all — what do we do to make that not happen?

We know exactly what to do, and they know exactly what to do too, and they fight it hard. In some ways, they’re playing their hand, so I…

Robin: You think they’re showing their hand?

Kathryn: Showing their hand. What did I say?

Robin: Playing their hand. I mean, I think they are also playing their hand, right?

Kathryn: I think they’re showing their hand in that they know what will actually be a threat to power. Showing their hand while playing their hand, and they have…

Robin: Just like, “And fuck you, I have all the cards.”

Kathryn: Fuck you. Yeah. I know that I can sound somewhat Pollyanna-ish when it comes to fixing these problems, but at the end of the day, generating income for working and middle-class households tilts power so much more than any pied-à-terre tax.

Robin: We’re way better off if we make things 30% better for 80% of the workers than trying to claw back 30% of the wealth from these 1,100 billionaires.

Kathryn: Yeah, I guess that’s what I meant. Their admission of how much we owe to them, and how powerful and important they are in the economy, is kind of like, “Yes, that’s what I’ve been saying.”

You just said the thing that I said, but you think it means something different than I mean, and you think it means that I should do whatever you say or else go to the cornfield, but I think it means we need to have a really simple set of solutions to labor and income and tax law. Boom.

Yeah, okay. Optimist, I’m fired up.

Robin: I think the title of this episode is “The Cornfield,” right?

Kathryn: The cornfield, because we never want to be found on Google, so we’re going to call this episode “The Cornfield.”

Optimists, still waiting for you guys to chime in about what we’re putting on that billboard saying goodbye to the last billionaire leaving Seattle.

Robin: Actually, I think it needs to be reversed. It needs to be, “When the last billionaire gets to Florida, somebody lock the gate.”

Kathryn: Robin, you are savage.

We’ll end there. And we will come back for executive orders and spiritual sponsors.

Robin: I love it when you leave these blank, because it’s going to be a surprise. I never know what you’re going to say.

Kathryn: A lot of the times it’s coming off the top of my head because I forget to write them.

Robin: I don’t trust myself to do this stuff off the top of my head anymore, yeah.

Kathryn: I was grateful for something. I don’t remember what.

Robin: When you were reading the quote from FDR’s fireside chat, we did get a suggested executive order, which is that people have to stop calling everything a fireside chat. The listener had seen some sort of webinar with Sam Altman where he called it a fireside chat, and he was like, “Fuck you, buddy.”

Kathryn: Get fireside chat out of your mouth, Sam Altman.

Robin: Right.

EXECUTIVE ORDERS — 00:38:15

Kathryn: Okay, we’re back to now, after we’ve fixed big things in the economy. Robin, why don’t you kick us off?

Robin: My executive order, this is really for my wife. We walk past the California Science Center, where they have an ongoing exhibit of mummies. And every time we walk by these signs, my wife says they should not call them mummies. They can call them mummified humans or preserved human remains. This term, which, by the way, the discourse even in academia is, it’s just a little creepy, for what are human people.

I went looking for a word to replace it, which was not easy. I came up with sah, which is the Egyptian word for what a person becomes through the ritual of mummification.

But there are a lot of museums that have stopped using the term mummies and use either mummified people or preserved human remains.

Kathryn: I appreciate it. My executive order is that when there is a red carpet or blue carpet for an event that really wealthy and rich and famous people go to, they need to name check all the unions that helped put the event together, and there needs to be a preceding or closing march of the actual staff that made the event work.

Robin: Mm-hmm. This blue carpet brought to you by IATSE?

Kathryn: Yeah, this blue carpet brought to you by IATSE. I want to make sure people know where the magic comes from. If you think about something like the Golden Globes, it’s really just kind of like a weird prom were it not for like the magic of certain unions to put together, you know, to put on a show.

So I would prefer the workers behind these red carpet events to… I mean, maybe like a share of tickets to go down the red carpet, or someone gets to attend, or there gets to be like a workers’ table.

Robin: I say this executive order, but I know someone’s going to write in and be like, “You know the much more fun party would just be the party with the unions that famous people aren’t invited to.” And that’s probably accurate. But let’s have some democratization of the red and blue carpets.

Okay.

SPIRITUAL SPONSORS — 00:40:30

Kathryn: Spiritual sponsors.

Robin: My spiritual sponsor this week is the Mellow Cello podcast by Nick Takénobu Ogawa. He hasn’t put out anything new in 2026 — Nick, if you’re listening — but he does one-hour live improvised YouTube sessions that he then also releases as a podcast.

He plays maybe five songs in each of them. They’re all mostly instrumental with loops and beats, and if I need something that is going to be just sort of mesmerizing but not too distracting, to work, to do yoga to, I listen to… His band’s called Takénobu, which is his middle name. I listen to Takénobu a lot, but the Mellow Cello podcast in particular is on repeat in my house.

Kathryn: That’s awesome. Mellow Cello. I’m going to have to look that up. Okay, well, my spiritual sponsor for the week is stupidly large floral arrangements. I’ve got to tell you, this ain’t easy to move around.

Robin: Ooh, is that a Mother’s Day?

Kathryn: I did get this on Mother’s Day. Yellow roses, one of my favorites. Yellow Rose of Texas might have been a prostitute, but that doesn’t mean we don’t like the flower. Anyway, something about floral arrangements that are just really big and stunning. It’s something I’ve always noticed in Jane Austen adaptations, that casually these really wealthy people, aristocrats who are pining over a guy that they don’t know how to express feelings for, will walk by, like, the most stunning floral arrangement.

Robin: Mm-hmm.

Kathryn: So yes, big floral arrangements, including big thing of yellow…

Robin: Nice. Nice.

CREDITS — 00:42:30

Robin: The Optimist Economy podcast is edited by Sofi LaLonde, and our video production for social media is by Andy Robinson.

Kathryn: Video clips from the show for you to share are available on TikTok, Instagram, Facebook, YouTube, and LinkedIn, and you can continue the thriving 86 discussion there, or conversely, talk about how to make the economy better and, you know, ricochet the things we’ve said. But we can also just continue to talk about 86.

And if you want a T-shirt, hat, or tote bag, they are on our website, optimisteconomy.com.

Robin: If you’re on Substack, if you’re a free or paid subscriber to Optimist Economy, you can join our chat room there. And if you have the means to contribute to the nonprofit that is Optimist Economy, we will take your gift at whatever level is comfortable for you. Just click donate at optimisteconomy.com.