Ep 139: "In This Economy?: How Money & Markets Really Work" -- an interview with its author, Kyla Scanlon

[00:00] Somebody's going to get upset. It's a great name for a podcast. [00:04] Welcome to the feelings check-in a feelings first look at the news of the week takes no one asked for on topics. Everyone's talking about I'm Natasha Hoskins. I'm Dina Burke and this is boys club. Wait, is it just boys club? It's just boys club the boys club podcast. No, no [00:21] Just sports club. [00:23] Here we are. Here we are. [00:25] This is the Boys Club Podcast, where we talk about big topics and explain the internet and its related topics. [00:33] tentacles. So today we have a very special guest. We're talking about the economy. [00:39] Dina, who did we have on? [00:41] We had on Kyla Scanlon, who does these amazing TikTok-style videos that are like explainers on complicated financial terms that she makes really accessible and charming and funny. She has a great newsletter. And yeah, she's just... [00:55] an incredible mind and a lovely human being and wrote this great book. And so we're so honored to have her on. She just wrote a book called In This Economy, How Money and Markets Really Work. It's a great book. And she is so smart, like so smart. I feel like an indicator of how smart somebody is, is their ability to take really complex things and explain it in a way that anybody can understand. That's like a telltale sign to me that someone is really bright. And [01:22] She does that so naturally in conversation and is able to make really amazing connections between things that are happening in the world and these huge financial ideas and concepts. And so I really, really enjoyed talking with her. I think that this will be a really helpful episode to people who feel overwhelmed and scared about talking about the economy. Totally. And it feels really accessible. So I hope you enjoy it. Yeah. One last thing. My pinned tweet is I want a beautiful woman to explain the jobs report to me.

[01:52] her beautiful on the podcast but she did explain the jobs report to me and she's a beautiful woman so i feel like i have a bucket list item checked off for me wow i love it [02:04] Hey, Natasha. So a question we get asked a lot is, what do you look for in a crypto platform? So let's talk about it. Well, Dina, I look for a secure, no fuss platform that I can dive into right away. That's why I love today's sponsor, Kraken. If you're waiting for the right time to get into crypto, Kraken makes it super easy and intuitive to get started. Plus, if you get stuck, they have an award-winning client support team that's available 24-7, along with a bunch of educational guides, articles, and videos to help you along the way. If you're ready to check out [02:33] On today's podcast, we have a very special guest, Kyla Scanlon, who is a financial educator and [03:03] really work. She's a TikTok girly, a YouTube girly, and explains the economy and how it works in really simple [03:11] accessible in funny ways. Welcome to the show, Kyla. Oh, thanks for having me. [03:15] We're so excited to have you. You do such incredible work. The book is so good. I got an advance copy and have just been devouring it. So for the listener, In This Economy is kind of

[03:25] I'm going to describe it like a textbook, but that's really unfair because that brings to mind all sorts of [03:30] terrible, boring books. Baggage. Baggage. There's baggage. But I guess it is a textbook in that it's, first of all, educational, but each chapter is self-contained. So you can kind of dip into different things. And I've learned everything from how a mortgage works to what OPEC is. I always wondered, what is OPEC? I have no idea. I hear it talked about all the time, but now I know. And yeah, the book is just, it's really anecdotal. It's meme-led, so that down to the title of the [03:59] economics book I've ever seen that quotes the artist's way, which is incredible. Yeah, definitely. There's a lot of poems throughout and illustrations. There's poetry, illustrations. It's so funny. It's a really funny read and really entertaining. So you're learning, but it's a good time. So congratulations, first of all. Thank you. I'd love to hear just your vision for the book and how you approached it. Yeah. So I coined this term called the Vibesession and then Penguin approached me after I wrote the [04:29] session and they were like, have you ever thought about writing a book? And I was like, yes, I have. Like that's been my dream since I was little. Like when I was younger, I wrote this book called The Little Penguin and I published it when I published when I was eight. And so it's always been like, you know, personally a big dream of mine to write a book. And it's so cool to have had that happen. So on a personal level, like extremely exciting. And then on a broader level, like I've spent the last couple of years doing economics education online. And my big goal is to give people

[04:59] the world around them. So understanding inflation, understanding labor market, understanding commodities, understanding GDP, right? The theory is that having this foundational toolbox, which I hope the book is, will help people feel less confused, less overwhelmed by a very confusing and overwhelming system that we're all a part of. And so that's why I wrote the book is to give people, you had such a nice summary of it, but it really is to give people the tools that they need to understand the world around them. [05:26] I love your quote in the book that people are the economy. And I'd love for you to just talk a little bit about that and what that means to you and how that shows up in the world. [05:35] Yeah, yeah. So that's something I try. I probably hammer that point home in the book quite a lot because I think it's important, right? I think that oftentimes we can feel totally separate than the economy. People aren't aware that like they are the economy. Like when I go and buy a cup of coffee, that's an economic transaction because there's coffee beans involved, which usually ship in from the US from overseas. There's a barista who's, you know, being paid a wage. There's machinery involved. There's shipping involved. There's trucks. [06:05] et cetera. And so all of that is a big economic transaction that you're [06:09] taking place in. Also, if you participate in the labor market, so if you have a job, that's part of the economy too. And so I think the idea of people being the economy is that what people do really matters and how people feel about things really matters. And so the goal with saying that is, number one, it's true. All of our individual interactions sum up to make the economy at large. And then I hope that it makes it seem less overwhelming and less scary because

[06:39] it that quote people are the economy is really useful for me because [06:43] Before reading your book and getting sort of a grounding in how you think about it, the economy to me was like just this weird, scary tower of mystery that it's complicated and convoluted and intimidating and has nothing to do with me. And so after reading your book and really... [07:01] understanding like the different component parts and also to your point how [07:06] much it is about our daily lived lives. It just makes it much more approachable. That is the goal. And I also think like you all do a really good job of this. It's like things can be fun. They don't have to be like big and scary. And I think that's kind of the goal with like how I talk about the economy and do my videos and stuff. This stuff doesn't have to be like boring and dry and charts and like men in ties. Like it really can be for everybody and it should be. [07:30] And so like that's kind of the broader goal of my [07:34] work here. That's really what the book is meant to do. Yeah, I love that. On that same note, want to ask you about, so you do these great short form TikTok reel style videos that are explaining really complex topics with a lot of fun and accessibility and you're really, really great at it. And so I'm curious, um, [07:54] that has given you a lot of success. You are loved by many and followed by many. And I'm curious what a book, the format of a book offered you that you feel like you couldn't get to in these short form videos and what was a driver of going more long form and going written and, and how that all came together. Yeah. I mean, you all know how social media is. It's so fast. It's like, you know, every time you turn around, there's a new story to respond to. There's

[08:24] my videos for as much as I try to like educate on inflation as I'm talking about a recent inflation print, it's just hard. And like you're kind of with people as they're scrolling, right? Like people are scrolling, they'll view your video for a few seconds, maybe the whole video if you're lucky. But, you know, you're fighting for attention with everything in the world. You know, people have the world on their fingertips when they're on the phone. And so the goal of the book is like, number one, I'm a big reader, like just a voracious reader. And that's how I learned. And I really [08:54] it'd be useful to have kind of like this island that people could go to outside of the scope of the internet you know returning back to something that's very static something that you can interact with as you see fit that's outside of the noise of social media and the phone which is like it's all very useful to have internet but it is also useful to have like [09:15] sort of escape. And I think books are a great way to do that. I also think one added benefit is like, I'm planning when I'm done with the book to hand it to my niece and like give it to her, the physical copy. And of course I could send her a video on social media, but I feel like there's something that, yeah, just has more gravity with a book. And so I'm excited to see it like get passed around as well. Well, you have a whole bookshelf behind you too, right? Like books are kind of like this really symbolic part of our lives also. And I think it's kind of important [09:45] that we keep that up. Sahil, who runs Gumroad, he calls them totems because they are kind of like these artifacts. This is like very pooh of me, but like they are these artifacts of the human experience. Like they're really these beautiful things that you can share with somebody. It's not like sending somebody a DM of a video. It's like, here's something that I loved, the physical version. And like here you can love it as well if you choose to do so. And so I think there's just something like really foundational to the human experience within that. So how did your background

[10:15] out. Where do the interest come from? [10:17] I started trading options when I was in high school, which is like a financial instrument. I had no business doing that, but was really interested. And I grew up in Kentucky, and I didn't know that you could major in finance until I got to school. And so I thought I had to be an engineer. And so then I figured out that you could major in finance. And so I quickly switched my major to finance and economics and data analytics. And all throughout school, I had this blog called Scanlon on Stocks, where I wrote about [10:47] and then just the economy at large and tutored in economics was a research fellow just like was very very interested in spreading economics knowledge and when I graduated I moved out to Los Angeles to work for a capital group I graduated in 2019 so you know six months later the pandemic happened I left capital group like a year and a half later and then started talking about GameStop online because I was like oh I feel like people need to understand this and things have just like taken [11:17] and so supportive. So that's been like a taste of the journey. [11:20] I love it. The memes got you here from the beginning. Yeah, I know. It's bizarre. [11:28] So one of the things I've heard you say is that the economy is art and that art is really hard to interpret. I've really loved that framing of the economy because I think the economy is sort of rooted in all of these terms that are very black and white, that are right and wrong and [11:44] truth and false. But then at the same time, because the economy is people, it's then put through these sort of funnels of humanity that is imperfect and complex and totally gray. And so that's part of why I think the economy is so hard to understand to get your arms around and really like feel like you have some confidence around what it is, is because it's a mishmash of these things that are hard truths and also false.

[12:07] the [12:08] complexity of humanity put on top of that. And so I'd love for you to just talk a little bit more about that and sort of your experience of educating people with how complex of a topic it is. [12:18] Yeah. So one thing I've said a lot recently is nuance doesn't sell. And that applies to the economy, too, because we like to think of things in black and white. But because it is an art form and because it is influenced by human behavior and humans are not irrational as much as theory loves to think that they are rational, it makes it difficult. [12:48] interpret, but also everybody, you know, all three of us have a totally, you know, sort of unique experience with the economy, a different inflation rate, depending on what items that we purchase, like I have a dog or dog bones have gone up in price quite a bit. That impacts my personal inflation rate, right? We all have a different experience with the labor market. We all have a different experience with how we sort of experience economic growth and how we think about, you know, [13:18] is that it impacts everybody differently. And so you have to be nuanced with it, but you're also talking about averages and averages are an average for a reason. And so it's quite complicated. And I don't know if I've quite figured out how to navigate that, but as somebody who talks about it, but yeah, I think it's just something to keep in mind is that the nuance is important and that it impacts everybody differently.

[13:42] There are so many great chapters, nuggets, moments in your book. I want to bring through a couple so listeners get kind of a taste of it. Two that I really loved, the abundance agenda and adventure mindset. I know you speak about a lot. Can you just give us some language for what you mean by those two things? They're related but different, I understand. So I would love to hear from you. [14:06] Yeah. So Derek Thompson is the creator of the Abundance Agenda. And it's this idea that we can like have an abundant world or like we can invest in health care. We can rethink immigration. We can rethink housing policy by just kind of doing more, investing more, putting money into the right spots, you know, rethinking education. And so the Abundance Agenda is just about like, how do we expand these things that we kind of tend to think of as needing, needing to shrink or maybe don't have the right sort of money allocated towards them. [14:36] venture mindset that was coined recently too and it's this idea that like we should really lean into innovation and we should lean into like risk-taking etc how do we we think about the world that we live in and how can we think expansively about it do you consider yourself yak oh oh oh um [14:59] So maybe. No, I don't know. Nuance doesn't tell, so I get it. The answer is not really, maybe, kind of yes, but... [15:09] It's like parts of it, I think. Maybe I don't understand...

[15:14] the mission well enough but I think that that [15:19] And somebody is going to get upset. But like, I think that that has a sense of being focused on perhaps one group in favor of all other groups. Somebody's going to get upset. It's a great name for a podcast. Everyone gets upset, you know, and it's understandable. Like everyone has, you know, opinions on what works for them personally. And that's my opinion on that. And people are allowed to disagree, which sometimes happens. [15:45] People seem to forget that. Yeah, for sure. What are concepts that you're really thinking about that as you were writing felt really pertinent to people in this time, particularly? [15:55] Oh, I mean, I'm obsessed with housing right now. Yeah. I think that that's like one of the most important things that we can focus on. This is very U.S. specific, but there's this concept called the housing theory of everything, where once we figure out housing, once we figure out to get people into homes, you know, make it so rent isn't eating away their paychecks, make it so if they want to purchase a home, it's a little bit more accessible to do so. [16:25] true because oftentimes like people's biggest interaction with the economy outside of their job or their grocery bill is their interaction with housing, right? Like all of us probably pay rent or have a mortgage. And so I'm really interested in how we can build more, you know, what types of homes that we can build, how can we rethink zoning laws so it's not just residential and commercial and separated, but like mixed use zoning I think is going to be incredibly impactful.

[16:55] a very um controversial topic but i'm very interested in like walkable cities and you know leaning away from car culture so i'm reading a book right now called paved paradise which is about parking lots and how the u.s in addition to having a housing crisis kind of has like this car crisis where the cars have more space than the average person does which is crazy um and so i'm very interested in like you know how do we redesign our cities and our suburbs so people feel like [17:25] easier, facilitates more economic growth, and then just probably leads to a healthier society overall. [17:31] Wow, I love that. Could you talk a little bit more about the mixed use, your conviction around that? What does that look like? Yeah, so this is the idea that commercial and residential needs to be separated. And if you mix them together, that means they'll be together. So you could have a coffee shop underneath an apartment building or a gym underneath an apartment building. And I just think that's great. I think that if people can walk down and they're not in a sea of five by one apartments, it's a much better place. [17:59] user experience of earth. So yeah, I think that's really useful. Yeah. And for that to be a reality, there's like legislation that needs to happen to change the existing laws. [18:09] Yeah, yeah. Zoning laws are super... [18:13] terrible. A few months ago, I interviewed the deputy secretary of the treasury, Wally Adeyemo, who's right underneath Janet Yellen at the treasury department about, you know, what incentives are going to be put in place around zoning. And that was like one thing that just kind of came up a lot was like, we can have all these monies directed to developers, but zoning reform is kind of the way that we build what we need to build. For a lot of cities, there's caps

[18:43] and it just makes it hard to build vertical, which is what you need to do when you can't build outward anymore, right? Yeah. [18:51] So this is a policy... [18:53] primarily a policy issue. I can imagine that there's a lot of corporate interests that are probably not aligned with the vision that you lay out. How much is it sort of private sector? How much of it is public sector in your mind? Yeah. So house planning is funny, right? Because there's a lot of private developers who have to have certain profit margins in order to build. And that's how it is. And then, you know, you do have kind of not wanting to build too much [19:23] areas, even though it's been shown in different Supreme Court cases that, you know, building more doesn't necessarily reduce the value of a home. So there are a lot of corporate interests involved, a lot of private sector interests, but the public sector, the government has started to bid on projects. You know, Montgomery County, Maryland is a good example of this, where they've intervened and they're like, listen, we don't need 20% profit margins. So we're just going to start building or we're going to start bidding on these housing projects and then, you know, take over and manage [19:53] So of course, there's differing opinions on that. A lot of people think free market solutions are the best solutions, but I think the free market is also driven by incentives. And right now the incentives are a little bit misaligned to what we probably need. [20:05] you [20:07] It's time for a more open, inclusive, and transparent financial system. A system that serves nearly everyone, everywhere, all the time. That's why we love today's sponsor, Kraken. Kraken is a crypto platform that provides a super simple on-ramp to the world of crypto with a 24-7 support team. Crypto transcends physical and imaginary borders. No matter where you are, you can send funds easily and quickly to almost any part of the world. Plus, forget about waiting times and waiting lines. You can send, receive, and trade crypto anywhere near instantly.

[20:36] I'm curious, your experience as a financial educator, what are some areas that people just totally resist? They're like, I can't, I don't want to learn about this. [21:04] I mean, I think it's like most things in the economy. Yeah. Like, so I love monetary policy. I think like it's just so fascinating how we're able to do that with interest rates and how it impacts the value of money. And for a lot of people, they're like, that's just not my cup of tea, which I understand. I'm just not going to go there. Yeah. Right. Like I get that. And I think people are interested in like how monetary policy impacts them, but like the actual mechanics, maybe not. And that's OK. You don't have to know everything about everything. But the way that I [21:34] I kind of think about, you know, talking to people about when they're like, I'm not interested at all is like everybody sort of knows that mitochondria is the powerhouse of the cell, right? Like we all remember that from high school biology. And I think there's just economic foundations that we kind of have to know, like the Federal Reserve says interest rates and that's going to impact mortgages and that's going to impact your ability to buy a house. That's the mitochondria is the powerhouse of the cell of the economy. And I think we just need more of those sprinkled into our lives. You don't have to be obsessed with the economy just to understand it. With that in mind, [22:04] to current events.

[22:06] What is up with the economy right now? What is your take? Yeah, so in time of filming, so Tuesday, June 4th, we got a labor market print showing a slowdown, which everybody expected. It's pretty good for what the Federal Reserve wants to have happen. What does that mean exactly? [22:36] are they hiring? What are they looking for? And so when the number of job openings declines, that means that the labor market is not hiring as many people. It's a slower labor market. But when there's a lot of job openings, they're hiring a lot of people. It's a strong labor market that bodes well for the economy. A slower labor market means the economy might slow down soon. And so we got a print of a slower labor market, which sounds like a bad thing. And here we go with nuance, right? Like it kind of is a bad thing. It's like not super fun that that [23:06] of monetary policy, we have a Federal Reserve, the central bank, who has been raising rates in order to battle inflation. They've been holding rates steady for a while, but they've been raising rates, making it more expensive to be alive. So inflation slows down, you know, et cetera. And now the big question is, like, when are they going to start cutting rates? Like, when are we going to return to a more normal economy? And because we got this slower labor market print, that means that the Federal Reserve is saying, OK, the economy is slowing down. We should be able to start cutting rates soon. Things should be getting back more so to normal.

[23:36] than they have been. And so that's kind of the state of the economy right now as we're experiencing a normalizing economy. Labor market is slowing down. Inflation is slowing down. The economy is still relatively strong according to GDP, but you're definitely seeing some weak spots in the labor market. It's very hard to find a job right now if you're outside of the labor market in certain sectors, specifically tech and finance. If you're in hospitality and healthcare, it's a little bit easier because those are very strong sectors right now. And so, yeah, the labor market [24:06] is slowing, but things are still quite expensive because inflation going down doesn't mean that prices are going down. It just means that things are getting expensive less fast. And so it's kind of like everything is going toward where we want it to. It's just not happening as fast as anybody wants it to. But it's still a relatively strong economy with some weak spots that aren't necessarily a bad thing because it could help the Federal Reserve cut rates and normalize the economy faster. Hopefully that made sense. That was a lot of words. [24:35] - Yeah, it was great. - I'm tracking. - I'm tracking. - Okay, cool. [24:38] Vibe Session, I know this was part of your rise to fame. What does it mean to you? [24:43] Yeah. So a VOB session is the disconnect between consumer sentiment and economic data. And so I wrote this piece back in July 2022, and it was to talk about this relatively strong economy. Back then, the labor market was pretty strong. The economy was booming. Inflation was still going down. But yet consumer sentiment was quite negative. People were feeling terrible about the economy, more so than we would have thought that they were relative to where the

[25:13] variety of reasons for the reasons that people feel bad. Number one of which, and the most important, structural affordability. We have a housing crisis. Inflation is a pressure cooker. There are real reasons that people feel bad. Number two is media headlines are quite negative. Business models are tough. Clickbait is all the rage. But the vibe session is really about why is sentiment so negative, even considering structural affordability, even considering [25:43] Super interesting. I have heard you also talk about sort of the connection between what's happening, as you're saying with Vibe Session, the economy... [25:52] with all these other sort of societal pressures, cultural moments like financial nihilism, the rise of fertility issues, the loneliness epidemic, all of these things play into... [26:05] how people spend money, what types of jobs they have, whether they have children. I'd love for you to sort of expand upon these societal issues and norms that we're seeing for millennials and Gen Z and how that relates to spending and the economy and what that means for us. Yeah. Financial nihilism is really interesting because it's essentially this idea that people [26:35] it makes sense right so i think the stem of that is sort of the student loan debt crisis that we have going on 18 year olds are taking out loans for 250 000 like of course there's going to be an element of like money isn't real when that happens and you're not going to want to stay for retirement because you're interacting with the economy in this really strange strange way and i think also like with the loneliness crisis it's largely driven by how we interact with algorithms

[27:05] bias that media oftentimes carries and the disappearance of third places, all of those things. And so we kind of have this world that is driven by low trust. The Harvard Youth Poll came out and trust in all institutions except for the United Nations has dropped tremendously, like 30 percent. And so when we think about financial nihilism, that's ultimately a function of low trust, especially in the system that you're in. When we think about the loneliness [27:35] to form meaningful relationships, which could be caused by not trusting in the world around you. And so I really think that's kind of the root of all the problems that we're facing is like, we just don't trust anymore. Like we don't see each other anymore. Zoom is great, but you're just not seeing the entire person for a person. And it really creates a weird human to human interaction. And there's, it's not all bad, but it just creates... [27:59] these issues, right? It creates all sorts of problems. And I think that's a big question that we're going to have to answer as we enter into a period of immense uncertainty with the U.S. election is like, how do we rebuild trust in a world where there isn't a lot of it? [28:14] the conversation around trust and young people's decline in trust in institutions. We've come across that at Boys Club, different pieces of research that talk about how people's relationship to or interest in crypto is inversely proportional to their trust in the government. So the less trust they have in the government and institutions, I think just more generally, the more they are interested in crypto. And there's definitely a nihilism in that. And on one hand, it's scary

[28:44] And I have a lot of compassion. I totally understand that. Like you were saying, [28:48] money isn't real when you're taking out loans of $250,000 for college. And so, yeah, I am curious more broadly your perspective on crypto. But yeah, just to say that like that really checks out for us as well. Yeah. Oh, yeah. I mean, it's a really unfortunate theme that makes it makes a lot of sense. And also like, you know, the theatrics of politics, like how are you going to look at the system and be like, I trust in this when when it's so inherently goofy to use a word that doesn't [29:18] I mean, crypto, like I used to work in crypto, like work for the bankless team very early on and still buy my $20 a month of Bitcoin and Ethereum. So I'm still invested in dollar cost average. I think crypto is like, as you all know, like trying to find its footing again. There's been a series of crises that have negatively impacted the industry, but the Bitcoin ETF is promising. I think they're announcing an Ethereum ETF soon as well. Yeah, it was approved. [29:45] Oh, it was approved. Amazing. And so, yeah, I mean, I think all of those are extremely exciting. And I think the technology behind crypto is great. I think that's kind of also, you know, I wrote about crypto quite a lot in 2021. And I think this concept of like owning the online is going to be really important, especially as we think about AI and what AI is doing and where do humans fit in on that. And I think actually crypto can help us figure that out [30:14] Wow, I love it. Ministering to my soul. I want to end with this. What do you hope people will do with the newfound information that they have after reading your book?

[30:25] Yeah, it's really – so I think it's our civic duty, right, as citizens of whatever country you live in to – [30:34] understand the world that you live in, to understand that country, to understand the intricacies of it, to understand the economy. And so I just hope that people take this information, you know, share the book with somebody else. But just I'm hoping that it'll enable people, number one, to make better decisions. Hopefully those better decisions compound and we have like better decisions across the board. But I also think it should help to reduce fear and uncertainty, because if you understand the system that you're part in, that should help a lot with just navigating it. So those are my two goals. Yeah. I love it. Kyla, thank you so much for [31:04] coming on what a pleasure and congratulations again on the book oh thank you all both yeah [31:09] *music*