I haven’t checked the math on this, but according to others, it checks out. To be honest, the post wasn’t fully clear about the strategy, when to buy, and when to sell. However, the post racked up thousands of comments and likes, and the finance bros spent days arguing about it.

If you believe markets are perfectly rational machines that only respond to earnings reports and interest rates, you have a problem, because this post violates that theory.

The rational markets hypothesis, the cornerstone of most mainstream finance, says that stock prices reflect all available information at all times. There is no edge. There is no pattern to exploit. The price is always right.

But here we are, with a claim on X that has intrigued our team. So we did what we love: we searched the academic literature to see whether any peer-reviewed research had examined this phenomenon before.

Here is what we found

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More Evidence of a K-Shaped Economy

The Federal Reserve’s annual Survey of Household Economics and Decisionmaking (SHED) found that 73% of U.S. adults reported being financially stable in 2025 — a number that looks reassuring until you look at who’s pulling that average up and who’s pulling it down.

This is a K-shaped economy in action. At the aggregate level, the numbers hold steady. But beneath that surface, the split is widening. Low-income, young, and Black adults saw meaningful declines in financial well-being. Nearly 50% of adults under 30 now live with a parent, up 12 percentage points since before the pandemic. Rent delinquencies are rising. Credit card balances among people already struggling have jumped more than 35% since 2023. Meanwhile, fraud losses totaling an estimated $100 billion hit hardest among those least able to absorb them — people earning under $50,000 had a median fraud loss of $400, yet 4 in 10 of them couldn’t cover a $100 emergency from savings alone. As economist Gary Hoover of Tulane put it, things are holding steady or improving for those at the top, and declining for those at the bottom.

The fraud number is the most underreported finding in this entire report, and it's worth discussing. Most people associate financial fraud with wealthy targets: stolen investment accounts, wire transfers, and large-scale identity theft. The SHED data tells a different story. Non-credit-card fraud cost U.S. consumers an estimated $100 billion in 2025, with $56 billion borne directly by individuals.

The headline number looks fine, but it obscures a concerning story. When nearly half of young adults can’t afford to live independently, when rent delinquencies are climbing, and when the people most exposed to fraud are also the least able to recover from it, that’s not a stable economy. Gary “Hoov” Hoover is right that this isn’t sustainable. An economy where the bottom half increasingly relies on family support, credit, and deferred expenses to stay afloat is one that builds fragility into its foundation.

What It Means for You: If you’re in the lower half of the income distribution, the data confirms what you’re already feeling, and the trajectory is getting harder, not easier. If you’re doing better than average, that aggregate stability number probably feels more real to you than it does to your neighbors. This is yet another example of the economic gap in our economy. We are experiencing very different economies based on our income.

For up-and-coming researchers, this is a great dataset to work with.

Interactive Maps https://www.federalreserve.gov/consumerscommunities/sheddataviz.htm

The Survey

https://www.federalreserve.gov/publications/files/2025-supplement-economic-well-being-us-households-202605.pdf

Congress Stopped Showing Up, and The Data Proves It

H/T to Jose Fernandez for sharing two graphs with us over the past week that highlight how little Congress is doing these days.

Here is What Happened

The current Congress is on pace to pass fewer laws than any Congress in modern history. So far, they have passed 75, compared to 700+ during peak legislative sessions in the Carter era. A second chart tells you part of why: the U.S. House worked 173 days in 1975 and just 109 days in 2025, a drop of more than 50 working days over 50 years.

The Economic Mechanism: We aren’t getting political here, but this is a story about an institutional productivity problem with real economic consequences. Congress is the body responsible for authorizing spending, setting tax policy, regulating markets, and responding to economic shocks. When it works less and passes less, the outcome is reliance on the executive branch and regulatory uncertainty, neither of which gives businesses or households the stable policy environment they need to plan. Fewer working days means fewer committee hearings, fewer markups, fewer floor votes. The pipeline for economic legislation slows down.

What People Missed: The working days chart complicates the easy narrative. It’s tempting to blame gridlock purely on polarization and chalk it up to two parties that can’t agree on anything. But you can’t negotiate what you never show up to debate. The House worked 180 days in 1995, a period of genuine partisan conflict between a Republican Congress and a Democratic president, and still managed to produce legislation. The current Congress is working 40% fewer days than the peak and producing a fraction of the output. At some point, reduced legislative output stops being a symptom of disagreement and starts being a choice.

Dr. A’s Take: There is an economic cost to legislative paralysis that rarely gets priced in. When Congress doesn’t act, uncertainty fills the vacuum, and you will often hear me say that uncertainty is expensive. When uncertainty increases, businesses defer investment. Households can’t plan around a tax policy that might change by executive order tomorrow. Infrastructure, workforce development, and safety-net programs that require reauthorization quietly deteriorate. The 119th Congress isn’t just historically unproductive. It’s unproductive at a moment when the policy agenda, tariffs, AI regulation, labor market transitions, housing, and prediction/financial markets are unusually consequential. That mismatch should concern anyone watching the economy.

What It Means for You If you’ve felt like Washington isn’t responding to the economic pressures you’re facing, the data backs you up. It’s not just that Congress can’t agree; it’s that Congress is structurally doing less work than it used to, on fewer days, producing fewer laws.

The government you chose is doing less to support you.

More Evidence the Government is Insider Trading

I was interviewed a couple of months ago by a media company that was building its economic stories. They asked me about the economic issues worth digging into and deserve to be heard. At the top of my list were the unregulated prediction markets and the rampant insider trading on these platforms.

In a recent CBS article and a 60 Minutes episode, they reported on a data analytics firm, Bubble Maps, that identified nine anonymous Polymarket accounts that placed bets on U.S. military action against Iran. These bets covered detailed events like the timing of strikes, the removal of Iran’s supreme leader, and a ceasefire announcement, and won 98% of them across more than 80 wagers.

The payout netted over $2.4 million. Separately, $800 million was wagered on oil prices dropping roughly 15 minutes before President Trump publicly posted about progress on a ceasefire with Iran. Federal investigators are now probing the oil trades. Also, an Army master sergeant was indicted last month for allegedly using classified information to bet on a special operations mission, netting over $400,000.

The Economic Mechanism

Prediction markets are supposed to work by aggregating information. Thousands of bettors each contribute a small piece of what they know, producing a price that reflects collective probability. The theory is beautiful; better information improves market outcomes. We are all supposed to win!

But what happens when one party in a transaction has information that others don’t? It increases the likelihood that insiders will trade on nonpublic information. This isn’t market improvement; it is insider trading. In regulated financial markets, insider trading is illegal.

The Polymarket case adds a twist: because every trade is publicly visible on the blockchain, the position is transparent but anonymous in real time. What that means is detection is possible, but prevention is nearly impossible without identity verification. The platform has resisted making the identity of position holders public. There’s also a national security threat here that standard insider trading analysis misses: if these bet positions on war events are public, American military movements eventually become readable in market data before they become public. If Bubble Maps could do it, adversaries can as well.

Dr. A’s Take: Prediction markets are being sold as the next frontier of financial participation, a way for ordinary people to put real money behind what they believe about the world. For those of us working in financial literacy and behavior, we are seeing an increase in young adults and kids participating in prediction markets. The “betting and gambling” wave is impacting the financial futures of the next generation of Americans. Your kids are impacted, and it is worrisome.

In this example, what worries me beyond the individual losses is what this does to institutional trust over time. The moment people realize that someone in a government situation room is using confidential information to make money, they will lose trust in both prediction markets and their government.

Prediction markets are behaving like financial markets and require the same regulation and insider-trading protections.

Here is a 60 Minutes Reel that sparked this take.

Last Wednesday, we reported that the CPI came in at 3.8%. The next day, the BLS reported that the PPI, the prices producers pay, increased by 6% year over year.

What does that mean?

The PPI leads the CPI. What businesses absorb today, consumers pay tomorrow. When producers face higher input costs, they eventually pass them downstream as higher prices. The latest data shows that the transition is already underway.

What makes the current picture more concerning is the breadth of the increase. Higher oil prices may be the primary driver, but energy costs don’t stay contained; they push up the prices of nearly everything that moves, refrigerates, or is manufactured. That’s contagion, not a one-sector story.

Add to that the pressure from tariffs, which economist Brandon Sheridan flagged as still very much in play, and consumers are looking at multiple cost pressures converging at once. Brace accordingly: CPI is likely to accelerate before it slows.

“This is a Choice”

Here’s what Brandon said on the podcast this week that is a good reminder for all: this isn’t something that happened to us. Tariffs are a policy choice. The Iran conflict accelerated it, but the stair-step rise in prices was already underway before that. And because prices move up like a rocket and come down like a feather, sticky on the way down due to long-term contracts, renegotiation cycles, and producer margins, expecting a fast reversal is wishful thinking.

The labor market is holding, but it’s not dynamic. Brandon noted that with reduced immigration, the economy simply needs fewer new jobs to maintain stability, which makes 115,000 monthly additions look better than they probably are. And less immigration over time means fewer entrepreneurs, less innovation, and more anemic growth further down the road.

What does this mean for your wallet right now? Brandon’s personal story said it better than any chart could: airfare that was $300 rose to $1,200 after the news of Iran broke. He took a connecting flight instead of a direct flight. Gas is running 50–60% higher than it was two months ago, which changes the calculus for which jobs are worth commuting to, how hard people push back on return-to-office mandates, and which big purchases get delayed.

It is easy to focus on the data point and forget the human-centered story behind the data.

What is EENE?

One more thing from this episode worth knowing about:

Brandon is a founding member of EENE — the Economic Education Network for Experiments (eene.org). It’s a research collaboration of 200+ economics instructors across institutions — public, private, HBCUs, R1s — running synchronized classroom experiments to actually answer what works in economics education. Most education research is too small to generalize. EENE is trying to fix that with scale and rigor. They have papers under review and their third annual conference coming up after CTREE in Las Vegas this summer. If you teach economics or know someone who does, this is worth knowing about.

Thank you for sharing this post with your community. Informed consumers and employees improve market outcomes for all.

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Walk into a Barnes & Noble today, and something feels off, but in a good way. The shelves aren’t organized like a warehouse. Staff may have left handwritten notes next to the books they love. There’s a local author section in the front. The store looks like it was curated by someone local who actually read the books, not by a corporate design team three time zones away.

This should not be happening. For two decades, the story of Barnes & Noble was a slow, painful decline, the kind economists use to illustrate what happens when a market shifts and a company can’t adapt. At its peak in the late 1990s, Barnes & Noble had more than 1,000 locations. By 2019, that number had fallen to 627. Borders, its main competitor, had already shut down entirely. Corporate mega bookstores had lost the fight against Amazon. We all moved to digital books and bookstores, and physical bookstores were over. The market had shifted, and the data told us that people chose convenience over tradition.

Turns out, the data was wrong.

Barnes & Noble opened over 60 new stores in 2025. It plans to open at least 60 more in 2026. It aims to reach 1,000 locations, and it is growing fast enough that the number seems realistic. The company has noticed that the number and duration of visits have increased. B&N is taking notice of a market change and is leaning into it.

And it is not alone. Dick’s Sporting Goods just acquired Foot Locker for $2.4 billion and is doing something similar. It is repositioning the brand away from malls and into neighborhood storefronts, the kinds of spaces left behind by abandoned Walgreens and Rite Aid locations. We are witnessing the rise of the local shoe shop.

The market chatter said physical retail was a dying format. Consumers wanted convenience, speed, and frictionless delivery. They wanted Amazon and online shopping. The companies that survived would be the ones that accepted this and learned to compete online. The ones that didn’t would disappear.

That story had one serious problem. It confused what people said they wanted with what they were actually willing to pay for.

The Commodification of Everything

When a product becomes a commodity, what becomes scarce is the experience of getting it. Over the past three decades, we have seen experiences and relationship purchases become commodified.

Amazon solved the product problem completely. You can get virtually any book, any shoe, any item delivered to your door in two days or less. They won at the logistics game. The price is usually competitive. On pure efficiency terms, Amazon wins every time.

But efficiency is not the only thing markets price. They also price scarcity. And something strange happened as Amazon made products infinitely available: genuine human experience, the feeling of being in a place, being helped by someone who knows something, stumbling onto something you didn’t know you wanted, surrounded by people who valued it as much as you do, became rare. Those experiences are things we are longing for today.

A book recommendation from a bookseller who has read the book is a different product than an algorithm recommending the same title because 47,000 other people with similar purchase histories bought it or rated it five stars digitally. One of them feels like a personal experience, and the other is a transaction. Although the algorithm might be more accurate, the personal recommendation develops a connection. I will always value your personal recommendation over the digital one.

Barnes & Noble: The Local Inversion

The turnaround at Barnes & Noble is a deliberate structural inversion of the logic that almost killed the company.

The old Barnes & Noble model was big-box retail applied to books: enormous stores, standardized layouts, centrally planned inventory, every location interchangeable. That model made sense when the competitive advantage was selection; if you wanted a large variety of books in one place, Barnes & Noble had it. It was efficient. Then Amazon offered infinite selection from your couch, and the competitive advantage disappeared overnight.

The new Barnes & Noble, under CEO James Daunt, handed control back to the stores. They would no longer compete on efficiency but focus on experience. Local managers now make decisions about layouts, selections, and events. The store in Washington, D.C.’s historic Woodward & Lothrop building does not look or feel like the store in suburban Ohio. The Manhattan store is not the Denver store, and that specificity is the product. We are seeing the rise of local personal experiences, and buying a book is one of them.

The results are measurable. Barnes & Noble fell below 600 locations as recently as 2023. It now has over 700. In 2024, it opened more new stores in a single year than it had in the entire decade from 2009 to 2019. Some of its most loyal customers visit nearly 20 times per year, a frequency that would make most retailers envious.

Dick’s and Foot Locker: The Real Estate Arbitrage

The Dick’s Sporting Goods acquisition of Foot Locker is a different mechanism, but the underlying logic is similar. We do not know how this experiment will end, as we are in the early stages, but it is an exciting one to watch unfold.

Foot Locker’s problem was location dependency. Its stores lived in malls, and malls have been losing foot traffic for years. The brand also became dangerously concentrated, roughly 60% of its purchases came from a single supplier (Nike), giving it almost no pricing leverage and enormous vulnerability to any change in that relationship.

Dick’s saw something else. Foot Locker’s small-format stores, the kind that fit in neighborhood retail spaces, give Dick’s a way to enter markets where a standard Dick’s Sporting Goods store simply wouldn’t fit. More importantly, the collapse of Walgreens and Rite Aid left behind thousands of affordable, high-traffic, neighborhood-scale retail spaces sitting vacant across the country.

The economics of a specialty neighborhood shoe shop are fundamentally different from those of a mall anchor. This is a drastic business model shift.

The Independent Bookstore Wave

Neither of these stories is happening in isolation. Independent bookstores, the category Amazon was supposed to have eliminated permanently, have grown 70% since 2020, from 1,916 locations to more than 3,200. In 2024 alone, 323 new independent bookstores opened and only 37 closed. For every bookstore that shut down, four new ones opened.

The American Booksellers Association, which once saw its membership fall from 7,000 in 1994 to fewer than 2,000 in 2019, has now grown its membership by 18% in a single year. The revival of Barnes & Noble did not cannibalize independent stores. It validated the format and expanded the cultural permission to shop locally.

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Why Students Stop Trying — and It’s Not What You Think

From Economics Unpacked by Mallika Pung

What Happened

Everyone has noticed that effort in learning seems to be declining; students leave assignments half-finished, checking out before the work is done. In my classes this semester, 22% of my students did not complete their final paper. They participated in the entire course, but just decided not to submit their final project! I have no way of explaining this behavior. Was it a lack of motivation to finish what they started?

A new paper in the Journal of Political Economy tracked over 1,600 fifth- and sixth-graders doing optional math work and found something that runs counter to the obvious explanation. Low-performing students are not less motivated than high-performing ones. On average, they want to succeed just as badly. The gap is in productivity, specifically, how efficiently a student converts time at the desk into correctly solved problems.

The Economics

This is a cost problem, not a willpower problem. When learning is slow, every additional hour of work extracts an increasingly heavy mental toll. The researchers put a number on it: doubling a student’s daily math commitment raises the internal cost of studying by more than 3 times. At some point, stopping before the assignment is done becomes the rational choice, not a character flaw, but a logical response to a cost that has grown too large to bear.

We have been misreading the effort problem for a long time. When we see a student who stopped before finishing, we diagnose motivation and prescribe pep talks, incentives, and information about the returns to education. This paper suggests that for many students, those interventions are targeting the wrong variable entirely. The lever that actually moved productivity was school quality, not who the student was, but what resources surrounded them. That is a much more uncomfortable conclusion because it places responsibility elsewhere than on the student.

What It Means for You

If you work in education, workforce development, or training, the next time someone stops before the finish line, ask whether the environment made the work efficient enough. Effort is not the bottleneck for most people. Access to tools and instruction that make learning faster is.

Visit Mallika’s website for the full write-up about this paper and access to the slides. https://www.gourmeteconomist.com/why-trying-harder-isnt-enough-for-struggling-students/

The Rise of Loneliness

Source: Our World in Data and the U.S. Bureau of Labor Statistics

A chart from drawing on BLS time-use surveys from 2010 to 2023, shows that young Americans aged 15–29 now spend about 45% more time alone than they did 13 years ago. That is roughly six hours per day alone, up from four. Time with friends has dropped. Time with family has dropped. But the isolation story doesn’t stop at youth. The same data show that time spent alone rises steadily across the lifespan, reaching nearly 8 hours per day by age 80. Americans don’t just become lonelier as a generation. They also become lonelier as they age.

The Economic Mechanism

Here is what makes the lifecycle pattern so important: the chart also shows why time alone rises with age. Coworker time peaks in the 30s and falls to near zero by retirement. Children fill the middle decades and then leave. Partner time holds through the 60s and then drops sharply, reflecting widowhood and separation. What appears to be a personal or cultural problem is actually a structural one. The social infrastructure that fills adult life, work, children, and partnership is time-limited. When it ends, there is often nothing behind it. For today’s young people, that future loneliness is being pre-loaded: they are entering adulthood already six hours a day alone, before coworkers, partners, and children have even entered the picture.

We are looking at a compounding crisis that economics has not fully priced in. Loneliness and social isolation is associated with health outcomes. According to the CDC, it can increase a person’s risk of heart disease, diabetes, depression and anxiety, and demintia. Solving the loneliness crisis requires effort and targeted interventions.

Social skills are a competency. It is built through repeated exposure, dinners, disagreements, negotiations, awkward silences, and all the informal friction of being around other people. When young people spend six hours a day alone before their careers even begin, they arrive in the labor market with fewer reps than any prior cohort. Social fluency is not fixed; it responds to practice. That’s why my research assistants this summer won’t just be working at their desks. They’ll be off campus, attending events, meeting people, and learning how to be in a room.

As Dr. says, you need to learn to

“Own the room and work the room, to own the room, you need to be able to read the room.”

What It Means for You

If you are early in your career, the most economically valuable thing you can do while optimizing your resume, is spending time with people, in rooms, in uncomfortable conversations, in situations where you have to figure out how to connect. That skill has a return. And like most investments, it compounds. Get out and spend time with people.

If you manage early-career employees, the pipeline arriving at your door has had fewer “social reps” than any prior generation. The communication gaps you are noticing are not an attitude. They lack exposure. Onboarding now has to include what was previously assumed. Talkign and connecting with people is a skill that requires development.

Blue Dot Fever: The Affordability Crisis Comes for Live Music

Source: Nexstar / Pollstar / McKinsey/ Morning Brew

What Happened

A wave of high-profile concert tours from Meghan Trainor, Zayn, Post Malone, and the Pussycat Dolls has been canceled or postponed in recent weeks. Fans on social media noticed the pattern first: seat maps on Ticketmaster showed floods of blue dots, the icons representing unsold tickets. The phrase “blue dot fever” was born. The official explanations for cancellations cited personal reasons. The data tells a different story.

The Economic Mechanism

This is a demand elasticity and affordability problem playing out in public. Concert ticket prices rose 41.3% on average between 2019 and 2024, well above general inflation, during what Pollstar called the “Golden Age of Live Stadium Concerts.” Artists and venues priced for a post-pandemic spending surge that assumed fans would pay almost anything to be back in a room together. Pent-up demand from Covid pushed up prices. That assumption held for a while. It is no longer holding. When tariff-driven inflation, fuel price spikes, and economic pessimism collide with $300 floor seats, consumers make the rational choice to pass on the concert. The blue dots are just what that choice looks like on a map.

The Economics

Here is the part with the most coverage missing: this is not happening evenly. Pollstar’s JR Lind told the The Times that top acts are still selling. The pressure is falling on the tier just below them. For superstars, concerts are closer to inelastic goods; fans pay almost regardless of price. For everyone else, the price elasticity of demand is doing exactly what it should. When your product is discretionary, and your price is high, a deteriorating economy will start to impact your market.

The live music industry made the same mistake many industries did coming out of COVID: it mistook a spending surge for a permanent shift in consumer preferences. It wasn’t. It was pent-up demand with a time limit. Now that the limit has been reached, it’s colliding with an economy where consumers are actively pulling back on non-essentials. The blue dots are not a music industry story. They are an affordability story. And they are showing up in restaurants, travel, and retail, too. It is evident in live music data and will soon show up in other sectors.

Inflation Is Back. This Time, Energy Is Driving It.

Source: U.S. Bureau of Labor Statistics

What Happened

The latest CPI data from the BLS shows headline inflation at 3.8% year-over-year. The increase is being driven by an 18% jump in energy prices from a year ago (40% from last month) and a 54% spike in fuel oil, a direct consequence of the War on Iran and the continued blockage of the Strait of Hormuz.

Why This One Is Different

The initial assumption was that the energy shock would be temporary. That assumption is getting harder to hold. Core inflation, which strips out food and energy and is the number economists watch most closely, is now beginning to rise. It is up .35 percentage points. That matters because it signals that higher energy costs are passing through to the rest of the economy: shipping, manufacturing, services, food production. Once core inflation picks up momentum, it is historically difficult to bring back down. The Fed knows this. So should you.

This is the inflation story I have been watching closely. Energy shocks are manageable when they stay contained, or “transitory”. When they start moving core prices, the calculus changes entirely. If the Strait of Hormuz remains blocked and energy stays elevated, we are not looking at a temporary spike, we are looking at a inflation that embeds itself. That is a different policy problem, a different consumer problem, and a different economic story. Inflation is sticky, and it will hang around much longer than we want it to.

This week’s episode of The Weekly Rap is out now. and I recorded it on Friday morning, minutes after the report dropped. Listen to the link below.

Jobs Report Summary

April’s jobs report landed Friday at 8:30 a.m.: 115,000 new jobs, unemployment unchanged at 4.3%. Economists polled by Dow Jones expected around 55,000. The actual numbers more than doubled the forecast.

That should feel like good news.

The Industry Breakdown

Healthcare led the way with 37,000 new jobs, right in line with its 12-month average. Retail added 22,000. Transportation and warehousing added 30,000.

The Numbers Under the Headline

Beyond the headline numbers, here’s what deserves more attention:

PART-TIME FOR ECONOMIC REASONS: UP 445,000

Nearly half a million additional workers are part-time, not by choice. Either their hours were cut, or they couldn’t find full-time work. That number jumped sharply in April and now sits at 4.9 million. The unemployment rate doesn’t capture this. These are employed people, by the BLS definition. But they’re not employed the way they want to be. This is a trend that deserves keeping an eye on.

FEDERAL EMPLOYMENT: DOWN 348,000 SINCE OCTOBER 2024

Federal government employment fell by another 9,000 in April. Since its peak in October 2024, the federal workforce is down 11.5%.

WAREHOUSING: UP 30,000 IN APRIL, BUT DOWN 105,000 FROM ITS PEAK

This was the number that stopped me on Friday morning during our podcast. It seemed large, and I had to go back to evaluate the trend. It turns out that employment in transportation and warehousing, although it added 30,000 jobs, is still 105,000 below its February 2025 peak. But the monthly gain is real.

INFORMATION SECTOR: DOWN 342,000 SINCE NOVEMBER 2022

Telecom, motion picture, and data processing are all continuing to shed jobs. The information sector has now lost 11% of its workforce from its peak. This is the category most associated with tech employment. It is not recovering.

Dr. A’s Take

The headline number is better than expected, but job growth remains below previous years. The composition of jobs underneath it is telling a more complicated story. Part-time work spiked for economic reasons. Federal employment continues its structural decline. The information sector keeps contracting. And warehousing, despite a good month, is still well below where it was a year ago. It is easy to get swept up in the +115,000 new jobs created; it sounds good only because we were expecting worse.

On This Week’s Pod

If you haven’t listened to our pod, Jack and I covered the following:

• The jobs number and what surprised me about the data

• Why the labor market data and the market narrative keep diverging

• GameStop’s bid for eBay, and what Ryan Cohen’s CNBC interview reveals about communication and markets

• Why Decode Econ is changing its format, and what that means for you

• Jack’s summer plans, and what five months of building Decode Econ together has looked like from his perspective

Listen to The Weekly Rap

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What you missed from last week

Recently, Nobel Prize-winning economist Claudia Goldin did something unusual for someone of her stature: she went to work for a basketball league. Goldin, who spent her career at Harvard meticulously documenting the gender pay gap, used that research to help WNBA players negotiate a 400% raise.

Critics argued she was injecting “activist economics” into a market that should be left alone. That her intervention distorted wages that were otherwise set by fair, competitive forces. That the market had spoken, and she was overriding it.

Here’s the problem with that argument: it’s built on an Econ 101 model of labor markets that doesn’t describe reality. It describes an idealized version of it, one that assumes you have power you probably don’t have, and information you almost certainly don’t have.

I believe in free markets. But believing in free markets means understanding when they’re working, and when they’re not. Most workers operate within a market that is quietly stacked against them, not because of bad luck or poor negotiating skills, but because of the market's structure itself.

Today I’m breaking down exactly why your labor market requires intervention, what monopsony power and information asymmetry actually mean for your paycheck, and what knowing this changes about how you negotiate. This is the economics your Econ 101 course probably skipped.

What the Free Market Model Assumes

The textbook model of a competitive labor market is elegant. Employers compete for workers. Workers compete for jobs. The wage that emerges reflects the value of the work. No single employer or employee has enough power to move the price. Everyone is a price-taker.

In this world, intervention is harmful by definition. If wages are already at the competitive equilibrium, any attempt to push them higher reduces employment. Simple supply and demand.

This model is useful. It’s also incomplete in many labor markets.

The reason isn’t ideology, although it gets tangled up in ideology more than it should. When wage policy becomes a political identity, the economics get lost. Conservatives defend low wages as market outcomes because intervention feels like government overreach. Progressives push for higher wages as a moral imperative without always engaging the underlying structure. Both sides end up arguing past the actual question: Is this market competitive enough for the model to apply?

That question has a lot to do with market structure. And when you look closely at how most labor markets are actually built, the answer is often no.

The Problem Has a Name: Monopsony

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The economy moves fast. Most people feel it, but don’t fully understand it.

Decode Econ breaks down what’s happening and how it impacts your financial life, career, and opportunities.

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In today’s newsletter:

1. Spirit Airlines

2. Foreclosures are up

3. AI data and your emails at work

4. WNBA a monopsony in action

5. History was made at the Kentucky Derby

6. Dr. A’s Take on Markets

Could a Merger with JetBlue Have Saved Spirit Airlines?

Thousands of panicked travelers were left scrambling over the weekend after Spirit Airlines’ sudden but expected collapse. The budget carrier ceased all operations on Saturday after growing financial struggles, resulting in the loss of 17,000 jobs. Rival airlines like Frontier and Southwest jumped in to assist affected travelers. Meanwhile, aviation experts weigh the long-term impacts of Spirit’s absence: its closure may lead to higher fees.

Republicans blame the Biden administration's block on the JetBlue deal; Democrats point to the fuel price surge amid the Iran war.

Here is a more economically focused evaluation of the Spirit Airlines issue from our friends at

Monday Morning Economist

The Last Flight of Spirit Airlines

You’re reading Monday Morning Economist, a free weekly newsletter that explores the economics behind pop culture and current events. Each issue reaches thousands of readers who want to understand the world a little differently. If you enjoy this post, you can support the newsletter by sharing it or by becoming a paid subscriber to help it grow…

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17 days ago · 69 likes · Jadrian Wooten

What it means for you: Expect fewer ultra-low fares and less price competition. Budget travel may get more expensive, especially on routes Spirit dominates.

A New Revenue Source for Troubled Startups

Is your startup going under? You can recover some of your losses by selling your employees’ communication. Startups are selling old Slack chats and emails to AI companies to serve as training data.

But here’s the catch: employees did not consent to their messages being used as training data. This raises ethical issues and may include data with sensitive, strategic, or personal information.

Just because there is a market, it doesn’t mean there is consent, ethics, or long-term value.

What it means for you: Your workplace communication may have long-term value beyond your job. Be more intentional about what you write and where it lives.

Foreclosure Filings Hit Their Highest Level Since 2020

Foreclosure filings have surged to the highest level since early 2020, fueled by rising insurance costs, property taxes, the end of COVID-era relief programs, and inflation. The Wall Street Journal reports that nearly 119,000 properties faced foreclosure in the first quarter. That is a 26% year-over-year increase.

Homeowners are experiencing “payment shocks” from taxes, insurance, and job struggles, says Marina Walsh, an economist at the Mortgage Bankers Association. The surge comes amid other financial pressures, including rising credit card delinquency rates and increasing inflation.

Top 5 states by foreclosure filings per housing unit

1. Indiana

2. South Carolina

3. Florida

4. Delware

5. Illinois

What it means for you: Financial pressure is building beneath the surface. Watch rising costs like insurance, taxes, and debt, not just mortgage rates. As costs rise, less money is left over for your home.

Use Econ For Good

This is old news in some circles, but we hadn’t reported on it.

Nobel Prize-winning economist Claudia Goldin helped WNBA players secure a 400% raise. Harvard’s Claudia Goldin spent her career studying the gender pay gap. She used what she learned to help WNBA players reduce the pay gap.

According to the WNBA’s own press release, the new deal is expected to change salaries as follows:

Maximum-contract players will earn a salary of $1.4 million in 2026 that is expected to grow to more than $2.4 million by 2032, based on current financial projections. The league’s average salary is expected to be $583,000 in 2026 and increase to over $1 million by 2032. Minimum salaries will range from $270,000 to $300,000 in 2026 (based on years of service) and will range from $340,000 to $380,000 by 2032.

The agreement also establishes a new rookie contract scale that significantly increases salaries for top draft picks, including the No. 1 overall pick in 2026 projected to earn $500,000.

The WNBA operates in a constrained labor market with monopsonistic characteristics, where limited domestic opportunities increase the importance of collective bargaining in wage determination. Having a Nobel Prize-winning economist argue for increased wages helps you make the case.

What it means for you: Wages aren’t just about performance; they’re about bargaining power. This shows why leverage, not just skill, shapes income.

Best Two Minutes in Sports

Speaking of Women! Cherie DeVaux became the first female trainer to win the Kentucky Derby.

It was a fun race, probably one of the best Kentucky Derby races. Golden Tempo came from last place to win. José Ortiz and Irad Ortiz Jr finished first and second, respectively. This is the first time in the race's 152-year history that siblings have taken the top two spots.

What it means for you: Barriers are breaking in traditionally closed industries. Progress like this expands opportunities, even in places slow to change.

Last week, while talking with on WCPT 820, I said that the markets were more optimistic than expected. They did not reflect the true cost of the Iran war on economic outcomes. Stock market indices and oil prices had brushed off the geopolitical risk. On Monday, that changed. Oil futures spiked, and markets showed signs of a pullback as tensions in the Strait of Hormuz escalated.

What is means for you: Brace yourself, higher energy costs can show up quickly. Gas prices, travel, and, eventually, broader inflation will begin to show the impacts of this war on your pocketbook.

In this episode of the Decode Econ podcast, Dr. Abdullah Al Bahrani and Jack Marx break down GDP growth, rising U.S. debt (now at 100% of GDP), Federal Reserve pressure, and whether AI investment is artificially propping up the economy.

We also discuss inflation, wages, oil prices, and what history (like Japan’s zero interest rate policy) tells us about what could happen next.

What You’ll Learn

• Why is GDP growth being driven by AI investment

• The risks behind a 100% debt-to-GDP ratio

• How Federal Reserve independence impacts markets

• Whether the AI boom is sustainable

• What rising oil prices mean for inflation

• Lessons from Japan’s economic policies

• Lessons from Dr. A’s last lecture

1. Oil, Geopolitics, and Inflation Risk

I joined the radio show in Chicago (WCPT 820) this week to discuss a scenario I flagged earlier: oil pushing toward extreme levels. Thanks to Bill Muck for the invite to share my views on the economy.

Recent Reuters reporting shows prices rising again as tensions with Iran escalate and negotiations stall.

What matters:

• Oil is one of the fastest channels from geopolitics → inflation

• If prices continue rising, we’re looking at renewed cost-push inflation

• That complicates everything for policymakers

• Even though the U.S. is a net exporter of oil, Americans will still see higher prices at the pump because oil prices are market-driven and global oil flows are lower today.

My take: The “$200 oil” scenario is still a tail risk—but it’s no longer unrealistic. Markets are starting to price in instability, not just supply.

2. The Fed’s Real Problem Isn’t Rates

The Federal Reserve meets today and tomorrow. Markets expect no change to interest rates. But, that’s not the story.

The real issue is Jerome Powell’s position.

Here’s the tension:

• The labor market is softening

• Oil-driven inflation could reaccelerate

• Policy uncertainty remains high

These signals point in opposite directions:

• Weak labor implies cut rates

• Rising inflation implies hold or hike

This is the typical issue we face when experiencing stagflation. The U.S economy is in a predicament.

My take: This isn’t about this meeting. It’s about whether the Fed is entering a phase where policy becomes reactive instead of predictive.

Also worth watching: whether Powell stays on after his term. Leadership transitions at moments like this matter more than markets admit. Chairs usually leave the board once their term ends, but political interference with the Fed might lead Powell to stay on longer.

3. AI Is Forcing a New Kind of Property Right

Taylor Swift is attempting to trademark her voice and image to prevent AI misuse. Last week, lawyers acting on behalf of the music superstar lodged three applications with the U.S. Patent and Trademark Office

At the same time, Oprah Winfrey is moving her content ecosystem to Amazon—leaning further into platform-controlled distribution.

These aren’t separate stories. They point to the same shift:

• Who owns digital identity?

• Who controls distribution?

• Who captures value in an AI-driven economy?

My take: We’re watching the early formation of AI-era property rights—voice, likeness, and content libraries. This will reshape contracts, media, and labor markets.

The Through Line

These stories connect: Oil is driving inflationary pressure, inflation is affecting the Fed’s strategy because labor markets send a different signal about the economy, labor markets are changing as AI reshapes value creation, and the meaning of productivity.

The environment ahead is more volatile and uncertain, and requires careful interpretation. Markets have been resilient to all that has been thrown at them. When will they begin to price in risk and uncertainty?

What I’m Watching Next

• Whether oil continues trending upward this week

• Powell’s tone (not just the rate decision)

• More public figures moving to lock down AI rights

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From real conversations at Eggs & Issues to insights from the Notes app, this discussion connects what students are experiencing with what’s actually happening in the economy.

We also have some important questions for you. Make sure to watch and tell us what you think.

Listen on Spotify

The big idea: the first rung of the ladder is breaking

We cover:

• Why “entry-level” now means experience required

• How rising expectations are reshaping the job market

• What income inequality (yes, the Gini coefficient) has to do with your career

• Insights inspired by Kyla Scanlon and Gary Hoover

• What students and graduates can actually do to adapt

• What is the American Dream, and how is it changing?

If you’re a student, recent graduate, or just trying to understand today’s economy, this conversation is for you.

Key Takeaway

You’re not falling behind—the system is changing.

Chapters

00:00 Intro
02:00 The Notes App & Thinking Process
05:30 Are Entry-Level Jobs Disappearing?
10:00 Eggs & Issues: What Leaders Are Saying
14:30 Inequality & the Gini Coefficient
18:00 The Broken First Rung
22:00 What Students Should Do Next

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Resources:

1. NKY Chamber of Commerce events - Next Eggs ‘N Issues event

2. Scott Galloway on Gini Coefficient.

3. NBER Paper INCOME AND WEALTH INEQUALITY IN THE UNITED STATES:

   AN UPDATE INCLUDING THE 2022 WAVE

4. BE NKY Report on Productivity.

5. Leadership program at . Applications are open for the 2026 cohort. Master of Business Leadership and Innovation.

6. The first rung is broken.

7. Join us this Friday for the Haile Research Lab Senior Sendoff and to welcome next year’s cohort.

There are moments when you step back and realize something is working, not because of a metric or a report, but because of the people. This year marks the 10th version of the Haile Research Lab. What people see today: the structure, the consistency, the students presenting their work, is not how it started. It’s the result of years of iteration. Trying things, adjusting, rebuilding. What looks polished now was built through trial and error. The entrepreneurial mindset, pivots, and adjustments that shaped this work are often missed.

If you’ve followed my journey or read my work, you know I’m a builder. Not just of programs, but of people. The Haile Research Lab sits at that intersection. It’s a reflection of what happens when you commit to both over time and allow the work and the community to evolve together.

Why It Started

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When I started the Haile Research Lab, I didn’t set out to build a traditional research program. What I wanted was a way to mentor students consistently, intentionally, and in a way that felt real. Research became the vehicle, but mentorship was always the goal. I wanted students to engage with ideas beyond the classroom and to build the confidence that comes from working through real economic and business problems in their community. I wanted my students to develop the curiosity needed to influence change. I wanted them to solve problems they were passionate about.

What It Has Become

Over time, the Lab has grown into something bigger than I expected. Every Friday, students show up not because they have to or because it’s required, but because they’ve chosen to be there on top of already heavy workloads. That choice, repeated week after week, is what makes this work. Alongside them are faculty who have stepped into this model in a meaningful way. This is not traditional teaching. It requires mentorship, patience, and a willingness to invest in students beyond the classroom. What we’ve built is a shared commitment.

The Real Differentiator

There are many programs that offer research opportunities, but that’s not what makes this different. Our differentiator is our community. Students support each other, faculty invest in students, and over time, that creates an environment where people grow. This is not about individual projects. It is about building something collective that lasts.

That support does not move in one direction. It is not just faculty supporting students or students supporting each other. It flows both ways.

This past Tuesday, HRL students showed up in the community to support me while I was on a panel for the NKY Chamber of Commerce in partnership with BE NKY. They did not have to be there, but they showed up. They felt empowered. They felt they belonged in that room because they had practiced showing up for each other many times before.

More Than Research

At some point, a phrase started to stick: “More Than Research.” It wasn’t planned, but it captures what this has become. The Lab is about exposure to real economic and business problems in our community. It’s about building confidence over time. It’s about learning how to think, communicate, and contribute. It’s about development. It is about people building and embracing a growth mindset.

Expanding the Model

The Fellows program is growing, and the model is beginning to take shape beyond our campus. Variations are emerging at other universities. The mentorship style may differ, and the structure may evolve, but the core principles remain the same: consistent engagement, real-world exposure, and intentional development.

That is how I measure impact, not just by what we build here, but by what others choose to build from it. That is influence.

A Moment to Appreciate

This week, our students are presenting their work. That’s what people will see. What they won’t see are the years behind it, the iterations, the adjustments, and the steady work to get here. More importantly, they won’t fully see the simple reality that makes this possible: students choosing to show up, faculty choosing to invest, and a community choosing to build something together.

That’s what I’m proud of. Not just what the Lab has become, but the people who have shaped it and the consistency it takes to build something that lasts.

You are part of this journey.

Many of the programs and initiatives I build start as ideas here. They are shaped through conversations, refined through writing, and tested through action. What you see in the Haile Research Lab is not just the result of work on campus. It is part of a broader process of building, sharing, and improving over time.

And we are just getting started.

— Dr. A

P.S I have one opening in the spring of 2027 for a speaker. Do you want to visit NKU and talk with our students and faculty at the Haile College of Business? Send me an email.

Join us on May 1

If you are in the Cincinnati area, join us on May 1 for the senior send-off. Eight of our students graduate, and we will welcome 12 new members to the Haile Research Lab.

Research Celebration Week is one of the best reminders of what a university is supposed to do: create, test, and share ideas.

Tomorrow at Northern Kentucky University, the schedule is packed with presentations and posters across campus. I’m especially proud that 14 members of the Haile Research Lab will be presenting their work. (Full schedule is here)

The Haile Research Lab (HRL) is a student-driven research initiative within the Haile College of Business. It is designed to give students hands-on experience applying economic and business thinking to real-world problems. Students in the lab work on research projects, data analysis, and policy-relevant questions, while also developing the skills needed to communicate their ideas to business, community, and policy audiences. The goal is simple: move students from learning to doing.

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Here’s where you can find our students tomorrow:

Research Presentations

📍 Student Union – Room 109

9:00 AM – 10:00 AM

• Emma Rademacher

• Aidan Staley

• Maddux Hoffman

10:00 AM – 11:00 AM

• Princess Nworah

• Jonathan Marx

11:00 AM – 12:00 PM

• Rebecca Stanley

• Dylan Fogt

12:00 PM – 1:00 PM

• Becca Stanley

• Wilfried Panlap

Poster Session

📍 Student Union – Ballroom
12:30 PM – 3:00 PM

• Linh Nguyen

• Judah Martin

• Elaine Chan

• Francesca (Frannie) Staley

• Ahmad Richardson

Final Presentation

📍 Student Union – Room 109
4:00 PM – 5:00 PM

• Ahmad Richardson

If you’re on campus, stop by. Talk to the students. Ask them about their work.

This is what applied learning looks like.

The group most affected by this is young college graduates. Their unemployment rate has risen sharply, nearing that of young workers without a degree. That’s triggered real concern, and predictable questions about whether a college education still pays off. Some have even argued that this signals higher education is no longer necessary.

But that conclusion is too quick.

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Recent reporting from the Wall Street Journal suggests firms are returning to entry-level hiring this spring. So what changed?

Here’s how I’m thinking about it—points I’ll expand on during today’s Eggs & Issues discussion at the NKY Chamber:

1. Policy uncertainty has been high.
   Over the past year, firms have faced significant uncertainty. When the outlook is unclear, hiring and investment slow down. “Wait and see” becomes the dominant strategy.

2. Entry-level hiring is a tough economic bet.
   Young college graduates are costly and inexperienced. If firms do hire, they often choose either experienced graduates—whose higher pay feels justified—or lower-wage, non-degree workers. New grads get squeezed in the middle.

3. AI became a convenient narrative.
   Over the past three years, firms that talked about AI have been rewarded by markets. Instead of saying, “We’re not hiring because of uncertainty,” many framed it as “We’re investing in AI.” It’s a cleaner story and better PR.

4. Investment in AI is ahead of its impact.
   Spending on AI is high, but measurable productivity gains remain limited. Most firms aren’t replacing workers with AI; they’re experimenting with tools. The real productivity effects will come later. Right now, most organizations are still trying to “figure out how to use” it effectively.

5. College still matters—but the target is moving.
   The issue isn’t whether higher education is needed—it is. The issue is alignment. What we expect from graduates must evolve with the labor market. The economy will demand more skilled, highly educated workers—not fewer—but with different capabilities than before.

AI didn’t cause the hiring slowdown; it gave firms a better story to explain it.

The good news is that our college students and recent graduates will start to see more opportunities.

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From time to time, I get overwhelmed by the notes and tags and feel like I should devote more time to creating structure. But random ideas need a place to land. They do not need organization.

There is something exciting about scrolling through old notes on random dates. It reminds me of the range of ideas I come across and the ones I thought were worth holding onto.

I will keep it messy, because I think that is the point. This newsletter and blog will hold the more organized version of my thoughts. Notes are messy by design.

Recently, I came across a note I wanted to flesh out. It was about a book I once thought I might write.

What Book Would You Write?

Three years ago, someone asked me what I would write about if I wrote a book. I jotted down three ideas:

1. Conversations with Students — based on mentorship discussions and topics related to professional development, growth in college, and the early years of a career.

2. A textbook built around my method of teaching economics and financial literacy.

3. Economic policies impacting you.

The first two are still in the running, but I am giving up on the third.

Why I Gave Up

There are two main reasons I gave up on the third book.

First, my friend Hoov (Dr. Gary Hoover) has already written an excellent version of that book, and I highly recommend it. I was happy to serve as a peer reviewer, and it is now in print.

Gary A. “Hoov” Hoover is Executive Director of the Murphy Institute, Professor of Economics, and Affiliate Professor of Law at Tulane University. He is also just a great guy. His book, Ladder or Lottery: Economic Promises and the Reality of Who Gets Ahead, would make a strong supplement in a macroeconomics course, a special topics course, or even a senior seminar focused on policy implications. If you are studying economics, this is a must-read.

The UC Press blog includes a great discussion with Hoov about why he wrote the book:

“Why did I write this book? Mainly to shed light on a simple question about placement on the social and economic scale, namely were people at lower or higher strata by their own choice or actions?”

“My argument was that there were approximately 45 million individuals at substantially lower rungs of the economic ladder, and that it was statistically inconceivable that so many were suffering from a culture or pathology that kept them from climbing the ladder. I stated that it was hard to fathom that some of those millions did not attempt to use the system as intended but did not get the desired result. If that was the case, then the economic system was not working as intended, and instead of a ladder, the economic system much more resembled a lottery.”

The second reason I gave up on the book is that I heard on Marketplace a week ago discussing the book she is working on, and it sounds very close to what I had in mind. I can’t wait to read her book.

About My Version

In my Notes app, I have an entry called “Entry Level Is Broken.” The premise is that markets and policymakers have designed systems that make it harder for people to start their economic lives. Our current economic conditions favor those with assets and established careers, often at the expense of young and early-career individuals. But it is not just a market or policy issue. It is also a cultural one, and even a parental one.

The social pressure on young people to display success early forces them to move through the economy already feeling behind. Social media, as discussed in The Anxious Generation, has only added to that pressure and brought its own consequences for well-being. Jonathan Haidt also writes about the overprotection of children in the real world. Now AI is reshaping how we think about entry-level work and what we expect from workers at the very beginning of their careers.

At the same time, I think the demand for true entry-level experiences has disappeared. Using Hoov’s ladder analogy, I am not sure whether the first rung is broken or whether we are all being pressured to skip it. Either way, something foundational to economic development and personal growth no longer seems to be part of the process.

So I have scratched “Entry Level Is Broken” from my list of books I might write one day. Hoov’s book, and I am sure Kyla’s book when it is finished, will stand as reminders of the book I once thought I might write.

What’s Your Book?

If you have never worked through that exercise, I highly recommend taking the time to think about the book you would write.

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Iran’s strongest position and most powerful tool is oil. By leveraging its geographic control over the Strait of Hormuz, it can inflict real economic pain on the U.S. through higher energy prices. Americans have shown a willingness to tolerate a lot from this administration, but that patience fades quickly when it hits their pocketbooks. Iran understands that.

I don’t want to minimize the human cost; the death and terror being experienced in Iran and other war zones are real. But the economic front of this conflict is increasingly centered on the oil market. Iran is trying to push prices up. The U.S. is trying to bring them down.

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Let’s Look at Oil Prices

Brent crude hit a high of $110 on April 6. Prices have been volatile and are currently around $97. The recent decline reflects diplomatic signals from Washington suggesting a potential easing of tensions with Tehran. Trump has indicated that Iran may be willing to accept terms it previously resisted, including reopening the strategically critical Strait of Hormuz.

But the reality is this: the tension is far from over. Oil prices will continue to swing with each new headline, press conference, and signal. Whether it is real or perceived.

“America Has Enough Oil”—So Why Are Prices Rising?

It’s true, the U.S. is now a net exporter of oil. But oil is a global commodity, and the U.S. does not directly control its price. Prices are set in global markets.

And right now, the global market has access to less oil than it did seven weeks ago.

This is shaping up to be one of the largest oil supply disruptions in history. Bank of America estimates that in March alone, the global economy lost between 14 and 15 million barrels per day.

Let’s Talk About What Comes Next

This week marks an important turning point: the last oil tanker that left the Middle East before the war began has now arrived.

According to Sea Rates:

An oil tanker typically takes 35 to 50 days to travel from the Middle East to the U.S. Gulf Coast—a roughly 12,000-mile journey. Many vessels reroute around the Cape of Good Hope, adding time. Speed (averaging about 13 knots), route choice (Suez Canal vs. longer routes), and port congestion all influence delivery timelines.

That lag matters. What we are experiencing now reflects decisions and disruptions from over a month ago. What happens next will reflect today’s conditions. It also means that if the conflict ends today, we will still experience oil disruptions based on the transportation lag.

Oil and Your Pocketbook

Inflation data released last week showed year-over-year inflation at 3.3%, with core inflation (excluding food and energy) at 2.6%. The gap tells the story: energy is driving the increase.

Fuel oil is up 44%. Gasoline is up 19%.

For now, markets expect these spikes to be temporary. But there is a real risk that higher energy costs begin to filter into broader consumer prices. If that happens, the next CPI report will show more widespread inflation across categories.

So far, many firms are avoiding permanent price increases. Instead, they are introducing temporary energy surcharges. This gives them flexibility; prices can come back down if oil does.

But if oil stays elevated, those “temporary” adjustments may not stay temporary for long, and that is the real threat.

The Path to $200 Oil

Whether oil reaches $200 a barrel will not be determined by fundamentals alone; it will be determined by signaling and market expectations.

Right now, the oil market is not just reacting to supply and demand. It is reacting to expectations. And those expectations are being shaped by the strategic signals coming from Iran and the United States.

Iran understands its leverage. It knows that sustained high oil prices can create economic pain inside the U.S., eroding domestic support for the administration. It also knows that if a conflict, one widely perceived as initiated by the U.S., leads to global economic hardship, it can weaken American standing with European allies already sensitive to energy shocks.

The U.S. administration understands the stakes just as clearly. One of its most central political promises, affordability, is directly threatened by rising energy prices. As the midterm elections approach, higher gasoline and energy costs are not just an economic issue; they are a political liability. The administration needs oil prices to move down, not up.

This is what makes the current moment fragile.

Every statement, every diplomatic signal, every perceived concession or escalation is being priced into the market in real time. If Iran can convince markets that supply disruptions will persist or worsen, prices will climb. If the U.S. can convince markets that a resolution is near and supply will stabilize, prices will fall.

The path to $200 oil is not inevitable. But it is possible.

And it will depend on one thing: which side can send the more credible signal about where this conflict is headed next.

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That alone is impressive. But what stood out more was not just the win, it was the institution behind it. Berea College has been a staple at The Econ Games from its early years. Their faculty advisors, Dr. Volker Grizmek and Dr. Nabila Biju, have been great supporters of The Econ Games.

The Econ Games were designed to test something beyond theory. They emphasize practical application, decision-making, and real-world problem-solving — the kind of skills often discussed in economics classrooms but not always fully developed there.

Berea students did not just compete. They excelled in an environment built around applied thinking.

That makes their win worth a closer look.

Berea College operates on a model that feels almost out of place in today’s higher education system. Students do not pay tuition. Every student works. And most graduate with little to no debt.

At a time when the average cost of college continues to rise, that raises a simple question:

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A Different Starting Point

Berea College was founded in 1855 with a mission that challenged the norms of its time: to provide education to students regardless of race or gender. It became the first interracial and coeducational college in the South.

That founding decision matters, not just historically, but economically.

From the beginning, Berea was built around expanding access, not maximizing revenue. That constraint shaped everything that followed.

No Tuition, By Design

In 1892, Berea made another unusual decision: it stopped charging tuition.

Today, that decision still defines the institution.

Instead of relying on student payments, Berea funds its operations through a different mix:

• A large endowment, built over decades through donations and estate gifts, now exceeding $1 billion

• Government support, such as Pell Grants, FAFSA-based aid, and Work Study funding, accounts for a portion of operating costs

• Ongoing contributions from donors

Endowment earnings alone cover the majority of the College’s operating budget.

This shifts the financial model entirely.

Most colleges depend on tuition as their primary revenue source. Berea does not. That changes the incentives for the institution and for the students.

Work as Part of the Model

Berea’s approach is not just about removing tuition. It replaces it with something else.

Every student works.

Students are required to work at least 10 hours per week in roles across more than 130 departments. These are not symbolic jobs. They range from agriculture and maintenance to software development and business operations.

This does two things at once.

• First, it supports the institution's functioning.

• Second, it changes how students experience education.

Work is not separate from learning. It is part of it.

Incentives Matter

From an economic perspective, Berea’s model is not just different — it is structured around a distinct set of incentives.

At most institutions, the transaction is simple: students pay tuition in exchange for education. At Berea, the structure is different. Students contribute labor and effort as part of their education.

This creates a different kind of engagement.

When students are working, contributing, and participating in the institution’s operations, they are not just consumers of education. They are participants in it.

That shift helps explain outcomes like the Econ Games. When students are trained in environments that reward applied thinking, responsibility, and decision-making, they are better prepared for settings that demand those same skills.

As Volker said

And just as importantly:

Human Capital, Not Just Credentials

There is also a human capital story here.

Traditional college models emphasize classroom learning. Work experience often comes later, through internships or first jobs after graduation.

At Berea, that timeline is compressed. Students graduate not only with academic knowledge, but with documented work experience and demonstrated skills. They have already operated in real environments, solved real problems, and developed workplace habits.

For employers, that changes the signal. A degree shows what a student has studied.
Work experience shows what a student can do.

Berea students graduate with both.

A Note on Liberal Arts

There is another pattern worth noticing.

The top two teams in this year’s Econ Games came from liberal arts colleges.

That may not be an accident.

A liberal arts education emphasizes broad thinking, adaptability, and the ability to connect ideas across disciplines. In competitive environments that reward applied reasoning, those skills matter.

Berea’s team reflected that balance, with a strong presence of economics majors, but grounded in a broader educational framework.

Depth matters. But so does range. If you ever wondered why general education courses matter, this explains it.

Reducing the Cost of Entry

The most visible outcome of this model is financial.

Many Berea graduates leave with little to no student debt. For those who do borrow, the amounts are far below national averages.

This matters beyond individual outcomes.

High tuition and rising debt levels shape decisions long before graduation. They influence:

• What students choose to study

• Whether they attend college at all

• What jobs they feel pressured to take afterward

By reducing or eliminating that financial burden, Berea changes the decision-making environment.

Students have more flexibility. And flexibility has economic value.

Why Isn’t This More Common?

If the model works, a natural question follows:

The answer is not simple. Berea’s model depends on a combination of factors that are difficult to replicate:

• A large and well-managed endowment

• A long history of donor support

• A clear and consistent mission

• Institutional willingness to structure education around work

Most institutions are built on a different foundation, with different financial pressures and constraints.

The Bottom Line

Berea College is not just an alternative model of higher education. It is a different way of thinking about how education can be structured.

• Instead of separating learning from work, it combines them.

• Instead of relying on tuition, it relies on long-term investment and support.

• Instead of treating students purely as customers, it treats them as contributors.

The result is not just lower cost. It is a different set of incentives and a different set of outcomes.

At a time when the value, purpose, and cost of higher education are being questioned, Berea offers something rare: A working example of how the system can be designed differently.

The more important question is not whether every college can become Berea. It is what we can learn from a model that has already rethought the rules.

About the Author

Darshak Patel, Ph.D., is an Assistant Professor of Economics and Director of Undergraduate Studies at the University of Kentucky’s Gatton College of Business and Economics. He is also the Co-founder of The Econ Games.

A post by Antowan Batts

Risk is rarely rational.

A man leaves home believing he has found a job opportunity. Months later, his family receives a photo of him in military gear, fighting in a war he never intended to join.

We like to imagine that people make decisions by weighing outcomes, calculating probabilities, and choosing the best option. But that is rarely how decisions actually happen, especially under pressure.

Textbooks give us rational agents, perfect information, and tidy Nash equilibria. Real life gives us incomplete information, emotional stress, poor communication, and choices made in uncertainty. What looks like a strategy from a distance is often confused up close. And many decisions do not end in careful optimization. They end in instinct.

Risk is not usually a clean calculation. It is often a messy response to pressure, fear, limited options, and imperfect understanding.

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Prospect Theory

Kahneman and Tversky’s foundational work on prospect theory set the standard and showed that people are not symmetric in their processing of risk. In the domain of gains, they are cautious, but once they are already facing loss, the math inverts, and they become risk-seeking, willing to accept gambles they would have rejected from a position of stability.

The experimental evidence was stark: subjects consistently demanded roughly twice the potential gain to accept a fifty-fifty chance of losing a given amount, but when the choice was framed as choosing between a certain loss and a risky bet, they pursued the gamble.

Scarcity

Mullainathan and Shafir pushed further, showing that scarcity does not just shift preferences — it degrades the cognitive architecture behind the decision itself. In studies measuring mental bandwidth, individuals under financial pressure performed the equivalent of 13 to 14 IQ points lower on cognitive assessments; Indian farmers tested worse before harvest, when money was scarce, than after, when it was not — the same people, the same questions, measurably different results.

When bandwidth is consumed by survival, long-term probability assessments do not just suffer; they collapse. What we do know is that when people are under real pressure, their risk tolerance tends to shift and not in the direction you’d expect.

Adversity doesn’t make people more cautious; it often makes them more willing to gamble. It is precisely this behavioral reality, not fiction, that explains why African citizens from multiple nations are dying in Ukraine fighting for Russia.

Ukraine War

According to Ukrainian Foreign Minister Andrii Sybiha, over 1,780 citizens from 36 African countries are currently fighting in the Russian army (Al Jazeera). These are not irrational actors making uninformed choices. They are men operating under a constraint set that most risk models were never designed to account for.

Recruitment typically flows through third-party agencies, dangling the promise of lucrative civilian employment (The Star ). A deliberate exploitation of the gap between what a man needs and what his home economy can deliver.

Inpact, a Geneva-based organization that has investigated Russian recruitment networks, verified a list of 1,417 recruits from across the continent, with Cameroon, Egypt, and Ghana among the most represented, and concluded that the recruitment of Africans formed the core of a deliberate strategy to overwhelm Ukrainian defensive lines (SRN News).

Pier Pigou of the International Crisis Group framed the logic plainly: “These dudes are just trying to earn a living. And because their countries don’t provide that for them, they’re going to take opportunities that arise.” Japan Today

But economic frameworks have limits. They can explain the decision. They cannot absorb the cost.

Russia

This is worth sitting with, because Russia is not operating in Africa out of neglect or accident. Russia-Africa trade has grown by more than 60 percent over the past five years, rising from $16.8 billion to $27.7 billion. Moscow has been explicit about its ambitions — in 2024 alone, trade between them grew by more than 17 percent (Modern Diplomacy). A third Russia-Africa Summit is scheduled for 2026.

The pitch to African governments is partnership, multipolarity, and sovereign economic development. What the pitch does not mention is that Russia’s on-the-ground presence across the continent is driven primarily by the Africa Corps, which operates directly under the Russian Ministry of Defense, as reported by GIS Reports — the same institutional architecture funneling African men into Ukrainian defensive lines. The investment courtship and the recruitment pipeline are not separate strategies. They are two instruments of the same policy.

Ghana

Ghana reported that more than 50 of its citizens had been killed after being lured into combat, with its foreign minister acknowledging the true figure could be higher (SRN News)

Behind every number is a household reckoning with a silence that no institution has officially broken. Felista Njoki, whose husband, Samuel Mwaura Wainaina, was recruited to fight in Ukraine, sat for a Reuters interview at her family home in Kenya, holding a phone with a photo he had sent her — in military gear.

In Japan Today, that image is more than a data point that no regression captures. A woman holding a screen, waiting, in a war her country had no formal stake in, and her government is reluctant to confront. African governments, wary of taking sides overtly, have largely avoided angering Moscow, mindful that the recruitment scandal has not yet triggered widespread public outcry or political heat (Daily Nation). The courtship continues. The summits are scheduled. The trade figures climb.

The real cost that risk models cannot price. The permanence is borne not by the institutions that created the incentives, but by the people closest to the man who responded to it. Russia is building an economic relationship with African governments while simultaneously liquidating African lives on the front line.

Dashboards for the story

Ukraine War Statistics Dashboard

The Russo-Ukrainian War Tracker - Spatial Studies Lab

News Reporting

1. Reuters / Daily Nation — African nations tiptoe around recruitment of citizens by Russian networks (March 15, 2026)

2. Al Jazeera — Kenya and Russia agree no Kenyans will be recruited for Ukraine war (March 16, 2026)

Economic & Geopolitical Analysis

7. Modern Diplomacy — Russia Steps Up Trade With Africa, Aiming to Fill in American AGOA’s Vacuum (October 2025)

8. Pressenza — Russia Outlines Broader Trade Strategies With Africa (October 2025)

9. GIS Reports — Russia’s Africa footprint is deeper than imagined (January 2026)

Academic Literature

10. Kahneman, D. & Tversky, A. — Prospect Theory: An Analysis of Decision under Risk, Econometrica (1979)

11. Mullainathan, S. & Shafir, E. — Scarcity: Why Having Too Little Means So Much (2013)

About the Author

Antowan Batts writes for Business Without Borders, a publication designed for working professionals seeking perspectives beyond the headlines. Each issue breaks down how business and economic shifts cross borders and impact decision-making in companies, careers, and everyday life.

I left you last time with the question, “Can you live on $3,775 per month?” I want to share how I would approach budgeting for that amount if I were to start today. My approach here is for people starting off their professional lives, and it might not be applicable to people with families and other obligations.

Let’s break it down.

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Financial Recap

Let’s revisit our example:

• Gross Salary $65,000

• Annual take-home: $45,300 after deductions and contributing 6% to 401 (k) and 3% match by the employer.

• Monthly take-home: $3,775

From there, we apply the budgeting framework: the 50–30–20 rule.

The 50–30–20 Rule

Needs

Allocate 50% of your take-home to needs; that’s $1,887/month

This is your baseline life:

• Rent

• Utilities

• Groceries

• Transportation

• Insurance (be careful with insurance coverage; just as you can be underinsured, you can be overinsured)

• Minimum debt payments

Here’s the constraint most people don’t want to hear: If your rent is too high, the entire system breaks down.

Where you live matters, and roommates might be needed early in life. In my generation, it was common to have roommates. I gather that this isn’t as common as it used to be.

Roommates are not just a financial decision; they’re a life decision. They expand your network, your social exposure, and your opportunities. In your 20’s, that matters more than people realize.

In a city like Cincinnati, keeping rent around or below ~$1,200 is a realistic goal, even without roommates.

Wants

Allocate 30% to wants, that’s $1,132/month

This is where life happens:

• Dining out

• Travel

• Subscriptions

• Shopping

• Entertainment

The problem isn’t that people spend too much here; it’s that they don’t choose how they spend. This is also the category that is most likely to balloon because we do not track it well. If not managed well, this 30% can grow and creep into the next category.

Savings and Investment

Allocate 20% to savings and investing; that’s $755/month

• Savings

• Investments

• Debt paydown

Remember, you are already contributing $487 to your 401(k) through your employer. This is additional savings for emergency funds, additional savings & investments, extra payments toward debt, and short-term goals like saving up for a new car.

What the Budget Actually Looks Like

• Needs: $1,887

• Wants: $1,132

• Additional savings, investments, and debt paydown: $755

Total: $3,775

Retirement savings already allocated as employee and employer contributions to the 401 (k) in the amount of $487.

Total savings and investment $755+487= $1,242

The Part Most Advice Ignores

The 50–30–20 rule is not a law. It’s a diagnostic tool. I use it from time to time to make sure that I am aligned with my own goals. As your income increases, be cautious about where you allocate the additional funds. As my income increased, I allocated more to savings and investments. Recently, with rising grocery prices and travel costs, I had to revisit how I wanted to respond to these changes.

This framework can help shed light on some problems:

• If your needs are too high, it’s a housing or fixed cost issue. Consider making some changes. This category is difficult to change and will require creative thinking.

• If your savings aren’t happening, your wants are likely untracked. Start tracking your spending on wants; it is too high.

• If everything feels tight, your margin is too thin. With this model, every dollar will be accounted for. At first, it will feel like you are living paycheck to paycheck.

What You Should Actually Do Next

Here is the sequence I would follow:

1. Contribute enough to get your full employer match (you already are)

2. Build a 3–6 month emergency fund using your 20%

3. Start a Roth IRA once you build your emergency fund

4. Payoff debt

5. Gradually increase your 401(k) to 10–12%

Depending on your situation, 3 and 4 can be interchanged. Whatever you choose, be consistent.

Sound Financial Advice Online

There are so many ways to grow from here and so many other frameworks to apply. The Money Guys have the 9 Step Financial Order of Operations that I like.

1. Deductibles Covered

2. Employer Match

3. High-Interest Debt

4. Emergency Fund

5. Roth IRA/HSA

6. Max-Out Employer Plans

7. Hyperaccumulation

8. Prepay Future Expenses

9. Prepay Low-Interest Debt

Part 1 in the series

Part 2 in the series

What does a donut have to do with monetary policy—and why did it earn a round of applause? In this week’s Decode Econ Weekly Rap, we unpack what makes a “perfect lecture,” rethink how we teach economics (hint: fewer multiple-choice exams, more real thinking), and break down the surprisingly doable path to saving $2 million starting from your first paycheck. Along the way, we tackle a deeper issue: why comparison—especially in school, careers, and money—is quietly undermining how we measure success. If you’ve ever felt behind, this episode will challenge how you think about progress, purpose, and your own path.

Subscribe to Decode Econ on YouTube

Listen on Spotify

Timestamps

00:00 – 02:30 | Names, Identity, and Professional Signals
Why “Jonathan vs. Jack” matters more than it seems—and how naming reflects identity in professional spaces.

02:30 – 06:00 | The “Perfect Lecture.”
A monetary policy lecture that landed—storytelling, student engagement, and ending with a donut analogy.

06:00 – 10:30 | Rethinking Econ Education
Moving away from multiple-choice finals toward research, writing, and economic thinking.

10:30 – 14:30 | The $620 Question
Can students realistically save $2 million? Breaking down the math behind early-career saving.

14:30 – 17:00 | Can You Live on $3,600/month?
Cost of living, geography, and how Cincinnati compares to major cities.

17:00 – 21:00 | Comparison Is the Thief of Joy
From social media to the classroom—how relative thinking distorts well-being and decision-making.

21:00 – 24:00 | Student Pressure and “Figuring It Out.”
Why students feel behind—and when the “click” actually happens.

24:00 – End | Trusting the Process
Growth, mentorship, and why your path doesn’t need to look like anyone else’s.