Fourteen questions. Zero softballs. Listeners from Tacoma to Montreal wrote in to ask about retirement savings, taxing capital gains, home-buyer assistance programs, corporate profits in the tariffs era, what one state employee can or cannot accomplish, and whether meaningful economic reform will arrive before Millennials drop dead. And more. The inbox did not disappoint. 

00:00 Announcements

01:59  Is a retirement savings crisis brewing? 

04:32  Tax credits for first-time home buyers… good idea?

08:10  What if tax breaks for capital gains only applied to new investments?

13:39  Explain the $1,700 tax credit scholarship program in OBBA?

16:23  Are institutional investors wrecking the housing market?

21:37  What quick policy moves could reverse worsening inequality?

27:32  Will meaningful reform arrive before Millennials retire?

30:56  Is a hotel tax the right way to fund a stadium?

33:05  Can I move the needle on labor policy from inside the system?

35:08  Why has the responsibility and risk for employment shifted onto workers?

37:50  Is fixing the care economy easier than we think?

40:47  Do rent caps work?

44:50  Can we prevent price gouging by companies?

47:53  If states roll out good policies, does the federal government need to do it too?

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The corporate income tax rate got hacked nearly in half by the 2017 Tax Cut and Jobs Act. So nine years later, how’s that working out? Corporations’ effective tax rate (about 9%) is lower than what the average American household pays (about 14.5%). After-tax corporate profits have hit record highs for the last four years — about 9% of GDP, a figure not hit since 1929. Workers' share of total national income, by contrast, is at a 70-year low. If corporate taxes go back up, some companies may threaten to reincorporate somewhere cheaper. Call that bluff. Someone else will deliver the toilet paper and make the coffee.

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Switchboard operators. Typists. Secretaries. Lots of factory workers. The economy has a long history of technology slowly eliminating not just jobs but entire occupations. The U.S. also has a long history of not doing a lot to help those thrown out of work by major economic shifts. Economist Kathryn Anne Edwards, who literally wrote her dissertation on unemployment insurance (her professional assessment: "it sucks"), makes the case for a wholesale rebuild that triages joblessness, distinguishing between those who need time to job hunt and those who need to pivot to a new career. 

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The popular narrative is that baby boomers rode cheap houses and 401(k)s to wealth, dismantled the welfare state behind them, and left everyone else to fight over scraps. But conflating boomers and conservatives lets the latter off the hook for 25 years of tax cuts and disinvestment in children. It erases the Black boomers, poor boomers, and pensionless workers who never got a slice of that wealth. And it lays the groundwork for the one policy outcome its loudest advocates actually want: gutting Social Security. Who really benefits when you decide your parents' generation is the enemy?

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“Trump Accounts” might evoke the president’s other side hustles, like gold-plated mobile phones or meme crypto coins. But these investment accounts for children are one of the actually beautiful things to come out of the "One Big Beautiful Bill." More than 30 years in the making, these accounts have previously been pitched as KidSave, Baby Bonds, the ASPIRE Act, 401Kids. They’ve been proposed more than a dozen times by Democrats and Republicans alike. Economist Kathryn Edwards explains the long journey, what the research says about why auto-enrollment is everything, and why the name won't last but the policy should.

Read more:

Every child deserves a Trump Account: Here’s how to make it happen 

Op-ed by Ray Boshara and Michael Sherraden in The Hill [2026].

“Check-the-Box” Enrollment Will Limit Participation in Trump Accounts: Lessons From Asset-Building Research — Center for Social Development at Washington University [2025]

Why Automatic Enrollment Is Essential for the Success of Trump Accounts: Lessons from SEED OK — Center for Social Development at Washington University [2025]

The (Unknown) Children’s Savings Accounts Federal Policy Landscape 

— Center for Social Development, Washington University in St. Louis [2024]

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Economist Kathryn Anne Edwards is a Social Security fan girl. Would it be possible for her to love it even more? Yes, if the old-age insurance program got some updates to handle the messy, gradual and interrupted way that retirement truly transpires. Her four blue-sky pitches: changing benefit calculations for caregivers, taking benefits temporarily, a sliding “full” retirement age based on years worked, and a tax on companies that abuse 1099 non-employee compensation. Plus: A big retcon segment including details from a new study by the Federal Reserve Bank of San Francisco that further explains why "more supply" isn't the whole answer to the housing affordability crisis.

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The Federal Reserve is in the news constantly these days. Beyond the regular will-they-or-won’t-they question on interest rates, there are multiple legal battles with implications for the central bank’s independence, President Trump’s nominee for chairman may (or may not) get a hearing in the Senate soon, and Jerome Powell's may (or may not) leave when his term as chair ends in May. So let’s try to demystify the Fed. How does it stop bank panics? How did it make the Great Depression worse? What is a Fed Note exactly? And is the discount window a metaphor? From Glass-Steagall to the dual mandate to quantitative easing, here’s a crash course.

• Watch video clips from this episode at the Optimist Economy YouTube channel⁠⁠.
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Recent polls show 54% now consider housing unaffordable and the cost of homeownership dominates Americans’ economic anxieties. The popular “abundance” narrative says there’s a housing shortage and suggests cutting zoning or environmental rules will let us build our way out of it. But we don’t have  a simple net shortage of units—we have a deep mismatch between what gets built and what workers get paid. After 50 years of wage stagnation, the median mortgage payment is over $2,200 while median weekly earnings are $1,200. That’s a gap deregulation or more luxury condos won’t close. The solution isn’t to just build more. It’s also to pay people more.

END NOTES:

• To be considered affordable (30% of income) the median mortgage of $2,259 would require weekly earnings of $1,737. But the median weekly wage for full-time workers is $1214. 
• Where is the Housing Shortage? Of the nation’s 381 metropolitan areas, only four experienced a housing shortage between 2000 and 2020. (Op-ed from the author in Barron’s here.)
• The US Housing Crisis is Really About Low-Wage Jobs. Kathryn’s take from 2024 in Bloomberg Opinion.
• Rate of U.S. homeownership has been climbing since bottoming out in 2016 (Federal Reserve Bank of St. Louis).
• Mortgage Debt Service Payments as a Percent of Disposable Personal Income is about what it was in 2019 (Federal Reserve Bank of St. Louis).
• Median Sales Price of Houses Sold for the United States shot up about $90,000 from 2019 to 2025 (Federal Reserve Bank of St. Louis).
• Housing Affordability and Housing Demand (Federal Reserve Bank of San Francisco)

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An essay went viral by claiming that $140,000 is what a family of four needs to just get by — a number higher than what 70% of American households earn. Conservative economists called it idiotic. Kathryn dismissed it and got a nasty DM. What’s the real controversy? It’s not that the poverty line is misleading. It's that we have no measure for our current affordability crisis. And the American mindset has been so warped by decades of bad economic policy that we think the only way to get help is to prove that we’re poor.

END NOTES:

• The essay in question: Part 1: My Life Is a Lie - by Michael W. Green,
• What economists thought: Viral essay says $140,000 should be the new poverty line - The Washington Post ; Cato: The $140,000 ‘Poverty Line’ Is Laughably Wrong, So Why Does It Feel Right? ; AEI: How Not to Redefine Poverty
• How U.S. poverty measures actually work: Two Ways the U.S. Census Bureau Measures Poverty to Capture Clearer Picture of Poverty in America 
• Kathryn on Money with Katie (at min. 35)

Watch video clips from this episode at the Optimist Economy YouTube channel⁠⁠.

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Our own optimist economist Kathryn Anne Edwards worked on a research project several years ago to measure income inequality. Its massive headline number has taken on a life of its own in columns, talking points, memes. We explain how Kathryn and co-author Carter Price managed to answer this question: What would have happened to Americans’ incomes if they’d grown at the same rate as the U.S. economy overall? Spoiler alert: 90% of us would be a lot better off.

Read the working paper Kathryn co-wrote in 2020: Trends in Income From 1975 to 2018 and Carter Price’s update going through 2023.

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Hey optimists! Season two of Optimist Economy is finally here. New episodes coming on Tuesdays starting January 27. More at www.optimisteconomy.com