Here we go again.

President Trump just announced that he has cancelled the strikes on Iran that he had scheduled for tonight. If you’re keeping count at home, this is the fifth time he’s walked back a threat like this during this war. 🌮🌮🌮🌮🌮

The president also tells us that the United States is on the cusp of a deal with Iran.

Hmm. Where have I heard that before?

By my count, he’s made similar claims fifty times so far. Fifty. Possibly more — I might have missed some. And he’s made these claims on at least twenty-five separate days. A sample:

• Feb 10 (before the war): “Iran wants to make a deal very badly.”

• March 23: “We have points, major points of agreement. I would say, almost all points of agreement.”

• April 5 (that’s weeks, not days ago): “It should be days, not weeks.”

• May 18: “We’re getting close to making a deal”

• May 31: “The U.S. is close to a deal.”

• June 8: “We are very close to a final deal with Iran.”

I’ve included the complete list (with sources) at the end of this post, so you can check them out for yourself.

The market responds every time

And here’s the thing that you’ve probably noticed. Each time he de-escalates like this, markets go up. And each time he escalates, markets fall. Substantially.

Today’s announcement sent markets up 1%.

When you buy or sell stocks, you’re making a bet about the future profitability of American companies. So when stocks rise on de-escalation news, markets are saying: American firms will be worth more if this war ends.

The scale of these moves has led me to estimate that markets are behaving as if the Iran war destroys trillions of dollars of wealth. That, in turn, translates into tens of thousands of dollars per household.

All of this raises a natural question: why do markets keep responding? Are they getting suckered, over and over again, by a resident who keeps crying peace?

I’d offer a different interpretation.

The known liar problem

It’s possible markets aren’t being suckered. They may understand perfectly well that the president only occasionally tells the truth. Indeed, only a fool would think otherwise. If that’s right, it changes how you interpret market reactions.

Think about it this way. If there’s only a one-in-ten chance that what the president says is true, then markets should respond only one-tenth as vigorously as they otherwise would.

So, when a known liar says something that could be good news (but may just be hot air)—and markets still rise 1%—that implies the news (if it were actually true) would be enormously valuable for American corporations.

By this view, markets aren’t responding because they’re naive; they’re responding because the Iran War has such outsized implications for our economic health.

Indeed, the market’s fluctuations in response to even the slightest hints of good (or bad) news suggest that traders believe that the war in Iran is the single most important economic story.

Feedback loops are breaking down

We’ve seen this two-step before. The president moves forward on a policy he believes in, markets tank, and he walks it back. We watched this play out repeatedly during the tariff wars. We’re seeing it again in Iran. This creates two big problems.

First, when the president spouts so many untruths, the market responds by discounting what he says. We all recognize the move; after this much shock and outrage, we've grown inured to the reality-TV aspects of the presidency. But here's the catch: as markets stop believing him, they stop responding to him. That's individually rational for traders — why react to hot air? — but it breaks the feedback loop. As a result, the president's next dum(b) idea is met with a Wall Street shrug.

There’s a second, related failure. If markets know that the president responds to falling stocks by reversing course, they can reason: if he does something dumb, he’ll undo it when stocks fall. And if that’s the case, why bother selling your stocks? But if that happens, markets don’t fall, the president doesn’t get the signal, and he persists with the dumb thing. Again: the loop breaks.

A flawed—and dangerous—information environment

President Trump has fundamentally transformed our information environment. Historically, the White House carefully managed its communication with investors, allies, and voters. Today, it’s more about presidential mood, and barely tethered to the truth. We’re all still adjusting to this change. Economics teaches about general equilibrium effects — consequences that spill over across domains. And my point here is that this doesn’t just change the media environment: It changes how all communication should be interpreted—by markets, by citizens, by everyone.

And once you account for this, and you still see markets responding to the president’s language, you should understand what that means. Markets are saying: this is so dangerous that we respond to it even knowing the president is probably lying. That’s not naivety. That’s a warning.

Is inflation rising? Yes, but we have to be careful. The norm is to report on the rate prices rose over the past year, and the war has really pushed prices a long way above last year’s prices. Right now, the year-ended rate is rising, and it’s likely to keep rising for a while. So by this measure, inflation is rising.

But we also observe month-to-month price changes. In just the last month, prices rose by +0.5 percent (which is an annualized rate of nearly 6 percent). But that’s actually less than in April (+0.6%) or March (+0.9%). Basically this is what it looks like when an oil shock works its way through the economy.

From a purely mechanical standpoint, the year-ended inflation rate will keep rising as long as each new monthly inflation read is higher than the corresponding monthly reading a year ago. A year ago we were seeing monthly price rises of only about 0.2 or occasionally 0.3 percent. So you should expect to see even more dramatic headlines next month.

Headline inflation includes gas and food prices, which are particularly susceptible to disruptions in the Middle East. For now, core inflation, which strips these commodities out, remains more moderate at 2.8 percent, but it’s rising. The real question is how far the spill spreads. Oil doesn’t stay in your gas tank — it hitches a ride into your groceries, your Amazon order, even your haircut. That’s how an energy shock can quickly morph into a core-inflation problem.

The sharp uptick in prices hasn’t been matched by a sharp uptick in wages. That’s usually the case — prices jump faster than wages. But it means that real wages — wages adjusted for inflation — are falling. This is not just due to the war with Iran: Real wages have been falling for the past six months.

As a result, real wages — that is, the purchasing power of the typical paycheck — haven’t risen a penny since President Trump returned to office in January 2025. Expect dozens of think pieces about wage stagnation. And the term “affordability crisis” will stick with us for a while.

I want to add a contrarian aside: Average wage data reflect the experience of the average American worker, but none of us is average. You’re not the average worker — you’re on a career path, a little more senior and a little better paid each year. And every year, well-paid near-retirees leave and fresh graduates start at the bottom. The mix churns even as you climb. So “flat average wages” and “most people got a raise” can both be true at once.

One more thought: The Fed tends to track a different inflation measure, called the PCE deflator. Today’s numbers come from a closely related measure, called the Consumer Price Index. With these data in hand, it’s pretty easy to form a good guess for what the Fed’s preferred measure will show when it’s released in two weeks’ time. So yes, expect another round of headlines describing higher inflation in the Fed’s preferred measure.

Kevin Warsh inherits the Fed mid-oil-shock — a rough hand for any inflation-targeter. Rougher still after five straight years above target. Good luck to him. Good luck to us all.

These were just a few of the responses I got on social media after saying the latest jobs report (released last Friday) was strong.

Look, I understand the unease. We’re living under an administration that lies relentlessly. We have a president who, less than a year ago, fired the head of the Bureau of Labor Statistics and attempted to install a crank in her place after the numbers didn’t go his way.

Those are real reasons to worry and I’m not asking you to blindly trust the government. Instead, I want to give you some information about how these numbers are put together, what it would take to mess with them, and what tampering might look like if it were actually occurring.

Because here’s the thing: I still believe the jobs report. But I also know it’s not enough for me to simply tell you that. Instead, I want to equip you to assess the evidence for yourself and make your own informed judgment.

Why these facts feel uncomfortable

The latest government report said that non-farm payrolls rose by 172,000 in May, while the unemployment rate held steady at 4.3%.

For many, just hearing those numbers—which sound pretty strong—was jarring. And the reaction was immediate: Impossible. Fake. Propaganda.

That instinct is incredibly human. We like stories that make the world feel coherent. And we prefer facts that slot neatly into the picture that’s already in our heads.

But economics begins precisely where that instinct ends. Economics tells us to start with the reality, and then build our story to make sense of it. Don’t start with a story and choose which facts you’re willing to admit.

Or, to put it in Platypus Economics terms, sometimes the world hands you a platypus. The first time the Europeans saw a platypus, many called it a fraud. George Shaw, a British zoologist and museum curator, checked the pelt for stitches, believing someone had sewn a duck’s beak onto a beaver.

But the problem wasn’t that the platypus was fake, it just didn’t fit the model already in their heads, leading them to deny the reality right in front of their eyes.

And I think that’s what’s happening right now with the labor market. This latest report doesn’t fit many people’s preferred story, so rather than update their story, they reject the evidence. That’s bad economics. And it gets dangerous very quickly.

Why the BLS scare was real

That being said, the appeal of this type of emotional response has understandably been heightened by very real concerns coming from the Trump administration, and its mistreatment of information.

The BLS scare was real. Last year, after a weak jobs report, President Trump fired BLS commissioner Erika McEntarfer, and accused the agency of dishonesty with absolutely no evidence. I remember that moment extremely well. I was asleep in a hotel room in Tokyo when my better half, also an economist, shook me awake at 6 a.m. to share the news.

The BLS is one of our country’s core truth-telling agencies. It measures so much of what matters: unemployment, payrolls, inflation, and productivity. The basic plumbing of our economic reality. So this was unprecedented, and scary.

And the story got worse from there. The administration put forward a partisan hack named E.J. Antoni. He had no knowledge of running a bureau, no experience studying labor, and no background collecting statistics. But he did have one qualification–he was at the Capitol on January 6th.

You should worry when leaders attack statisticians. You should worry when they sack people for publishing unwelcome facts. And you should worry when they try to install loyalists in truth-telling institutions.

But you should also ask—what happened next?

How the institution quietly held

The public heard about the firing, and the crackpot nominee. But while everyone was staring at the circus, the Bureau of Labor Statistics kept producing data the way it always has.

That means career staff, routine processes, standard release schedules, and overlapping internal checks. The acting leadership stayed in the hands of the long-term professionals and the cranks never got near the seat of power.

The president was ultimately forced to withdraw his nomination of the charlatan E.J. Antoni, and the replacement nominee—Brett Matsumoto—looks like exactly the sort of person a normal White House would nominate for the job. He’s a career public servant, a statistician, and a social scientist. He could have been easily appointed by either a Democrat or a Republican; in other words, he’s the anti-Antoni.

So we avoided the worst-case scenario that so many of us feared. More than that, the Bureau of Labor Statistics remains in very good hands today. The president did real damage to public trust, but he didn’t get his way. Our official economic statistics survived, and that survival is part of the reason I’m willing to make the next argument.

Why I believe the numbers

I know how the BLS data is put together. I know there are dozens of people and processes that sit between the president’s whim and the final published number. I know exactly how big the conspiracy would have to be to fake this thing. And I know this administration leaks like a sieve.

At a personal level, I personally know many of the people who put these numbers together. I know their integrity. I know that they’d call me if things were going wrong. And—even more importantly—I know what the tells would be in the data if the processes were being rigged.

That’s why I believe the numbers, but you need to know how to check for yourself. And I’d like to give you a few clues.

First, the jobs report isn’t just one number from one source. It combines two separate surveys:

• The Current Population Survey provides the unemployment rate and additional information about who’s working, who’s looking for work, and who’s dropped out of the labor force.

• The Current Employment Statistics Survey measures the number of people on employers’ payrolls.

With two different instruments measuring closely related statistics, we’re not hanging the entire story on one survey, one method, one lever, or one set of statisticians.

Second, we can look inside the data. The results from each individual response to the household survey is posted online in the form of microdata. And researchers from outside the government can and do dig into it every single month. They test it, challenge it, and cross-check it. And no one has found anything fishy so far.

Third, the payroll data is checked against broader administrative records including the Quarterly Census of Employment and Wages, which gathers unemployment insurance records from every state. This is important: it is extremely difficult—if not impossible—for a federal government to falsify state records.

Fourth, we’ve got private sector smell tests. Beyond the employment data collected by the BLS, the payroll company ADP has records of how many checks it’s printed, Bank of America has account linked data, Homebase tracks small business and hourly worker data, and Paychex has its own small business employment measure.

All of these measures are imperfect, and none are as precise or comprehensive as the numbers we get from BLS. But if the government numbers were being systematically falsified, this broader ecosystem would start to smell funny.

That’s one of the wonderful things about the American statistical system. We’re a big economy with a lot of ways to measure the things we care about. None of our statistics dwell alone in the dark.

I do want to add one important nuance. Government data, like all data, involves scientific judgments. Good statisticians can and do argue about how to make the numbers more accurate. That’s science, and it’s healthy.

But it’s a completely different claim from saying the numbers are dishonest. That should only be done when you’ve got more than a suspicion. And if you care about truth—if you care about the scientific method—you should fight back against that confusion.

What distorted data really looks like

By now, you’re probably wondering what it would look like if our government were actually distorting the data.

I’ve been an economist for a while, and I’ve seen authoritarian regimes mess with their numbers. It turns out that it’s pretty uncommon to invent a number entirely out of thin air. The real playbook is more subtle, and more dangerous.

Instead of making up numbers, they:

• Attack the credibility of the statisticians.

• Sack or intimidate those who publish unwelcome facts.

• Reduce the transparency of the process.

• Suddenly change methods without reason.

• Create discontinuities that make it hard to compare data before and after a regime came to power.

• Change the frequency of data releases.

• Stop publishing data they don’t like.

President Trump started at the top and was working his way through this list. Antoni—had he been appointed—was willing to keep up the fight.

They were stopped.

I’m not naive. I’m not saying that governments never distort data. I remain vigilant and I hope you do too. But I also know what manipulation looks like. And what I see right now is an administration that has flirted with it, but—at least so far—hasn’t produced a fabricated number.

Which brings us, finally, to my interpretation.

Why the labor market looks strong

In this report, we saw a payroll gain of 172,000 in May, alongside upward revisions for March and April. Those are the facts.

But saying that these numbers are good news, and therefore you should feel more upbeat about the labor market is my interpretation. A reasonable person can disagree about how upbeat to be. Different people will put different weights on different parts of the report.

But this is my read, and I want to tell you how I got there.

Many have pointed out that these numbers are much lower than many of the reports we saw under Biden. That’s true. Payroll growth of 172,000 would have looked pretty middling during the big snapback from COVID when millions of people were flooding back into an economy that had been temporarily switched off.

But that comparison is the wrong benchmark for today.

Today we’re more or less back to normal. Actually, we’re in a new normal. And that’s because the Trump administration’s crackdown on immigration has led population growth to virtually stop for the first time in decades. Which also means the economy doesn’t require the same pace of job creation to keep the labor market healthy.

And so, according to our new benchmark, 172,000 jobs is a pretty solid number. And it comes after two prior months of solid numbers.

That doesn’t mean everything in the economy is perfect or everyone is thriving. Macro data and personal experience can—and do—diverge. You may be struggling, while the aggregate is doing okay.

But to me, this report says that panic over a possible recession should cool down. The labor market is holding up better than many feared. And the economy is still adding jobs at a healthy clip relative to the supply of available workers.

That’s what makes these pretty good numbers.

Truth over tribalism

Here’s the thing I really want to leave you with: If I only ever give you facts that make you feel good, I’m not telling you the whole truth. That’s a tell that I’m not doing my job and you should listen to me less. It’s a test you should apply to any commentator in any domain.

A healthy society depends on institutions that tell us uncomfortable truths. We don’t get to keep the parts of reality that flatter our worldview while throwing away the rest. That’s not economics, it’s not science, and—over time—it’s not democracy either.

And if every inconvenient fact is dismissed as propaganda, we don’t just lose one jobs report. We lose our ability to spot the platypus.

(By the way, Platypus Economics released a video about Brett Matsumoto’s nomination back in February—before we were officially Platypus Economics. Check it out here to learn more, including why revisions make BLS data even more trustworthy.)

The May jobs report was, frankly, really good news—172,000 jobs added, more than double what forecasters expected, and three strong months in a row averaging around 188,000. A lot of my liberal friends have suggested this couldn’t possibly be true. But I’m an empiricist, and my job is to read the data as honestly as possible. There’s no gain in pretending strong numbers are weak, or fake, or anything else.

I joined today on to walk through what these numbers actually say, push back on some of the skepticism (stay tuned — I’m going to say a lot more about this tomorrow), and explain how healthcare and social services is propping up the job market.

I also get into why markets sold off on what should have been a celebratory Friday. A strong jobs report changes the Fed’s calculus on interest rates—lifting the odds of a hike. Suddenly, those long-horizon AI bets start looking a lot less attractive.

We also dig into the real wages story, which is going to generate a lot of breathless think pieces over the coming weeks—and I want to give you the tools to read those pieces a bit more critically.

Some of the big questions we address in this video include:

• How does the gender wage gap fit into this story?

• What’s standing in the way of more men entering care job?

• Has demand for labor in “masculine” fields (i.e. construction and skilled trades) been overhyped? and

• How will AI impact the “pink-collar” economy?

It’s a discussion about economics, politics, and culture — and part of a much larger conversation that’s only just beginning.

I hope you’ll join in.

The goal of this series is to help you understand what to actually be concerned about, what you can safely ignore, and where there’s even room for a bit of hope.

Together, we dig into May’s better-than-expected jobs report, the stock market’s confusing reaction, and the recent cancellations for Trump’s Freedom 250 celebration. I argue there’s an important economic story here—especially when you compare the rational choices of these artists to the tech industry’s relentless brown-nosing.

Then—in a new segment—we take a step back from the grind of a daily news cycle to appreciate broader economic trends that give us much more fodder for optimism. First up: inflation (yes, really!).

Editor’s Note: In our conversation, we mistakenly refer to Freedom 250 as America250. America250 is a bipartisan initiative established by Congress in 2016 to commemorate America’s 250th birthday. Freedom 250 is a separate, public-private initiative established by the Trump administration via executive order earlier this year.

Payrolls grew a massive +172k in May, well above expectations. April was also revised up +64k to +179k, and March was revised up +29k to +214k.

The labor market appears to be motoring along — an average of +188k jobs over the past three months — after a slow 2025.

Here’s the key point: When the labor market looks like this, take that recession talk off the table.

And perhaps this graph tells the real story: unemployment is stabilizing at a reasonably happy level.

All this points to the Fed turning its attention more fully to fighting inflation, rather than unemployment.

New Fed Chair Kevin Warsh has been under pressure from President Trump to cut interest rates, but other Fed officials have been looking to hold rates steady or even raise them. These numbers won’t convince them otherwise. There’s no rate cuts coming anytime soon, no matter what the President — or his appointee — want.

Digging a little deeper: It's worth watching where jobs are being created.

May had more widespread growth than previous months, but healthcare and social assistance still dominates the story of the past 16 months.

Since Trump returned to office, that sector has added 901,500 jobs. Meanwhile, the rest of the economy has shed 168,500 jobs in that same time span.

This helps explain another trend: women continue to outpace men in job growth. They now account for 77% of all net new jobs during Trump’s second term.

That’s down a bit from the 86% we discussed in this recent piece, but the drivers and implications remain the same.

I want to leave you with two final but crucial points:

If you’re not changing your view based on these data, you’ve got partisan blinders on. We can find reasons to be concerned about specific sectors or demographics as we dive into the details, but the overall trend from the last three months suggests a real, robust improvement in the overall strength of our labor market.

I’m also seeing a lot of people doubting these numbers, and I want to be clear — that is conspiracy theorizing. These are legitimate numbers, put out by legitimate public servants with no political interference. I have plenty of friends in the Bureau of Labor Statistics, and if the numbers were being fiddled with, they would have told me, and I would tell you. These numbers are legit. That might change, but today isn’t that day.

What piece or pieces of media — movie, song, book, TV show, article, poem, etc — has really changed how you think? (How you think about life, about the world, or just how you think.)

We had a wonderful chat about his views. Peak #DadLife.

I was also so struck by the delight his question stirred, that I posted it on my socials.

And then I realized, it just isn’t fair if I don’t chime in. So here I am, feeling vulnerable as I share mine with you:

Ted Lasso. I love this TV show for the different — and aspirational — model of masculinity it offers. Ted isn’t simple, he’s thoughtful. He’s vulnerable. He is open about his struggles, including his mental health. He’s a version of masculinity that I wish had been on my screens when I was my son’s age. And he’s the reason that my home studio displays a small ‘Believe’ sign, reminding us that hope’s all around us.

Strunk and White. Yes, it’s weird to include a prescriptive style guide as life changing. But seeing great writers fling around words with reckless precision was eye opening. I’ll never achieve their level, but I try to inch closer. I don’t think they teach it in school any more, so gift it to the youngs in your life.

The Underground Railroad, by Colson Whitehead. It made me feel the horrors of slavery deep in my bones. That should be obvious, I know. But I didn’t go to school in the U.S., so I never really had the reading list – or cultural literacy – of most Americans, and my sense of the history of slavery is weaker than most. This book transformed an abstract notion of the stain of slavery into a visceral feeling that will never leave me.

Up. We’ve all wondered what love is – whether we feel it, how we get it and give it, and what it all means. The purest distillation I’ve ever seen is the opening moments of this beautiful Pixar movie. Carl and Ellie’s adventures are an aspirational script for romantic life. #CoupleGoals

The Grapes of Wrath, by John Steinbeck. If you’ve ever wondered how abstract realities of economics and business cycles translate into life and struggle, injustice and unfairness, and what the work of economics is fundamentally about, start here. I want a better life for the Joads.

“Desolation Row,” by Bob Dylan. This opening verse has been ringing in my head recently. I’ll leave the reason why as an exercise for the reader:

They’re selling postcards of the hanging
They’re painting the passports brown
The beauty parlor is filled with sailors
The circus is in town
Here comes the blind commissioner
They’ve got him in a trance
One hand is tied to the tight-rope walker
The other is in his pants
And the riot squad, they’re restless
They need somewhere to go
As Lady and I look out tonight
From Desolation Row

Why Buddhism is True, by Robert Wright. Honestly, I listened to the audiobook. And the title makes a promise that is provocative but scares too many folks off. If I were the editor, I wouldn’t have made this bet. But the book delivers. And for me, the book taught me an essential truth: You aren't your emotions. Who knew?

That’s a partial list. And there’s a lot more one can say.

I’m more interested in your answer to my son’s beautiful question.

And the thing that I’ve already learned: Your answers add up to an absolutely mouth-watering menu for the summer ahead.

(P.S. I've left the comments open to all for this one.)

So why is job growth tilting so hard toward women? And what does it say about our economic policies and politics? Are they keeping with the labor market we actually have — or stuck idealizing a past that’s unlikely to return?

Women are pulling ahead

Let’s look at the numbers.

Over the course of the second Trump administration, the U.S. economy has added 468,000 payroll jobs. Women received 403,000 of those, leaving men with 65,000.

And over that same stretch, the crossover happened: women now hold slightly more non-farm payroll jobs than men.

This is the latest chapter in a story 50 years in the making.

In 1970, men outnumbered women on non-farm payroll by a ratio of nearly two-to-one. Over the next half century, women’s numbers rose quickly, while men’s grew more slowly and occasionally plateaued. Over time, the gender gap narrowed, then closed — and now it’s flipped.

What’s driving this

There are two main mechanisms for how this shift could have occurred:

1. Employers may have started hiring relatively more women than men across many different industries. Or,

2. The industries adding the most jobs are those already dominated by women.

The first possibility implies that the gender composition of individual workplaces changed; the second implies that the composition of the economy changed.

To isolate which mechanism was at play here, I conducted a few analyses.

First, I sorted all industries (as defined by the BLS) into three categories — mainly female, mainly male, and roughly even — based on their gender composition as of January 2025.

The picture became clear: the mainly female category added 828,000, the mainly male category lost 218,000, and the roughly equal group lost 142,000 jobs since the start of Trump’s second term.

So, female-heavy industries are the ones that are actually growing.

Next, I conducted an Oaxaca-Blinder decomposition — or shift-share analysis — to separate the shift in industries where jobs were created from changes in who got a job within a given industry.

This analysis allowed me to ask a very specific question: if each industry kept the exact same male-to-female ratio as it had back in January 2025 — and the only thing that changed was which industries grew and which shrank — how much of the job-growth gender gap would this explain?

In other words, does compositional change by industry explain this story?

The short answer: yes.

Actually, the pattern of job growth across industries explains more than the observed gender gap. This means that within industries, we’re actually seeing a shift toward men. (Mathematically, the two effects must add up to the total.)

This led me to wonder which specific industry — or industries — were driving this. To find out, I plotted every industry for which we have gender data, comparing how female it was in January 2025 to how fast it’s grown since then.

One industry stood out: healthcare.

The official category — private education and health services — started out more than 75% female, and added over 800,000 jobs over this period. So nearly all the action in terms of female job growth occurred in this single sector.

Our debates are outdated

A lot of our political debates are still tied to the old industrial picture of work — a heroic breadwinner who makes tangible items with his hands. That’s a fine picture for a 1970s campaign ad, but it’s wildly disconnected from our 2026 reality.

And when our politics continue to romanticize one kind of work while the labor market is busy creating another, policymakers start to make mistakes.

They try to revive jobs that belong in the past. They launch trade wars in the hopes of restoring a labor market that no longer exists. They subsidize the work that fits an outdated idea of dignity — and undervalue the work that’s actually putting food on the table.

A little history is instructive here.

In the mid-to-late 19th century, a majority of Americans worked in agriculture. Today, that number is around 1%. This shift didn’t occur because food became any less important. Rather, agricultural productivity improved so dramatically that we no longer need tens of millions of people to grow all the food we want.

And as societies get richer, most people don’t spend their extra income on even more wheat.

The same basic story has also played out in manufacturing. Like agriculture, this sector still matters enormously — America continues to produce vast quantities of industrial goods — but technological advances allow us to manufacture far more with far fewer workers than before.

Modern factories, like modern farms, are often more machines than people.

Nor do we keep buying extra washing machines.

This is one of the deepest truths about economic development: as productivity rises in some sectors, labor gets freed up to go to others. And as incomes rise, demand shifts. At this moment, it’s shifting towards services — especially those delivered person to person.

Those services include healthcare, childcare, education, and elder care. These are the things that make a rich life feel like a full life.

From this vantage point, the rise in healthcare jobs is neither a fluke nor a surprise. This a central story of what happens when a country gets richer, more productive, and yes — older.

We need to reinvent work

All of this brings us to a crucial, final point: there is nothing inherently female about this work — about helping a patient stand up, moving medical equipment, running diagnostics, doing rehab support, or transporting people through hospitals.

In fact, many healthcare settings are actively trying to recruit more men.

These jobs require reliability, strength, competence, patience, and responsibility. And if it’s where the labor market is growing, we need to help men see that opportunity, too.

My partner, Betsy Stevenson — former chief economist at the Labor Department and member of President Obama’s Council of Economic Advisers — has made a similar point: if we want job growth for men to match that for women, men may need to move toward the industries that are actually growing.

And a serious jobs agenda should care less about whether work comes with a hard hat or scrubs, but whether it’s needed, paid, respected, and available.

Good economics starts with the world as it is. In a rich, productive, and aging economy like ours, that requires recognizing that a lot of tomorrow’s dignity and opportunity will be found in the service sector.

Today, these jobs are often coded as feminine — referred to as the “pink-collar” economy. But if we’re going to get this transition right, we need to embrace one more important truth: real men wear pink.

Following up on my earlier explainer, I dig into subscriber questions: Should we tax oil company windfalls? What would smarter relief actually look like? Does a diesel tax holiday make any more sense? And why do gas prices have such an outsized grip on American politics — even when the policy response makes things worse?

In case you missed it, I spent an hour last weekend on ’ podcast. We had a sprawling conversation that covered everything from the costs of war, to school cell phone bans, to whether anyone should earn more than $100 million (that last one might get me in trouble).

But one topic in particular has stuck with me since we finished recording: the difference between being pro-market and pro-business.

To many, these sound like the same thing — but they are in fact almost opposites. Markets, competition, and the innovation they foster are extraordinary. You need to look no further than North and South Korea — whose opposing economic systems have produced dramatic differences in wealth, health, and even physical height over the past 70 years — to see the genius of capitalism at work.

But businesses actually have a vested interest in undermining competition. Limiting competition is exactly how they protect and grow their bottom line.

In a truly pro-market world, political leaders set fair rules, allow companies to compete, and let the best products win. They don’t take calls from CEOs. They don’t even know their names. But with this White House, the companies that thrive are not the ones building the best products — they’re the ones sending the most flattering quotes to CNBC or flying Gulfstreams to Mar-a-Lago.

That’s not capitalism. That’s corruption.

Every way I look at it — from the oil price shock that’s added roughly $1.50 to every gallon of gas, to Fed rate cuts that have evaporated overnight, to investment decisions being quietly shelved as geopolitical risk soars — the bill ends up in the hundreds of billions of dollars, and possibly the trillions.

But this conversation — and what feels like my entire “costs of war” press tour (wait for the shirts; they’ll be epic) — isn’t about nailing down the one true number. It’s about sharing a way of thinking. The Pentagon is counting the cost of the bombs. I’m trying to measure the size of the crater they’ve blown in the global economy.

And look, anytime a government throws around “billions” and “trillions,” it’s easy to go numb. But once you divide by 130 million American households, the cost — tens of thousands per household — stops being abstract and becomes a question you can actually feel. These are tradeoffs you can picture and make sense of.

Jackie and I also got into who’s winning from all of this (oil companies, mostly), why I find prediction markets more useful than scandalous (really!), and what feels different — and familiar — about this war compared to Iraq.

My answer might surprise you. It’s not social media or the speed of the news cycle. It’s that this president never made his case. George W. Bush was wrong about Iraq, but he at least tried to win the argument. He made his case to the American public, to Congress, to our allies, and (infamously) the United Nations. This president simply hasn’t bothered.

And perhaps that explains something else. Political scientists have described the tendency for Americans to support their political leaders during wars and international crises. They call it the “rally ‘round the flag effect.” But right now, it’s operating in reverse.

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It’s is a policy that sounds like relief — and sure polls like relief — but gets the economics wrong in almost every direction.

And it’s not just one side being silly. It’s a bipartisan blunder.

President Trump has thrown his support behind Sen. Josh Hawley’s legislation that would suspend the federal gas tax for 90 days. Meanwhile, Democratic senators Mark Kelly and Richard Blumenthal have put forth a similar proposal, and Rep. Josh Harder wants to suspend the tax through the end of the year.

But a gas tax holiday mistakes the problem, blunts the signal, and makes a shortage much harder to manage. It also provides the least benefit to those who need it most, and will likely fatten the bottom line of oil companies even further.

The Real Tax is the Iran Tax

The federal gas tax is an extraordinarily precise 18.4 cents per gallon. The bright sparks who passed it 30 years ago apparently forgot about inflation. As a result, it has fallen away from being consequential, to relatively minor.

But the cost that’s really hammering households right now is not a gas tax. It’s what I call the “Iran tax” — the extra that you’re paying for energy because of the war with Iran. An actual tax raises revenue for the U.S. government; this one raises revenue for oil companies.

Before the war began, the average price of gas in the United States was just under $3 a gallon. Now it’s up to about $4.50. That surcharge — of roughly $1.50 per gallon — is about eight times larger than the federal gas tax.

Which means a gas tax holiday simply does not get to the heart of the issue. The real burden isn’t the 18.4 cents the Washington taxman adds, but the much bigger $1.50 the Washington war has added.

We can see this effect in real time. Every time the president de-escalates the war, the price of oil falls… pretty dramatically. And when oil prices fall, gas prices follow.

So if you want the biggest, fastest, cheapest way to cut gas prices, don’t fiddle with an 18.4 cent tax. Reopen the Strait of Hormuz. Turn up to the talks. Push for peace. Calm markets instead of frightening them.

For a little added context, American gas taxes are extraordinarily low by rich-country standards. Even when you combine federal and state-level taxes, no other OECD country has lower rates than we do.

In much of Europe, gas taxes are several dollars per gallon, not cents.

So no, Americans are not being crushed by some unusually heavy tax. If anything, we consume too much gas and tax it too lightly given the pollution and congestion that driving causes.

And while that’s not the most essential point I’d like to make, it’s worth acknowledging that vilifying the gas tax is a very American piece of political folklore.

Cheap Gas Won’t Solve A Supply Shock

Now I want to explain some of the economics.

What we have right now is an adverse supply shock: There’s less oil reaching the world market, causing gas prices to rise. This is simple supply and demand (welcome to Econ 101).

But if there’s not enough fuel to go around, making gas cheaper is not a solution.

Yes, it’s painful. Yes, it’s annoying. Yes, it’s frustrating. But the higher prices are doing a job. They’re telling each of us that oil is scarce, and we need to cut back. The high price gives each of us an incentive to combine errands, delay a non-essential trip, carpool, and maybe drive a little less.

A gas tax holiday? That blunts that signal.

Think of it this way: You don’t solve a drought by subsidizing showers. If there’s a traffic jam, don’t cut tolls. And in a blackout, making air conditioners cheaper won’t help.

So if there is an oil shortage — don’t cut gas taxes. That works against the very mechanism, the price signal, that helps an economy adjust when supply goes down.

Those Who Need Most Get Least

Another issue with a gas tax holiday is that it is poorly targeted social policy.

A gas tax targets gasoline purchases, not need. Which means those who buy the most gas get the biggest subsidy. And in the United States, richer households overwhelmingly buy more gas.

The poorest one-fifth of Americans spent an average of $1,200 on gas in 2024. Meanwhile, the richest one-fifth spent nearly $4,000 — more than three times as much. So a gas tax holiday would end up sending three times as much cash to the richest households as to the poorest ones.

Now, these are averages. Some low-income families do depend heavily on a car, and for them higher gas prices can really bite. But that’s a case for targeted aid. If we genuinely want to help those in need through an energy shock, we can provide assistance based on hardship, not on gallons burned.

Impact vs. Incidence — How Oil Companies Win

Any time a government talks about taxes and subsidies, it’s important to distinguish between the impact and the incidence of their proposals.

Let me translate.

The impact of a tax is who legally pays it. It gets the headlines. The incidence is who actually ends up bearing the cost after prices adjust. In other words, lawyers (and not coincidentally, Congressional reps) obsess about the initial impact, but incidence is what really matters for your life.

When you cut the gas tax, drivers might initially see a lower price. And because of that lower price, they’ll want to drive a bit more and buy a bit more fuel. Notice something important: The tax cut doesn’t create any more oil or reopen shipping lanes. It doesn’t rebuild refinery capacity or cause tankers to suddenly materialize.

So now you’ve got more demand chasing the same constrained supply — which leads prices to go back up. This means some of the tax cut gets bid away into higher gas prices. Those higher gas prices end up in the pockets of suppliers as higher profits. It ends up fattening the wallets of those folks who are already benefiting from the aforementioned “Iran tax.”

That’s not just bad optics, it’s bad economics.

We don’t know precisely what percentage of a federal gas tax holiday will end up helping drivers versus the oil industry. The best evidence we have comes from studies of state-specific gas taxes. My friends at the Penn Wharton Budget Model have a useful set of studies and a useful rule of thumb.

They reckon that consumers keep about 72 cents of every dollar of a state-specific gas tax cut. However, this is likely an upper bound for how much relief customers would experience from a national holiday. That’s because during state-specific holidays, fuel can flow in from elsewhere in the country to offset increased demand. But when the tax is suspended at a federal level, there are no other states that can send over extra fuel to meet the extra demand. National supply is much less flexible.

Because of this, I’d wager about half the money we’d spend to cut the federal gas tax would end up in the pocket of consumers, while the other half would go upstream. That’s far from a precise estimate, but I’m fairly confident it’s less than 72%, and it’s definitely more sensible than assuming drivers would pocket the full 18.4 cents per gallon.

We’ve Seen This Movie Before

If you’ve been around a while, all of this might sound pretty familiar.

That’s because we’ve done this same silly dance before.

During the 2008 presidential election, John McCain called for a gas tax holiday, while Hillary Clinton — in her primary against Barack Obama — endorsed a similar plan. (Obama opposed it.)

In response, economists lined up against the idea. I wrote a rather cranky piece daring anyone to find a coherent economist willing to defend it, and George Stephanopoulos posed the challenge directly to Clinton on air, asking her to name one credible economist who supported her proposal. She famously responded: “I’m not going to put my lot in with economists.”

Ouch.

So, we’ve seen this all before. The same gimmick, the same fake relief, the same pandering politics, and the same refusal to ask whether a policy actually gets to the heart of the problem we face.

The Broader Lesson — Data Over Vibes

If there’s one lesson I’d like you to take from this latest frustrating debate, it’s this:

You cannot evaluate policy by vibes alone. You can’t simply decide that a policy sounds like it might help struggling families and therefore conclude it’s a good idea.

You have to ask the harder questions.

What problem are we really trying to solve? How will markets respond? Who will get the money, and who will get left out? Are we making the underlying problem better — or worse?

On each and every one of those scores, the gas tax holiday falls short.

We need to help people — absolutely. But we need to do so in ways that actually help.

I think this conversation with Derek Thompson is really worth watching (or listening to). Here’s why: Derek pushed me to do the best job I’ve ever done of really explaining the underlying economics of debt and deficits, and what we should and shouldn’t worry about.

If you watch or listen, you’ll also hear some personal discomfort, as we each spent years arguing against debt scolds.

Some personal backstory: I first met Derek during the 2008–09 financial crisis. He was a young econ journalist trying to make sense of an economy in freefall. I was a young economist trying to do the same thing, but with more equations, messier hair, and weaker writing skills.

I was wildly impressed by Derek; by any measure he was — and is — one of the best economics journalists of his generation. Since then I’ve watched him build Plain English into a wicked smaht podcast, move his writing to Substack, and write Abundance with Ezra Klein. (When I first heard early rumblings of that book, my honest reaction was jealousy — that Ezra had been smart enough to grab a superstar co-author before the rest of us could.)

Back to our conversation about debt and deficits: The funniest part is that each of us seemed to be trying to make the other one own the uncomfortable position of worrying about debt. Derek wanted to say: even center-left economics professor Justin Wolfers is worried about the debt. I kept trying to say: even center-left economics journalist Derek Thompson is worried about the debt.

That mutual reluctance is the story.

Back in 2009, we were each trying to impress on people a sense of urgency that if the government didn’t act decisively to put the economy back on track, it might leave scars that would last for years.

Sadly, we turned out to be right. The recovery from the Great Recession was remarkably slow. Remarkably painful. The Obama recovery plan was intended to be a first step: do something pretty large now, see how the economy responds, and go back to Congress if more was needed.

More was needed. But fiscal politics got weird. The Tea Party wave arrived. Partisan divisions hardened. And the deficit hawks — folks who warned that America simply couldn’t afford a bigger recovery effort — played a deeply unconstructive role.

Their argument was simple, and it sounded responsible: Debt is rising. Fiscal crisis is coming. We must tighten our belts.

But in that moment, it was mostly a bad argument, often offered in bad faith. Many of these so-called deficit hawks were less interested in fiscal responsibility than in preventing the government from doing more. The deficit became a respectable cloak for a much older instinct: they wanted smaller government, and if that sentenced a generation to joblessness, them’s the breaks.

The economics didn’t support their moral panic. Government debt was — by today’s standards — remarkably low. Interest rates were low. The urgent danger wasn’t that the United States would borrow too much to support recovery. The urgent danger was that it would borrow too little.

That formative experience made this week’s conversation feel so odd.

Nearly two decades later, both Derek and I find ourselves saying something that sounds uncomfortably close to what the debt scolds used to say. Each of us is concerned that our fiscal path might lead to a painful adjustment. (That’s a polite euphemism because I don’t want to sound too dramatic.)

So the question I kept asking myself was: Did I change, or did the economy change?

Did I get older and grumpier? Did I drift right without noticing? Did I catch whatever bug makes middle-aged economists start muttering about bond markets at dinner parties?

Here’s the first answer: the economy changed.

Federal debt as a share of GDP was around 35 percent on the eve of the financial crisis. It rose during that recession, never really came back down, and then jumped even higher again during COVID. It is now roughly 100 percent of GDP. So today’s national debt is nearly triple what is was when a younger Derek and a younger Justin weren’t so worried about it.

But debt is only half the picture. The other half is the deficit — how much we’re adding each year.

Today’s deficit would have looked extraordinary to pre-crisis America.

This is the part that would have blown young Derek’s and young Justin’s minds. If you had told us back then that the United States would be running a deficit of roughly 5.8 percent of GDP outside a world war, outside a financial collapse, outside a pandemic, we wouldn’t have believed you. And the idea that this would occur under a Republican House? Well, that’s crazy talk.

Today that enormous budget deficit barely gets a mention.

And so as the debt and deficit have changed, so have my concerns. When debt-to-GDP was much lower, I felt confident saying a fiscal crisis wasn’t coming. Now? As I said to Derek, “I am humble and I don’t have a clue.”

But that’s actually a thing: I have lost all confidence that I know a reckoning isn’t coming. Sorry for the double negative, but that’s how I got here. My conclusion — written in the positive voice — is that there’s a very real possibility that such a reckoning is just around the corner, a decade or two away, further off, or maybe it’s never coming. Derek is even more worried than I am.

I don’t want to oversell this. There’s no fiscal pumpkin that appears when the debt-to-GDP ratio hits 100 percent. What matters is the interaction between debt, interest rates, deficits, and trust.

Those are the big ideas. The video has the details.

Still, there are things that haven’t changed.

I still think austerity in a slump can be cruel, pointless, and self-defeating. I still think the deficit hawks of 2009 were wrong. I still think the government should act boldly in emergencies. If unemployment is surging and families are being knocked off course, the right question is not “how do we make the spreadsheet prettier by Tuesday?” It’s “how do we stop lasting damage?”

But a government that wants to act boldly in emergencies needs to build fiscal space in ordinary times.

That’s the uncomfortable middle-aged sentence. I don’t love typing it. I like it even less when Derek gets me to say it in front of a microphone.

We can’t do everything. We can’t have everything. Magical thinking is the disease, not the cure. And we can’t dismiss the arithmetic just because some of the people who used to talk about the arithmetic were using it as a dodge.

That’s why I’m proud of this conversation. I think it’s a genuinely useful place to start our fiscal debates — not because Derek and I solve the problem, but because we begin in the right place.

The deficit hawks were wrong then.

The debt is worrying now.

Those two sentences are not in tension. They’re the same framework applied to a different world. If you want to understand that world, start there.

I’m back on the mic with Stacey Vanek Smith, unwinding some of the week’s biggest stories in economic news.

First up, we’ve got the arrival of a new Fed Chair — Handsome Kevin. Stacey and I dig into the mystery of “the two Kevin Warshes.” Is the new chair the inflation hawk we saw during the financial crisis, or a more political figure willing to echo President Trump’s demands for lower interest rates?

Next, we talk Bond Market 101: why the U.S. government sells Treasury bonds, why investors buy them, and what rising 10-year and 30-year Treasury yields signal about inflation, oil prices, and the national debt.

And finally, we take on the stunning recent collapse in consumer sentiment. I argue that these historically bleak numbers are not the result of having “the worst economy ever,“ but largely reflect Americans losing confidence in those who manage our country’s economic policy. That said, the affordability crunch is real — with inflation hitting some summertime staples particularly hard.

Be sure to share and subscribe if you enjoyed our conversation! We’ll be back next time on video.

In the meantime, check out the bet Stacey and I made about midterm gas prices. You can register your own wager (fake money only!) on Manifold Markets here:

Oh, and one more thing: This pod takes on the most important issue of our time. The Arch, versus The Zipline. Your vote matters:

My colleagues have been putting these numbers together since 1952, so that’s quite an achievement. (Okay, they’re not that old; it’s not the same folks.)

Some useful context: We’re 16 months into mass deportations, 14 months into a trade war, and 12 weeks into our 4-6 week war of choice.

There’s a bunch of numbers that stick out in this report:

• Only 7% of Americans expect “good times” for business conditions next year.

• Only 7% rate current business conditions as “better than a year ago.”

• Looking ahead, only 13% expect business conditions to improve over the next year.

• Nearly two-thirds (okay, it’s 65%) expect unemployment to rise over the next year.

Short-run expectations for personal finances, business conditions, and inflation have been worsening quickly since February, but long-run expectations are now starting to catch up. Consumers are no longer buying the story that our current chaos is transitory.

And don’t expect the inflation story to go anywhere anytime soon: 71% of folks expect price hikes to exceed income gains in the year ahead — reflecting recent data that shows real wages have indeed declined.

But perhaps most revealing is consumers’ beliefs about where to place the blame for these conditions. 77% of respondents (an all-time high) disapprove of the government’s approach to economic policy. (Just 11% rate the government as doing “a good job” on this measure.)

We have never seen numbers like these before.

And here’s the thing: there’s no way the economy is in any realistic sense bad enough to warrant an all-time low on so many of these sentiment measures. (Remember the OPEC oil shocks and stagflation? The twin early-’80s recessions? The financial crisis? COVID? Those sucked.)

But perhaps this last question — about competence — is the key. Perhaps folks are upset because they see our current economic troubles as entirely self-inflicted.

On inflation: both headline and core numbers are up. The Fed’s 2% target feels distant. But the most alarming detail isn’t price increases — it’s that wage growth isn’t keeping up.

On affordability: oil prices are expected to stay elevated through at least 2028. That matters because energy costs ripple through everything. Add in unilateral tariffs, institutional erosion, and crony capitalism, and you can see how Trump’s policies amount to a direct attack on affordability.

On AI: about two-thirds of recent economic growth is AI-driven — but almost entirely in the form of data center construction. We’re in the foundation-laying phase. What AI actually does to jobs and growth over the long haul remains an open question.

Listen or watch the full conversation here. →

For many, enforcement comes in the form of lockable phone pouches. The most common are from a company called Yondr.

Yondr pouches got their start at concerts and comedy shows for performers who wanted a phone-free experience. But the company quickly realized an even better use case: schools.

From a social science perspective, the adoption of Yondr pouches sets up an interesting experiment: If you make phones harder to reach, do students get happier, calmer, and more focused? Or do they simply get annoyed? And what’s the impact on behavior, attention, attendance, and academics?

These questions are not just relevant to school policy, but can also help us figure out what happens when a device that’s become part of the furniture of our lives is suddenly a bit more difficult to access.

Does less phone time make our lives better?

A new paper and new answers

A new paper has provided some early answers to this question.

The researchers — which include some of my friends and colleagues — studied the effects of these pouches in roughly 5,000 American schools. They had a whole bunch of data, and a clever design to distinguish correlation from causation.

Because different schools adopted the pouches at different points in time, the researchers are able to compare the changes in adopting schools to changes in similar schools that hadn’t yet (or never) adopted them.

This is what economists call a natural experiment. It’s not perfect (nothing in social science is), but it’s a serious attempt to get close to the logic of a randomized control trial.

The data used includes records from Yondr about which schools adopted the pouches and when, surveys of students and teachers, and school-level statistics on discipline, attendance, and standardized test scores. The researchers even used anonymized phone location data to track phone activity on school grounds during school hours.

What the researchers actually measured

The question “do phone bans work?” is actually several different questions squashed into one. So it’s important to establish the specific outcomes these researchers were measuring.

First, they asked: did phone use itself fall? This sounds obvious, but the world is full of policies that look great on paper and are never actually enforced.

Next, they looked at well-being: did students feel better or worse after the introduction of Yondr pouches? For this, they analyzed surveys asking students about their feelings of happiness, excitement, and safety, as well as sadness, worry, and frustration.

Then, the researchers looked at the social environment — primarily counting disciplinary incidents and perceptions of online bullying.

And finally, they turned to more traditional metrics: attention, attendance, and standardized test scores (in math and reading).

The order they approached these questions matters. A lot of education research tends to jump straight to grades, but the other measures are important in their own right. These authors take the human component very seriously.

On to the findings

First up: the pouches reduced in-school phone use — a lot.

Teachers reported student phone use fell from 61% prior to the phone ban to 13% after adoption. The anonymous phone location data also shows a substantial drop in phone activity on adopting campuses during school hours.

This means the intervention is real and it bites.

But if the problem’s distraction, taking away one cause of disruption does not guarantee attention. So the more interesting questions come next.

Well-being drops first, then improves

To me, this might be the most important result of the bunch.

In the first year after schools adopted Yondr pouches, self-reported well-being actually falls. But — over time — this measure rebounds. By the second year after adoption, students report feeling better than they did before the policy was introduced.

This suggests that the short run hit is more transition pain than permanent damage. Students adapt, and get used to the new normal.

How the social environment does — and does not — change

When it comes to discipline, things also get worse before getting better.

During the first year of adoption, schools using Yondr saw an increase in disciplinary incidents. Much of this can likely be explained by the friction of a new rule being enforced. If you draw a new line, more people will get caught crossing it.

Nevertheless, this measure returns to normal over time.

As for online bullying, the paper finds little evidence of a meaningful improvement. That’s a useful reality check – a lot of online bullying happens outside school hours, and is unlikely to be affected by locking phones up from 8 a.m. to 3 p.m.

Attention, attendance, and academics

Here, the results are more sobering.

The authors find little evidence of a clear gain in classroom attention and no meaningful improvement in attendance or chronic absenteeism. They also find the average effect on test scores to be close to zero.

That doesn’t mean the policy failed, but the big, across-the-board academic payoff did not show up in the way many people expected.

Now, there’s an important caveat when it comes to test scores. When the researchers split students by age, an interesting pattern emerges.

For math, high school students saw modest positive effects, while middle school students saw small negative effects.

It could be that older students have a more genuine problem with phones, and thus the upside is bigger. Or perhaps younger students are more likely to substitute one form of disruption for another.

The researchers are careful not to over-claim here, but there’s a practical, common-sense lesson: different ages might need different rules. What works for a 17-year-old may not work the same way for a 12-year-old.

What this tells us about our own lives

So what does this all mean? And what should we do with it?

Here’s my take:

First, making phones harder to reach does change behavior — a bit of friction makes a real difference.

Second, if you add that friction, you should also expect some initial turbulence, discomfort, and conflict. But that tends to fade as people adapt.

Third, big benefits aren’t automatic. Gains in well-being appear to be real, but we also have to care about what replaces the phone.

If you want less phone time for your kid — or yourself — you need to think like an economist, and consider substitution effects. Less scrolling isn’t the same thing as more studying. Less Instagram doesn’t necessarily equate to more sleep. And deleting one bad habit doesn’t automatically install a good one.

What it does, is give us a chance.

So my advice — as an economist — is to be just as intentional about what you’re adding as about what you’re taking away.

That’s how you think clearly about schools. And it’s not a bad way to think about your own life either.

Futures markets are useful because they’re effectively a prediction market where traders bet millions of dollars on the future price of oil, and a bet is a tax on bullshit.

Right now, these markets are speaking clearly: oil will likely be expensive at least through the midterms.

The November 2026 WTI futures contract — oil for delivery in the month voters go to the polls — is now at $86.20, an all-time high. That’s a 45 percent increase since the war began.

Since its increasingly clear that energy prices will still be a big deal during the midterm elections, I’m left to wonder: Why aren’t more Republican members of Congress panicking?

Even more concerning, this war-fueled rise in energy prices may still be with us by the next presidential election.

Like November 2026, the November 2028 oil futures contract has also moved up — from roughly $60 per barrel to about $71.

The longer-run effect is smaller, but it’s the same message: markets aren’t just pricing a bad week or a bad month. They’re pricing more expensive energy until at least the next general election.

The full set of longer-term consequences can be illustrated by focusing on the futures curve, which plots the price of oil for delivery at different dates.

Think of each point on the curve as the market’s price for oil delivered in a particular month. The near end tells you about the next few months. The far end tells you what traders expect years from now.

So let’s compare two futures curves: one from the eve of the war, and one from today.

Today’s curve slopes down, which tells us that markets expect oil prices to fall from today’s spike. Near-term oil is extremely expensive, while oil for later delivery is less expensive.

If I’m being generous, that’s the argument the White House is making.

But if you want to figure out whether the war is costly, that’s the wrong comparison. Instead, we should focus on the gap between the two lines.

Today, the entire futures curve sits above its pre-war levels. That means that — for every delivery date — markets expect oil to be more expensive than they did before the war.

The White House wants you to compare future prices with today’s spike. That comparison says relief is likely coming. Comparing the two futures curves answers a different — and arguably more interesting — question: how much has the war boosted oil prices, and for how long?

The answer: the Iran war is expected to reverberate through energy markets for years.

Futures markets can tell us what traders expect, but they can’t tell us exactly why. Maybe the market is pricing physical disruption — damaged export capacity, clogged shipping routes, depleted inventories, higher insurance costs, tolls and delays.

Maybe it’s pricing a broader risk premium — the world looks riskier, so traders are charging for the chance that something else goes wrong.

Either way, this is the part that should worry Republicans: the market isn’t pricing a disappearing problem. It’s pricing a lingering one.

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Catch up on my guest appearance from last week’s episode of It’s Happening With Velshi and Ruhle.

I had fun filling in for Stephanie and chatting with Ali about the week’s biggest stories in economics and politics, including:

• What Kevin Warsh’s confirmation means for the future of the Fed,

• How spiking energy costs feed into inflation for producers versus consumers (nerdy…I know),

• Why consumer sentiment keeps diverging from stock market headlines, and

• The ongoing economic fallout from war with Iran — from oil prices to newly exposed geopolitical vulnerabilities.

Don’t forget to subscribe and share, and look out for more original content later this week!

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