Marketplace - The cost of being prepared

Episode Date: October 8, 2024

Natural disaster recovery is often expensive, but this season is shaping up to be particularly costly and painful. The Southeast is reeling from Hurricane Helene, and Hurricane Milton is expected to inflict more damage starting tomorrow night. Disaster preparedness can reduce the economic burden of recovery, but not all localities can afford to be prepared. Also in this episode: The Fed’s interest rate cut raised business owners’ optimism and China invites more young Americans to visit.

Hi, I'm Kyle Rizdal, the host of How We Survive. It's a podcast from Marketplace. In 1986, before I was a journalist, I was flying for the Navy. Mr. Gorbachev, tear down this wall. It was the Cold War and my first deployments were intercepting Russian bombers. Today though, there's another threat out there, climate change. This could be the warmest year on record. Climate change is here.

Temperatures here are warming faster than anywhere on earth. And while the threat seems new, the Pentagon's been funding studies on climate change since the 1950s. I think we will put our troops and our forces at higher risk if we don't recognize the impact of climate change. This season, we go to the front lines of the climate crisis to see how the military is preparing for the threat. Listen to how we survive wherever you get your podcasts.

All right, how about this? We'll do the economic news because of course, but then a nice long conversation about artistry. From American public media, this is Market Plants. In Los Angeles, I'm Kyle Rizdal. It is Tuesday, today the 8th of October. Good as always to have you along, everybody. It is going to be another day or so until Hurricane Milton makes landfall on Florida's Gulf Coast.

Meanwhile, people all across the southeast are still trying to get a firm handle on the damage caused by Hurricane Helene. The dollar cost is set to run into the 12 figures, more than $100 billion, and a death toll likely to rise as well. As we know, climate change is making the physical impact of these big storms more intense and there will be more of them. And as Marketplace's Kelly Wells reports, it's making the long tail of recovery more expensive too.

Kelly Wells Disaster recovery takes a lot longer than the public might think, says Andrew Rumbach. He's a senior fellow at the Urban Institute. Once the event has gone by and the news coverage has stopped, you know, recovery goes on for years or even decades. There are backlogs for building permits, red tape that delays the arrival of federal funding. But his big complaint, that's mostly reactive. We still spend the vast majority of money on disasters after they occur on response

and recovery, rather than investing more heavily before disasters to try to mitigate other impacts. Of course, investment requires money upfront, so the problems get exacerbated in communities that have less money. They might be economically disadvantaged, where these disasters can just instigate downward spirals. Headwater's economics researcher, Kristin Smith, says climate change is also causing more smaller disasters that aren't large enough to warrant federal funding. Most people assume FEMA is coming in and paying for all of it. But study after study shows

that actually it's the local governments that spend a good chunk of the money on it. Then there's resistance to recovering with climate change in mind. We help people rebuild houses. We don't revise building codes. We don't take the time to say, hey listen, this area is now no longer really habitable. Gabriel Filippelli leads the Environmental Resilience Institute at Indiana University. And not doing it as like an ostrich with your head in the sand, right? It's going to happen again. It's just a matter of when. Filippelli says recovering with resilience saves lives and has positive mental and physical health impacts that don't even show up in financial calculations.

I'm Kaylee Wells for Marketplace. Wall Street on this Tuesday markets, more broadly actually, oil down, stocks up. Details numbers, y'all know the drill. It's been almost three weeks since the Federal Reserve cut interest rates for the first time in more than four years. And yes, the federal funds rate is a half a percentage point lower today than it was those three weeks ago. And in a way, things aren't really all that different. Businesses aren't suddenly deciding to jump into new projects. They're probably not loading up on new equipment or building out new factories.

As Marketplace's Justin Ho reports, the biggest change brought on by that rate cut was in business owners' minds. Over the last few weeks, John Kirk has been getting a lot of unsolicited phone calls. From lenders who have been on the call at sidelines for the last 18 months, 12, 18 months, they're starting to call and say, okay, tell me, what are you working on? Kirk is the CEO of an apartment development firm in New Braunfels, Texas, called the Lightpath Company. He says for most of the early part of this year, developers had trouble getting loans. That's because rates on construction loans were high and so were construction costs

that made new projects too expensive and risky. But Kirk says that's starting to change. You're seeing construction costs level out and now you're seeing interest rates drop. So you're starting to see market fundamentals start to come back into play to make economic sense of these projects. Kirk says he's not breaking ground on any projects right now, but he says he and other developers are laying a lot of groundwork. You're investing with your architects, your engineers, all your consultants. You're spending money to get a great set of drawings, you know, submitting for permits. As a developer, you're making sure the site can be developed.

It's not just big, expensive projects that are being affected by the Fed's rate cut. It's also the small day-to-day realities of running a business. Each month we're paying between $5,000 and $7,000 just to debt. Madeline Reeves runs Fearless Foundry, a marketing and consulting firm near Seattle. She's been trying to pay down her business debt, and right now she's focused on one of her business credit cards with a balance of about $27,000. We're paying right now somewhere between $2,000 and $3,000 a month on that credit card. It's making a dent, but not nearly as much as I wish it could because the interest rate I think on that card is close to 30%.

Reeve says she's thinking about taking out a new loan at a lower rate to cover that debt or doing a balance transfer to a cheaper credit card. Either way, she says she can think of a lot of ways she'd rather spend that money than paying 30% interest. One would be to put more money in the pockets of our team members and two would be putting money into a profit account or a savings account that we can actually be holding on to that capital for a rainy day. Meanwhile, other business owners see the Fed's rate cut as a sign that they can start feeling more confident.

Like, our level of caution is reduced. Is it probably a good way of saying it? Spiro Papadopoulos is the CEO of Schlal Restaurant Group, which operates seven restaurants in several states. He says he'd love to operate more. And now that interest rates are lower, he's been having more conversations with real estate brokers about expanding. Like, hey, you know, like, even though we may have passed on X six months ago, I still want to see opportunities like that. And our appetite for them is more than it was in the past.

A big reason Papadopoulos is feeling bolder about expanding is because lower interest rates also improve consumers' mindsets. If new car loans are back to like one or two percent because they're incentivizing them and they can shave a couple points off their mortgage and put a couple hundred, 200, 300, 400 more dollars into a disposable income, then that affects restaurants a ton. And retailers and service providers and all the rest of the more than two thirds

of this economy that's driven by consumer spending. I'm Justin Ho for Marketplace. But The president of China, Xi Jinping, has promised to invite 50,000 young Americans to visit his country over the next five years. That is going to be a tall order given that there are less than 900 Americans studying there now. There are, should you be curious, about 300,000 Chinese students here. But exchanges sending American visitors to China have ramped up over the past couple of months.

Most are run by groups affiliated with the Chinese government. Some though are organized around sports, which is how New York University's men's and women's basketball teams wound up in Shanghai not too long ago. Marketplace at Jennifer Pack was there. At a stadium in Shanghai, some 1800 spectators have come to see the U.S. and China face off on the basketball court. First up, the men's team, NYU versus Shanghai Jiao Tong University. Among the players is NYU's Alan Mieszczynski. It's a great opportunity to come to China and experience a new culture.

I probably would have never came here without the team, but it's exciting. This is a friendly game, but far from ordinary. VIP guests include presidents of the government-linked Shanghai Friendship Association, the American Chamber of Commerce in China, and the U.S. Consul General in Shanghai, Scott Walker, who gave a speech before the game. We believe that sports have a unique power to bridge divides and bring people together. And there's a lot to bridge. The U.S. and China are divided over things like Chinese exports, American semiconductors, and Russia's war in Ukraine.

Eight, seven, six, five. When the NYU players are not on the court for this week-long trip, they've been doing touristy and cultural stuff like the Ming dynasty Yu Garden, Disneyland Shanghai, and a lesson in the traditional martial arts, Tai Chi. I thought it was really cool. I was like in one with my body. That's Yasmine Clark with the women's team. She's also trying more modern aspects of China, like e-payment. I've been using Alipay. It's really easy.

You just kind of pull up your QR code and they scan it. Her teammate Chloe Teeter says before they came to Shanghai, they were given a tip. You can't jaywalk or else you could like get severely injured. I thought New York, the traffic was crazy, but it's a lot more fast here. The men's game ends. Shanghai Jiao Tong University wins 73 to 56. One Chinese student in the stands says she does get affected by negative US-China relations. I hesitate to visit the US because there's a possibility I could encounter racism or discrimination.

Then I ask for her name and she says, Do I have to? She ends up giving me her English name, Jodie Ji, which is not registered with the Chinese police. Like many people in China, she's self-censoring in case of official retaliation. So have NYU students been asked to do the same? Again, Mishenski. No, there was kind of do and say whatever you want. I mean, there's always this understanding of hey, like be careful, but yeah, we didn't get a fully pre-planned thing of what to say and what not to say.

Next up, the women's game. Again, NYU versus Shanghai Zhaotong. American and Chinese officials say they want more exchanges like this. But they sure don't make it easy for people on both sides to keep in touch. China bans most Western apps used by the NYU students. Most Chinese use WeChat, an app scrutinized by the US government for potentially allowing the Chinese Communist Party to collect the personal information of Americans.

Shanghai Jiao Tong ends up winning the women's game 69 to 64. These exchanges have sometimes been criticized for tiptoeing around tough topics. But these trips still serve a purpose, says Maszanski after he returned to New York. It's obviously better to go there because as you spend time there and you immerse yourself in the experience and the culture and the people, you start to understand their cultural norms, what they want, how they act, even how they do business, obviously. He'd like to visit China again, he says, perhaps to a different city.

In Shanghai, I'm Jennifer Pak for Marketplace. Coming up. I am an enthusiastic collaborator with almost anybody who doesn't do what I do. Yeah, I get that. First though, let's us do the numbers. Dow Industrial's up 126 points today, three tenths of 1%, finished at 42,080. The NASDAQ gained 259 points, that's 1.5%. Closed at 18,182.

The S&P 500 added 55.1%, 57.51. PepsiCo reported better than projected earnings today, but reduced its outlook for organic revenue. The brand blamed weak demand in the U.S. and Mexico and recalls of some Quaker brand foods earlier this year. PepsiCo bubbled up 1.9%. Coca-Cola, which also owns Vitamin Water, and Fairlife fizzed up a quarter of 1%. Netflix up 2 and 8 tenths percent. Today Disney inched up about a tenth percent.

Paramount dipped two tenths of 1%. Bonds rose, yield on the ten-year T-note down 4.01%. You're listening to Marketplace. This podcast is supported by Fundrise. Buy low, sell high. It's a simple concept, but not necessarily an easy concept. Right now, high interest rates have crushed the real estate market. Prices are falling and properties are available at a discount, which means Fundrise believes now is the time to expand the Fundrise flagship fund's billion-dollar real estate portfolio.

You can add the Fundrise flagship fund to your portfolio in minutes by visiting fundrise.com slash marketplace. That's F U N D R I S E dot com slash marketplace. Carefully consider the investment objectives, risks, charges and expenses of the Fundrise flagship fund before investing. This and other information can be found in the funds prospectus at fundrise.com slash flagship. This is a paid advertisement. This is a paid advertisement. the finish line. If you've thought about investing in Marketplace, make today the day you do it. Help us get back on track. Go to marketplace.org. Donate and thank you. This is Marketplace. I'm Kyle Rizdal. We've got an every now and then series that we do when we

can make schedules line up, honestly. Where we go back to some of the people we've had on the show the past number of years just to talk a little more. Regular listeners might recognize the name Dessa. Hip-hop artist, author, touring musician, polymath. We got her on the phone the other day. Hey, how are you? Hey, Kai. How's it going? Good, good. Long time no speak. You too. How you been? Hey, how are you? Hey, Kai, how's it going? Good, good, long time no speak. You too. How you been?

B minus heading B, how about you? I think I'm going a little bit the other way. So look, we have a long established relationship here on this program, you and I, and we're friends on the socials and all that jazz. So I'm just gonna start with, you've been on the road a lot lately. How you holding up? You know, I think like where the spirit is willing,

the knees can get weak. I mean, I'm good. I think there is a constant tension that just becomes more pronounced, you know, the longer you stay in the game with like, what's good for the art versus what's good for the artist? Totally. But also though, what's good for the business, right?

100%. You know, I think probably those would represent the three interests that I spend a lot of my time thinking about how to balance. Like, what's good for the meat machine that you live inside? And what's good for the big ideas that you're hoping to breathe life into and How are you gonna pay for it? and also like how are you gonna pay for it in a way that also looks out for the woman that you'll be in ten years and 15 years when you don't have like, you know an indie pension to draw on to

I was gonna save this for later. But since you you kind of got there You've been doing this for a while and and I mean you're're not old by any means, but you ain't no spring chicken anymore either. Agreed. Yeah, agreed. I wondered the extent to which this line of thinking presents itself in any life, irrespective of whether or not you're in the arts, but like, how do you go about presenting yourself in a way that isn't just sort of like cosplaying the younger self? Do you really? Every day.

Listen to me on the radio and see if you don't know what I mean. Do you think that you would if you weren't on the radio? No, no. Less so. But there's this weird, you know, I have this weird, my identity is bound up in my job, right? And it's just... That must be strange, Kai.

It is very strange. And I don't know what listeners are going to make of this conversation. But I think about this that especially when I get ready to talk to you, because of the memoir you wrote, because of the interchanges and exchanges that we've had over the years, and how deeply thoughtful a person you are about the things that you do. And that's just not me. And I'm gobsmacked every time by how you can be so relentlessly thoughtful, but also so completely productive, you know?

Well, I mean, thanks, first of all. I do think that the productivity this year has been the hardest for me. It does feel like there's a headwind. I've made stuff that I'm proud of, I'm really like ringing the stone and I think in part There's a discomfort for me that by now. I'm familiar with in the space between projects before the new enthusiasm like Animates you and yeah, and you're ready to go and I think living in the arts for all of the like life-affirming, nourishing parts of it, it does also really give license for a person to like lean into the external

validation bits. Like I've been surprised and disappointed at how fully grown adults, myself very much included, are so sensitive to this currency of cartoon hearts that you can't take to any counter for actual currency to spend in the real world. We are so socially sensitive. You had a piece in the New York Times a couple of months ago, a while ago anyway, about losing your voice, which for what I hope are obvious reasons, really resonated with me because my big fear is, I mean, like when I get a cold and my voice gets all gravelly, I'm all cranky on the radio and all cranky with my family and it's just, it completely messes me

up. And clearly it hit really hard for you. What was it like for you as a performer, a singer, to not be able to do your thing? You know, I've gotten gravelly like you have where I feel like I'm still behind a microphone, but I know that I'm not presenting my best work. Like, I'm just so aware of not holding up my end of the bargain. Like, people pay their money and this is not my best delivery. I hate that feeling. Then this last round was like totally different. I was essentially, you know, voiceless. So instead of that sort of kind of horse limping through it, it was just silent. And my first fears were professional, oh my gosh, am I going to have

to cancel this tour? And then I think my second set of fears were more existential. Like I, I present myself to the world primarily through words. It's the medium with which I am most comfortable. It's the medium that I think also is like slightly maybe over-indexed and over-rewarded because so many of our casual conversations happen with words. So if someone is a great dancer, they don't get credit for that at the bodega. Do you know what I mean? Yeah. And so I felt alone and pretty spun out.

Pete What was it like when you came back when you could finally do it again? Nicole I would love to say, and now I'm like this new woman and I'm just like this hallmark. Do you know what I mean? Like every day is full of rays of sun. But I think it felt glorious the first time I could sing again. And do you sing at all, like even just when you're by yourself? In the shower and in the car, yeah. When you, you know, with your working at the edge of your range, even just like singing along with the radio, there's sometimes you sort of like send your voice up like an arrow and you don't know if it's going to hit its mark.

And the first time I could like trust the Falcon of my voice to go out and come back as we practiced, That felt fantastic. And now, because I'm human, I habituate to glory. And Tuesday feels like Tuesday. So you're a performer. You are a lyricist. You are a writer of books. You've got a new one coming out, which we'll get to in a minute. Which one do you like best? I think that there are probably some days when I feel most comfortable in one of those forms. You know, people have like good hair day where there's just like sort of some series of unidentifiable variables. You slept on it, right? You washed it two days ago. The

dew point is 67. For whatever reason, it worked when you woke up. I feel like there is some similar set of variables organically happening in my brain that some days I wake up and I'm like, oh, I've got language at my disposal. Like it's a good word day, you know, for metaphor making on the fly. And on those days, it feels good to be on stage because I know that if a mic goes out or if somebody says something funny or a bartender breaks a glass, like I can maneuver quickly enough to incorporate that into the show. About the bartender. So your new book that's coming out, I think we're doing this interview too early, but it's coming out what November ish, right?

Yeah, you got it. It's called bury the lead a cocktail book. You teamed up with a bartender, sort of instructor, sage guy in Minneapolis and Lazerbeak, your longtime partner, and you wrote a book about drinks that he had created, right, based on your latest album, Bury the Lead. Do I have that right? You got it, yeah. Why?

I mean, it's a fun book and I really enjoyed it and I learned some things about cocktails, but why'd you go there? Uh, you know, okay, so I think, as I mentioned in the book, you know, I am an enthusiastic collaborator with almost anybody who doesn't do what I do. Like, working with other writers, I find myself, even though I wish I didn't, I find myself getting, like, weird and territorial. But I love working with people who are really serious about their craft in a monomaniac

way that I can recognize, but it's in a parallel lane so that I have no ego threat. And I'd worked with Marco Zappia, who did the cocktail recipes in the book. I worked with him once in Minneapolis and I just thought it would be kind of a cool add on. You know, hey, could you put a drink together for the song? And he came back and blew everybody's mind. It was a show about science and he had one whiskey drink that was served in a syringe from which he'd remove the needle to render.

Yeah, it was so cool. And he'd dried out the hearts of beats in an effort to resonate with some of the themes about heartbreak in the show. And I thought, wow, this guy's awesome. And I want to find some sort of excuse to like link my wagon to his star. And so this was that opportunity. What's your, just getting back to the business here for a second, what's your biggest worry about the music business and how you play in it?

I guess there's some like off the hip answers that I talk about, like how do we compensate creatives well in an era of streaming? But also I want to make sure that my worries about the music industry aren't born of an undue attachment to the way it happened to be when I found it. Things changes all the time. It's definitely in an era of disruption. I think there's a lot of concerns. The idea that really large multinational conglomerations seem really well positioned at the moment

to turn a decent dollar. And it's a lot harder for the songwriters to do so. Ah, but the trick is, of course, that the songwriters have a double bottom line. We want to write the song as much as we want the money for it. And that means we'll work cheap, free, and sometimes even at a loss. So I have been romanced by, I think, behavioral economics as much as the next person, but there is another currency at play here that renders the artist and the songwriter, I think, pretty easy to overwork and underpay. She's an artist, she's a songwriter, she's an author, she does a bunch of stuff. New book coming out in a month or two.

It's called Bury the Lead after her last album. Dessa, thank you. Thanks for having me, Kai. This final note on the way out today, you may have seen or heard the stories yesterday about the relative hit to the federal debt that the economic plans of Vice President Harris and former President Trump will give. Spoiler alert, in case you didn't, the GOP nominee's plan would be roughly twice as debt-laden as the vice president's would. But that is yesterday's news.

Today's news is that no matter who wins, they are walking into a whole lot of red ink. The Congressional Budget Office was out today with its estimate of the federal deficit. Remember, deficit is the yearly shortfall. Debt is every dime we've borrowed since the days of Alexander Hamilton. Anyway, the federal deficit for the fiscal year just ended a little bit more than $1.8 trillion. Our digital and on-demand team includes Kerry Barber, Jordan Mangy, Dylan Miethenen, Janet Nguyen, Olga Oxman, Ellen Rolfus, Virginia K. Smith, and Tony Wagner. Francesca Levy is the executive director of Digital and On Demand.

And I'm Kai Rizdal. We will see you tomorrow, everybody. This is APM. Hi, I'm Kyle Rizdal, the host of How We Survive. It's a podcast from Marketplace. In 1986, before I was a journalist, I was flying for the Navy. Mr. Gorbachev, tear down this wall. It was the Cold War and my first deployments were intercepting Russian bombers. Today, though, there's another threat out there.

Climate change. This could be the warmest year on record. Climate change is here. Temperatures here are warming faster than anywhere on earth. And while the threat seems new, the Pentagon's been funding studies on climate change since the 1950s. I think we will put our troops and our forces at higher risk if we don't recognize the impact of climate change. This season we go to the front

lines of the climate crisis to see how the military is preparing for the threat. Listen to How We Survive wherever you get your podcasts.