A lot of people have a sense of

financial nihilism because they might

not necessarily be on the right the path

that they want to be with the American

dream, but they can afford these things.

And so it does create a weird

discrepancy in the economy where we see

strong retail sales, but we see consumer

sentiment um so low. And in terms of how

it's changing the economy, you see

companies catering to it a lot more.

Like there's a whole airline that caters

just to dogs. I think it's called Bark.

Have you seen this? Have you seen that?

You can fly your dog on the Bark place.

Yeah.

>> Welcome to the second and final episode

of ProfG on Economics, a special series

focused on the forces shaping the

economy and your financial life. I'm Ed

Olson, co-host of Profy Markets. I'm

joined again by Kyla Scandlin, economic

commentator and author of In This

Economy: How Money and Markets Really

Work. Together, we will be answering

your questions on the economy and what

it means for your money. Kyler, thank

you for joining us. Thank you.

>> Are you ready to get into this?

>> Yes.

>> Our first question comes from Spencer

Combmes on Instagram. They say, quote,

"It seems like a growing number of

millennials priced out of home ownership

and delaying kids are redefining

traditional spending patterns. Rather

than channeling money into homes and

early family life, they're allocating

more toward experiences, pets, and

accessible luxuries. These categories

may increasingly replace those older

economic anchors. How do you see this

generational reallocation of spending

influencing the economy overall? and

what opportunities could emerge as a

result. Kyla, what say you to Spencer

Combmes?

>> I think it's an interesting question and

it actually becomes an American dream

question. So there's something called

aspirational displacement where people

who can't afford to buy a house which is

that traditional path of the American

dream, they start buying experiences,

they start spending on their pets cuz

they have additional income but they

can't, you know, make a huge p purchase

like a house. And so it's an interesting

thing that we're seeing in the economy.

And on the previous episode I talked

about uh balance cost disease and how

goods were getting cheaper and cheaper

because we've gotten better and better

at producing them. Services have taken a

longer time to get cheaper because it's

much harder to make services more

productive. It's very easy to automate a

car factory, much harder to automate a

physician. And so I think that's also

part of it is that it's much cheaper to

access these accessible luxuries. We

also have international trade which uh

has informed a lot of the access to

these luxuries oftent times which come

from abroad. And then the experiences

part is a lot of travel too. And so the

average American travels a whole lot

more than they used to. And so these are

interesting indicators of economic

health. Um, so a lot of people have a

sense of financial nilism because they

might not necessarily be on the right

the path that they want to be with the

American dream, but they can afford

these things. And so it does create a

weird discrepancy in the economy where

we see strong retail sales, but we see

consumer sentiment um so low. And in

terms of how it's changing the economy,

you see companies catering to it a lot

more. Like there's a whole airline that

caters just to dogs. I think it's called

Bark. Have you seen this? Have you seen

that? You can fly your dog on the bark

planes. Yeah. No, I'm serious.

>> Oh god.

>> Yeah. It's um it's something that

happens.

>> Did not know.

>> It's it's something that happens in

higher inome countries is you know more

and more so they'll spend on these sorts

of things. It's the same pattern that we

saw in Japan as well, South Korea too.

So yeah, it makes a lot of sense and

there's going to be a lot of luxury

brands that are able to capture that, a

lot of dog airplanes that are able to

capture that. And it does represent a

strange amount of um economic health.

>> I think the thing that's so depressing

to me about it is it's like we don't

have enough money to buy houses, but we

do have enough money to buy flights for

our pets. And that's such a weird like

in between stage, which is almost I

don't know if it's it's worse than than

not having the money to to buy the the

the dog flights, but it's it's

definitely got like an a very depressing

irony to it that that concerns me. And

it reminds me of also like the little

treat culture. um which is this this

whole thing where it's it's like you you

don't think that you can buy a house or

get anywhere because everything's way

too expensive. So instead of like saving

up for these meaningful purchases, you

instead just like spend all of your

disposable income on what people are

calling like little treats. So, like

maybe the dog flight would be one of

them or like um you know clothes or uh

laboo or like expensive coffee like

whatever it is. Maybe you'd put sports

betting in that category too. Um which

is really concerning to me at least

because it just makes me think that this

generation has kind of given up and has

decided that they're not they're not

going to get out. So why even try? and

to the the dog flight. So, I've got to

look this up. Bulock, that's crazy. So,

I have some data in front of me to to

the the pet point about how much young

people are spending on their pets. So, I

guess this really aligns with what

you've just said. So, the average

American across all age groups spends uh

if you have a pet, spends $4,400 per

year on their pets. For Gen Z, the

number is over $6,000. So, young people

are spending 40% more than the average

pet owner. But here is where it gets

worse.

A third of those Gen Z pet owners say

they have gone into debt because of

their pets. So, we're literally levering

up to put our dogs on flights and get

them fancy dog collars and maybe get

them fancy dog treats. And meanwhile,

the cost of housing is six times our

income. And we're doing nothing, it

seems, to figure out how to save for

that event. And and you can't really

blame us because of the environment, the

financial environment we're in. And I

think this also goes to the stuff that

we're seeing with like family planning

where young people just don't really

want to have kids anymore. It seems like

they're more interested interested in

having like a dog or a cat or a pet

because it's just less expensive. So I

don't know what the opport I mean the

question is like what opportunities

arise. I I'm not seeing much positive in

any of that, but I think that it is a

really good question that highlights

something that probably deserves more

airtime in the young people conversation

and after this I will be checking out

that airline dog on the airline. Well,

it's it it does create I think a Yeah, I

mean it creates a distorted lens on on

the economy because like some people

will be like, "Hey, you know, they're

buying their dogs airline tickets, you

know, things have to be somewhat okay."

So, it is seen as Yeah, it's seen as

like and they do have the money to do

it. Like it's some well, they're taking

out debt, but it's some element of um

economic health and then it's just a

shift in priorities too. And you know,

we often talk about this like fabled

American dream. It's something I write a

lot about because I think it's really

interesting like what does a society

subscribe to as a path and I think right

now that path is evolving because of the

economic constraints. um you know,

houses are just a lot harder to come by

and so it's harder to do family

formation to stay in one place even um

and it's just a different it's just a

different world and I think that it's

hard um because for the past 40 years

with this great moderation where things

the growth of suburbia the growth of

white collar jobs it seemed like

everything would stay stable forever and

that's just not this just not how the

world works apparently. Support for this

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>> So, I'm looking at our second question

and it kind of relates to what we just

discussed. This comes from Instagram

user Alan Davidson. Allan asks, quote,

"What's the most misunderstood economic

indicator when it comes to whether

younger generations are actually gaining

ground?" This is interesting because

it's I mean it really relates to what we

just talked about where if young people

are out buying avocado toast and lattes,

I feel like boomers immediately go,

"Well, you can buy avocado toast, so

you're fine. Everyone's fine." The first

thing that comes to mind for me is like

whatever avocado toast sales are, that

would be a misleading economic indicator

of what's really going on. But the one

that bugs me right now is this

interest that people have. And it's true

that more young people than ever before

are investing in the stock market. Like

it's something like half of us today,

half of Gen Z, which is a record high.

And then also like young people today

are investing way earlier than other

generations did. So, it's like, okay,

you guys have some money and you're

interested in stocks. Therefore, you're

good. Like, you're in good shape. And

for me, this frustrates me because I

feel like it ignores two really crucial

things. One of which is how much are we

actually investing?

And the answer is it's really not a lot

at all. Like if you look at Robin Hood

as an example, which is where most young

people are trading, the average account

balance is less than $250, which is

tiny. So sure, we're investing, but

we're not investing in a way that's

meaningful,

most of us, or at least on average. And

then the second for me is like what are

we actually investing in? And for most

young people, it's very heavy on the

crypto and the meme stocks. And there

was this Bank of America study uh

survey. They found that the average

young person has 30% of their portfolio

in crypto. That to me is that's not

healthy. That's not a symbol or a signal

that young people are doing well. That's

a signal that they're getting a little

desperate and they're yoloing into

things where they might see perhaps a

glimmer of outstanding returns. But the

phrase young people are investing more

than ever in the stock market like it

makes you think that we we're set. And I

feel like there are a lot of other uh

indicators which we could get into which

I feel like are are more symbolic of

what's really going on and that is we're

not set.

>> No, I think that's um true. And the

economic indicator that I brought to the

table is a bit similar where people talk

about how much young people are sports

betting. You know, 31% of 18 to 34 year

olds have an account with with sports

betting as you were talking about. 32%

of them bet three or three or more times

a week. A 30% um has bet more than 500

in a single day. But when you ask them

if they want this, people say no. A Pew

Research poll found that over 40% of

people aged 18 to 29 think that

legalized sports betting is is bad. Um,

it's up sharply from 34% in 2022. By the

way, that's that matters that change.

And so I think that's another thing that

ties into what you're saying is it seems

like everybody wants to be betting.

Everyone, even though it's a it's not

that many, it seems like a lot of

people, but everybody wants to be

betting. Everybody wants to be a part of

this like casino economy, but when we

look at the data, that's just not true.

Like they are that that ties into the

first question pretty well where people

are doing this because of the

aspirational displacement. They're doing

this because they're trying to find some

way out and because it's accessible. I

think also prior generations might have

tapped into this stuff a little bit, but

I don't know. So, I think that's I think

one of the most misunderstood things is

that people don't want what's happening

right now with elements of the casino

economy.

>> Yeah, that's a great point. It's like

the same with any other addiction. Like,

you know, you could be addicted to

alcohol, you could be addicted to

>> opiates, and then you can also probably

think these things are terrible and I

wish they had never entered into my

life. I feel like the data that you're

you're producing there is like that's

exactly the story that it's that it's

telling. It's like we're addicted to

this stuff. We know it's not good for

us, but we keep doing it because that is

the nature of addictions, which again is

is really concerning to me. Okay, we

will be right back after a quick break.

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Let's move on to our final question.

This is from MattMC121.

Matt says, "With so much noise in

today's media, how do you navigate

through it? What is your process for for

arriving at a point where you can give a

new perspective?"

That's a great question, Kyla. What do

you think?

>> Oh man. Um there's a lot going on and so

what I do every morning is I check all

of the major outlets. So Bloomberg, Wall

Street Journal, uh Financial Times to

try and get a sense of what has happened

overnight. And then I keep a running

word doc, a Google doc throughout the

week where I take notes on various

themes that I think are popping up. So

if I see a lot of research coming out

about gambling or if I see a lot of

articles written about gambling, I'll

add that to my Google doc. So I try to

compartmentalize and create themes for

all of the things that I'm seeing

because then it's easier to connect the

dots. Everything is connected um in this

sort of world. Um and so that's what I

try to do is make sense of it through

writing it all down. But that takes a

tremendous amount of time. So what I try

to do with like arriving to a new

perspective is say okay what did I learn

this week like how can I help explain

all this stuff that's happening and then

relay it to somebody who's just trying

to understand and they have 3 minutes

every day to understand what's going on

around them. So it's it's um it's uh

there's a lot there's a lot going on. I

feel like the other thing that you nail

which probably helps with understanding

things is just like how would I explain

this in three minutes to someone who has

zero context and I feel like that's a

really good way to understand the issues

deeply. I mean, this is what people say,

if you want to learn, teach, which I

feel like is kind of what you do. And

that's probably a really I mean, I feel

like people could take that in their own

lives. For me,

same as Kyla, I try to read everything.

So, read all the papers, try to

understand both sides of the argument if

possible.

That is always going to be helpful. I

think another point that I would say

that I think has really helped me is the

fact that my job is to say stuff

and it's not just to read stuff. Um,

it's like I I literally have to by the

nature of this job, I literally have to

have a viewpoint and I have to

articulate that viewpoint out loud which

by its very nature forces me to be a

smarter person. Like tomorrow, as an

example, I am going to be on MSNBC. I

have no idea right now what we're going

to talk about. They'll tell me in the

morning and then by the time I appear on

camera later in the day, I need to have

an understanding of what we're going to

talk about. I need to have an opinion. I

need to have a position. And I can

guarantee you I'm going to have that

because of the pressure I have to

perform. I just will. Like I don't know

right now, but I know that I'm going to

figure it out tomorrow. So I feel like

the learning there I mean most people

don't have a job like this. Most people

don't have a job like Kyler does, but I

still think there's something you can

take with you. And that is if you want

to connect the dots and be smarter about

what is happening in the world, you

should just make yourself speak more.

Like you should say more things at work.

When you're in a meeting, you should

just force yourself to say something,

have an opinion. uh you should have that

pressure on yourself maybe at a cocktail

party like okay I usually don't have a

thought but you know I'm gonna just take

the risk and like say it right now um

you should do it online like you should

like post on LinkedIn you should start a

newsletter like I feel like the more you

hold yourself accountable to producing

thoughts and ideas which is really

uncomfortable to do but the more you

force yourself to do it I think it

really helps you connect the dots and

also develop your own perspective. That

might be kind of like an aggressive way

to to to to get it get it home. But I I

do feel like that's been a real benefit

for me of doing this podcast and doing

this stuff. It's like I don't have a

choice. I have to have an opinion on

stuff and I feel like you can you can do

that too in your daily life.

>> I think I'm just I don't know if we need

like more hot takes. I think we need

more informed takes. And so I would

agree. Yeah, I would agree that like

people should read the data, read the

research, and then they should post on

LinkedIn. I don't think they need to be

just um that's not what you said. Like

you didn't say that they should just

like post on LinkedIn with whatever

they're thinking about. But

>> I do think

>> informed. Yes. But it is an important

caveat.

>> I think it would do a great service to

us as a capital S society if people were

engaged a little bit more. um actively

in how the news is impacting them. I

think it's really important to not

internalize it. You know, it can be very

stressful part of the media environment

right now is a little bit of the flood

the zone strategy where it is stressful

by design. And so I think you kind of

just have to know okay like what do I

want to learn? like what do I want to

have a new perspective on and then go

and and seek that out and so I don't

know if you have to like read everything

all of the time because that just might

wear you down. Um but if you know sort

of what you want to be knowledgeable

about like is it you know peptides which

is the new craze in Silicon Valley like

do you want to understand everything

about that like you can go down that

rabbit hole. So that's what I'd

recommend is like read and stay informed

and then you know know what you want to

learn.

>> Read and then speak.

>> Crazy.

>> And I'm trusting Matt Mc121

to not just spout off about that he

has no idea about. I am trusting you,

sir, to understand the ideas. But I do

think again, hold yourself to it. Okay,

I've read stuff. I've looked at all the

perspectives. Now it's my job to say

something to someone. I think that's an

important step that you shouldn't count

out.

>> Yeah, you have to approach this with

kindness and empathy. Uh so like one

thing that I also do to sort of get rid

of the noise is I talk to a lot of

people. So I'm on the road quite a bit

and I'm traveling and I'm talking to

people who are real and like not on

Twitter.com. And so I think that's also

important is like to talk to real people

and not to let your perspective totally

consume you to where you're not allowing

any other input. It's really a tricky

ledge to walk. Um but you have to make

sure I think that you're you're open.

Not to be like too prescriptive, but I

think you have to be open and you have

to make sure you're approaching people

with kindness. Uh because the world

needs a little bit more of that.

>> That is a wonderful place to end. Kyla

Scanland is an economic commentator,

educator, and founder of Bread, a

financial education platform reaching

millions through storytelling and

analysis. She's also the best-selling

author of In This Economy: How Money and

Markets Really Work. Kyler, this has

been awesome. I hope Scott is gone again

cuz we should do this again.

>> Yeah, thanks for having me. And if you'd

like to submit a question for next time,

you can send a voice recording to office

hours.com

or post your question on the Scott

Galloway subreddit.