Planetary Sunshade Climate Solutions

On the show today, signals or not from the new Fed chair the economy post Iran deal, and an out there idea to cool the planet from space from American Public Media. This is Marketplace In Denver, I'm Amy Scott in for Kai Risdll. It's Friday june nineteenth, happay juneenth It was a big week for the Federal Reserve. Kevin Warsh's first interest rate meeting as chair, followed by his first press conference, at which he set a decidedly different tone with me to talk about what we might expect from the new Fed chair, and the rest of the week's economic news are Stacy Vankmith with Bloomberg and Jordan Holman at the New York Times. Thanks for joining us Thanks Amy. Thanks Thanks, Amy All right, Stacy, let's start with you. What did you make of that first press conference? Anything stand out to you Oh yeah. Well, I mean, everyone was watching this press conference to see what Warsh was going to say. If he was going to deliver on what Trump really wants him to deliver on, which is lowering interest rates And I think the answer is a definitive no. I think Warsh kind of came out as a talk in this first press conference We'll talk more about that, But Jordan, what about you? What does the beginning of the Kevin Warsh era look like just based on these initial statements and appearances Yeah, you know, I spend most of my time talking to executives. and so they were also very much watching to see what to make of how they're planning their businesses and the fact that he did keep the interest rate high. It's kind of more of the same for them, which is more of the same of trying to figure out a complex economy, what's happening with the consumer And that's just something that's going to continue to play out in this economy Okay, so Stacy, one change that we got here was no guidance basically. Kevin Warsh doesn't want to tell us where he thinks the Fed might be headed on interest rates. But we do have the dot plot right that shows where FOMC members anonymously think interest rates are headed. And as I think you alluded to, the markets really took those predictions to mean that we will see at least one increase in interest rates this year Um you know, is that the right read, do you think I do think that's the right read. yes. And I think the dot plot famously or since Bernank throughrew Yellen and Jerome Powell I feel like the Federal Reserve has been moving towards more and more transparency and openness. And I think Warsh was delivering a message. He did not participate in the dot plot, we think He's delivering a message that things are just going to be a little more secretive a little more kind of behind closed doors But he did give us one really big hint, which was he said, you know quote this committee will deliver on price stability, which is essentially Fed speak for we're not going to lower interest rates. But I do actually think even if he came in planning on lowering interest rates, that does seem like an appropriate response to this moment because jobs have looked stronger in the last couple months and inflation has looked higher. So both of those things would be conducive to raising interest rates. So I don't know what his initial plans were, but it seems like he's definitely moving in a hawkish direction Okay, so Jordan, you know for those of us who watch the Fed closely, all this is super fascinating. We're always reading the fine print and interpreting body language. But what do you think this leadership change means to the average person or to the business leaders that you talk to Yeah, I mean, obviously whatever the Fed does gives them gives business leaders and thus us consumers who are purchasing their wares or going to their restaurants and whatnot. It gives a roadmap for just possibly how expensive things will be. Should we invest now? Should we not invest now? And when we think about what's really driving the economy, it's really the stock market. And so all of this is important to just think about the next three, six months or a year of what our economy and spending could be. And so when I'm talking to executives, this is just another data point that they're putting together as well as like supply chain and thinking about the disruption from the war, all of those things to just think about what business what their business will look like and thus how they price things for us, what they offer us, all of that. So it's very important, but it's just one data point that business leaders are looking at All right, so the big cloud hanging over the economy for the past hundred days or so has been the war in the Middle East Stacy, we've got this tenuous deal now with Iran, which was looking a bit shaky even today before Israel and Hezbollah agreree to a new ceasefire U, But, you know compompared to before the war and where we are now, how would you characterize the economic impact I mean, it was huge. Obviously Y fuel prices went up know double digit percentages. We've all seen this change at gas stations, but also fertilizer prices rose, which has pushed up food prices So I think everyone is hoping that this ceasefire will deliver lower price that it will hold and it will deliver lower prices like lower gas prices, lower food prices, which is the kind of thing that can really trickle through the economy But that is also not certain. Even if the Strait of Hormuz closing and fuel prices rising triggered the inflationary rise, I think we all remember transitory inflation, which was kicked up by supply chain snags during COVID, even when the supply chain snags went away, the inflation didn't. So I think that is what everyone, including Kevin Warsh is watching right now And Jordan, you know, we've talked about how the economy has held up, you know, maybe surprisingly well given all of that. And the latest retail sales numbers this week seem to back that up How are consumers managing to keep carrying this economy even with the higher prices that Stacey was talking about Right, Well, I think the context around these retail cales, which cover May is it was tax refund season. And also is the start of the summer travel season. And so when I was chatting with some CEO's in the hospitality space and even think about like Airbnb and you've already set your plans. So that means You're getting your clothes, whatever electronics you need. So that is kind of set. I think one of the questions is does it continue during the summer? because it Stacy set Just because we get the deal now, it doesn't mean everything goes back Prices will still probably be elevated for airline flights, food costs are higher. then Consumers will have to start really thinking about trade offffs. But right now it's what we saw with the retail sales might have been a moment in time with that elevated boost of tax refunds. All right, Jordan Holman with the New York Times and Stacy Vank Smith with Bloomberg. Thanks both of you for joining us. and hope you have a good weekend Thanks Amy Me too US markets were closed for the holiday, but we'll have some other numbers for you when we get there spring housing market can best be characterized as mixed. High prices and high mortgage rates are still keeping many would be buyers out. And while sales of existing homes picked up in May, The market for new builds is struggling a bit. We learned this week housing starts, that is new construction fell sharply last month And in April, sales declined after steady growth since January This explains why, according to the National Association of Home Builders, nearly two thirds of builders are offering incentives. Marketplace's Novisafo has more Kara Laveandnder at John Burns Research and Consulting, surveys about three hundred builders monthly And she says incentives are now averaging about seven percent of the asking price for a property twice the pre COVID average So incentives can be a range of things, right? Things like design options, spin. so getting or fifty thousand dollars or whatever it may be to spend in the design studio Customize a new home Also builduilders will do things like include appliances for free. So you know washers and dryers, dishwashers Joel Berner is senior economist at realtor. com They'll do freed upgrades on build to order homes. So if you want that quartz countertop, whatever it may be, the builder may include that at no cost just to get you to sign their deal. Builders might also offer cash for closing costs and they might, maybe actually cut the asking price for a home But only as a last resort, says Robert Deietets, he's chief economist at the National Association of Homebuilders when you artificially lower the price of a home you're essentially disconnecting that price from construction costs and thus setting expectations in the future that could be difficult to reverse. Often, lowering what the monthly payment will be is a key selling point, experts say And one way builders have been doing that is by lowering the interest rates buyers pay on mortgages. lower than what you' get at a bank. Builders do this by essentially buying mortgages in bulk from a lender, says Allie Wolf, chief economist at the housing data and consultancy firm, Zonda. Put simply, they shell out a lot of money to then be able to offer these rates lower That's not something you and I could do. That's only something that the builder can do because they have to put millions of dollars up front. All of this leaves potential buyers with a bewildering array of options. That is if they can afford to take advantage of the deals in the first place I'm Novasao for Marketplace Nonprofits tend to be pretty lean operations. IRS data from twenty twenty four says ninety seven percent of them in the US had annual budgets of less than five million dollars And well over half were working with fifty thousand dollars or less How these organizations stay afloat can be tricky, as you'll hear in the latest installment of our series, My Economy I'm Becca Jery, Executive Director of Radio Talking Book Service. We read newspapers and magazines for folks who are blind low vision or otherwise print impaired, and we broadcast those across the state in Omaha, Nebraska I came to Radio Talking Book Service as a volunteer, but it was involuntary volunteering I was convicted of a felony in twenty twelve and as a result had a fair amount of community service to complete and they paired me with Radio talalking Book service In twenty fifteen, I wrapped up the hours and the volunteer coordinator approached me and said, Hey, we have this part time office summer gig paid, would you be interested in applying And I thought, yeah, why not? I was at a bit of a crossroads. I was about three years sober And I interviewed with the director at the time, and what he described was not going to be simply part time nor just a summer gig. Like it was a rule that was going to be evolving And I thought to myself, oh man, I'm going to have to turn him down because I don't think this is for me And he finally got done with his pitch and he looked at me and he said, what do you think? And I said, Yeahah, sounds great In twenty fifteen, we were in that mid two hundred thousand dollars a year kind of budget that goes to make sure that we keep the lights on and that we have recording booths here for our volunteers. It pays salaries We have a small but mighty team of three We maintain over seventy subscriptions with twenty seven newspapers. So that's another big chunk of our cost Back in twenty sixteen With our endowment, we were relying on it so much We would have spent it all in five years if we were to continue at the rate we were going. I had never written a grant in my life. and so I very quickly took an online grant writing course and just I taught myself how to do it on the fly, essentially I am so grateful that every day I am of service And I forget that sometimes when I'm crunching numbers and trying to check boxes. And then we'll get a phone call from someone that says Thank you for making the Lincoln Journal Star available because I was able to find a volunteer position as a low vision person and they have since asked me to be on their board of directors. And I would have missed that opportunity Had you not read that newspaper article It's just it's kind of incredible. It is incredible. Becca Jery, exxecutive Director of Radio Talking, Book Service in Omaha, Nebraska You know, we always say it, but it's true. We can't do this series without you. so let us know what's going on in your economy. You can do that at marketplace d. org slash my economy comoming up the red white amb umbrella. It's a good day to go to the beach. But first, let's do the numbers. US markets were closed for the juneteenth holiday. Jordan and Stacey and I talked a bit about the uncertainty still hanging over the agreement between the US and Iran. In global energy markets. Oil prices moved up and down with the back and forth around negotiations and ceasefires. Benchmark Brent crude futures for August hovered around eighty dollars a barrel, US West Texas Inmediate futures for July danced around seventy seven dollars a barrel. And where you might be on that supply chain, TpleA reports the national average for gas is three dollars ninety seven cents a week ago, four dollars ten cents. a month ago, four dollars fifty three cents. Looking ahead to next week's circle Thursday on your calendar for a free ticket to Data Palooza We've got first quarter GDP revision, M durable goods, and the Fed's preferred inflation measure, personal consumption expenditures. You're listening to Marketplace. This is Marketplace. I'm Amy Scott. In an economy that's racing towards automation, you might think a hotel housekeeper's job would be relatively safe. But while AI can't make the beds or scrub the sinks Automation is already disrupting some jobs. Rebecca Clevin with the nonprofit tech newewsroom Proof News, has the story Elsa Rodon is a housekeeper at a luxury hotel on the Las Vegas strip She used to have near complete control of the order of the room she cleaned She checked off her progress on a clipboard That changed in twenty nineteen when her employer rolled out a software called the Hotel Service optimization System, or hot sauce It uses an algorithm to rank which rooms to clean next You have a device like tellelling you move here, move there. if you were a robot The app is from Spanish tech company Amadeus. In twenty twenty one, it said hot sauce was used by more than seventy percent of global hotel brands in seventy countries promises to speed room turnover and boost worker productivity But Roldonne told me the A center zigzagging around the massive hotel with her bulky cart We literally can waste more than twenty minutes in the trouled time elevators are busy, the cart is slow. It also tracks her progress throughout the day, clocking when she starts and finishes each room I asked Aadeus about worker dissatisfaction, but no one responded Rolledon is part of a union of sixty thousand hotel workers in Nevada Soon after hot sauce was introduced, the union started negotiating more autonomy from the app In twenty twenty two, it won Yes, we go with the instructions, but also if we see It's available to clean can do it. Unions are in many cases, using bargaining to establish basic protections against AI and automation in the workplace ten percent of the country's workers are union members, resulting in a patchwork of protection I met housekeeper Luz Nunez at a resort near Palm Springs in California She said, the app makes her job more stressful She's not represented by a union She has a daily quota, and managers can use hot sauce to monitor her productivity She says, If you don't change the bed, they give you twenty or twenty five minutes And if you take longer than that, they'll ask you, why did you take so long days she logs a ten minute break but keeps working fearing she won't reach her quota Instead, she tries to take it a little easier She says she doesn't sit down or anything, Rather, she works a little slower Then she picks up her pace again Ready for the algorithm to serve up another room to clean. In Palm Springs, I'm Rebecca Plevin for Marketplace On an unseasonably hot day in Venice Beach, California earlier this year, people were out in force with their beach umbrellas. bright ones, striped ones. It's a red, white ubue umbrella popping open for shade. It was just five dollars and I seen it and I was like, let me go ahead get this with the chair and then I thought it would be beneficial to have shade When you're under the umbrella, like you feel like that breeze feels nice and you feel cool. If only cooling the planet were as easy as opening a beach umbrella Well, what if I told you there are people actually looking into that idea as a real climate solution So If we're too hot out here and we want a little bit less sunlight We can Put up the shade Block some of the sun and cool us off Obviously, the technology would be different in space, but the concept is exactly the same. Morgan Goodwin is executive Director of the Planetary Sunshade Institute. The organization brings together climate scientists, aerospace engineers, and governance experts to study how we could cool the Earth by reflecting sunlight from outer space Imagine something like an umbrella about the size of Argentina. When you think of spacecraft or shadecraft that are very large and very flat. And so the umbrella is a really good kind of metaphor for that Instead of one massive spacecraft or shpecraft, you would want to figure out the optimal size and then construct a very large number of those to form the kind of a total area that you would need to block Flying together like a school of fish sort of. Exactly. yeah. A constellation would be the celestial term Other proposals include a shield made up of thin film bubbles, or a cluster of solar sails, just hanging out, giving us some shade here on Earth. There's a region of space about four times further away than the moon where objects that are place there, maintain a constant position This area in space is known as L one or Lag Grange point one. It's where gravitational forces between the Eth and the Sun cancel each other, so objects kind of stay put. That would allow continuous shading of the planet think about roughly a one percent dimming of the sunlight And the climate science that we look to says that would equate to a roughly one degreree Celsius global average temperature reduction This idea is in the early stages. It's a tiny field, mostly researchers, talking to other researchers And there would be risks like termination shocks the sudden warming that would result if the sunshade failed. Petary sunshade could affect rainfall in harmful ways. Others say investing in tech solutions like this is a distraction from the real solution decarbonizing our lives Goodwin says a sunshade is no substitute for reducing emissions and removing some of the carbon we've already emitted from the atmosphere evenven if we do both of those things as aggressively and as well as we possibly can It still puts us into a climate trajectory that risks catastrophic dipping points And that's even in those best case scenarios, which we are not on Planetary sunshade would also be expensive in the low trillions of dollars, Goodwin says Though the predicted costs of unmitigated climate change are far greater. And Goodwin says the rapidly growing space economy makes a giant sunshade more feasible To hear more about that and why many scientists are skeptical of climate interventions like this? Check out the latest season of How We Survive wherever you listen to podcasts This final note on the way out. We're in the midst of the first World Cup since prediction markets really took off as a new way to bet on sports. And Bloomberg reports more than five billion dollars have been traded on the game so far on the platform's polymarket and Kulchi Meanwhile, Draft Kings said last weekend was its biggest ever for event contracts, bigger even than the Super Bowl Plenty of money is being made. One polymarket user reportedly lost nearly nine million dollars when Belgium failed to beat Egypt. They tied e one I think I'll stick with the no stakes FIFA match predictor Thee Music was composed by BJ Leedermman, Marketplace's executive producer is Nancy Fergali, Joanne Griffith is the Chief content offfficer, Neil Scarborough is the vice presresident and Geral manager, and I'm Amy Scott. Have a great weekend. We will be back on Monday This is APM