Inflation Origins: Supply, Demand, and 'Transitory'

On this episode of the Chuck ToddCast, Chuck sits down with Jared Bernstein — veteran economic adviser to both the Obama and Clinton administrations — for a sweeping, candid breakdown of the American economy, why the data and national mood feel so misaligned, and how technological change is reshaping the labor market. Bernstein explains how the White House approached economic tradeoffs, from inflation and tariffs to the stubborn low-hire, low-fire job market. He and Chuck dig into the uncertainty surrounding AI-driven job displacement, why Americans are more skeptical of AI than peers abroad, and how policymakers failed to build guardrails around the harms of social media. Bernstein argues that a federal jobs guarantee would be far more effective than universal basic income, and that political candidates will increasingly need to get tough on tech as the power of the “Magnificent Seven” distorts markets and discourages regulation.

The conversation then turns to the structural failures of America’s healthcare system — from inelastic demand to weak cost controls — and why “Medicare for more” could be a practical starting point for reform. Bernstein outlines the entrenched inefficiencies of employer-based coverage, the rise of contract work, and the political salience but poor targeting of policies like “no tax on tips.” He also discusses the missed opportunity to protect the expanded child tax credit, the flaws in Trump’s proposed baby bond program, and the broader need for progressive taxation rather than philanthropy by billionaires. Finally, Chuck and Jared confront the realities of the national debt in an era of higher interest rates, the feasibility of reviving a robust child tax credit, and whether new supports — like credits for childcare or elder care — could help families navigate an affordability crisis that shows no sign of easing.

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Timeline:

00:00 Jared Bernstein joins the Chuck ToddCast

00:30 Jared worked for both the Obama & Clinton administrations

02:15 Drafting economic policy that has the most upside, least downside

03:15 The economic data doesn’t match the vibe of the country

04:15 The Biden WH talked past the electorate but didn’t lie about economy

05:45 Biden thought the job market was most important economic indicator

08:30 Inflation has been stubborn, how long did you assume we’d have it?

10:15 Tariffs have contributed to about half a point of inflation

11:00 Inflation during Covid was a combo of low supply & high demand

12:45 Should the fed be focusing on inflation or the jobs market?

14:30 AI isn’t causing mass layoffs yet, but it has frozen hiring

15:30 We’re stuck in a low hire, low fire jobs market

16:45 Technology displaces the most workers during economic downturns

18:45 How can we avoid job displacement destruction from AI?

20:15 Americans are far more negative on AI than other western nations

21:30 Politicians failed to create guardrails for the harms of social media

22:15 We don’t know the extent of how AI will displace jobs

23:15 Government should offer a federal jobs guarantee for AI displaced jobs

24:30 Universal basic income pales in comparison to a jobs guarantee

26:15 Getting tough on tech will be critical to successful political candidates

27:30 Tech companies threaten regulators with exiting the country

28:30 Breaking up tech’s power has appeal on both sides of the aisle

29:00 Market cap of the magnificent 7 is 22 trillion dollars

31:00 The S&P 500 minus the magnificent 7 is basically flat

32:45 Non-profit hospital systems make more money than for profit ones

33:30 Leaving healthcare to the free market doesn’t work well & is expensive

34:15 Healthcare isn’t shoppable and demand is inelastic

35:45 The only healthcare solution from congress is subsidizing insurance 

36:30 The ACA did a lot to control healthcare spending, but not enough

37:15 We have very few cost controls in our healthcare system

38:00 “Medicare for more” would be a great place to start fixing the system

39:15 Competition in the health insurance market has been insufficient

41:00 Health insurers don’t want to compete with government, will fight hard

42:00 Medicare won’t be free but considerably cheaper than private market

42:45 Will a shorter work week be realized in the age of AI?

43:45 Social welfare is too often correlated to GDP

44:30 A shorter work week isn’t feasible during an affordability crisis

46:15 Employer based healthcare system is deeply rooted, but inefficient

47:30 Companies have pivoted to contract work to avoid paying benefits

48:30 The salience of the “No Tax On Tips” policy

50:45 No tax on tips is poorly targeted and inefficient, but will be hard to repeal

51:30 Biden should have “died on the hill”  protecting the child tax credit

53:30 Trump’s baby bond program is poorly targeted & exacerbates inequality

55:30 Government shouldn’t rely on philanthropy by billionaires & tax progressively

57:15 Raising the corporate tax was always a nonstarter in administration meetings

58:15 We’re at a dangerously unsustainable level of national debt

59:15 Higher interest rates are making the debt much harder to sustain

1:00:00 A child tax credit is feasible, but needs a pay for

1:01:00 The childcare industry is very responsive to demand

1:01:45 Could we see a “home care” credit for both kids or seniors

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