Consumer Sentiment, Junk Fees, Medical Debt, and the Future of Economic Policy with Neale Mahoney

>> Jon Hartley: This is the Capitalism and Freedom the 21st Century podcast, an official podcast of the Hoover Institution Economic Policy Working Group where we talk about economics, markets and public policy. I'm Jon Hartley, your host. Today my guest is Neale Mahoney, who's a professor of economics at Stanford University and the Director of the Stanford Institute for Economic Policy Research, or CPR.

Neale is a highly distinguished, widely published applied microeconomist, and recently served as Special Assistant to the President for Economic Policy during the Biden administration, working at the White House National Economic Council. Welcome, Neale.
>> Neale Mahoney: Great to be on the podcast, Jon.
>> Jon Hartley: Really wonderful to have you on here.

I want to start, Neale, and just talk about your background and where you grew up. How did you first get interested in economics?
>> Neale Mahoney: Yeah, great question. So I grew up in Amherst, Massachusetts, College Town in Western Mass. Home of Amherst College, Hampshire College, and UMass Amherst. My parents are both academics, my dad's a retired professor of food science, with a PhD in biochemistry.

My mom actually defended her dissertation, her PhD dissertation in nutrition when she was pregnant with me. Took some time off to raise me and my brother and then went back to Amherst College to work in a microbiology lab on research and advising students once I was in elementary school.

So grew up academic house and in a house where there was a lot of exposure to an interest in economic policy. So listening to the news, reading newspapers, arguing about things. As we got older and I came to economics out of an interest in policy. I was thinking about the questions of domestic policy, international policy, and found economics and economists to be illuminating and credible in the frameworks they brought, which helped me think about a complicated world in tractable ways and in the evidence and the analytical rigor they brought to thinking about policy.

And that just hugely appealed to me and that set me on the track to being first taking AP Economics in high school, then being an undergrad econ and math major, and then finally going to get my PhD.
>> Jon Hartley: Great, and so you're a boss guest. I think you must be a Boston Red Sox fan.

I guess, given the fields that your parents studied, did that influence you to study health economics, which is sort of a big, I think, theme in your own research or?
>> Neale Mahoney: Yeah, no, it's a good question, actually. My interest in in health economics grew out of the classes that I was taking at Stanford.

I was taking second year Industrial Organization on competition and regulation in markets. And you know, I found the, the tools, the frameworks to be very powerful. I found the topics of inquiry to be Less interesting than I would like. And there was, this was 2006, there was, I think, a growing debate about healthcare policy.

And so my primary advisor is, I guess you have an advisor for life, John Levin, but he's gone on to bigger and better things. But he pulled me into a project on health insurance markets and it was a combination of being able to use these IO tools with an area that I think is important and interesting and really rich with economics, which, which got me into health economics, which continues to be, you know, a, a large share of my portfolio.

But I have very broad interests. So you know, I, I'm working in lots of areas.
>> Jon Hartley: That's great. And IO being industrial organization for those that aren't familiar. And John Levin, I mean, he's now the President of Stanford. It's amazing see how so many economists in the president roles at various universities.

I wanna, first, I guess get into talking about some of your research you've done. I think to start us off, you've done some really great work on consumer sentiment. I think macro and micro people would find this really interesting. I mean, yeah, consumer sentiment is something that I feel like has been a big theme in the, I guess behavioral macroeconomics, even in the sort of policy world for a long time.

A lot of, I think Wall street traders follow the University of Michigan consumer sentiment surveys have been running for many decades. How much does consumer sentiment really matter for the macroeconomy in your mind? And I mean, what do we know about it? We know it's I think correlated with economic activity variables.

But I mean what do we know is actually causal? Does weak consumer sentiment cause negative economic activity? Does negative economic activity cause negative consumer sentiment? And what do we know about seminate measurement and how much of it maybe is politically driven? I know you've done a lot of work on this.

>> Neale Mahoney: Yeah, so great questions. I will try and get to them as I maybe I'll tell you a little bit of the story of sort of how we got into this space and what we found as a way of answering your question. So together with another Stanford graduate student or Visma graduate student, Ryan Cummings, we got interested in consumer sentiment, or I guess started doing work in consumer sentiment in fall 2023.

When this really large gap emerged between consumer sentiment as measured by University of Michigan and what you would predict if you looked at the historical relationship between consumer sentiment and economic outcomes and you sort of rolled that forward into that time period. And so I think like many others, we wanted to come up with explanations and whenever you see a big gap.

I think there are multiple factors at play. I'm not going to argue that we understand everything that's going on, but we wrote two pieces which we thought were illuminating and got a good amount of traction. One of them looked at political polarization. As you mentioned, responses to these surveys on consumer sentiments based on five questions have become, I think, increasingly politicized.

So when a Democrat is in the White House, people who affiliate with the Democratic Party tend to be more optimistic. When a Republican is in the White House, people who affiliate with the Republican Party? One thing we pointed out, this sort of jumps off the page if you look at the data carefully, is that this political polarization is not symmetric.

We wrote the line that Republicans cheer louder and boo harder, but their sort of deviation is about two and a half times as large as that of Democrats. And we could speculate on reasons. Maybe they're just better fans to their team. But that means that when Republicans are in office, then because their positive sentiment is not canceled out by Democrats, there's a little bit of a boost or a moderate boost, and vice versa.

So we found that if you adjust for this, you can explain about one third of the gap. So by no means all of it, but enough that it was sort of interesting to write up. And I think it was something that resonated. The second piece we wrote, which I think also resonated is this was in fall 2023.

And at that point inflation, the way economists measure it, which is the change in prices over the last year had come down to, I don't remember the exact number, let's call it around 3%. And so there was this puzzle. While yes, consumers, we know sentiment is dragged down by inflation, but now measured inflation is historically close to normal, why is sentiment still depressed?

And we made the point which is consumer. While economists measure inflation as the price change over the last year, consumers experience inflation as the change in prices when they go to the store relative to what they think is normal. And if you're buying eggs, maybe that's relative to the price last week or last month.

But if you're going to buy a pair of new running shoes, you don't run as, as much as you like to. Like me, it's based on the price three years ago. And so, if prices increased a lot two years ago, three years ago, and not as much this year, you will still get sticker shot when you go into the door.

So we did this analysis, we found that inflation has a enduring effect and that it has a half life of one year. Which means a shock to inflation. The impact in year one let's say it's 10 percentage points, in year two it's 5 percentage points, in year three is 2 and a half percentage points.

And so it just takes a while for people to acclimate to the new price level.
>> Jon Hartley: Interesting. So this is more but I guess, I think very timely, I guess, with all these elections where incumbents are kind of being voted out of office. That it's really price levels that matter, rather than year over year inflation rates.

Which, I guess, year over year inflation rates is generally what central bankers pay attention to and internal policy makers pay attention to. But at the end of the day.
>> Neale Mahoney: It's just like one nuance, is it? I don't think it's price levels, right? A Coke costed a nickel for something like 100 years.

And even now we're not outraged when we go into the store and bottle of Coke would cost 1.50. But it takes a while for us to acclimate. And so not as far as price levels, but it's not just inflation over the last year that people are experiencing. And so, you know, we had some estimates in the paper on, based on historical patterns, how long it takes for the impact of inflation to work its way through the system, two, three years.

But, you know, I think that's the frame of mind that I think the evidence suggests that one should take when we're thinking about the impact of inflation on consumer sentiment.
>> Jon Hartley: Interesting. Well, I do know that when you look at elections, there are these shocks to consumer sentiment.

Where basically members of the losing party, their consumer sentiment basically collapses after elections. And this is a pretty, I think what I would say is like a pretty robust result, I think, across countries. What's interesting is I've seen some work by, I think Atif Mian and Amir Sufi, and some others.

That they sort of look at elections as kind of natural experiments and look at these sort of potentially exogenous shocks to consumer sentiment. And, and what they find is that there aren't really big real effects in terms of the differential between, say, the losing parties, consumer spending versus the winning parties.

And I think that kind of casts some shade on the idea that consumer sentiment really matters a ton in terms of economic activity and that it's maybe a reverse causality thing, that economic activity really causes shifts in consumer sentiment. I'm curious what your thought is on the sort of causal questions.

Obviously, Wall Street traders are very closely following these consumer sentiment prints when they come out from the University of Michigan and others. But maybe it's more just a proxy for how economic activity, real variables, are affecting consumers. And I'm curious what you think about the whole causal question here.

>> Neale Mahoney: So there's, I don't remember all the details. There was a study, I think it came out of the St. Louis Fed probably close to 20 years ago which said that consumer sentiment is a leading indicator of economic outcomes at that time. But as it's become more politicized, it becomes maybe a leading indicator of political outcomes, but less so of economic outcomes.

And consistent with the evidence that you just talked through, one puzzle in the data has been that even, even though consumer sentiment has been historically low, that consumer spending behavior has been very robust. And so I think that points to also, you know, I wouldn't say that consumer sentiment is useless.

It's just it is teaching us a different set of things over time. And, like, there's a lot of research to be done to help us understand what it's teaching us, perhaps better and where it has less predictive power moving forward.
>> Jon Hartley: Yeah, absolutely. And, I mean, it being a lead indicator is certainly useful in forecasting.

Which is largely something a lot of Wall Street and sort of policy economists tend to do or tend to use. So I know they find that data very useful. I want to pivot a little bit to some of your other research. A lot of your other research is focused on health care, you know, industrial organization, consumer regulation, and really want to start with talking about your work on junk fees.

So, I mean, could you explain to us what junk fees are exactly? How pervasive are they in the economy and what you think some of the right policy fixes are?
>> Neale Mahoney: Yeah, so maybe for context for this. When I was in the White House in 2022, 2023, and everything in the White House is done in team.

But I was a core member of the group that was sort of building out the White House junk fees agenda. Co-authored a blog which laid out the principles for the agenda, ran policy processes, I was writing speech blocks and tweets for the president. I think the agenda was clearly good politics.

And what I was trying to do, and your listeners can tell me if we were successful, is also trying to ground this in good economics. So what do I think are the economics of these policies? Markets work, and I'm a firm believer in markets. When people can compare the price and ideally the quality of goods on offer and move their business to firms that provide them a better deal, that provides the incentives for firms.

That's sort of a bedrock principle behind competitive markets. I think the most egregious example of junk fees are when there are mandatory charges. Which are not rolled into sort of the upfront fee. So if you're buying a concert ticket and, you know, now I think these issues have maybe been made more salient, but you're buying a concert ticket and you don't realize that you're going to be hit with $20, $30 service charges when you're checking out.

And there's, you know, really good evidence from experiments showing that if you knew, you might not buy the ticket or you might buy a cheaper ticket because you have a certain budget in mind. And so that's, there's no economic reason why people shouldn't know the price when they're.

Before they enter the credit card information, before they select the seat, before they make this both time commitment and I think also mental commitment into, I'm gonna be near the front of my favorite concert. So I think one thing that this agenda is trying to do is get markets to work by forcing those prices to be upfront and all in.

There's a recent finalized rule by the FTC which does this for lodging and for events. Some states have gone further. State of California. And I think the idea is like when this happens, one, it makes markets more competitive because it reduces search costs. You don't have to click through seven screens to figure out the price.

Two, I don't think we want markets where nice guys finish last or firms that try and do well by their customers end up getting worse business or less business because they look like they're more expensive. So I think it helps well meaning firms. And there's this literature on exploitative innovation where I don't think we want industries which are in the business of coming up with new tricks and traps for consumers.

We want businesses to lower their costs and increase the quality of what they're offering. And so when you take these strategies off the table, I think you're actually empowering markets to write that. And obviously some, not every policy is going to be constructed like I would construct it.

If, you know, I'm sitting in my office as an academic. There are political considerations, there are industry pressure groups, but that is the North Star that we've tried to lay out. And you know, I've been, you know, whenever possible explaining this to folks, lifting up policies which I think move towards this North Star.

And I think when policies stray from it, I'm also going to be critical. So that is what I'm trying to do with this agenda.
>> Jon Hartley: And it's fascinating. And, and I mean, anytime I feel like I book a hotel and I see a hotel price. You know, it ends up being the case that there's just like an extra, I don't know, 40, 50 being added here and there.

And it's, it takes a lot of time to figure out, like what. It's not salient, what the actual price is. And so I think it's a super interesting question because. And I think it's feeds into free market and economic institutions, which I think are a leading driver of growth, especially liberal economic institutions.

And when we talk about the law and contracting, which is very important, my limited understanding of contract loss, is that there has to be this concept of mutual assent, right? And so if people are voluntarily entering a contract but not knowing the actual price, I think that kind of mucks up this sort of bedrock principles of voluntary exchange and free markets.

I mean, there's a reason why at sort of a much worse level, why we have legal protections against fraud, right? People can't kind of lie during these sorts of economic transactions involving contracting. I think this is very much kind of related to that. I guess that the challenge is these price deviations.

I mean, sometimes they're small, right? I mean, it's extra $40. You can't really sue someone for fraud, right? But these are little frictions that I think can really, at some degree, muck up voluntary transactions. And I think that's maybe a free market case that you could kind of make for that.

I know you've also done a lot of work on medical debt as well. I mean, just how big of a public policy issue is it and what do you think the best policy fixes are there? I do know that a lot of these hospitals have lots of medical debt that's kind of outstanding.

I know there's a lot of charity care, but obviously there's a lot of people that are being chased around. You have to pay outstanding medical bills and so forth. Often that skews to lower incomes. Explain to us some of your work on that and what the big issues are there, as you said.

>> Neale Mahoney: Thanks for taking me up for this. I think since I was in grad school, I've been interested in the intersection of our healthcare system and financial distress. And part of this is economics. Part of this is my sense of fairness, that having a health shock, I think is incredibly disorienting, scary, burdensome.

And this is my preference, I don't wanna be in a world where we're compounding that with financial shocks. The question is, how can we do that with policy which generates benefits and not too many unintended consequences? And so it is sort of delivering help to people who are going through difficult times.

And that's. That is trial and error. So, on medical debt, maybe I can start by telling you about briefly about two studies, I think, one which is discouraging and one which is more encouraging and points us in a direction where I think we should go. And I think the policymakers I've talked to have been responsive in some of the policies they put out.

So starting in maybe it was 2016, myself and people who became my co-authors saw an episode of Last Week Tonight with John Oliver where as a stunt and to attract attention to the issue, he bought and forgave millions of dollars in medical debt. And you can buy this from collection companies.

Collection companies are expecting to collect pennies on the dollar after the recovery costs and so it's cheap to do. And so, you know, he did this stunt and, you know, we called. So he worked with a, a nonprofit which at the time was called Rip Medical Debt. Now they're called Undue Medical Debt.

And we called them up and said, you guys should study what you're doing. You know, this could be really beneficial for people. It could be the rare example of something which has a low cost and high benefit, because there's a bunch of anecdotal evidence that these folks are really struggling in that medical debt could help them get back on their feet.

And so they play ball with us, these wonderful people at the non-profit, they agreed to randomize their debt forgiveness where possible. They didn't have enough money, an athlete would want to buy and forgive. Trae Young would wanna buy and forgive medical debt. In Atlanta, they couldn't buy it all obviously, so they randomized it.

And so we got this data. We also ran some of our own experiments and we basically studied the impact on every outcome. We thought we could measure your things you can see on credit reports. We would run surveys where we'd look at mental health people going back to the doctor.

Our results were largely, but not entirely disappointing. So we found for people who had their debts reported to the credit bureaus, removing that debt, I think unsurprisingly, boosted their credit scores, especially if they didn't have other derogatories. If you have seven flags on your credit report and they remove one, you're not going to look that much better.

But if you have an otherwise clean credit report, it does make a real difference. But we couldn't detect any impacts on mental health or on healthcare access, despite this being a population where there's really poor mental health and people are less likely to go to the doctor than I think clinicians think they should.

So that was one result. I'll tell you another result, and then I'll tell you how we square the circle. We also did a study with Kaiser Permanente where some nonprofit hospitals in the US are required by law to provide financial assistance to people who have large medical bills and are unable to pay.

There's a lot of investigative journalism suggesting the degree to which they do this or the degree to which they make this easy is limited. I think Kaiser Permanente probably does a good job and the qualification for their program is based upon what we economists call regression discontinuity. So if your income is below a specific level and it's 350% of the federal poverty line, which, like, I think regular humans don't know what it is.

I don't even know what it is for my family. If you just below, you qualify. If you're just above, you don't. So we get a whole bunch of people apply. We see people who just qualify, just don't. You can compare the people who qualify to the people who don't.

The people who qualify for this financial assistance, they are more likely to take their meds. So it's Kaiser Permanente. So they're in this integrated system, we can see everything they do. More likely to take their meds, they're more likely to go back to the doctor. They're more likely to get tested in treatment for mental health, for early stage diabetes.

So it does seem like addressing these financial constraints, which I think make people scared of going back to the doctor, showing up at the doctor is like a random number generator in terms of the bill you're going to get for many people. And removing that fear factor, eliminating some of those costs so that people can afford coinsurance deductible going forward makes a real difference.

The medical debt relief we were studying, I previously told you that was occurring often five plus years after the hospitalization. So once the debt had been sent to collections, once a primary debt collector had scrubbed it over, I think at that point, other than the impacts on your credit report, it's probably a little bit, it's too little, too late.

People have moved outside of the window where they need follow up care for their health condition. They're probably used to screening their phone calls, ignoring letters from debt collectors. And so I think what we're learning from this research is the burden of medical debt is real, but addressing it sort of super downstream where it's cheap is limited cost but limited benefit.

Addressing it further upstream, some of those people are going to pay. So it's higher cost, but it also, you know, I think has demonstrated benefits. And what we're trying to figure out now in research, is there intermediate policies which give us some benefit, aren't too expensive, right? The folks who can and should pay are still paying, but the folks who are never going to be able to pay are getting relief early enough so they get the care they need.

So that is the agenda. And we've seen lots of action by cities and states where I think they recognize that they're doing this downstream relief but they're also trying to address things closer to the source. So I'm cautiously optimistic that we are both going to figure out what is good policy and we're going to move towards doing it in this space.

>> Jon Hartley: Yeah, very interesting too on the, I guess the RCT sort of limited results are interesting that you know, the credit scores change but not too much else. So I just wanna I guess pivot a little bit and I think medical, that's one, I think it's a huge issue and a lot of people come out of these unexpected health shocks in their lives and they either sometimes have challenges affording things and the medical debt can follow people around for quite some time.

Just pivoting to a more of a macro level here, you served in the Biden administration on the National Economic Council, which is the White House's Economic Policy Coordination Council. You were particularly focused on energy and junk fees and a whole set of other issues. What do you think the major lasting accomplishments of the Biden administration's economic policy agenda are.

I mean, we'll see how much the Inflation Reduction Act gets rolled back in the Republican reconciliation tax bill. I predict that much of it will be. But I'm just curious, sort of even beyond the Biden administration, what do you think the path forward on economic policy is for the Democratic Party following Kamala Harris's loss to Trump in 2024?

I mean, do the Dems go back to more of a, a Clintonite vision of sort of, you know, free trade, somewhat more free market oriented, or more down the road of Elizabeth Warren with certainly a much more progressive approach that's less friendly to markets?
>> Neale Mahoney: Yeah, so let me start with the last question, and this is something I've spent time thinking about.

I think like many people who are in capital D Democratic policy circles, in the wake of the election, my view is that the Democratic Party can and really needs to be a big tent and that it's sort of a false dichotomy between the more progressive policy and the more centrist policy.

I think instead it's building out and making case for good policy. And so let me tell you a little bit about sort of how I try and do that from where I sit as an economist and why I think it can be successful. I think there are sort of some policies which are say, coded as progressive.

So some of the junk fees policies, I think are coded as progressive. They came out of those sort of think tanks. They were championed by people from that wing of the party. And this is not the case with every progressive policy. But I think these policies actually, when designed correctly and when messaged correctly, I think.

I think have much broader appeal. And that is what I've been trying to do is using I think a long standing literature in behavioral economics and in sort of study of competition to show that. These policies should appeal to people who believe in markets and want them to work.

And actually know that saving markets from some of their excesses is actually going to help having a more market oriented economy moving forward. They realize that this is sort of important policy to be championed. And so that's what I was trying to do, or one thing I was trying to do there is build a bridge between the progressive wing and the centrist wing.

And I think we were reasonably successful in doing that in reading the types of journalists who then wrote op EDS in support of the policy. In terms of bipartisan support for some of the bills that were introduced in committee where we've seen this passed, I think with broad bipartisan support in states.

So that would be one example of taking something that's coded as progressive. Using evidence to show that this is actually benefiting in a stories should be supported by groups which extend, I think across the right. You see folks like Holly who are supportive of some of these sort of competition consumer protection policies.

I'll give you another example which works in the other direction, which is housing policy. I think the yimby sort of removing constraints on the supply of housing. Those policies are sort of traditionally coded as centrist, center right, center left, sort of deregulatory. But because of this huge body of evidence, I think there's been now understanding among the progressive left that.

Even though deregulation isn't the first thing that those folks think about when they wake up in the morning, that housing is a sort of kitchen table issue for every American. And regulation is preventing us as a society from allowing people to live where they want to live, allowing people to live where the jobs are.

And so we've taken a center, center right coded issue and with evidence created a much broader coalition. So that's just to return to your point. I think Democratic party can and should be a big tent and evidence can build bridges between progressives and centrists on good policy. And that's, I think that's sort of a key thing I try and do is how can I make a case for good policy and build a broad coalition in support of it.

>> Jon Hartley: It's fascinating and I think there definitely are some realignments going on I think in both parties. And I think you're right that there is this sort of, I guess maybe even a neo Populist sort of bipartisan shift on things like for example, pro family taxation. And you see sort of pushes for expanded get child tax credits to some degree with maybe some favoritism towards baby bonus oriented policies.

You've also got, I guess some thoughts on paid family leave and maybe some bipartisan consensus emerging on that too. But it's interesting too, I guess on the land use regulation front, you would think that in general maybe traditional Reaganite Republicans would be in favor of housing deregulation. And especially, it's deregulation that kind of helps, helps the poor a lot.

It's interesting how I think that the Democratic Party is much more embraced, you know, the EMB movement. And I think it makes sense at some level because it is an issue that largely pits incumbent homeowners against non incumbent homeowners. And how you make the case to incumbent owner owners to somehow take a hit to their own housing values I think is a hard sell.

Even though maybe in the long run there's a case that, you know, they'll bring in more economic productivity to their locality in the long run. But yeah it's an interesting question. I do think a lot of those YIMBY folks do like public housing too. I think the YIMBY movement itself is not purely sort of a free market one.

I think there's many phases of it. I'm curious. One thought on behavioral economics is you work a little bit in the space and I know there was this big advent of behavioral economics in really the 2000s and 2010s. And I think this sort of peaked with the Thaler Nobel and you had the Kahneman Nobel, and these people were very influential I think certainly in the 2010s and late 2000s.

Where do you think behavioral economics is at? It sort of offered that the whole RCT revolution was part of this and this idea that you could sort of study these interventions that could potentially be low cost, high benefit, have a big policy impact. Obviously, economists have totally shifted into doing this kind of research on the empirical front.

But I feel like the more behavioral oriented type interventions that have, I guess maybe been a bit more challenging in the public policy sort of arena where. One like providing evidence that these things can scale is a big issue. There's the replication crisis has been a huge issue.

Dan Ariely and a lot of other sort of behavioral economists have kind of been ensnared in there. But there's this explosion of behavioral ideas and I think there's a lot of them that don't really work very well too. That's kind of another problem. What do you think behavioral economics is?

I mean, there's some people out there that said that behavioral economics is sort of dying or has died. What behavioral economics is, I think, hugely not well defined as well, like any rct, I guess, could be a behavioral economics kind of issue. But I think RCTs related to randomizing tax rates, for example, is I think, very different from maybe some of the more nudge oriented ones that,.

Thaler and Sunstein wrote about in the late 2000s. But I'm just curious what your take is on sort of the state of evidence based research in particular as it relates to behavioral economics and policymaking.
>> Neale Mahoney: So I don't think of myself as a behavioral economist. And I think one measure of success of behavioral economics is I do papers that I think have strong behavioral components.

And so I think the field to some extent has been very successful because now there's all these people who think about, quote unquote. Behavioral factors in consumer decision making settings, even in, in firm settings, which wouldn't. And they don't think of themselves as doing behavioral economics. They think about themselves as studying retail, of studying competition, of studying the airline industry.

So that actually strikes me as a true marker of success, that it is now just an accepted part of our toolkit, like any field where people are being entrepreneurial, something. Things are going to work and some things are not going to pan out, you know, at scale and that's fine.

So I don't, I see that as a sign of a sort of a healthy field, you know, where people are being entrepreneurial and trying things and trying to scale things. So I don't. Yeah, I'm not deep enough to have sort of more sophisticated views than that. But, but it does strike me that, just like I'm not, I'm not a research design person, I'm not a sort of causal inference person.

But all of my papers, I think had about causal inference in them. It's just an accepted thing that we do as economists.
>> Jon Hartley: It's fascinating, yeah, it's one of those things where you're like in 2010s. We had this massive rise. All these governments were adopting these nudge units.

And it was kinda presented along with, I think the book, Nudge, if you read it, by Cass Sunstein and Richard Thaler as this sort of third way type policy approach. And so, well, I think it's sort of a great idea in its day. I just feel like that the big issues that are really sort of come home to roost are taxes, trade is obviously back in the forefront, and has been since 2016.

Both parties have pretty significantly shifted on trade. So I feel like a lot of the, which are really the more sort of classic issues have sort of kind of eclipsed that old kind of that maybe third way nudge sort of policy agenda or evidence-based policy agenda to some degree.

I mean there's lots of RCT that shed lots of light on things, on many areas of public economics and, and definitely don't want to discount any of that. Research I think is super useful and super helpful. But yeah, it's, it's interesting just how, how like I feel like a lot of that evidence based policy work, like, you know, your junk fees work is a great example of something that's had success in terms of, you know, going from research to actually being implemented in actual the public policy space.

But you know, you just wonder like, are there enough of these sorts of things that you can really scale to create like a policy agenda that's a sustaining sort of political one. And it's hard I think to even sell the masses on what even RCTs are. I mean, certainly, people with academic backgrounds understand that, but I think it can sometimes be a bit harder in growing a larger coalition.

I wanna just spend a little bit of time talking about you and your new role at SIEPR. For the audience members who are less familiar with what SIEPR does, can you explain a little bit more about what it's doing and what your vision for it is as you step into the role as director?

>> Neale Mahoney: Totally, so SIEPR, or Stanford Institute for Economic Policy Research is an institute at Stanford, and we try to do three things. So one is attract, train, and launch careers of young folks in economic research and in economic policy. So we host the Stanford pre-doc program which has 30 plus people.

We have visiting postdocs, we run programs for undergrads. Something that I would like to do more of over time is bringing people and launch them into government jobs. I think having ambitious, well trained folks in government economic background, I think in the long run is just hugely important.

So, so we'll be doing, doing more there. So that's, that's bucket one of what we do, Bucket two is that we, we host events. So we have an annual economic summit which has had many high profile speakers over the years. This year we have Jamie Dimon, Austan Goolsbee, Ruth Porat, other sort of household names.

But then we also do almost on a monthly basis, events where we bring in leading sort of economic thinkers in business, in research and in policy, you know, to interact with our community. And so I think that's, you know, a great resource for, for students, for faculty, for, you know, folks who live nearby or who just want to watch something on YouTube.

The third thing we do is we try to do work which bridges between economic research and economic policy. And so there it's everything from how can we support the type of research which is going to provide nonpartisan, rigorous answers to pressing policy questions, to how can we do the translational work or build models based upon economic research that will help inform policymakers on a quick term basis, let's say around housing policy or some other issue that they're thinking about.

And we're trying to increase connective tissue with policymakers, so that when they're thinking through an economic issue, they can pick up the phone and call us, and we can direct them to an expert and help them think about the consequences and unintended consequences of what they're thinking about, or give them a menu of options.

So, so I think, you know, super exciting job for me. I have a great staff. Stanford faculty and students are amazing. No, there'll be a learning curve but we're setting our height or our ambitions high and hopefully getting close to them.
>> Jon Hartley: Well, that's terrific. I spent a lot of time at SIEPR events, and they're great.

And SIEPR, there's a lot of great programming, and hosts a lot of great academics, and does a lot of great work. A real honor to have you on, Neale, and to hear about your career, and ideas, and as you're stepping into a SIEPR director role, what SIEPR's planning for the future.

Thank you so much for joining us.
>> Neale Mahoney: Thank you for having me, Jon.
>> Jon Hartley: This is the Capitalism and Freedom the 21st Century podcast, an official podcast of the Hoover Economic Policy Working Group, where we talk about economics, markets and policy. I'm Jon Hartley, your host. Thanks so much for joining.