The ‘money ladies’ answer your economic questions

U.S. Federal Reserve chairman Jerome Powell recently said "the time has come" to lower interest rates.

But the impacts of inflation and the housing crisis have hit millions of Americans hard — and left them with questions.

Today, On Point: Our "money ladies" answer your economic queries.

Rana Foroohar, CNN global economic analyst. Global business columnist and associate editor at the Financial Times. Author of several books, including Homecoming: The Path to Prosperity in a Post-Global World.

Michelle Singletary, Washington Post personal finance columnist. Author of, among other books, The 21-Day Financial Fast: Your Path to Financial Peace and Freedom.

Part I

MEGHNA CHAKRABARTI: Even though summer isn't officially, over astronomically over until the autumnal equinox later this month. For all intents and purposes, it's basically over, right? For us mere humans and our daily lives, because by now we're all headed either back to school or we've experienced the end of our vacations, that last hurrah over Labor Day weekend.

So even if you were able to take a bit of a break this summer, and I truly hope you were. Reality is back, and it's expensive, meaning this is the perfect and long overdue time to have our money ladies back. Rana Foroohar and Michelle Singletary. Hello there, ladies.

RANA FOROOHAR: Hey, glad to be back.

MICHELLE SINGLETARY: Hi.

CHAKRABARTI: Hey guys. Now just as a periodic reminder, because everyone's still, get an email about like, why do you call them the money ladies?

Several years ago, we had Rana and Michelle on for the first time of their now regular appearances and there was a very sweet listener who loved you guys so much. He couldn't remember your names when he just emailed me and he said, have the money ladies back. And thus a moniker was born.

(LAUGHS)

But first of all, before we dive into the challenges of the fall season.

I want to know how your summers were. Michelle, how was your summer?

SINGLETARY: My summer was great. I just celebrated a birthday, and no, I'm not telling y'all how it was.

FOROOHAR: (LAUGHS)

CHAKRABARTI: Happy birthday, nevertheless.

SINGLETARY: Yeah, but it was really good. It was good. Nice vacation. Just relaxed a lot of the summer.

CHAKRABARTI: Okay, that sounds good and much deserved.

What about you, Rana? I was on the road 24/7 for pleasure and for work. And all of this accumulated in my dropping my youngest son at Northeastern College a couple of days ago in Boston. So I have been about town and getting him settled and now in the Berkshires enjoying a couple more days of pseudo relaxation before hitting New York and hitting the campaign coverage pretty hard the next couple months.

CHAKRABARTI: Okay. Okay. We won't let you relax today though, because we've got a lot to talk about. And by the way, let me just formally introduce both of these magnificent women. Rana Foroohar is a CNN Global Analyst and Associate Editor at the Financial Times and author most recently of Homecoming: The Path to Prosperity in a Post-Global World.

And Michelle Singletary, of course, is the nationally syndicated personal finance columnist at the Washington Post and author most recently of The 21-Day Financial Fast: Your Path to Financial Peace and Freedom. Which I feel like a lot of people, if they haven't bought that book already, they should because we have so many questions about just ongoing stresses on Americans daily financial lives for both micro and macro reasons.

Number one, ladies, amongst them recently for us in terms of feedback from listeners has been housing, of course. Let's listen really quickly to a story from Dominique Montgomery. She's 32 and a professor of social work, a recently minted professor, in fact, because she just finished her PhD. And then she got a new job in a new state.

DOMINIQUE MONTGOMERY: I was lucky enough to find an open position in Reno, Nevada. And, when we got to Reno, we were really excited.

One of the things we quickly realized being here is that rents are moving in the upward direction here pretty rapidly, due to some expansions in the tech industry in this area. Reno's a really interesting place because it has a long history of like mining from here.

So what actually happened is Tesla ended up building a huge facility here a couple of years ago, almost practically the size of a small city. A lot of people are moving from California to the Reno area because of that tech expansion, and just for a variety of other reasons, because California is becoming less affordable.

So we, as a young small family, myself, my partner, and we have one son, who at the time was not even one years old. We were thinking, hey if we want to ever be able to purchase something here, we might need to do that soon before we get priced out of the market. And we were able to find a condo, we were very financially disciplined when purchasing, we got approved for way more than we wanted to spend.

And we were like, we're going to start in something small that we'll be able to afford that hopefully would be close in price to how much we were paying to rent already. When you add in all the extra expenses that go into homeownership, we also have a small child who's two now, and one of the big things was my husband and I were sharing childcare responsibilities completely with him, but we've gotten to a point where we wanted to begin putting him in care.

And high-quality childcare is just extremely expensive for me and for him. We want to make sure he was in the best hands possible. In all honesty, when we purchased, which was a year ago, interest rates were extremely high. We actually qualified for a middle-income homeowners' program, which gave us a good amount of money to put down towards the house, which was great.

We were even able to buy down some of our mortgage points, but still, we're at 6%, 6.125% and talking to my parents who purchased a long time ago and are still paying off their mortgages, my dad has a mortgage that's at 3%. We've already begun to get emails from banks telling us, Oh, mortgage rates are going down.

Consider refinancing. And even when we purchased, my dad gave me the advice, probably what will happen is eventually y'all are going to refinance. And now I'm starting to think when do you know whether it's the right time to refinance? Like hopefully interest rates will continue to go down, but you never know what the new normal low is going to be.

So just looking for some advice on how you can think about making that decision.

CHAKRABARTI: Okay, so that was Professor Dominique Montgomery in Reno, Nevada. Michelle, I think a lot of people have this question right now because, yeah, we are seeing a slight downward trend in mortgage rates from those unusual highs that we experienced a couple of years ago. How do you know when it's time to refinance?

SINGLETARY: You have to look at the rate you have, the rate that you refinance, and whether or not it makes sense on a monthly basis. So it probably isn't right just yet for them, because even though the Fed rate, we expect a rate cut and some rate cuts in the future, mortgage refinance rates are still like 6.5, around that range. And she's probably not going to get the best deal for them right now. Just wait a little bit longer.

And I just wonder if they're going to stay in that condo and if they're going to maybe move up, perhaps they should look at that, if you're going to move anytime soon, because there's costs to refinance. So you have to look at everything, don't just look at the rate. Because that tends to get people onto a refinance sort of pinwheel. They just, every couple of years they refinance it and they really aren't gaining ground by that because a lot of times they reset their mortgage.

So they go from another 30 and maybe they're five years in and then they refinance that. They've set it back to 30 as opposed to being 25 years into the mortgage. So you really need to look at that. When my husband and I refinance, we went from a 30 to a 15, that's going to cost you a little bit more money, but we wanted to get rid of our mortgage fairly quickly.

And we have, we've been mortgage free now for a year.

CHAKRABARTI: Wow. Okay. First of all, once again, congratulations, because being mortgage free is awesome. So look at the whole package. That's really good advice. Because I think people, all of us are so obsessed with interest rates of various kinds, that you can actually keep jumping from mortgage to mortgage, which overall may cost you more.

So that is very good to know. Now, Rana. For you, look, I think Professor Montgomery also in her story points to two other really critical factors. First of all, she felt like she had to make this decision simply because of rents and the cost of housing overall. Now I'm looking at a chart for Reno. And back in 2020, in Reno, Nevada, the median sale price was about, for a home, okay, this is not for a condo, but for single family home, median was $365,000.

That was in 2020. And now it's $560,000, almost. Yeah. And it doesn't sound, doesn't look like there's any relief from that long term upward trajectory, even though there has been construction in Reno.

FOROOHAR: Yeah. It's interesting just to put this in context with what's going on nationwide.

I am looking literally right now at the front page of the Financial Times today, and we have a big story on how housing has become the major issue in terms of cost concerns for people, not just in the U.S., but in most rich countries, many parts of Europe as well. And there's an interesting stat here from Harvard's Joint Center for Housing Studies, looking at how the monthly housing payment on a medium-priced home, so average home with a low deposit loan, the kind that a first-time buyer would be looking at, is now over $3,000.

And that's compared with around $2,000 back in January of 2021. So this is a story that is a nationwide story. There are cities like Reno that have been harder hit. There's a lot of, I would call them maybe second cities that post COVID people moved from places like New York or Boston or the coasts, where things were already expensive, into places like Charlotte or Indianapolis. And so those second markets have begun to shift and really see a boom as well.

And it's something that's happening, not just for home buyers, but for renters. And what we're seeing here really, it's a perfect storm, because you had a housing shortage in this country even before COVID. You saw a lot of shifts that raised rents and house prices in formerly affordable parts of the country post COVID.

You had mortgage rates that had gone up because the Fed was trying to fight inflation that happened also as a result of the pandemic, war in Ukraine, other factors. So you have this weird situation where there's a big housing shortage, high rates, which makes it more expensive, but y'all also have people like me that were in this weird housing arbitrage that didn't serve them.

So for example, as I said earlier, I just dropped my second child at college. I would actually like, my husband and I have thought about downsizing to a smaller home, but we're locked into a pretty low rate mortgage, much lower than the numbers Michelle was quoting. So we could sell, we still probably would need a mortgage, but we'd be paying a lot more right now.

So there's all these different factors in the housing market that need to be unwound and they're not going to happen overnight.

Part II

CHAKRABARTI: Rana, I failed to write down that fact that you had shared that was in the FT today about housing costs per family. Can you just quickly remind me what that was?

FOROOHAR: Yeah, absolutely. So we're talking about a median priced home with a low deposit loan, which is what a first time buyer would be looking at. That is now over $3,000 at a national level compared with $2,000 or less in January of 2021.

CHAKRABARTI: Per month. Okay. In terms of expenses for people. That's right.

FOROOHAR: That's a monthly housing payment.

CHAKRABARTI: Yeah. Okay. So Michelle, that's a 50 percent increase. Which is huge. How do people manage that?

SINGLETARY: Yeah, they manage by just paying other things on their credit card, delaying having children, pushing forward their student loan debt into the future.

By forbearance and things like that. They shave other places. And it really is a problem that we need to address in terms of more affordable housing. And I say this all the time, and I know people groan when I say it, but we have to rethink this whole idea that everybody has to have their own home, multi generational housing.

I'm a big advocate for it. And I, you know, said this before, and I hate to sound like I'm just repeating myself. But I really want people to get this message. We have three 20-year-olds. They're all living in this very beautiful house on a one-acre land that we have. And my two daughters, they're thinking about moving out and they've been looking at renting.

And they just, they're still here because, one's a teacher, one's a therapist. And they're just thinking, we can't do this because that almost 50% of their pay would go towards housing. That's too much. So they're staying put. And what they might end up doing is the girls at least and maybe all three, but at least the girls.

Buying a house together which would bring down the cost for each of them on their paychecks. So even the rental units that they're looking at, it is around that amount, $3,000. So they each could handle $1,500 and they're thinking about doing that. But see, again, they're not going to be out on their own.

They're going to be together in a family unit or other people. So I think we've got to rethink how we're doing housing. So that people can afford it and be able to save, if they don't do it, they won't be save for retirement and other things.

FOROOHAR: I'd love Meghna, if I may, I'd love to jump in on this point.

Just to pull the lens out too, it not, this is not even just a, an immediate term issue. This is something that all the demographics are gonna push over the next several years and decades. Because you've got older people, you have an aging population that is going to probably need more help, in place in a home.

You have younger people that have not built up enough asset wealth, particularly in this kind of a market, to buy a property. So I'm already seeing, in my neighborhood in Brooklyn, many, it's almost like a return to a historic norm of homes being divided in new and interesting ways.

You've actually seen in New York, Eric Adams, the mayor, several months ago, passed some new laws to shift zoning in such a way that there's more flexibility for people to do that. Some new ways to think about small landlords being able to have more flexibility to get tenants in, get around codes that may be outdated, et cetera, I just think this is where we're going.

The whole paradigm has got to be rethought. There's all kinds of issues here in play, and I haven't even gotten to the supply chain problems with housing, which are still there. Don't get me started.

CHAKRABARTI: Actually, so to me, there's a couple of things that come up here. One is it's just more evidence of how basically the American Post World War II ideal of everyone having their own home. It is coming, if it hasn't already come to an end for a lot of people, it is coming to an end. And so this giant rethink after two or three generations is not going to be easy, but it's necessary. Okay. But, on the other hand. And I'm going to turn this to both of you, but Rana, since you brought it up, I'll start with you first.

I am looking right now at, we love charts, ladies?

FOROOHAR: Oh yeah.

CHAKRABARTI: I'm looking at housing starts, a chart of housing starts, single family again, and we haven't even gotten to, what's the challenge in building multifamily housing? But in the United States, from January of 1968 to January of 2024.

And it goes up and down seasonally, blah, blah, blah. There's, of course, the dramatic drop after the housing crisis in '07, '08. But then there's, it's been creeping back up at a reasonable pace. But the thing that I note is right now, housing starts are still, if you compare them, they're at a rate that we saw at the, what, the late '90s.

So the population has risen, the number of jobs has grown, but there's no way those starts are keeping up with the demand. Rana, can you just explain, is there an easy explainer about why that is?

FOROOHAR: There's a simple explainer, but it's not a silver bullet. There's multifactors that are making it hard to get housing up.

I'll start with supply chains. Cause I mentioned that, this is something that we saw post COVID. It just became incredibly expensive and difficult and time consuming to build. Anybody that was in the middle of a building project or even a restoration project at that point, probably had this problem. And that's because housing is perhaps the most supply chain intensive industry in the country in the world.

You've got seven different supply chains that need to be flowing in order to build a house, you've got electrical, you've got insulation, you've got materials, wood, stone, et cetera. It's a lot going into one thing. So you have multiple nodes that can be problematic depending on what's going on in the world.

What logistical problems you may be having in one place or another. And we're still having a lot of those, in part because of geopolitical conflict. You've seen trouble in the South China seas. You've seen trouble in the red sea. There are transport issues. There are shipping delays.

That's the whole shipping industry is something else that's problematic right now. And that's where supplies come from. So that's point number one. Point number two is you've got this hit that happened post COVID where consumers, many people lost their jobs.

Consumers were in a tough spot. We buffered that I think very correctly. The Biden White House buffered that with a lot of fiscal stimulus to consumers. But that cushion has been spent down. And a lot of inflation has risen during that time period. And so people are crunched, they don't necessarily have that deposit for those rising prices.

And at the same time, you've got the high interest rates. So the builders are looking out at the economy and saying, we're not sure what's going to happen. Then, and this is a soft, squishy factor, but I think it's worth playing in. I do think the political uncertainty that we saw for so many months.

I think it's dissipated a little bit now with Kamala Harris being the democratic candidate. I think there seems to be a little more certainty, although I think it's still going to be a nail biter of an election. People in the industry look at that and they're hedging their bets, I think that we're going to see a lot of movement in the fall and a lot of telling things. First, I expect the fed to cut rates and I think that there we will see more than one cut probably before the end of the year. Second, once we know who's in the White House in November, we're going to have a much better picture on where the economy is going, that may also start to ease some pressure.

CHAKRABARTI: Michelle, what do you think?

SINGLETARY: I think everything she said, and I just want to add to one or she had two points, the shipping and the pandemic, but also consumer spending. All of this is also happening while we are pushing people to spend more and people are spending more, which puts more pressure on their ability to save for a home or have that cushion.

Our economy is driven by consumer spending, and that is actually why the Fed took so long to raise rates. Because we were still spending, even though things were costing more. There was a part of our society was still spending, and so that so all three of those put pressures on people to be able to do the things that, you know, people just wanted like a life, like I want a home for my family, I want to send my kids to college and not sentence both of us, the parents and the children, to decades of debt, and I want to take a vacation, right?

And all of those pressures were put on families. It's just so much. But I think that we always like to have hope on this show. I think things, hopefully with the election, things will settle down. We hope it will settle down.

(EVERYONE LAUGHS)

FOROOHAR: Sorry, Michelle, you're an opinion columnist. You can be, you can say what's on your mind.

SINGLETARY: Listen, y'all, we have got to have some sensibility. And think about it. These last two years, very little has happened in Congress because it's just so awful. The two extremes, and when you have extremes, there is no room for middle and it's no room for the middle income and even helping people at the lower end.

And that's what we need to bring stability to our economy. I think it's crazy that we don't recognize that we came out of a pandemic, and we didn't have a recession. My goodness.

FOROOHAR:  Oh yeah. Absolutely.

SINGLETARY: How do we not just cheer and jump up and down, and so some of the rhetoric is making people feel that things are much worse than they are now.

There are people, I have to say this, because people take your words out of context, there are people who are absolutely struggling, but they were struggling before, the pandemic just made it worse. But there are a lot of Americans that are doing okay. Your 401k is doing great. If you have a  ... portfolio, and so we need to have some sensibility in Congress. So that A, we fix social security, there is an issue coming up with social security that needs to be addressed.

We need to address having a decent living wage for people, maybe more home ownership programs that allow people who can get a home. And then, as Rana said, situations where maybe we have a better sense of multigenerational housing. And also lastly, stop telling people what they need to have before they're ready.

My kids, 20 something, Gotta get a house. Gotta get a house. No you do not. You have decades to be a homeowner. Let's just get you situated now in your twenties and early thirties and have a cushion so that when you get into that house, whether you get in it with your sister or your sisters and your brothers, or your spouse, that you have some room to breathe.

CHAKRABARTI: Okay. Michelle, can I just jump in here? Because I have a question for you. And back in the day, in our day, when we were young. I understand why people were like, you need to get a house because it was seen as the primary vehicle for wealth growth, wealth generation, right? Especially if you didn't have intergenerational wealth.

But I wonder now, since you mentioned 401k, that makes me think of the market. And Rana, you're going to roll your eyes here. Would you, because of that asset bubble, but you, Michelle, would you actually recommend to young people now that maybe instead of killing yourself to get a mortgage, try to find a more affordable housing situation, like you talked about, and put the rest of it in some kind of other investment.

SINGLETARY: I do. I absolutely do. And I think we're not quite different on this, but here's the thing. We talk about the equity in a home, but when can you touch that? And when you touch it and use it, it's more debt. And so that doesn't necessarily increase your wealth, right? You're just using more debt. And that's why I tell my children and anyone. It's oh, I got to get a house because I'll build up equity, what you're going to do with that money when it's in your house?

Because you either have to sell or refinance and if you sell you got to go live somewhere else. And if you refinance, that's just more debt. And so for my kids, we don't charge them rent. And our agreement is we don't charge you rent. But you got to put money into investment accounts and my 28-year-old, she's got a considerable amount of money in an investment account right now.

And she's saving for retirement at the same time. And how can she do that? Cause she's living at home and she's not paying $3,000 a month in rent.

CHAKRABARTI: And paying a lower tax rate because of the cap gains rate being lower. But Rana go ahead.

FOROOHAR: I was just going to add, no, I've come around actually a little bit on that.

I know I've talked many times on this show about how I think there has been a bubble, asset bubble, particularly in tech and things like that. And there's a lot of froth, but let me say. We, I actually made a decision. I hope this won't make Michelle anxious. But we left some mortgage, we have left some mortgage debt outstanding that we could have paid down in part because I have a mortgage rate, I'm locked into something for the next few years, that's under 3%. And that money put in the market over the last few years has done better.

So overall it has made sense for me to keep pushing money into my IRA. One thing I will say, I think this is going to be one of those interesting moments in the next few years where you will want to think very much about that point Michelle made, about diversification. And a lot of times particularly in the U.S., we've just been sticking stuff in the S&P over the last few years. And the S&P has been a good place to get global exposure, because a lot of big companies have a lot of that, but the world is changing. It's becoming a little more multipolar.

Big companies are getting shut out of some of the growth in China, for example, because of the some of the tensions between the U S and China. And I expect that some of that will continue. And so I think looking at, okay, do I have some S&P, do I have some emerging market investments. What is my overall lens here?

Because if you look at what does well in one generation, sorry, one decade tends to do less well in another. And if you look back for the last 10 years, it's been U.S. and tech stocks. If you look forward, it's probably going to be something different. We don't quite know what yet.

CHAKRABARTI: Okay, yeah.

SINGLETARY: That's such a great point about, it's the only place where we disagree a little bit. And that's okay because we're the money ladies so my husband and I did get rid of a 2.75 mortgage. And I wrote a column about that and people lost their minds. But because I'm a money lady I'm looking at all the money. So the outrage, just outrage. Oh, you gotta put that money in the market. But hey, hold on. 2.75 of a huge mortgage is still a lot of money. We live in the Washington, D.C. area.

So huge mortgage, right? And the other thing is because we don't have a mortgage, and he's retired. So only one of us are working now. Guess what? His money and his retirement account is still in there earning a whole bunch of money, as opposed to us tapping it to help pay for mortgage now that one of our paychecks is gone.

So we still have money market. And because we don't have that big mortgage, we can then increase how much we're putting in the market. And so we did not lose anything by getting rid of that 2.75 mortgage. We gained freedom and we still are in the market. So it's the best of both worlds. And now we are not sweating anything and it's great.

And so when our kids move out, we also will be able to save enough to help them with the down payment. And so you've got to stop focusing on the interest rate and no cost debt, because debt is still a sentence.

FOROOHAR: It's a great point. And I love the way you're bringing in your kids too. And it's a holistic picture here.

You got to sit down at the kitchen table and write out all the priorities and write out all the pots. I'll be honest with you, Michelle, I probably would have erred more on the side of paying down the mortgage. My husband, and this is often a male, female difference. My husband was like, yeah, the math is this, you got to get, we've been doing 15% in the stocks, and I'm like, all right, and that, of course, that was a relational plus. So that's a whole 'nother area of the emotional aspect.

SINGLETARY: But you know, that's okay. Because you guys talked about it and that was the best decision for you. And I think ultimately that is what we're both saying, that you look at your own numbers and your own comfort level.

Because both my husband and I are on the same page in terms of debt. We both got there at the same time. But we wouldn't have, for example, tapped money, we wouldn't be house rich and cash poor. So we had, I had some old retirement money that didn't really factor in because we've done so well.

We've been saving for 30 years with our current jobs. And so this other pot of money, we were okay getting rid of that, even paying the taxes on it so that we could be free of a mortgage and just enjoy this wonderful house without that debt.

CHAKRABARTI: I think a lot of people may have stopped listening when they heard both of you say you had mortgages below 3%. (LAUGHS)

FOROOHAR: Oh god. I know.

CHAKRABARTI: But we have much more good advice for everybody. When we come back in just a minute, this is On Point.

Part III

CHAKRABARTI: Now, before we get to the other big issue, which of course starts with an I, for people in their lives, I wanted to just add a little coda to our housing conversation, ladies, because I was listening really carefully to both of your examples on decisions that you'd made around your mortgages and the lesson that really comes screaming loud and clear is like you have to look at the whole picture of your lives.

And I just wanted to offer, I'm in a different place in my life. I've still got to save for, I don't have any kids in college yet. So I got to save for that. I have, I was really super lucky to be able to refi in 2020 at a rate that like blew my mind. So I'm holding onto that mortgage for, it's got a couple of decades ahead of it, but I don't, first of all, I don't have anywhere near the cash to pay it off, but I just have other costs that I have to deal with, that are much more beneficial for me to do than to even try to be able to pay down that mortgage more aggressively.

Looking at the whole picture is the key message I'm hearing here from both of you, but the problem is, again, and we heard this from listener after listener, right now, so much of that whole picture is taken up by just the daily cost of household items, right? So here's a story. This is Jackie.

She's 72 and she's a former Mahle Engine Components worker near Cambridge, Ohio. And for her, she says two things are dominating her budget.

JACKIE: Groceries and pet food.

CHAKRABARTI: And so you heard it. Groceries and pet food. The stuff that families need every day. Now Jackie cooks for herself, her husband, and her 13 year old grandson, who she says, by the way, on his own, he can basically eat a pan of lasagna by himself.

13-year-old boy.

FOROOHAR: (LAUGHS)

CHAKRABARTI: She also takes care of her dog and also several cats that have taken up residence behind her barn. So that means she needs and uses lots of things like OdoBan, that's a sanitizer and deodorizer.

JACKIE: Prices have increased recently quite a bit, for instance, a gallon of OdoBan, because we ran out.

And it went from $9.99 to I think $14.91. And that's one increase. And I thought good grief, it's just a little bit ridiculous. But it's just everything is going up. I think here, this is the sixth price increase since COVID. It doesn't seem like there's an end.

CHAKRABARTI: That means Jackie has taken to reducing the shopping down to what the family essentially just needs. That means she's skipping extra purchases, skipping events, or additional family entertainment. Even the county fair, the entrance fee has gone up. Now, Jackie told us that luckily her grandson was able to get into the fair this year for free because his 4-H project was accepted for display.

But for everyone else, entry tickets cost $15 a person now, that's up from $14. So this is really what she wanted to emphasize to us, that even when just getting into the county fair, let alone buying anything or food at the fair, cost 60 bucks for a family of four. Jackie says that leaves her with just one feeling.

JACKIE: It's like an overall feeling of despair. I just, I would like to know when things are expected to change. Even now, like with price increases, it just seems like everybody's under pressure to make more money all the time. And it's hurting regular people.

CHAKRABARTI: So that's Jackie Adamek in Cambridge, Ohio.

And Michelle, earlier when you said you didn't know why more people weren't cheering. Because, you're right, we didn't have a full blown recession after the pandemic. It's right there. Because things like just buying deodorizer for taking care of your pets has gone up 50%.

SINGLETARY: Yeah, and I do, listen, y'all, almost made it through the whole show without crying.

But I didn't come from money, I know what it's literally like to be hungry. People use that word literally, and don't literally use it the right way. But I know what it's like to be hungry. So I don't say this with any callousness, but listen to what she said. Everything is more expensive, these all-inclusive things that we tell ourselves, just this despair. But it's not as bad as Jackie thinks. Inflation, because what we tend to do is compare what we're paying now with what we paid 10 15 years ago. Inflation is a natural thing of our economy, and it also involves the decisions that we make. So she's got her grandson.

She's helping take care of, wonderful. She's got her own dog, but then she said, I'm taking care of all these other cats. So the decision might be that maybe you can't take care of those other cats. You got to cut there. And just look at there are some things that are absolutely crazy expensive. And are still expensive. But we went from 9% and some change inflation, to now almost under three.

You got to put things in perspective, folks. And everybody now, obviously there's still people struggling, even before the pandemic, just putting food on the table, but that's not what she was talking about. And so you don't have to go to the county fair, or you go and you don't have to buy all the stuff at the county fair. So we talk ourselves into despair without actually looking at how bad things are for each of us. And even as we report on these things, we have to help people put things in perspective.

CHAKRABARTI: Rana, I'm going to get back to you, in just a quick second, but Michelle, I got to jump in here, because I absolutely followed the Michelle Singletary Bible on personal finance. I am your acolyte for sure.

But just speaking on behalf of listeners, though, I think a lot of people hearing right now would be like yeah, okay, we're down from 9%, we're under 3% now, but when inflation hit 9%, my salary didn't go up 9%, right? And so inflation, at just, we all know this, it's a measure of the rate of growth, right?

So things aren't, people are comparing from four years ago, not 10 or 15. And I think, you talked earlier, I'm so glad you bring your own deep experience to these conversations because you're right. Fortunately for many of us, we're not struggling with hunger. There are Americans who are, for example, for sure.

But the reason why I say that is because for folks who are really feeling the daily pinch in their pocketbook when they go to the grocery store, it links back to something you said earlier. It's wait a minute, what should we expect for what it means to be an American right now? It's like our whole view of what a good American life is supposed to be is in a bit of a vice now.

And that's really hard to cope with.

FOROOHAR: Oh, go ahead, Michelle. Sorry.

SINGLETARY: No, go ahead, Rana. I was going to say, because I deal with people at all income levels and I actually look at their budgets and help them, look at things. I see people at all, the whole spectrum. People who, they just they don't have enough to put on the table. The people who complain that they don't, but they took a $3,000 or $5,000 cruise. And then they're complaining that eggs are up a dollar. And so I just, for those folks in that latter category, we've got to redefine what happiness is. So you can be happy and not take a vacation, and I guess that's what I mean. You have to be okay where you are, if that is where you are, and not want for so much more to the point that you feel like you're in despair when you really aren't, is what I'm saying.

FOROOHAR: I just want, I think what you're saying is so profound. I was thinking back to my own childhood, and we did get to take a vacation, but it was one vacation. We drove the entire way, without stop, 20 hours from Indiana to North Carolina to be with family friends.

We stopped once at Bob Evans and my father, who was very thrifty, thank God, always made me take the child's menu. Like I was 12 until I was about 17, because that was how you got the deal.

CHAKRABARTI: (LAUGHS)

FOROOHAR: But what I'm thinking about, something, Bob Putnam, the Harvard sociologist who wrote the book Bowling Alone, there's a wonderful film that's come out about him called Join or Die.

And he gets at the point, which I think is similar to what Michelle's saying is, yeah. Consumption culture has replaced a deeper sense of belonging, which is where real happiness comes from. It comes not from spending, although we do that, because it gives you the dopamine hit, let's face it. But it comes from deeper connections to each other.

It comes from helping, it comes from being outside of yourself. And so I think that's a really profound point. I do want to make one other point, actually two other short points though. I think what Michelle is saying is very true and interesting, that when you put inflation in perspective, yes, it's coming down, but it's also up, particularly in areas like food and fuel, double digits over the last three or four years, which is what people feel.

And what's very interesting to me, is in this presidential election, you're seeing different folks look at inflation in different ways. And part of it is a felt experience, but part of it is also political. Our views about actual economic data have become more polarized.

I'm guessing you're a Democrat like me, Michelle, but you're probably saying, Hey, we've done really, and rightfully so, we've done really great in the last three years at managing an unbelievably difficult situation. Let's look at the good news. Others are looking and saying, wait a minute. We're starting from X and we've gone to Y and that's not good. I would just point out that Kamala Harris in her presidential platform has made price gouging a big issue, and that's something we haven't touched on yet.

I think it's very important. Because if you look at something like groceries, for example, you need to start looking at all of the systemic ways in which prices go up. Some of it is based on real things that governments can't control. Some of it is based on corporations, and there's research to back this up.

Jumping into this inflationary environment saying, Oh, we can up our margins a little bit. And we've heard that on earnings calls. We've heard CEOs talking about it. I love that she's tackling this issue, because it hits the felt experience of a lot of people.

SINGLETARY: I so agree. Oh my gosh. I'm so glad you said that.

CHAKRABARTI: We've just got a couple of minutes left here. And before I turn my last question to both of you, since you were swapping stories about vacationing when young and frugality, I just have to share with you that when I was growing up, we didn't really have much money.

And so we would do the same thing, right? The car vacation, Rana, we'd go to national parks, and we'd camp, right?

FOROOHAR: (LAUGHS)

CHAKRABARTI: We do camping.

FOROOHAR: Oh yeah. Oh my God. Yes. (LAUGHS) Yes. Because it's really cheap. And we have a little Indian family with our chutney sandwiches in the car.

FOROOHAR: And then we had our hummus, little Turkish family with our hummus.

CHAKRABARTI: Exactly. And then we would like never, ever really go out to eat because that was an extravagance. But Michelle, you'll love this. The one or two times a year we'd go out to eat, we'd all have to get water. But when it was a really special occasion, Michelle, my dad would allow us to get one Coke, right?

One cup of Coke that was refillable so we could share it. And he would always say to the waiter or waitress, No ice.

(EVERYONE LAUGHS)

FOROOHAR: I love it. That's my hero. You're getting the value. That is so awesome. I'm going to tell my dad that. He's going to nod appreciatively.

CHAKRABARTI: These are formative experiences for me.

But they really do teach you about like, how you can be, make the best of whatever your circumstances are. Okay. No ice. That's my mantra. Now look, we've got like just three minutes left and I did want to look forward with both of you really quickly. So Michelle, listen, as much fun as I have with both of you, and I'm so delighted to talk to you every time we do.

I also know that we're talking about politics, and I think there's a lot of people who, even if they may feel hope, regardless of who they're going to vote for, they're also cynical that what can politics do to change these underlying long-term trends that we were talking about?

Corporate profit, lack of housing starts, overall rise of cost of living. Do you have any idea? Do you have any thoughts about that?

SINGLETARY: I think that there is a lot to do on policy, absolutely. Strengthening the programs that help people who are struggling. More home ownership programs to help, not give people a house, but just help them. Help them up. Not a handout, right? Tackling social security, making sure that's secure, because we know that the vast majority of seniors are only living on social security, right? Making college more affordable. Encouraging families to send their kids to community college first, and then the four-year university. And also, pressure on these corporations, so that we don't feel like, I'm an investor, but I'm okay.

If they don't have a 20 percent growth every year, I just want to make sure my money keeps pace with inflation, but there's a lot of pressure on corporations to deliver profits that just are not sustainable long-term. And, even when you talk about homes, people want to get so much for their home.

They're pricing out federal fellow Americans. I'm okay if I don't get back everything, a 20% return on my home, if it meant that my kid or your kid can buy a home, because I've saved all of my life and I'm okay if I don't go on a grand world trip for the rest of my retirement.

And so I think there are policies that can happen, but they won't happen if we still have such a divided Congress and someone occupying the White House is more interested in his comb over, coming up with policies that will help truly help America.

CHAKRABARTI: Rana, you get the last minute today.

Yeah I'm not going to talk about the comb over man because as Kamala Harris says, he is an unserious person. But I will say, I think what Michelle is talking about is something that the country as a whole is moving towards, back towards, which is the common good. We have come from about 40 or 50 years of a sort of trickle down.

I got mine, Jack, as long as the market is up, everything's fine. But in that paradigm, it's all about consumption. It's all about stock prices. Guess what? Most of us get most of our money in a paycheck. We need a place to live. We're beginning to think about, gosh, if we don't have jobs, we can't buy anything.

If the company is just looking at labor as an input to be cut, that's ultimately not good for people and their ability to buy a home. So I think there's that holistic shift that is happening. And I will say, I do think it's happening on the right of the political spectrum as well, although not represented by Trump, but I think there is a deeper thinking, bipartisan thinking about, wow, we need to shift to a much more holistic look about the economy in general.

We talked about that at the kitchen table, but it's true in the nation as a whole.