Episode 61 – Exploring economics with TikTok’s @EconChrisClarke
Episode transcript:
[music intro]
Jenny
Welcome back to Fund Your Future with DRS. Today our guest is Chris Clarke, who’s an economics professor at Washington State University in Pullman. And he’s gained a bit of internet fame for making economics more approachable by posting videos on Instagram and TikTok. And if you want to follow him there, you can follow his handle on both those platforms is @EconChrisClarke. We’ll put that in the description of the podcast. And Chris, it looks like as of January 2025, you’ve had over 125,000 followers on TikTok.
Chris
Yeah.
Jenny
That’s quite an accomplishment. Congrats!
Chris
Yeah, been pretty lucky.
Jenny
Nice. And I’ll also mention that Chris, if you watch any of his videos, has quite the beard game going on here. I think you’re quite famous for your beard style, is that right?
Chris
Well, that’s notable coming here, living in the Pacific Northwest. I got started on TikTok down in Texas, where long beards are a little more rare. But then I moved up here in the past few years, and I realized that there’s a few more of us.
Jenny
Yeah, there’s a whole culture around that. So, if you watch any of Chris’ videos, you’ll get to see his beard. Yeah. So just to kind of get started, like I mentioned, Chris has a lot of great videos on TikTok. I’ve followed you on Instagram. I especially loved the video you posted recently where you were asked how the Hawley Smoot tariffs, contributed to the Great Depression, and then you get really into detail in all your videos explaining and citing your sources. And it’s just a really great resource for folks to be able to understand these econ topics.
Chris
Oh, yeah. I mean, these things move the world. Everyone has to participate in the economy, but the economy is big and fat and huge and complicated. But everyone has to be a little economist just to function. So, I hope to… like any piece of context like the current tariff question for example, is just huge because we haven’t seen tariffs this size for 90 years. So, there’s a whole lot to unpack there and learn more about it.
Jenny
Yeah. That’s fantastic because I kind of leads into my first question. So how did you get into teaching economics and kind of what ignites your passion for it?
Chris
Well, when I was an undergrad, I couldn’t figure out what to major in. Like, a lot of students, everything was kind of interesting. I thought: “Oh, that’s kind of cool. Oh, that’s kind of cool.” And then I realized economics is a field that studies almost all social interactions of all kinds. So, you could do the economics of X or the economics of Y. And I realized I didn’t really have to pick a major. I just stick at econ and keep studying everything.
Jenny
I love it.
Seth
That also, rings a little bit true for me is I think I was an econ major for about a quarter. It seems interesting. And you dive into the topic and yeah.
So, what have been the biggest challenges for you as, an economics professor? You mentioned this kind of off right off the start that it touches everything. But as you’re working with people who are new to the subject, I imagine in your, your undergrad classes, like, what sort of challenges do you have in talking about economics to somebody who maybe doesn’t even understand what economics is.
Chris
Right? I mean, any challenge for a principals instructor, you know, teaching freshmen and, you know, in a survey course at the beginning is trying to see this big picture of how the world works and then relate it down to and how we all see the world when we’re 18. We’re just finished high school. Some of us are just barely starting to read the news, barely starting to see how things are going.
And it’s to kind of ignite and say, “hey, there’s this big world and this is how it works.” And that’s always a challenge. You know, the biggest economic issue today in America will probably be housing affordability, right? But how many 18-year-olds are thinking about mortgages? Nobody is. So, here’s the biggest issue. And yet I have an audience who, you know, is on a meal plan or some dorm situation, you know, and so it’s, you know, trying to make all of these very adult topics interesting to folks who are just barely starting their adulthood.
Seth
I love that because it’s actually very similar. When you talk about personal finance to people. They talk about how, “oh, we should be teaching more personal finance in high school and college.” And then it’s like, but you have to teach the right…topic. Like, no 17-year-old is interested in the mortgage lending rates because it’s not realistic to at the time.
Chris
They’re not going to get a mortgage for another decade. So like, why teach it now? They don’t have the questions. There’s no curiosity yet because you can only teach when there’s curiosity. And, there has to be a need to spur that curiosity in the first place.
Seth
That also reminds me about how at DRS, we talk to people about pensions, but people usually aren’t curious about their pension until they’re 55 or 60.
Chris
Yeah, they’re not that worried about it.
Seth
It starts to become real for folks. And so that’s… I mean, it’s one of the things I really appreciate about your videos as well, is that you’re trying to figure out how to make these topics real to people in their daily lives.
Chris
Sure. I mean, in the case of housing, why should an 18-year-old care about that? One: they vote and policy affects these things, so they should be, well informed. And then two, you know, you start saving now, compound interest, blah, blah, blah, eventually you get your down payment, you know. And then there’s also the hope because housing is less affordable, a lot of students don’t have the hope.
So, talking about a plan, you know there’s these FHA loans that you only need 3.5% down to get started, not the full 20. You know, those things kind of build hope when they’re young so they can start planning for it, in the future.
Jenny
Yeah. Do you try to use modern pop culture references in your classes to help kids understand?
Chris
Yes. The one that came off the top of my head is not very modern. Mel Brooks did this History of the World, and his character is in Rome, and he’s a stand-up philosopher. So he’s unemployed, right? The stand-up philosophy is just not, a thing. Right? So, he’s in an unemployment office and he goes and collecting unemployment check, and he’s dotting the I’s and crossing the T’s and check boxes. And it’s the same type of, bureaucratic system we have today for, for how you qualify for unemployment. So that’s always fun to do. Things like that.
Jenny
I love it. So, what do you think is one example of an idea from economics that you think our audience would benefit from?
Chris
Oh, it’s the one we learned day in day one, week one. But it’s just one of the crucial things of decision making. And I find outside of economics, other fields don’t take it as explicitly. And what we call it is opportunity cost. So, opportunity cost is the entire cost of making a decision. Usually when you make a decision, you know you have your cost on one side of your benefits on another side.
But if you go to a movie, for example, the cost is not just the $10-$15 you’re shelling out for the film or the gas that you got, to get there. But it’s the three hours of time. What else could you be doing with that time? So, if you do this in the middle of the day, well, now you’re forgoing work.
So, you know, if you’re 18, you’re making 16 bucks an hour. You know, that’s 45 plus dollars that is costing you an opportunity. But if you’re spending money in general, so in the personal savings, you know, am I going to save for the future or am I going to consume now? The opportunity cost of consuming today is always that forgone future interest that you could have got, had you decided to save.
So you have to keep that into your total cost benefit, because some things can make sense. If you do: “Okay. Yeah. I like this movie. This movie is worth $16 bucks to me.” But is this movie worth $60 to you? That’s a very different question, right? Is it worth the three hours? What else could you be doing with those three hours?
Jenny
That’s fascinating. I’d actually never, really thought about it that way. I guess I’ve never studied econ too much. But, yeah, the opportunity cost of all of that.
Seth
Well, I think we’ve talked about this on some previous episodes, Jenny, about things about like side hustles. And if people are trying to save more money and how you’re spending that time. If I’m trying to get my own side business off the ground, and what are the best uses of my time: promote that effort or build my own skill set?
And it’s similar in a job setting as well as kind of your own job. What are the things that are going to provide me the most benefit? I think some of our teachers deal with this. Is it worth it to get a master’s degree or some advanced degree for the additional earning power that’s going to get me in the future? There is an opportunity cost. If I can’t spend that time with my family or doing other things that I might enjoy more, more right now.
Jenny
That is true. We kind of talk about that time versus money conversation.
Chris
That’s exactly what this is. Yeah.
Seth
Chris, are there some other topics that might be misunderstood or misconceptions about economics that you deal with either in your class or kind of that you pick up through all your interactions with people on the internet that people have this thought of, something that works in economics that maybe doesn’t work as they think it should.
Chris
So economics is the study of the allocation of scarce resources, right? So, it’s a huge field and we study lots of things. And there’s some things we know really, really well. And there’s some things that we’re still, learning more about. And I think, a misconception is economists claim to know everything. And, you know, especially when you go on TV, you don’t always get a good sense of: how strongly does the entire field understand… what’s the quality of our knowledge?
So especially big macro questions like, we don’t know how to predict recessions, no one on the planet has a tool or a system that can consistently predict recessions every time. We can forecast, but the quality of our forecasts are really only ‘okay.’ So, we can’t forecast the macro economy excellently.
So questions of like, you know: is the stock market going to crash? Who knows? Is the unemployment going to go up? And what we just experienced in the past few years is inflation. We understand a little bit about inflation. Like we understand how recessions work. But then the second part for these macro question is okay, we understand a little, but can we even do anything about it? You know what policies work? And we do know some about recessions.
We know that stimulus can help, ease recessions. But we still have lots of open questions about what’s the right size of a stimulus. Can we control inflation? Only a little bit. You know, when the Federal Reserve changes interest rates, it’s kind of a big bludgeoning tool. It’s not a fine…we can’t control it, like you can, your vehicle.
But then other things. So those are things we don’t know very well. We know some, but we don’t know it very well. But other things we know really, really well are like supply and demand, like the basic like microtransactions. If you increase demand, price is going to go up. And we can fine tune this. Like if we get data, we can plug it into a supply and demand model, and we can get you an exact a pretty close prediction of that individual price and the individual quantity and how will change.
So, some things we know really, really well and then other things we don’t know that well. And I think what happens is when you have public conversations with an economist is you’ll say something like in the issue of housing, we understand housing really well. We just got to build more like that’s the only solution. Whatever we do, we have to build more. And then people say, “oh, but you couldn’t predict the financial crisis.” I’m like, well, yeah, those are two different questions.
Jenny
I was going to say, obviously you use a lot of research and what are just kind of like some top websites that you use or resources that you like to go to for various topics. Like you said, either the how the economy’s doing or the housing crisis or whatever it is.
Chris
Well, where’s my information diet? Well, the cool thing about the online world we live in is, if you follow a ton of experts because no economist knows everything, right? So, some economists specialize in real estate and other economists specialize in inflation and like all these things. So, you go on Twitter or other places on social media and, you curate your ‘for you’ pages, as it were, full of just the world’s best experts from across the planet. And that’s just one of the coolest things.
But in terms of like specific websites, oh, there’s lots of blogs. I got a buddy, he’s another teacher, he writes Monday Morning Economist and that’s a newsletter that’s every Monday. That’s really quite good. I mean, Substack is kind of the growing place for high quality blogging. So, Monday Morning Economist I recommend that one. Noah Smith, he’s very, very famous. But he’ll do lots of political commentary or other types of things too, in addition to just economics.
And Kyla Scanlon, I can always plug her. She’s a friend from TikTok and Instagram and stuff. Kyla Scanlon does a lot of finance, commentary. And she’s very, very excellent.
Jenny
Great. I’ll have to check those out. Yeah.
Seth
Chris, you kind of mentioned this in a previous answer about the misconceptions about the economy and the stock market, and how sometimes our thinking gets jumbled up about that. I’m just wondering if you might want to expand a little bit on that.
I know one of my favorite quotes about from economists is about how, like 11 out of the last five recessions were predicted correctly by the stock market. I feel like since 2020, I have lived in a world like where every person has told me there’s a recession that’s going to happen in [next] three months.
Chris
Oh my God, the doomers.
Seth
I’ve been hearing that since, you know, since March of 2020.
Chris
And, yeah, well, they were right in March 2020, we did have a major recession, but it only lasted two months. Yeah. I mean, you touched on a couple of things. One, I’ll just say briefly, I’ll answer the question, but I first, I gotta take a tangent and talk about doomerism and going viral and being on the internet. It’s not just social media.
Doomerism…so that’s when a very negative headline is going to go further and make more money. I remember, so every Friday we get new unemployment data and I would show my class, you know, here’s the media reporting about the unemployment data that just came out this month. I’m sorry, not every Friday. Once a month, the first Friday of every month, we get unemployment data.
And I remember we had the lowest unemployment rate in 60 years. Like you had to go back to the moon landing to get 3.5% unemployment. And CNN figured out how to turn that into a negative headline. I’m like, this is one of the best job reports — I mean, we were experiencing inflation and that’s a bad thing. But on the job side, we were doing really well.
And they figured out how to make these really doomer negative headlines for a long time. I remember Bloomberg had that famous headline, “100% chance of recession.” I think they said that in 2022. And here we are. We didn’t get one. So that’s doomerism. Doomerism goes more viral. So, take that into account when you’re trying to know what is really happening in the world around us.
And the only way to really do that is a representative sample. And a representative sample of what’s really happening in the economy. So, when I say the unemployment rate, they interviewed 60,000 households every single month, and then they go to 600,000, businesses and see how many jobs they’ve created. These are huge, very carefully scientific, representative samples of what’s really happening to people.
Now, the stock market is none of that. Stock market is simply a bet about the future. And bets about the future sometimes are right. And bets about the future sometimes are wrong. I mean, if the economy’s doing bad, the stock market’s going to be doing bad, right? But sometimes the stock market can go up when the economy is doing bad because they think, “hey, in the future the economy is going to recover.”
So that’s why in Covid, even though the unemployment rate jumped to 15%, stock market recovered very fast and like, exploded. Why? Because they’re like, hey, we’re going to get out of this. They all took that bet. And they were right. We did get out of that. The economy recovered incredibly quickly. The stimulus package has worked wonders in terms of making sure people weren’t suffering in 2020 and early 2021.
And, so I think that’s the difference. The stock market is a bet about the future. And it’s a noisy bet, like any betting market would be. I mean, it’s only representing some companies, like the Dow Jones is like 29 companies. The S&P 500, okay, 500 companies. But it’s only the biggest 500 companies, not the smaller ones.
And then there are only companies that trade stock. Half of businesses aren’t on the stock market. So it’s only reflecting a sliver of the economy. It’s an important sliver, but it’s not the same thing as actual dollars and people’s experiences on the ground.
Jenny
Thank you for that. That’s really a good way to think about, like you said, doomerism and stock market and all of those pieces that make up economics.
Chris
So I think like when you’re interpreting the stock market in relation to the economy, you have to know why it’s moving. Like what are the narratives, what are people saying. So, right now at time of recording, the stock market has lost six months worth of value, for example. And so, the question is this just like betting noise should we be worried about this because the unemployment rate is looking pretty good right now.
Well, what’s causing the narrative? And the question is these trade disruptions. Are these trade disruptions going to affect the real economy? And, of all the things we know really well, we’ve been studying trade in earnest for 250 years. It will slow down the economy. We’re going to be living a little less and potentially because of these, these trade disruptions. So, I think here the stock market is getting this relatively accurate. So, I guess the question for the future is how much will the magnitude be?
Jenny
And for the record, we’re recording here in March of 2025.
Seth
I would be curious just because I would just love to pick your brain on inflation. I mean, I think many of us and you’re relatively young, like Jenny and I, never lived through inflation. I mean, I remember growing up and hearing stories from my parents about people waiting in line for gasoline for, you know, half a day. These stories that I just never would have assumed that my life could be impacted by inflation, to this degree and now I like I can’t go outside without people telling me how much they paid for eggs.
And I guess from an economist point of view, how do you help people understand what inflation is and how it impacts them day-to-day? And then also over the course of their lifetime?
Chris
Yeah, inflation is complicated. People have good intuition that, “oh if prices go up, therefore, my quality of life is going to go down. Everything’s more expensive. My paycheck is not going to go as far.” And there was some truth to that, especially in 2022, kind of at the peak. I mean, in June ‘22, the annual, CPI was at 9%.
That’s the highest we had seen since like 1980, which is long before, any of us are born. But, people close to retirement age now certainly remember it. So what is it?
There’s these short run costs where your paycheck doesn’t keep up. But then wages are the price. Wages are the price of an hour of labor. And just like all prices are adjusting in an inflationary period, wages do adjust. And we saw wages on average went up. Now this isn’t universal. Not everybody got a raise. Not everybody switched to a better job. But on average people did. On average wages eventually caught up and surpassed it. I mean, today in 2025, our wages have a better purchasing power, than they did before the inflationary period.
So, wages eventually catch up. So, what’s the big macro cost? Well, it’s the disruption. It’s all that noise that gets introduced in the economy. And economy runs well when there’s more clear information, more clear expectations about the future and when prices are suddenly changing, that disrupts everybody’s plans and the transactions slow down. And businesses don’t invest because you’re not quite sure what’s going to happen in the future.
So those are the kind of, disruptions from inflation. So, I think for me, the biggest challenge is for people to recognize that your wages fluctuate with inflation, just like regular prices do, because psychologically we treat it as different. A lot of us don’t realize that we’re all just interacting according to these broad macroeconomic laws of how things interact.
We all want to believe that we control our destiny. So, everyone’s like: “A wage? Well, I earned that. I went out and got a new job.” And you did. “I went out and negotiated a better pay or treatment for my boss.” And you did. But that’s just a cog in a big machine. People negotiating, people working hard to get better wages is just the same thing as when businesses see demand go through the roof and raise the price; it’s all just functioning to these big macroeconomic supply and demand rules.
So, they view prices going up as something that’s happening in the system, but they view their own wages going up as something they earn. So, it’s kind of this interesting psychological asymmetry.
Seth
Yeah. That totally makes sense. It’s something that’s being done to me versus something I am doing. And yeah, a little bit to your doomerism comments as well. Like, the things I can’t control oftentimes are the things that keep me up at night the most.
Jenny
It’s a great lesson of: let’s focus on the things that we can control, like our budgets.
Chris
Yeah, yeah.
Jenny
Well, Chris, I remember when I was in college, the book Freakonomics was, really popular, obviously there are a lot of economic books out there. Do you have maybe three book recommendations for our listeners?
Chris
Okay, okay. I’m going to do a first off, a contemporary book like Freakonomics, but it’s better, it’s held up better. And that is The Undercover Economist by Tim Harford. So, it’s like 20 years old. What came out like in 2005? But this book still holds up and I always feel guilty, with it being the first one off the bat because like, well, maybe some of it’s a little dated, but it’s not. I mean, you’re going to get examples from the last millennium, of course, but it’s the best conversational discussion of basics like: How is rent determined? How is land rent determined? And, you know, more profitable places… why is a hot dog $10 in Manhattan, but like half the price or even a fraction of the price at Costco? A lot of that has to do with land rent. It’s just the best introduction. It’s conversational. It’s got tons of great anecdotes: Tim Harford’s, Undercover Economist.
So my second book, that I’d like to recommend is also for my friend Kyla Scanlon In This Economy? is the name of it. She goes into the fed and finance and you know how all these things work. And she’s got nice little drawings throughout the whole thing. It’s a lot of fun.
And then the third book, just coming out. So, I’ve only had a chance to read the first few chapters. I got, lucky enough to get an advanced copy, and it’s by Daryl Fairweather called Hate the Game: Economic Cheat Codes for Life, Love and Work. She is the chief economist at Redfin. That’s the real estate website.
And she’s also on social media and makes these really great, informative videos just to talk about how we navigate through this game of the economy. So, the economy is this big game. And a lot of times the economy is very unfair, very unforgiving, but the more we know about it, the better we can navigate it. And I think she does a really good job at, kind of unlocking that for the individual navigating it. And, it’s well-written, lots of great anecdotes, lots of good advice. And she’s an excellent economist to boot.
Jenny
Awesome, I love it. Well, I think that’s a great segue into, like, the theme of this, podcast episode and all the reasons for why people should be interested in economics and follow it. Follow Chris on Instagram and TikTok.
Chris
Econ Chris Clarke.
Jenny
Yes, @EconChrisClarke, his handle on Instagram and TikTok. All the reasons why we should be following economics. And the better we can understand it, the more we can make great predictions about the future.
Chris
Well, I was a real pleasure being on. Thanks for having me.
Jenny
Yeah, thank you so much, Chris. We really appreciate it.
Chris
Good luck everybody! Go retire. Be ready to retire when it’s time!
[music outro]
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