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Platypus Economics with Justin Wolfers

@platypuseconomics

The lesson here isn’t just about phones in schools. It’s about human behavior: Take something away, and people usually replace it with something else.⁣ ⁣ Economists call this substitution.

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More from Platypus Economics with Justin Wolfers

Politicians love visible gestures. Economists ask the annoying follow-up: does it work? ⁣ ⁣ On gas tax holidays, the answer was basically no then, and no now.

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Even if Middle East tensions ease, futures markets are signaling oil prices will stay elevated for months — maybe years.⁣ ⁣ That's the "Iran tax." And it's not going away anytime soon, regardless of what the White House says about prices coming down.

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“There is no price tag in the economy as tall as gas prices, and that you pass as often.”⁣ ⁣ Visibility matters. Economics isn't just about prices; it's about attention. Gas prices shape how people feel about the economy because they're impossible to ignore.

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Pete Hegseth’s focused on the cost of the bomb. I’m more interested in the size of the economic crater.⁣ ⁣ And that crater may be 10 to 100 times larger.⁣ ⁣ For many families, that translates into thousands — perhaps tens of thousands — of dollars.

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$42 million raised sounds enormous. It is. But economics is about compared with what? If the Met Gala creates far more value for fashion brands than for the museum, then the ticket price is probably too low.

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Lemme ’splain: calling it a “big beautiful bill” doesn’t make the maths prettier. If you cut taxes and don’t cut spending, the deficit goes up. That’s not ideology. That’s just arithmetic wearing sensible shoes.

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The key distinction is between nominal wages and real wages. Nominal wages are the dollars on your paycheck. Real wages are what those dollars can actually buy.⁣ ⁣ If prices rise faster than pay, you’re going backwards.

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If there’s a water shortage, don’t subsidize showers. If there’s a blackout, don’t make AC cheaper. If there’s an oil shortage, don’t cut gas taxes. Prices are helping signal scarcity. A gas tax holiday weakens that signal right when it matters most.

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Economists call this diminishing marginal utility. The first dollars change your life. The billionth doesn't. So the argument stops being about consumption and starts being about power.

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Since Trump returned to office, 86% of net new payroll jobs have gone to women. Women now hold slightly more nonfarm payroll jobs than men — 50.02%.⁣ ⁣ The labor market has shifted. The question is whether our policies and politics have noticed.

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