An Honest Conversation About Money & Politics With David Pakman



hey guys it's Chelsea from the financial diet and this week's video is brought to you by the free exchange of ideas and to exchange those ideas I am here with David Pakman who is a fellow youtuber a political talk show host and someone I am personally a huge huge fan of so to give you guys a little bit of background he is the host of the David Pakman show which is a show that how would you describe it left-wing political show so you don't portray yourself as just like neutral unbiased etc you you come right out and you're like left-wing I would have no audience if I played to the middle that's very interesting I feel like it's it's fairly common for people who even have a very strong ideological bent who clearly have it to portray themselves it's just sort of a neutral arbiter just observing things that can be I mean the truth is everybody has bias everybody has a perspective it's a question of what do you choose to hide it with and sometimes people replace political bias with corporate bias or bias to sensationalism or bias towards your advertisers views so I just do a left wing show I'm upfront about it people often disagree with me about my conclusions and that's okay as long as it's a good-faith disagreement based on what I've actually said right deliberate Mis statements about what I've said and strongmen and all of that type of thing very cool and so you also as it happens and I didn't know this I initially reached out to him not knowing this but you apparently also have a bit of a background in personal finance that's right I have an MBA and I had two concentrations financial planning and entrepreneurship and I'm sort of using both of them and I'm glad I'm not directly working in those in at least in financial planning because it's not a field that I would like to be working in but the knowledge has been super useful for understanding politics and just like household economic circumstances that relate to the decisions that our elected officials make and in that sense it was a great area focus in my grad school studies here on this channel as you guys will know we do talk about the macro view of how the people in power or this systems in place impact our individual financial circumstances and decisions but this is a space personal finance is a space that is often framed as being a political or let's be honest a lot of people in this space are explicitly right-wing but I would say more than more often than not people try to sort of ride the the middle and and take politics out of the conversation which I feel that it can't be yeah I mean I think that there's so many ways in which it is political inherently when you talk about education and how should college be paid for when you talk about interest rates predatory credit card and payday lending practices well we should be talking about why so many people are even in a situation where that's a product that might appeal to them or they might think or actually need a product like that and that has to do with politics it has to do with our elected officials when we talk about the bail bonds industrial complex and why that prevents many people who are already economically disadvantaged from even mounting the defense that supposedly everyone is entitled to in our justice system I mean all of these are personal finance issues that also cannot be divorced from the politics so my approach is usually when I talk about the politics I talk about what are our elected officials doing what do Democrats and Republicans want to do on on some of these issues they actually want very similar things on others they want different things but then also like what can you do you know if you don't have a thousand dollars in an emergency fund that's an emergency and right whatever the politics are whatever the politics are that are going on whether your tax rate is going up or down based on who's in power not having that emergency fund is an emergency and there's a lot of different ways that you could immediately focus on sort of building that up are there ways in which the average person can use their own financial growth and their own financial education to in some way affect change or to become more empowered more lucid more political you know absolutely I mean if you have a retirement account the decisions you make about what company do you put your money into whatever it might be with mutual funds or whatever the case may be that has big political impact the decisions you make about the specific funds and the sorts of companies that you are saying I am sort of putting my retirement in the same space as companies that are doing one set of business activities or a very different set of business activities and thinking about how those businesses relate to the climate for example I mean with the idea of voting with your dollars goes very very far I mean we we know because of campaign finance that people who have many dollars are able to vote in a very special and influential very literal way a very literal way literal way sure the individual consumer can also do that in the aggregate and that comes to the products you buy the companies you support how you're saving money for retirement or for kids college or whatever the case may be all of those decisions and even including I mean when you talk about programs that exist on YouTube deciding whether you're going to put a hundred dollars a month into a cable subscription supporting probably mostly channels you don't watch and certainly don't want to be supporting in many cases versus channels like ours or independent media or whatever the case may be all of those decisions are political personal finance decisions so I as I mentioned watch quite a lot of political YouTube and I do try to be diverse in my diet if only to kind of stay abreast of what's happening although sometimes it becomes overwhelming but one thing that I have noticed is that the entire concept of personal responsibility and taking control of your life a lot of that I think has been co-opted frankly by often rather dishonest actors who want to pretend as though we're all operating in a vacuum we're all on equal footing these are all choices and and movements that are that are really under our control when I think frankly in many cases they're not but I also think going to the other end and only focusing on sort of the macro issues and only focusing on what's going on around us at a larger scale and and in some way abdicating our responsibility to be really sort of in control as much as we can over our individual lives that is something that I see a lot and I wonder how can we more integrate that concept of personal responsibility without rejecting all of the the realities that many of us live in well when it comes to personal finance I think it just comes down to education and in the same way that critical thinking is basically not taught period unless you seek out critical thinking in college for example Oh thinking and personal finance really should be taught probably starting at age 12 I mean it's middle school really where it should start to be taught you're right that the political right has completely co-opted the idea of personal responsibility even though in practice they're often not living it I think we're seeing that you know in a lot of different ways which we could talk about but we don't need to but the idea of pulling yourself up by your bootstraps is great but what if you don't have bootstraps and can't afford to get them right then what do you do and I think that that's sort of the way in which someone like me whose political views are what's called social democracy which is a system that is capitalist there is private ownership of business people can get wealthy in that system but we are saying we are going to prioritize using taxation to make sure that no one gets below a certain level often this includes healthcare often this includes education it can include paid Family Medical Leave for for mothers and fathers that is it is personal responsibility but it's a different flavor of it so so often a lot of the personal finance advice almost has to come and I include this channel in it by the way we are part of this issue it's inescapable it almost comes with an unspoken asterisk of like if you are above a certain level of income so what are some of the ways that you have found in in the way that you talk for example about economic issues so really kind of bridge that gap and make it clear that like there are some things under our control but a substantial amount that are not sure so the first thing is just understanding that in the United States over long periods of time income mobility is quite low so if you want to focus overly on a latte or avocado toast or whatever which he ate this morning this morning and it was very good everything if you want to focus too much on those things what you have to do is zoom out a little bit and realize most people who are born poor stay poor most people who are born middle-class stay middle-class most people who are born rich stay rich yes there are celebrities and athletes and and startup people who go from anywhere to super rich but these are small numbers of people they are not representative of most of what's going on so then when you realize that income income mobility is really low you have to ask yourself are people who are born poor staying poor because they're not smart enough to be more than poor are the people who are born rich stayin staying rich because they also happen to be smart enough to remain rich and of course the answer is no once you realize that income mobility is so limited because of the overarching infrastructures that exist then you can start to understand why the financial advice that's good for someone who is even lower middle-class and up is not going to be applicable to people who are in a literal sense paycheck to paycheck but not only paycheck to paycheck meal to meal as the case may be you have to be able to distinguish that and that's where how do you not talk about politics right well I agree but it's interesting because I mean at least from my perspective and this is obviously anecdotal this is not there's I have no data on this but I bet if someone were to do it the data would bear it out that the vast majority of financial media out there especially the older stuff is very very right-wing if not explicitly so in their approach to how we all move through the world it's like often just like quasi-libertarian it's very sort of like we're all you know I mean it's almost like doomsday prepper in some capacities well it's certainly anti-regulation in that sense it's you want the government to have a small role and as little involvement as possible in what businesses do because that's what's going to be best for the businesses and what's unfortunate about that is that a lot of the same people that say they are against socialism when they push for that type of infrastructure you are essentially socializing the negative externalities of what businesses do so you say I want the government imagine an energy company that's doing fracking or drilling of different kinds they want the government as out as much as possible from any kind of regulation so that the profits are all capitalist and then when there's a big spill or something that needs to be cleaned up well they're totally funded socializing the cost to clean that up so one of the reasons why I think that most of personal finance media is just like it has to have this political framing is because people don't want to hear they're not gonna pay money for a book that says you're probably not going to escape your your current situation within a range right like you're probably gonna fall within the same standard deviation well I would go even further who has the most power to dictate what becomes policy in the US big corporations and very rich people they benefit from convincing other people that they too may one day be rich and a few of them will be sure but most of them are not going to be and how are you going to convince people to push for a tax policy that benefits you and not them unless you at least to some degree convince them that some portion of them is going to benefit at some point in the future even though most are not it's necessary to convince people to push for some of these policies or at least look the other way when you push for them well and I would also say that there's a real value in creating a sense of resentment amongst people of lower income or towards people of lower income because you make it a character question and you're probably not going to think deeply about what your role has to be right it would be in changing that status quo right I as someone who was born in Argentina and my family via a visa lottery ended up coming to the United States the David Pakman show wouldn't exist if I still lived in Argentina because by chance my family didn't get the visas that we got I would be the same person I would have conceivably the same cognitive and intellectual capacity I might even end up with some of the same interests but the the the happenstance of that visa is what made it so that now I have a national talk show in an ad agency rather than whatever it is I would have in Argentina that's purely timing odds or luck I mean it's literally odds that some people get the visas and some people don't a few things I think illustrate this better than when you look at the second generation or third or fourth generation of people who come from great wealth and power who are visibly incompetent who have clearly messed up more than they've succeeded but who continue to fail upwards because once you reach a certain level of money and influence and power there's basically no stopping you sure and I think that's why a lot of my views which again I sort of consider under the umbrella of what's called social democracy the wealth of people that did things to become wealthy long before you were alive serves us almost like an insurance policy for you if you were born into that situation what about also creating some kind of insurance policy for people who aren't born into that to make sure that their standard of living doesn't drop below a certain level I think we should well absolutely and I think we need to be much more honest with ourselves about what it means for most people who are successful to have worked hard the idea that people who are at a certain level have worked to get there which first of all implies that all the other people just didn't work as hard which is almost categorically untrue but even if it were true when you look at the pay disparity between executives and the person Manning the counter it is physically impossible that they have worked you know seventeen thousand times harder than the other person but for some reason that framing of working as primarily what gets people to a certain economic status seems to me to not go away do you know why that is well I think that there is there's a total lack of perspective as to what goes into getting a person or a business to where it is today and it's very easy to say listen you've got a show and employees and it's now you know successful to a certain degree that's because of your hard work and you deserve all of the fruits that that has produced well do I really deserve all of it because I have employees who come to work using public transit and have been educated by the public education system I have a intellectual property protection infrastructure which the government and the legal system is involved in like a it that's I didn't create all that stuff I mean I benefit from all of that stuff so how can i really say that it was all me if we didn't have that if we didn't have institutions that to some degree can be trusted even though of course there is corruption and malfeasance if we didn't have those things a lot of these businesses that were supposedly created by hard workers would not exist quite simply for a certain you know certain trench of the American economic population very there is a fair level of mobility an autonomy like I I think it is realistic and I'm sure the data bears this out to go from like if you were born into a family that earns I don't know like sixty thousand dollars a year to potentially earn you know quite a bit more than that as an adult yeah and a lot of that will go with it realistically it's it's not I mean you know what talk about inflation adjustment right so there's more travel people moving within the United States to areas that have a higher cost of living but also tend to have higher salaries yeah that level of mobility is much more significant than what is happening at the very bottom for sure for those who fall beneath that ability at least for now what else do you think is really tangibly something that they can that we can offer them you know I mean the tough thing about this is I could give a list of ten things and nine of them a lot of people would say you are totally out of touch because that wouldn't work for people in X situation so I feel like there's no one prescription for everybody but I feel like the principles tend to basically be the same ones I mean it's spend less than you earn if possible it's I some people can't do it if you have children if you live in a high cost of living area there's all sorts of situations where it can't be done you need an emergency fund you need a budget you need to understand what's coming in and what's going out you want to only use credit particularly higher interest credit when absolutely and completely necessary you need to understand which now is made a little clearer from credit card bills that people get if you make the minimum payment how long is it going to take you to pay it off and what is the total amount of interest that you're going to pay which was very opaque before newer regulations were passed about how that has to be disclosed you know it's not about the latte millionaire versus the latte poor person that that's an exaggeration but understand the impact of doing grocery shopping one way versus another way and of eating out right I mean it's like it needs to be tailored to the individual financial situation for most people there are changes that would apply to them but it's really tough because it can appear almost patronizing sometimes to say things that appear so obvious for people who really are not in financial situations where these are the types of decisions they need to be making that is very true and I and I do feel personally that once you get to a point in life where these decisions are not so fraught and you have the mental and often just pure time bandwidth to expand your your view of these things a little bit I personally think that it's an ethical obligation to involve yourself to some extent in the political world because you can't escape it and even if for you it doesn't make a huge difference who's in office because you're kind of going to be fine either way that is very much not the case for many real individuals but I'm sure that a lot of people respond to things like this and say well I what am I supposed to do I'm not going to like sit and scream on Twitter about it all day like a lot of people do I vote what else is there that's available to people particularly when it comes to a lot of these like very very tangible economic issues there's a lot of you know people the presidential election gets so much attention that it can often seem like that is really like the primary way to participate in the political system but there are so many other ways and often at the local level and for financial stuff it's often at the state level that a huge difference can be made because a lot of what is going on I mean yes federal tax rates are a big thing if you're below a certain level the federal tax rate is not going to play a big role in your year to year sort of budget there's a lot of stuff happening at the state level in terms of programs that are available to low income people and most of the stuff is politics there's often a divide between the American left and the American right on these issues so getting involved it can't just be every four years in the presidential election and a lot of people aren't even doing that but City Council's state governments governor's although they are very political they are also much more administrative than something like a president or a senator is so there's many opportunities at the local and state level to get involved sometimes people will say I'm not political and I'm not into politics and that's fine but either way it's affecting your life not voting or not being involved is not a neutral act and that's what I try to tell people who call into my show and they say I just you know my vote is not going to make a difference which by the way we could talk about that talking point which makes no sense my voice is not going to make a difference and I just don't even I'm not really that into politics I'm into ABC and almost invariably a B and C are heavily influenced by politics so by you can be involved or not be involved either way it's a decision what are some of the biggest ways in which you stay optimistic and positive and perhaps most of all productive I try to just look at the things that are going okay or at least slightly better so if you look at you know the number of people in abject poverty even if we understand that in a world of inflation and changing political realities and there's all these different caveats we have made some progress in reducing that we are hopefully starting to get consensus on the urgency of the climate crisis to where maybe in the next 10 years it will be taken seriously enough that we could get to some kind of deceleration of the problem I mean I know that this is like a low bar but you've kind of got to start somewhere also I do think that there are just ideas that are good ideas that are more popular than ever so the idea that if you can't afford health care the government should provide some basic level for you that idea is more popular than than ever in the United States if you're a social progressive gay marriage approval and the idea that abortion should be legal safe and accessible in most cases those ideas have more support than ever before in American society for as long as there has been polling on these issues so those are all good things the elected officials often lag behind a little bit right now the American electorate is to the left of the average elected official so hopefully with time and fixing some of the gerrymandering and campaign finance and all of that other stuff that is preventing this from improving hopefully over time that will pull our elected officials more in the direction you want them to be so those are my questions for David but now we have them much more interesting and thoughtful questions which are coming from you guys how do you actively contribute to future capital accounts ie 401 K Roth IRA etc when the earth is inevitably going to implode climate change / famine / disease / war before you can access these funds so my thought there is if it's going to be that bad then what does it matter where my money is exactly anything so at least I suspend momentarily the possibility that that may be the reality and just make the decisions that I think are best assuming that humans continue to be able to live on earth if it doesn't work out that way it won't really have mattered where the money was whether it was in a high-yield online savings account or in a 401 K or whatever yeah that's just a reality don't live like you're gonna die tomorrow like that's a horrible way to live you're probably going to be alive tomorrow and what are you going to want when that happen and retirement savings is very much sort of along those lines honestly as dark as this is the most realistic outcome is that like by the time you're taking that money out like most of Miami Beach will be underwater but they will have long since found a way to monetize that and part of your 401k will be in the companies whose job it is to pump out luxury condos how are young professionals supposed to balance their need to make as much as possible to pay off their nearly mandatory debt with their desire to not feed certain industries or companies whose practices and values are morally objectionable everybody has to figure out where they are drawing the line I mean there may be so some people would be in the mindset of I will never take a dollar from a company in Ex industry no matter how desperately I need that dollar that might be the right decision for one person someone else might say I'm gonna take this job for the next five years if I don't take it someone else will either way this company's going to do the bad stuff that they're going to do it will allow me to get out of debt more quickly and then really get into the field where I'm going to improve society and better the world around me that's a very personal decision everybody needs to make for themselves I like to take the money from the capitalists and use it to fund a very co-op so you know how aggressively do we need to be paying off student loans given that a we want to live and be they will hopefully be forgiven maybe so the the forgiveness is a newer piece but this kind of gets to the same question that I often talk about in terms of like paying more off of your mortgage than what is actually required on a month-to-month basis this is different for everybody because you have to number one calculate the difference between the interest rate on the student loan or the mortgage versus what the return might be on what else you might do with that money if you consider the stock market over long periods returns 8% then if your mortgage is three and a half percent you might choose not to pay the mortgage off early there's also something to be said for just like the safety and security of having a cash cushion so even if you are choosing to continue paying three four five percent interest on something in order to have a cash cushion that has a significant psychological impact including of knowing that if you lose your job you could go however long it is that you could go with that cushion without needing to have replaced that job and that's a really powerful thing for a lot of people so I think that again it's your mileage may vary and every situation is different we actually advise that people get a couple months of emergency fund for they start paying anything above the minimum like you have to pay the minimum until you have because what happens if like you said you lose a job no emergency fund is an emergency might have to steal that thank you so much David for being a part of this I'm very still all giddy about it but please go check out the David Pakman show on YouTube and elsewhere I'll link you guys in the description I can't recommend it enough thank you so much for having me thank you for being here as always guys thank you for watching and don't forget to hit the subscribe button and to come back every Tuesday Thursday and Friday for new and awesome videos bye you

Maurice Vega

35 Responses

  1. This is excellent ?? I am lucky enough to live in Australia where we can access free heath care and essentially interest free loans for university. But even then there are so many things that make large wage mobility difficult

  2. I’m gonna have to watch this again, cause this topic is something that I battle with in my mind all the time. How am I supposed to take responsibility for my finances when I live in a system that was designed to exploit me (!) thank you for bringing that up, TFD

  3. I fall to the right of both of you and to the left of many friends. I appreciate you not bashing conservatively minded people.

  4. @Katherine Petersor you make great points but another circumstance that people forget about is that they had the American dream until they got ?!

    Years ago a Caucasian male 18 or so living the American dream who thought that he could never be poor unless they caused it! I asked him “ If you were hit by a car and rendered disabled and no one wants to hire you because they don’t want to accommodate your wheelchair or could no longer work at all why do you feel that becoming poor is a choice”. Too poor to pay your rent living in a shelter in your wheelchair and yet you had a college education and all of the opportunities and when you lose them what do you do?

    Crickets ? then bless him an apology for assuming that poverty was a choice and didn’t happen if you made the right choices!!!

  5. Failing upwards? You mean these politicians that have no term limits in most cases and keep getting voted in by standing for "New Popular Social Movement" and then screwing everyone over? Right. Let's keep applauding Bernie Sanders and other slimeballs.

  6. When most people think of personal finance and financial literacy Dave Ramsey comes to mind. Very right-leaning and conservative, the work harder, “bootstraps” mentality if you will. This perspective is a refreshing change from that.

  7. Hey Chelsea! Why doesn’t the Financial Duet have a podcast?! I would love more conversations like this and longer conversations based on finances! Love your videos/blog but we want more! 🙂

  8. What would you do with an extra $1000 a month? Doesn't help out the rich that much, substantially helps the low/middle class. Helps bridge the income gap while opening opportunities to go to college, vocational school, start business and pay these student loans :O #YangGan2020 Great collab!

  9. Girl why is the sound on on your phone’s screen for this? Come on. I feel like some of your interviews are great and they’ve gotten worse. The last really good one was Nikola, now the sound or editing or SOUND is always weird.

  10. Well corporations actually pay taxes that pay for some of those public services that we all benefit from. The employees did not go through the startup phase most of the time, and they don't have anywhere near the same amount of sweat equity. Start a business and have it work and then come tell me….

  11. I'm going to unsubscribe as soon as Chelsea starts to preach about her love for socialism and Bernie Sanders.

  12. YES. If I could outlaw payday loans I WOULD. So we need to support those who can get that done for us. Interesting convo, guys!

  13. This channel is so consistently one of the best channels I watch. I really appreciate your content. This is a great video, and I think it would be great to have other similar discussions focusing on different aspects of people's finances. Thank you.

  14. I love how she keeps bringing the conversation back to personal accountability— what can people do to help their situation rather than blame it all on someone else.

  15. I think financial advice is often conservative-leaning because as an individual, you are preparing your own finances. You're looking out for yourself and your best interests. But socialist politics doesn't really solve personal finance problems. Asking for socialize healthcare and loan forgiveness is great, but until that happens are you going to just not pay for health insurance, prepare an emergency fund, or pay your loan payments? Heck no. I guess I see it as more of a "prepare for the worst, but hope (or in this case, vote) for the best.

  16. Thank you for creating such a great video! Your compassion really shows in this video. Keep up the good work!

  17. Hi from Buenos Aires! Here you would be complaining about the "Macrisis" and trying to guess how to have financial security in this inflationary/recess economy

  18. Voting and education will never matter until private money is taken out of politics. Qualified candidates should each get equal amounts from local/state/federal campaign funds. Only then will the people/voters votes matter..

  19. Storytime: I'm sitting in the dentist chair, my 4 year old is sitting nearby with my phone. The assistant walks up making small talk and ask my son what he was watching. She looks over and says "oh! 'An honest conversation about money & politics' wow ?!" He was a good 2 minutes in btw.

  20. At first I agreed with you guys but it eventually started to seem like you guys have a completely left wing interpretation of things as if there aren’t a few credible instincts and truths to the other side.

    It’s just overly dismissive to me. And I don’t think everything can just be explained away as oversimplifications and misjudgments. No financial ideology is as complete as you guys make it seem.

    TLDR; personal responsibility and politics are sort of different things, you guys are blurring the line between victim blaming and constructive criticism to give someone a better outcome.

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