Planet Money : The Indicator from Planet Money : NPR
SYLVIE DOUGLIS, BYLINE: NPR.
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SALLY HERSHIPS, HOST:
This is THE INDICATOR FROM PLANET MONEY. I’m Sally Herships, in for Stacey Vanek Smith.
DARIAN WOODS, HOST:
And I’m Darian Woods.
HERSHIPS: And we have some exciting news. We want to introduce our new reporter, producer Adrian Ma.
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ADRIAN MA, BYLINE: What’s up?
HERSHIPS: Welcome (laughter).
MA: Hey. It’s good to be here.
HERSHIPS: We have brought Adrian in for our indicators of the week. Stay tuned for some sunny news about solar, along with…
MA: El Salvador’s official adoption of Bitcoin.
WOODS: Along with consumer confidence and how that’s going with the delta variant breakout and the vaccination rollout.
HERSHIPS: All of these exciting indicators after the break.
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HERSHIPS: So the Biden administration has just released this big report laying out how the U.S. could massively increase the amount of energy we get from solar by 2050 – up to almost 43%. That is my indicator of the week, 43%.
WOODS: OK. That’s a good one.
HERSHIPS: Right now we only get, like, 4% of our energy from solar, so this is, like, this huge leap. And I wanted to know, how is that possible? So I called Michelle Davis. She’s a solar industry analyst at Wood Mackenzie.
Can you illuminate us? Do you get those jokes a lot? Sorry.
MICHELLE DAVIS: No, not really to be honest (laughter).
HERSHIPS: You guys, I promise. She has an answer.
DAVIS: When I think about the answer to that question – how do we get there? – I think of the current challenges that the solar industry is facing, which can be broken down into a couple different categories. So the first one are the supply chain constraints that are currently having an impact on this industry.
HERSHIPS: So when you make solar energy, you do not just need the sun. The pandemic comes into this. There was this big slowdown in demand for all kinds of commodities that are really important for producing equipment. And now demand for solar is just super high. So Michelle says, so is demand for these commodities.
DAVIS: Things like aluminum, steel, glass, copper and then pricing for polysilicon as well have all been up in the last year. And that has started to make its way into actual equipment for solar projects enough so that developers are actually increasing their prices today, which hasn’t happened in – basically since Wood Mackenzie has begun tracking this data, since 2014.
WOODS: That doesn’t sound very good, Sally.
HERSHIPS: Yeah. As you both may know, a lot of the world’s polysilicon, which is what you need to make solar panels, comes from China. But there have been accusations that China is using forced labor, so the White House has banned imports of some materials you need to make solar. There has been this big push to incentivize domestic manufacturing. But Michelle says, to expand solar quickly, we need both an international and local supply chain. And O to the M to the G – there’s also this labor shortage, so I also asked her if we have enough skilled workers.
DAVIS: Unfortunately, the answer to that is not right now.
MA: I mean, it sounds like it’s a really good time to be in the solar business.
HERSHIPS: Yes, it is a sunny time, you might say. But Michelle says, even if we do get the supplies and the workers, there are still all these permits and studies you need to do to connect power utilities and to do upgrades. And those can be so onerous, and they can take so long – up to years. So she says, that will have to happen faster. But you guys, the news is still good for solar.
DAVIS: It is possible, it is feasible to meet these targets. It’s just going to be quite challenging, and we’re going to need to remove as many barriers as possible.
HERSHIPS: All right, Adrian, it’s your first day. No pressure. What do you got?
MA: OK, so my indicator of the week is 550, as in 550 bitcoins. That is how many bitcoins the government of El Salvador has purchased this week.
HERSHIPS: Wait a minute, that does not sound like a lot of bitcoins (laughter).
MA: Five hundred fifty bitcoins is actually 26 million U.S. dollars. And here’s the thing. It’s not just the fact the government bought some bitcoin that made international news this week. On Tuesday, El Salvador became the first country ever to adopt the cryptocurrency as legal tender.
WOODS: So what does that actually mean – legal tender?
MA: So basically, the government has thrown its weight behind this digital cryptocurrency. And on top of saying, you know, people can buy goods and services with it, they can even pay their taxes with it.
WOODS: OK, so a couple of days in, how’s it gone?
MA: Well, you know, as you might expect, there have been reports of some technical glitches. But, you know, online people are sharing videos of themselves making withdrawals from bitcoin ATMs and buying food at Pizza Hut and Starbucks. And they sound, like, kind of giddy about it.
HERSHIPS: So Adrian, how did we get here?
MA: So it was basically driven by President Bukele, who kind of has the look of, like, a millennial tech mogul. But as a political leader, you could say he has sort of an authoritarian streak. So the upshot of being an authoritarian is that he can make things happen pretty quickly. He announced this idea back in June. And three months later, Bitcoin made its debut as a national currency. So on the pro column, he says, look, this will make the country’s economy more inclusive. Most people don’t have bank accounts, and Bitcoin is accessible to anyone who has a phone. And then it’ll also be a lot cheaper for people to send money, you know, than using, like, a wire service.
The con side of this is that Bitcoin is really volatile. And in fact, on the first day that this debuted in El Salvador as the national currency, the price of Bitcoin dropped 10%. So this is why critics say it’s like gambling with the economy. They’re worried that this could have a lot of negative effects. And surveys showed that a lot of the El Salvadorian public don’t have faith in Bitcoin. On the flip side, people who are really, like, bullish on cryptocurrency, they are psyched. They see this as, like, just the first of multiple countries to make this move. And they’re feeling super confident. And actually, speaking of confidence, Darian, you have an indicator on that.
WOODS: I do – consumer confidence in the U.S. So are you guys feeling confident, guys? Confidence is key.
HERSHIPS: Woo (ph), yes.
WOODS: Yes? That sounds a little uncertain. Let me hear that again from you.
WOODS: Adrian, are you feeling confident?
WOODS: I almost believe you. Consumer confidence is, I think, emblematic of this weird place that we’re in with the American economy right now. The Consumer Confidence Survey every month asks a bunch of questions about the economy to everyday people. And the overall numbers are kind of what you would expect at the moment. There was this real optimism at the start of summer in the U.S. The vaccine’s rollout was going very well. The summer vacations were coming up. And consumer confidence in the economy was basically at pre-pandemic levels. So the Consumer Confidence Index was a beautiful 125. That is a very good number.
HERSHIPS: I feel darkness coming (laughter).
WOODS: Some storm clouds. And yeah, we got a wake-up call, right? So the vaccine rollout stalled. Delta infections came roaring in. Some schools closed – not great for the economy. That 125 number in July plummeted to 114 in August.
WOODS: Yeah, that’s just an OK number. But if that kept going obviously in the next few months, that would really start to show an economy faltering.
HERSHIPS: Darian, are you telling us we should be worried?
MA: I think he’s telling us that a lot of us are worried.
WOODS: There’s almost two separate stories here. When people are asked about jobs – like is it hard to find a job? – about 90% of people say, no, now is not a hard time to find a job right now. But if they’re asked whether or not it’s hard to run a business right now, that’s only about three-quarters of people saying it’s not hard, and it’s getting lower.
MA: OK, so where’s all this going?
WOODS: So glass-half-empty version of the future, this could just be a lag. You know, if businesses stop hiring, then, yeah, people will also say that it’s hard to find a job right now. But there’s also glass-half-full. These numbers might just be a bump in the road. If the economy starts looking sunnier, if vaccinations increase a lot again – yesterday, President Biden said that all businesses with over 100 workers have to be vaccinated or have weekly COVID tests, and there was vaccine mandates for millions of federal workers and contractors. So the economy could start to expand again. This might just be a blip in late summer. So this means that we should really look at the next two months pretty closely.
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HERSHIPS: This was a triple play – three indicators. Adrian, thank you so much. We are looking forward to your next exciting and awesome indicators of the week.
MA: Thank you. I’m super psyched to be here.
HERSHIPS: Everyone else, have an awesome weekend.
Today’s episode was produced by Julia Ritchey with help from James Willetts. It was fact checked by Kaitlyn Nicholas. This show is edited by Kate Concannon and is a production of NPR.
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