How Do You Gauge the Impact of Washington on Your Finances?

MARK RIEPE: I'm Mark Riepe. I head up the Schwab Center for Financial Research, and this is Financial Decoder, an original podcast from Charles Schwab. It's a show about financial decision-making and the cognitive and emotional biases that can cloud our judgment.

I can't think of a single client event that I've done this year, or maybe the last two years, that didn't involve at least one political question from the audience. And that makes sense because there's always a lot of news coming out of Washington.

But rather than just talk about Washington and its impact on investors, we thought we'd take a different tack with this episode and talk about how many of the same decision-making biases we talk about each week are present in politicians and ultimately impact the rest of us. The goal is to give you some tools to help you sort through the news from Washington and ultimately improve your financial choices.

Our guide is Mike Townsend. Mike is a managing director of legislative and regulatory affairs here at Schwab. In that role, he's Schwab's Washington-based political analysts, with more than 30 years of Washington experience, including 24 at Schwab. He analyzes legislative, regulatory, and political developments to determine how they would affect individual investors and then develops strategies to communicate those perspectives to policymakers, the media, employees, and clients.

He's a featured speaker at dozens of industry events each year, and he is the host of Schwab's popular WashingtonWise podcast, which explores the intersection between policy, politics, the markets, and the economy.

Mike Townsend, thanks for joining us today. 

MICHAEL TOWNSEND: Great to be with you, Mark. Thanks for having me. 

MARK: Mike, this is going to be a great conversation because whenever I think about politics, immediately my head starts kind of turning around some of the cognitive and emotional decision-making biases that are all over the place in the political realm. 

So we're just going to start going through a few of those, and it'd be great just to get your thoughts on how you see some of these biases kind of playing out in the real world. So we're going to start off here with the planning fallacy, and that's kind of our tendency to really to be kind of overly optimistic and underestimate the difficulties of getting something done even when you know better and have personal experience with how long it takes to get things done.

And as I think about this election year, we've got candidates running around making all sorts of promises and proposals. Tell me a little bit about the gap, as you see it, between what people are saying on the campaign trail and the actual legislation, the actual work that takes to get actual legislation in place. 

MICHAEL: Yeah, there's no question, Mark. There is a huge gap. But it almost feels like a feature of every political campaign these days. And candidates make a long list of promises that they probably know they won't be able to keep. 

Presidential candidates in particular make enormous numbers of policy promises. That's kind of the way they appeal to the interests of different voters. It's almost like throwing candy out to different constituencies. 

But the president's ability to enact policy is actually quite limited. There are certainly some things that can be implemented by executive order, but the vast majority of policy is drafted and debated, and endlessly debated, and debated again, and eventually passed or not passed by Congress. And that can take months. I mean, sometimes it takes years. 

And because compromises are inevitable along the way, it almost never looks much like the original proposal. So there's this huge gap between sort of the idea and the coming into fruition of that idea that can take a very, very long time.

MARK: Mike, you're out on the road periodically doing public events, talking to investors about some of these issues. From your interactions with them, do you get examples, or do you get the sense that people are worried that many of these proposals are kind of done deals, that they're going to be enacted pretty quickly after the election? 

MICHAEL: Yeah, absolutely. I hear about it from investors all the time. You know, they're worried that this presidential candidate is going to raise their taxes or change the rules regarding their retirement accounts or pass some sweeping policy proposal that they don't agree with. 

In this 2024 campaign, probably have heard it most about taxes because we know that's going to be a big public policy topic and a big debate on Capitol Hill in 2025. But many of the questions I get sort of start from the premise that a particular outcome is already determined.

So the questions I often get are more along the lines of, you know, I heard candidate X is going to raise the capital gains tax rate. When does that go into effect? And I have to step back and say, no, no, no, that's just an idea, one of a hundred ideas about taxes that could come into play next year. 

The reality, of course, is tax policy is incredibly complex. First of all, how it unfolds in 2025 is going to depend on what the post-election political balance of power is, which party controls the White House, the Senate, and the House of Representatives. 

It's going to depend on the cost of all these proposals, how lawmakers think about those proposals in the context of a budget deficit and a rising national debt. And probably most importantly, when it comes to taxes, whatever is ultimately adopted by Congress in 2025 won't even take effect until 2026. From a taxpayer standpoint, you probably won't even be noticing it until you pay your taxes in April of 2027. 

So investors often assume that whatever the candidate said on the campaign trail is what is going to happen. And they need to remember that the details will change, compromises will be made, and all of it will take months and months of messy public debate and discussion to unfold. And even if it does ultimately pass, there's going to be plenty of time to absorb what's happened and figure out how it affects your particular situation.  So definitely a big gap between promises and reality.

MARK: So definitely a big gap between promises and reality. And sometimes that length of time that you were just talking about, some of that's just driven by the legislative cycle and getting things through Congress. But there's another method by which things get done. And that's through executive action and executive orders. 

And I'm not even kind of clear myself exactly when does something require a law and when is it something that the president can just implement? 

MICHAEL: Yeah, I mean, there is no sort of clear this and that, although there are some issues that just absolutely need Congress, taxes being one. So tax policy is enacted by Congress. Congress writes the tax laws. The president can't change the tax code tomorrow.

The president can use executive orders on things like tariffs. That's one that comes up a lot because that's a big discussion point on the campaign trail. So tariffs can be imposed by executive order. And then most executive orders are really directing government agencies to do something, to have a policy or to, you know, focus on this issue or that issue. 

So there is kind of a big gap between what the chief executive can do just by saying and making it so. And much of what the candidates say on the campaign trail, for example, ultimately has to go through Congress. And that's why I take a lot of it with a grain of salt, because I think, oh, that promise is going to take months and months of debate if it ever even comes up in Congress. So there is a big difference there. 

MARK: Mike, you were just talking about taxes earlier, and I want to talk a little bit about federal debt and the deficit levels. And of course, that's driven in part by tax policy. 

And I don't know, this may be an overly simplistic way of thinking about it. I think a lot of what's going on here is just procrastination. You know, none of us want to deal with problems right now. We'd rather kind of push them off. And the problem in public policy is that often makes problems worse. 

So before we kind of dive into that, maybe can you talk a little bit about the difference between the federal debt and the federal deficit? 

MICHAEL: Sure. I mean, the deficit is the annual budget deficit. More money going out the doors for programs than is coming in via taxes and other sources. So it's just like your own household budget. You want more coming in than is going out in order to be saving and to have a balanced budget or a surplus. Current budget deficit is about $1.8 trillion.

And then the national debt is the accumulation of deficits over time. It's kind of the running total of how far we are behind. And the current national debt is more than $35 trillion. 

MARK: So clearly a big problem. What do you think? I mean, is it really just an example of procrastination, and it's not in anyone's best interest to tackle this in any particular election cycle? 

MICHAEL: Well, I think there are a few things going on here. I like to say that when I started my career in Washington, I was a Senate staffer more than 30 years ago. And at that time, the national debt was $4.6 trillion. And everyone then said, well, it'll never get to 10 trillion because Congress will have to do something about it by then. 

And then it was $15 trillion and then $20 trillion. And today here we are at $35 trillion. One of the issues is I think it's hard for a lot of people to point to something bad that has happened as a result of carrying a large debt. And that creates this kind of optimism bias. 

A few years ago, the major rating agencies downgraded the United States credit rating by a notch, and that briefly rattled the markets. But that top rating has never been restored. But if you look around, you see the stock market setting record highs, you see inflation coming down, you see unemployment is low, you see the economy growing.

It's hard for anyone to look at that and think that the $35 trillion debt is something that they need to worry about in the short term. And the longer we go without something obviously bad happening to the market or the economy or our standing geopolitically as the result of the large debt, I think the harder it is to argue that it's an urgent problem that needs addressing. 

The other thing, I think, Mark, is $35 trillion is a meaningless number to the ordinary person. It sounds made up. It's completely disconnected from an ordinary person's life. And most people don't understand how or why it applies to their life. So you look around, there aren't people protesting in the streets here in Washington about it or putting any real pressure on Congress to address it. 

I think that makes it easier for lawmakers to sort of ignore the problem. And the reality is that, historically, the level of debt has had no correlation with the performance of the stock or bond markets. They continue to do their thing. It kind of puts it out of sight, out of mind for a lot of people. 

And ultimately, that's probably going to be a problem. But right now, Congress doesn't seem too interested in addressing it. 

MARK: Yeah, it'll sort of take a take a crisis probably for meaningful action to be taken to kind of address some of the root causes. And some of those root causes as you were just laying out, you've got a revenue issue and you've got an expense issue. 

So when I think about things, like for our listeners, probably Social Security and Medicare are probably two of the spending factors that are particularly important to them. So how have those been treated historically, and what are the potential paths forward to address those given the large size they comprise of the federal budget? 

MICHAEL: Yeah, everyone on Capitol Hill knows that both Medicare and Social Security are on unsustainable paths. Everybody has known that for many, many years. 

Right now, the estimates are that Social Security won't be able to pay out full benefits beginning in 2034, and that Medicare will not be able to pay out full benefits a year or two after that. And the problem is a demographic one. Fewer people paying into the system, more people taking out of the system. 

Medicare is the trickier one in my view because of the complexity and cost of our healthcare system generally. That's sort of interwoven with Medicare. Social Security is more on a straightforward path in terms of how we could shore it up. And the problem there is that all of the options are politically challenging. 

You know, you can raise the retirement age, you can raise the amount of income subject to the payroll tax, you can raise the payroll tax rate, you can reduce benefits for everyone or maybe just for higher earners. Any one of those steps would shore up Social Security for decades.

But all of those are really, really difficult votes to take and then have to go home and explain to the constituents who are trying to decide whether to re-elect you that you just raised their tax rate or something like that. 

So that continues to be the challenge. And it's been the same challenge for a long, long time. I'm not sure how Congress is going to get around that, but I think everyone knows that deadline is coming in less than a decade, and they'll have to get to it at some point. 

MARK: Well, I think in the early '80s, the Social Security Trust Fund was getting near zero, and it was just a matter of months before it was going to run out, and some pretty comprehensive changes were made. But I think your point about these are challenging, I think, is a good one because we know losses hurt a lot more than gains feel good. 

And everything you were just laying out, raising the retirement age, raising the payroll taxes, they're all about kind of taking things away from people. Do you think that's ultimately what makes these entitlement programs kind of special? 

MICHAEL: Definitely. I think entitlement programs are particularly sensitive to this. And I think that's because people paid into the system through their working lives, and they're paying into the system as they're working now. And when they retire, they expect to get back what they put in. 

And that's why, you know, one of the most reliable and effective political campaign ads in recent years has been one in which a candidate accuses another of wanting to take away your Social Security. It's why Social Security has long been known as the third rail of politics. It's just, I mean, it's called an entitlement for a reason. People feel entitled to it, so if you change the system in the middle of the game, that is what frustrates people.

MARK: I'll get back to my conversation with Mike in a few minutes, but at this point in the show, I'm turning the spotlight on a study that came out a couple of months ago that I think is especially apropos for our topic today. It's called "Spending Less After (Seemingly) Bad News."[1]

You might have noticed that when it comes to politics, you can find ample news coverage on just about any platform you choose … TV, radio, websites, podcasts, social media, to name just a few. We also know that there's tons of coverage about economic news. 

The study provides an answer to the question as to whether people overreact to economic news. Now it didn't look at the portfolio decisions people made, but rather what they did with their spending behavior. The study looked at how the announcement of the local unemployment rate hitting a 12-month high affected consumer spending. 

Researchers used the 12-month high in the local unemployment rate because it gets a lot of local news coverage. The spending they looked at was discretionary spending drawn from information on credit card and bank account transactions. They viewed the data for the two weeks before the unemployment announcement and the two weeks after and compared the spending over those two different periods.

And this was a big study with data collected from more than 9.5 million consumers across the United States. The conclusion of the study was that hearing about a 12-month high in the local unemployment rate led consumers to reduce their discretionary spending by 1.5%. 

In addition, they reduced their credit card repayments by 1.4%and were less likely to apply for new loans. Lower-income consumers reduced their spending more than higher-income consumers, relatively speaking. 

All that seems to make sense, but there's a twist. In this study, they also compare the results to other areas of the country that had the same unemployment rate, but whose rate didn't hit a 12-month high. In those areas, the study found that unemployment news didn't affect spending. 

So why would the residents of one city with an unemployment rate of, let's say, 5% react so differently from residents of different cities with the same unemployment rate? 

It all comes down to news. Unemployment hitting a 12-month high is newsworthy attention in one area, but that same unemployment rate elsewhere may not be newsworthy, and so people don't react to it or even hear about it. 

As the authors wrote, "Media attention is an important determinant of consumer confidence and therefore spending." Now keep in mind the vast majority of people in this study didn't lose their jobs, but they were reacting to others losing their jobs and at a higher number than in the previous 12 months. 

There's something called the availability heuristic where we overreact to information that's easily available to us. We often don't take the next step and ask ourselves, "Is that information valuable? Is it relevant to our situation?"

So be careful about interpreting news. Don't just take it on face value. And even if the news is true, before making changes in your financial life, be sure to understand how that news will affect your situation.

Now let's get back to Mike Townsend and get his advice on how to make sense of the news from Capitol Hill and the White House.

Mike, periodically, we'll talk about jargon that people use, usually in a kind of a financial context, and try to decode that a little bit. When you're talking about different tax policies, we know that, in fact, I think we've done some episodes on it, that people have this like big aversion to paying taxes. 

So what does some of Washington speak that you've heard where that you can kind of share with us stories about how listeners really should pay attention to some of the words that politicians are using to kind of get around the sensitivity around taxes? 

MICHAEL: Well, there's no question, there are a lot of euphemisms in Washington for "tax increase." Nobody wants to say "tax increase" out loud. So one phrase that you will always hear around tax debates is "revenue raiser." They talk about revenue raisers or "pay-fors."

You also hear about offsetting the cost. And that means that every tax cut should, at least in theory, have a matching tax increase that balances out the lost revenue from the cut. Otherwise, Treasury is just losing revenue and not making that up anywhere else. That doesn't usually work in practice because Congress does, in fact, rarely offsets equally. That's why we have a $1.8 trillion budget deficit. 

Another one to watch out for is when politicians tell you that the cost of a tax cut will be recouped via the economic growth that is spurred by the tax cut. Those calculations also almost never turn out to be correct. It all feels like kind of mumbo jumbo designed to obfuscate the fact that someone somewhere is getting a tax increase. 

But again, nobody wants to use that. So we're always talking about revenue raisers. 

MARK: Yeah, you know, the economic growth point is an interesting one because I think to … maybe I'm being a little bit naive, but I suspect that many politicians and the analysts who work for them, I suspect they genuinely believe their forecast. 

But you're absolutely right. A lot of times, that forecast doesn't materialize exactly the same way it was when the proposal was put out. And I think that's probably because people are optimistic. All of us make proposals to do things, and most of us are kind of prone to optimism. So our forecasts end up being rosier than they probably merit. You know, you work with a lot of people working sort of within government and kind of adjacent to government. What are your thoughts on that? 

MICHAEL: I think that's absolutely right. I think in particularly with politicians and government officials, you know, they genuinely believe that their ideas are the right ideas and that their ideas are going to, if implemented, spur all this positive outcome. Right? I mean, you know, in some ways it makes sense. Right? You wouldn't put out an idea that you thought would have a bad outcome. 

So they genuinely believe that their policy solution is going to be the one that triggers all this economic growth and all this positive momentum. And as we know, there are so many other factors that can happen over the time of those projections. If you're in Washington and you're projecting something that's going to happen over the next decade, this policy move is going to result in this much revenue for the Treasury over the next decade. 

Well, there are a thousand things that are going to happen over the course of that decade that could impact that. But when you're just looking at the straight number that if nothing else affects it, you end up with a very positive outlook. So I think that's sort of almost natural to the politician's brain at this point. 

MARK: Yeah. Another thing you've mentioned, particularly this year, Mike, is the emotion you see when doing public events and talking about some of these politically related topics.

There's an interesting bias—it's called affective forecasting. That's "affective" with an A. And it points to a gap between how we forecast what we'll feel about something in the future and then how we actually end up feeling when it comes to pass. The classic example is, if my favorite team loses in the Super Bowl, you asked me the day before, I'm going to be horrible. This is going to ruin the next year for me. In fact, people tend to kind of get over things fairly quickly. 

So what kind of advice do you have for people to … not eliminate emotions because that's ridiculous—we're all emotional at some level—but keep their emotions at a proper level when they're making decisions? 

MICHAEL: Well, I think this election in particular has been one where there's very extreme emotions out there. It feels for a lot of voters like it's a darkness-versus-light kind of approach to the election outcome.

If my candidate wins, everything is going to be great. And if my candidate loses, then the whole country is going to fall apart. And that's happening in both directions, right? No matter which candidate you're supporting. And that seems, that's always true in elections. I would say in my experience in talking to people, it seems higher this time around. 

But I'd like to point out, first of all, markets don't care much about the election outcome. Historically, that's always been true. And second, all the things that are being talked about on the campaign trail are going to take a really, really long time to happen, to be implemented. 

They're probably going to look very different when they get implemented. And lots and lots of them are never going to be implemented because there just isn't time to sort of do everything to, you know, Congress can only handle so many big issues at the same time. So I try to remind people that it's never as good or as bad as you think it's going to be.

There are, in the political system, still plenty of checks and balances in place. And certainly if, you know, we have a divided Washington, that's going to act as a break on the worst impulses of either side, and compromise will have to be made. 

So I try to remind people that you may feel really emotional about the outcome of an election or about the policy decision, but the ultimate impact on the market of that is likely to be very, very small. So keeping your focus on sort of your longer-term goals, I think is a really important way to be. 

MARK: I wanted to backtrack a little bit and go back to prioritizing short-term outcomes over long-term outcomes. Do you get the sense that that tendency is kind of built in or exacerbated by our political system? 

MICHAEL: Oh, I absolutely think the very nature of our political system means the focus is almost always on the short term. I mean, members of Congress have to run for office every other year if you're in the House of Representatives. So the next election is literally always around the corner. And that means that the long-term solution is almost always put off in favor of a shorter-term solution. 

We see this all the time where, you know, I like to say, I mean, Congress's greatest strength is its ability to kick the can down the road and put off a problem until another day. 

You know, take Social Security. It's been known for decades that Social Security was on an unsustainable path. Right now, we know that the program will no longer be able to pay out full benefits in 2034. But for a congressman in 2024, that's five elections away. It's hard to tell voters that this vote I've made to raise your payroll tax or raise your retirement age is going to mean that Social Security will be around for your grandchildren because our political system, you know, basically rewards short-term thinking. 

So I think it makes it really hard to focus on big, longer-term problems. And Mark, it's probably one of the most common sets of questions I get from investors is around big things like Social Security, like Medicare, like the budget deficit and the national debt. And there's no short-term solution to those. Those are very, very long-term solutions that need to be made and really, really difficult for a congressman who is always running for re-election to think that far down the road. 

MARK: Yeah, all those issues you just listed. There's a lot of complexity associated with those. And we're also kind of wired as people to prefer simple explanations to why some of these complicated things end up existing. And particularly, you've got a chart where you show that the impact of different political environments, political control, its relationship to the performance of the stock market just isn't as strong as people think it is. 

So talk to me a little bit about some of the disconnect where people think the relationship between sort of governmental action and the markets is super tight when in fact it's looser than probably most people think. 

MICHAEL: Yeah, I think this is a huge area of disconnect for investors. The market doesn't really care about election outcomes, doesn't really care about the sort of daily micro dramas around policy debates on Capitol Hill.

Ultimately, the only thing that the market really cares about is what Congress actually does. And one example I use a lot is the CHIPS Act, which Congress passed in 2022. That bill included more than $50 billion to boost U.S. manufacturing of semiconductors. You look around today, companies are building semiconductor plants all over the U.S. That's an example of where the markets can sort of draw a more direct line from a policy decision made in Washington to a specific set of companies that are benefiting. 

So the market tends to look for those kinds of connections. I think investors, though, think the possibility of government action moves the markets. And that's why probably the most common question I've heard this fall, something like, "What should I do with my portfolio if Trump wins?" Or "What should I do with my portfolio if Harris wins?" 

I think a lot of these questions come from people listening to the radio or watching financial news channels, and they see some expert who's saying, "If Trump wins, they should buy this stock and load up on this sector." "If Harris wins, it's going to be good for these types of companies, bad for these types of companies." And the truth is that almost none of that actually ever comes to pass. 

Markets, as you know, react to things that we all know they react to. Corporate earnings, economic data, geopolitical developments that affect things like oil prices. Policy outcomes in Washington can have an effect now and then, but they're relatively rare. 

And someone winning an election does not mean that their policy plans are actually going to come to pass. So I think that's a really major source of disconnect for investors. 

MARK: Well, and one thing that I wasn't planning to ask you about, but since you brought that particular issue up, I was just thinking about the Chevron Supreme Court case and how you've talked about in the past about how that sort of inserts the judiciary into some of these kind of policy issues that potentially could just lengthen even more the timeline between policy and then what actually happens on the ground that's going to affect kind of real companies and real people. 

MICHAEL: Yeah, that's absolutely right. The Chevron Doctrine was in place for 40 years. It basically said that courts had to give deference to the regulatory agencies when they were making rules to interpret a law that Congress had passed. And what it's going to do, I mean, at some level, we don't know what it's going do. It just happened this summer. It's going to be years to sort it out. 

But I think most regulatory questions are going to end up in the courts now. And what that means is you're going to go through a whole long regulatory process to create a rule. And then that rule is going to be challenged in court, and it's going to go through the whole long court process. It's just going to make an even longer period of time before we know what the ultimate outcome is. 

For companies, you know, that could be frustrating. It could be, you know, more time of uncertainty of how, you know, they're going to manage something over the longer term. So I think it's going to be really interesting to watch that particular one over the next few years and see how it plays out. 

MARK: All right. Final bias, and that is confirmation bias. And I'm bringing this up because in the age of social media and the way different platforms either automatically or allow us to kind of curate the sort of information that we're seeing really in many cases reaffirms what people already are thinking or believing. 

Do you think that some of the short-term moves in the market that align with news out of Washington, do you think that ultimately is misleading investors into confirming a perceived correlation between this and that that may not in fact exist?

MICHAEL: Yeah, I think there's no question this is a big reason why, frankly, the country has become so divided. Someone who only gets their news from MSNBC just is going to have a completely different perspective on things than someone who only gets their information from Fox News. I think on social media platforms, it's even more pronounced. It's very, very easy to live in a world where the only information that you get sort of reinforces the perceptions and notions that you already have.

I also think that's reflected on Capitol Hill where there are many elected representatives who really don't have any interest in engaging with members of the other party. They sort of have this attitude that if they're for it, I have to be against it. Maybe they don't even understand what it is that they're against. They just know that the other guy is for it, so it must be bad. 

You also see this in polling where polls in recent months have consistently shown that about half the country thinks inflation is rising when it has been falling for months. About half the country thinks the stock market is down for the year when it has hit record high more than 40 times this year. So there's just a huge amount of information disconnect that is out there. 

One of my favorite points to make when I talk to investors about the connection between markets and sort of perception of policy decisions is this: What is the best performing sector since Joe Biden was inaugurated? It's energy. And what was the worst performing sector during President Donald Trump's administration? Energy. 

For most investors, that just seems completely counterintuitive, completely against the narrative that they have maybe in their heads about whose policies are good for what. And it's an important reminder that the markets aren't really affected by these policy perceptions or even ultimately some of the policy decisions that are made. 

MARK: You know, you're taking in all sorts of information. You're the ultimate sort of noise collector, and you've got to filter out all that noise to get really at things that actually matter. So how do you do it? What's the … do you have any wisdom for people who are bombarded with all this information? They've got to decide what to pay attention to, what not to pay attention to. 

MICHAEL: Yeah. You know, first of all, it's part of my job is to kind of read perspectives from across the spectrum, right? And I spend a lot of my time, you know, trying to get beneath the sort of soundbite rhetoric that dominates life in Washington and really understand, OK, I hear what you said there. I understand the point you're trying to make, but what is your ultimate sort of goal? Where the compromise is going to be. 

And trying to get both sides of the aisle to sort of articulate that so that you can better understand what's the noise and what's the real goal here. But you know, the other one that I think is really important, particularly this year that we're in, is just separating your emotions from some of your investing decisions in particular. 

It's an emotional time. It's an emotional election. And as we've been talking about in this conversation, those emotions may be sort of overthinking how much impact there really is on the markets from this election, from any particular policy decision that may or may not be made in months and years ahead. 

So trying to kind of talk investors away from thinking that a politician saying something means it's going to happen and sort of challenging those emotions to be more thoughtful about your longer-term plan. I think that's the real focus I've had this year. 

MARK: Mike Townsend is a managing director here at Schwab in our Office of Legislative and Regulatory Affairs. Mike, thanks for being here today.

MICHAEL: Great to talk to you, Mark. Thanks for having me.

MARK: Time to wrap things up. Just remember, when listening to news coming out of Washington or anywhere really, our advice is not to be a cynical listener, but instead to be a critical listener in the sense of critically examining what's being reported or proposed. And that includes understanding the potential decision-making biases of your source, but also your own. 

If you'd like to hear more about what's happening in Washington from Mike, listen to his podcast from the Charles Schwab family of podcasts. It's called WashingtonWise. It's available on the podcasting app of your choice. And you can find plenty of articles by Mike on Schwab.com. He's also at X @MikeTownsendCS, M-I-K-E-T-O-W-N S-E-N-D-C-S.

If you'd like to hear more from me, you can follow me on my LinkedIn page or at X @MarkRiepe, M-A-R-K-R-I-E-P-E. And if you like the show, a rating or review on Apple Podcasts would be much appreciated. We always like new listeners, and if you know someone who might like the show, please tell them about it and how they can follow us for free in their favorite podcasting app.

For important disclosures, see the show notes and schwab.com/FinancialDecoder.

[1] Garmaise, Mark J., Levi, Yaron, and Lustig, Hanno, "Spending Less After (Seemingly) Bad News," The Journal of Finance, Vol. LXXIX, No. 4, August 2024.