Understanding the State of the Economy

0:00:01 - Announcer

You are listening to the National University Podcast. 

0:00:10 - Kimberly King

Hello, I’m Kimberly King. Welcome to the National University Podcast, where we offer a holistic approach to student support, well-being and success- the whole human education. We put passion into practice by offering accessible, achievable higher education to lifelong learners. Today we're talking about the economy, with the economic activity projected to stagnate, rising unemployment and falling inflation. Interest rates are projected to remain high initially and then gradually decrease in the next few years as inflation continues to slow. We'll get some tips today on how to write out this economic wave. On today's episode, we're discussing the state of the economy, and joining us is National University's Dr. Riyad Abubaker. 

Dr. Abubaker has earned a bachelor's degree in accounting and a master's degree in economics from Birzeit University in Palestine, in the Middle East. That was in 2007. He migrated to the United States in 2008 and has joined the University of California at Riverside in 2011. He earned another master's degree and a PhD degree from UC Riverside in 2016. After his graduation, Dr. Abubaker worked for several institutions between 2016 and 2023, the American University of Kuwait, Trinity College, the University of Hartford, the University of California at Riverside and National University. He serves now as a finance lead in the School of Business and a dissertation chair for many PhD students. His focus of research is on macroeconomics, monetary policy and international trade. In his recent working in progress research, Dr. Abubaker is investigating the asymmetric impact of the Federal Reserve's policy on the economy during COVID-19 and the Russian-Ukraine War. Wow, we welcome you to the podcast, Dr. How are you? 

0:02:10 – Dr. Abubaker

Very good. Good morning. Thank you, Kim. I really appreciate it. 

0:02:15 - Kimberly King

Absolutely. It's so impressive, your background. I'm sure we can talk for more than just the time of this podcast, but why don't you fill our audience in a little bit about your mission, your passion and your work before we get to today's show? 

0:02:29 - Dr. Abubaker

Thank you, Kim. Basically, what drives our mission is the curiosity. Growing up as a child who's curious, curious about things around us, and the economy changes every day. It's something like we need to investigate, we need to search for. And this is very important. Money, economics, resources is the driver for many political changes around the world, for global changes and environmental changes. This is basically the curiosity that drives a person to exploring this field. 

This is like my passion. This is something I love to do, not just I like to do. This is something I'm very passionate about, which is basically what is the impact for example, the monetary policy or recent monetary policy on international markets and financial markets and individuals. This is what we live every day. For example, the inflation today is the talk of everyone. When we go to buy groceries, buy stuff, buy cars, we see increasing prices and that impacts every one of us. 

Our mission is not just like individual, it's human. It's human nature that serves for the truth, for answers to questions that could be unanswered. This is basically my mission here is to see how things work around us and how the economy works and who's the leaders for this economy and how can they change our basically lives to the better. The main goal is to get a better life for everyone. That is basically why I'm here. 

0:04:06 - Kimberly King

Well, thank you. thank you for everything that you have done and where you've gone, and what's happening in the future. Today, we are talking about the state of the economy and, boy, Dr. Abubaker what is the economy standing today? Where is it? Where are we at today? 

0:04:21 - Dr. Abubaker

Thank you. Basically, this is the question of our economics around the world. We are not really lacking the middle. Let's say 50-50. Within the next, let's say, 12 months. Almost 59% of the economists don't predict recession within these 12 months. But what's after that is that question. 

The economy is really in the middle. Every day we hope to get better. In terms of data and statistics, things are not bad. If we look at the unemployment rate, currently it's 3.4% compared to 3.5% last month, 3.6% last year. So we're doing good in terms of labor market. 

If we look at the financial market, I predicted that the worst thing to happen is to go, for example, below certain numbers, like Dow Jones Industrial, to go below 28,000 points, but currently we are 33,000 points, but we're not going into like the 52 weeks high. So let's say, last year we crossed 36,000 points but we're not going over that And that is kind of the middle. If you look at the numbers between 36,000 and 30,000, we're kind of in the middle. So what's happening right now? It's really the complete uncertainty. Every day we hope things to get better, but second day we have things that drive us back, like, if you look at the war last year in February, the Russian-Ukrainian war. That put us back before we had the COVID-19. And then also, like the peak, in COVID-19. And then we started basically the increase in interest rate that drives home buyers away, drives basically customers away, reduced consumption, decreasing the inflation rate. The inflation rate reached 10% almost, which is the highest within the last 40 years. This is a huge increase in the prices. 

And then, after we tried to recover the Fed kept increasing the interest rate. The housing market, for example, is stable, but we're going with this. So there's kind of a freeze in the housing market. No new buyers, the number of new buyers is decreasing, the number of sellers is decreasing. So it's kind of we're in the middle. We really could go either way, and that is very, very big question. We could really crash at any minute and go into deep recession And hopefully that will not happen. And we could recover. But we're still taking time to recover. So it's kind of we could go either way. So all policymakers have to be really careful at these levels and at these times, including the Federal Reserve and the government. So this is exactly like the time where we have complete uncertainty. 

0:07:18 - Kimberly King

Right. What is your prediction for any inflation soon? 

0:07:24 - Dr. Abubaker

The inflation so far is good, like last year. Last month, in April, it went below our prediction It was 4.9% And that is very low. So the Federal Reserve did a good job by increasing the interest rate and decreasing inflation. The target really went down, but still the Federal Reserve is going toward a 2% inflation target. Now the prices are down. That is a good thing. Let's say we did accomplish something. 

But if you look at the big picture, like let's take oil prices or prices currently at $70, $71 per barrel, right, and this is very low. So what drives this price low? Let's say, is there, for example, increase in supply, what OPEC plus meeting is going to do? Is there increase in output, oil production? So that's a bigger question. So let's look at what we did to reduce the prices and what's happening outside our hands, let's say on the supply side. That is a bigger question. 

Now, if, for example, there is any occasion that leads to higher oil prices, then inflation will go back. So there is something that the Fed did, but there's something else that's happening globally and internationally. And we don't influence that, we really have no influence on that. So if oil prices, for example, went up, let's say this summer or in upcoming months, then the prices will go back again. And the Federal Reserve has to keep increasing. Then just right, and so on and so forth. So that is like the changes in the prices is coming from where? And that is the bigger question. So I think in my opinion, prices will unfortunately go back [up] a little bit. At least, will not go down. The Federal Reserve will find themselves in a position where, no matter how much we increase the rates, there are things out of our hands, our control. 

0:09:29 - Kimberly King

Wow, it's such an unsettling time, but it would be really nice to have the bird's eye view that you have. Is the Fed expected to keep interest rates high? 

0:09:44 - Dr. Abubaker

Yes, the Fed - actually, within the last meeting on May 3rd, and within many sentences have been said by the Fed chairperson, Jeremy Powell- they will keep increasing the interest rate until we reach the 2% target. And that is like a big thing. 2% within this global economy, within increasing the prices in almost all countries around the world, that is kind of, let's say, impossible. I don't want to say it's impossible, it cannot happen, it's miracle. But targeting 2% inflation rate within these conditions is very hard unless you keep going aggressively toward interest rate and keep increasing the interest rate. But that has also a huge impact on our economy. Within a time we're suffering from the ceiling and government default, or possibility for government default. So I say that if the Fed keep increasing the interest rate, which could happen, they have to watch carefully for the labor market. The labor market is still good and that is that's what they're watching for. They say, okay, unemployment rate is still good, below the natural rate, which is 3.4%, but naturally usually 4% is, let's say, acceptable. Now we don't want to overestimate the strength of the economy. The economy could collapse at any minute, you know, especially like, again, we need to look at certain sectors and if they collapse at certain points, then things will go back, you know. 

So the Federal Reserve, I think, insists on increasing the interest rate, thinking that 2% has to be made. The 2% target has to be made. That's like their goal, their agenda. Because the target of the Federal Reserve is simple - any monetary policy around the world. They focus on two goals: maximum employment and stable prices. Stable prices means a 2% inflation rate and maximum employment means that there's no output gap. Basically, we are at the frontier. We're hiring everybody in the economy. That's kind of, but not everybody means zero unemployment rate. It means like 4% unemployment rate. So my prediction is the rate will keep going up and that could be like a dangerous path. We don’t want to keep doing that until we find ourselves forced to go back and decrease interest rates. 

0:12:24 - Kimberly King

Question for you, about your feeling about the recovery from COVID-19. Was it strong or did we recover less than expected? 

0:12:33 - Dr. Abubaker

No, we recovered, actually very strongly from COVID. I do believe COVID did not do what was predicted to do. Let's say the worst months of COVID were, let's say, February 2020 to April 2020. Let's say these two, three months were very bad where, for example, Dow Jones Industrial went down from 7,000 points to 18,000 points. Like third of the stock market. Returns were gone. That was very dangerous. Unemployment rate went up to 10%. Oil prices went down too much, like $20 or less. So these things were gone. But the problem we injected too much money in the economy too. When you say $2 trillion stimulus package, that actually inflated our economy. That's why we're also suffering from higher prices right now. Basically, we numbed the economy for a while, but at the end we suffered higher prices. Practically on the labor market side, in the financial market. We recovered big time from COVID. I don't think COVID still has a huge impact on the economy. What has a huge impact on the economy is the economic policy and the international factors too. 

0:13:59 - Kimberly King

That leads to the next question, regarding COVID-19. What about the effect that our funding of the Ukraine war has on our recovery? 

0:14:08 - Dr. Abubaker

Of course that's a big, big, big impact. Let's say, look at the oil prices. Oil prices, it's a big thing. When the barrel jumped from 60, 70 bucks to 135 bucks per barrel, that's almost double oil prices. For example, in LA we start finding $7 plus per gallon. That's a huge increase in oil prices. So yes, in terms of oil we suffered a lot. That's what drives the prices. And the oil prices definitely has something to do with Ukraine and Russia and the war, right, the sanctions on Russia, the cut supply oil from Russia and other countries. Also, all of Russia was not really, let's say, a big exporter of oil to the US, but it has its impact on the world. 

And again like there is a chain reaction. Whatever, in back to Europe, in back to the US, in back to China. We're like kind of have that influence from international markets. That's a big thing. But again that was, let's say, solved by the idea that President Biden injected or increased the oil price like output per one, almost one million perlady for six months. That's after the Russian-Ukraine war. That has a positive impact. That reduces really the impact of the, let's say, Russian-Ukraine war on the US. But again, we were just working with many countries around the world. If we look at the OPEC plus like, let's say that President Biden administration tried, even through visits of the President to Saudi Arabia and other countries, to impact the supply of oil, but eventually that did not have an impact. So at the end of the day we suffered from this war big time. But that is related to the supply side, the short supply, and oil prices or energy prices, natural gas and others. 

0:16:32 - Kimberly King

So what about the impact has our domestic energy policy had on our economy? 

0:16:39 - Dr. Abubaker

The domestic policy is still good. I see that basically we're kind of pushing toward more environmental, health friendly projects like EV cars, electric cars. These projects are very good, and recently they have been many projects on going on in this direction. This is really good, like an increase in the oil price, the oil output domestically. It was good. But again there are companies who take an advantage of that- And that's why, for example, seven CEOs of the big gas companies they were justifying in the Congress to make sure that basically the gas at the gas station reflects that the actual price, the equilibrium price, let's say supply demand, not their taking advantage. 

For example, many companies what they did they start basically reducing less, producing less oil in the time we need that oil and try to do maintenance and other things and other projects at the same time to keep that supply flow oil low in order to keep the price up and high. And that is kind of you need like more accountability, you need really a policy that investigates whether what's going on is correct, reflects the market or not. But I mean there are many projects, especially after COVID-19 and after the Ukraine war started, to basically enhance the energy supply for our domestic economy. 

0:18:27 - Kimberly King

Boy, you have given these students and myself, along with this, just all of this information that I think it's so imperative. I think we all need to study what you're offering here and talk about what's going on. What is the possibility of a recession? 

0:18:46 - Dr. Abubaker

Let's say we are now at 50-50, exactly 50%. 50% The recession is. When you look at the recession, what do we mean by recession? It's simply increased unemployment and reduction in prices, and now we're not facing either one. Prices are high, and unemployment is low. You see, that is something very important. Now, what we teach our students. Usually this is like kind of stagflation, supply-driven fluctuations. That has something to do with higher prices and higher unemployment at the same time, but we still don't have higher unemployment. 

So, as long as like, if we look at the markets, we have to separate things and look at each one and see the impact of each one on the economy. Let's look at the financial market. Financial market is still good, but again it could crash. The possibility, to be honest, is very low, but the recovery is very slow. It's extremely slow. Like every day, for example, the financial market or stock market tends to be bullish. Give it one day, two days, then it goes back to be bearish. 

If you look at the housing market, there is a freeze again. There's no new buyers. There's almost 50% drop in the new home buyers. And many people, they lost almost - in the US - almost $100 billion. The new home buyers who actually put money in new homes, and within five, six months during the last year. So the housing market did not crash. It's still very strong. If you look at the labor market, it's still strong. When we talk about the 3.4 unemployment rate, this is really good, but the prices are still high. Again, there is decrease in the prices. There's almost 50% decrease from 10% to 4.9%. That is a huge accomplishment. So again we're not like there's nothing that shows we are recession for sure. 

Let's say there's a possibility, but that possibility has to do with what? Like keep increasing the interest rate aggressively. Some international markets like, let's say, another war or the war gets too bad. The oil prices- there is a shock in oil prices or energy prices. Let's say there's another war and retaliation and trade,like tariffs and stuff like that. If, for example, there is like kind of, let's say, a war in Taiwan and China. Taiwan and the US is involved, for example. Let's say Iran, Israel and let's say the US involved, for example, in a war in the Middle East, let's say something happened like internationally that definitely could basically bring our economy back. But at the same, like currently, we are still stable, we're still strong. The recession is unlikely within at least the next 12 months. It's not going to be like tomorrow or next quarter or, let's say, end of the year. That is kind of far away, it's very unlikely. It could happen, let's say, 2024, if we keep like again going in a bad direction. 

0:22:18 - Kimberly King

Wow, interesting. I guess we all just need to be prepared. This is great, fascinating information. We have to take a quick break, so stay with us and more in just a moment, don't go away. 

-break- 

Now back to our interview with Dr Riyad Abubakar, and we're talking about the state of the economy. So, dr, for first time home buyers, what does that look like? What are the interest rates and how difficult is that going to be? 

0:22:48 - Dr. Abubaker

Oh, thank you, Kim. This is a very important question. This is really the question of all the new home buyers, let's say. It is very difficult to buy home these days. For new home buyers It's really extremely difficult. Now the difficulty comes from two things. One is the prices. And, as you can see, the housing market price is going up internationally and, let's say, by the state. The other thing is the interest rate. The interest rate is really high, like, let's say, last year, for example. Let's give one example from the information I see within friends and family. If you bought like $3,000 a month as a contract to buy a home, let's say in December or November 2021, and let's say the home is built in June, your monthly rate will go from $3,000 to $4,500. 

Imagine like from $3,000 to $4,500 within these six months. And for new home buyers who put already some money to hold the home, this money is gone right? Because you're not going to be able. And this money, if you collect it within the US and see the cost of you know the amount of this money. It's almost $100 billion. So new home buyers lost almost $100 billion, stopped buying new homes and they moved to rent. So this is a big thing because the interest rate is really high. Now we're talking in California almost 7% real estate rate compared to 3% after COVID 2.99, 2.6 sometimes. So this is a huge increase. And that is a big thing. 

Now imagine when interest rate increases, the impact does not just in new home buyers in terms of mortgage. There are other things right, because you pay your credit card bills, your student loans maybe, so you pay many interest rate increases within, like you know, your daily life activities. So that's like adds to you basically out of wallet money. And at the end of the day, you know new home buyers will suffer a lot. So that's why there is a huge drop in these, in the rate of new home buyers, because they cannot afford it, simply, you know. So, if you look at it, there is many restrictions, you know, in terms of a credit score and other stuff, unlike 2008 or before. The other thing is rate is high, prices are high. And income did not change. You know basically the income does not change as much as a price change or interest rate change. So it's very difficult. 

If you look at the index of rent versus home. Now also, they're very close, so that that also goes to the supply, the supply side, for example, for people who own their home, right now they're not willing to sell because if they sell their home they're going to go search for rent and rent is high. And this is kind of a freeze. Let's say, buyers don't want to buy, sellers don't want to sell, and this is like exactly when the stock market holds. Where we go in next, you know well, suppliers keep us, you know speculating and selling it quickly, like the homeowners, and that the crashes the stock market sorry, housing market, or buyers will keep jumping and buying and say you know, I can afford it, let me go with it, I refinanced later or something, and then home prices keep climbing. So that's kind of - if you look at the home prices, you know in the US, there's a decrease, you can find kind of almost in every city, there is a price cut, you know. But again there is a rate, there is a higher rate. And the interest rate is very, very high and it's going to keep climbing. So that is, there's no hope too. Sometimes, like buyers will say, okay, let me buy now because later on I will buy by at higher rates. So what should I do, you know? It's confusing, but if you look at it in terms of rate versus income, that's hard to afford the current rate. Now, if your future rates are higher, then that's harder. 

So, in to avoid that, you know the current generations, let's say people between 20 and 30 years old. You know they have different time. You know even some people, their parents are telling them okay, stay in my home. You know, stay with them within the family, so you can, you know. You know, later on, save money and get the home you want, because it's hard. I mean, it's really hard, like because people, after COVID-19, they start thinking that, oh, do you know what? I don't want to miss the opportunity that I missed in 2008. Let me buy a home. And that's why the home prices did not really go down significantly. So there's increasing prices, like the prices are going up, you know, but with higher rates. That is a big, a big thing. So I think for new home buyers it's really tough. And if you really interview, most of the people are searching for homes these days, unless they have cash, you know, to pay, they will be discouraged. You will see that there is disappointment. 

0:28:10 - Kimberly King

There is an, especially, as you mentioned, in California, which is just it's so hard to be young, be at you know a new job, new career, and try to buy a home. It's just insane. We have beautiful weather, but they we pay for it right. Can you talk about the relationship between higher wages and higher inflation? 

0:28:32 - Dr. Abubaker

Definitely. The way we look at it in economics is simply, there is nominal versus real variables like, let's say, nominal wage, real wage. Now the real wage represents the real purchasing power, how much you can buy with what you have in your pocket. You know that is very important. Let's say, when the prices go up, like last year, by 10% And there's kind of like a sticky price, is what we say, usually prices are not flexible. So if the prices go up, you're not going to go to your employer a second day and say, hey, do you know what I need increasing in my salary? You're not going to do that right away. You know it takes time. So it takes time for households, people, to see the impact of the prices. But when inflation is 10%, when you when the increase in your annual salary let's say 4%, 3%, 2% or 1% that is very low. You're going to see that your income cannot afford what you used to afford with it. And you could see that there is a huge drop in your real purchasing power, in your real wage, what you can buy with the money you have. So that that's going to lead to two things either prices should go down or your wages should go up. That's why, as you can see this, there's so many strikes, for example, University of California and UCLA, UC Riverside. In many schools they started, you know, strike because, oh, what is the wage that, especially like adjunct instructors or, you know, like part-time professors, they start suffering from okay, what I'm getting, you know, in a month compared to the current prices. And that's why people, you know, they're demanding higher wages, some, some other, like for, let's say, you know, jobs like fast food, McDonald's, other jobs, what they start doing. Okay, you know what? I want to go on unemployment benefits. That's part of it for me. Why do I work? and all this job does not really afford what they can afford. So, within the last year, the highest number of voluntary unemployment we don't call it unemployment, it was within the last you know year or so people are leaving the job voluntarily. They're not laid off, you know. They're not leaving their job because you know the employers telling them so- they want to leave it because they don't see benefits for these jobs when the prices are very high. So this is a big thing, you know. 

You need always to manage the price increase with the salary or wages increase. There are some unions are, you know, asking for minimum wages. For example, in San Francisco, sou see the minimum wage is going up. This is a good thing, you know. But definitely as employers ,they have to take that into consideration. When the prices are higher, employees should ask for higher salary. So at least let's say you know, um, if prices are going up by 10%, let's say your salary should go up by 10 plus percent in a way that you can cover your expenses. 

Because at the end of the day, there's something that also we have to watch for. When inflation is, let's say, 10%, so what is the increase? You know what is the consumer percent? For example, if I go, okay, there's increase in, let's say, vacation prices or hotels, by 100%, for example. Not all people go for vacations, right. But if you go to the produce market to which vegetables, fruits, dairy products and you find 10%, 15%, 20% increase in these prices. This is what we consume in daily basis, right? 

That's why, if, if you see, or, like you, listen to the news or watch for the data, and you see 5% increase in inflation, you don't be shocked that you're your basket that you go to buy from you know, groceries, monthly or weekly, you're gonna find 100% increase and that is so. You're gonna say, okay, I’m paying almost double the price, but why? why they're saying inflation is 5%. That's not the truth. Again, because they're taking many items. You know the average consumption or you know what we call it the cost of living for a typical consumer with certain items, certain quantities. But in reality It is very important for us to see why is the increase in the prices? For example, let's say school tuition, let's say, declined over the last year, but again grocery prices or meat doubled. So maybe an average we're gonna get 5%, but we have to see that, oh, you know what, what I consume daily or monthly is going up by 20%. That's something we have to watch for. 

0:33:06 - Kimberly King

Yeah, yeah, I totally agree that we do need to work harder on all of that and balance that. Who's being impacted the most by this current state of the economy? 

0:33:17 - Dr. Abubaker

The current state of the economy in in my opinion, in fact mostly the middle class people. You know that is mainly because Think about it like if you, if you are earning the lowest income, you're eligible to get other benefits, like unemployment benefits, let's say social security benefits, tax refund, for example, food stamps, you know, free health care, or like Medicare or something. So this is good. Now for the people who earn like, let's say, you know, 300, let's say above six figures and seven figures, whatever, they're not gonna suffer a lot because they can afford it, you know. But the people will barely make the minimum. These people will suffer a lot. I mean, if you give me the minimum wage these days in California and let's say the minimum wage, let's say 20 bucks, you know, and working 40 hours a week, that means you're giving me, let's say, If we calculate this number, you're not gonna be able to get the minimum wage. You're not gonna make more than $4,000 right a month. But the average rent is $3,000 plus in southern California. If you go to northern California for one bedroom you might pay for $4,000-$5,000. 

So, realistically speaking, how can we afford it? I mean, how are somebody with that income could afford this living? It's impossible. I mean, if you look at, yeah, last year's, um, last year has numbers that nobody can believe, like, for example, you're talking about almost 80% of the people around in New York, they were not being able to pay their basic utility bills. 

If you look at the whole national level, U.S. level, almost 35 million dollars are the default of people on their medical expenses. People are unable to pay their medical expenses.And there was a law that saying you know what, don't take these to credit score and stuff like that. So, um, yeah, people are barely making the minimum. And barely also could survive, you know, just a basic living. This is very hard. This is very hard. That's why they have to relocate, especially the people who could work online versus in person. You know, many people, for example, left San Francisco, the Bay Area, the expensive areas in California, and they moved even out of the state. Uh, as long as they could work online, that is something you know was good for the middle class. So the state of the economy most likely impacts really the middle class people. 

0:35:54 - Kimberly King

And I believe that as well. Uh, we're all feeling that, but do you think that the unemployment rate is lower because people are having to take on extra jobs to make ends meet? 

0:36:03 - Dr. Abubaker

Definitely. most people may definitely most people take extra job, but as long as you're employed, you're employed. whether you take two jobs or three jobs or so on and so forth, you're still employed. That's not going to basically reduce or increase the unemployment rate. What decreased unemployment rate, in my opinion, is there is a demand for labor. Simply, like recently, many people are posting jobs, especially for trucking companies, for fast food industry. There's a shortage in the labor. There is a need for a good amount of labor because of the voluntary unemployment. These people are not included within the unemployment number of statistics. Let's say statistics or survey wise, there is a need. 

If you go now, you will see that the demand for labor in many sectors is increasing, especially, again, the fast food, let's say driving, transportation. even in the academia. You see that there is a difference. There's more posting than basically other jobs like or in the bust. So, yeah, definitely, definitely, the unemployment is low because there is higher demand. We cannot say there's lower supply, that's not 100% true. But there's also reduction in the supply because some people are not joining the labor force. They're saying let me be a student, even for graduate level, and so on and so forth. As we know, like statistic wise, as long as a person is a [full-time] student, he or she will not be included in the labor market. 

0:37:46 - Kimberly King

Wow, what is your best advice, doctor, for people to get through these difficult economic times? 

0:37:54 - Dr. Abubaker

Thank you. This is really the bigger question that we all live as economists, in ourselves, in our households. So the best thing to do to really face these challenges is to make choices. As we always teach our students, economics is the best optimal allocation of scarce resources. So we have scarce resources, limited resources, but we need to do the best of these resources. So, definitely, like as a family, all family members should sit and discuss what they can do with the leftover money or the money they have after they pay all these high rates and stuff like that and mortgage. So you need to make choices, you need to sacrifice. 

Basically, for example, somebody used to go two times, three times, vacation to other countries. They might cut that to one time or two, like from three to two or two times to one time. If you used to travel a lot, if you used to drive a lot, try to drive to the areas that you need to drive to. For example, you can take the train instead of taking, let's say, your own car. Other things like, for example, you can use Tesla or, let's say, EV cars. There are other cars other than Tesla in the market. They could go as low as $10,000 per electric car, which is a good thing in many ways. That actually gives some tax subsidy for the consumers. And, on the other side, also that reduces the consumption of oil and gasoline. Yeah, you need to make choices. It's a time where you will sacrifice and you have to lose something in order to gain something and make the best optimal allocation for these limited resources. But again, from family to family, from a person to person, things will be different. Not everybody will think the same way. 

0:39:57 - Kimberly King

Wow, this has been fascinating. Thank you for your great advice. And we're going to definitely have you back on again. Thank you again, and if you want more information, you can definitely visit National University's website at nu.edu. And Dr. we look forward to your next visit. Thank you so much for your time. 

0:40:15 - Dr. Abubaker

Thank you, Kim. I really appreciate it. Have a good day. 

0:40:18 - Kimberly King

Thank you. You too, you've been listening to the National University podcast for updates on future or past guests. Visit us at nu.edu. You can also follow us on social media. Thanks for listening.