Erika Barris

This is Planet Money from NPR. Mike Mears is a biologist and an assistant professor at Washington University in St. Louis, Missouri. He runs his own lab. Does everybody wear a white lab coat?

When I asked NIH about the cuts, a spokesperson referred me to a 63-page document of all the cuts they've made and to a White House statement that in part read that the U.S. spends too much on projects that, quote, do not promote the interests of the American people. But funding for all kinds of science is at its lowest level in decades.

And at Harvard, all research funding is being withheld because the university has refused to comply with the administration's long list of demands. most of which aren't related to science.

After the break, we dive into Washington University's audited financial statement with the guy who commands the ship.

Is there like a big president group text chain?

Okay.

So individual texts with Andrew's closest 12 president-chancellor friends. And one of the things they're asking each other is if their funding gets cut. How are they going to survive? So I asked, can we actually look at your university's whole entire big budget?

And he did send it to me, last year's 35-page audited financial statement, showing what they own, what they earn, what they saved, and everything they're spending. We focused on the amount of money coming in. And the thing that I wanted to understand, what does it take to run a university of this size? And where does that money come from? So the easiest way to think about it is like a big pie.

Andrew showed me that it was about one fifth of the pie, 20%. So Washington University got about $700 million in federal grants last year. But they also got hundreds of millions more from the federal government because of something called indirect cost payments.

So not the direct costs like the microscope for our DNA researcher or the centrifuge tubes, but indirect costs like the counters in his research lab, the chair he sits in.

Right.

Light bulbs, probably.

Every school negotiates how much of that overhead money they'll get. Like, we need the grants plus an additional percent. So for Washington University, Andrew told me they get about $700 million in grants and then $250 million or so for overhead.

So Andrew and I went through all the other sources of income for Washington University, all the other pieces of the pie. to understand what, if anything, could expand if the federal money went away.

The doctors at the university partner with hospitals in St. Louis, and when they see patients, they get insurance payments. And that makes up about half the pie.

In another grant, he's asking for equipment.

Okay. So that's a lot of money.

So if the university wanted to make up for cuts to its federal funding, it could maybe get its physicians to see more patients. Andrew says, yeah, great. But the problem is that's difficult in a city like St. Louis that is not growing. He hopes to make that piece of the pie bigger, but he says it can't replace federal research grants.

all the tuition adds up to about $500 million. The rest is a few hundred million more. So if they wanted to use this piece of the pie to fill in for federal money they might lose, they'd have to increase tuition or reduce financial aid.

Washington University has $12 billion in endowment money. It's the 15th

A piece of the pie? Gone. Andrew told me every year they earn about 8 percent on their endowment and they spend about 4 percent, which comes out to about half a billion dollars a year. And he says they need to save the rest.

So if the school doesn't want to dip all the way into its endowment and doesn't actually turn a profit from tuition and can't immediately just produce thousands more medical patients, what then? Well, Andrew told me the university does have a cash reserve. It's not a source of revenue. It's emergency money.

Okay. That seems like you could use that. What would be the harm in using that?

You can't just take a stack of $2 billion and say, all right, we'll fix this problem.

Universities, they are an incredibly complicated ecosystem. They're where people go to get educated, but they're also where people do research and where doctors do their jobs. And they are 300-acre coffee shops and landlords. And it's a virtuous circle. If they get the federal funding, they'll get the tuition dollars and the parking lot money and the big gifts from alumni.

These potential grants are a tiny but vital piece of Washington University's budget. The university actually gets lots of tiny pieces like this. Right now, they have around 1,500 NIH grants. And if you add up all the checks WashU received last year from the government, it was nearly a billion dollars for just this one school.

It's all these different streams of revenue all intertwined.

Andrew and the other president-chancellor friends he's texting with, they're trying to rethink what the entirety of a budget and mission of an American university will look like. Especially when the rest of the world is still clamoring to compete.

And when Andrew goes to Washington, D.C. every month to talk with lawmakers, he's focusing more on the basics, trying to make them understand the value of everything that happens at Washington University. How much, just like Vannevar Bush argued decades ago, it does benefit all Americans. That the money the government spends, it's an investment. It will pay off.

If you're new to Planet Money, welcome. Come on in. We've got all kinds of shows for you. Everything from how the U.S. dollar became the world's reserve currency to how a month of tariff uncertainty affected the economy.

I'm Erica Barris. This is NPR. Thanks for listening.

It's stressful out there if you're a researcher. And Mike was one of the few willing to talk to me about it. It feels as if everyone is kind of scared.

Hello and welcome to Planet Money. I'm Erika Barris.

Today on the show, we walk you through the history that made our universities what they are today. And we also get our DNA researchers' big boss, the head of Washington University, to open up his books to show us where all their money comes from and what will happen if some of it goes away.

We talked about it in a language I don't usually speak. Is there an emoji that best represents how you felt the last few months?

So you are like the person who is guiding the ship, essentially.

I feel like it's probably been a busy few months for you.

In the last few months, the Trump administration has pulled visas from students, including some at Washington University. They've told Harvard they can no longer have international students, currently more than a quarter of the student body. Trump has issued executive orders prohibiting diversity initiatives.

And the government has canceled research grants all over the country, including millions for a handful of projects at WashU.

Oh, wow.

Did you have to let anyone go?

When it comes to NIH funding, Washington University is getting around a billion dollars a year. It's among the nation's top recipients of federal money. So the idea that it's starting to go away?

Has there ever been a time when this relationship between the federal government and the university has felt so fraught?

That story of how we got the system we have today began with this guy named Vannevar Bush.

The first project that he got famous for is now infamous. He decided to bring some of the best scientific researchers in the country together to develop weapons, specifically a bomb that would be so ferocious no country would ever attack the U.S. again.

People were like, we should keep doing some of this. This is Elizabeth Popperman, professor at University of Michigan, who wrote a book called Creating the Market University, How Academic Science Became an Economic Engine. How does the system work? Like, where does the money come from?

So...

But Vannevar argued America's private sector didn't have enough incentive to conduct basic research. Because some research isn't commercial. You can't immediately make money off of it. Also, it can take years and sometimes it doesn't pan out.

The thought of those cuts is panic emoji, crying emoji, or I don't know, poop emoji.

There was this historic moment where Vannevar wrote a report called Science, the Endless Frontier. It was like a call to arms for the federal government to help university researchers open new frontiers.

Initially, a lot of the research was oriented towards defense because we'd gone from World War II to the Cold War.

Right, other R's of all kinds.

But Vannevar also wanted to broaden the focus to new frontiers of all kinds. There's actually this interview of him from back then with Edward R. Murrow. He talked about the importance of competing with the Soviet Union and the world in all the ways.

If you can't tell, neither one of us is super emoji literate.

In this interview at his home, Fanny Burr is rocking a three-piece suit, maybe tweed, and his signature rimless glasses.

Or would this funding system be more scientist-driven, independent, like scientists would decide what was interesting or pertinent or necessary and propose research, find their own new frontiers? And that's the system we chose, science driving science.

Scientists at universities would submit proposals. Their own peers would review them and decide which projects to fund. And the federal government would hand over the money. This system took off. More Americans than ever went to college. People from all over the world came to the U.S. to study and work. The grants grew, the science flourished, and the universities got bigger.

So now the health care side of universities grew. Universities partnered with or purchased more hospitals. They got bigger. And the grants for medical research got bigger. Now we have what we call eds and med cities, where medicine and education are huge economic drivers.

In 1980, the federal government gave American universities one more big boost. It was a few years after Vannevar Bush died. We were coming out of the 70s when the economy wasn't so great. So Congress made a key change that would add to the wealth of universities.

Things like inhalable COVID vaccines, the computer mouse, drone technology. Google search code. Today, universities issue nearly 5,000 new patents a year.

In 2023, the federal government spent $60 billion on research and development at universities, more than 30 times as much as they spent in the early 1950s, even adjusted for inflation. Has there been too much government money going towards funding research?

The big one he's applied for would bring in $300,000 every year for a half decade. And the proposal he submitted is as detailed as you'd expect. Salaries for people in his lab, his salary, software.

Since January, the Trump administration has been attacking universities. saying the, quote, left-wing ideology at elite schools doesn't reflect the population of the United States.

The administration has accused universities of allowing anti-Semitism on their campuses and has told some of them that if they want to continue receiving federal funding for research, they have to change how they run things.

The initial concept was to come up with the ultimate sofa. So we sat down as a team and said, what is the ultimate sofa? But it had to look beautiful because everything we do has to look visually strong. And it had to sit like a cloud.

What else is there to say? It is the ultimate sofa.

Hey, it's Erika Barris. A quick word before the show to talk about this year and all the different kinds of stories you heard on Planet Money. This year, we brought you stories about inflation, disinflation, stagflation, skimflation, dynamic pricing. What is Timu? Banking apps, rum taxes, the main potato war of 1976. So many stories about so many different things.

That link is in our episode notes. And thank you. This is Planet Money from NPR.

And the one thing they all have in common is we work really hard on each of them so that they make you smarter and they're fun to listen to. And another edition of Planet Money Summer School. So this is the time of year when we say, hey, if that stuff was useful to you, if you made us a part of your day in the car, on the train, while you were doing dishes... chip in and help keep us going.

Your support matters so much that NPR basically invented an entire new product that we will give you to incentivize your donation. We're talking about NPR+. Maybe you're already a Plus supporter. If so, thank you.

If you're not and you sign up today, you get perks for more than 25 different NPR podcasts, sponsor-free listening to all of them, and bonus content for some of our biggest shows, including this one, and exclusive access to special Planet Money merch in the NPR shop. You get all that as a thank you for investing in NPR and our work at Planet Money. So go to plus.npr.org to sign up. Plus.npr.org.

Corey Frayer, the former SEC staffer, he gave us a second example.

And he says he sees a similar thing happening with new investigations of problems in financial markets. It used to be that career staffers could launch new formal investigations themselves, get subpoenas, hold depositions.

This is the kind of deregulation by non-enforcement idea. Exactly.

This is Yale law professor Cristina Rodriguez, who we should say is not a big believer in this particular interpretation of the Constitution.

I feel like folks at the White House would say, none of those civil servants were elected. The president was elected. Therefore, the president should have the power. That's what the voters decided on.

Law that was written by Congress.

I did reach out to the White House for this show. They connected me with someone who didn't want to be recorded and who spoke on condition of anonymity. They were only willing to be identified as a senior administration official. But they confirmed that the executive order was based on the unitary executive theory. They told me, quote, no agency is independent. It goes back to the Constitution.

The president of the United States is the head of the executive branch.

For example, an appeals court just issued a ruling that suggests the firing of the Democrat appointee on the National Labor Relations Board was illegal. But then the Supreme Court put that on temporary hold. Christina says ultimately all these questions of how far the unitary executive theory can go, they're going to end up in the Supreme Court with its conservative majority.

So your sense is that a fair bit of this goalpost moving by the Trump administration is going to get the thumbs up in the Supreme Court?

A little Planet Money-flavored side note, in the executive order that gives all this new power to OIRA, an exemption was given to one independent agency, at least in part, the Federal Reserve. According to the order, monetary policy at the Fed, setting interest rates, among other things, that will still be independent.

The nutritional content of baby formula. That's from FDA regulations. How much silica dust counts as dangerous for workers. That one is OSHA, the Occupational Safety and Health Administration. How energy efficient your new water heater has to be. Department of Energy regulations. I can keep going. Nope. I think people got it. I think people got it. The point is the federal government is enormous.

Christina, she was perfectly happy to explain all this stuff to us wearing her law professor hat. How the statutes that set up independent agencies work legally, how the Supreme Court has ruled on this stuff before. But every now and then in our conversation, this other part of her would break through. This part that has watched the last three months of the Trump administration with real worry.

I feel obliged to ask this question because it's sort of around all of these conversations, which is, are we in a constitutional crisis?

And here is what is so strange about this political moment that we are all living through. The range of ways to make sense of what is happening is just so wide. Christina's reading of this executive order expanding the power of OIRA is that it's one more step down the path to autocracy.

But for now, at least, unless the courts or Congress or maybe the next administration push back, Executive Order 14215 will be the law of the land by the end of this week. Today's episode of Planet Money was produced by James Sneed and Will Rubin. It was edited by Jess Zhang, fact-checked by Sierra Juarez, and engineered by Jimmy Keeley. Alex Goldmark is Planet Money's executive producer.

Hundreds of agencies, more than 2 million civilian employees. And over time, you end up with this problem where Congress has delegated rulemaking power to one agency that overlaps with power they already gave to another agency.

A huge special thanks today to Carolyn Maraskin from DC Design Tours and Keri Kalanisi. I'm Keith Romer.

But homeland security might not totally understand the effect that new regulation could have on things besides homeland security.

It comes in last place. I was sure it was going to be number one.

Yeah, all of these federal agencies, they are part of the executive branch. The regulations coming out of the Commerce Department or the EPA, they are supposed to align with the president's agenda. OIRA gives the president a way to make sure that's happening.

I'm Erika Barris. And I'm Keith Romer. If you are like us, the last three months have felt like this relentless high-speed civics course.

All of these different parts of the federal government that maybe we knew something about suddenly getting thrust into the spotlight because the Trump administration is shutting them down or the person in charge of them is being fired or they are being given an entirely new purpose. Well...

Today on the show, those new powers coming to OIRA and what they could mean for the future of American democracy. OIRA, the Office of Information and Regulatory Affairs, is not a particularly large part of the federal government. It's got like 50 career staff who take up half a floor in this boring brick building around the corner from the White House.

That is Susan Dudley. Susan worked on regulation in the Reagan administration and for both Bush administrations. She's built her entire career around trying to help government agencies write better rules.

But for Susan Dudley, it was a kind of professional home.

Because, even though most Americans have never heard of OIRA, Susan understood just how central it was to the way the federal government works.

That's an amazing thing to Google. That's going to be my first Google after this call. Erica, you want to do the honors?

Checks out. So a little history of this obscure but powerful agency. OIRA was created at the tail end of Jimmy Carter's presidency in 1980 as essentially an information clearinghouse for the executive branch. Then Ronald Reagan shows up in the White House and he supercharges it.

So if the EPA or the Department of Transportation wants to put out a new regulation, they first have to send it to OIRA. And then all the policy analysts and scientists and lawyers and economists there will weigh in on whether the regulation is a good one. If OIRA doesn't like it, it's going to be pretty hard for that regulation to happen.

Yeah, all these agencies theoretically answer to the president already. But there are just so many of them. OIRA is a tool for the president to make sure no new regulations slip through without the White House having a chance to weigh in first.

Did you have the same kind of Judge Judy impatient vibe?

Susan says it's pretty rare for the president to get directly involved with OIRA's review of regulations, but it does happen.

And then maybe puppies second.

We love to be in the weeds, I find.

Crops, weeds. Anyway, EPA's new regulation came into OIRA. Susan's staff did their normal review, pulled in folks from the Department of Agriculture and other agencies to get their takes. Eventually, the rule went all the way up the chain to Susan's ultimate boss, President George W. Bush.

So I want you to rank the following in terms of your emotional attachment to them. Chocolate, sunsets, puppies, the study of regulation.

Yeah. Over the years, Congress created this whole set of agencies that are kind of in the executive branch, but kind of outside it at the same time. The independent regulatory agencies.

FTC.

FCC.

SEC.

Corey Frayer used to work at one of these agencies, the SEC. He was a senior advisor to Gary Gensler, the chair of the agency during the Biden administration. Corey says independence from the White House is kind of central to how these places work.

There are all these ways that these agencies have traditionally been insulated from the influence of the White House. For one, the SEC, FTC, FCC, they are all run by commissions made up of members from both parties.

And presidents have historically not had direct oversight over the regulations those independent agencies put out. When the SEC comes up with a new rule about what information hedge funds have to disclose or what money market funds can and can't do, the SEC does not have to go through OIRA review.

They don't have to send their regulation to OIRA's lawyers and policy analysts and economists to get their sign-off.

This new executive order, takes the independence of the independent agencies and kind of just tears it up. By the end of the week, the SEC, FTC, FCC, they are all going to have to go through the OIRA process too.

What do you think about this executive order requiring the SEC to go through OIRA review?

Take car safety. In 1966, Congress passed the National Traffic and Motor Vehicle Safety Act. But the law didn't specify all the rules for how cars were supposed to be made safer. Instead, the finer points of writing those rules were left to a federal agency, the Department of Transportation.

It's worth pointing out that not everyone feels the way Corey does. Former OIRA administrator Susan Dudley thinks there are a lot of reasons to like the change. She thinks it will be good to have OIRA look over regulations from the independent agencies.

But Susan thinks this change will just make government regulations better by holding the rules put out by the independent agencies to a higher standard.

But can President Trump legally make this change? Turns out, it's complicated. That's after the break. OK, so far, we've just been talking about this new executive order expanding OIRA's powers. But the Trump administration has actually been making moves on a lot of fronts to exert control over the independent agencies.

Hey, it's Erika Barris. A quick word before the show to talk about this year and all the different kinds of stories you heard on Planet Money. This year, we brought you stories about inflation, disinflation, stagflation, skimflation, dynamic pricing. What is Timu? Banking apps, rum taxes, the main potato war of 1976. So many stories about so many different things. Semiconductors.

That link is in our episode notes. And thank you.

I'm Sally Helm.

And the one thing they all have in common. AI. Trade fraud. Is we work really hard on each of them. International shipping. So that they make you smarter. And they're fun to listen to. Tiny soda cans. Zombie mortgages. Why flying sucks. And another edition of Planet Money Summer School. So this is the time of year when we say, hey, if that stuff was useful to you.

If you made us a part of your day in the car, on the train, while you were doing dishes. chip in and help keep us going. Your support matters so much that NPR basically invented an entire new product that we will give you to incentivize your donation. We're talking about NPR+. Maybe you're already a Plus supporter. If so, thank you.

Can we do another one?

If you're not and you sign up today, you get perks for more than 25 different NPR podcasts, sponsor-free listening to all of them, and bonus content for some of our biggest shows, including this one, and exclusive access to special Planet Money merch in the NPR shop. You get all that as a thank you for investing in NPR and our work at Planet Money. So go to plus.npr.org to sign up. Plus.npr.org.

Hey, it's Erika Barris. A quick word to talk about this year and all the different kinds of stories you heard on Planet Money. This year, we brought you stories about inflation, disinflation, stagflation, skimflation, dynamic pricing. What is Timu? Banking apps, rum taxes, the main potato war of 1976. So many stories about so many different things. Semiconductors.

And the one thing they all have in common. AI. Trade fraud. Is we work really hard on each of them. International shipping. So that they make you smarter. And they're fun to listen to. Tiny soda cans. Zombie mortgages. Why flying sucks. And another edition of Planet Money Summer School.

So this is the time of year when we say, hey, if that stuff was useful to you, if you made us a part of your day in the car, on the train, while you were doing dishes... chip in and help keep us going. Your support matters so much that NPR basically invented an entire new product that we will give you to incentivize your donation. We're talking about NPR+. Maybe you're already a Plus supporter.

If so, thank you. If you're not and you sign up today, you get perks for more than 25 different NPR podcasts, sponsor-free listening to all of them, and bonus content for some of our biggest shows, including this one, and exclusive access to special Planet Money merch in the NPR shop. You get all that as a thank you for investing in NPR and our work at Planet Money.

So go to plus.npr.org to sign up. Plus.npr.org. That link is in our episode notes. And thank you.

Couple minutes, not much. Okay. Should we do it here? Okay.

What has it been like? Turmoil. Everything upside down. People don't know what to expect.

No. Even in zero degree weather? No. It's not typical. The cold doesn't stop Chicago. We live in the Windy City. We've been here for 47 years. I've been cutting the shift down. We've been down to one shift a day. People are losing. Taxes, revenues, everybody's going to take a loss on it. You said that there's only one shift this week? That's our producer, Willa Rubin. Why only one shift?

There's one shift because there's no business. How are you going to be able to pay employees? Economics. You've got to cut down supply and demand.

We'll see where this prevails. Our president, he's a businessman. I have faith. I don't think he's going to want to hurt the economy vastly. If you pull out people from the community like that, you will have the USA in shambles.

Have a blessed one, guys. Thank you.

This is Planet Money from NPR. Gina Lito is a real estate developer. She buys properties, builds houses on them, sells them. And she's pretty hands-off about all the paperwork. She has her lawyer handle that stuff.

Who found this unattended piece of land and looked up who owned it? That passport Anthony had scanned? Fake. The email, danielkenningsberg at yahoo.com, made up. The DocuSign signature. It wasn't really Daniel. This fake Daniel is what we now call a title pirate. Someone who, by fraudulent means, steals a title to someone else's land.

Did you?

There are all kinds of things Anthony could have done. He could have video verified that Daniel was Daniel. He could have caught a typo in the fake passport. He could have made reference calls on his client.

What kind of investment are we talking about?

The title insurance company is the professional entity assuming the risk of our tacked together receipt by receipt property record system.

And the entire real estate industry, from the listing agents, the real estate lawyers, to the banks running transactions, to the people recording those transactions in county offices, relies on these private title insurers, which serve as a de facto centralized registry to catch any and all problems.

Now, in lots of other insurance markets, moral hazard, it's bad. You don't want people with auto insurance to take more risks on the road just because insurance will cover the cost of their accidents. But in the world of real estate, you could say the system works better. It's more profitable, more efficient if buyers aren't so worried about risk.

Okay, that's a lot of money.

Then they can just focus on buying the house and not have to sit around doing detective work. But flagging problems before they happen is only part of the responsibility of a title insurance company. The other part is when something goes wrong, they pay out. They absorb the cost of the risk.

But in the case of the overgrown lot slash apple tree forest, it's one of the rare times things did go wrong. And the title insurance company did pay, as did a few other responsible parties. Here's how it all played out. Did you sue anybody or did anybody sue you? Yes, both. Pretty much everyone involved ended up suing everyone else.

In this case, every single party, Gina, Daniel, Anthony, was a victim. They were all defrauded. The case ended up in federal court. Real Daniel, who has never even been to South Africa, wanted one thing.

They already had buyers lined up, this nice young couple. And Gina, as the work was getting done, went on vacation to Turkey, where she got a phone call from her lawyer.

Is that what you actually wanted?

In the end, all parties ended up settling. As part of the settlement, Daniel, the real Daniel, ended up selling the land to Gina and her partner. They couldn't tell me for how much, but I looked it up for $965,000. Did you then end up buying the property twice?

And if you're thinking, man, these people, they all seem so kind and so gracious about this whole thing, that too was part of the settlement. None of them can disparage each other.

Real Daniel, he has made his peace with all of this. And as for fake Daniel, he still has his money and he's still out there.

I'm Erica Barris. This is NPR. Thanks for listening.

Hello and welcome to Planet Muddy. I'm Erika Barris.

But there's this one part of that system that is a bit more hodgepodge than you'd really want it to be. The way we track who owns a property, who has a title to it, and there's a whole new kind of villain trying to exploit that system. Today on the show, the wild world of title insurance.

Weird proprietary land ownership maps, disconnected registry systems, the tragic loss of historic apple trees, and title pirates. So Gina Alito had paid $350,000 for a piece of land. Then she spent nearly a million dollars constructing a brand new house on that piece of land. And now she had gotten a phone call that the person she had bought that lot from was not actually the owner.

So impersonal.

She and her business partner had to stop construction of the house. Technically, they were trespassing.

Now, this other story is about a guy named Daniel Kenigsberg. Nowadays, he's a super successful doctor. But way back in 1953, he was just a baby. And in those post-World War II suburban boom years, his dad built a house in a Connecticut suburb where Daniel and his brothers grew up.

Very idyllic.

So they had a tree fort, but that's pretty much all they ever did with that lot.

And what did you say?

Even though the property was 25 miles from where Daniel lived on Long Island, it was a tie to his hometown and an asset he figured he'd leave to his kids. Plus, by then, he says, the lot was like this mini forest. A whole ecosystem had grown.

A house on Daniel's lot.

Oh, okay.

So there was a house there?

That dense forest Daniel described, that was now scorched earth, that's the property Gina Lito had purchased, the quote-unquote overgrown lot. Gina and Daniel may have different ways of describing the property, but they were both flummoxed.

To answer some of Gina and Daniel's questions, I called Stuart Stark.

So instead of a national master list that says, This plot of land is owned by Jeff. That plot of land is owned by Erica. And so on and so on. All the records that actually exist are just records of real estate transactions. That plot A was sold in 1984 to someone named Judy. And before that, it was sold in 1970 to Darlene and Bob, who inherited it from Harry.

And before that, it was sold to someone else. You get the idea. Every township or borough or county might have their own registry of those types of transactions.

Now, even though she's pretty hands-off, every time Gina buys property, she does her due diligence. Like, is the land flat? Are there any wetlands? She and her partner look at zoning, boundaries, that kind of thing. And of course, with this new property, she checked out the owner. She wanted to have an idea of who she was doing business with.

And all towns and counties keep track of these transactions differently. In one town, you physically go to a building and look through a big stack of papers. Somewhere else, you might be able to search the records online on your phone. And all those different systems of registering land transactions, they're not really communicating with each other. There's no cohesive system.

And all this stuff is really high stakes. Like, if there's a partial owner to the property, that person may come knocking on your door and they're going to have rights. Or if a seller actually took a loan out on that property they sold you and then never paid it off, that bank is going to come find you. Or the lot you purchased for your community garden actually has years of unpaid taxes on it.

Oops, that's on you now.

This seems like a little bit of a, for lack of a better word, a janky system, what you just described.

Title insurance. It's called insurance, but it operates more like a warranty. It's a fee you pay to a company when you close on a property. They're supposed to guarantee that the title to the property you just bought is clean, meaning there aren't unpaid taxes or loans on it, and that you're buying it from the 100% real owner.

If you've ever bought a house, it is most likely that you also bought a title insurance policy. lenders require them. And these companies, there are only like four of them in the whole country, have these separately maintained, comprehensive, highly efficient, proprietary records of land ownership called title plants, their own system. And when someone buys title insurance on a

which maybe takes them like a couple hours since they already have the information on hand. So once they've compiled those super secret records, title insurance is a very good business.

Right, right. They've done. There's no more to do, right?

Yeah. And what they can get out of the homeowner is significant, up to 2% of the cost of a property for a couple hours of work. But homeowners pay it because it's often required. And because that fee, it's just one more closing cost in the midst of a huge purchase with a ton of paperwork and all kinds of fees. So people stomach it.

Gina and her partner had $350,000 of title insurance on the property, so her lawyer told her no matter what, she would get back that $350,000. However, we had a house on that land. A nearly million-dollar house.

And how did the land get sold if Apple Tree Daniel didn't sell it? That's after the break. So to tell you what actually happened, we're going to tell you a third side of this story. The story of the person who actually sold the land. Some months before all of this went down, Anthony Minnelli, a lawyer in Connecticut who does real estate transactions, got a phone call.

Ooh, an expat.

I mean, do you just do a Google search on your clients or anything?

You talked to him over the phone, actually?

Was there anything that seemed like suspicious or different or whatever?

And so what they find?

Gina and her partner gave Anthony a bank check and he wired the total cost for the land to a Wells Fargo bank account. Anthony took his fee and he moved on with his life.

That link is in our episode notes. And thank you. This is Planet Money from NPR.

Hey, it's Erika Barris. A quick word before the show to talk about this year and all the different kinds of stories you heard on Planet Money. This year, we brought you stories about inflation, disinflation, stagflation, skimflation, dynamic pricing. What is Timu? Banking apps, rum taxes, the main potato war of 1976. So many stories about so many different things.

And the one thing they all have in common is we work really hard on each of them so that they make you smarter and they're fun to listen to. And another edition of Planet Money Summer School. So this is the time of year when we say, hey, if that stuff was useful to you, if you made us a part of your day in the car, on the train, while you were doing dishes... chip in and help keep us going.

Your support matters so much that NPR basically invented an entire new product that we will give you to incentivize your donation. We're talking about NPR+. Maybe you're already a Plus supporter. If so, thank you.

If you're not and you sign up today, you get perks for more than 25 different NPR podcasts, sponsor-free listening to all of them, and bonus content for some of our biggest shows, including this one, and exclusive access to special Planet Money merch in the NPR shop. You get all that as a thank you for investing in NPR and our work at Planet Money. So go to plus.npr.org to sign up. Plus.npr.org.

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This is Planet Money from NPR.

This is Planet Money from NPR.

The grant is for $199,006 over three years. It would pay for a student to work with him, for travel money to attend conferences, and for the summer when he doesn't get a salary. And the university takes some of the money into their budget as well.

We reached out to the NSF. They referred us to their web page about executive orders, which does seem to say the NSF is still requesting its congressionally allotted funds and distributing them. But you know what might be useful? Look at the money pipe tracker. We pull up the graph of outgoing money to the National Science Foundation to see if there are any signs.

And looking at it, you can sort of see the story of the last couple weeks pretty clearly.

But the United States is a country of transparency. And if you know where to look, there is a way to cut through all the confusion and peer deep into the giant money pipe for answers. Hello and welcome to Planet Money. I'm Erika Barris.

Yeah, a really big spike. Yep. Looks like a freeze in funds flowing. And then presumably a big unfreeze when all the backed up funds flow out.

Even though the money seems to be flowing to NSF, Steve hasn't hired his summer student. He'll spend the money if and when it shows up. Okay.

Yeah. So some background on this one. A concern that has developed over the last couple of weeks has to do with access to the giant money pipe. Late last month, Elon Musk's Doge team was granted access to federal payment systems as part of what they say is an effort to suggest cuts to wasteful spending.

And so for our final stop, we called up someone who is expecting lots of these regular interest payments.

Guy buys and owns bonds professionally for clients. And once a month on the 15th, he gets interest payments of millions of dollars on U.S. treasuries.

Treasuries are seen as the safest investment in the world. The U.S. has never missed a payment in modern history.

But other than that, so reliable. And Guy admits if the U.S. truly, truly, truly missed a payment, it would probably ruin his day.

Lauren Bauer from Brookings Institution has been frantically trying to keep track of who is using this and for what. It is still a work in progress, and Lauren apparently is also open to ideas.

Good job. Thank you. It would be hard to find someone who loves the daily Treasury statement more than Lauren Bauer. And she is delighted to be elevating the plucky little PDF, getting it more and more attention.

Lauren says no. If that little PDF disappeared for some reason, she thinks that would attract even more attention to it.

If you would like to follow the giant money pipe for yourself, you can find that at the Hamilton Projects website. This episode of Planet Money was produced by Emma Peasley with help from James Sneed. It was edited by Kenny Malone. It was fact-checked by the same James Snead and engineered by Jimmy Keeley with help from Neil T. Vaught. Alex Goldmark is our executive producer.

Plus, a tool you can use right now if you want to follow along at home as this gigantic federal spending story continues developing and developing.

I'm Erica Barris. This is NPR. Thanks for listening.

At least that's how we think of it. More officially at the Treasury, it's known as the secure payment system.

Lauren Bauer works for something called the Hamilton Project within Brookings. They're a nonpartisan group. They do policy research.

But Lauren remembered something, another chaotic moment, when she'd also wanted to check government spending.

In terms of popularity, it gets Googled way less than the Harmonized Tariff Schedule, but maybe slightly more than the Short-Term Cash Investment Report, so you know. Not popular.

Real Treasury heads? They'll probably know about this PDF. But it is easily overlooked. It's like the digital equivalent of a piece of paper under a giant stack of papers on your desk. Okay, great.

And that's it. You click it, download. It's a PDF. It's like 80 kilobytes, not even close to a full megabyte. There's a new one every business day at 4 p.m.

Classic layout, a two-column ledger.

Payments to the Library of Congress, the SEC, the FCC, the FCIC. That's the Federal Crop Insurance Corporation.

Imagine it like a daily Venmo feed for the government. $191 million to NASA.

Every dollar rounded to the millionth dollar that comes out of the government's checking account posted at 4 p.m. in this daily Treasury statement.

Rachel Snyderman is with the Bipartisan Policy Center, and she knows a bit about the U.S. being a little extra in showing its paperwork.

Open data, information that's free, publicly accessible, and that people can download and use for their own purposes.

The idea was the American people could see if, to quote a Republican congressman at the time, their taxpayer dollars were being wasted or if they were being spent wisely.

While the government has chosen to have this access, not everybody knows about it or thinks about it.

So there was Lauren at Brookings a few weeks ago after a lot of confusing headlines over the weekend about federal spending and freezes. When Lauren was like, oh, yeah, the daily Treasury statement.

So the Brookings team gets to work. They pull hundreds and hundreds of old versions of that daily treasury statement, three years worth. And they build a way to automatically pull every new daily treasury statement as it is published.

The Trump administration ordered a pause, a freeze on a huge chunk of federal spending on federal assistance, grants and loans and subsidies, that kind of thing. saying, basically, do not request your funds. All of those need to be reviewed.

Just the basic numbers. How much money had been flowing through the money pipe? How much is still flowing? And to whom?

Yeah. Their daily Treasury statement tracker had shown that all of the money had suddenly stopped flowing to USAID. USAID had been functionally shuttered. And all of this, of course, would become an ongoing legal dispute.

After the break, we take the money pipe tracker on the road for some use cases of who might be tracking the federal money pipe.

And we will begin with use case number one, which we will call the, if you know, you know, use case.

While Lauren deals with that, you should know that being obsessed with the daily Treasury statement is not her normal job. She is an expert in nutrition assistance programs like SNAP, formerly known as food stamps.

And because Lauren studies this program so closely, she knows that cadence is related to the way the program works. First week of the month, that's when people typically get their benefits. So that's when states generally request the federal money they've been allotted. Later on, there are administrative costs. Some more spikes.

But the use case we're talking about is a little different. Because Lauren knows Snap so well, she's able to keep an eye out for more subtle changes. She zooms in on the most recent round of Snap money payments.

And this use case, experts who really know what to watch for, this is a big part of why Lauren wanted to make this in the first place. To basically hand these financial heart monitors over to other specialists who know what to look for in their areas of expertise.

And in this specific case, it's more like is Stephen Hellman going to get his money or not? I notice you have literally nothing on your walls here.

Fortuna has no tractor-based plans. And after a couple months, they finally submit their real, full, official application.

At this point, the bank's organizing group had already raised a couple million dollars. Lisa herself had invested. Her mom was an investor. And they'd already spent a bunch of money. If the bank didn't open, that money would be gone.

They're expecting 200 people for the ribbon cutting, and they're feeling ready, though they are still putting the pieces of the bank together. That afternoon, I sat in on a meeting where Fortuna was working with an outside vendor to set up a way for people to open accounts online. And they had to make all of these small, important decisions, like would overdraft protection be an option?

Fortuna would have to convince them otherwise. That is after the break.

Like all new businesses, banks need capital to get started, to hire people, to buy dishwasher pods for the break room. But capital is especially important for a bank. There are rules about how much you have to have. And the big reason for this is safety. Like if the economy tanks and a lot of loans fail at once, the more capital you have, the easier it is for you to get through that.

And a new bank like Fortuna might also use some of that initial $20 million to make loans while they're getting things off the ground.

It might have been harder because Columbus had already had some new banks start up in recent years. Maybe people were all tapped out on that. Maybe the Silicon Valley bank stuff did have people spooked. Also, they were trying to raise more than 50% of their money from women, which they both said made things slower.

When they made their pitch to men, Lisa said they'd be more likely to get a yes or a no right away. Women needed more time.

She said this did drive home to her how important the bank's mission was, educating women around business and money and investing. They ended up having lots of conversations with business people all over Columbus, a lot of women. I talked to a local bookkeeper who ended up investing $10,000. She'd never considered investing in a bank before, but liked Lisa and Elaria and their whole project.

Yeah, they might go public. That could be the event. Then early investors could sell their shares and hopefully make money on that. Or they might sell the bank to like a larger regional bank and investors would get a return then from that big sale. And I was a little surprised to hear this. You know, it maybe wouldn't feel as much like a community bank anymore. I don't know.

In February of 2024, their application is approved by the FDIC. Ilaria said it took 17 rounds of questions, but it happened. And in October of 2024, they finally raised the money.

One of the people on the leadership team, Ashley Dick, she made their first cash deposit, $50, a gift from her grandma. It disappeared. We lost it. We're like, where did that $50 go? Like, it's not in my online banking. We couldn't see it anywhere.

They're definitely going to have overdraft protection eventually, but it wasn't set up yet. Ditto debit cards. They were still waiting on Visa to get that figured out. It's a whole thing.

About 200 people showed up at the bank for its grand opening. Shareholders, family members, the armored car service that they contract with had sent flowers. I saw one woman walking around with what looked like a strange instrument case.

This was L.J. Boggs from the Columbus Chamber of Commerce. She's done this before. Sometimes it takes a couple tries to get through the actual ribbon.

Finally, the big moment arrived. Ilaria and Lisa gave speeches. So did Ingrid White, the regulator.

Yeah, they have been in the process of starting a bank. And I gotta say, like, I barely knew that was something you could do.

Once almost everyone had gone home, I found Ilaria and Lisa in the lobby. They looked a little bit like bedraggled wedding guests. They'd both taken off their heels. Lisa was wearing the ceremonial ribbon like a sash.

But this bank was up and running.

Special thanks to Jim Stevens. I'm Sallie Helm.

Yeah. Last year, 2024, six banks started up in total.

And I'm Sally Helm. This process took Fortuna three years, $20 million, and a lot of sleepless nights. Today on the show, we get a close-up look as they go from the idea of a bank to the first deposit.

Like any business, a bank starts as just a twinkle in someone's eye. And of course, that twinkle has some dollar signs attached.

Someone described Lisa to me as being a rare combination, intense, and also somehow laid back. That was definitely the vibe I got. A while back, she started a title company and realized that she loved it. Lisa is an entrepreneur at heart.

What, you're going to go to the quarry? Where are you going to get your vault with the tourney thing on the front of it? Where do you get all your big stacks of cash to put in that vault? Erica, I wanted to find out. You're in the secret tunnels of the bank. That is the bank's CEO, Ellaria Rollins. The bank is called Fortuna, named for the Roman goddess of fortune.

Lisa knows a lot of people in the Columbus business world, and she actually knew some guys who had started a bank. And they were like, Lisa, maybe you should think about that.

All girls school. One of three daughters. Also, when she'd been running the title company, her own banker was a woman. The person she worked with to manage her business accounts. The person she once called panicking when she thought she'd lost a big check. She hadn't.

Lisa explained, I want to start a woman-owned bank aimed at helping female entrepreneurs, what would eventually become Fortuna. But Lisa is the ideas person. She needed a CEO, someone with serious banking experience.

Ilaria had loved working at a DeNovo. It felt less corporate. It felt more alive. And from both a business perspective and like a meaning perspective, she thought that focusing on female entrepreneurs was a good idea. She said men in general have more connections in the commercial banking world, like someone they could just casually text and say, hey, I'm thinking of starting a business.

One lawyer I talked to who works with a lot of new banks told me that this, starting banks with a particular demographic group in mind, it's kind of a trend. And it could be part of how the future of community banking looks. Are you guys going to be a community bank? I don't know if that's a term. We will. You will. Okay. Is that a technical term?

Oh, wow. Yes. There are various ways to define it, but community banks are generally smaller, at least as far as banks go. The Federal Reserve actually says it's any bank with less than $10 billion in assets. And I just want to pause here for a second and talk a little bit about why community banks are important.

The two of us are standing in one of the bank's back hallways, a.k.a. secret tunnels. Speaking of that, where is the money?

Because I guess before I started reporting this story, I thought of them as kind of just quaint, like probably mostly in the past, probably mostly exists in the movie. It's a Wonderful Life. Maybe they have like a cute little thatched roof.

$3.9 trillion in assets.

$3.2 trillion.

Giving out small loans isn't as valuable for banks. Some big banks have automated systems that can reject a loan application before it ever reaches a human. But that won't happen at a bank like Fortuna.

So Ilaria and Lisa decide they want to do it, start a community bank focused on female entrepreneurs. And in making this decision, they're joining a pretty small club. Community banks have historically been a huge thing in the United States, but lately, not that many people are starting them.

Oh, come on. Erica, Ilaria told me they do have a vault. It's all ready to go, but it is in a secret location for security reasons because bank robberies do happen. Ilaria has been in banking 30 years and she has actually been through four of them. Whole other story. But she doesn't want to show me the vault. Fair enough. She just describes it.

And people like Kate do worry about that. The idea is banking will be healthier if there's more competition, more new ideas.

And that kind of makes sense for a few reasons. I mean, one, the economy crashed in 2008. It wasn't a great time to start any new business. And so the Federal Reserve did something to help. They lowered interest rates, which makes it easier to get loans. And that's good for new businesses.

Now, interest rates have been comparatively high in the last few years. But in the meantime, other things have made the banking business harder, including another tech-related thing. Banks just have to spend so much money these days on digital stuff.

So post-2008, the business of banking got harder. Also, regulation got a little trickier after the 2008 crisis. Kate told me that might have had some impact on whether people wanted to start banks, but it's not the main thing. Because the fact is, regulation has always been intense, always been a barrier to starting a new bank. So let's talk about that for a minute.

Banking, of course, is highly regulated. And I think that's a good thing. CEO Ilaria Rollins, remember, she's been in banking a long time, speaks carefully about the importance of regulation.

And alas, it does not have one of those big turny things on the front.

What's the vibe of the regulators? I'm hoping I'll be able to talk to some of them, but just like they are human beings and I feel like they're human beings. I guess I couldn't be totally sure unless I actually talked to a regulator. Can you confirm that you're a flesh and blood human being? Oh, yes.

Point being, definitely human. Ingrid told me, yeah. They first met with the Fortuna Bank organizers way back in the summer of 2022. This is kind of the first unofficial step for a new bank before any paperwork changes hands.

I visited Fortuna in late January when they were gearing up for their grand opening and ribbon cutting. The day before that big event, I was in Ilaria's office where she logged on to a meeting with the bank's leadership team.

By the way, the FDIC is one of the agencies being targeted by the Trump administration for cuts. Some employees have been fired. In any case, regulators want to see that new bank organizers are serious, experienced.

Are you like, whew, okay, this is my next couple months?

The lawyers make sure it all checks out legally. Does the bank have a plan for complying with the Bank Secrecy Act, the Community Reinvestment Act, etc., etc.?

What's an example of something that that could be?

This is Planet Money from NPR.

and wanted to be part of his cause. Tata Samuel was like, yeah, great. The more, the merrier.

So far, we've talked about three groups who are claiming the San Jose shipwreck. Colombia, Spain, and the Caracara. But there is this other group whose claim is throwing a wrench in the proceedings of all the others. They call themselves the Sea Search Armada.

And one of those groups out there searching was a pair of American businessmen, both named Jim, who pooled together millions of dollars from investors to look for the San Jose. In 1981, they say they found pieces of wood that looked like they'd been blown up, cannons, artifacts. So they told Columbia the secret coordinates where they had found evidence of a shipwreck.

And as they look at these grainy black and white underwater images from a few meters off the seafloor, they start to make things out.

But almost immediately, they say the Colombian government started changing the rules. So C-Search Armada sued all the way to Colombia's Supreme Court.

And the fight in this court kind of encapsulates the four decades of C-Search Armada's dispute with Colombia. C-Search Armada's lawyers say Colombia gave us permission to search a little area and we found the San Jose in that area, which entitles us to half of what we found.

A hundred teacups just lying there nestled into the sand next to the fish and crabs.

Seaser Armada says, yeah, that is how it works. The ship blew up and it's been floating around on the seafloor for 300 years. It's going to be spread out by now.

Okay, so everybody has a claim. Colombia and the group that financed Mike Purcell's voyage. Spain, the Caracara, sea search armada. Because since the San Jose sank in 1708, power has shifted so much. The way we think about territory and land and ownership has shifted. And we are left trying to use today's tools to resolve something that started hundreds of years ago.

This is all really complicated.

Alex Goldmark is our executive producer. Thank you to Nicolette Kahn, Carla Ron Phillips, Leonardo Moreno Alvarez, Jose Maria Lancha, and Mariano Javier Aznar Gomez.

Thanks for listening.

I feel like my image of what a shipwreck looks like is literally that, like a chest with gold coins spilling out of it.

You're telling me that's actually real. That's actually what the picture showed you.

But they were there, maybe not in a chest, but scattered about the seafloor. Mike and his team were pretty sure this was the San Jose.

They sent the big news back. About a week later, when they returned to port, they were told they had a visitor.

Wait, you chatted with the president?

This was 10 years ago. And that shipwreck is still sitting on the bottom of the seafloor. Because while the Colombian government is clearly invested in this ship, they are not the only ones. The battle that sank the San Jose was fierce. And so is the battle over who deserves control of its shipwreck and all its billions of dollars of treasure.

A sunken ship. This autonomous vehicle that Mike helped develop is like a little underwater drone. It would scan the bottom of the ocean and record whatever it came across. And one day, it came across a very, very big object.

And because the laws that govern this stuff can overlap and the jurisdictions can be so murky, every single group kind of has a valid argument. Today on the show, the fight for the San Jose. What one 300-year-old shipwreck can teach us about just how hard it is to untangle the legacy of colonialism.

To Colombians, the ship that Mike Purcell found plays a huge role in the country's cultural imagination. To them, it was another El Dorado, the lost city of gold. The great Colombian author, Gabriel Garcia Marquez, even wrote about the ship. In Love in the Time of Cholera, one of the characters wants to recover the San Jose so the woman he loves can bathe in gold.

President Juan remembers vividly when he found out that Mike's team had located the shipwreck.

How did you feel at that moment?

And then they found it. So President Juan says it's theirs. That's how it works.

So long as that thing was abandoned. And Colombia did find it because Mike Purcell and his autonomous underwater vehicle, his group was working with the Colombian government. And the San Jose has been sitting at the bottom of the sea for over 300 years. That sounds abandoned.

A possible yes. Mike gets called in for all kinds of jobs like this. He was once asked to find Amelia Earhart's plane. No luck. Another time to locate this Air France plane that went down between Rio de Janeiro and Paris. That one they did find.

Not long after he heard the news, President Juan gave a speech standing at the naval base in Cartagena about how Colombia was bearing witness to one of the greatest discoveries in the history of humanity.

But historically, it's kind of not a Colombian galleon. It was a Spanish ship from Spain. To learn its history and learn about Spain's claim, we called up a Spanish expert in these types of artifacts, Ricardo Sanz Marcos.

Bueno, eso ahora tal vez no se ve, pero en ese tiempo.

Ricardo says it had all the latest technology. For the 17th century, it was like a rocket built to go to Mars. Spain was a global superpower. And the route the San Jose took was iconic.

La Carrera de Indias, the maritime network that connected Spain to the Americas and Asia and created what is often called La Primera Globalización, the first era of globalization, the period when Spain helped to establish this global network of trade.

The San Jose was flying the Spanish flag when it sank. And warships generally have something called sovereign immunity, which means they fall under their country's jurisdiction no matter where they are.

He says it has information about how the boat was constructed, what they ate, what they carried, where that stuff came from.

Spain has tried to insert itself into other recent legal proceedings around this galleon, but to date it hasn't brought its own legal case based on sovereign immunity. Spain did put out a public statement that described the San Jose as an underwater tomb that, quote, cannot be subject to commercial exploitation, end quote. In other words, don't just haul off the silver and gold and dump the rest.

But if we're talking historical claims, there's another group with a claim that goes slightly further back in history. Because while the ship itself may have come from Spain, that was not true of everything on board. To hear this claim, I called up Tata Samuel Flores Cruz.

To investigate, they sent the drone back down to take pictures. And when the images came back up, Mike and his team crowded around this one guy's desk to see what they'd found.

which he says is in the jurisdiction of the indigenous Caracara Nation. He's one of the leaders of the Caracara.

Potosi is home to mines, gold and silver. One of the world's largest silver deposits was in Potosi. Tata Samuel says he became kind of obsessed with the San Jose.

Possibly the same coins that Mike Purcell spotted scattered about the seafloor. The circumstances under which this mining took place were terrible. Spain had a horrific system of forced labor. Mistreatment, suffering, humiliation, human exploitation.

What Tata Samuel wants is an acknowledgement that the silver and gold mined in Potosí belongs to them. If there's any financial gain that comes from what's on board the San Jose, he wants to be sure that the Caracara benefit.

Or it has to fund reparations for the Caracara. Tata Samuels traveled to Colombia to meet with government officials to make his case. And he says they seem open.

So go to plus.npr.org to sign up. Plus.npr.org. That link is in our episode notes. And thank you. This is Planet Money from NPR.

Hey, it's Erika Barris. A quick word before the show to talk about this year and all the different kinds of stories you heard on Planet Money. This year, we brought you stories about inflation, disinflation, stagflation, skimflation, dynamic pricing. What is Timu? Banking apps, rum taxes, the main potato war of 1976. So many stories about so many different things. semiconductors.

And the one thing they all have in common is we work really hard on each of them so that they make you smarter and they're fun to listen to. Tiny soda cans, zombie mortgages, why flying sucks, and another edition of Planet Money Summer School.

So this is the time of year when we say, hey, if that stuff was useful to you, if you made us a part of your day in the car, on the train, while you were doing dishes, chip in and help keep us going. Your support matters so much that NPR basically invented an entire new product that we will give you to incentivize your donation. We're talking about NPR+. Maybe you're already a Plus supporter.

If so, thank you. If you're not and you sign up today, you get perks for more than 25 different NPR podcasts, sponsor-free listening to all of them, and bonus content for some of our biggest shows, including this one, and exclusive access to special Planet Money merch in the NPR shop. You get all that as a thank you for investing in NPR and our work at Planet Money.

This is Planet Money from NPR. Wow. This has been a roller coaster of a week. Trade as we have known it for decades has been completely turned upside down. We are in a legit trade war with many countries. And underneath all of these tariffs is the international flow of actual things. All these goods that people buy and sell to each other across borders and oceans.

So when he came back in 2011, he had all this expertise and he was able to put all his new skills into this new economy that had cropped up. He landed a job at one of the biggest producers and agricultural export companies in Peru, Camposol.

Do you remember the first blueberry you ever had?

Did you ask anybody what it was or did you just eat it?

Peru in South America, more than 3,000 miles away from this grocery store. When I was growing up, this was unheard of. You could not get fresh, cheap blueberries in the winter. You pretty much couldn't get any blueberries out of season. And now you can get a fresh blueberry in your local grocery store every single day of the year.

Isn't Biloxi a city?

You have probably had a Biloxi blueberry. It is kind of big. It's water balloon round. It's, you know, crunchy, firm, tart.

So Jose Antonio started cold-calling blueberry brands like Driscoll's.

Jose Antonio left Peru, again, with this goal, to own the entire supply chain. While a team in Peru started converting asparagus canning factories to fresh blueberry packing facilities, he moved on to the next step.

You're talking shipping containers, right? Yeah, yeah, yeah. We're not talking clamshells. Okay. No, no, no.

Did you have a grocery store in mind?

Costco's berry buyer. Yes, that is a real job. He was very hesitant about this Biloxi blueberry.

If you, like me, have ever wondered why that is, why it seems like blueberries from Peru are everywhere in a way they just were not like 10 or 15 years ago, we can tell you. The reason why is cocaine. Hello and welcome to Planet Money. I'm Erika Barris.

Oprah, she had been talking about blueberries on her show. Blueberries.

Without realizing it, Jose Antonio had picked an amazing time to enter the American blueberry market. He had tapped into the American fruit zeitgeist, the Oprah effect. Hard to measure, but easy to feel.

Other companies on the coast also grew more blueberries. And today, Peru is the world's biggest exporter of blueberries. And all this happened in the last 10 years. In the U.S., during about the same period, there's been a 91% increase in per capita consumption of blueberries.

That's about right. And who knows? That may change now that there's going to be at least a 10% tariff on almost every country in the world, including Peru. Which is why looking back at this particular history of free trade is so interesting.

Now, that huge change in Peru introduced some tough competition for American farmers, especially asparagus farmers. They took a huge hit. And the whole program also cost American taxpayers hundreds of millions of dollars over decades. Robert Rogowski, who chronicled this effort across the Andean region, says one way to look at the payoff is that It brought Peru closer to us.

Our two countries are politically aligned. What about the war on drugs? What about that part of the program? Was that successful?

He says if you look at the big picture in the Andes region at Peru, Colombia, Ecuador, and Bolivia, the drug trade there no longer dominates the economy the way it did.

But drug markets have a way of winding their way into eternal existence. Those coca farmers in the mountains of Peru, they didn't all move over to coffee. And there's been some coca farming in new parts of the country, like the rainforest.

And an unintended consequence of so much legit shipping out of the country? Well, sometimes hidden in those big old steel containers, there might be some cocaine riding shotguns. For more on trade and tariffs, check out Planet Money's homepage. We've got articles looking at how much the new tariffs will raise prices and shows on everything from diamonds to potatoes to why you bought your couch.

We've linked to it in the show notes. Also, if you have any trade or tariff questions, let us know. We're at planetmoneyatnpr.org. And the best way to support Planet Money and the work that we do is to become a member of Planet Money Plus or NPR Plus. You get sponsor free listening and bonus episodes and it really means a lot to us. It is super helpful.

You can learn more or sign up at plus.npr.org. And thank you to everyone who has already signed up.

Thank you to Robert Koopman, Paul Guttenberg, Lawrence Ruby, Javier Morales, Everett Eisenstadt, and Todd Egan. I'm Keith Romer. And I'm Erica Barris. This is NPR. Thanks for listening.

The result? After nearly half a century, our year-round consumption of literal drugs tons of Peruvian blueberries.

It was so bad that there was a war to fight it, the war on drugs. Drug use was punished in a much harsher way than it had been before. A lot of people, disproportionately Black people, were put in jail. There were also all kinds of campaigns to get drug users to stop. Or not start at all. You might remember to say no, or this is your brain on drugs, or crack is whack.

Those efforts were trying to hit the demand side for cocaine, and they were mostly failing.

Where were these drugs coming from?

I've seen those movies too.

Robert was the chief economist at the U.S. International Trade Commission. And part of his job there was to serve as kind of the archivist for this whole cocaine to blueberries saga.

The U.S. government wanted farmers to stop, to stop growing coca plants.

Were they actually going and ripping the plants out?

You seem to say, oh, whatever, that's just another day.

So today I'm going to tell you the story of one very small thing, one good from one place whose very existence in the U.S. is intertwined with our history of free trade. Oh, excuse me. I'm just going to reach right past you here. Winter is finally over. And the thing that has kept my spirits up over this long, cold, dreary winter was one particular fruit. Blueberries, blueberries, blueberries.

The carrot wasn't going to be a carrot, also not a blueberry, but the U.S. needed to give farmers some incentive to grow something other than coca, something they could export, something that American consumers would want to buy. Otherwise, why would they switch?

The U.S. government enlisted help from some less warlike agencies like USAID and also Congress. The idea was to make Peruvian farmers our economic partners.

This side of fighting the war on drugs was more of a soft power approach.

And the U.S. government didn't just knock out the tariffs. They were also sending lots of assistance for infrastructure, roads, ports, seed research to figure out the right crop for export to the U.S. Because at the time, Americans weren't feeding for Peru's native crops like quinoa the way they are now.

First, they tried to convince the coca farmers in those mountains, hey, look how well this coffee can grow in your fields. That land was fertile, lush peaks and valleys, every shade of green possible. Warm, birds, wild animals, all of it. The problem was the farmers could make 10 times more farming coca than other crops.

I talked to a man named Gustavo Guerrero Pareto who lived to the north of that mountainous region. Back then, he was managing a flower farm, but the farm couldn't keep its workers because there were militant groups that were sowing chaos. And a lot of the workers were leaving the area to go farm coca. Coca was the dominant economy.

Gustavo says in Peru at the time, there was a huge economic crisis. And he told me between the drug dealers, the militants, and the corruption, the violence was so bad, often when he'd leave the relatively calm... also heavily policed area where he lived, he'd see something terrible. I just want a flag. What you're about to hear is very disturbing.

He says one Sunday he was with his wife and infant daughter. They were taking a trip to the big city.

And along the road, they came across four bodies hanging from a tree. With a note that read, this is for being a traitor. Horrible.

horrible for Gustavo, for the country as a whole. And the security situation was also a major impediment to the kind of economic change the U.S. was trying to encourage.

Gustavo got interested too. He had a friend who was experimenting with a new irrigation system down there. Gustavo told me he and his family left their beautiful home for these sand dunes. And he says there was nothing more extreme than going from that lush green land full of vegetation surrounded by snow-capped mountains to the Peruvian desert. There was not a single tree. Everything was dry.

Esto era USAID? USAID?

Love me some blueberries. They're delicious, which is why I am kind of squeezing in front of someone's shopping cart at my local grocery store to fill my cart. I'm going to get like one, two. Sorry, am I in your way? They're just $3.50 a pint. Three, four. I'm going to buy four of these. And curious thing. Every floppy plastic container I pick off the shelf says the same thing. Origin, Peru.

USAID was working with the Peruvian government to figure out what export could be Peru's big one.

And what they came up with was not blueberries. They decided, bueno, asparagus could grow.

I love asparagus. Love it with lemon. Love it with butter.

Now, we should say, it's not like everybody just got an American seed packet and then everything changed. The successful planting of these American asparagus seeds coincided with some major shifts in the Peruvian economy. New laws making it easier for businesses to operate, fewer restrictions on seasonal workers and on how much land companies could buy. And there were tax incentives to grow food.

Thousands of people began moving from the mountainous green coca-growing part of Peru to work in the asparagus fields on the coast. Suddenly, this deserted desert that Gustavo had moved to was his hot garden bed of activity. And he says watching this was amazing.

People bought houses, opened bank accounts, built up credit. Things that seemed impossible just years earlier. So this this changed a lot in the country. And Gustavo was a part of it. He became an asparagus farmer, too.

Which meant the project worked. This Aid for Trade initiative helped create a new Peruvian industry supported by American consumers. At least for a while. Because after a couple decades, there was a lot more competition. Americans were now getting cheaper asparagus from Mexico and China. The asparagus market became oversaturated.

Because USAID wasn't working along the coast anymore, where the asparagus industry had flourished for so long. The aid workers were elsewhere, still trying to lure coca farmers into growing something legit. So the big asparagus companies on the coast, they had to find something new to export on their own. After the break, the little blue orb that could.

And the answer to the question, did all the new fruits and veggies ever replace cocaine? All those years asparagus was booming, this Peruvian businessman named José Antonio Gómez Bazán was not there to see it. He was away from the country, so his memory of the coast before the boom was just that, a coast.

Green asparagus, green fields.

This is Planet Money from NPR. Oh, we're going in.

I'm not hurting them? Oh, my goodness. Oh, this is so cool.

It's actually just a panel of three scientists.

The potato judges come back with their ruling. Their scientific opinion was that most of Mexico's potato pest concerns were... not really legitimate. Like, yes, the U.S. had a couple of serious pests, but there were simple ways to deal with that. And the risks they posed were fairly minimal. In other words, the U.S. had triumphed.

The Mexican potato industry had found one more way to stop American potatoes from getting into the country. That's after the break. In 2014, José Francisco Pérez Miel started a new appointed post as a federal judge in a potato-growing region of Mexico, Los Mochis, Sinaloa.

which was great for him because he told me, in Spanish, that while he didn't know anything about this dispute, he does love potatoes. ¿En ese tiempo empezaste a comer más papas o no?

Did you used to come play up here when you were a kid?

He said, yeah. When he moved there, he started eating more potatoes. That's why he stayed kind of chubby. He used to be thinner.

You know, when you were kids, the funnest thing was you'd just slide on your bottom down the base of the pile. I would not suggest that because you will get very dirty, but it was cool.

Compapa is to Mexico what the National Potato Council is to us. a group that represents the interests of Mexican potato farmers. It's short for La Confederación Nacional de Productores de Papa de la República Mexicana. And they call themselves Con Papa. The Spanish word for potato is papa, so the translation is with potato. And Con Papa's goal is to protect the Mexican potato industry.

Now, we reached out to Con Papa, but they didn't want to do an interview with us.

They filed a lawsuit, not just any lawsuit, a constitutional lawsuit, that claimed that the Mexican government had violated their rights to a healthy environment and food sources when it agreed to let in American potatoes. They go before Judge Jose and ask him to use his power to block the American potatoes from entering the country.

That's fun. We should do it. We should do it. Jeff sits at the top of the potato mountain.

But he lived in potato country. He could picture how letting in fresh American potatoes could harm his neighbors.

Jose ruled in favor of the potato lobby. He declared that the Mexican government, specifically the Mexican Department of Agriculture, did not have the power to let in the potatoes. Once again, American potatoes were stuck in the border region. That potato DMZ.

You just sit down on the potatoes? Yeah, this is very light on technique.

Now, in the grand scheme of things, economists like to say that the benefits of trade outweigh the costs. But for the losers, it doesn't always feel that way. And when those groups are politically organized, like, say, Con Papa, they can use their power to make things happen.

And eases his way downhill.

Here we are.

One key person behind these new potato negotiations was a diplomat named Doug McCaleb, who has been thinking about the potato issue for a long time.

Wait, I'm sliding. Well, the rate of descent is not extremely quick. It's very slow.

So that was a conscious thing. This wasn't like an afterthought. The potato kind of got moved up to the forefront then.

Discussion after discussion, it was potato, potato, potato.

This has been one of the longest-running... most complex trade sagas in modern times. But Doug says it gives you a window into how free trade actually works.

Our system of free trade, it's never been entirely free. It's subject to a complex system of rules and technicalities, rules about pests, rules about safety standards and labeling requirements. And because free trade inevitably creates those winners and losers, technical rules have a way of becoming political.

Yeah, yeah, so. It's picking up, it's picking up. It was amazing. It was one of the best things I've ever seen.

Now, Mexican consumers have not yet become obsessed with American potatoes. But U.S. farmers hope that with more potatoes in the market, the market will grow. Besides, Brian Wada, the third generation potato farmer, points out that we're sending those big brown russet bakers. They're different than what Mexican farmers grow. Those potatoes are smaller and thinner skinned. So they're complementary.

They can coexist.

The potato varieties are different. I don't think we're taking away market share from domestic growers. I think we're growing the market in general by introducing just new products and new varieties that haven't been there before.

Let's say goodbye. Adios.

Hasta luego. Goodbye, potatoes.

And I'm Erica Barris. This is NPR. Thanks for listening.

Here in the rich volcanic soils of southern Idaho is one of the best places in the world to grow potatoes. And Brian Wada's potatoes, these potatoes, Jeff is joyfully and maybe kind of fearfully sliding down.

They go all over the place, from the Florida Keys all the way to, like, the central California coast. They end up at Walmart, McDonald's.

It's a vast, untapped market right on our doorstep. Mexico. Mexico. Hello and welcome to Planet Money. I'm Erika Barris.

Today on the show, American farmers spent more than 25 years trying to get their potatoes over the southern border. Standing in their way, a trade loophole and the Mexican potato lobby. La Confederación Nacional de Productores de Papa de la República Mexicana, better known as CONPAPA, who were able to take advantage of an ingenious technicality in the way nearly all free trade agreements work.

Oh my goodness.

When Brian Wada's grandparents first came to Idaho, they basically had nothing. It was the middle of World War II. And as Japanese Americans, they'd been forced out of their home in California.

So they moved inland and ended up really where we're at now in Pingree, Idaho, and started over as a 100-acre sharecropper.

Oh my goodness.

I live here. I live on the farm. I live in my grandparents' house, about 100 yards away from the warehouse and office.

So 100 yards away from where we're sitting, like, right now. Yeah. Over the course of three generations, the Wada family farm has grown from 100 acres to 32 acres. thousand acres.

It's a wall of potato. We're at this wall of potato to learn about what happens after a trade deal is signed. In this case, it's this wild saga that's been playing out over the past quarter century.

Which is why they were so excited at the idea of sending potatoes to Mexico, where they don't eat quite as many potatoes as we do here in the U.S., but they could.

That's an untapped country. And so how many times are you going to get a great marketplace that has a high population base that has never had U.S. potatoes for the most part?

Now, the dream of selling American potatoes to Mexico really got started about three decades ago with the signing of the North American Free Trade Agreement, NAFTA.

It also seemed like NAFTA was going to change everything for the U.S. potato industry. Before NAFTA, American companies could basically only sell processed potatoes to Mexico, like frozen French fries or potato chips. But as part of NAFTA, Mexico agreed to totally open up the market to fresh American potatoes.

So after a big trade agreement is signed, when one country actually wants to start shipping a new type of crop to another country, their agriculture departments have to figure out how to do it in a safe way. Like what kind of pests do these American potatoes have? How are they going to inspect for those pests?

Governments have to come up with all these standards for how a potato is going to make it across the border.

Matt is not a potato farmer himself. He's an international trade consultant. Back in the 1990s, Matt was hired by American potato farmers to help lobby for their interests in these tricky negotiations.

What was harder?

Yeah. Did we actually have that, though?

Okay. So it was like... It was a little founded.

Can we climb this ladder? Well, of course. Be careful. All three of us get on this ladder that's precariously propped up against the giant mountain of potatoes. I don't normally climb ladders of potatoes, so I'm going a little slower.

the American potato farmers were furious. They were like, Mexico is way overreacting. They're essentially closing the market to our potatoes. Pretty soon, this becomes one of the major trade food fights between the two countries.

So the two countries start negotiating and eventually they agree on protocols for inspections and some other precautions that should help minimize the number of pests in these potatoes and avocados. But they also recognize that in order to open up trade, they're each going to have to take on a certain amount of risk.

Pretty soon, the U.S. is buying millions more Mexican avocados. All that avocado toast. Bankrupting millennials. But U.S. potatoes are having a much harder time getting into Mexico. They keep failing Mexico's inspections. And from Matt's perspective, the problem is that Mexico is being way too picky.

Potato, potato, same difference.

Yeah, Matt and the rest of the U.S. potato industry suspected that Mexico had an ulterior motive here. Because remember, Mexico had its own potato industry. And the Mexican potato farmers were understandably upset at the prospect of all these American russets coming in and taking over their market. Now, Mexican farmers couldn't stop NAFTA.

They couldn't undo this huge international free trade deal. But they could push the government to make a big fuss about pests as a scheme to stall for time to keep the American competition at bay.

Here was a huge loophole built into basically every free trade agreement because every country has a right to keep out products that might carry invasive pests or diseases.

Yeah, it felt like we were walking on loose cobblestones, except they were potatoes.

This is what makes pest regulations such a good loophole in our international system of free trade. It's a totally legitimate reason to shut down trade entirely or subject foreign crops to an endless process of bureaucratic inspections and risk assessments and pilot programs, you know, just to be safe.

In the case of American potatoes, Matt was fairly certain that Mexico was playing games, using these pest concerns as a pretext.

Wait, we're going to just stand on all these potatoes? Yeah. Can we do that?

Yeah, Mexico had the same nematode. It claimed that the nematode was under control, that it was only in a few places, and those places were quarantined. But in 2009, Matt discovers that potatoes from those quarantine places could actually travel anywhere in Mexico. It seemed pretty hypocritical.