How The Opioid Crisis And The Trump Administration Are Changing Middle America's Economy

Tracy Alloway (0:09)

Hello, and welcome to another edition of the Odd Lots Podcast, I'm Tracy Alloway.

Joe Weisenthal (0:14)

And I'm Joe Weisenthal.

Tracy Alloway (0:15)

So Joe, I am not in the American Heartland, but I'm certainly closer to it than I was last week when I was in New York.

Joe Weisenthal (0:24)

Yeah, I kind of feel like even if someone's not technically in what people think of as the Heartland, as long as they're not in New York City or Abu Dhabi, then you're probably closer to it than you normally are.

Tracy Alloway (0:38)

All right, well, I am in Naval Town, Annapolis, Maryland, where the Naval Academy is. I've been listening to local radio and getting a good feel for some of the local issues. And every time I come back here, I always notice a couple new things that kind of catch my attention.

Joe Weisenthal (0:56)

So what do you learn when you step out of the bubble?

Tracy Alloway (0:59)

All right, so first of all, it has to be the polarization of American politics and media. Even the local radio stations now seem to be divided between Republican and Democrat. So that's pretty amazing to me. But the other thing that I always find interesting is I watch the commercials on cable news, and there are always new trends that you can find from watching the commercials.

Joe Weisenthal (1:21)

What do you see on the local ads there?

Tracy Alloway (1:23)

All right, so there's one thing I'm really noticing that I can't remember seeing ever before, and that is all these ads for basically addiction treatment centers, opioid addiction treatment centers.

Joe Weisenthal (1:35)

I've seen some ads, and I know that also you get, I think there are a lot of ads for drugs that treat the side effects either of painkillers, of painkiller treatment. So it's pretty extraordinary how much this issue and this crisis has sort of soaked into the media.

Tracy Alloway (1:52)

Yeah, so huge, huge social issue in the United States, and such a big social issue that people are starting to take it seriously from an economic standpoint for the very first time, as you know.

Joe Weisenthal (2:03)

Right.

Tracy Alloway (2:03)

So the issue that people are talking about is whether or not opioid addiction is now so pervasive in American society that it's actually having an impact on the workforce, and in particular, the labor participation rate.

Joe Weisenthal (2:19)

Right, because there has been this so-called mystery, which is that the economy has rebounded in an impressive way. Many indicators are at the highest level, well above their old pre-crisis highs, but there do seem to be pretty large swathes of the population that have not returned to the labor market the way economists would expect.

And more and more people are wondering and talking about this possibility, right, that the addiction issues that so many people are facing is having a real macroeconomic impact.

Tracy Alloway (2:51)

Yeah, that's right. The workers are missing. So today in a podcast that I would describe as Notes from the American Heartland, we are going to be talking to Jeff Korzenik. He's the Chief Investment Strategist over at Fifth Third Private Bank.

Fifth Third, of course, is a big, big bank for a lot of the Heartland American country. He's going to be talking to us not just about the opioid crisis and its impact on the economy, but also how the economy is faring in general in the Midwest. So it should be good.

Joe Weisenthal (3:24)

Looking forward to stepping outside of our New York Abu Dhabi bubbles and talking about the real economy a bit more.

Tracy Alloway (3:32)

So let's bring on Jeff.

Jeff Korzenik (3:37)

It's my pleasure. Thank you.

Tracy Alloway (3:39)

So you're coming to us from, I think you said it was Columbus, Ohio. Is that right?

Jeff Korzenik (3:43)

I am. I'm speaking at the Ohio Tax Conference. It doesn't get any more Midwest business than that.

Joe Weisenthal (3:50)

For some of our listeners, maybe everyone is familiar with it, but tell us a little bit about the size and scope of Fifth Third Bank, its geographical footprint and the type of customers, whether on the business side or the retail side, it typically deals with.

Jeff Korzenik (4:05)

Sure, happy to.

We're coming up on our 160th anniversary. We were founded in 1858 in Cincinnati. If you think of Cincinnati in that time and place, it was essentially the gateway to the Western expansion, the gateway to the agricultural boom in the United States and industrialization. And we're still very much the bankers to the American market. We have a 10-state footprint of retail branches as well as other offices that are not retail. That extends from the Northern Midwest, the traditional Rust Belt states, down through the Southeast in Florida, $142 billion bank.