BRIEFLY NOTED: For 2022-07-29 Fr
BRIEFLY NOTED: For 2022-07-29 Fr
A read-around...
I greatly enjoy and am, in fact, driven to write Grasping Reality—but its long-term viability and quality do depend on voluntary subscriptions from paying supporters. I am incredibly grateful that the great bulk of it goes out for free to what is now well over ten-thousand subscribers around the world. If you are enjoying the newsletter enough to wish to join the group receiving it regularly, please press the button below to sign up for a free subscription and get (the bulk of) it in your email inbox. And if you are enjoying the newsletter enough to wish to join the group of supporters, please press the button below and sign up for a paid subscription:
One Audio:
Alice Evans & Daron Acemoglu: What Did Acemoglu Get Wrong? <
One Image:
Very Briefly Noted:
Charles Schumer: Summary of the IRA: <https://www.democrats.senate.gov/imo/media/doc/summary_of_the_energy_security_and_climate_change_investments_in_the_inflation_reduction_act_of_2022.pdf>
Inflation Reduction Act of 2022<https://s3.documentcloud.org/documents/22122279/inflation-reduction-act-of-2022.pdf>
Simon Kennedy: What’s Happening in the World Economy: Why Stocks Went Up Even as Fed Hikes: ‘On Wednesday, the Federal Reserve raised interest rates by 75 basis points for a second straight month…. Yet up equities went with the S&P 500 rising 2.6%. … What explains the upbeat markets? The assumption is investors are betting Powell is going to pivot…. Goldman’s economists see a 50 basis point increase in September followed by 25 basis points at subsequent meetings… <https://www.bloomberg.com/news/newsletters/2022-07-28/what-s-happening-in-the-world-economy-why-stocks-went-up-even-as-fed-hikes?cmpid=BBD072822_NEF>
John Lanchester: Fraudpocalypse: ‘“Money Men: A Hot Startup, a Billion-Dollar Fraud, a Fight for the Truth”, by Dan McCrum…. McCrum, a journalist for the Financial Times, is both the author of Money Men, and also, though he wouldn’t put it this way, the hero of its story. He was more responsible than anyone else for the exposure and eventual collapse of the hugely fraudulent payment company [WireCard]… <https://www.lrb.co.uk/the-paper/v44/n15/john-lanchester/fraudpocalypse>
Greg Sargent: The Huge, Hidden Bonanza in Getting Joe Manchin to Yes <https://www.washingtonpost.com/opinions/2022/07/28/how-joe-manchin-got-yes-why-that-holds-hidden-promise/>
Jonathan Bernstein: The Do-Something Congress Is on a Roll <https://www.washingtonpost.com/business/the-do-something-congress-ison-a-roll/2022/07/28/1f444fb6-0e71-11ed-88e8-c58dc3dbaee2_story.html>
Emily Cochrane, Jim Tankersley & Lisa Friedman: Manchin, in Reversal, Agrees to Quick Action on Climate & Tax Plan <https://www.nytimes.com/2022/07/27/us/politics/manchin-climate-tax-bill.html>
Tony Romm, Jeff Stein, Rachel Roubein, & Maxine Joselow: Manchin Says He Has Reached Deal with Schumer on Economy, Climate Bill <https://www.washingtonpost.com/us-policy/2022/07/27/manchin-says-he-has-reached-deal-with-democrats-economy-climate-bill/>
Steve M.: Mike Pence to Republican Voters: I’m Really a Trumper, Just Like You! <https://nomoremister.blogspot.com/2022/07/mike-pence-to-republican-voters-im.html>
Twitter & ‘Stack:
Kevin Munger: Why I Am (Still) a Liberal (For Now)
Klon Kitchen: The CHIPS Act: Far From Perfect, but Still Very Good
Rajiv Sethi: On Summers, Manchin, & the Value of Dissent: ‘Disagreement has social value, demonization does not. Sometimes public positions are simply disguised statements of private interest, and sometimes they are just good faith arguments. Summers was able to speak his mind and stick to his guns, but few people have his power, prestige, and public platform. More generally, vilification stifles debate and promotes self-censorship, undermining the very interests it seeks to serve…
¶s:
Five things worth reading on CHIPS and IRA:
Greg Sargent: The Huge, Hidden Bonanza in Getting Joe Manchin to Yes: ‘If the West Virginia Democrat and his party get this done, it will probably be with zero Republicans—while expanding the boundaries of what’s achievable by that Democratic coalition. The deal would raise $739 billion by rolling back tax benefits enjoyed by corporations and the wealthy. It would pump $369 billion into incentivizing green energy, extend health-care subsidies for millions and empower government to negotiate down prescription drug prices…. On climate, Manchin says he backs investment in the technologies of a greener future, but without an abrupt abandonment of fossil fuels…. Yet… this would be our biggest investment in our climate future ever… could reduce carbon emissions by 40 percent from 2005 levels by 2030. Manchin represents the very outer reaches of the Democratic coalition…. If Manchin can sell this package on his own chosen terms in West Virginia, that hints at new possibilities for Democrats…. Republicans will likely sit all this out entirely…. Both parties are shifting toward embracing industrial policy. But only one is serious about our need for a far-reaching clean-energy transition and a full overhaul of a regressive tax system…
Klon Kitchen: The CHIPS Act: Far From Perfect, but Still Very Good: ‘The U.S. Senate has passed a $250 billion plan to boost American semiconductor manufacturing…. I’ve come to believe the Creating Helpful Incentives to Produce Semiconductors (CHIPS) Act meaningfully advances U.S. interests…. $52.7 billion in grants to support domestic semiconductor research, manufacturing, and production—including $2 billion for chipsets that are essential to the U.S. auto and defense industries; $24 billion in estimated tax credits for investments into U.S. semiconductor manufacturing; and, $200 billion for chip-related scientific research…. Congress… has been debating a series of “guardrails‘’ that would allow this support to energize the American chip industry without also boosting the capacity of our chief geopolitical rival. These guardrails are a key point of contention…. The CHIPS Act is something conservatives can, and do, disagree on—and that’s okay. What’s not okay, however, is not taking decisive action to constrain Chinese and to bolster American advanced chip manufacturing. I think this legislation meaningfully does both and that’s why it has my support…
LINK:
Jonathan Bernstein: The Do-Something Congress Is on a Roll: ‘An extremely productive 117th Congress…. Chuck Schumer and Joe Manchin on a revived Build Back Better plan…. Chips and Science… with $52 billion for US semiconductor development… an impressive string of bipartisan agreements that have produced legislative achievements already, with a chance for more before the end of the year…. Theories for why so much bipartisan legislation has passed, contrary to predictions (including mine)…. The threat of removing the filibuster… may have convinced many Republicans to cut enough deals to keep Manchin and other Democrats wary of changing Senate practices from getting fed up and acting…. The best reason for Republicans to cut deals is that doing so can produce policy gains for them that they couldn’t get from obstruction, and the electoral costs to the out-party of passing bills is almost certainly minimal (see above). But again, that wasn’t enough to get Republicans to endorse compromises during the Obama years…
Emily Cochrane, Jim Tankersley & Lisa Friedman: Manchin, in Reversal, Agrees to Quick Action on Climate & Tax Plan: ‘$369 billion for climate and energy proposals, the most ambitious climate action ever taken by Congress, and raise an estimated $451 billion in new tax revenue over a decade, while cutting federal spending on prescription drugs by $288 billion…. The plan falls far short of the ambitious domestic policy and tax package President Biden proposed last year…. The abrupt announcement came only hours after passage of a huge industrial policy bill aimed at bolstering American competitiveness with China that Senator Mitch McConnell, Republican of Kentucky and the minority leader, had said he would never support as long as Democrats continued their efforts to push through their marquee domestic policy bill over G.O.P. opposition…. His embrace of the plan did not guarantee it would move forward…. The legislation “will make a historic down payment on deficit reduction to fight inflation, invest in domestic energy production and manufacturing, and reduce carbon emissions by roughly 40 percent by 2030,” Mr. Manchin and Mr. Schumer said in their joint statement. The two senators added that “we urge every member of the U.S. Senate to support this important legislation.”… The two health care pieces would allow Medicare to directly regulate the price of prescription drugs… extend through 2025 an expansion of premium subsidies… raise most of its new tax revenue, an estimated $313 billion, by imposing a minimum tax on the so-called book income of large corporations… raise another $14 billion by reducing a preferential tax treatment for income earned by venture capitalists and private equity…. It invests $30 billion in production tax credits for solar panels, wind turbines, batteries and critical minerals processing; $10 billion in tax credits to build clean technology manufacturing facilities; and $500 million to be used through the Defense Production Act for heat pumps and critical minerals processing. The deal also includes a means-tested $7,500 tax credit to make new electric vehicles more affordable, and a $4,000 tax credit for used electric vehicles, according to a summary of the package. Both credits will be offered only to lower and middle-income consumers. The measure also includes a methane fee that will start in 2025. Also included will be $60 billion to address the disproportionate burden of pollution on low-income communities and communities of color, $27 billion for a “green bank” aimed at delivering financial support to clean energy projects and $20 billion for programs that can cut emissions in the agriculture sector…
LINK: <https://www.nytimes.com/2022/07/27/us/politics/manchin-climate-tax-bill.html>
Tony Romm, Jeff Stein, Rachel Roubein, & Maxine Joselow: Manchin Says He Has Reached Deal with Schumer on Economy, Climate Bill: ‘$433 billion in new spending, most of which is focused on climate change and clean energy production. It is the largest such investment in U.S. history…. The Democrats coupled the spending with provisions that aim to lower health-care costs for Americans, chiefly by allowing Medicare to begin negotiating the price of select prescription drugs…. To pay for the package, Manchin and Schumer also settled on a series of changes to tax law that would raise $739 billion over the next decade…
In the authoritarian social-media Schmittian politics of friends-and-enemies, saying that I follow Trump’s policies but have broken with Trump-the-fool is not going to cut it with the Republican base for Mike Pence:
Steve M.: Mike Pence to Republican Voters: I’m Really a Trumper, Just Like You!: ’Mike Pence’s memoir… the oddest sentence in the publisher’s announcement: “The most robust defense of the Trump record of anyone who served in the administration, SO HELP ME GOD also chronicles President Trump’s severing of their relationship on January 6, 2021 when Pence kept his oath to the Constitution.” We know that Pence is delusional: He thinks he can win the votes of Trump supporters, even though they regard him as a traitor and a RINO. But now we know the specifics of his pitch…. Pence wants 2024 GOP primary voters to think: The state of the Union in the Trump years was very good, and the man who was a heartbeat away from the presidency surely deserves a large share of the credit for that—and also he’s a man of character and an admirer of the Constitution, unlike the former president. So let’s get the good stuff—the record—without Trump and his awful character flaws. Pence ’24! But Trump fans… think America and the world were better in the Trump years because Trump was tough, smart, and crafty, a bully and a rule breaker. I’m sure they can’t explain how that helped him bring about paradise on earth. He just did it with Trumpness. To the fans, the outward manifestation of Trumpness is that you say and do things that infuriate your enemies, and you get away with a lot of them. Ron DeSantis has Trumpness. Mike Pence doesn’t. But Pence doesn’t grasp any of this…. DeSantis will win the nomination if Trump doesn’t, while Pence will be lucky to win a dozen delegates…
LINK: <https://nomoremister.blogspot.com/2022/07/mike-pence-to-republican-voters-im.html>
Is liberalism as we have known it a consequence of print-culture that is unlikely to survive its end?
Kevin Munger: Why I Am (Still) a Liberal (For Now): ‘The platform web has cannibalized liberal/literate culture overnight. Twitter is a “deliberation-themed video game” that has deformed real, vibrant humans into bitter cyborgs competing to dehumanize and degrade. Twitter culture is Cruelty Culture. This epicenter of intellectual/cultural/political activity is proudly incompatible with liberalism. The “thick liberalism” of the past centuries has been rendered obsolete by new media technologies. The groups who can harness the internet for their own ends will decide what comes next. But I am (still) a liberal (for now) in the “thin” sense, the sense in which avoiding human cruelty and humiliation should be a central political goal. Twitter Cruelty Culture is what illiberal intellectual ironism looks like. And it is an abomination…. [Richard] Rorty is a self-avowed liberal, with two related conceptions of liberal: someone who believes cruelty is the worst thing that can happen to a human being (what I’m calling “thin”), and someone who believes that values of political liberalism (freedom of speech, representative democracy, toleration) are the best way to achieve a reduction in human cruelty and suffering (“thick”). The problem for Rorty, as for so many of the thinkers from the Gutenberg Parenthesis, is that they are unavoidably embedded in the culture made possible by the technology of writing. That is: he needs more McLuhan. Freedom of speech, representative democracy toleration: these are all products of a literate culture, designed/discovered to take advantage of writing’s strengths and ameliorate its weaknesses…. Defending thin liberalism—ceasing to valorize cruelty—won’t solve the problem of what comes next. But it will help us preserve some dignity and humanity in this inhuman time…
LINK:
I greatly enjoy and am, in fact, driven to write Grasping Reality—but its long-term viability and quality do depend on voluntary subscriptions from paying supporters. I am incredibly grateful that the great bulk of it goes out for free to what is now well over ten-thousand subscribers around the world. If you are enjoying the newsletter enough to wish to join the group receiving it regularly, please press the button below to sign up for a free subscription and get (the bulk of) it in your email inbox. And if you are enjoying the newsletter enough to wish to join the group of supporters, please press the button below and sign up for a paid subscription:
Director’s Cut PAID SUBSCRIBER ONLY Content Below:
The American Legislature Creaking Into Motion
DRAFT of a Project Syndicate Column
In the United States Congress, nothing is ever over until it is finally over, but as of the end of July, it looks as though the Creating Helpful Incentives to Produce Semiconductors Act and the—but it is not and we should not call it Build Back Better—call it Make Again Higher Act will actually arrive on President Biden's desk for signature late this summer. That will shift Biden's first two years from "disappointing", as far as legislative accomplishments are concerned, to "exceeds expectations"—if not "fulfills wild hopes and dreams".
The early American Rescue Plan cemented a strong recovery that ensured we would not have a repeat of the long, grinding semi-depression of Obama's years; its contribution to our COVID- and Russia-generated inflation problem was small, and our inflation problem is a much smaller headache than another mostly-lost growth decade would have been. $50 billion in semiconductor manufacturing credits, $200 billion for semiconductor scientific research, $370 billion in climate and energy, $300 billion in drug-price savings, and $450 billion in tax rates and tax enforcement—all of these are very good things for America to do.
America will produce some $325 trillion of goods and services over the next decade. Thus, in context, we are only committing 0.7%-points of our next-decade's productive resources to additional semiconductor-related investments, only raising tax rates and tax enforcement by 1.3%-points, only saving 0.9%-points worth in drug costs, only boosting the resources we are devoting to fighting global warming and its consequences by 1.1%-points of our next decade's productive resources. Thus the big complaint against what will roll forward under the acronyms of CHIPS and IRA will be that out is only a drop in the bucket: a small redirection of what we do in a constructive direction, only one-tenth the scale of the investments and commitments that a rational government faced with America's and the world's current problems would undertake.
But one should do what one can. The story about French Marshal Lyautey, told by his gardeners that he would never live to see the trees grow that he had wanted planted tomorrow comes to mind: “In that case”, the aged retired soldier said, “plant them this afternoon”.
All of the pieces seem to me to be no-brainers. The semiconductor industry will be much healthier if it is pushed further away from monopoly and tight oligopoly by preserving and expanding the United States as an advanced manufacturing site, and thus also preserving the United States's viability as not just a basic science but as a research and development site. Slimming-down the rents the pharmaceutical companies have won through their lobbying past congresses is long overdue. There is no argument against increases in tax progressiveness to offset a small part of the increase in income inequality and the increased tax regressiveness of the past generations. And as for global warming and the energy transition—we are now three decades late in taking steps that we ought to have taken, and that Al Gore's foresight and pressure got us within one senate vote of taking, back in 1993.
“Why can’t America make good decisions, make good policies anymore?” That was what one of my foreign-born friends asked me over coffee in the Berkeley, CA afternoon sunshine a couple of weeks ago. Well, if CHIPS and IRA pass, it will be a sign that perhaps we can. Perhaps the political fever by which politics has become an extremist game of “own your enemies” is breaking.
Or perhaps not. The Republican House leadership has just announced that it is not only opposed to CHIPS, but is going to actively whip against it, and try to keep it from getting any Republican votes in the House. Why? It is not because they have decided that CHIPS is bad policy. It is because Senators Schumer and Manchin are advancing the IRA through the Senate. And it is not even that they claim to think that IRA is a bad idea because global warming is a hoax—at least not any more—and because Medicare currently pays fair prices for pharmaceuticals.
It is, rather, that passing CHIPS and IRA would give Joe Biden one accomplishment too many.
IRA: Nothing in this has anything to do with inflation (unless there is some odd theory of Fed policy making). Political fluff.
Nothing is obviously bad for long term growth, but I'd like to see the policies vetted through a cost benefit analysis that properly prices the net CO2 emission reduction. (Subsiding electric vehicles probably does not, but it's de minimis.)
Too bad IRA did not refer to lifting the maxima that can be put into IRA/401K plans. That, if done revenue neutrally, would increase investment.