Worþy Reads: For 2021-06-11
A preview of my weekly read-around for Equitable Growth...
Worthy Reads from Equitable Growth:
1) The labor market is actually starting to look not completely horrible:
Equitable Growth: ’For the week ending June 5, 367,117 workers filed for regular unemployment benefits. After robust employment gains in May, regular initial claims are approaching their pre-pandemic levels. States reported that another 71,292 workers filed for initial PUA, which extended UI to some workers who are not eligible for regular benefits. In total, 438,409 workers filed initial PUA or regular unemployment benefits last week. Regular continued claims, also referred to as insured unemployment, was 3.3 million the week ending May 29. Adding all Unemployment Insurance programs—including PUA, PEUC, and Extended Benefits—a total of 15.3 million workers claimed benefits the week ending May 22. Although the U.S. economy continues to be 7.6 million jobs down with respect to February 2020, starting this week, many states are prematurely cutting federal UI—a policy choice that is estimated to affect almost 4 million workers…
LINK: <https://twitter.com/equitablegrowth/status/1402967367089594370>
2) Equitable Growth grantee and stalwart has been on this issue his entire career and gives the best capsule summary of what the Biden administration is trying to do that I have seen:
Gabriel Zucman: ’Ok what, exactly, is this global deal on corporate taxation about?…. The most important component is the minimum tax of 15%. This does NOT mean that all countries must increase their corporate tax rate to 15%. It means that multinational profits will be subject to a 15% minimum effective rate…
LINK: <https://twitter.com/gabriel_zucman/status/1401193407742189572>
3) Forthcoming Tuesday June 15 at 2:00 PM EDT. This should be extremely good:
Equitable Growth: Data Infrastructure for the 21st Century: A Focus on Racial Equity: ‘Large… racial divides in income, wealth, employment, and other markers of economic well-being… have a tragic human cost…. Pay discrimination, barriers to wealth accumulation, and other forms of systemic racism prevent people from developing and fully deploying their human capital. The Biden administration has… an Equitable Data Working Group. Across many domains, federal data collection and reporting can be improved to better reflect the diversity of our economy. These improvements could then guide policymakers in implementing more finely tuned policies to address the legacy of systemic racism and the differential impacts of recessions and other economic shocks on communities of color. This event will convene a panel of academics to discuss some actionable areas of policy where the Biden administration could take steps to increase the quality and utility of economic data disaggregation and how these steps will lead to better policy outcomes. Please direct questions related to event content to Computational Social Scientist, Austin Clemens…
LINK: <https://web.cvent.com/event/443b4018-f6b5-49c5-8ec9-37389d827977/summary>
4) The best thing I have done this past week is this podcast, which I did with Bloomberg Opinion’s Noah smith and with Warburg-Pincus’s Bill Janeway. Janeway is always worth listening to: either a paleo- or a post-Keynesian economist who spent his career in finance funding innovation and Silicon Valley:
Bill Janeway, Noah Smith, & Brad DeLong: The Ecology of Innovation: ‘Key insights: When industrial policy in America has been successful, it has always had a profound political driving motive: maintaining independence, manifest destiny, Sputnik, and so on. The only such driver today—and it is urgent—is green energy to fight global warming. The U.S. used to be excellent not just on the “novelty” prong of [Dan] Breznitz’s prosperity-in-an-unforgiving-world quadent, but also on the “engineering design”, “second-generation innovation”, and “production-assembly” prongs as well. We threw that away in the era Reagan began—the era of neoliberalism, financialization-driven short-termism, and tax cut-driven exchange overvaluation. We need to get those other three prongs back, lest we become a country of technoprinces and dopamine-loop brain-hacked technoserfs. When you do industrial policy, you need to think very carefully about what kind of economy you want to create. A better retranslation of the Arkhilokhos-Isaiah Berlin “Fox & Hedgehog” tag line is: “The fox knows many tricks; the hedgehog knows one good one”…
LINK: <https://braddelong.substack.com/p/podcast-hexapodia-is-the-key-insight>
Worthy Reads from Elsewhere:
1) The extremely sharp Martin Sandbu over at the Financial Times tells people to calm down about inflation. The inflation we would worry about would be broad-based, inertial, and present in wage expectations and wage increases. That is definitely not what we have now. The intelligent course is to prioritize recovery to full employment and then see where we are in early 2023. The unintelligent course is to raise alarm and try to get people to take actions that would slow recovery over the next year and a half:
Martin Sandbu: Who’s Afraid of Labour Shortages?: ‘A lack of workers would be a nice problem for us to have—but we don’t…. Reams of reports are coming in that businesses are struggling to recruit as economies reopen…. Some, it appears, are even taking the unheard-of step of raising pay in order to find staff. That should be good news. But such stories are feeding the bigger debate on whether the risk of overheating is starting to overtake the risks of stalling growth—at least in the US…. Free Lunch says don’t panic…. You can see shortages everywhere except in the data…. The US economy is still 10m jobs short from the pre-pandemic trend…. But isn’t inflation suddenly accelerating? Sort of—but not in any way that indicates broad price pressures…. There are certainly dizzying price rises in some sectors, such as lumber, where US prices have more than quadrupled. But… these are exceptions…. The prices of most things are behaving in a benign way…. And this is even more true for wages…
LINK: <https://www.ft.com/content/8d47ac74-cf0d-40cb-92df-8d8bf4c7d895>
2) A very nice introduction to a very interesting and useful way of thinking about income distribution as a process:
Yonatan Berman: Reallocating Geometric Brownian Motion
2) We economists observe the very broad sweeps of data generated by firms and governments accounting systems arising out of human propensity to cement social bonds and deepen our societal division of labor by entering into reciprocal gift-exchange relationships. We have both extraordinarily amplified yet also narrowly focused these by mediating them via through the social fiction of “money“. Thus gift-exchange gets divided into one-shot cash-on-the-barrelhead quantified discrete episodes. And from the counted-up totals and subtotals we economists can see, plus economists’ present and past introspection into our motives and behavior, we then guess at what human reality is signalled by those particular patterns. We count, and our counts tell us what interactions are typical and representative. But then we rely on introspection to help us turn our numbers into ideas of what these patterns really mean. That is not good enough. What we really, really need is for somebody who can dive deep into an individual case study—someone very sensitive to human psychology, to how it signifies itself in human actions, and how human actions combine with the actions of others to generate human group behavior. We need anthropologists. Gillian Tett is an anthropologist:
Gillian Tett: Anthro-Vision: A New Way to See in Business & Life: ‘Because “gifts” are usually considered to be the mirror of market—or commercial—behavior, they tend to be excluded from economists’ models…. Anthropologists have always had a much broader vision of “economics”… study how exchanges bind societies together in the widest possible sense…. Mauss argued that gift-giving is endemic to societies around the world, and has three parts: an obligation to give, to receive, and most crucially, to reciprocate… usually delayed, creating a social “debt”….“Gifts” create trailing debts that bind people together…. Just think of how the gigantic student loan industry in America, say, is embedded in family obligations and relations which cannot be captured just by a trillion-dollar number… financial flows are about money but they also involve far more than finance, since they are rooted in kinship structures and trailing patterns…. [Thus] talking about “barter” in the twenty-first century might not be as odd as it seems…. Communities without money often have extensive and complex “credit” systems since households create social and economic debts…. In Silicon Valley information is constantly being “given up” in exchange for the “gift” of free services…. Many of the participants in this “barter” are not explicitly aware that they are involved in a barter at all. However… there is no other readily available word in English…
LINK: <https://www.google.com/books/edition/Anthro_Vision/up0tEAAAQBAJ>
4) Three days a week—or two—interacting in-person and two days a week—or three—holed up and focusing in our offices, our homes, or the library sub-basement, communicating asynchronously, is how we academic types have been trying to structure our worklife for a century. It works well. One long-lasting effect of the COVID-19 plague may be to kick a critical mass of other forms of white-collar employment into this pattern, with far-reaching ramifications for workplace functioning and economic geography
Stephen Loynd: ‘Amazon, “which has allowed its corporate employees to work entirely from home for over a yr due to the pandemic—said in an internal memo on Thurs that its new policy will be to allow those employees to indefinitely work 3 days a week in the office & 2 days a week remotely”…
LINK: <https://twitter. com/loyndsview/status/1403346603147157506>
5) The shift of macroeconomics to “RBC models”—and the fact that a good and very vocal 1/3 of the economics profession went the full Herbert Hoover during the Great Recession of 2008-2010—should make every economist in the world embarrassed for the profession. Paul Krugman has a theory about why this happened, with which I think I agree:
Paul Krugman (2010): The Instability of Moderation: ‘We used to pity our grandfathers, who lacked both the knowledge and the compassion to fight the Great Depression effectively; now we see ourselves repeating all the old mistakes…. The kind of moderate economic policy regime Brad and I both support—a regime that by and large lets markets work, but in which the government is ready both to rein in excesses and fight slumps—is inherently unstable.… Conservatives have always tended to view the assertion that government has any useful role in the economy as the thin edge of a socialist wedge… William Buckley… one of his key complaints was that the Yale faculty taught—horrors!—Keynesian economics…. Last but not least, the very success of central-bank-led stabilization, combined with financial deregulation—itself a by-product of the revival of free-market fundamentalism—set the stage for a crisis too big for the central bankers to handle. This is Minskyism: the long period of relative stability led to greater risk-taking, greater leverage, and, finally, a huge deleveraging shock. And Milton Friedman was wrong: in the face of a really big shock, which pushes the economy into a liquidity trap, the central bank can’t prevent a depression…. The era of the Samuelsonian synthesis was, I fear, doomed to come to a nasty end. And the result is the wreckage we see all around us…
LINK: <https://krugman.blogs.nytimes.com/2010/11/26/the-instability-of-moderation/>
6) Moving out of my comfort zone again. But this is very important: Jim Crow was the law. That was the point:
Jamelle Bouie: ’I find myself referencing Jim Crow again and again. The whole trick of Jim Crow was that it had a veneer of legality. It was a “lawful” means to keep blacks out of the electorate, as opposed to the violence of the 1870s and 1880s. Many people act like as long as things are following rules, and as long as the rules are passed legally, then things are proceeding in order. If a state passed drastically suppressive laws, keeping many out, then that’s what the legal and legitimate system is—why be alarmed? Even if, in practice, Jim Crow was utterly lawless, the appearance of law allowed its defenders to attack critics and dissenters as lawless threats themselves…
LINK: <https://twitter .com/jbouie/status/1403333146297483264>
7) Still out of my comfort zone, but it does seem worth noting this quote from Josef Stalin, as reported by his former secretary: “I consider it completely unimportant who in the party will vote, or how; but what is extraordinarily important is this—who will count the votes, and how”:
Jeet Heer: The Coup Next Time: ‘Trump is a sinister buffoon and his attempts at subverting democracy are farcical but also threateningly persistent. His failure to pull off a coup was due to no lack of trying. Rather, he was foiled by the reluctance of the permanent bureaucracy… to carry out absurd and sometimes illegal demands, along with the a similar crucial reluctance among state level Republican elected officials…. But… Republicans who stood up to him are being marginalized…. This continued Trumpification of the GOP opens the way for the most likely path for a repeat of 2020 that ends with a successful coup…. the Democrats win an electoral college victory and the popular vote but the Republicans have control of the House, the Senate, and state legislatures in crucial swing states… [and] override of the vote…
8) Those who say that the lab-leak hypothesis is probable or likely or even a substantial probability are seeking to herd you like cattle. They strike me as the kind of people who said that Iraq had a rapidly progressing and active nuclear weapons program back in 2002. Do not assume they are your friends:
Michael Hiltzik: Why the COVID Lab-Leak Hypothesis Is Quackery: ‘the virological community believes that it’s vastly more likely that COVID–19 spilled over from an animal host to humans…. "Both scenarios are possible, they are not equally likely,” [Kristen] Andersen said. “Precedence, data, and other evidence strongly favor natural emergence as a highly likely scientific theory for the emergence of SARS-CoV–2, while the lab leak remains a speculative incomplete hypothesis with no credible evidence.”… What remains of the lab-leak theory is half-truths, misrepresentations, and tendentious conjecture…. A May 23 article in the Wall Street Journal reporting that three researchers… became sick…. Virologists point out, moreover, that it would be unlikely for COVID to affect only three people seriously enough to warrant hospital care without infecting hundreds of others in the lab or their households…. Their goal in signing the letter, they said, was not to point fingers at the Wuhan lab, but to urge WHO to devote more effort to determining the origin, whatever it might be, before expressing a categorical opinion…
LINK: <https://www.latimes.com/business/story/2021-06-03/lab-leak-covid-origin>
(Remember: You can subscribe to this… weblog-like newsletter… here:
There’s a free email list. There’s a paid-subscription list with (at the moment, only a few) extras too.)