Recommended Lynx

A few things for your reading stack, and knowing how high that stack is already, I've kept the bar high.

Here’s a new feature up in here where I suggest things to read that you might have missed, pieces I think are important in econ, politics, resistance, etc. I will try to keep the bar high because everyone is inundated. “High” in this case means things you might have missed (like the first one below) and pieces that are 1.5 standard deviations above the mean in the distribution of importance according to moi.

Occupational upgrading back to normal? As you know by now, I will never stop singing the praises of full employment labor markets. They definitely don’t solve everything, and overheating can happen, but they’re a necessary component of economic justice, healthy macro, and they probably even contribute to that elusive holy grail of economies, better productivity outcomes.

Also, persistently tight labor markets can give workers the opportunity to seek better jobs, as in occupational upgrading. Such upgrading is a big win-win as it is good for workers but also for the economy, especially if it engenders better, more productive matching of workers and jobs.

This WSJ column, however, suggests that’s mostly behind us. Along with copious anecdotes (not a diss—this is good journalism), the fact that job-switchers’ (nominal) wage growth is back down to more normal levels suggests they are probably right about this.

Other evidence in support of this hypothesis is lower quit rates, which spiked up over this period, and slower hiring rates.

I strongly suspect that the mountain you see among job switchers in the figure was also a function of the pandemic, specifically the collision upon economic reopening of strong labor demand and weak labor supply. Two pandemic era policy lessons from this trend: 1) I suspect the very generous Unemployment Insurance benefits facilitated this upgrading (this is empirically testable, if someone’s looking for a cool dissertation chapter topic!), and 2) you probably don’t get this effect if you do the Euro-policy thing of keeping workers attached to their jobs in a downturn. There’s a dynamism/security tradeoff in play.

Jared re Sherrod: Numerous people told me to read this and now I’m telling you. It’s former Ohio Sen. Sherrod Brown’s contribution to the burgeoning literature on what the Ds must do to revive the party. The fact that he long held a seat in an increasingly Trumpy state make's Brown’s voice uniquely important. (He and his team were also essential in my confirmation, so this is also personal).

It’s a carefully crafted, muscular, fact-based polemic on how Ds came to be seen as supporting a status quo which left working people behind, starting with NAFTA.

He writes:

Most families at all income levels feel squeezed by soaring housing costs, unaffordable childcare, rising insurance prices, stubbornly expensive health care—not to mention trying to save for retirement, higher education for their kids, and care for aging parents. Life feels unaffordable even for workers whose incomes put them well ahead of their working-class neighbors.

And most people get their income from a paycheck, not an investment portfolio. Work unites all of us.

Spot on.

But here’s the thing: this is precisely the conversation that me and the incoming team were having with President-elect Biden in December of 2020, along with what we needed to do about the pandemic, which despite a massive outbreak of 20-20 hindsight, was still generating deep economic uncertainty and angst back then.

And as Brown would acknowledge, I suspect, Biden was the most worker-centered, pro-union president since FDR. He couldn’t give a speech about the economy without talking about the dignity of work, without recalling hard lessons he learned as a kid about what economic insecurity does to families.

To be clear, Brown’s piece is highly resonant and he’s surely right. And I’ve got the scars to show that our agenda got buried by inflation (really, the level of prices, about which I’ll have a new analysis this week), the immigration surge, alienating messaging, anti-incumbency, and fateful political mistakes.

But anyone from team Biden econ who reads this will recognize that we were guided by Brown’s thesis.

Ben Rhodes on what Americans need to do to “Stop Trump and Save America.”

This has also got to be right:

I believe that most Americans don’t want to rip health care away from veterans, defund schools or deregulate cryptocurrencies so that billionaires can scam ordinary people without consequence. I believe that most Americans do not want to destroy the economy through stupid trade wars or go in search of minerals in Canada or Greenland to suit the boundless ego of our president. I believe that most Americans are sick of culture wars that force us to care about the political views of athletes, the restroom policies of some school on the other side of the country or the programming decisions at the Kennedy Center. I believe that most Americans would rather raise their kids in a society that values empathy and not cruelty.

I’d add that most Americans don’t want to defund the IRS to clear the way for illegal tax evasion by rich scofflaws. (This article should really get its own callout in this post—it’s top flight journalism and it’s especially good to see it in WaPo, owned by Trump ring-kisser Bezos.)

But I gotta say, I’m not quite getting his path forward, i.e., what Americans “need to do.” He argues for supporting better politicians who buck the stagnant status quo that Brown also inveighs against, which is surely right. He believes that “people across the country want to be asked to join an opposition where they can be part of the solution,” which I very much hope is right but is pretty vague. It’s certainly the case for the political engaged and activated resistance movement.

But I suspect most people just want and don’t want the things he ticks through above. Rhodes seems to be arguing that because Trump’s actions don’t deliver what they need and want, they too should be politically activated, again, by better politicians than we’ve had. And perhaps the raucous town halls and protests at Tesla dealerships show he’s onto something.

It may just be inevitable at this early stages, but the path of resistance remains less clear, at least to me, than I’d like it to be.

“Reading” Abundance: When it comes to this important new book by Ezra Klein, who I knew when he was a cub reporter at the American Prospect (!) and Derek Thompson, I decided *not* to give it the “Washington read.” That’s when you convince yourself you’ve read a book by reading a bunch of articles about it, reviews, listening to podcasts.

But did you know that the book is on Spotify Audiobooks feature?! That means you can listen to it while you exercise, wash the dishes, etc. I’m doing so and man, does their agenda resonate. I’ll have more to say about when I’m done; I’ve yet to get to the part about how we unravel the layers of blockages that prevent us from building what we need. (I did read this excellent Brian Deese set of policy ideas about precisely that. It’s almost by definition a slog, but it is a slog any serious policy analyst must make.)

But so far, my main reaction to almost every sentence is “yep…that’s right.” (Exception: Ezra and Derek will have to pry the analogy of “growing the pie” from my cold, dead hands. They argue it doesn’t work, but I’ve long and highly efficiently summarized the goal of righteous economic policy as: the bakers should get a fair slice of the growing pie.)