Getting ready for T-giving, here's a mash up: a few numbers of interest, and Greg Ip says affordability can't be solved and is therefore a loser for incumbents.
Glad to see you use the amputee economist aphorism, “On one hand …”.
Let’s pick one element of “affordability,” .. childcare. Mamdani and NYS guv Hochul are discussing an income-based childcare tax targeting, in the beginning, the most economically marginalized communities… yes, complicated, but, a huge political winner. It’s not resolving affordability, it’s the perception that you actually acknowledge and are addressing, even if only one aspect
Well, I hope nobody is going to run on a deflation platform! As you point out, there’s plenty that can be done in housing, at least in certain areas, though it would require local cooperation. Child care is another tough, but achievable, target that would make a big impact. I believe you’ve mentioned in the past that it’s key to set up these policies to make an impact quickly. Much of the good policy from Biden was invisible because it was still in the works, and now being thwarted by the Orange One.
People want an FDR-like agenda and will reward politicians who deliver on it. Universal healthcare. Free college/technical school/jobs training (and a ban on unpaid internships). Minimum wage raised to $20 an hour and pegged to inflation. Free childcare Raising taxes on the 1%. Making corporations PAY taxes. Breaking up monopolies. I'd say take over utilities so it's a public service like water and roads and the like. A Biden-like jobs program focused on making America competitive in green energy, rebuilding our public infrastructure including a smart grid and roads and bridges and the internet. Surely this falls under the rubric of affordability and people will believe rightly the American Dream (however they define it) is closer in reality thanks to these policies. Deliver on two or three and you'll get re-elected. Do you agree?
I can understand the current focus on right now. That's where we are. But we need to remember that some of these issues have taken decades in the making.
Education is one. My county schools lost students this year. Charter schools and officially private schools are taking those students. Those two areas are thriving. But what happens to my grandkids' public schools? They see budget cuts in a state (NC) that is well below the national average in funding per pupil and just about at the bottom for teacher salaries. This is not a recipe for educational (nor economic) success in the long term.
Yes, capital investment is important and AI will affect our future. But if we cannot afford to prepare students for that world, we are to blame.
Plato would have recommended give the AI ideas to the poets to implement, except they couldn’t be trusted.
Of course that's a syllogism. Nevertheless, it won't matter how many AI resuts recreate human thought. We've each already got one. Let's put them together and make sure the megalomaniacs and pedofiles don't gain control.
Affordability is doable. My favorite brain storm is the proposal to raise the minimum wage for the 2,000 largest corporations. Raise it to $24/hour. That would improve the lives of 1 in 4 workers (all who are low-paid). These corps have an average of 20,859 workers, so about 40 million workers would receive higher pay. It would take a national corporate charter law to make that possible. I got the figures from an essay by William Lazonick. He claims that 92% of corporate profits go to stock holders. We've read the news stories about how Walmart workers would receive a $6,000/year raise if buybacks were illegal and that money went to employee wages. Last thought: The web page RealTime Inequality (a product of U.C. Berkeley economists) shows that since 1976 the income distribution has shifted enormously; the lower-earning 90% of households were earning 63% of all income and now they earn 48%, a shift of 15.4%. If we had the '76 ratio, then each household would have around $30,000 more income each year. Hard to believe, but it is logical, at least. We had affordability previously, we can find a way to achieve it again.
There's something strange in the unemployment graph. In almost all of the cases where unemployment went from falling to rising the onset of the rise was rapid. In other words UE went from slowly declining to rising rapidly very quickly and corresponding with a recession in almost every case. But now UE has been rising slowly for a long time. It looks very different from all the other reversals in the chart. Why???
We pay roughly twice as much for brand name prescription drugs as other countries. Negotiating a 50% discount would be deflationary. Deflation in prescription drug prices would be a boost to the economy. (Except for the pharmacy benefit managers, insurance companies, group purchasing organizations, and pharmacies owned by insurance companies. )
Dr Bernstein wrote that we need to: "reduce regulatory sludge, subsidize where needed, increase competition". We need to use monopoly power, not competition, to lower drug prices.
I assume in AI capex you include (as the WSJ does) not just chips and servers but also the AI data center building boom, namely, land purchases, construction, the hooking up utilities (electricity and water) to the data centers, etc.
Do any of the sources you see break out the former from the latter in terms of their current economic effect on GDP growth?
That is, how much of our current growth is the result of a temporary (and probably misguided) commercial real estate bubble?
Humm,,, mine is completing my sentences as I type this, grabbing my info nonstop and pretty much trying to prioritize what I “ search” for….Best just to increase personal vigilance and appreciate spell- correction…
Glad to see you use the amputee economist aphorism, “On one hand …”.
Let’s pick one element of “affordability,” .. childcare. Mamdani and NYS guv Hochul are discussing an income-based childcare tax targeting, in the beginning, the most economically marginalized communities… yes, complicated, but, a huge political winner. It’s not resolving affordability, it’s the perception that you actually acknowledge and are addressing, even if only one aspect
Wait! You forgot today's "MUSICAL CODA".
(Don't worry. I've got you covered.)
MUSICAL CODA
https://www.youtube.com/watch?v=qMxwef3W_0c&t=9s
----
Whoops! I seem to be mixing up the economist substacks.
Never mind.
I wrote that old chestnut almost 40 years ago! Thanks for getting it out of the attic.
My google search (Jared Bernstein jazz) only turned up two videos.
Both of the same old chestnut, of which this was one.
Surely there must be some other videos around somewhere? (Perhaps not on the internet.)
Maybe even of Jared Bernstein performing?
Well, I hope nobody is going to run on a deflation platform! As you point out, there’s plenty that can be done in housing, at least in certain areas, though it would require local cooperation. Child care is another tough, but achievable, target that would make a big impact. I believe you’ve mentioned in the past that it’s key to set up these policies to make an impact quickly. Much of the good policy from Biden was invisible because it was still in the works, and now being thwarted by the Orange One.
People want an FDR-like agenda and will reward politicians who deliver on it. Universal healthcare. Free college/technical school/jobs training (and a ban on unpaid internships). Minimum wage raised to $20 an hour and pegged to inflation. Free childcare Raising taxes on the 1%. Making corporations PAY taxes. Breaking up monopolies. I'd say take over utilities so it's a public service like water and roads and the like. A Biden-like jobs program focused on making America competitive in green energy, rebuilding our public infrastructure including a smart grid and roads and bridges and the internet. Surely this falls under the rubric of affordability and people will believe rightly the American Dream (however they define it) is closer in reality thanks to these policies. Deliver on two or three and you'll get re-elected. Do you agree?
If the American people expect to be delivered to the promised land
( of affordability) - they should realize that we have been in the wilderness for over 40 years
( with the secular decline of the middle class) .
We better reverse direction soon
because the desert is dead ahead.
I can understand the current focus on right now. That's where we are. But we need to remember that some of these issues have taken decades in the making.
Education is one. My county schools lost students this year. Charter schools and officially private schools are taking those students. Those two areas are thriving. But what happens to my grandkids' public schools? They see budget cuts in a state (NC) that is well below the national average in funding per pupil and just about at the bottom for teacher salaries. This is not a recipe for educational (nor economic) success in the long term.
Yes, capital investment is important and AI will affect our future. But if we cannot afford to prepare students for that world, we are to blame.
Plato would have recommended give the AI ideas to the poets to implement, except they couldn’t be trusted.
Of course that's a syllogism. Nevertheless, it won't matter how many AI resuts recreate human thought. We've each already got one. Let's put them together and make sure the megalomaniacs and pedofiles don't gain control.
Affordability is doable. My favorite brain storm is the proposal to raise the minimum wage for the 2,000 largest corporations. Raise it to $24/hour. That would improve the lives of 1 in 4 workers (all who are low-paid). These corps have an average of 20,859 workers, so about 40 million workers would receive higher pay. It would take a national corporate charter law to make that possible. I got the figures from an essay by William Lazonick. He claims that 92% of corporate profits go to stock holders. We've read the news stories about how Walmart workers would receive a $6,000/year raise if buybacks were illegal and that money went to employee wages. Last thought: The web page RealTime Inequality (a product of U.C. Berkeley economists) shows that since 1976 the income distribution has shifted enormously; the lower-earning 90% of households were earning 63% of all income and now they earn 48%, a shift of 15.4%. If we had the '76 ratio, then each household would have around $30,000 more income each year. Hard to believe, but it is logical, at least. We had affordability previously, we can find a way to achieve it again.
Happy Thanksgiving, Jared!
I propose that there is a bubble in articles about an AI bubble.
There's something strange in the unemployment graph. In almost all of the cases where unemployment went from falling to rising the onset of the rise was rapid. In other words UE went from slowly declining to rising rapidly very quickly and corresponding with a recession in almost every case. But now UE has been rising slowly for a long time. It looks very different from all the other reversals in the chart. Why???
We pay roughly twice as much for brand name prescription drugs as other countries. Negotiating a 50% discount would be deflationary. Deflation in prescription drug prices would be a boost to the economy. (Except for the pharmacy benefit managers, insurance companies, group purchasing organizations, and pharmacies owned by insurance companies. )
Dr Bernstein wrote that we need to: "reduce regulatory sludge, subsidize where needed, increase competition". We need to use monopoly power, not competition, to lower drug prices.
I assume in AI capex you include (as the WSJ does) not just chips and servers but also the AI data center building boom, namely, land purchases, construction, the hooking up utilities (electricity and water) to the data centers, etc.
Do any of the sources you see break out the former from the latter in terms of their current economic effect on GDP growth?
That is, how much of our current growth is the result of a temporary (and probably misguided) commercial real estate bubble?
Politicians know predictions are about convincing people today, not being right tomorrow. -- Daniel Gardner
AI is only as good as the input entered. I at this point do not want computers telling me what I want to hear or say.
Humm,,, mine is completing my sentences as I type this, grabbing my info nonstop and pretty much trying to prioritize what I “ search” for….Best just to increase personal vigilance and appreciate spell- correction…