Thursday, December 30, 2021

Wrap Up for December 2021

"Booms and busts affect low-wage workers the most."

Data finally show when people move from unemployment to self employment.

The placebo effect is apparently stronger in the U.S. than in other nations.

Despite recent appearances, migration remains historically low. "For three years running, the national migration rate has stood below 10%.

Net worth has soared in relation to actual economic growth.

China's lack of water could prove an unfortunate game changer for its manufacturing capacity.

China "doubles down" on its property sector.

Early on, healthcare was still responsive to deindustrialization. "In historical perspective, the process appears in close parallel to mass incarceration."

A book review of Grand Transitions by Vaclav Smil.

Are there ways to increase the cost of Nimbyism?

Low paid healthcare workers are in especially short supply now. And, why are physicians faced with such struggles?

The Biden administration is inexplicably raising the cost of building homes (NPR).

Alas, there's not much Christmas spirit in Washington this year.

"Drug lords would be horrified if we ended the drug war."

If only more communities had a monthly ritual like this.

There's an app that lets you lend your eyes to a blind person.

Noah Smith returns to techno-optimism.

The first year of the Great Depression was "100% tight money".

China doesn't really have a safe route forward.

There is increasing pressure on the Fed to take up what are populist goals.

What happens when everyone demands employment that's solely high skill human capital?

What makes a quarter point so important?

The new Medicare model keeps up to 40% of revenues for its own profit.

Another area of life which could benefit from time arbitrage: the lost art of listening to others.

The "Great Resignation" has been more of a Big Switch than a Big Quit.

Timothy Lee explains the "expectations channel" in easy to understand terms.

Inflation affects high income versus low income populations somewhat differently.

Democratic rights gains over time: First, the good news. However, democracy in the U.S. can no longer be taken for granted in the near future. Plus, a negative international trend towards lost freedoms, began in 2006.

When oil prices rise, the resulting inflation is only temporary.

A crisis of capitalism? On the contrary, its production methods remain both dominant and stable.

Since healthcare in the U.S. is not free market, both low income groups and other markets have suffered the consequence.

Not all flood proofing infrastructure has to be government planned. Also, creating drinkable water from the atmosphere.

Scott Sumner highlights some immigration issues.

Climate change responses include their own opportunity costs.

What made this recent supply chain problem so different?

An introduction to economic complexity.

What happens when producers simply "demand" their own goods?

David Andolfatto interviews David Beckworth in this end of year podcast.

There's not really a truck driver shortage, after all.

However, there is definitely a car shortage. And dealership expectations amplified the problem.

Who should we be keeping up with in 2022?

Tuesday, November 30, 2021

Wrap Up for November 2021

Did Baby Boomers really ruin it for everyone else?

30 percent of Republicans now believe violence may be warranted.

A different knowledge systems approach is needed for public health labs which sometimes require more education than can realistically be compensated.

How relevant are supply and demand for macro level inflation?

Could deglobalization also prove problematic for inflation?

When it comes to economic growth, governments sometimes imagine they are the ones in control.

Prior to the pandemic, Texas led every state in rural hospital closures.

Some capitalism basics from Miles Kimball.

"Is economics fit for the modern world?"

Algorithms could do a lot of good, but not if bias is built into their design.

The evidence has only grown that the Great Recession caused the housing crisis, not the other way around. "There was never a national housing glut."

Many traffic stops are really about increasing municipal revenue. One might even designate this as a "highway robbery" example of the Baumol effect.

Dementia is a major public policy challenge.

A closer look at supply side bottlenecks in U.S. healthcare.

Private insurance for aging needs is no longer a realistic option on a middle class income.

Medicare and Medicaid are subject to more billing uncertainties than private insurance.

This "inflation problem" is actually a lack of real GDP growth.

Disparities in state level health outcomes have grown in recent decades.

An update on economic conditions from Matthew Klein.

Is the U.S. well positioned for AI adaptation?

Difficulties in hiring are leading to further automation. Robots for "unpopular night shifts" sounds like a particularly good idea.

It doesn't take much for excess demand in manufactured goods to result in bottlenecks.

When it comes to politics, the adults have left the building. Will democracy survive?

The pandemic has left many healthcare workers worried about the future of medicine. Alex Tabarrok also highlights how many have left the profession.

A closer look at international convergence.

An in depth consideration of state capacity.

The China trade shock reached a plateau in 2010.

What construction innovation is actually getting utilized? And, "The assembly line was part of a long series of efforts to streamline the production process, all built on a foundation of interchangeable parts."

Will minerals for the renewable energy transition become accessible in the U.S.?

China's growth trajectory continues slowing down.

Childcare as an apt example of services needs: When the personal time of others is the product we're seeking, "You can't raise wages without raising costs." 

When, and how, is social mobility a positive outcome?

The likelihood of job loss due to automation, is also a factor in radicalization.

Recycling may come early to electric vehicle batteries.

Agriculture as an echo of technological progress in general.

Supply side circumstance aren't as simple as they sometimes appear.

Few people are taking on the role of distilling research.

Matthew Klein explains to David Beckworth why we shouldn't be worried about inflation right now.

Macroeconomics would be less confusing with a nominal spending/real output model.

Sunday, October 31, 2021

Wrap Up for October 2021

U.S tariff rates are now insanely high.

Our working lives in time based services are being reconsidered.

A look at the productivity slowdown which took place in the seventies.

Too much of China's power needs are still being met by coal.

Peter Boettke on efforts to "repair a broken world".

"Increasing the national debt is not popular."

Staying open while still controlling Covid, has been a delicate balance.

Is drama over the debt ceiling more than "just theater" this time?

We are far more polarized than we were in the past.

Even though meritocracy is problematic in multiple respects, it is still better than the alternative.

Some reasons for deficit worries are more reasonable than others.

"Do Not Blame Trade for the Decline in Manufacturing Jobs."

Sketching out a theory of construction productivity.

Durable goods as a more reliable source of recession recovery.

"A Nobel Prize for the Credibility Revolution." And, "David Card on the return to schooling" Timothy Taylor also discusses causality.

The goals of fiscal policy aren't as easy to pin down as the goals of monetary policy.

Scott Sumner discusses his new book with David Beckworth.

There's plenty of reasons it's not really working to tax the rich. Plus a related discussion re opportunity zones as tax havens.

How high will house prices go in 2022?

Efforts to reduce overfishing in the U.S. have proven successful.

Everywhere you look there are bottlenecks. But goods have rebounded more than services.

Stagflation? We're not even close to what the seventies were like.

If the nation defaults on debt payments, what are the consequence? How to respond?

When it comes to supply chains for electric vehicles, there's plenty of work to be done.

Jason Furman considers why recent productivity is higher in the U.S.

"A Critique of Interest Rate-Oriented Monetary Economics" Also, "The Princeton School and the Zero Lower Bound"

Ryan Avent suggests a "Commonwealth of the Americas".

What does meaningful work consist of?

Taking proactive steps for climate change.

Hopefully the Fed will not overreact to higher inflation.

States benefited in the 1850s when they slaughtered special interests.

Community ownership has reduced deforestation.

Without fiscal assistance, the economic effects of the pandemic could have been worse than the Great Depression.

Which will prevail, robots or full employment? 

Are sugar subsidies here to stay?

States are waking up to the fact non-compete agreements create unnecessary burdens.

Services are evolving. But how will they contribute to productivity gains?

The labour market has changed in unexpected ways.

"The Rise of Pass-Throughs and the Decline of the Labor Share" When it comes to tax avoidance, plenty of undeclared high skill self employment hours remain hidden.

Diane Coyle reviews Radical Uncertainty.

Extreme political polarization makes the U.S. an unreliable geopolitical partner.

Lessons learned from the Great Recession helped the Fed respond to the pandemic. Also, a closer look at recent progress.

Unique circumstances led to the creation of GDP as an economic measure.

Saturday, October 23, 2021

Is Time Arbitrage Feasible For Post Covid Economies?

Even though time arbitrage would be a complex undertaking (particularly for large scale versions), today's time based services are nevertheless being called into question, as post Covid realities gradually emerge. Plus there's plenty of unknowns in time based service markets which represent a wide range of knowledge, skill, and yes, physical activities as well. How will societies ultimately respond?

While problems were already evident in secondary markets such as healthcare before the pandemic, there's also recent troubles for time based services that are directly linked to originating (primary market) wealth. For instance, both manufacturers and home improvement retailers have limited incentive to compensate the time based labour involved in installations and repairs at private residences. Worse, these resulting service labour shortages are amplified by resistance among service workers who were never really keen on commuting to outlying areas in the first place! Indeed, a CEO for Whirlpool expressed concern that labour shortages may in fact be structural. Likewise, Zillow, recently had to stop purchasing homes when it struggled to secure sufficient timely labour in order to resell at a profit.

More specifically, what can be done at local levels, should time centered services become increasingly difficult to procure from a distance? Just as time arbitrage could function as a primary market substitute for some of today's secondary markets in knowledge and skill, it could also shore up missing services associated with traditional primary markets. In many instances, time arbitrage could benefit coordination patterns in local services where strength and physical stamina may be just as important as knowledge and skill. Since many manufacturers and retailers have become compromised in terms of services employment potential, they could shift towards establishing commodity and goods specific educational support for their product to local community levels. Doing so would also allow local citizens to more meaningfully incorporate home renovation and appliance maintenance needs in their (time symmetric) educational settings Even though local citizens would not be employed by home improvement manufacturers and retailers, they still have incentive to work with these firms for an outcome that would help both groups. Best, a hub and spoke (or city to country) educational approach could help recreate formal services economies where they are most needed. 

Better use of coordinated time symmetry could eventually help restore structural balance to economic conditions in general. Chances are, efforts to bring time value to the table for market outcomes, would result in greater general equilibrium representation for direct forms of wealth creation than is presently the case. After all, there's a good chance that 80 percent monetary representation for services was too much to begin with, to maintain long term economic stability. Only consider the prominent example of structural imbalance in our healthcare knowledge use patterns. Even Noah Smith recently challenged "shoveling money at overpriced service industries", hence has become one of many who wonder why governments continue to subsidize vital services purposely made scarce in the twentieth century.

Long term economic stability may well depend on whether societies are able to make time value a more important component of formal economic activity. All the more so, since many communities already struggle to provide the kinds of local services which are so beneficial for citizen outcomes. When it comes to general equilibrium dynamics, time arbitrage might at least be able to reduce the discrepancy between monetary representation for services versus traditional wealth sources, to 70 percent versus 30 percent. 

A more reasonable sectoral balance could improve the long term odds of good economic complexity in our formal activities. One way to think about the processes involved, is how such efforts might ensure reliable forms of societal coordination to transfer knowledge and skill which can be understood by most citizens. Otherwise - if and when service markets become distorted - people understandably react with DIY measures instead of - for example - benefiting from healthcare services provided by others. Granted, DIY is often the most practical strategy. But done in excess, extreme self reliance might put the long term preservation and transfer of knowledge use through society, in doubt. And should too many of us end up resorting to DIY, when might the process eventually evolve into a tipping point of informal economic activity, even in places where it was never expected? Alas, informal economies have their problems (such as oppressive amounts of gang activity) and often prove difficult to change once entrenched. If we can avoid it, let's just not go there. Hopefully, societies will learn to better coordinate services so that knowledge and skill can be preserved, hence remain part of our formal economies in the foreseeable future.

Thursday, September 30, 2021

Wrap Up for September 2021

"Economists should be wary of ideas that cut supply."

"In a heatwave, lively streets save lives."

Do inequalities in income negatively impact the natural interest rate?

Medicare warnings have been (consecutively) issued for four years already.

Economic asymmetries have become more dominant in the last twenty years.

Growth can also mean finding "more efficient ways to use the stuff we have".

How many unfilled employment positions might actually be due to lousy software?

Conservatism is changing.

Financial crisis and the radicalized voter.

Is there rationale for being an inflation "crank"?

Scott Sumner highlights some useful posts from Trevor Chow

"Will Employers Cast a Wider Net?"

Why has innovation been so slow?

"people who expect to earn the most are less likely to sign up for ISAs."

Births never rebounded after the Great Recession.

Market monetarism is more monetarist than Keynesian.

Despite the shift in economic approach, structural remedies - for services in particular - still are not on the horizon.

George Selgin reviews Scott Sumner's latest book.

Democrats hope to increase Medicare's benefits even as it runs out of money. Wait, what?

More housing would be a single solution for multiple problems.

Matt Klein takes a closer look at recent inflation concerns.

Will state control reverse extensive societal gains? Alas, sometimes it feels that way.

Carbon footprints as a personal journey.

The more expensive the location, the more likely its inhabitants will reduce routine activities. This study is another way to think about the effect as well.

Young men are in trouble. Yet women have problems too. Why not help both.

The paper also suggests societies are no longer susceptible to this barbarianism model. If only that were true! Yet democracies could still be successful if they remain committed to economic growth and continued prosperity.

Inflation is not caused by changes in relative prices.

Why not build new versions of prosperous community which don't require government funding?

The Niskanen Center takes a closer look at the "cost disease".

A 2020 census map of American diversity.

Evergrande as the beginning of a debt cycle shift.

Is cell-cultured meat economically viable?

"Peak car" has already arrived. Perhaps the nature of the automotive chip shortage is part of the problem.

Given the institutional uncertainties of today's time centered services, paying to be insured for long term care might not be such a good idea after all. 

As it turns out, purposeful supply side limits in healthcare were a contrary example of the non rivalry of knowledge detailed by Paul Romer. 

When is monetary policy neutral? When is this not the case?

Deep-learning researchers are approaching the frontier of what today's tools can readily accomplish.

"The failure to industrialize construction makes us all poorer."

Noah Smith is also concerned about lack of productivity in construction.

Saturday, September 11, 2021

Walkable Community Can't Happen Soon Enough

If only we already had more walkable communities! While they are occasionally found in high income locations, lower income groups could especially benefit from them. After all, local walkability reduces transportation costs, which in turn makes it easier to budget for local housing options. 

One wonders whether this logic is included in billionaire Marc Lore's plans which could eventually produce a walkable city. Alas, his vision is only on the drawing board at the moment. Indeed, for anyone whose life could be enhanced by walkable community in the here and now, Lore's initial starting point of 2030 must seem a long way off. According to CNN:

The former Walmart executive last week unveiled plans for Telosa, a sustainable metropolis that he hopes to create, from scratch, in the American desert. The ambitious 150,000-acre proposal promises eco-friendly architecture, sustainable energy production and a purportedly drought-resistant water system. A so-called "15 minute city design" will allow residents to access their workplaces, schools and amenities within a quarter-hour commute of their homes.

For one thing, it's not helpful to frame these efforts as cultural battles, as Tucker Carlson recently did.  In particular, petroleum production will continue to be an important part of near future market patterns for all populations. There's no need to imagine petroleum production as mostly advantageous for rural dwellers and others who embrace the low population densities associated with automotive ownership. Hopefully, petroleum production will continue to enhance a wide range of global markets, even as other energy sources gradually come to the fore. In all of this, we can encourage free markets which represent a diverse range of population densities. If national governments are willing to remain open minded re diverse market preservation, we stand a better chance of preserving market freedoms at local and state levels as well. 

Nevertheless there's some wishful thinking in this latest city building attempt, which needs to be addressed. While "human centered" communities are a reasonable desire, who really knows what that means? Fortunately, a better understanding could be gleaned via the active discovery of individual and group time preferences, through markets for time value. Time based service markets would make it easier to discern preferences that could translate into local time and space design. A free market orientation for time value, is vitally important for any "15 minute city design" to function as intended. Otherwise, participating groups would struggle to effectively coordinate times and places for getting things done.

Mutually determined individual/group needs are key for services based markets in the 21st century. In all of this, intentional markets should not mean imposing specific group preferences on other groups with different outlooks and lifestyles. Rather, intentional markets could create better defined environments that respect personal choice, so as to broaden market possibilities for everyone.

Tuesday, August 31, 2021

Wrap Up for August 2021

When homeownership makes people selfish and exclusive.

What workplace learning options currently exist, which don't require college?

A perspective on "the economic origins of mass incarceration".

Some recycling has proven difficult to achieve profitably. Nevertheless, recycling progress is being made.

"big institutions can't get enough of family homes."

When "permanence" is out of reach: "At the very least, if we can't build infrastructure to last we should build infrastructure that can be repaired using material, energy and skills that are likely to be around when it inevitably fails, at some point in the future."

How much trust has really been lost?

What actually "constitutes a civilisation"?

The U.S. does a great job of freight railroads, but is lousy at passenger rail.

Water wars are coming to Texas.

Could tunnels provide efficient transportation?

Has inflation really gotten out of hand?

Deliberation as antidote to partisanship.

Degrowthers are essentially at an impasse.

Real estate property rights go well beyond the landowner.

Is something positive happening in rural America?

Building with what we already have in abundance. Plus, human scale, parts I and II. 

Authoritarian nationalism as the most important political development of the 21st century.

Giles Wilkes on the UK services productivity debate. Some refer to services as a foundational economy. Also, sectoral bragging isn't helpful. 

Oysters as a natural source of pollution removal.

Should childless Americans really be part of the culture war?

The Afghanistan war was in some respects actually a success. Indeed, it seems the country has gone back to its natural rulers.

Illustrations by county for rent affordability.

Population growth has dramatically declined.

Texas demographics are changing. Also, illustration for U.S. counties.

Variation and unpredictability slow down production processes.

Do intermediate services diminish the dangers of the Baumol effect?

"in low wage environments, low-income families will impart values of obedience to their children to prevent disadvantaging them in the labor market."

The U.S. became increasingly polarized over the last four decades.

"Sovereignty will steadily decline."

What caused the supply side losses for U.S. healthcare in the early 20th century? However, hospitals took a different market approach.

Preserving the Colorado River basin.

Climate change may also pose risks to growth.

What if the Taylor Rule had been strictly followed?

Why are so many resources for capital being idled? And, Before production gains showed up in worker's wages, early capitalists plowed their new wealth back into more capital to create further output.

Deficit hawks never got their moment. But why?

The Afghanistan tragedy has been twenty years in the making.

Aging demographics affect general equilibrium outcomes.

Stories we tell ourselves about ownership.

Universalism in economic behavior.

Which income groups are actually facing the most inflation?

In the 21st century, the term NIMBY became associated with an identifiable "villain". Consequently housing access is now recognized as a collective action problem.

"Most spending on goods and services isn't done by the rich, but by the poor and middle class."

Change is coming to rural areas.

Afghanistan's economic collapse. 

"The Financial Channel of Wage Ridigidy" And Scott Sumner reminds his readers of the relevance this paper holds for the musical chairs model.

Interest rates in a time of inequality and changing demographics.

Rural environs as the new Confederacy? 

Thursday, August 26, 2021

The Role of Formal Education in Cultural Divides

What makes our formal educational institutions such a problem when it comes to long term economic stability? Unfortunately, they contribute to our cultural battles by dividing people into haves and have nots, when it comes to skill sets and access to vital information. While this is obviously a problem for citizens in mature economies, these educational divides impact lesser developed nations as well. 

For instance, when emerging economies lack sufficient wealth sources to fund high level human skill, formal education can become associated with "brain drains" or possibly even the need to escape one's country to achieve success. Hence such circumstance pose a threat to many in underdeveloped countries (alas, such as Afghanistan), where knowledge based skills are not yet a dominant factor for local economic activity. Indeed, how could "nation building" ever substitute for the economic pursuits which local citizens need to generate for themselves?

In advanced economies, cultural divides play out differently. All too often, the asymmetrical financial obligations of today's human capital, can crowd more direct wealth sources. Not surprisingly, battles over who even "deserves" access to high skill human capital, lead to social instability and polarization. This lack of long term monetary sustainability for high skill human capital, is already undermining national economies regardless of their level of economic complexity. Hopefully it is not too late to embrace a wide range of valuable human capital formation which doesn't require college degrees, familial wealth, or extensive monetary compensation for that matter. I believe it is still possible to make time use an integral source of wealth in its own right. With a little luck, our formal educational institutions may eventually recognize the need for such an approach as well. 

At the very least, nations now sense that nation building is not a reasonable option. What's more, top down "solutions" leave little room for the true potential of local knowledge and skill alongside tradable sector wealth sources. In order to bridge our cultural divides, new communities are needed, where local participants can generate sustainable sources for human capital formation. Such communities could actually function as knowledge priors, since participating group time could be coordinated symmetrically. Reciprocal time value would in turn allow new wealth to be built via knowledge and skill, without need of compensation from other forms of wealth. 

The monetary flows which exist between primary and secondary markets, affect our structural economic realities in ways that aren't always easy to understood. Let's observe more closely, the nature of existing originating wealth sources. Why do they already exist, and how might they be further augmented? Applied knowledge via coordinated time could serve as a more direct form of wealth creation, so that primary markets eventually come into better balance with dependent or secondary markets. Best, more efficient patterns for human capital formation, would make it possible to address the limitations of formal education which exacerbate our cultural divides.

Thursday, August 5, 2021

Is Social Mobility Not as Beneficial as Equality?

Like many - especially those of us with limited means - I believe social mobility is important for personal aspirations and economic access. Of late, the Olympics has been providing some inspiring examples. However, a recent post from Chris Dillow reminds how some on the left are quick to dismiss social mobility as a real positive. Their dislike of the societal need for social mobility, is something I've never quite understood. 

In his post, Chris Dillow presents a more nuanced perspective. He's also realistic in asserting that class issues will never be completely eradicated. For that matter, despite our occasional frustrations with meritocracy, at least it functions better than earlier aristocratic norms. Dillow sums up:

The point of all this is not to say that young working class people should not be ambitious. Instead, it is to suggest that social mobility is no substitute for genuine equality.

Perhaps more discussions along these lines would be worthwhile, especially if it could reduce our constant culture wars. It would be great if class perspectives and framing, could help reduce the excessive focus on identity politics. Nevertheless, people have different images in mind, when they conceptualize "genuine equality". For one thing, I believe that income redistribution should not be a primary focus in these matters. Even if societies could somehow wave a magic wand to reduce existing inequalities via monetary means, what would we get? Especially since our most pressing inequalities tend to involve resources which are aligned with time and space. Chances are, these are the areas we need to focus on the most.

When money is envisioned as sole solution for existing inequalities, too many intangibles and unknowns are left in the picture. How much income would ever be "enough" to pay ones basic bills, for instance? For one thing, societies are often inclined to raise prices for our most basic needs whenever local income levels rise. In other words everyone gets higher prices chasing higher incomes and we're essentially in the same position as before. 

Chances are, market solutions which lead to good deflation in non tradable sectors, might prove a more tangible and practical approach. In particular, good deflation in time based services would allow a wide range of other market prices to benefit from lower operational costs as well. Like the circumstantial nature of social mobility, market solutions could create tangible rewards that give small income levels more discretionary freedom. Supply side production reforms, much as social mobility benefits, would focus on what can be accomplished in the here and now, instead of getting lost in wishful thinking.

Production reform would be incremental and specific in nature, yet it holds considerable potential to create more positive outcomes. The long struggle to make various groups responsible for the welfare of other groups, is no longer working as well as it once did. We might accomplish much more, by creating better market opportunities for aspects of life which simply haven't responded well to income redistribution. In all of this, an important path to greater equality, is the creation of viable market options for everything we connect to specific time and place.

Let's make peace with the fact that money simply can't accomplish everyone that societies might hope for. Indeed, the sooner we make that peace, the sooner we could build markets in time value which surpass the monetary limitations of present knowledge providers. Plus, the sooner we make room for housing which is not imagined as "permanence", the less expensive it will be to maintain and reconfigure these structures once the need arises to do so. Why not build a better, more agile economy where everyone benefits from good deflation in non tradable sectors? Chances are, existing inequalities would also be eased. It's time to get started. 

Friday, July 30, 2021

Wrap Up for July 2021

What shifts in labour demand since the pandemic, are most likely to last?

"In a saner world, it would be advocates of government intervention who would insist upon a proper and regular assessment of its works."

El Salvador provides a teaching example for different monetary roles.

"the age-earnings profile is getting both higher and later in life."

For Scott Sumner, productivity losses are one of the most important economic stories.

The Agricultural Revolution was overshadowed by the Industrial Revolution.

Which economic patterns will return to normal?

A book review: Colonial Ecology, Atlantic Economy

A Texas example for sustainable towns  

Some concerns regarding digital currencies. 

"Market observers said they have already begun to see diminishing demand for units in older buildings in the areas that are typically occupied by lower-income tenants and retirees" 

Lowering carbon emissions would require lifestyle changes which nations have yet to address. 

What kind of utilitarianism is most reasonable?

"Eventually some structures and activities will retreat from the coast because they are not economic. Maintenance and insurance costs will increasingly be factored into decisions about where people choose to live, work and invest."

The condo collapse in Surfside, was an extreme example of the kind of infighting HOAs often face.

Some explorations of long-run growth.

Solar and wind have become competitive to the point of no longer needing subsidies.

Low interest rates are not a policy, but an outcome of both monetary and non monetary factors.

Why is Cuba in such dire straits?

What will happen to the High Streets after the pandemic?

Is inflation always a monetary phenomenon?

Climate change is affecting the productivity levels of U.S. wheat crops.

Who is journalism actually for?

Inflation levels face the challenges of demographics, globalization, and E-Commerce.

What would Milton Friedman think of today's monetary policy?

"Our economy doesn't create meaningful high-paying work for people, and that's the problem."

Are our daily lives too comfortable and convenient?

The move from a gold standard to one of fiat money, wasn't easy.

When does technology have broader purpose?

Brian Potter looks at sixty years of homebuilding.

Homebuilders are finding it difficult to build homes that are affordable for first time homebuyers.

The "leakage problem" adds extensive and often unnecessary infrastructure costs.

What is inflation, and why does it matter?

An astonishing survey re confidence in institutions.

Interesting addition to books which seek to "mend a broken society".

The authors of this study found a pronounced rise in cognitive distortions since the turn of the century.

Some jobs won't come back.

Limited supply made the housing market "too hot" during the spring.

In Britain, "Neo-Nazis make up 20% of the current prison terrorist population"

Even though utility is difficult to measure, so are other policy goals. Should policy makers embrace utility?

Why are high administrative costs for healthcare in the U.S. so difficult to reduce?

Saturday, July 17, 2021

Could Building Maintenance Become Less Costly?

The recent condo collapse in Florida serves as a reminder, that many concrete structures are overdue for millions in repairs. And already it's evident how rusting steel contributed to the condo's demise. But what makes steel rebar so important for concrete construction in the first place? Indeed, this is far more than a cost concern for residential condo owners, since much of a nation's physical infrastructure is also composed of concrete and steel. At the very least, a recent Axios article notes some possibilities which might lessen long term maintenance costs for physical infrastructure:

The rebar can be made more resistant to rust, by coating it in zinc, or passing an electric current through it, or making it out of glass-fiber reinforced  polymer, or carbon fiber, or bronzed aluminum, instead of steel. Such actions involve greater upfront cost, while saving a lot of money over the long term. 

It's even possible that some concrete buildings might not need any reinforcement at all, so long as the concrete is only under compression. No steel rebar means no erosion, after all. But that's still a step too far for most architects and engineers - and most buildings will always end up passing some kind of steel pipes through the external concrete, for things like water, gas, and electricity.

While the above recommendations could prove helpful, the higher upfront costs of those initial suggestions are less likely to be adopted in residential construction, where individual owners bear ultimate responsibility for both upfront costs and long term maintenance. What about the possibility of relying on compression instead of steel rebar? For one, I question the rationale that people should pass pipes and wiring through walls to building interiors for utility needs. Not only does this procedure mean higher upfront costs, but it includes long term maintenance requirements which have become prohibitive for lower income groups. 

Fortunately there are viable ways to avoid internal utility installations, altogether. It's time to explore the advantages of external utility compartments, which could be designed without "permanent" connections to building materials such as wood, brick, stone or concrete. Only recall how many of these connections have to be broken, sooner or later. 

External and detachable utility compartments would not only benefit individual property owners, but also those with shared ownership in multi level building construction. The adoption of such technology should make it simple to embrace concrete construction which relies on compression rather than steel rebar. While external utilities might limit design ideas for internal floor space and layout, that would be a small sacrifice, given the ultimate gains in both initial and long term building costs.

Much about future growth and prosperity, depends on our ability to improve building construction of all kinds. Let's contribute to the process with improvements in flexible design. Granted, as a older Baby Boomer, I know it's a bit late to expect innovation which translates into affordable housing retirement options for myself. Indeed, the main affordable "options" for many retirees are deteriorated older homes in need of extensive utility renovations! Small wonder some Baby Boomers are remaining in place (with sizable homes consequently kept out of the marketplace), when they would otherwise seek to downsize.

In all of this, recent questioning about the safety of old condos (many of which house older folks), puts additional housing supply pressures on communities which refuse land sales for tiny homes. This especially affects retirees who lack the stamina to start over with dilapidated housing stock, and recognize tiny homes as a cost effective, low maintenance way to avoid doing so! But who knows, within the next decade, communities might become open to zoning which better reflects retiree's needs. Plus, architects and engineers could also embrace external utility compartment design. If they do, that would benefit people of all ages and income levels, not just retirees. External utility compartments would also make it easier for people of all ages and incomes to renovate older housing stock, some of which otherwise is likely to be demolished due to long term neglect. With a little luck, perhaps the last of the Baby Boomers will finally gain real retirement housing options which retirees such as myself only dream about.

Tuesday, July 6, 2021

Addressing the Confusing Incentives of Shared Ownership

The tragedy which unfolded recently at Champlain Towers South, has also exposed some basic problems regarding shared ownership for physical properties. When it comes to shared ownership: the larger the relevant structure, and the closer its proximity to other installations, the more difficult it may be for all involved to resolve maintenance issues. 

Many who have paid close attention to these events in Surfside Florida, are at least gaining a better understanding re complexities in shared ownership responsibilities. As it turns out, when maintenance delays accumulate exponentially, the situation will sometimes prove impossible to successfully resolve. For instance, in the case of Champlain South, due in part to "extensive concrete deterioration and corrosion of reinforcement", Morabito Consultants indicated it would not be able to perform some much needed remediation that had been deemed necessary. There were also questions in this October 2020 assessment, whether full repairs might negatively impact nearby structural features. 

Hence Champlain Towers South became "a catastrophe in slow motion". An article from CNN discusses some of the relevant ownership issues:

The disaster appears to have exposed some of the limitations of condo associations, which are made up of condominium owners with a vested interest in the property but that seldom possess much expertise in structural engineering. And it has raised questions about whether other residential structures could be at risk in Miami-Dade County, where sea levels are rising, the salty air is corrosive and nearly two-thirds of all commercial, condo and apartment buildings are as old or older than the 40-year old edifice that went down.

Granted, the collapse doesn't necessarily mean excessive risk elsewhere, since much also depends on the degree of ongoing maintenance. Nevertheless, as Peter Dyga, the president of Associated Builders and Contractors noted,

We're probably going to overreact. But it's understandable--people want a level of assurance that their building is safe.

It's being said this is a "wake up call on many fronts" - one which basically translates into more laws, regulations and building inspections. But might this be our only societal response? How will additional regulations accomplish what is truly needed in this instance? Already, the condo residents were quite aware of ongoing problems due in part to regulations already on the books, not to mention ongoing inspections. Chances are, the main problem was finding a "meeting of the minds" in a timely manner. Of course, what would have been timely, given the extensive concrete issues?

These shared ownership issues are problematic in much of housing in general. Only considered for instance, how shared family ownership in single family housing (which may be further undermined by family law rigidity), often results in extensive housing deterioration. Clearly, the difficulty of achieving "meetings of the minds" can mean maintenance breakdowns for shared ownership in every capacity imaginable. 

For one thing, proactive market frameworks are needed which leave more room for individual decision making as to ongoing maintenance. In other words, more promotion of home ownership specifically for individuals. However, this post is primarily about problems in shared ownership and how they might be addressed. Perhaps the best possibility is a "meeting of the minds" in free market building innovation, to reduce need for intensive long term maintenance, altogether. Only consider that when ongoing maintenance is neglected, that often leads to a costly "starting from scratch" at some point. 

Meanwhile, we've been learning some hard lessons about basic 20th century innovations. Concrete maintenance is beginning to emerging as an important issue. Equally important however, are the long term maintenance problems of today's plumbing and electrical systems. Even though 20th century plumbing brought tremendous gains in health and public sanitation, much of it was constructed in ways which pose additional stressors for buildings of all kinds. Some of what is becoming obsolete, is not easy to remove and replace without compromising structural integrity. Equally important, is how the fact plumbing pipes and electrical wiring were installed behind walls and interiors, makes it difficult for lower income groups or (many) senior citizens to participate in basic maintenance responsibilities. 

Even when monies are available for extensive renovations in older structures, it sometimes proves impossible for people to live normal lives (in place) in these buildings, once extensive maintenance needs arise. For example, consider how even the desire of condo owners in Champlain South to keep their pool in use, is one factor which made complete renovations impossible. It's not difficult to extrapolate this example to deterioration in older homes that are continuously lived in and essentially co-owned by multiple family members, once electrical and plumbing systems near the end of their useful lives. Often when completely new beginnings are required for these systems - especially if they have otherwise damaged the buildings in some capacity - it may prove impractical to live in the affected buildings for at least a full year.

Ultimately, greater flexibility is needed. It's time to design external home components for plumbing and electrical which can be changed out as needed, so we won't routinely have to take jackhammers or axes to "permanent" building fixtures. Doing so is almost always a major inconvenience! As it turns out, much of our so called building permanence since the 20th century has been largely an illusion, especially in a time of climate change. The need for greater building component flexibility should be obvious to everyone by now, since the short life cycles of plumbing and electrical systems in interior walls are becoming more evident by the day -  let alone what occurs when concrete and steel are exposed to the elements! Let's build in the future, so that both interior and exterior mini-demolitions will become less necessary - likewise the major demolitions that can be such a relief, once failed notions of permanence get out of hand.

Wednesday, June 30, 2021

Wrap Up for June 2021

By some estimates, there could be nearly a trillion dollars in deferred infrastructure maintenance.

Are we "better off"? It's complicated.

The politically homeless: "Last year marked the first time that there were more people registered as independents in the U.S. than Republicans or Democrats."

Pandemic circumstance turned broadband access into a necessity.

A closer look at the natural real rate and inflation expectations.

Lots of workers remain on the sidelines. Scott Sumner also considers the labour supply shock. Cyril Morong notes recent job gains for 25 to 54 year olds.

Why is the U.S. still so attached to timber for home building?

Not your average economic recovery.

A new safeguard to address sharp spikes in money market rates.

Part of the mismatch between employers and prospective employees, comes down to location.

It's been difficult for those with strong allergic reactions to the vaccine, to get definitive answers.

Much of the scarcity this time around, is artificial.

World trade is picking up more rapidly than expected. But there are regional disparities.

Some commodity prices are simply returning to pre-pandemic levels.

John Kay's book recommendations for "economics in the real world".

Given the unusual character of employment losses in the Covid recession, NGDP targeting should logically take a pause, but resume a normal path in the near future.

Markets are also spaces for social relationships.

Once again the Electoral College is under scrutiny.

When "enhancing consumer choice" is actually a betrayal of private property rights.

Addressing regional divides.

Wikipedia is more influential than some of us imagined.

Using Medicare's already fragile funding sources for this new drug: What were they thinking?

Adam Tooze touches on inflation basics, then discusses the Weimar hyperinflation.

 A Fed rule proposal to maintain nominal stability.

In many instances, women have been working all along.

Inflation: Which is transitory, and which is persistent?

"The untapped potential of less"

Practicality is making efficient use of the resources we already have.

A different approach is needed for the severely disabled.

"It seems that we approve of boundless intellectual property for nice people and no IP at all for scoundrels."

Milton Friedman did much to change the trajectory of monetary policy. He also stressed that monetary tools couldn't be used to address real targets.

Finally, progress in rights to repair.

"If you think of involuntary unemployment as being at the heart of recessions, you should start from a sticky wage framework, not a sticky price framework."

Will boarding houses make a return as affordable housing options? And last year, average household size increased for the first time in over 160 years.

On productive disagreement.

Housing in the seventies, versus now: similarities and differences.

Is industry concentration rising?

How could we regain our enthusiasm for the future?

Some unexpected leverage for low wage workers.

Training teams for mental health emergencies.

An unexpected price point for willingness to change behavior.

Social Security won't be an easy fix this time.

The shrinking role of the U.S. in global auto markets.

"Transformational cost reduction would have to come from changing what we think a house is." Also, "Why It's Hard to Innovate in Construction" Plus, "Why Did Agriculture Mechanize and Not Construction?"

The pandemic has affected our friendships.

Jason Furman and David Beckworth discuss fiscal possibilities in an era of low interest rates.

Balance as loyalty to group in exchange for freedom. 

What's behind the urge to quit? Also, some unemployed aren't coming back.

Peter Boettke remembers Steve Horwitz.

Water scarcity as a "classic externality risk."

Sunday, June 13, 2021

Frozen Foods Brought Economic and Cultural Change

As it turns out, frozen foods came with unanticipated effects which are still relevant. Once electrification transformed factory production, it also made widespread refrigeration feasible, which ultimately led to frozen foods manufacture. A quick Google search further elaborates:

During the 1940s, the volume of frozen foods available to consumers boomed. It wasn't until the 1950s, though, that the first frozen ready meals hit the shelves in the United States.

Once frozen meals made their way into our homes, the production based expectations of our interpersonal relationships began to dramatically shift. Not only did time use patterns change among those primarily responsible for kitchen duties, but also other family members - particularly for families with limited incomes. Even now, frozen foods in the form of prepared meals, remain one of the simplest cost effective ways to "save time" in the course of a day. 

However one trade-off in these recent changes, is that many processed frozen foods aren't necessarily healthy! Even so, frozen foods are valuable production and consumption options, since they promote personal autonomy by freeing more time for daily routines. Further, the trade-off decisions involved for optimal health versus time saving convenience, are a reminder how personal health involves more time based commitments, than today's healthcare systems can readily provide. 

There was also a cultural trade-off, in terms of the ambivalence surrounding what women could accomplish with their newfound freedom from domestic responsibilities. How might gender relationships change, once women experienced new lifestyle options? 

What was perhaps not widely recognized, is that women were only a part of this changed cultural equation. For one, frozen foods manufacture has given real benefits to men insofar as their own preferences for meals. Equally important is how young, old, and disabled individuals became able to assume more central and often desired roles in kitchen responsibilities. Nevertheless, some of us still love to cook from scratch, even though due to market evolution, cooking is no longer highly valued as a practical skill. Basically that means we end up having to eat more of the leftovers ourselves!

Consider what these changed realities also suggest, regarding other domestic burdens many still face. In particular, some individuals with limited income, lack the stamina to fully maintain dwellings which have yet to benefit from new technology. Only imagine, how innovation in building design and manufacture, might one day alter this unfortunate reality. Once individuals with limited means become better able to take care of needed renovations, their non economic time value would also be improved. Granted, frozen foods manufacture reduced non economic time value for many women. Hopefully these individuals (and countless others) can one day regain value for their non economic time, so as to master their environments with less need of expensive services and other assistance.   

In all of this, technological advances have changed social expectations and there's no going back to earlier cultural realities. This is relevant for both the right and left. Indeed, consider how many individuals of both sexes come to prefer cooking for one, to the compromises involved in routinely sharing meals with others. Likewise, some forget that a truly healthy diet includes more hours in the kitchen than what might be possible. Perhaps these are moments when one can at least cut some fruit and cook some fresh vegetables on the stove, to go with that prepared frozen entree which only needs to be briefly heated in the microwave. 

Monday, May 31, 2021

Wrap Up for May 2021

Noah Smith examines connections between labour and the value it actually creates. Plus, knowledge is power, even when it makes us uncomfortable.

Some (inside) historical perspective for the University of Chicago.

A look at the light side of modal papers.

An overview of the Texas power failure.

Emily Hamilton on housing affordability.

The feedback loop in traditional education is too slow. 

On the relevance of human networks.

Finally, a bipartisan agreement for updating water systems.

A new normal for wind and solar.

Innovations in technology can take decades to appear in productivity statistics.

A defense of inflation.

"Everything that determines the success or failure of a country has turned upside down."

A look at the bright side: restored forests.

When material interests turn the right away from free markets.

Buchanan believed that individuals should be trusted to help formulate market solutions.



For hospitals, the insurance company is the real customer.

"Transit thrives on density, which parking undermines, and parking and walking don't mix."

The strong association between population and regulations.

Why are recent debt burdens perceived as necessary?

"It is perplexing that we humans have felt so safe from fungi when we have known for centuries that our crops can be devastated from their attacks."

An apt example, how important flexibility is for surviving long term.

The politics of housing reform is no simple matter.

Anton Howes reflects on the long road to (gradually) increased state capacity.

JW Mason distinguishes aggregate demand from aggregate supply in hysteresis

The worst chip shortage is actually in chips which are not cutting edge.

What makes inflation such a touchy subject? 

Democrats have a "messaging problem".

A more inclusive approach to real estate ownership.

Diane Coyle reviews Ages of American Capitalism. Also, Bettering Humanomics.

A "new model of the macroeconomy". Or is it?

"The inflation expectations of U.S. firms"

Mark Carney discusses his new book with David Beckworth.

Tuesday, May 25, 2021

Don't Blame the Fed for Supply Side Recalcitrance

While there's a common refrain re "easy money" in a recent AEI article, this one comes with a twist. According to Tobias Peter and Edward Pinto, the Fed is also at fault for a growing divide in terms of inequality:  
The Fed's easy credit policies are widening wealth inequality as they fuel persistent home price inflation.
That's a serious charge. But how true is it? And does Chairman Powell - or the Fed for that matter - really not understand "how price inflation differs from inflation for commodities and services"? Granted, the authors have a point about current home price instability. But I believe these particular assertions against the Fed to be unsubstantiated and a convenient diversion from what's at stake. There's been plenty of times when it was appropriate to accuse the Fed of wrongheaded moves, but this isn't one of them. Rather, I'm encouraged by the Fed's recent maintenance of monetary velocity, especially given the difficult transitions of a post pandemic recovery. 

And insofar as the supply side is concerned re housing, technological innovation need not be as insurmountable as the authors imply. Of course builders struggle to meet demand due to high prices for labour and materials - not to mention NIMBY considerations! But when has this not been the case? Fortunately for all of us, a great deal of private sector activity has adapted and evolved, when faced with resource constraints. It's time for building sectors to do likewise, in shifting to manufacturing strategies which include more flexible means of ownership and land utilization. So we are within reason by asking at this historical juncture: if not now, when?

Also, consider the awkward policy expectations which Tobias Peter and Edward Pinto contribute to (re Fed obligations), by asserting:
The Fed's easy credit continues to drive housing demand higher, but has done little to boost supply.

Does this mean the Fed should somehow become more responsible for supply side circumstance? If so, in what capacity? The last time I checked, the Fed's primary responsibility was nominal in nature. Indeed, should they assume market activities currently neglected by other private interests, who is going to be comfortable with such an outcome? Hence even though this is an illogical assertion, it must seem occasionally "useful" anyway, since it implies private interests need not lose sleep over damaged markets. 

Another sad aspect regarding inappropriate blame, is that many in the Fed do take such criticisms quite seriously. Indeed, how often does Fed "meddling" actually mean members of the Fed are losing sleep on behalf of others less concerned? This is no minor matter, given the nature of present day structural shifts in the economy.

Just the same, one must be careful in assigning blame to today's non tradable sectors, despite their exacerbation of social inequality via quality requirements and lack of innovation. All the more so, since structural fault lines and their resulting disequilibrium, aren't easy to understood. What's at stake however, is that we start making up for lost time. Ultimately, it's real economy conditions instead of the nominal realm, which cause such social and political unrest. 

What about high house prices, then? Don't get me wrong, I dislike today's high house prices as much as the next person. But I'm not fool enough to imagine that tight money - let alone the possibility of bad deflation - would somehow make me more "equal" to anyone else. I don't want everyone to lose in this scenario, via the money illusion that would make it appear I was somehow getting ahead. Consequently, I'd rather not sacrifice the nominal stability that does more than anything else right now, to prevent an unraveling of mutual financial obligations and societal trust.

Sure, it would be great if I could find retirement housing that was more in line with my actual Social Security. But I'd still rather not witness millions of citizens facing a world of financial hurt, in the event of bad deflation and seriously falling house prices. Deflation simply isn't a good thing, unless it positively impacts output so as to make life better for all concerned. So, let's get serious about building homes and workplaces which take advantage of centuries of innovation. We've absolutely run out of excuses, and only further the damage all around by pretending it's not feasible to do so.