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.

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.