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.

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.

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.

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.

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? 

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.