Sunday, July 5, 2020

Is The NBA’s Reopening a Warning Sign for the U.S. Economy?



Tyler Cowen makes the case in his July 4th Bloomberg column that the failure of some NBA players to return to work has implications for the rest of the workforce:

Key snippets:
As a fan of professional basketball and a student of economic game theory, I am becoming increasingly concerned. I fear that the NBA, in particular, may be reflecting a still-hidden trend in the broader economy: People may not actually be so keen to return to work.

The NBA is planning to resume a fragment of its regular season, and then the playoffs, in a custom-tailored “bubble” in Orlando, Florida, on July 30. The games will be played only among the top teams in a single complex, with regular testing and tight regulations governing the entry of outsiders. The league is going to the maximum lengths possible to ensure a safe reopening.

There’s only one problem: An increasing number of players do not seem very interested in being guinea pigs in this experiment. At first the secessions were a trickle. Now they are picking up steam.

Davis Bertrans, arguably the second-best active player on my home team the Washington Wizards, will not play because he doesn’t want to risk injury and endanger his prospects as a free agent next season. That’s an entirely reasonable excuse, and more and more players are finding them....

These players will still be paid, but they are lowering their future market value by expressing less than a full commitment to the team. And it is hard to imagine that many other workplace environments can be made much safer than the planned NBA bubble...

In the normal business world, the superstars — in this case, the CEOs and other leaders — are indeed eager to resume and expand operations. But as with the NBA, the grumblings beneath the surface are real and growing.

How well will business reopenings go? If you wish to track the American economy, professional sports has never been a better place to look.
I am not sure Tyler has this right. Two facts stand out:

1. Some are apparently holding out because they don't want to injure themselves in an airball of a season when they have a big free agency contract in front of them.

2. According to Tyler, they will continue to get paid even if they don't play!

These are not circumstances that your average worker faces.

There are no big free agency contracts dangling in front of workers next year.

They are not going to get huge payments by just sitting at home (unless Trump extends the mad federal unemployment payments).

The NBA world and the rest of the labor force are two different worlds.

The NBA employment situation is not an indication as to what will occur in the rest of the economy.

-RW

Saturday, July 4, 2020

Price Inflation in Iran Hits 64%...

....according to Steve Hanke, who is keeping the best data on price inflation from country to country

-RW

Two Competing "Stimulus" Packages: One Pays You to Stay On Your Couch and Watch Netflix, The Other Pays You If You "Get the Economy Going" By Working


Casey B. Mulligan,   professor of economics at the University of Chicago and author of “You’re Hired!,” and Stephen Moore,  a co-founder of the Committee to Unleash Prosperity, report in The Wall Street Journal:
The White House will soon begin negotiating with congressional Democrats on a “Phase 4” economic revival plan. President Trump has repeatedly expressed his support for suspending the payroll tax through the end of the year as a way to stimulate jobs and help low- and middle-income families gain after-tax income. Speaker Nancy Pelosi opposes the idea. Instead, she’s pushing the $3 trillion spending bill that passed the House in May, which includes a six-month extension of the $600-a-week supplemental unemployment payments enacted in March, which are scheduled to end July 31.

These proposals create opposite economic incentives. The payroll tax suspension would reward employees for returning to their jobs and working more hours by providing a 7.5% rise in take home-pay immediately on income up to $137,700. (Income over this amount would still be taxed at the usual rate, which is lower.) The suspension of the additional 7.5% tax on employers’ wage and salary costs would encourage small businesses to hire more employees by reducing the cost.

The unemployment-benefit extension would discourage work. According to the Congressional Budget Office, it would pay 5 out of 6 workers more to stay unemployed than to return to their previous jobs. Already employers are having trouble persuading employees to come back.
The Pelosi program is, of course, mad and designed to keep unemployment high going into the November elections. Trump would display more mental deterioration than Joe Biden if he went along with it.

Of course, there are problems with Trump's plan if he doesn't cut government spending at the same time he cuts taxes. It would just be a shift in the manner of taxation.

-RW

Friday, July 3, 2020

Shock Resignation of Ukraine Central Bank Head

Yakiv Smolii
Ukraine's central bank chairman  has resigned.

In a statement, Smolii said he left the National Bank of Ukraine due to political pressure.

This may be as a result of a $5 billion eighteen-month loan Ukraine received as emergency funds due to the COVID-19 crisis, $2.9 billion of which has already been distributed.

His letter of resignation submitted to President Volodymyr Zelensky said:
For a long time, the National Bank of Ukraine has been under systematic political pressure. This makes it impossible for me, as the Governor, to effectively carry out my duties as the head of the National Bank of Ukraine and interact with other government agencies,” according to the statement posted prominently on the NBU's official site.
 “Under his leadership, Ukraine has made important strides in achieving price stability, amply demonstrating that an independent central bank is a key element of modern macroeconomic policymaking,” an IMF spokesman said in a statement.

“That is why the independence of the NBU is at the centre of Ukraine’s Fund-supported programme, and why it must be maintained under his successor.”


-RW

What Noam Chomsky Gets Wrong About the COVID-19 Crisis and Capitalism

Noam Chomsky
During an interview with the Greek newspaper Ekathimerini, Noam Chomsky blamed "the logic of capitalism" for the current COVID-19 economic crisis.

"The pandemic derives from deep failures of capitalism exacerbated by the impact of its savage neoliberal version. In 2003, after the SARS epidemic was contained, scientists warned that another coronavirus epidemic was likely and outlined ways to prepare for it. But knowledge is not enough. Someone has to act on it. The obvious choice is Big Pharma, bloated with gifts from the public thanks to the devices of neoliberal globalization. But that is barred by capitalist logic: It is not profitable to prepare for future catastrophes," Chomsky said.

This is demonstrably false. The entire concept of private sector insurance is to prepare for future catastrophes. And there is nothing in capitalism that prevents an entrepreneur, in anticipation of profit, to prepare for a catastrophe he sees developing.

Indeed, if anything, situations of unforeseen catastrophe lead to massive losses for capitalists, as is the current case with the economic crisis caused by government lockdown orders. Absent government interference, the private sector, that is the capitalists, would have adjusted their production of goods and services to recognize the COVID-19 threat in a manner that was not like the blunt instrument lockdown orders of government central planning.

Further, Chomsky appears to be blaming pharmaceutical companies for not having therapeutics and a vaccine in advance of COVID-19---a virus that took on specific characteristics that could not have been known in advance.

Indeed, now that the structure of COVID-19 is known, there is a mad race among pharmaceutical companies to develop therapeutics and vaccines.

Chomsky went on to say that:
The business model imposed more wreckage. Hospitals run on this model do not waste resources on spare capacity, like extra beds. That more or less works in normal times, but quickly causes catastrophe in an emergency.
That is the bare beginning. In general, it is quite correct to describe the pandemic as a capitalist catastrophe, exacerbated by neoliberal savagery.
Here Chomsky fails to understand that it is government central planning that prevents hospital expansions.

As Reason magazine notes:
In many places, that shortage of beds is the result of state-level regulations—known as "certificate of need" laws, or CON laws—that artificially limit the supply of medical equipment...

"There have been artificially imposed restrictions on the number of beds, ventilators, and facilities in general that can exist. Some states might find themselves having a real problem," says Jeffrey Singer, a medical doctor and a senior fellow at the Cato Institute, a libertarian think tank

In other words, Chomsky does this odd thing. He finds some inadequacy or failure and blames capitalism without looking deeper into the situation.

One is almost driven to say that Chomsky's failure here is because of his adoption of the central planning model that results in what Hayek called a fatal conceit.

-RW

Thursday, July 2, 2020

Larry Kudlow Endorses Plan to Give $4,000 in Tax Credits for People Who Go On Vacation

Larry Kudlow
U.S. Senator Martha McSally (R-AZ) has introduced legislation, called the American TRIP Act, that would provide tax credits to Americans who spend money on lodging, entertainment, and other expenses related to travel in the United States and its territories.

Additionally, the bill provides funding for Destination Marketing Organizations to promote the travel and tourism industry across the nation.

The American TRIP Act provides a $4,000 travel credit for individuals, and $8,000 for joint filers (plus an additional $500 credit for dependent children), for 2020, 2021, and 2022. 
   
This credit applies to all travel within the United States and its territories, so long as the travel and expenses and final destination is 50 miles from the principal residence of the filer(s).

On Fox's  "Mornings with Maria," top Trump adviser Larry Kudlow endorsed the plan
I am all for tax cuts but two things:

1. This is micromanaging the economy in favor of the travel industry, what needs to be done is the unsupported by science lockdowns need to be taken off.

2. Broad-based tax credits like these are but government spending must be cut to match the tax credits. Otherwise, the taxes will be taken out of the hides of Americans in some other way.

-RW

A Batshit Crazy New York Times Editorial on Wages



First, it was Larry Summers at the Washington Post, see Why Did Larry Summers Just Write a Batshit Crazy Lefty Op-Ed for the Washington Post?

Now The New York Times takes the economic ignorance to an entirely new level not seen since Karl Marx promoted his confusion of what drives wages.

Summers approves:
Some snippets from the "very powerful" opinion":
American workers need a raise. But it is not enough to transfer wealth from the rich to the desperate...

 [T]he revival of broad prosperity — and the stability of American democracy — require the imposition of limits on the political influence of the wealthy. It requires the government to serve the interests of the governed...

Americans especially need to confront the fact that minorities are disproportionately the victims of economic inequality — the people most often denied the dignity of a decent wage. That inequity is the result of historic and continuing racism, and it should be addressed with the same sense of fierce urgency that has motivated the wave of protests against overt displays of racism...

Americans need robust minimum standards for employee compensation and benefits, and the revitalization of institutions to safeguard those guarantees. The federal minimum wage needs to be raised to $15 an hour, with regular adjustments for inflation. Corporations have long warned that raising the minimum, now $7.25 an hour, will force companies to get rid of workers...

In 2016, [Rev. Dr. William Barber II, a civil-rights leader,]  was arrested in Durham, N.C., while protesting for a $15 minimum wage. He said that he was pursuing the fulfillment of the language written into the state’s constitution by freed slaves more than 150 years ago.

The injustice remains. So does the opportunity.
For the record, the stumbling blocks faced by minorities are generally stumbling blocks in the inner city where government education does not provide basic skills, or lessons on civility, coupled by minimum wages which are already too high and which prevent young black teens from getting that all important first job, see: How to Smash Slick Lefties Who Advocate the Minimum Wage.

The racism crutch is a terrible crutch that just provides young black youth with an excuse for not succeeding. Black youth with proper motivation can succeed. I believe in them more than those who think that government hustlers are somehow going to give black youth an edge.

-RW

Wednesday, July 1, 2020

YouTubeTV Price Inflation!!



I just received this notice from YouTubeTV:
Hi Robert,
As we pass the 3-year mark for our service, we want to sincerely thank you for being part of our journey and share a few updates on the future of YouTube TV.
We built YouTube TV to bring you the best of live TV, delivered how you want it, without commitments. Since our launch, we’ve listened to your feedback and worked to build an experience that fits the needs of everyone in your household.
Today we are also adding more of ViacomCBS’s family of channels to YouTube TV, which includes 8 of your favorites: BET, CMT, Comedy Central, MTV, Nickelodeon, Paramount Network, TV Land, and VH1.
To continue delivering the best content and service possible, we’re also updating our price for new and existing members to $64.99/month. Your base membership price will change on 08/05/2020. To check on the status of your account, go to your Settings > Membership page for updated information.
We don’t make these decisions lightly, and we realize how hard this may be for our members. This new price reflects the rising costs of content, and we also believe it reflects the complete value of YouTube TV.
The basic part of my YouTubeTV membership is currently $49.99 so we are talking about a 30% increase in the price.

Prices are going down for the things we aren't using and going up for the things we do buy.

-RW

The Whiplash on Businesses Caused by the Reversals on the Easing of the Lockdowns is Devastating to Many

What New Jersey restauranter Andrew McCrone is going through is occurring with businesses across the country as government officials reverse the easing of lockdowns that were questionable lockdowns in the first place  (See: Stanford Nobel Prize Winner on the 'Stupid Lockdown') .

The reversals are coming as the spike in COVID-19 cases appears to be because more are being tested and because the young who are not at severe health risk if they are infected by COVID-19 are mingling.

The governors and mayors instituting these draconian measures are destroying parts of America.



-RW

WARNING: Al Gore's Advice to Corporations in the Post-COVID-19 World

Al Gore
Al Gore, in a Wall Street Journal op-ed with David Blood, provides frightening advice to investors and corporate leaders on how they should act in the post-COVID-19 world.

Here are key excerpts from the piece:
As economies reopen around the country, it is essential that policy makers don’t default to pre-pandemic thinking. Covid-19 with all its unfolding tragedy presents a once-in-a-century obligation to rethink the relationships among business, markets, government and society. What is desperately needed, and what we must deliver, is a sustainable form of capitalism.
---

 All investments made today must factor in long-term climate and societal implications.
---

Companies making cuts in pay or staff numbers should lead from the top. The C-suites should be taking the largest cuts to total compensation, and we are pleased that many companies have adopted this approach.
---

Finally, we want CEOs to accelerate their efforts on climate action.
Gore and Brooks don't come out and call for more government regulations and interventions in the economy but you can be sure that is behind the curtain---to be produced when the time is just right.

There is just no indication of understanding by these two of fundamental basic economics or sound science of any kind.

-RW

What Venezuela Needs Desperately…


A review by David Gordon of Prosperity and Liberty: What Venezuela Needs… by Rafael Acevedo (editor)
Rafael Acevedo is a distinguished Venezuelan economist, now in part-time residence at Texas Tech University, who is deeply concerned about the future of his native country. Socialism has brought Venezuela to rack and ruin, and if the country is to recover, a move to the free market is essential.
Many have said the same thing, but Acevedo has done much more than bemoan his country’s fate and point to the obvious remedy. He is the head of a think tank called Econintech, and he and his collaborators have proposed detailed plans for the reconstruction of Venezuela from its present state of wreckage.
In Prosperity and Liberty, Acevedo has gathered together a number of these plans, as well as essays by eminent scholars who tell Venezuela’s sad tale and compare the situation of the country with what has taken place elsewhere.
A vital point made in the book is that Venezuela’s descent into disaster did not begin with the overtly socialist regime of Hugo Chávez. To the contrary, the relatively free economy that had existed before 1958, albeit under a political dictatorship, was gradually supplanted by interventionist policies that brought with them massive corruption and a decline in economic growth. Though Venezuela is blessed with immense natural resources, oil deposits foremost among them, these did not suffice to fend off disaster.
Given the economy’s poor performance, what was to be done? One might think the answer obvious, a return to a freer economy, but unfortunately another path gained popularity. Advocates of this path said that Venezuela’s economic problems resulted not from too much socialism, but rather from too little of it. As Acevedo and Luis Cirocco note in an illuminating essay,
Over time, the gradual destruction of economic freedom led to more and more impoverishment and crisis. This, in turn, set the stage for the rise of a political outsider with a populist message: Hugo Chávez. He was elected in 1998 and promised to replace our “lighter” socialism by a form of hard socialism, which he called “the revolution of the 21st century” and which only magnified the problems we had faced for decades. He was able to pass an even more anti-private property constitution. Since Chávez’s death in 2013, the attacks against private property continued, and Chávez’s successor, Nicolás Maduro, keeps promising more of the same. The government has turned toward outright authoritarian socialism.
Students of Austrian economics will not be surprised that the socialist program has failed completely. The most overt sign of economic chaos is the country’s extraordinary inflation rate. Essential consumer goods are at best in short supply, and the entrepreneurial spirit, a key to economic growth, has been stifled. Small wonder that many have fled the country, and many among those who remain cross the border to engage in black market exchanges. It must be said, though, that the contributors to the book fail to address the dire effects of American economic sanctions on the Venezuelan people.
The disaster that has resulted from socialism is by no means confined to the economic sphere. Those who openly challenge the regime have been arrested and sometimes tortured as well, and again, this should come as no surprise. As Bob Lawson and Ben Powell pointed out, “In his 1944 book The Road to Serfdom, Friedrich Hayek argued that a competitive capitalist economy is necessary to sustain democracy, and that once a country becomes ‘dominated by a collectivist creed, democracy will inevitably destroy itself.’” The reason is simple. “Centrally planned economic systems necessarily concentrate economic power in the hands of government planners, who can punish dissent through their economic edicts.” (Lawson and Powell 2019)
If Hayek accurately depicted the road to serfdom, our pressing question becomes: what is the road to freedom? The answer does not lie in the deposing of Maduro and his replacement by his rival Juan Guaidó. He is, sad to say, also a socialist, though not so extreme a one as Maduro, and his program would not rescue Venezuela from the economic doldrums. I should add, though the contributors to the volume do not state this directly, that it would be a path of folly to install Guaidó by force, a course of action urged by many American neoconservatives, ever eager to mind the business of other countries.
As Ron Paul has trenchantly remarked about the recent CIA-backed effort to oust Maduro,
While US Administrations engaged in “regime change” have generally tried to mask their real intentions, this US-backed coup is remarkable for how honest its backers are being. Not long ago the National Security Advisor to the president, John Bolton, openly admitted that getting US companies in control of Venezuelan oil was the Administration’s intent. Trump Administration officials have gone so far as mocking the suffering of Venezuelans when a suspiciously-timed nationwide power failure heightened citizens’ misery…. Was the US behind the take-down of Venezuela’s power grid? It would not be the first time the CIA pulled such a move, and US officials are open about the US goal of making life as miserable as possible for average Venezuelans in hopes that they overthrow their government.
The starvation blockade imposed on Venezuela, denounced by the eminent international lawyer Alfred de Zayas, has brought about great suffering. Most Venezuelans, even those not favorable to Maduro, naturally resent efforts by foreigners to order them to change their government, and they remember with bitterness the CIA-orchestrated coup against Chávez in 2002. Support for such efforts, even in the name of opposition to socialism, plays into the CIA’s efforts, dating from the inception of that agency, to promote at all costs global American hegemony.
Political and economic salvation for Venezuela can come only from the Venezuelan people themselves. They cannot be “forced to be free” but must seek, if they have the wit and wisdom to do so, the guidance of experienced free market economists such as Acevedo and his coworkers at Econintech.
What is the best way to establish a free market economy? Acevedo with penetrating insight accepts the counsel of the greatest Austrian economist of the latter half of the twentieth century, Murray Rothbard. Economic reform must be extensive and fast, not creeping and piecemeal: “Freeing only a few areas at a time,” Rothbard said, “will only impose continuous distortions that will cripple the workings of the market and discredit it in the eyes of an already fearful and suspicious public.”
It is heartening that Acevedo and his colleagues have learned so much from the Austrian school, and he and his colleagues have made abundantly clear the best course of action for Venezuela. It is a course of action that only the Venezuelan people themselves can take.

The above originally appeared in The Quarterly Journal of Austrian Economics (Volume 22 | No. 4 | Winter 2019)



Tuesday, June 30, 2020

EconomicPolicyJournal.com Service Notice


Yesterday, I received this notice from my web hosting service:
Dear Robert,

You have 2 days before we fully migrate and upgrade our hosting servers on July 1st 2020.  As a result, your website’s PHP and PERL scripts may be incompatible, causing your site to lose functionality.

If you don’t act now, your website’s outdated PHP and PERL scripts can cause serious functionality issues.

You have 48 hours to update and test your scripts in our sandbox environment. 
I don't believe this will be a problem for EconomicPolicyJournal.com but you never know.

So if the site goes down tomorrow, rest assured I haven't gone anywhere and may have to tweak something.

-RW

COVID-19 Bankruptcies: What Really Are the Ramifications?



At the post, Cirque Du Soleil Files For Bankruptcy, Dominick asks an important question:
RW, any opinion on how harmful (to the economy) these bankruptcies actually are? After all, it is a way to shed debt and reorganize the balance sheet...and come back leaner and meaner than before. Any comment?
There is a lot to consider here.

First, if it is a small mom and pop shop that files for bankruptcy and doesn't have strong relationships with banks and suppliers, it could very well be a direct hit. These type shops do go out of business and COVID-19 lockdowns are the clear direct cause.

In situations of larger operations such as Cirque Du Soleil that have stronger relationships with banks and other financiers, the cases are different. Such operations are very likely to recover and come back "leaner and meaner."

However, in these cases, it does not mean there is no damage to the economy. The creditors of Cirque Du Soleil will certainly be damaged since they are unlikely to receive 100 cents on the dollar of what they are owed. This could mean losses for suppliers, to landlords to banks.

And we shouldn't dismiss the losses to banks from these types of bankruptcies with a wave of the hand and the thought "Oh, it is just the banks. They can absorb it."

To the degree such banks face losses from bankruptcies, it is a shrinkage of the banks' capital and thus a shrinkage of the amount of capital they can put out in the economy to help it grow. It does get a little bit complicated with the current fractional reserve banking system but the point is that the structure of the economy does change with these bankruptcies even if the firms themselves are able to come back with a stronger balance sheet.

But bottom line, there are all kinds of twists and turns and distortions on going with these COVID-19 related bankruptcies beyond the firms coming back lean and mean.

-RW

MORE MONEY PRINTING: Proposals Under Consideration for Another Reckless Stimulus Package

Larry Kudlow
On Monday, top Trump economic adviser Larry Kudlow cited the following as options for a phase 4 stimulus:

-- Payroll tax holiday;
-- Capital gains tax cut;
-- Business investment incentives;
-- Deductions for restaurants/biz expenses/"baseball games";
-- State and local aid of some kind

I am all for tax cuts, and the first four options can all be considered tax cuts of one form or another. However, without accompanying cuts in government spending, these cuts will only result in increased taxes of one form or another via various methods.

The greatest tax threat being Federal Reserve money printing to make up the shortfall between revenue and spending. The money printing, of course, brings with it the tax of price inflation.

Further, the final item on the stimulus list of options should be a no go.

State and local governments brought on their fiscal woes by launching unscientific irresponsible lockdowns. Let those who financed these governments take the financial hit for this reckless behavior, not the citizens of the country. Once again, the federal government has no funds for such a bailout and the ultimate source of the money would have to be via taxes of one sort or another.

The nation is in terrible economic shape, the last thing that should be instituted are more taxes including Federal Reserve money printing style taxes.

Of course, the typical shallow-thinking Trump administration is not thinking beyond the "stimulus." The disaster of the Fed money pump could result in the destruction of the dollar on foreign exchange markets and high-grade price inflation domestically.

-RW

Monday, June 29, 2020

Cirque Du Soleil Files For Bankruptcy


The highly questionable lockdowns have taken down another big name.

Cirque du Soleil, the Las Vegas Strip’s preeminent production company for more than two decades, has filed for bankruptcy protection, reports the Las Vegas Review-Journal.

The company, which has six productions on the Strip, announced Monday morning that it was seeking debt restructuring protection.

The company said in its filing announcement the refinancing move was “in response to immense disruption and forced show closures as a result of the COVID-19 pandemic.”

Cirque du Soleil shut down all 44 of its shows in March, laying off 95 percent of its workforce, including more than 1,300 in Las Vegas.

The bankruptcy filing also allows the company protection from creditors to reduce its debt load, reported being at least $900 million.

-RW

Why Did Larry Summers Just Write a Batshit Crazy Lefty Op-Ed for the Washington Post?

Joe Biden and Larry Summers
It appears that Larry Summers is going out of his way to restore his lefty credentials after setting them on fire when he was president of Harvard University.

The tone-deaf Summers said, in comments at a conference held by the National Bureau of Economic Research on January 14, 2005, while he was the university's president, that the fact there are few women in top positions in science may be because of  "issues of intrinsic aptitude."

He was gone by 2006, one of the first known successful victims of the now burgeoning cancel culture.

Summers, who was a senior U.S. Treasury Department official throughout President Clinton's administration, concluding as  Treasury Secretary, and for a time director of the National Economic Council for President Obama, appears to want in on a potential Biden administration.

He has reportedly been on several internal Biden campaign calls.

But the radicals around Biden are in attack mode. The Nation in April came out with a major hit piece on Summers titled, Larry Summers Is a Dead Albatross Around Biden’s Neck.

Here's a key excerpt:
[S]ome of Biden’s top advisers are anathema to progressives. As [Politico’s Michael] Grunwald notes, “This week, Biden has taken flak from the left for including the corporate-friendly Democratic economist Lawrence Summers on internal calls.”...

There are two main objections to Summers: his personality and his politics. He has a well-documented history of being an overbearing boss, a know-it-all with a habit of publicly humiliating his underlings and colleagues. Christina Romer, who served as chairwoman of the Council of Economic Advisers in the Obama administration, complained that Summers treated her like “a piece of meat.”...

As appalling as Summers might be on a personal level, his politics are even worse. Joe Biden might be ready to bid adieu to the era of Milton Friedman, the right-wing economist who was one of the major architects of neoliberalism, but Larry Summers most definitely is not
Friedman is far from consistently sound on free-market economics, especially when it comes to monetary policy, but linking Summers to Friedman is like linking Kim Kardashian to Kim Jong-un.

And as if to prove it, Summers has written (with Anna Stansbury) an op-ed which appeared in Sunday's Washington Post.
Among the anti-Friedmanite policy proposals, Summers and Stansbury make in the essay are these  (my highlights):

 A traditional economic argument is that policy should let markets function competitively and then rely on progressive taxation and spending to redistribute income afterward. It is this kind of thinking that lies behind advocacy of negative income taxes or, more recently, for a universal basic income. But progressive institutionalists have long argued for pre-distribution alongside redistribution, strengthening worker power by changing the structure of labor market institutions.We believe both ingredients are required.
---

 When something is a big problem — as is inequality in America today — it is appropriate to tackle it from multiple angles.
---

 There is reason to believe, for example, that allowing bargaining at a broader level than just the individual firm — such as sectoral collective bargaining — would reduce the negative effects of unionization on unemployment.
---

Overall, we believe that increasing worker power must be a central and urgent priority for policymakers concerned with inequality, low pay and poor work conditions. If we do not shift the distribution of power toward workers, any other policy changes are likely to be short-term and insufficient.
Wow, after that, even senile Joe would get that Summers is no Friedmanite. If that doesn't establish you as a lefty nut job central planner I don't know what will.

But what is most concerning is that Summers believes this is the position he has to get good with the Biden team. He has an inside glimpse as to what is going on around Biden and its secretive economic team and it must be packed with extremely radical central planners.

So from an economic policy perspective, the 2020 election may come down to Trump, who doesn't have a clue about economics, or Biden who is even worse--maybe much worse.

-RW

Sunday, June 28, 2020

Dread Risk Fear And Its Role in the Current COVID-19 Fear




In this episode of my podcast, This Week in Economics with Robert Wenzel,  I discuss dread risk fear and its role in the current COVID-19 fear.

The episode is available on most podcast platforms and alternatively here.



Note: If your podcast platform does not carry the series, just add this link to your platform:
https://wenzel.podbean.com/feed.xml

-RW