Tweet [1]
My GMU Econ colleague Vincent Geloso warns against the error of using WWII as an example of successful fiscal stimulus [2]. A slice:
In no way can wartime spending be used to justify fiscal stimulus.
We know this thanks to the work of economic historians Alexander Field [3], Richard Vedder [4], Lowell Gallaway [4], and Robert [5] Higgs [6], who picked apart this narrative by pointing out three facts.
The first is that the price indices needed to adjust income for inflation were plagued by the problems that wartime price controls created. Once adjusted price deflators were used, more than two thirds of the wartime gains commonly reported in the data were eliminated.
The second is that many assumptions needed to estimate economic output in the form of Gross Domestic Product (GDP) vanish or are weakened in wartime. One must account for, for example, the depreciation of capital goods, which means selecting a depreciation rate. Qualitative and quantitative evidence at the firm level suggest that businesses used capital more intensively during the war, and thus that capital depreciated faster — something that is not taken into account. Corrections for the rising depreciation rate during the war only lower the estimated growth rates.
GMU Econ alum Dominic Pino wonders just which workers are Biden appointees “pro.” [7] A slice:
The Washington Post story [8] about the nomination of Julie Su as secretary of labor begins, “President Biden on Tuesday nominated Julie Su to be the next labor secretary, elevating a longtime advocate for workers to implement a key part of the administration’s agenda.” The print version of the same story carried this headline: “Biden nominates longtime pro-worker advocate to lead Labor Department.”
Which workers?
Probably not truck drivers, who had their business models upended [9] by California’s A.B. 5 law, of which Su was “an architect,” according to the Post, during her tenure as California’s labor secretary from 2019 to 2021.
Probably not other independent contractors, who had to be reclassified as employees under A.B. 5 in many different industries. Independent contractors, contrary to media impressions, are mostly not “gig workers” and are commonly found in countless industries holding well-paying full-time jobs. When surveyed, they overwhelmingly say they prefer their independent status over traditional employment.
Probably not fast-food workers, many of whose jobs would be automated away if California enacts the FAST Act [10] and raises the minimum wage to $22 per hour. Su supports the FAST Act as well, but it was so radical that even Californians said it went too far. They put the law on hold [11] through a petition drive, and it will be up for a referendum in 2024.
Here’s the conclusion of Princeton senior Adam Hoffman’s thoughtful op-ed in the New York Times [12]: (HT my intrepid Mercatus Center colleague, Veronique de Rugy)
If colleges don’t want to produce a new generation of conservative firebrands, they need to pump the brakes on campus progressivism. Campuses that are more welcoming to conservatives are in universities’ own interest.
Let’s call it the “Biden way”: When our president can’t get his policies through Congress, he tries to impose them in other ways. Just look at his student loan forgiveness [15] plan, which faced a stiff Supreme Court challenge this week, and his imposition of stricter “Buy American” provisions to the infrastructure-spending bill. Now, he wants to reshape corporate America by attaching the big string of “high-quality” child care to, of all things, semiconductor subsidies.
This strategy, while popular with other presidents, has only one redeeming aspect: It beautifully illustrates how politics diverts industrial policy and similar attempts to direct the economy away from their stated goals. See, politicians say they want to subsidize this and that to improve manufacturing or bolster national security, but invariably sabotage themselves by weighing the policies down with rules and requirements that have nothing to do with the plans.
John Stossel decries the cronyist Jones Act [16].
Jon Sanders asks a germane question: “Hospitalized with, or hospitalized for?” [18] Two slices:
Among the muddied data were COVID hospitalizations and, consequently, deaths. Former AIER president Edward Peter Stringham wrote in July 2020 [19] about what a Texas medical care facilities managing partner had told Alex Berenson (who later took Twitter to court for suspending him at the request of the Biden administration [20] over his COVID questioning) about cases and hospitalizations. The partner said that “discharge planners are being pressured to put COVID as primary diagnosis — as that pays significantly better. … You open up your hospitals for normal medical care and you test everyone (sic) of those patients — the result is a higher percentage of patients who have COVID — now.”
…..
On January 13, CNN medical correspondent Leana Wen publicly called for accurate accounting of COVID hospitalizations and deaths. In a Washington Post column [21], Wen highlighted data from Massachusetts showing that “only about 30 percent of total hospitalizations with COVID were primarily attributed to the virus” and discussed the problems from overcounting COVID hospitalizations.
The following day, CNN anchors questioned her assertions, with Poppy Harlow asking if she had “thought about” whether her information might “give fodder to conspiracy theorists and those who downplay COVID, to anti-vaxxers [22].” Wen, to her credit, noted that others’ criticism was that “You should have said this two-and-a-half years ago.” Wen said, “I think at the end of the day we just need the truth.”
On that count, Wen is right. We just need the truth.
el gato malo tweets [23]: (HT Jay Bhattacharya [24])
the great barrinton declaration was based in 100 years of evidence based medicine and pandemic guidelines.
what the “experts” did instead was a complete circus of proscribed and long disproven pseudoscience.
and it all failed while incurring ruinous cost.
take the L. you earned it.