Inflation didn’t just happen on Biden’s watch. His budget-busting American Rescue Plan—which dumped a bunch of monopoly money on an already recovering post-pandemic economy—predictably sent prices through the roof.
At the time, “neoliberal” economists who’d held prominent positions in previous Democratic administrations, but had been largely replaced by the New Progressive types Prokop profiles, publicly warned that the ARP was too big and would generate lots of inflation.
The New Progressives shrugged off these criticisms as reactionary snipping from careerists steaming over their loss of power and influence.
But neoliberals turned out to be right. Progressive dismissals of their warnings ended up endangering their entire political project.
The silver lining to Biden-era inflation, for all the hurt it caused, is that it might end up discrediting the New Progressive’s economic policies within the Democratic Party.
Scott Lincicome ponders the power of the U.S. president to impose tariffs by executive diktat. A slice:
For more than 80 years, presidents largely avoided abusing the enormous unilateral tariff powers that Congress had delegated to the executive branch under several different laws and under the assumption that such abuse was highly unlikely. This all changed in the last decade, as both presidents Trump and Biden implemented broad tariffs on dubious grounds, and as Congress and the courts proved unable or unwilling to limit such actions.
In this regard, the problem of presidential tariff power is really a small part of the even bigger problem of executive power run amok: Once Congress cedes important constitutional authorities to the president, it’s darn near impossible to get them back—especially today, when partisanship is high, vanishingly few members of Congress appear interested in a pesky, time-consuming, and responsibility-creating thing called legislation, and White House inhabitants of both parties are eager to not merely protect the power their predecessors have left them but expand it even further while in office.
Harris, for her part, has derided tariffs as a “sales tax on the American people” but hasn’t detailed whether she would extend the trade restrictions put in place by her predecessors.
Bottom line: Tariffs might be a beautiful word to Trump’s ear, but he’s telling a fictional story about what they do in practice. Prices go up and America’s trading partners retaliate.
The United States is at a crossroads. You may have heard that Social Security is politically impossible to reform. But that belief will be hard to sustain. In a few years, the Social Security Trust Fund will be exhausted. When that happens, Social Security benefits will be cut across the board by 21% — that is, unless Congress changes the law. Either way, changes are coming.
Yet like Ms. Harris’s scripted reversals on fracking, immigration and Medicare, her push to build more single-family homes contradicts her past positions. As California’s attorney general, she wielded the state’s environmental laws against new residential developments, exacerbating the affordability crisis that her campaign plan aims to address.
Years of excessive housing regulations and legal attacks on developers have left much of California unaffordable today. Median house prices in the Los Angeles, San Diego and San Jose metropolitan areas are more than 300% above the national average. In 2021 California had the nation’s second-lowest homeownership rate at 55.9%, slightly above New York.
Here’s GMU Econ alum Ryan Young on the newest economics Nobelists. A slice:
While AJR are right that institutions matter, they do not explore institutions’ deeper roots. They have also fallen for recent political trends, especially Acemoglu. These trends include populist anti-tech animus, cozying up to illiberal governments, and asking the fashionable questions about inequality instead of the right ones.
Iain Murray decries the bipartisan attack on credit markets.
Jim Geraghty observes that governments can’t even do well their recklessness at spending money. A slice:
In my neck of the woods, Fairfax County, Va., the Board of Supervisors carried over into the new fiscal year “$59.22 million in federal coronavirus state and local recovery funds.” Wait, you guys have nearly $60 million in coronavirus funding left over, years after the pandemic ended? Then why are my property taxes rising so quickly?
