“Last Tuesday President Biden’s Council of Economic Advisers published a blog post warning everyone not to make too much of any one month’s employment report. It presumably released this in advance of Friday’s report to fend off possible accusations that it was just trying to make excuses for a weak number. As it happened, however, the report came in strong: The economy added an impressive 850,000 jobs.
The job gain was especially impressive given widespread claims that businesses couldn’t expand because generous unemployment benefits were discouraging workers from taking jobs. (Recent benefit cuts in many states came too late to have affected this report.) Well, somehow employers are managing to hire a lot of people anyway.
Oh, and so much for Donald Trump’s warnings that there would be a “Biden depression” if he weren’t re-elected.
That said, the council’s points were well taken. Covid-19 created huge dislocations in the economy, and as we recover from these dislocations economic data are unusually noisy — largely because the standard adjustments statisticians make to smooth out things like seasonal variation don’t work well in an economy still distorted by the pandemic.”
This is another great essay by Paul Krugman, economist and political commentator extraordinaire. Many of popular comments are cheerful and thoughtful. Too bad someone at the NYT put up a cropped photo or Joe Biden, just showing his nose and teeth. The photo is impolite, possibly mocking, whereas all the Krugman essay and the following comments are cheering our worldclass leader.
I too am proud to have been an early supporter of Joe Biden, back, two years before he became President, or was it only a year, when the Nate Cohn in the NYT showed polls showing that of all the Democrats running for President, only Joe Biden could beat Donald Trump in the six most critical swing states to win the electoral college. That day, I dropped my support of Pete Buttigieg, and began supporting Joe Biden.
David Lindsay Jr. is the author of “The Tay Son Rebellion, Historical Fiction of Eighteenth Century Vietnam” and blogs mostly at InconvenientNews.Net.
“. . . So low population growth can cause persistent spending weakness, a phenomenon diagnosed in 1938 by the economist Alvin Hansen, who awkwardly dubbed it “secular stagnation.” The term and concept have been revived recently by Larry Summers, and on this issue I think he’s right.
Secular stagnation can be a problem, because if interest rates are very low even in good times there’s not much room for the Fed to cut rates during recessions. But a low-interest-rate world can also offer major policy opportunities — if we’re willing to think clearly.
For what we’re looking at here is a world awash in savings with nowhere to go: Households are eager to lend money out, but businesses don’t see enough good investment opportunities. (Bitcoin doesn’t count.) Well, why not put the money to work for the public good? Why not borrow cheaply and use the funds to rebuild our crumbling infrastructure, invest in the health and education of our children, and more? This would be good for our society, good for the future, and would also provide a cushion against future recessions. . . . “
“Like many progressives, I like the Biden administration’s plan to invest in infrastructure, but really love its plans to invest more in people. There’s a good case for doing more to improve physical assets like roads, water supplies and broadband networks. There’s an overwhelming case for doing more to help families with children.
To Republican politicians, however, the opposite is true. G.O.P. opposition to President Biden’s infrastructure plans has felt low-energy, mainly involving word games about the meaning of “infrastructure” and tired repetition of old slogans about big government and job-killing tax hikes. Attacks on the family plan have, though, been truly venomous; Republicans seem really upset about proposals to spend more on child care and education.
Which is not to say that the arguments they’ve been making are honest.
How do we know that we should be spending more on families? There is, it turns out, a lot of evidence that there are big returns to helping children and their parents — stronger evidence, if truth be told, than there is for high returns to improved physical infrastructure.
For example, researchers have looked into the long-term effects of the food stamp program, which was rolled out gradually across the country in the 1960s and 1970s. Children who had early access to food stamps, the Washington Center for Equitable Growth concluded, “grew up to be better educated and have healthier, longer and more productive lives.” Researchers have found similar effects for children whose families received access to the earned-income tax credit and Medicaid.
Mr. Krugman is an Opinion columnist.
“Conservatives beware: If the main elements in Joe Biden’s American Family Plan become law, they’ll be very hard to repeal. Why? Because they’ll deliver huge, indeed transformational benefits to millions.
I mean, just imagine trying to take away affordable child care, universal pre-K and paid leave for new parents once they’ve become part of the fabric of our society. You’d face a backlash far worse than the one that followed Republican attempts to eliminate protection for coverage of pre-existing health conditions in 2017. And that backlash quickly gave Democrats control of the House and set the stage for their current control of the Senate and White House as well.
So what’s the Republican counterargument? Well, much of the party appears uninterested in debating policy, preferring to lash out at imaginary plans to ban red meat or give immigrants Kamala Harris’s children’s book.
The official G.O.P. response to Biden’s speech on Wednesday, by Senator Tim Scott, seemed low-energy; Scott is still complaining about “big government” and denouncing Biden for spending money on things other than roads and bridges. The closest thing to a real argument was the claim that Biden is proposing “the biggest job-killing tax hikes in a generation” — presumably a reference to Bill Clinton’s tax increase in 1993.
Indeed, Biden intends to pay for his proposals with higher taxes on corporations and high-income individuals, including a dastardly plan to give the Internal Revenue Service enough resources to crack down on wealthy tax cheats.
It’s important, then, to realize that the family plan would, if enacted, be a major job creator. That is, it would increase the number of Americans — women in particular — in paid employment substantially, probably by several million.
To understand why, the first thing you need to know is that while Republicans always claim that raising taxes on the rich will destroy jobs, they have never yet been right. Scott’s rejoinder to Biden appeared to suggest that the 1993 Clinton tax hike killed jobs; in reality, the United States added 23 million jobs on Clinton’s watch. People also seem to forget that Barack Obama presided over a significant hike in high-end taxes at the beginning of his second term; the economy continued to add jobs rapidly, at the rate of about 2.5 million a year.
Oh, and employment in California boomed after Jerry Brown raised taxes on the wealthy in 2012, defying conservative declarations that the state was committing economic suicide.
It’s also instructive to compare the United States with other advanced countries, almost all of which have higher taxes and more generous social benefits than we do. Do they pay a price for these policies in the form of reduced employment?
Many Americans would, I suspect, be surprised to learn that the truth is that many high-tax, high-benefit countries are quite successful at creating jobs. Take the case of France: Adults between the ages of 25 and 54, the prime working years, are more likely to be employed in France than they are in America, mainly because Frenchwomen have a higher rate of paid employment than their American counterparts. The Nordic countries have an even larger employment advantage among women. . . . “
We just watched a documentary on PBS, “Greta Thunberg: A Year to Change the World.” Surprisingly well done, where she goes from rallys to interviews of oustanding scientists, economists and politicians. She interviews coal miners in Poland at the Belchatow Power Station, and they said they accepted the transition away from coal because of the threat of climate change, but wanted supports to find new work. A similar message to the beginning of the following Krugman piece, left out in the ending below. I continue to lobby or at least pray and sing for a carbon tax.
“. . . . . Some background: Conventional economics suggests that the best way to limit greenhouse gas emissions is either to impose a carbon tax or to create a cap-and-trade system in which polluters must buy permits for their emissions.
This argument underlies high-profile initiatives like the Climate Leadership Council, whose founding members included a wide array of business leaders and economists — including Janet Yellen, now the Treasury secretary — and a number of major corporations. The council, whose creation was announced in 2017, calls for carbon fees whose proceeds would be redistributed to families. This plan is part of a “bipartisan road map” for action.
This is, however, not the path the Biden administration is taking. Why?
First, the economic case for relying almost exclusively on a carbon tax misses the crucial role of technological development. The reason large reductions in emissions look much easier to achieve now than they did a dozen years ago is that we’ve seen spectacular progress in renewable energy: a 70 percent fall since 2009 in the cost of wind power, an 89 percent fall in the cost of solar power.
And this technological progress didn’t just happen. It was at least partly a result of investments made by the Obama administration. These investments were ridiculed by conservatives; back in 2012 Mitt Romney declared that all of the money went to “losers” like Solyndra and, um, Tesla. In retrospect, however, it is clear that government spending provided a crucial technological lift. And this suggests that public investment, as well as or even instead of a carbon tax, can be a way forward in fighting climate change.
Second, the idea that a carbon tax can achieve bipartisan support is hopelessly naïve. Only 14 percent of Republicans even accept the notion that climate change is an important issue. And redistributing the proceeds of such a tax to families in general won’t win over voters who believe that climate action will threaten their jobs and communities.
What might win over at least some of these voters, however, is the kind of program the United Mine Workers is calling for: targeted spending designed to help retrain former miners and support development in coal country communities.
I don’t want to be overly optimistic about the Biden strategy. For one thing, while there’s a compelling case against relying exclusively on a carbon tax to fight climate change, public investment alone also probably isn’t enough. Eventually we will almost surely have to put a price on greenhouse gas emissions, politically difficult though that will be.
On the other side, while it’s great to see the mine workers’ union call for policies that support “coal country,” not coal jobs — that is, communities rather than a specific industry — that’s still a tall order. Although Covid-19 created temporary disruptions, it remains true that the 21st-century economy “wants” to concentrate good jobs in major metropolitan areas with highly educated work forces. Promoting job creation in West Virginia or eastern Kentucky won’t be easy, and may be impossible.
But we can and should make a good-faith effort to help workers and regions that will lose as we try to avoid environmental catastrophe, and in general to make climate policy as politically palatable as possible, even at some cost in efficiency. Climate action is too important a task to insist that it be done perfectly.