Brad DeLong: Worthy reads on equitable growth, June 15-21, 2021

Worthy reads from Equitable Growth:

1. Past discrimination in the United States has created a legacy of present inequality in wealth, income, access to education, and so on. Present discrimination amplifies these inequalities inherited from the past and ensures that they are transmitted into the future. We do not know nearly as much as we should about how these processes are working out on the ground in the United States today. And if we are going to attain equitable growth, we very much need to collect much more data on how these processes are working. Read Shaun Harrison, “The imperative of focusing on racial equity in U.S. economic statistics,” in which he writes: “The coronavirus pandemic and resulting sharp recession put a glaring spotlight on the importance of data disaggregation. During the early stages of the pandemic, most states were not reporting coronavirus infections and COVID–19 fatalities by race. Consequently, policymakers did not know—but do now—that Black people in the United States died at 1.4 times the rate of White people from COVID–19, and that in certain states, Latinx people were 3.7 times more likely to have tested positive for the virus than their White neighbors. This lack of data disaggregation made it more difficult for policymakers to understand the contours of the pandemic. … Data disaggregation is likewise critically important for better understanding the many racially disparate aspects of the U.S. economy and considering policies to address those disparities. Racial and ethnic discrepancies in economic outcomes have long been known, but improvements to data disaggregated by race and ethnicity by federal statistical agencies can help improve policymakers’ understanding of economic and social outcomes for all communities of color.”

2. With each passing year it seems that I get more information about just how disastrous the policy response was to the Great Recession of 2007–2009. Read Austin Clemens, “New Great Recession data suggest Congress Should go big to spur a broad-based, sustained U.S. economic recovery,” in which he writes: “Undershooting the policy response would be a far more dangerous prospect and could lead to a repeat of the slow and inequitable economic growth that followed the previous U.S. recession. … After the Great Recession of 2007–2009, then-President Barack Obama and the U.S. Congress passed an insufficient stimulus, then pivoted too quickly to debt reduction. This was a crushing mistake that left many U.S. workers and their families stuck in the doldrums for years, facing stagnant, or even declining, incomes. The slow and uneven recovery was the direct result of these policies. … A new data series from the U.S. Department of Commerce’s Bureau of Economic Analysis—its Distribution of Personal Income series—shows just how devastating this pattern was for most U.S. workers and their families.”

Worthy reads not from Equitable Growth:

1. No. We do not know how to get 8 million people hired in six months. But we should try everything to see if we should get it accomplished, and we should be sensitive to not ripping holes in families finances while we try to do so. Read Lauren Bauer, Arindrajit Dube, Wendy Edelberg, and Aaron Sojourner, “Examining the uneven and hard-to-predict labor market recovery,” in which they write: “Any effects of expanded unemployment insurance benefits on labor supply will dissipate quickly as the benefits expire nationally in early September and before then in an increasing number of states. Indeed, policymakers should be on high-alert for whether the expiration of those benefits results in extraordinary financial hardship for some workers unable to find jobs. There are many signs that the U.S. labor market is on the mend. For example, the average net increase in payroll employment from February to April was over 500,000. Initial unemployment insurance claims continue to decline. The number of unemployed people per job opening has fallen sharply. Teens are working in the labor market at higher rates than at any time in the past decade. Nonetheless, policymakers must be vigilant—continuing to increase easy access to vaccines and helping to make working safe and rewarding.”

2. A truly excellent window into what the Biden administration is thinking right now about fiscal policy. I highly recommend that you watch Kim Clausing, “Fiscal Policy for Today’s Economy.”