Brad DeLong: Worthy reads on equitable growth, July 13-19, 2021

Worthy reads from Equitable Growth:

1. I think this is a great decision and is going to lead to great and wonderful things. Read “A note from incoming Equitable Growth President & CEO Michelle Holder,” in which she writes: “I’ve admired the Washington Center for Equitable Growth since its inception in 2013, so I am thrilled to become its next leader. Equitable Growth’s mission—to accelerate research on how inequality affects economic growth and stability—hits home for me. … Examining how inequality inhibits growth, and promoting effective and actionable policies, is absolutely critical if we want to improve our economy and society more broadly. As a second-generation immigrant, first-generation college graduate, and working mom, my lived experience lies at the nexus of characteristics associated with marginalization and cuts right to the heart of many topics Equitable Growth studies. …The present moment is charged with opportunities. … I could not be more excited to lead the Washington Center for Equitable Growth through this next chapter.”

2. It is Child Tax Credit week. We have very solid projections of all the good it will do from studies of partially similar programs in the past, but it would be nice to confirm or disconfirm our expectations as rapidly as possible. Read former Equitable Growth senior policy advisor Liz Hipple, “The child allowance will pay dividends for the entire U.S. economy far into the future,” in which she wrote: “Research into positive, long-term benefits of the Earned Income Tax Credit and the Supplemental Nutrition Assistance Program is directly translatable to the benefits we can expect to see from the new child allowance. Economic research clearly demonstrates that an investment in families today is an investment in their future economic mobility, as well as in broad-based, stable economic growth. Making the newly enacted child allowance permanent will pay dividends for all Americans far into the future.”

Worthy reads not from Equitable Growth:

1. If you had told me a generation ago that we would let local control of zoning get this dysfunctional, I would not have believed you. Read Joseph Gyourko and Jacob Krimmel, “The Impact of Local Residential Land Use Restrictions on Land Values Across and Within Single Family Housing Markets,” in which they write: “The amount by which land prices are bid up due to supply side regulations … [is] especially burdensome in large coastal markets. … Price impacts in the big West Coast markets now are the largest in the nation. In the San Francisco, Los Angeles, and Seattle metropolitan areas, the price of land everywhere within those three markets having been bid up by amounts that at least equal typical household income. … In the San Francisco metropolitan area (which includes San Francisco, Alameda, Contra Costa, Marin and San Mateo counties), the median “zoning tax” for a quarter-acre of land was $409,000—more than four times the region’s median household income.”

2. As far as I know, there are very few people who were satisfied with the sluggish recovery from the Great Recession. Read Matthew Yglesias, “When experts go astray,” in which he writes: “On the specifics of full employment, what happened after the 1970s inflation experience is that economists promulgated a view that democracy naturally tends toward inflation. … Elected officials always want to err on the side of less unemployment, even if that means more inflation. They say you can worry about the inflation later. But there’s a ‘time consistency problem’ where once it’s later, you still want to defer addressing inflation. … The solution to this, according to economists, was to create central banks that are staffed by experts (i.e., economists), pay higher salaries than normal civil service agencies, and also receive unusual levels of insulation from the political process—to the point where the president criticizing their decisions is considered inappropriate. … But just as biology lab insiders are reluctant to conclude that biology labs are running reckless risks, economists are reluctant to conclude that this set of special arrangements might have some downsides. I don’t think it’s a coincidence that Jay Powell is not an economist—he’s not intellectually, emotionally, or professionally invested in the community of practice that looks at the sluggish recovery from the Great Recession and says ‘yeah, we did a great job.’”