Brad DeLong: Worthy reads on equitable growth, February 9-16, 2021

Worthy reads from Equitable Growth:

1. If you haven’t read this, read it. If you have read it, re-read it now. My grandfather used to lament, to the end of his days, that his discipline had turned from “Public Administration” to “Political Science” over his lifetime. Political science, he thought, was a swamp of opinion and ideology that produced very little of value. In contrast there was a great deal that was know about Public Administration, and a great deal to study, and the tools to study it to learn more. Read Amanda Fischer and Alix Gould-Werth, “Broken Plumbing: How systems for delivering economic relief in response to the coronavirus recession failed the U.S. economy,” in which they write: “Four delivery systems [were] tasked with providing relief during the coronavirus recession—relief targeted to small and large businesses, Unemployment Insurance, direct payments to consumers, and paid leave programs … Looking at business rescue programs, we see pipes well-designed to flow easily to people with power, while the taps of the less powerful remain dry. Looking at Unemployment Insurance, we see the failure to invest in pipes, preventing these benefits from flowing smoothly to people who need them the most. Looking at direct payments, we see who profits when the plumbing is routed through costly private systems that twist and turn, enabling the powerful to siphon off of the plumbing. And looking at paid leave, we see what happens when policymakers build no pipes at all and suddenly need to turn on a spigot when the economy hits a drought.”

2. And if you haven’t read this, read it. If you have, re-read it. Practically everything in it is still very valuable, and we will hopefully have time and political energy to put all the recommendations into effect before the next recession comes to visit. Read Equitable Growth and the Hamilton Project, Recession Ready: Fiscal Policies to Stabilize the American Economy, in which they write: ‘Economic recessions are inevitable and they are painful, with harsh short-term effects on families and businesses and potentially deep long-term impacts on the economy and society. But we can ameliorate some of the next recession’s worst effects and minimize its long-term costs if we adopt smart policies now that will be triggered when its first warning signs appear. Equitable Growth has joined forces with The Hamilton Project to advance a set of specific, evidence-based policy ideas for shortening and easing the impacts of the next recession. In a new book, Recession Ready: Fiscal Policies to Stabilize the American Economy, experts from academia and the policy community propose six big ideas, including two entirely new initiatives and four significant improvements to existing programs, all to be triggered when the economy shows clear, proven signs of heading into a recession. These proposals (see more on each below) aim to strengthen and add to our automatic stabilizers: policies that inject money into the economy in a downturn and withdraw stimulus when the economy is strong. Congress should consider these policy proposals now because when the next recession appears on the horizon, it may be too late.”

Worthy reads not from Equitable Growth:

1. Hiring Ezra Klein may well be one of the very, very few really good decisions The New York Times’s editorial editors have made recently. I would note that much of what Ezra Klein fears in California are the consequences of immense wealth inequality—and would melt away if we could return to a properly social-democratic income distribution via an appropriate federal-level tax system. But this is very keen-eyed. Read Ezra Klein, “California Is Making Liberals Squirm,” in which he writes: “The California Environmental Quality Act wasn’t passed to stop mass transit—a fact California finally acknowledged when it recently passed legislation carving out exemptions. The profusion of councils and public hearings that let NIMBYs block new homes are a legacy of a progressivism that wanted to stop big developers from slicing communities up with highways, not help wealthy homeowners fight affordable apartments. California[‘s] … structures of decision making too often privilege incumbents who like things the way they are over those who need them to change … In California, taking that standard seriously might mean worrying less about the name on the school than whether there are children inside it—as Mayor Breed has been insisting. It might mean worrying less about the sign in the yard than the median home price on the block. And yes, it might mean worrying less about a cumbersome process that claims to be about environmental protection and more about how to speed along projects that will lead to environmental justice … If progressivism cannot work here, why should the country believe it can work anywhere else?”

2. The slowdown over the past 15 years in the rate at which the value of the stock of useful ideas about technology and organization has been growing in the global north is very worrisome. In order to figure out why it happened and how to repair it, we need to think straight about how our industrial research labs create and our corporation-based value chains deploy new ideas. And William Janeway has spent a lifetime working in this sector and thinking about it. Read his “Venture Capital in the 21st Century,” in which he writes: “In this eight-part lecture series, Bill Janeway investigates the relationship between venture capital and technological innovation, and the interdependent roles of entrepreneurial firms, the mission-driven State and financial speculation in the overall innovation system.”

February 16, 2021


Brad DeLong


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