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. @lindsey_brink and I began outlining our agenda paper before the pandemic hit, not knowing how relevant its core themes — building state capacity, modernizing social insurance, reviving technological progress — were about to become.
Read it here: https://www.niskanencenter.org/faster_fairer/agenda.html
Read it here: https://www.niskanencenter.org/faster_fairer/agenda.html
The Table of Contents spells out our agenda. But don't let the length be forbearing. Whether you read the .pdf or online version, it's easy to jump ahead to whatever section that interests you.
Part I. opens by giving a diagnosis of "What Went Wrong."
It's a story of declining American state capacity amid a period of lackluster growth and dynamism, worsened by regulatory capture, and deep structural trends that policymakers have in many cases actively exacerbated.
It's a story of declining American state capacity amid a period of lackluster growth and dynamism, worsened by regulatory capture, and deep structural trends that policymakers have in many cases actively exacerbated.
Technological stagnation and demographic decline have resulted in slower overall wage growth. Meanwhile, globalization and the knowledge economy have led to bifurcated labor markets and the erosion of the middle-class.
Yet policy thinking on the right remains stuck in the 1970s!
Yet policy thinking on the right remains stuck in the 1970s!
Breaking our impasse will require the Right to drop its anti-government mood, & accept that private sector dynamism if strengthened by basic public goods and a capable public sector.
The Left, meanwhile, must face up to the failures of progressive governance in states like CA.
The Left, meanwhile, must face up to the failures of progressive governance in states like CA.
That means building an economy that takes the high road: one that treat workers as assets rather than as costs, and aims to elevate the condition and capacities of ordinary people....
...and a government that demands high performance: one with the state capacity required to get things done and resist regulatory capture, while being transparent and accountable.
In other words, not "small government" but rather simpler, more legible government.
In other words, not "small government" but rather simpler, more legible government.
Our agenda is neither left or right. Instead, it draws from the best of both sides to form what we see as a distinctive, yet coherent policy synthesis.
Let's dive in. https://www.niskanencenter.org/faster_fairer/supporting_workers_and_protecting_families.html
Let's dive in. https://www.niskanencenter.org/faster_fairer/supporting_workers_and_protecting_families.html
In January of this year, Taco Bell began advertising $100,000 salaries for general managers at certain locations.
The generous pay was an experiment driven by the tightest labor market in a generation. Full employment boosts workers’ bargaining power: https://www.nytimes.com/2020/01/10/business/taco-bell-manager-salary.html
The generous pay was an experiment driven by the tightest labor market in a generation. Full employment boosts workers’ bargaining power: https://www.nytimes.com/2020/01/10/business/taco-bell-manager-salary.html
How quickly things change.
The disruptions caused by COVID-19 have thrown millions of people out of work—many for the foreseeable future.
Indeed, as a “reallocation shock,” upwards of 1 in 3 of the newly out of work may need to retrain or relocate, dragging out any recovery.
The disruptions caused by COVID-19 have thrown millions of people out of work—many for the foreseeable future.
Indeed, as a “reallocation shock,” upwards of 1 in 3 of the newly out of work may need to retrain or relocate, dragging out any recovery.
America’s hot labor market may be gone, but it is not forgotten.
As the U.S. economy reopens, returning to full employment should be a top priority.
But we must also reexamine the policy choices that left so many low-wage workers vulnerable to dislocation in the first place.
As the U.S. economy reopens, returning to full employment should be a top priority.
But we must also reexamine the policy choices that left so many low-wage workers vulnerable to dislocation in the first place.
The first step to full employment must be to abandon excessively tight monetary policy.
As @econjared has noted, U.S. labor markets have had slack 70% of the time since 1980.
The Fed's premature tightening b/t 2015-18 cost ~1 million jobs jobs alone: https://www.economy.com/home/products/samples/2018-11-20-Feds-Mistake.pdf
As @econjared has noted, U.S. labor markets have had slack 70% of the time since 1980.
The Fed's premature tightening b/t 2015-18 cost ~1 million jobs jobs alone: https://www.economy.com/home/products/samples/2018-11-20-Feds-Mistake.pdf
If the Fed adopted level targeting it would be forced to make up for past mistakes.
Any deviation below the target NGDP growth rate, a signal of monetary tightening, would itself signal equal and opposite easing over the years ahead — the ultimate “automatic stabilizer.”
Any deviation below the target NGDP growth rate, a signal of monetary tightening, would itself signal equal and opposite easing over the years ahead — the ultimate “automatic stabilizer.”
Yet monetary policy isn't enough. We also need modernized social insurance.
From inundated UI offices, to PPP and IRS failures —
As @pmarca wrote, “A government that collects money from all its citizens...never built a system to distribute money to us when it’s needed most.”
From inundated UI offices, to PPP and IRS failures —
As @pmarca wrote, “A government that collects money from all its citizens...never built a system to distribute money to us when it’s needed most.”
How did we let this happen?
Social insurance systems are ultimately a kind of public infrastructure: like our roads and bridges, they require continuous repair.
Instead, in some cases we're using architectures that date back to the freakin' Kennedy administration.
Social insurance systems are ultimately a kind of public infrastructure: like our roads and bridges, they require continuous repair.
Instead, in some cases we're using architectures that date back to the freakin' Kennedy administration.
As Monic Prasad argues, the US welfare state is based on subsidized credit.
Where many countries subsidize payrolls directly, we did so through a Rube Goldberg device of forgivable loans.
@HawleyMO & @RepJayapal proposed the same but were shot down.
https://www.niskanencenter.org/the-trade-off-between-social-insurance-and-financialization-is-there-a-better-way/
Where many countries subsidize payrolls directly, we did so through a Rube Goldberg device of forgivable loans.
@HawleyMO & @RepJayapal proposed the same but were shot down.
https://www.niskanencenter.org/the-trade-off-between-social-insurance-and-financialization-is-there-a-better-way/
