Very good article. Based on my interactions with people I think the issue people have with economists is that people really want to tell a moralizing story which reflects their values and says who is a good guy and bad guy. Economic results tend to interfere with that desire.
I think that has some important implications about things like belief in global warming. If you want conservatives to listen to those experts it's really important to disassociate them with moral language/accounts (eg seeing nature as valuable in itself not there to serve man, degrowthy values) to the maximum extent possible.
Or just follow trends in the property insurance and re-insurance markets. Wall Street as such is already completely on board with Global Warming as a thing...that's getting worse.
But politically, the GOP has a key constituency in the fossil fuel energy sector. Which decided for their own reasons to deny climate science on global warming. GOP carries water for Big Oil/Coal; FOX carries water for GOP + Big Oil/Coal...and you get 35% of Americans who still believe it's just a big hoax, and pooh-pooh green energy/tech.
I don't think that's the reason. Yes, the GOP ends up serving the ends of big oil/coal to a degree but I think the causation is reversed. Corporations are more likely to try to control the nature of regulation, time frame (can execs take their incentive packages first) and otherwise manage the details rather than going high risk and trying to deny the problem entirely.
On the other hand, almost all conservatives I know hate the environmental movement with burning fire. Hell, I'm a liberal and support carbon taxes, regulations to preserve the environment etc.. etc.. and I often hate them too. Yes, there are some reputable evidence based organizations but the way most environmental concerns are encountered is a combination of lecturing, emotional appeal to not wasting things or the purity of the natural world and some emotional sense that it's bad for us to want to own nice things, build buildings etc.. etc.. Add to that the fact that people are calling their friends names -- even if you might believe in global warming you don't think your friends who question it are bad people or idiots -- and I don't think you need much more to explain the reaction. Most people would rather cut off their noses than agree with what feels like an enemy.
I could imagine a different kind of environmentalism that didn't have these associations but it's hard to shift them once they are in place.
While the vast majority (98% or so) of climate scientists do not agree on how fast it will get really bad, or exactly how bad it will get; they're all in agreement that it's in motion, and that fossil fuel use is the cause (mostly).
From an economics standpoint, sharply rising homeowners insurance is just one major warning signal. The longer term, worst-case scenario, is a global financial catastrophe that will eradicate tens of trillions of dollars of accumulated wealth. And make most or all of us a whole lot poorer. Just to (temporarily) preserve Exxon-Mobil share price. Sounds like a bad deal to me.
Sure, but I don't understand the relevance. My point is that people respond more to the value message than to the facts.
Imagine being a religious person in a context where a bunch of aethist academics are all talking about how important it is for their government to trick those dumb idiots in the public to believe in this god nonsense because they need it to feel good about themselves and to form social connections. They could be citing the best, most reliable studies showing the benefits of religious belief (hypothetically not claiming it's true) to the public and even though the religious individual might have their own reasons why they would otherwise want to encourage religious belief they'd likely prefer to cut off their own nose than seem to align themselves with people they feel are being derogatory to what they deeply care about. They'd almost certainly find some way they could find whatever that group proposed objectionable just so they didn't have to be on their side.
Unfortunately, we aren't evolved to vote for the best policy in a huge society. We are evolved to survive in small groups where knowing someone has your back is often going to be more important than supporting the absolute best policy.
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And yes, the science published in the journals and IPCC reports tends to be very careful and well researched but even when journalists try to directly summarize them it's not pretty (combines the failures of reporting on medicine, physics and uncertainty) but the real problem is that normal people don't read the journal articles and the way our media works means they can't tell the difference between those high confidence clearly articulated claims and the constant stream of articles about how Ikea furniture is a grave danger because it takes up landfill space (published in NYT despite fact that landfills are not really a limited resource we just need to dig them) or constant calls to ban plastic straws or a hundred other calls for action that arise from a sense that consumerism and artificial products and etc are things to feel guilty about.
For understandable reasons environmental scientists tend to be people who want to save the planet so they don't like publicly tearing down other people who share that goal because they didn't realize that landfills aren't really a limited resource. But the net effect is to create an environment where the average person can't really understand whats really serious well researched objective science and what is just driven by value judgements they don't share (using things once and throwing them away is bad in itself).
As they can tell things aren't all just hard scientific facts but not which ones there is a tendency to just throw up their hands and reject it all.
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In short, half the problem is one of emotional aversion -- there is enough history with the environmental movement for many on the right to feel their values are being denigrated as backwards and wrongheaded -- and the other half is a joint failure of journalism about the environment (and science generally) plus a lack of incentives for the scientists to police mistakes equally in both directions.
You may be overthinking this. When I visit(-ed) with my parents, FOX News was almost always on. So I got weeklong samples 4-6 times/year. And on FOX News shows, the entire concept of global warming is either flatly painted as an evil--or at best deluded--hoax; or as a "maybe it is real; but it'll be too expensive to correct. And why even try if it's not?" Or, "Climate science is undecided that it's even happening. It might be all due to volcanism."
Even otherwise highly intelligent people with graduate degrees watching that shit day in, day out for years, start to buy into one or more of the various denial scenarios. And I know because I'd socialize with just such folks. And that's how good propaganda works. Do not underestimate FOX or the rest of the Murdoch empire, because collectively it's the most powerful force in American politics today, bar none.
That's certainly part of it but why do you think fox does that? Fox doesn't inherently give a fuck about the oil or coal industry and even if the Murdochs own a bunch of shares in those industries the profit motive actually favors selling those shares and buying green stocks then switching the message from fox.
No, fox bangs that message 24/7 for the simple reason that's the message that resonates. I agree that in a different media environment we wouldn't see this outcome. Indeed, it's exactly because our media system incentivizes both sides to search out the most infuriating examples of behavior from the other side that this is possible.
But that's just the incentivizes created by the current tech/economic ecosystem. If fox didn't bang on about it they'd lose market share to OAN. The only way to do better is to change how we communicate to make this response resonate less with the people fox reaches and then they'll stop banging on about it.
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And yes some of this is path dependent. If concern about global warming hadn't been initially aligned with groups that were already hated by the right and subject to talk radio ridicule it might have gone different. I’m not arguing that the features I mentioned are somehow unique to environmentalism or the only factor — but I think they are the only factor that is plausibly something the left can change. The media ecosystem isn't.
The 98% figure doesn't say anything at all. All the 98% agree on is that the climate can change (for any reason), which isn't what people mean when they say "climate change" of course. Once you start asking questions like, is humanity driving the change, is it worth worrying about etc, then the percentage who agree falls rapidly.
Regardless of the actual proportion of warming is the result of human activity, the only thing we can control are human activities. Hoping that the “natural” portion will reverse direction and allow us to keep on burning fossil fuels will be our doom or, more to the point, the doom of our children and grandchildren. It’s bad enough that we are foisting massive debts on them but to leave them a dying planet is the worst collective decision in history.
Yes, but in giving fossil fuel companies a pass you keep their share prices high and their campaign contributions to the GOP (and a few select Blue Dog Dems) flowing.
I'm thinking of what James Howard Kunstler (one of the more honest degrowthers) said back in 2005, that "Americans will vote for cornpone Nazis before they will give up their entitlement to a McHouse and a McCar".
And I'm now convinced that this is one factor (amongst others, such as a likely Russian hack of Fox News) why American conservatives are increasingly pro-Russia: people who cherish very fossil-fuel heavy lifestyles (such as driving monster SUVs) see Russia as a natural ally, because Russia has a natural interest in thwarting climate action both because its economy is completely dependent on fossil fuel exports, and because it is the coldest of the world's major powers.
I don't think this kind of reasoning is that considered — do they really look to Russian geopolitical and economic interests in long run? But sure, Russia is saying the kind of things that anger the people that those on the right hate including about the environment.
But yes, 100% agree with the first part. And that's why I still believe if you had a real movement that made the case “You deserve to keep your McHouse and McCar and if we don't take care of this carbon shit we might lose all this money trying to save our cities from the sea”
The problem is that to work it would need to clearly telegraph that it was giving the finger to the kind of people who want us to have less stuff and thereby make it anathema to most of the environmental base.
That kind of moralizing is part of what makes the debate over housing policy so difficult. People _love_ the story where a few malevolent billionaires / corporations are buying up all the housing and keeping it empty, even though it's _completely insane_. (If they're so focused on making a profit, they can't just keep flipping the houses to each other, money has to _come_ from somewhere eventually. They'd rent the units out, at the market rate, and while it would become harder to _buy_ a house, it would become _easier_ to _rent_ one.) The reality of course is that the big villain in the housing story is Neighborhood Defenders (as Katherine Levine Einstein christened them - https://www.cambridge.org/core/books/neighborhood-defenders/0677F4F75667B490CBC7A98396DD527A ) who are invested in a status quo that was created over the course of decades to keep Those People out of Our Neighborhoods. But they don't make a good villain for a morality play, they look like "the little guys" standing up to "greedy developers". ( https://www.youtube.com/watch?v=dIjskDtki8A )
My understanding is that there are plenty of wealthy people buying up housing and keeping it empty, because their motivation _isn't_ actually to make a profit from renting it out!
Most of the wealthy people in question are subjects of foreign dictatorships (especially China) who are motivated by a desire to get as much of their wealth as possible out of the reach of their own government, as well as by a desire to own a "bolthole" in the West in case their own government turns on them (and note that East Asians have a strong cultural preference for newly-built housing).
And doesn't the Chinese government forbid its citizens from investing in non-Chinese assets other than real estate, because they believe higher real estate prices in the West will promote a "wealth effect" there that will increase spending on Chinese-made consumer goods?
If you are just talking about the small number of ultra wealthy individuals who have the resources to not care if western house buying money generates revenue or not -- because it's more important to them that they be able to stay in that residence at a drop of the hat -- that's going to be a relatively tiny number of billionaires and 100 millionaires (same class that here in the us has NZ boltholes) who will buy a few luxury apartments.
OTOH people whose motive is to make sure they have assets outside of the Chinese system -- not just a personal place -- and aren't so rich that this is a trivial amount of their wealth then obviously it does matter to them if those assets generate money. And they don't actually really care if those assets are in a high demand housing market -- indeed they'd likely prefer not so they don't face systemic risk from adoption of more housing friendly policies -- they can and I believe to some extent do buy farmland.
Also, fun fact: If you go read the SEC filings from the companies that operate in the space of buying single-family and small-plex homes, and renting them out, you know what they say is the biggest threat to their future income? That cities will decide to allow more construction, thus lowering the trajectory of rents.
The _reason_ big money is flowing into buying SFHs is _because_ they believe supply will remain constrained. Go YIMBY, make private equity douchebags cry!
As far as I know the "buy to leave empty" narrative usually refers to apartments in high-demand urban areas (such as prime central London or west-coast North American cities) not to SFHs.
I hear it about both. But in any case, buying apartments in a central city to just hold them empty would be nuts, you'd be leaving money on the table. There is some legitimate concern around price fixing with stuff like RealPage, where managers are being encouraged to set a price that is high enough that the unit doesn't just get immediately snapped up, it sits for a few month until a desperate-enough renter comes along. There also are, in some cities, _condos_ that are being bought by foreign owners (Russians, Chinese, etc) as a combo "pied a terre" and investment asset, and held empty a very large part of the time. (Actually that's probably _more_ of an issue for vacation destinations as well, like Tahoe, where they need to build a lot more housing for the people that actually live and work there.) But that's not really a big enough phenomenon to be the main driver of the shortage. And it's just not true that there are large numbers of apartments that would be occupied by middle- to upper-middle-class people that are being held off the market entirely. That's basically a conspiracy theory.
No, what you're describing is not a meaningful effect. It is extremely obvious, if you look at the data, that however you choose to define the vacancy rate, it's much lower in the expensive markets than in cheaper markets, exactly as you'd expect for the basic supply and demand story. It's also obvious in the data that there are three kinds of markets:
* metros that have built a lot relative to existing population and are cheap;
* metros that have built not-much and are expensive;
* metros that haven't built much, but haven't gotten expensive (yet), because they haven't been under pressure from a jobs or tourism boom.
But there's no such thing as a metro area that's actually built a lot, and stayed expensive.
This really isn't up for debate. Other factors may be at play around the edges, and there are arguments other than the basic economic one for why you might want to address some of them. But they're a side show. The core problem is that we haven't built enough housing in the places that people are trying to move to.
A lot of people don't understand that you _want_ a vacancy rate that is well above zero. A lot of the vacancy rate is basically houses that are between occupants for a month or three. A renter moved out and a new one hasn't been found; it's being renovated; it's up for sale; whatever.
Investors buying up housing and speculating on it is absolutely a real phenomenon. I mean, there are so many empty high-end condos where I live, meanwhile there are tens of thousands of homeless.
Matt Yglesias likes to talk a lot about message framing and unforced errors, recently citing the examples of Uber’s error in implementing a surge pricing structure instead of discounting from "standard pricing" during off-peak times (bad framing example) and Obama’s intelligent framing of housing abundance as fixing governance issues through deregulation (good framing example).
But I don’t think he’s talked enough (or possibly at all, if memory serves) about how framing the energy abundance agenda as a climate agenda is one of the most damaging unforced errors in American political history. Especially if you believe, as I do, that climate change poses a real and grievous threat to the planet and its inhabitants. If the stakes are that high, you need to get off your high horse and gain buy in any way you can. Instead, the likes of AOC chose to stack horses upon horses and brag about the view from the top. I'm a liberal, but I think she's an idiot, and I know for a fact she's bad at her job.
Noah, I am a long time reader and like most of what you have to say. But saying that you are "really liking what you see from the Kamala campaign", when, essentially, there has been NOTHING other than some jiggling around, some cackling, and (on day one) 142 deprecations of Donald Trump (whether merited or not, that is not really what anyone needed to hear) you blunt your own credibility. I look daily and have seen no policy statement other than her price control statement, which she quickly walked back because it was populist but so unconnected to reality that even the plebes caught on that she was economically illiterate.
So if you have a magic source that allows you to see anything other than laughing and gyrations, would you share it with us? Some of us have looked high and low and have found, essentially, nothing.
Of course the real question for those who are not already pre-sold down the river is if she has so many great ideas, why did she not implement any of them the first four years, but all of a sudden is sure that (whatever they are) she will implement then the next four because...
You seem to retreat to an approach that she will just rely on the expertocracy and that will be great. I am an expert on infectious diseases and can tell you that the expertocracy was dead wrong on virtually every part of the covid response. Krugman is wrong every day. So while I agree that expertocracy has some merit, that approach provides little solace.
You must know something the rest of us have been unable to find. I hope you will share it so that we will all know.
The thing is that Kamala is trying to run just as “generic Democrat” and trying hard not to be pinned down. If her opponent were any of the following: thoughtful, moderate, reasonable, humane, competent, law-abiding, what have you - it would be important for Kamala to drill down, but Trump is none of those things. Anything she clarifies risks pissing off one constituency vs another and/or promising something she may not be able to keep, and it’s just not worth that risk. Generic Democrat is pretty popular!
Spot on. This isn't the primary; but the general election, where tacking back to more centrist positions is pro forma.
For me, it all comes down to the industrial policy accomplishments of the Dems: Infrastructure, IRA, and CHIPS. Add to that some domestic drone manufacturing, and we might just survive the onslaught by China in a few years time. The GOP, by contrast, just wants more tax breaks for the rich...
Infrastructure bills are almost always bipartisan. Pelosi blocked one in the Trump years because she didn’t want a win for Trump in the Covid recession (demanded a $2 trillion bill larded with giveaways). The CHIPS act was a bipartisan effort started in Congress during the Trump admin. Again, Pelosi chose not to advance it in the House under Trump.
The Dems have full credit for the IRA, passed only with Dem votes, because paying rich white people to buy EVs and having union labor assemble Chinese parts is what they care about.😊
The CHIPS Act hasn't actually accomplished anything. The bulk of the money is hardly getting dispensed, because it legally mandates diversity hiring but chip manufacturing expertise is overwhelmingly dominated by Asian males. So there's no legal way to use it.
Didn't the ANC make a similar error in the 1990s when they tried to build a black middle class too quickly, when black South Africans were mostly too poorly educated (due to the legacy of apartheid) to be good at running businesses?
The GOP has lots of stupid ideas, like tariffs which will be equivalent to a sales tax on all imported goods and domestic goods made with imported parts, and no taxes on tips (which like price gouging is popular as well as stupid, so of course Kamala copied it), but the only tax breaks for the rich Trump talked about is not taxing social security benefits, another stupid idea.
What does she actually believe? What are her instincts? What is her history? Her voting record shows her as one of the most liberal senators ever. Her instincts are, apparently, to embrace price controls. The fact that she could be convinced that was terrible politics during a campaign doesn't give me any great faith that she won't go right back to that if she's elected. The idea that Kamala Harris is some sort of moderate centrist is completely unsupported by her record and by anything that has come out of her mouth. Campaign surrogates have walked back her previous statements like ban all private health insurance, but she hasn't.
I don’t particularly want a centrist, I want a Democrat. I think she’s solidly in the center of the Democratic Party. And it doesn’t matter at all when Trump is the opponent.
Biden did what the party (elders, donors, activists) told him and signed whatever was put in front of him, except maybe in foreign policy. KH will have no independent ideas. She is the candidate of the machine. Anyone who has lived under a parliamentary system is familiar with PM candidates like this- not a bad thing, depending on whether you like the machine (you know, the one that told us Biden was sharp as a tack and outworking the youngsters).
A problem is the US doesn’t have a parliamentary system and the Dems likely won’t control the Senate so we’ll have another four years of illegal and destructive exec orders and misguided and illegal regulatory actions to keep the donors happy. Democracy at work
Well, in the first sentence of the post where I said I liked most of what I was seeing from the Harris campaign, I provided three links to posts I wrote explaining what I like.
I see, that's fair enough. The first link is to an article I'd overlooked arguing that the Democrats now embrace patriotism. The video would be an example of that.
The second link is about housing. The third is about sunny vibes.
Yep! Vibes are about moderation on cultural issues, which is important for ending unrest. Patriotism is important for building unity on...well, anything.
I also like her determination to improve the lethality of the military.
And on top of all that, I assume she'll continue Biden's industrial policies, which I like a lot.
The Democrats clearly think they don't need to care about policy at this point, but all that means is they risk getting a nasty shock if Harris does win and starts making decisions. A policyless president isn't actually possible, only one who pretends to be for a short period.
Note how desperate both our host and Dr K are to believe that the price controls policy was walked back. It wasn't! Noah presents a quote that he says shows Harris "clarifying" that she doesn't believe in price controls, but the quote comes from an anonymous official (i.e. they can say anything and it doesn't matter), who doesn't even use the anonymity to run damage control! Instead they continue the charade that there's a difference between control of price gouging and control of prices, whilst "clarifying" that the policy won't go beyond food and grocery stores. This is simply re-stating her policy in the same words as before. It walks back nothing. Yet Noah will now pretend that price controls were all just an unfortunate error, swiftly corrected.
The reason the party set up Biden last time is because they have developed a serious shortage of people with moderate policy instincts, and Biden - so old he's on death's door - was the only one left. Even he turned out to be more extreme than advertised. With no primary process to let new moderates enter the race you are left with Harris, whose handlers are clearly terrified of letting her say anything they haven't pre-scripted. There's a reason for that beyond incoherence and now we're finding out what it is: the few policy positions that have escaped her handlers so far have all been wildly far out of the American Overton window, immediately drawing sharp criticism even from her own side. Price controls, claiming the First Amendment doesn't protect hate speech, a tax on "unrealized" gains (whatever that would mean). The only defense people have against this is to descend deeper into denial that their preferred side is now run by people who are drastically more socialist than any US President in living memory.
Ok, I actually, as one on the center left see us going strongly to the center...
As do most Libs/Dems I know..it satrted iwth keeping Bernie out...and the progressives are losing elections quite a bit, and in the jouralist/pundit side, most these days are also center left and they have the audiences...
And I would wait before jsudging policies, they will be fleshed out and described later
She's a Democrat. 95% of policy is obvious. Biden took Democratic policy to another level (Chips Act, Infrastructure, ...). She isn't going to walk away from that.
The elephant in the room is affordable housing. She has identified that.
Honestly hope your right, capital gains are out of control and need to be reigned in. I say this as someone who currently benefits a ton from them too.
Her policy statements regarding housing have been specific, clear, and excellent. The limited subsidy for some new homebuyers got all the attention because mediots, but it is the least interesting/significant part of what she proposes. And housing policy is a huge important issue for this country right now.
Limited? Freddie already offers 3 pct down mortgages for first time homebuyers. Should we give them a 25k handout on top of that? Inane vote buying from someone who doesn’t understand current policy- just like she and Trump not taxing tips
The 25K subsidy as proposed would be limited in the sense of not applying to all first-time home buyers. And by the time it got through Congress I'm sure it would be a choice, buyers able to do that one or do the Freddie Mac program but not both.
Regardless it is the least-consequential part of Harris' housing policy proposals.
I’m not sure of anything, except as proposed it is ridiculous and discriminatory (against American citizens).
Like you, I doubt any of these vote-buying schemes will be approved by Congress, but as we saw with Biden’s illegal student loan decrees, a President can spend tens or hundreds of billions on an authoritarian basis.
What first four years? The VP is just a powerless position that often gets tossed on political grenades by the president.
Regarding the expertocracy, sure they can be dead wrong but the problem is that in areas where there is genuine hard to aquire expertise it's really hard for non-experts to do better or for other non-experts to evaluate whether they are.
In most of those discipline it's not enough to just ask "is there a study" because the background judgements of plausibility built up by understanding of the underlying mechanisms and experience are more important -- especially early in a crisis where you have few published studies to rely on. If you don't have that expertise you need to ask someone who does and how do you pick them? Recommendations from other experts? That is essentially guaranteed to get you the expert consensus on average.
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To be clear, I think it's critical to distinguish the epidemiological expert consensus as displayed at conferences or in publications ABOUT epidemiology from what a few people who had expertise in disease did in government or when acting outside their expertise by opining on economic, educational and values matters -- epidemiologists are experts in the additional risk associated with opening schools not the educational, economic etc benefits.
"Regarding the expertocracy, sure they can be dead wrong but the problem is that in areas where there is genuine hard to aquire expertise it's really hard for non-experts to do better or for other non-experts to evaluate whether they are."
Right, and there's an important distinction between "don't give anyone, even experts, too much power" and "we're OK with letting folks have too much power as long as they're not experts". Trumpian populism seems more comfortable with the latter than the former, honestly.
Noah has been suffering from TDS for some time now. Hopefully he will regain his objectivity after the election.
We lived through 4 years of Trump economic policies and 4 years of Biden/Harris policies. You can have a joyful recession or a mean great economy. The choice is yours.
A lot of this is just inflation. If my portfolio goes up 20% and USD is worth 20% less, I'm just treading water. And if the government takes 40% of whatever gains I do make, then I have to beat inflation by that same margin.
In any event, the "Economy" for most people is not the stock market. Housing prices is a whole other story, though.
Market is up (anticipating the end of Bidenomics?) But gdp is down, cost of living is crazy , $5 gas, groceries, rent, insurance all up double digits. Interest rates highest in 30 years. I suppose if the Biden economy started in Venezuela you're right!
“why did she not implement any of them the first four years”???? Come on, now. No VP has enough power to implement anything. Please convince me otherwise.
She's a Democrat. That's 95% of it. She won't cut benefits. She might raise taxes to pay for benefits. She will try to address housing affordability. She will be open to bipartisan legislation.
Republicans will try to cut benefits and try to cut taxes. They won't give a shit about the budget or any important issues.
Trump is Trump. A moron. Should be disqualifying for everyone.
How would you summarize your belief on how the experts got the Covid response wrong?
Was it a case of believing that because a few countries largely eliminated Covid in 2020 (communist police states such as China and Vietnam, or isolated islands without truck-borne international trade such as Australia, New Zealand and Taiwan) then most of the world ought to have been able to do that too?
Noah has TDS he might as well admit it at this point because he looks so un-self aware attempting to run away from the plainly obvious fact all the time. Democrat voters like Noah have exposed themselves as being obedient to whatever the party machine and media tell them to think though. Uncritically cheerleading the alternative to Trump is better than having to wake up every day and see the bad orange man in the White House again. Democrats love to choose Vice Presidents and people who are annointed as next up to run for President because their voter base do what they're told.
Thanks. Your paper from 1999 argues about which of a few different models is most accurate for predicting impact on agriculture, but all are over simplistic to the point of uselessness. For example they only take into account temperature (but higher CO2 levels increase crop yields), and don't take into account the possibility that the underlying temperature data is itself flawed.
With the benefit of hindsight we can say the events theorized about in the paper (e.g. farmers scrapping equipment and moving north) never happened. Crop yields continued to smoothly increase on their prior trends, with no apparent impact from climate change.
Climate economics died out as a field not because it was wrong, but because any fair treatment of the evidence will conclude there won't be any impact. This conclusion is so counter to the needs of governments, universities and the media that it will never be given any close attention. In recent years those who point out what the calculations really say also tend to get fired, because ideological purges are the only way to sustain the narrative of meaningful impact.
That may be true on Planet MAGA (which your tag suggests you inhabit). On Earth, climate zones are shifting polewards, taking pests and diseases with them. And climate economics is very much alive, as the OP suggests.
If you had been dealing with these guys for 25 years as I have, you’d realise these aren’t arguments put forward in a search for truth, they are debating points put forward to defend a predetermined (and wrong) position, in this case climate denialism.
If I bothered responding to this (very old) talking point, Penbroke would come up with a new one. I got sick of playing this kind of whack-a-mole decades ago, and I have no problem being churlish to trolls.
Your paper wasn't about pests and disease, but in the north more people die of the cold than the heat by far. To do a realistic economic accounting in terms of lives lost you'd need to balance those things out.
Give it a break. I don't waste my time on denialists and donothingists. I have long since learned that it's just whack-a-mole, as in this discussion. Let's leave it there.
Nordhaus has updated DICE, presumably taking into account the criticism it’s received over the years. If you choose the alt damages or lower discount runs it justifies plenty of climate action
The choice of terms is indicative of the difference between the fields. We don't think usually of the "wisdom" of economists. We think of their expertise, their technical ability. "Fine tuning" comes to mind, as an example. Should it be 25 or 50 basis points?
History is different, entirely too complex to be as useful. So useless that apparently we need many fewer academic posts. The supply, it seems, vastly exceeds the demand.
Noah, I think you make a mistake when you tell your readers "don't worry, it's just campaign rhetoric, her people are saying that off the record." You may be right, but whether a politician means what she says isn't your area of expertise. And if we're supposed to be reassured because a candidate's campaign promises are bullshit that can't be implemented, we should feel a lot more comfortable with Trump.
You do a greater service when you just point out what economic policies do and don't make sense (which you do better than almost anyone else), and let us figure out for ourselves which candidate is less likely to carry out his or her lamebrained ideas.
Free markets are NOT the most efficient way to distribute resources. "Free" markets don't even exist really. They literally can't.
America produces enough food to feed the **entire world's population**, yet so much much of it is wasted while millions the world over starve to death every year.
The market allocates resources to 300 dollar tasting menus for the wealthy while children go into lunch debt at school. 1 in 4 American children are food insecure, while America wastes billions of meals worth of food.
That’s the narrative (“just rhetoric”) the partisans decided to use once the proposal was mocked in the mainstream press. Just following the damage control script.
Apparently., like Trump, don’t take KH seriously or literally. Not that any campaign should be taken seriously.
Why not just raise capital gains taxes and eliminate the step up basis at death (as Canada has) and stop allowing charitable deductions for the value of (untaxed) appreciated stock? Make tycoons pay taxes on their gains.
That is much more straightforward and has the advantage of successful examples elsewhere. Taxing unrealized gains is likely unconstitutional and distorting. Look at the Italian example. Personal property taxes at the state level are doable (though you could also look at the French history on the subject).
Not to worry, most of the unrealized gains nonsense is just populist campaign fodder meant to stir up hatred/envy of billionaires and justify expensive new spending programs that will never be properly funded.
Personally, I don’t care which taxes are hiked by whatever pol is elected. They key thing is that 100 percent of every tax hike (including if the individual income tax levels are hiked back to pre-Trump levels) should be used for deficit reduction and matched one for one with spending cuts. Just think, if KH can raise taxes by $500 billion a year and cut spending by $500 billion a year, the deficit will be halved (for a short while) and we’ll likely have lower interest rates (lower interest expense on the debt) and lower inflation.
Let me make sure I understand: If a homeowner "borrows" money with a HELOC or new first or second (or third or whatever) mortgage, that loan would be declared as a realized capital gain?
Among historians it seems that the way for a young academic to make a name for themselves is to create a case attacking a long held consensus -- anything from George Washington was a lousy military leader to there was no compromise of 1876. One wonders if the same dynamic exists among economists. I grew up with Samuelson and one of the abiding principles is that tariffs are bad and that free markets are good for everyone.
Another way to understand the price-gouging/demand shock problem is to look at the perspective of retailers rather than manufacturers. If retailers know that they can raise prices for snow blowers when a blizzard occurs, they will keep more in stock in anticipation of a windfall. This stockpiling serves as a source of additional demand in non-blizzard times that provides an incentive for greater production.
I think you should draw a strong distinction between what economists really do, including folks like Krugman, and the caricature of economists as "free market" apologists. You've done this elsewhere with the trope of econ 101.
IDK what Krugman used to do. I hear it had something to do with economics. But all he is now is a Democrat hack. That's OK. He can be whatever he gets paid well to be, and I can ignore him.
"Teachout also fails to grapple with a second reason to worry about price controls during “abnormal market disruptions” — they can lead to hoarding."
Teachout also fails to grapple with a third reason to worry about price controls during "abnormal market disruptions - they can suppress short-term supply responses. To use the blizzard example, a snowblower distributor would have great incentives to find unsold snowblowers in unaffected areas, get them, and bring them to his store. Even if he had to pay full retail price, plus the cost of transportation, he might give more supply if there were an adequate profit opportunity. But if price controls prevent him from charging more than normal retail price, he'd have no reason to go to great efforts to find snowblowers he could sell for obscene profits. In this case, it's not the distributor who would suffer from price controls, but his would-be customers.
"My objections were based on the assumption that Harris was endorsing Warren’s ideas about price controls; instead, it seems like she’s simply throwing out some populist rhetoric."
The laptop class (of which you are part, Noah) has been saying for years that every word Trump says must be stretched to its illogical conclusion and taken 100% literally. But now, Harris' words openly praising a policy that you well know has been proven a failure dozens of times in recent history is "just populist rhetoric".
You're "no longer worried about this issue." Why? Because, "the Democrats can be relied upon to listen to the relevant experts and avoid taking extreme and dangerous policy steps."
In other words, Trump won't listen to the laptop class (your class, Noah) and Democrats will. And everyone knows that the laptop class is really the people who are entitled to rule. And even when they make mistakes, it's just "a few old guys getting some basic things wrong". Even when "this deference to authority can lead to a sort of cascade failure", it's still a worthwhile price to pay... because the alternative is fascism of course. (Ironically, fascism is a system that relies on subject matter experts far more than democracy is supposed to... but let's ignore that.)
What's amazing is that the people who articulate this argument -- the expert class should essentially rule -- in one breath, immediately tout themselves as defenders of democracy with the next.
I'm always surprised when people assume that regulations restricting purchasing will somehow benefit the less well off. Control prices and inventories fall, and people hoard. Who can better afford to hoard? Not the less well off. Cap rents and landlords will choose on factors other than the rent. Think that really is going to redound to the benefit of the least powerful in society? In general you should be more cynical about how people will respond to policy, not less.
High prices **don't** disincentivize hoarding for the people who can actually afford it. If something is in short supply, the rich can afford to buy it up because they are undeterred by high prices.
If the price of something becomes prohibitive (because the supplier must make a profit), then people who really need it literally do not possess the amount of currency that ownership has requested. This isn't "allocative efficiency", it is deliberate starvation.
Look at what's happening in Cape Town. The wealthy are literally causing water shortages.
What you are describing isn't hoarding, it is just buying things. Hoarding is buying something now on a precautionary basis because you are worried it won't be available later. It is particularly damaging because it is more demand at a time there is already a shortage when the product may ultimately not be used. The ability for prices to rise to market clearing levels helps prevent hoarding because it keeps the product available at all times. That's especially true for a wealthy person who knows they will be able to afford whatever the price is.
But price caps aren't going to fix the situation that you are describing. To the contrary, they will make it much worse. If wealthy people get cheap prices for water when they know it's scarce, they'll build water tanks and buy a bunch of cheap water. And when dry pipes break, who's are going to get fixed first? Bet it won't be poor neighborhoods'.
Addressing the type of situation you identify is, however, absolutely doable. On the demand side, you can give each household a certain amount of free or discounted water. Then you charge the rest at the market rate, which will end up quite high. And, in fact, that's eventually what Cape Town did, and it was very successful at stabilizing water use and avoiding "Day Zero" before the rains returned and ended the shortage.
On the supply side, it's not like there isn't water by Cape Town. It's next to the ocean! Desalination just requires electricity, and solar panels are pretty cheap. Letting the prices rise to clear the market creates the incentives to invest in that capacity. Cape Town ultimately did build three desalination plants to address the issue and isn't facing shortages any more. It also invested in pressure management equipment to better husband the now more expensive water.
The point is to move beyond just saying "people are dying we have to do something, and this is something" and actually figure out what will address the problem. And not do things that feel good but in fact may make a problem worse.
By "hoarding", I meant buying things in unnecessary quantities that you don't actually need.
This is the type of behavior that markets and price signals are meant to discourage, but they don't discourage it for the select portion of the population that can afford the higher prices and are undeterred by higher prices. Price elasticity of demand goes down as income goes up. The only people who need to regulate, or even eliminate, their consumption are the poor and working people.
You mention keeping the product available at all times, but available to whom? Available to people who can afford the price, even if people who cannot afford the price actually need it more.
Market economists claim that price signals will allocate the goods to the people who value them the most. But if someone literally doesn't have enough money to pay for something, for example a medication or article of food, does this mean that they do not value it?
I would put to you this question: is it more efficient to direct large amounts of resources to luxury resorts in developing nations, or towards improving the material quality of life for the local residents there? Clearly, the locals (who often live with spotty access to water that isn't even potable in the first place) need those resources (water, electricity, etc) a lot more than the multimillionaires who spend a few days of summer there. But the market gives the resources to those wealthy few, not the people who need it more.
Again, it would be absurd to suggest that struggling villagers in Peru "value" water, electricity, and shelter less than the tourists for whom all of this is a temporary luxury accommodation.
I must also point out that the solution you suggested, which Cape Town implemented, involves government action and interference with market mechanisms- everything that economics 101 teaches against in such cases.
The statistical problems in empirical research are well-known. But in your last sentence, when you say that meta-analysis shows that results are "biased and ideological", you make a mistake. The research you cite only shows that effects tend to be OVERSTATED; the finding says nothing about bias or ideology.
This religion of the market is completely unempirical.
"Prices fall when supply is high-"
No they don't. Companies destroy the stock they cannot sell for a price that is profitable.
"Markets allocate resources to whoever needs them the most"
No, they allocate them to who can pay the most money for it. Inputs are allocated to making yachts and luxury dwellings for billionaires while ordinary people cannot afford housing and heating.
As per the paper, average statistical power of economic empirical analyses is 7%, while in most sciences 80% is expected for significant results. Qualifies as "abysmal" to me, but I'm not a specialist :)
I admit that "bias" may be too strong a word. Economists abuse of their political influence though...
If you see a paper showing that empirical economic effects are half as large as reported, and you conclude that this is evidence of bias and ideology, you've gone wrong somewhere. Effects are smaller than reported because of publication bias.
I didn't precisely attribute the bias. You're taking it personally, but I certainly didn't accuse you, or empirical economists in general. On the contrary : the main source of bias IMO is the pile of garbage theoretical economics that drove the discipline for so long, with utter contempt for such low things as "physical reality" -- you know, like that econ 101 textbook that says that a bakery produces bread with capital and work as input, forgetting unimportant stuff like... flour?
If you think I'm taking it personally, you have erred once again! I'm just explaining where you made a mistake. 😊
In general, ideology is pretty orthogonal to the direction of the effects reported in empirical papers. Sometimes ideology tells you an effect should be bigger; sometimes, smaller. Thus, observing that empirical effects tend to be overstated doesn't tell you much about ideology at all; what it tells you about is publication bias. 😉
OK, but what drives publication bias ? Of course it's not restricted to economics, it's probably mostly an ill-effect of the "publish or perish" ... ideology rife across all of academia :)
Your last point is where I sit on this. But, I can take into account obvious bias and judge whatever comes out their pie holes or pie charts accordingly.
This is unfair but I can’t take Zephyr Teachout seriously because of her name. If she were Zephyr Johnson or Megan Teachout, I wouldn’t bat any eye at it.
But the combination of that first name and last name and it’s like a fake English name from a bad Japanese video game.
The worst was “Reality Winner” that was busted releasing classified docs incriminating Trump or something. I’m like this has to be a made up person and we’re being fucked with right?
I’m not worried about any policy proposals from the Harris campaign because they almost certainly won’t ever be implemented if and when there’s a hostile Congress. The last few election cycles where one party has run the legislature and the executive branch has showed that they rarely do anything
Very good article. Based on my interactions with people I think the issue people have with economists is that people really want to tell a moralizing story which reflects their values and says who is a good guy and bad guy. Economic results tend to interfere with that desire.
I think that has some important implications about things like belief in global warming. If you want conservatives to listen to those experts it's really important to disassociate them with moral language/accounts (eg seeing nature as valuable in itself not there to serve man, degrowthy values) to the maximum extent possible.
Or just follow trends in the property insurance and re-insurance markets. Wall Street as such is already completely on board with Global Warming as a thing...that's getting worse.
But politically, the GOP has a key constituency in the fossil fuel energy sector. Which decided for their own reasons to deny climate science on global warming. GOP carries water for Big Oil/Coal; FOX carries water for GOP + Big Oil/Coal...and you get 35% of Americans who still believe it's just a big hoax, and pooh-pooh green energy/tech.
I don't think that's the reason. Yes, the GOP ends up serving the ends of big oil/coal to a degree but I think the causation is reversed. Corporations are more likely to try to control the nature of regulation, time frame (can execs take their incentive packages first) and otherwise manage the details rather than going high risk and trying to deny the problem entirely.
On the other hand, almost all conservatives I know hate the environmental movement with burning fire. Hell, I'm a liberal and support carbon taxes, regulations to preserve the environment etc.. etc.. and I often hate them too. Yes, there are some reputable evidence based organizations but the way most environmental concerns are encountered is a combination of lecturing, emotional appeal to not wasting things or the purity of the natural world and some emotional sense that it's bad for us to want to own nice things, build buildings etc.. etc.. Add to that the fact that people are calling their friends names -- even if you might believe in global warming you don't think your friends who question it are bad people or idiots -- and I don't think you need much more to explain the reaction. Most people would rather cut off their noses than agree with what feels like an enemy.
I could imagine a different kind of environmentalism that didn't have these associations but it's hard to shift them once they are in place.
While the vast majority (98% or so) of climate scientists do not agree on how fast it will get really bad, or exactly how bad it will get; they're all in agreement that it's in motion, and that fossil fuel use is the cause (mostly).
From an economics standpoint, sharply rising homeowners insurance is just one major warning signal. The longer term, worst-case scenario, is a global financial catastrophe that will eradicate tens of trillions of dollars of accumulated wealth. And make most or all of us a whole lot poorer. Just to (temporarily) preserve Exxon-Mobil share price. Sounds like a bad deal to me.
Sure, but I don't understand the relevance. My point is that people respond more to the value message than to the facts.
Imagine being a religious person in a context where a bunch of aethist academics are all talking about how important it is for their government to trick those dumb idiots in the public to believe in this god nonsense because they need it to feel good about themselves and to form social connections. They could be citing the best, most reliable studies showing the benefits of religious belief (hypothetically not claiming it's true) to the public and even though the religious individual might have their own reasons why they would otherwise want to encourage religious belief they'd likely prefer to cut off their own nose than seem to align themselves with people they feel are being derogatory to what they deeply care about. They'd almost certainly find some way they could find whatever that group proposed objectionable just so they didn't have to be on their side.
Unfortunately, we aren't evolved to vote for the best policy in a huge society. We are evolved to survive in small groups where knowing someone has your back is often going to be more important than supporting the absolute best policy.
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And yes, the science published in the journals and IPCC reports tends to be very careful and well researched but even when journalists try to directly summarize them it's not pretty (combines the failures of reporting on medicine, physics and uncertainty) but the real problem is that normal people don't read the journal articles and the way our media works means they can't tell the difference between those high confidence clearly articulated claims and the constant stream of articles about how Ikea furniture is a grave danger because it takes up landfill space (published in NYT despite fact that landfills are not really a limited resource we just need to dig them) or constant calls to ban plastic straws or a hundred other calls for action that arise from a sense that consumerism and artificial products and etc are things to feel guilty about.
For understandable reasons environmental scientists tend to be people who want to save the planet so they don't like publicly tearing down other people who share that goal because they didn't realize that landfills aren't really a limited resource. But the net effect is to create an environment where the average person can't really understand whats really serious well researched objective science and what is just driven by value judgements they don't share (using things once and throwing them away is bad in itself).
As they can tell things aren't all just hard scientific facts but not which ones there is a tendency to just throw up their hands and reject it all.
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In short, half the problem is one of emotional aversion -- there is enough history with the environmental movement for many on the right to feel their values are being denigrated as backwards and wrongheaded -- and the other half is a joint failure of journalism about the environment (and science generally) plus a lack of incentives for the scientists to police mistakes equally in both directions.
You may be overthinking this. When I visit(-ed) with my parents, FOX News was almost always on. So I got weeklong samples 4-6 times/year. And on FOX News shows, the entire concept of global warming is either flatly painted as an evil--or at best deluded--hoax; or as a "maybe it is real; but it'll be too expensive to correct. And why even try if it's not?" Or, "Climate science is undecided that it's even happening. It might be all due to volcanism."
Even otherwise highly intelligent people with graduate degrees watching that shit day in, day out for years, start to buy into one or more of the various denial scenarios. And I know because I'd socialize with just such folks. And that's how good propaganda works. Do not underestimate FOX or the rest of the Murdoch empire, because collectively it's the most powerful force in American politics today, bar none.
That's certainly part of it but why do you think fox does that? Fox doesn't inherently give a fuck about the oil or coal industry and even if the Murdochs own a bunch of shares in those industries the profit motive actually favors selling those shares and buying green stocks then switching the message from fox.
No, fox bangs that message 24/7 for the simple reason that's the message that resonates. I agree that in a different media environment we wouldn't see this outcome. Indeed, it's exactly because our media system incentivizes both sides to search out the most infuriating examples of behavior from the other side that this is possible.
But that's just the incentivizes created by the current tech/economic ecosystem. If fox didn't bang on about it they'd lose market share to OAN. The only way to do better is to change how we communicate to make this response resonate less with the people fox reaches and then they'll stop banging on about it.
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And yes some of this is path dependent. If concern about global warming hadn't been initially aligned with groups that were already hated by the right and subject to talk radio ridicule it might have gone different. I’m not arguing that the features I mentioned are somehow unique to environmentalism or the only factor — but I think they are the only factor that is plausibly something the left can change. The media ecosystem isn't.
The 98% figure doesn't say anything at all. All the 98% agree on is that the climate can change (for any reason), which isn't what people mean when they say "climate change" of course. Once you start asking questions like, is humanity driving the change, is it worth worrying about etc, then the percentage who agree falls rapidly.
Regardless of the actual proportion of warming is the result of human activity, the only thing we can control are human activities. Hoping that the “natural” portion will reverse direction and allow us to keep on burning fossil fuels will be our doom or, more to the point, the doom of our children and grandchildren. It’s bad enough that we are foisting massive debts on them but to leave them a dying planet is the worst collective decision in history.
Yes, but in giving fossil fuel companies a pass you keep their share prices high and their campaign contributions to the GOP (and a few select Blue Dog Dems) flowing.
https://www.opensecrets.org/industries/indus?ind=E01
https://www.texastribune.org/2024/05/07/texas-oil-gas-political-donations-august-pfluger/
I'm thinking of what James Howard Kunstler (one of the more honest degrowthers) said back in 2005, that "Americans will vote for cornpone Nazis before they will give up their entitlement to a McHouse and a McCar".
And I'm now convinced that this is one factor (amongst others, such as a likely Russian hack of Fox News) why American conservatives are increasingly pro-Russia: people who cherish very fossil-fuel heavy lifestyles (such as driving monster SUVs) see Russia as a natural ally, because Russia has a natural interest in thwarting climate action both because its economy is completely dependent on fossil fuel exports, and because it is the coldest of the world's major powers.
I don't think this kind of reasoning is that considered — do they really look to Russian geopolitical and economic interests in long run? But sure, Russia is saying the kind of things that anger the people that those on the right hate including about the environment.
But yes, 100% agree with the first part. And that's why I still believe if you had a real movement that made the case “You deserve to keep your McHouse and McCar and if we don't take care of this carbon shit we might lose all this money trying to save our cities from the sea”
The problem is that to work it would need to clearly telegraph that it was giving the finger to the kind of people who want us to have less stuff and thereby make it anathema to most of the environmental base.
That kind of moralizing is part of what makes the debate over housing policy so difficult. People _love_ the story where a few malevolent billionaires / corporations are buying up all the housing and keeping it empty, even though it's _completely insane_. (If they're so focused on making a profit, they can't just keep flipping the houses to each other, money has to _come_ from somewhere eventually. They'd rent the units out, at the market rate, and while it would become harder to _buy_ a house, it would become _easier_ to _rent_ one.) The reality of course is that the big villain in the housing story is Neighborhood Defenders (as Katherine Levine Einstein christened them - https://www.cambridge.org/core/books/neighborhood-defenders/0677F4F75667B490CBC7A98396DD527A ) who are invested in a status quo that was created over the course of decades to keep Those People out of Our Neighborhoods. But they don't make a good villain for a morality play, they look like "the little guys" standing up to "greedy developers". ( https://www.youtube.com/watch?v=dIjskDtki8A )
My understanding is that there are plenty of wealthy people buying up housing and keeping it empty, because their motivation _isn't_ actually to make a profit from renting it out!
Most of the wealthy people in question are subjects of foreign dictatorships (especially China) who are motivated by a desire to get as much of their wealth as possible out of the reach of their own government, as well as by a desire to own a "bolthole" in the West in case their own government turns on them (and note that East Asians have a strong cultural preference for newly-built housing).
And doesn't the Chinese government forbid its citizens from investing in non-Chinese assets other than real estate, because they believe higher real estate prices in the West will promote a "wealth effect" there that will increase spending on Chinese-made consumer goods?
If you are just talking about the small number of ultra wealthy individuals who have the resources to not care if western house buying money generates revenue or not -- because it's more important to them that they be able to stay in that residence at a drop of the hat -- that's going to be a relatively tiny number of billionaires and 100 millionaires (same class that here in the us has NZ boltholes) who will buy a few luxury apartments.
OTOH people whose motive is to make sure they have assets outside of the Chinese system -- not just a personal place -- and aren't so rich that this is a trivial amount of their wealth then obviously it does matter to them if those assets generate money. And they don't actually really care if those assets are in a high demand housing market -- indeed they'd likely prefer not so they don't face systemic risk from adoption of more housing friendly policies -- they can and I believe to some extent do buy farmland.
Also, fun fact: If you go read the SEC filings from the companies that operate in the space of buying single-family and small-plex homes, and renting them out, you know what they say is the biggest threat to their future income? That cities will decide to allow more construction, thus lowering the trajectory of rents.
https://x.com/IDoTheThinking/status/1378737834824060931
The _reason_ big money is flowing into buying SFHs is _because_ they believe supply will remain constrained. Go YIMBY, make private equity douchebags cry!
As far as I know the "buy to leave empty" narrative usually refers to apartments in high-demand urban areas (such as prime central London or west-coast North American cities) not to SFHs.
I hear it about both. But in any case, buying apartments in a central city to just hold them empty would be nuts, you'd be leaving money on the table. There is some legitimate concern around price fixing with stuff like RealPage, where managers are being encouraged to set a price that is high enough that the unit doesn't just get immediately snapped up, it sits for a few month until a desperate-enough renter comes along. There also are, in some cities, _condos_ that are being bought by foreign owners (Russians, Chinese, etc) as a combo "pied a terre" and investment asset, and held empty a very large part of the time. (Actually that's probably _more_ of an issue for vacation destinations as well, like Tahoe, where they need to build a lot more housing for the people that actually live and work there.) But that's not really a big enough phenomenon to be the main driver of the shortage. And it's just not true that there are large numbers of apartments that would be occupied by middle- to upper-middle-class people that are being held off the market entirely. That's basically a conspiracy theory.
What is the difference between "apartments" and "condos" for the purpose of your argument?
No, what you're describing is not a meaningful effect. It is extremely obvious, if you look at the data, that however you choose to define the vacancy rate, it's much lower in the expensive markets than in cheaper markets, exactly as you'd expect for the basic supply and demand story. It's also obvious in the data that there are three kinds of markets:
* metros that have built a lot relative to existing population and are cheap;
* metros that have built not-much and are expensive;
* metros that haven't built much, but haven't gotten expensive (yet), because they haven't been under pressure from a jobs or tourism boom.
But there's no such thing as a metro area that's actually built a lot, and stayed expensive.
https://x.com/JeremiahDJohns/status/1615352365040766976
https://www.vox.com/2014/5/15/5716364/nobodys-building-houses-in-the-places-where-theyre-most-needed
See also the very obvious (negative) correlation among construction and rents, in several comparable midwest cities:
https://x.com/AlecStapp/status/1827893002062152137
This really isn't up for debate. Other factors may be at play around the edges, and there are arguments other than the basic economic one for why you might want to address some of them. But they're a side show. The core problem is that we haven't built enough housing in the places that people are trying to move to.
A lot of people don't understand that you _want_ a vacancy rate that is well above zero. A lot of the vacancy rate is basically houses that are between occupants for a month or three. A renter moved out and a new one hasn't been found; it's being renovated; it's up for sale; whatever.
https://darrellowens.substack.com/p/vacant-nuance-in-the-vacant-housing
What are you talking about?
Investors buying up housing and speculating on it is absolutely a real phenomenon. I mean, there are so many empty high-end condos where I live, meanwhile there are tens of thousands of homeless.
Matt Yglesias likes to talk a lot about message framing and unforced errors, recently citing the examples of Uber’s error in implementing a surge pricing structure instead of discounting from "standard pricing" during off-peak times (bad framing example) and Obama’s intelligent framing of housing abundance as fixing governance issues through deregulation (good framing example).
But I don’t think he’s talked enough (or possibly at all, if memory serves) about how framing the energy abundance agenda as a climate agenda is one of the most damaging unforced errors in American political history. Especially if you believe, as I do, that climate change poses a real and grievous threat to the planet and its inhabitants. If the stakes are that high, you need to get off your high horse and gain buy in any way you can. Instead, the likes of AOC chose to stack horses upon horses and brag about the view from the top. I'm a liberal, but I think she's an idiot, and I know for a fact she's bad at her job.
Noah, I am a long time reader and like most of what you have to say. But saying that you are "really liking what you see from the Kamala campaign", when, essentially, there has been NOTHING other than some jiggling around, some cackling, and (on day one) 142 deprecations of Donald Trump (whether merited or not, that is not really what anyone needed to hear) you blunt your own credibility. I look daily and have seen no policy statement other than her price control statement, which she quickly walked back because it was populist but so unconnected to reality that even the plebes caught on that she was economically illiterate.
So if you have a magic source that allows you to see anything other than laughing and gyrations, would you share it with us? Some of us have looked high and low and have found, essentially, nothing.
Of course the real question for those who are not already pre-sold down the river is if she has so many great ideas, why did she not implement any of them the first four years, but all of a sudden is sure that (whatever they are) she will implement then the next four because...
You seem to retreat to an approach that she will just rely on the expertocracy and that will be great. I am an expert on infectious diseases and can tell you that the expertocracy was dead wrong on virtually every part of the covid response. Krugman is wrong every day. So while I agree that expertocracy has some merit, that approach provides little solace.
You must know something the rest of us have been unable to find. I hope you will share it so that we will all know.
The thing is that Kamala is trying to run just as “generic Democrat” and trying hard not to be pinned down. If her opponent were any of the following: thoughtful, moderate, reasonable, humane, competent, law-abiding, what have you - it would be important for Kamala to drill down, but Trump is none of those things. Anything she clarifies risks pissing off one constituency vs another and/or promising something she may not be able to keep, and it’s just not worth that risk. Generic Democrat is pretty popular!
Spot on. This isn't the primary; but the general election, where tacking back to more centrist positions is pro forma.
For me, it all comes down to the industrial policy accomplishments of the Dems: Infrastructure, IRA, and CHIPS. Add to that some domestic drone manufacturing, and we might just survive the onslaught by China in a few years time. The GOP, by contrast, just wants more tax breaks for the rich...
Yeah, I mean who knows what the next 4 years will hold? One candidate at the very least has a level head on her shoulders, the other…not so much
Infrastructure bills are almost always bipartisan. Pelosi blocked one in the Trump years because she didn’t want a win for Trump in the Covid recession (demanded a $2 trillion bill larded with giveaways). The CHIPS act was a bipartisan effort started in Congress during the Trump admin. Again, Pelosi chose not to advance it in the House under Trump.
The Dems have full credit for the IRA, passed only with Dem votes, because paying rich white people to buy EVs and having union labor assemble Chinese parts is what they care about.😊
The CHIPS Act hasn't actually accomplished anything. The bulk of the money is hardly getting dispensed, because it legally mandates diversity hiring but chip manufacturing expertise is overwhelmingly dominated by Asian males. So there's no legal way to use it.
Didn't the ANC make a similar error in the 1990s when they tried to build a black middle class too quickly, when black South Africans were mostly too poorly educated (due to the legacy of apartheid) to be good at running businesses?
The GOP has lots of stupid ideas, like tariffs which will be equivalent to a sales tax on all imported goods and domestic goods made with imported parts, and no taxes on tips (which like price gouging is popular as well as stupid, so of course Kamala copied it), but the only tax breaks for the rich Trump talked about is not taxing social security benefits, another stupid idea.
Of course Trump doesn’t talk about tax cuts for the rich, but it’s the only consistent part of the Republican platform since forever
What does she actually believe? What are her instincts? What is her history? Her voting record shows her as one of the most liberal senators ever. Her instincts are, apparently, to embrace price controls. The fact that she could be convinced that was terrible politics during a campaign doesn't give me any great faith that she won't go right back to that if she's elected. The idea that Kamala Harris is some sort of moderate centrist is completely unsupported by her record and by anything that has come out of her mouth. Campaign surrogates have walked back her previous statements like ban all private health insurance, but she hasn't.
I don’t particularly want a centrist, I want a Democrat. I think she’s solidly in the center of the Democratic Party. And it doesn’t matter at all when Trump is the opponent.
Biden did what the party (elders, donors, activists) told him and signed whatever was put in front of him, except maybe in foreign policy. KH will have no independent ideas. She is the candidate of the machine. Anyone who has lived under a parliamentary system is familiar with PM candidates like this- not a bad thing, depending on whether you like the machine (you know, the one that told us Biden was sharp as a tack and outworking the youngsters).
A problem is the US doesn’t have a parliamentary system and the Dems likely won’t control the Senate so we’ll have another four years of illegal and destructive exec orders and misguided and illegal regulatory actions to keep the donors happy. Democracy at work
Yeah I’m hoping the kamalamentum applies downballot too!
https://x.com/RpsAgainstTrump/status/1826788473875185699
Could you explain this response further? That's a video of people cheering, it doesn't seem to have anything to do with policy.
Well, in the first sentence of the post where I said I liked most of what I was seeing from the Harris campaign, I provided three links to posts I wrote explaining what I like.
I see, that's fair enough. The first link is to an article I'd overlooked arguing that the Democrats now embrace patriotism. The video would be an example of that.
The second link is about housing. The third is about sunny vibes.
Yep! Vibes are about moderation on cultural issues, which is important for ending unrest. Patriotism is important for building unity on...well, anything.
I also like her determination to improve the lethality of the military.
And on top of all that, I assume she'll continue Biden's industrial policies, which I like a lot.
A whole lot of good stuff there!
I think that is the point...most people aren't worried about policy right now...I suspect policy wonks are the minority these days
Plus, look at the ethusiam, which is very much a part of getting people out to vote and winning
Plus it was Republicans for Harris...they are impressed
The Democrats clearly think they don't need to care about policy at this point, but all that means is they risk getting a nasty shock if Harris does win and starts making decisions. A policyless president isn't actually possible, only one who pretends to be for a short period.
Note how desperate both our host and Dr K are to believe that the price controls policy was walked back. It wasn't! Noah presents a quote that he says shows Harris "clarifying" that she doesn't believe in price controls, but the quote comes from an anonymous official (i.e. they can say anything and it doesn't matter), who doesn't even use the anonymity to run damage control! Instead they continue the charade that there's a difference between control of price gouging and control of prices, whilst "clarifying" that the policy won't go beyond food and grocery stores. This is simply re-stating her policy in the same words as before. It walks back nothing. Yet Noah will now pretend that price controls were all just an unfortunate error, swiftly corrected.
The reason the party set up Biden last time is because they have developed a serious shortage of people with moderate policy instincts, and Biden - so old he's on death's door - was the only one left. Even he turned out to be more extreme than advertised. With no primary process to let new moderates enter the race you are left with Harris, whose handlers are clearly terrified of letting her say anything they haven't pre-scripted. There's a reason for that beyond incoherence and now we're finding out what it is: the few policy positions that have escaped her handlers so far have all been wildly far out of the American Overton window, immediately drawing sharp criticism even from her own side. Price controls, claiming the First Amendment doesn't protect hate speech, a tax on "unrealized" gains (whatever that would mean). The only defense people have against this is to descend deeper into denial that their preferred side is now run by people who are drastically more socialist than any US President in living memory.
Ok, I actually, as one on the center left see us going strongly to the center...
As do most Libs/Dems I know..it satrted iwth keeping Bernie out...and the progressives are losing elections quite a bit, and in the jouralist/pundit side, most these days are also center left and they have the audiences...
And I would wait before jsudging policies, they will be fleshed out and described later
There's not that long to go. How close to the election do you think is reasonable to start stating why people should actually vote for you?
She's a Democrat. 95% of policy is obvious. Biden took Democratic policy to another level (Chips Act, Infrastructure, ...). She isn't going to walk away from that.
The elephant in the room is affordable housing. She has identified that.
Honestly hope your right, capital gains are out of control and need to be reigned in. I say this as someone who currently benefits a ton from them too.
Why? Parts of Switzerland don't tax capital gains at all, and they're doing just fine.
If you are just anti-Trump, be really “progressive” and vote for the gay guy.
Her policy statements regarding housing have been specific, clear, and excellent. The limited subsidy for some new homebuyers got all the attention because mediots, but it is the least interesting/significant part of what she proposes. And housing policy is a huge important issue for this country right now.
Limited? Freddie already offers 3 pct down mortgages for first time homebuyers. Should we give them a 25k handout on top of that? Inane vote buying from someone who doesn’t understand current policy- just like she and Trump not taxing tips
The 25K subsidy as proposed would be limited in the sense of not applying to all first-time home buyers. And by the time it got through Congress I'm sure it would be a choice, buyers able to do that one or do the Freddie Mac program but not both.
Regardless it is the least-consequential part of Harris' housing policy proposals.
I’m not sure of anything, except as proposed it is ridiculous and discriminatory (against American citizens).
Like you, I doubt any of these vote-buying schemes will be approved by Congress, but as we saw with Biden’s illegal student loan decrees, a President can spend tens or hundreds of billions on an authoritarian basis.
3% now?!? Nah
What first four years? The VP is just a powerless position that often gets tossed on political grenades by the president.
Regarding the expertocracy, sure they can be dead wrong but the problem is that in areas where there is genuine hard to aquire expertise it's really hard for non-experts to do better or for other non-experts to evaluate whether they are.
In most of those discipline it's not enough to just ask "is there a study" because the background judgements of plausibility built up by understanding of the underlying mechanisms and experience are more important -- especially early in a crisis where you have few published studies to rely on. If you don't have that expertise you need to ask someone who does and how do you pick them? Recommendations from other experts? That is essentially guaranteed to get you the expert consensus on average.
--
To be clear, I think it's critical to distinguish the epidemiological expert consensus as displayed at conferences or in publications ABOUT epidemiology from what a few people who had expertise in disease did in government or when acting outside their expertise by opining on economic, educational and values matters -- epidemiologists are experts in the additional risk associated with opening schools not the educational, economic etc benefits.
"Regarding the expertocracy, sure they can be dead wrong but the problem is that in areas where there is genuine hard to aquire expertise it's really hard for non-experts to do better or for other non-experts to evaluate whether they are."
Right, and there's an important distinction between "don't give anyone, even experts, too much power" and "we're OK with letting folks have too much power as long as they're not experts". Trumpian populism seems more comfortable with the latter than the former, honestly.
Well, for one thing , she was VP, not president, not much she could do
I have been told by other pundits that detailing policy has never been that deep for any election
It happens later
Noah has been suffering from TDS for some time now. Hopefully he will regain his objectivity after the election.
We lived through 4 years of Trump economic policies and 4 years of Biden/Harris policies. You can have a joyful recession or a mean great economy. The choice is yours.
The true Trump Derangement Syndrome is the pathological need to defend Trump at every turn! ;-)
Biden economy has been quite good given where they started. Also have you seen the S&P500?!
A lot of this is just inflation. If my portfolio goes up 20% and USD is worth 20% less, I'm just treading water. And if the government takes 40% of whatever gains I do make, then I have to beat inflation by that same margin.
In any event, the "Economy" for most people is not the stock market. Housing prices is a whole other story, though.
Market is up (anticipating the end of Bidenomics?) But gdp is down, cost of living is crazy , $5 gas, groceries, rent, insurance all up double digits. Interest rates highest in 30 years. I suppose if the Biden economy started in Venezuela you're right!
“why did she not implement any of them the first four years”???? Come on, now. No VP has enough power to implement anything. Please convince me otherwise.
The current US President is clearly not making the decisions. If it's not Harris either, then who is it?
What do you want to hear?
She's a Democrat. That's 95% of it. She won't cut benefits. She might raise taxes to pay for benefits. She will try to address housing affordability. She will be open to bipartisan legislation.
Republicans will try to cut benefits and try to cut taxes. They won't give a shit about the budget or any important issues.
Trump is Trump. A moron. Should be disqualifying for everyone.
How would you summarize your belief on how the experts got the Covid response wrong?
Was it a case of believing that because a few countries largely eliminated Covid in 2020 (communist police states such as China and Vietnam, or isolated islands without truck-borne international trade such as Australia, New Zealand and Taiwan) then most of the world ought to have been able to do that too?
Noah has TDS he might as well admit it at this point because he looks so un-self aware attempting to run away from the plainly obvious fact all the time. Democrat voters like Noah have exposed themselves as being obedient to whatever the party machine and media tell them to think though. Uncritically cheerleading the alternative to Trump is better than having to wake up every day and see the bad orange man in the White House again. Democrats love to choose Vice Presidents and people who are annointed as next up to run for President because their voter base do what they're told.
I'll take a victory lap here. I was putting the boot into Nordhaus on climate change 25 years ago when I was still young(ish) and I haven't stopped
https://www.aeaweb.org/articles?id=10.1257/aer.89.4.1044
That article isn't open access, by the way.
Here's an open-access draft https://www.researchgate.net/profile/John-Quiggin/publication/4980858_The_Impact_of_Global_Warming_on_Agriculture_A_Ricardian_Analysis_Comment/links/0fcfd5123d7f9ee74c000000/The-Impact-of-Global-Warming-on-Agriculture-A-Ricardian-Analysis-Comment.pdf
Thanks. Your paper from 1999 argues about which of a few different models is most accurate for predicting impact on agriculture, but all are over simplistic to the point of uselessness. For example they only take into account temperature (but higher CO2 levels increase crop yields), and don't take into account the possibility that the underlying temperature data is itself flawed.
With the benefit of hindsight we can say the events theorized about in the paper (e.g. farmers scrapping equipment and moving north) never happened. Crop yields continued to smoothly increase on their prior trends, with no apparent impact from climate change.
https://ourworldindata.org/explorers/crop-yields?time=1999..latest&facet=none&country=OWID_WRL~OWID_EUR~USA&hideControls=false&Crop=Wheat&Metric=Actual+yield
Climate economics died out as a field not because it was wrong, but because any fair treatment of the evidence will conclude there won't be any impact. This conclusion is so counter to the needs of governments, universities and the media that it will never be given any close attention. In recent years those who point out what the calculations really say also tend to get fired, because ideological purges are the only way to sustain the narrative of meaningful impact.
That may be true on Planet MAGA (which your tag suggests you inhabit). On Earth, climate zones are shifting polewards, taking pests and diseases with them. And climate economics is very much alive, as the OP suggests.
This is churlish and unbecoming. Mr. Penbroke is raising good arguments — you are not.
If you had been dealing with these guys for 25 years as I have, you’d realise these aren’t arguments put forward in a search for truth, they are debating points put forward to defend a predetermined (and wrong) position, in this case climate denialism.
If I bothered responding to this (very old) talking point, Penbroke would come up with a new one. I got sick of playing this kind of whack-a-mole decades ago, and I have no problem being churlish to trolls.
https://johnquiggin.com/2007/06/30/talking-point-whack-a-mole-1997-edition/
Your paper wasn't about pests and disease, but in the north more people die of the cold than the heat by far. To do a realistic economic accounting in terms of lives lost you'd need to balance those things out.
Give it a break. I don't waste my time on denialists and donothingists. I have long since learned that it's just whack-a-mole, as in this discussion. Let's leave it there.
Nordhaus has updated DICE, presumably taking into account the criticism it’s received over the years. If you choose the alt damages or lower discount runs it justifies plenty of climate action
https://www.nber.org/papers/w31112
Yes, it was a big struggle to shift him on that Here's a survey of soem of the issues (For some reason, the abstract isn't the right one, so just read the paper) https://www.researchgate.net/publication/46452701_Stern_and_his_critics_on_discounting_and_climate_change_An_editorial_essay
Much more difficult to explain why we ignore historians. You should give that a try.
hehehe
For those who don't get the reference:
https://www.noahpinion.blog/p/on-the-wisdom-of-the-historians
The choice of terms is indicative of the difference between the fields. We don't think usually of the "wisdom" of economists. We think of their expertise, their technical ability. "Fine tuning" comes to mind, as an example. Should it be 25 or 50 basis points?
History is different, entirely too complex to be as useful. So useless that apparently we need many fewer academic posts. The supply, it seems, vastly exceeds the demand.
Because historians are the least scientific of the social sciences
Deep cut right here. Nice.
I've tried ignoring historians. Was easy enough.
Noah, I think you make a mistake when you tell your readers "don't worry, it's just campaign rhetoric, her people are saying that off the record." You may be right, but whether a politician means what she says isn't your area of expertise. And if we're supposed to be reassured because a candidate's campaign promises are bullshit that can't be implemented, we should feel a lot more comfortable with Trump.
You do a greater service when you just point out what economic policies do and don't make sense (which you do better than almost anyone else), and let us figure out for ourselves which candidate is less likely to carry out his or her lamebrained ideas.
I mean, you're right, I still dislike the price controls thing. I'm just less *worried* about it now.
Free markets are NOT the most efficient way to distribute resources. "Free" markets don't even exist really. They literally can't.
America produces enough food to feed the **entire world's population**, yet so much much of it is wasted while millions the world over starve to death every year.
The market allocates resources to 300 dollar tasting menus for the wealthy while children go into lunch debt at school. 1 in 4 American children are food insecure, while America wastes billions of meals worth of food.
That’s the narrative (“just rhetoric”) the partisans decided to use once the proposal was mocked in the mainstream press. Just following the damage control script.
Apparently., like Trump, don’t take KH seriously or literally. Not that any campaign should be taken seriously.
Great article, would love to see one on the unrealized capital gains tax proposal.
Why not just raise capital gains taxes and eliminate the step up basis at death (as Canada has) and stop allowing charitable deductions for the value of (untaxed) appreciated stock? Make tycoons pay taxes on their gains.
That is much more straightforward and has the advantage of successful examples elsewhere. Taxing unrealized gains is likely unconstitutional and distorting. Look at the Italian example. Personal property taxes at the state level are doable (though you could also look at the French history on the subject).
Not to worry, most of the unrealized gains nonsense is just populist campaign fodder meant to stir up hatred/envy of billionaires and justify expensive new spending programs that will never be properly funded.
Personally, I don’t care which taxes are hiked by whatever pol is elected. They key thing is that 100 percent of every tax hike (including if the individual income tax levels are hiked back to pre-Trump levels) should be used for deficit reduction and matched one for one with spending cuts. Just think, if KH can raise taxes by $500 billion a year and cut spending by $500 billion a year, the deficit will be halved (for a short while) and we’ll likely have lower interest rates (lower interest expense on the debt) and lower inflation.
Although a couple of years old, this is probably still fairly relevant: https://open.substack.com/pub/noahpinion/p/some-problems-with-unrealized-capital?utm_source=share&utm_medium=android&r=1lmtlf
Let me make sure I understand: If a homeowner "borrows" money with a HELOC or new first or second (or third or whatever) mortgage, that loan would be declared as a realized capital gain?
Among historians it seems that the way for a young academic to make a name for themselves is to create a case attacking a long held consensus -- anything from George Washington was a lousy military leader to there was no compromise of 1876. One wonders if the same dynamic exists among economists. I grew up with Samuelson and one of the abiding principles is that tariffs are bad and that free markets are good for everyone.
Another way to understand the price-gouging/demand shock problem is to look at the perspective of retailers rather than manufacturers. If retailers know that they can raise prices for snow blowers when a blizzard occurs, they will keep more in stock in anticipation of a windfall. This stockpiling serves as a source of additional demand in non-blizzard times that provides an incentive for greater production.
Yep.
I think you should draw a strong distinction between what economists really do, including folks like Krugman, and the caricature of economists as "free market" apologists. You've done this elsewhere with the trope of econ 101.
IDK what Krugman used to do. I hear it had something to do with economics. But all he is now is a Democrat hack. That's OK. He can be whatever he gets paid well to be, and I can ignore him.
"Teachout also fails to grapple with a second reason to worry about price controls during “abnormal market disruptions” — they can lead to hoarding."
Teachout also fails to grapple with a third reason to worry about price controls during "abnormal market disruptions - they can suppress short-term supply responses. To use the blizzard example, a snowblower distributor would have great incentives to find unsold snowblowers in unaffected areas, get them, and bring them to his store. Even if he had to pay full retail price, plus the cost of transportation, he might give more supply if there were an adequate profit opportunity. But if price controls prevent him from charging more than normal retail price, he'd have no reason to go to great efforts to find snowblowers he could sell for obscene profits. In this case, it's not the distributor who would suffer from price controls, but his would-be customers.
"My objections were based on the assumption that Harris was endorsing Warren’s ideas about price controls; instead, it seems like she’s simply throwing out some populist rhetoric."
The laptop class (of which you are part, Noah) has been saying for years that every word Trump says must be stretched to its illogical conclusion and taken 100% literally. But now, Harris' words openly praising a policy that you well know has been proven a failure dozens of times in recent history is "just populist rhetoric".
You're "no longer worried about this issue." Why? Because, "the Democrats can be relied upon to listen to the relevant experts and avoid taking extreme and dangerous policy steps."
In other words, Trump won't listen to the laptop class (your class, Noah) and Democrats will. And everyone knows that the laptop class is really the people who are entitled to rule. And even when they make mistakes, it's just "a few old guys getting some basic things wrong". Even when "this deference to authority can lead to a sort of cascade failure", it's still a worthwhile price to pay... because the alternative is fascism of course. (Ironically, fascism is a system that relies on subject matter experts far more than democracy is supposed to... but let's ignore that.)
What's amazing is that the people who articulate this argument -- the expert class should essentially rule -- in one breath, immediately tout themselves as defenders of democracy with the next.
I'm always surprised when people assume that regulations restricting purchasing will somehow benefit the less well off. Control prices and inventories fall, and people hoard. Who can better afford to hoard? Not the less well off. Cap rents and landlords will choose on factors other than the rent. Think that really is going to redound to the benefit of the least powerful in society? In general you should be more cynical about how people will respond to policy, not less.
High prices **don't** disincentivize hoarding for the people who can actually afford it. If something is in short supply, the rich can afford to buy it up because they are undeterred by high prices.
If the price of something becomes prohibitive (because the supplier must make a profit), then people who really need it literally do not possess the amount of currency that ownership has requested. This isn't "allocative efficiency", it is deliberate starvation.
Look at what's happening in Cape Town. The wealthy are literally causing water shortages.
What you are describing isn't hoarding, it is just buying things. Hoarding is buying something now on a precautionary basis because you are worried it won't be available later. It is particularly damaging because it is more demand at a time there is already a shortage when the product may ultimately not be used. The ability for prices to rise to market clearing levels helps prevent hoarding because it keeps the product available at all times. That's especially true for a wealthy person who knows they will be able to afford whatever the price is.
But price caps aren't going to fix the situation that you are describing. To the contrary, they will make it much worse. If wealthy people get cheap prices for water when they know it's scarce, they'll build water tanks and buy a bunch of cheap water. And when dry pipes break, who's are going to get fixed first? Bet it won't be poor neighborhoods'.
Addressing the type of situation you identify is, however, absolutely doable. On the demand side, you can give each household a certain amount of free or discounted water. Then you charge the rest at the market rate, which will end up quite high. And, in fact, that's eventually what Cape Town did, and it was very successful at stabilizing water use and avoiding "Day Zero" before the rains returned and ended the shortage.
On the supply side, it's not like there isn't water by Cape Town. It's next to the ocean! Desalination just requires electricity, and solar panels are pretty cheap. Letting the prices rise to clear the market creates the incentives to invest in that capacity. Cape Town ultimately did build three desalination plants to address the issue and isn't facing shortages any more. It also invested in pressure management equipment to better husband the now more expensive water.
The point is to move beyond just saying "people are dying we have to do something, and this is something" and actually figure out what will address the problem. And not do things that feel good but in fact may make a problem worse.
By "hoarding", I meant buying things in unnecessary quantities that you don't actually need.
This is the type of behavior that markets and price signals are meant to discourage, but they don't discourage it for the select portion of the population that can afford the higher prices and are undeterred by higher prices. Price elasticity of demand goes down as income goes up. The only people who need to regulate, or even eliminate, their consumption are the poor and working people.
You mention keeping the product available at all times, but available to whom? Available to people who can afford the price, even if people who cannot afford the price actually need it more.
Market economists claim that price signals will allocate the goods to the people who value them the most. But if someone literally doesn't have enough money to pay for something, for example a medication or article of food, does this mean that they do not value it?
I would put to you this question: is it more efficient to direct large amounts of resources to luxury resorts in developing nations, or towards improving the material quality of life for the local residents there? Clearly, the locals (who often live with spotty access to water that isn't even potable in the first place) need those resources (water, electricity, etc) a lot more than the multimillionaires who spend a few days of summer there. But the market gives the resources to those wealthy few, not the people who need it more.
Again, it would be absurd to suggest that struggling villagers in Peru "value" water, electricity, and shelter less than the tourists for whom all of this is a temporary luxury accommodation.
I must also point out that the solution you suggested, which Cape Town implemented, involves government action and interference with market mechanisms- everything that economics 101 teaches against in such cases.
I am normally adverse to econpmic discourse, my eyes tend to glaze over...lol..I took basic Econ in college and figured that was enough.
But, I learned a lot from this piece, thanks
Thank you!!
Why you should be extremely wary of economists :
Robustness of their work is very poor
https://www.econstor.eu/handle/10419/295222
Statistical significance of their results is abysmal
https://onlinelibrary.wiley.com/doi/10.1111/joes.12598
Meta-analysis show their results are completely biased and ideological
https://www.econstor.eu/bitstream/10419/280745/1/Meta-analysis-review.pdf
The statistical problems in empirical research are well-known. But in your last sentence, when you say that meta-analysis shows that results are "biased and ideological", you make a mistake. The research you cite only shows that effects tend to be OVERSTATED; the finding says nothing about bias or ideology.
This religion of the market is completely unempirical.
"Prices fall when supply is high-"
No they don't. Companies destroy the stock they cannot sell for a price that is profitable.
"Markets allocate resources to whoever needs them the most"
No, they allocate them to who can pay the most money for it. Inputs are allocated to making yachts and luxury dwellings for billionaires while ordinary people cannot afford housing and heating.
As per the paper, average statistical power of economic empirical analyses is 7%, while in most sciences 80% is expected for significant results. Qualifies as "abysmal" to me, but I'm not a specialist :)
I admit that "bias" may be too strong a word. Economists abuse of their political influence though...
If you see a paper showing that empirical economic effects are half as large as reported, and you conclude that this is evidence of bias and ideology, you've gone wrong somewhere. Effects are smaller than reported because of publication bias.
I didn't precisely attribute the bias. You're taking it personally, but I certainly didn't accuse you, or empirical economists in general. On the contrary : the main source of bias IMO is the pile of garbage theoretical economics that drove the discipline for so long, with utter contempt for such low things as "physical reality" -- you know, like that econ 101 textbook that says that a bakery produces bread with capital and work as input, forgetting unimportant stuff like... flour?
If you think I'm taking it personally, you have erred once again! I'm just explaining where you made a mistake. 😊
In general, ideology is pretty orthogonal to the direction of the effects reported in empirical papers. Sometimes ideology tells you an effect should be bigger; sometimes, smaller. Thus, observing that empirical effects tend to be overstated doesn't tell you much about ideology at all; what it tells you about is publication bias. 😉
OK, but what drives publication bias ? Of course it's not restricted to economics, it's probably mostly an ill-effect of the "publish or perish" ... ideology rife across all of academia :)
Your last point is where I sit on this. But, I can take into account obvious bias and judge whatever comes out their pie holes or pie charts accordingly.
This is unfair but I can’t take Zephyr Teachout seriously because of her name. If she were Zephyr Johnson or Megan Teachout, I wouldn’t bat any eye at it.
But the combination of that first name and last name and it’s like a fake English name from a bad Japanese video game.
The worst was “Reality Winner” that was busted releasing classified docs incriminating Trump or something. I’m like this has to be a made up person and we’re being fucked with right?
I’m not worried about any policy proposals from the Harris campaign because they almost certainly won’t ever be implemented if and when there’s a hostile Congress. The last few election cycles where one party has run the legislature and the executive branch has showed that they rarely do anything