Abbott’s border policy cost the U.S. almost $9 billion in just 10 days

Posted on by Lone Candle

“Republican Texas Gov. Greg Abbott’s short-lived policy of requiring state troopers to conduct secondary inspections of trucks crossing into Texas from Mexico cost the United States almost $9 billion in just 10 days, Axios reported Tuesday.

The policy, which Abbott enacted on April 6, snarled truck traffic at the border and led to a protest by Mexican truckers that stopped trade at some major crossings. On April 15, Abbott ended the double inspections, for which he’d received withering criticism from both sides of the border and the aisle, after striking deals with the governors of the four Mexican states that border Texas.

Per Axios, Abbott implemented the policy “in response to the Biden administration’s announcement that it would lift Title 42,” a Trump-era public health policy that denied migrants entry into the United States.

An analysis by the Perryman Group showed that the U.S. lost an estimated $8.97 billion in GDP due to delays at the border, while Texas alone lost $4.23 billion.”

Is High Inflation the New Normal?

Posted on by Lone Candle

“Partisans in the inflation battle frequently fail to acknowledge that their stories are not mutually exclusive. If public policy boosts demand while production bottlenecks hamper supply, there is no question about what happens to prices—up they go. Digging further into the debate provides additional reasons to eschew confident assertions.

Orthodox economic theory says fiscal and monetary stimulus can increase total spending, or what economists call aggregate demand. We’ve certainly had lots of both. The American Rescue Plan Act, signed into law by President Joe Biden on March 11, 2021, had a top-line figure of $1.9 trillion. Expansionary fiscal policy, meaning increased government spending to boost output and employment, requires deficit spending, because financing outlays with taxes blunts the effects on aggregate demand.

At the same time, the Fed’s balance sheet has surged. Total assets held by the central bank grew from roughly $4 trillion in early 2020 to $8.9 trillion as of late January. Driven by these asset purchases, the M2 money supply—cash, checking accounts, and “near monies,” such as savings accounts and money market mutual funds—grew from $15.5 trillion in early 2020 to more than $21.6 trillion today. So Americans definitely have more money to spend.

It is also true that fiscal and monetary expansion don’t boost supply of the goods people might want to buy with that money. Widespread COVID-prevention policies threw a wrench into the economy’s gears. Transportation gridlocks on sea, on land, and in the air make production and distribution harder. Major inputs, such as semiconductors, are frustratingly scarce. There are also frictions in labor markets, such as recently boosted unemployment benefits and union disputes over vaccine mandates. The combined effect is rising prices, independent from demand considerations.

A supply-and-demand double whammy could explain inflation. But both stories have problems.

On the demand side, all that stimulus might not be as expansionary as it appears. “We know from experience that budget deficits, by themselves, are not very inflationary,” writes Scott Sumner, the doyen of the market monetarist school, in his new book The Money Illusion (University of Chicago Press). Sumner cites the absence of major inflation during the Reagan and Obama administrations, both of which presided over growing budget deficits.

Nor was money especially loose during the early stages of the pandemic. As the money supply ballooned, the velocity of money—its average rate of turnover—cratered. People held on to that extra money. According to data from the Federal Reserve Bank of St. Louis, money demand increased by 22.5 percent from the fourth quarter of 2019 to the first quarter of 2020. Velocity remained depressed as the money supply continued growing. Since supply outpaced demand, monetary conditions did loosen. But Fed policy did not open the liquidity floodgates, as many initially supposed.

As for the supply of goods, congested production and slowed distribution clearly are making inflation worse. But this explanation is prone to just-so stories. Supply conditions vary greatly by sector. Aggregate data, constructed to get a fuller picture, is not as clean on the supply side as on the demand side.

We also have to consider politics. Behind the inflexible insistence that supply problems matter most lies a possibly partisan reluctance to indict policy makers and technocrats.

The doves are down, but they are not out for the count. Market inflation expectations peaked in mid-November. As of January, bond traders forecast 2.8 percent per year for the next five years, meaning they are not convinced runaway inflation is our destiny. “Predictions are hard, especially about the future,” a wise man once said. Much will depend on how fast supply constraints loosen and Fed policy tightens.”

They warned about pandemics before Covid-19. Now they have a $100 billion plan to stop the next one.

Posted on by Lone Candle

“Among other priorities, the plan includes funding for: creating vaccine candidates for each of the 26 families of viruses known to infect humans; developing antiviral medications that can work against a broad spectrum of viruses; building out manufacturing capacity for vaccines, antivirals, tests, and other countermeasures; deploying genomic sequencing as a way to track outbreaks; developing broadly useful diagnostic technologies and better regulatory processes for approving and disseminating plentiful rapid tests; and improving security in laboratories dealing with dangerous viruses.

The White House, to its credit, has already proposed funding around this level. Most recently, in its 2023 budget proposal, the Biden administration asked for $88.2 billion in funding over five years on pandemic preparedness. That includes $40 billion for the Office of the Assistant Secretary for Preparedness and Response (ASPR) at the Department of Health and Human Services to “invest in advanced development and manufacturing of countermeasures for high priority threats and viral families, including vaccines, therapeutics, diagnostics, and personal protective equipment (PPE),” as well as $12.1 billion in research funding for the National Institutes of Health for vaccine, therapeutics, and diagnostics development.

Bumb notes that the Biden proposal actually drew on the original Apollo plan put out by the bipartisan commission. That’s part of why the new commission report is so notable: This is a group that’s capable of driving policymaking at high levels.

That said, Congress has yet to appropriate money at the commission’s desired level to prevent the next pandemic. It’s barely interested in further funding response to the current, ongoing pandemic, which is still killing hundreds of Americans a day. A group of senators recently cut a deal for $10 billion to fund Covid-19 response, after slashing funding the White House wanted to help fight the pandemic abroad — only to have Republicans block the deal on the Senate floor over separate immigration concerns. Even if the funding eventually passes, it’ll have to wait until after the Easter recess ends on April 22.”

When Russian troops arrived, their relatives disappeared

Posted on by Lone Candle

““Woman, calm down,” soldiers told Maruniak’s wife, according to Natali. “Maybe it’s the last time you see your husband.”

She saw her husband one more time, on March 24. He returned again with soldiers, though this time, they covered their faces. “Feed him, change his socks, and give him his medicine,” they ordered Maruniak’s wife. As she did, she noticed his legs were bruised blue. There was another bruise on his right temple, another on his arm. Maruniak said nothing, only that it was cold where he was being held.

That was the last Maruniak’s family saw or heard anything about him.

Maruniak is among dozens of local officials or community leaders who have been abducted or arbitrarily arrested by Russian forces as they seized territory in Ukraine, especially in the east and the south. These disappearances are both an attempt to coerce cooperation and a targeted effort to silence and intimidate Ukrainians who may oppose or organize against a Russian occupation.”

…

“The United Nations Human Rights Monitoring Mission in Ukraine has documented about 109 cases of suspected detention or enforced disappearances among civilians since February 24, including 48 local officials. The UN and other human rights groups have confirmed disappearances among other members of civil society: volunteers, activists, journalists, religious leaders, protesters, and former military veterans. (Vox reached out to the Russian Embassy for comment, but did not receive a response.)

Anastasiia Moskvychova, who has been tracking disappearances for ZMINA, says they have confirmed more than 100 arbitrary detentions since February 24; about 50 people are still missing.

But Oleksandra Matviichuk, a Kyiv-based activist and head of the Center for Civil Liberties, said these numbers are only the “top of the iceberg.” Her group is tracking dozens more suspected cases of enforced disappearances, but they are still trying to corroborate evidence, a task that’s all the more difficult in Russian-occupied areas. Other times, family and friends of the suspected victims fear making that information public.”

…

” All of this foreshadows how Russia might try to consolidate control in Ukrainian areas it captures by force.”

…

“Extrajudicial arrests happen within Russia, but they are documented more frequently in Russia’s other territories, including Dagestan and Chechnya, where enforced disappearances became what Human Rights Watch described as an “enduring feature” of the conflict.

In Crimea, ethnic Tatars, who tended to oppose Russia’s annexation in 2014, were targeted, including one local activist and leader who was allegedly kidnapped by men in Russian traffic police uniforms in 2016. In the Donbas, militias kidnapped, tortured, and killed a local city council member who tried to take down a flag of the so-called Donetsk People’s Republic. “They hunted after the activists, after the persons who supported the Ukrainian army, Ukrainian volunteers,” said Oleksandr Pavlichenko, executive director of the Ukrainian Helsinki Human Rights Union.

“Now we see the same scheme,” Pavlichenko added, “and it’s only the beginning of this scheme.””

…

“Human rights watchers and experts say it is often difficult to say who is carrying out disappearances, or subsequent mistreatment — including in Ukraine right now. “The state actors are not interested in accountability for those kinds of abuses, so it creates this environment of impunity,” said Saskia Brechenmacher, a fellow at the Carnegie Endowment for International Peace who has researched Russian civil society.

That can make it hard to know exactly how organized these actions are, or whether they are directed top-down from Moscow, the work of local units or security services, or militias affiliated with Moscow.”

…

“Ahead of the invasion, the United States told the United Nations it had credible information that Moscow was compiling lists of Ukrainians to be “killed or sent to camps.” Advocates do not have confirmation of such lists, or who may have compiled them if they do exist, but emphasized that this campaign of disappearances is not random.

“It’s not happening as some chaotic or spontaneous thing,” Andreyuk said. “This is very targeted detentions — and it’s a very targeted policy to get more control over society.””

…

“Added together, these disappearances help create a “Stalin-like” police state, a rule through terror and mistrust, and where nobody knows what — or who — might make them a target of disappearance. “If you just keep silent, it is also suspicious,” Pavlichenko said.”

The Time the Federal Government Built a Flawed Housing Project and Tore It Down 20 Years Later

Posted on by Lone Candle

“Pruitt-Igoe represented complete racial and economic segregation. The building was dominated by single mother households that symbolized the collateral damage of public assistance. This was described by sociologist Lee Rainwater, in his book Behind Ghetto Walls: Life in a Federally-Subsidized Slum, “Only those Negroes who are desperate for housing are willing to live in Pruitt-Igoe.” When imploded, the buildings weren’t even two decades old.

The problems that toppled Pruitt-Igoe do not go nearly far enough to capture the deeply mistaken assumptions about government housing policy whose bad ideas continue today.

After clearing seedy areas, housing reformers who pushed for Pruitt-Igoe assumed that the neighborhoods they replaced were irredeemably bad and required what Architectural Forum magazine called, in 1957, “slum surgery.” In reality, the DeSoto-Carr neighborhood—like Chicago’s Bronzeville, Detroit’s Black Bottom, and New York’s East Harlem—contained small businesses, community institutions (such as a St. Louis hospital financed by African-American philanthropy) manufacturing, and, most notably, owner-occupied homes. Of the housing units cleared, according to the Census Bureau, 21 percent of the properties had “nonwhite owners.” What’s more, an additional 25 percent of those included rental units. It offered, in other words, a path to wealth accumulation through property ownership—a path wiped out by public housing.

Implicit in that heedless clearance was the idea that the private market inevitably fails to produce housing for those of modest means. In her landmark 1934 book Modern Housing, housing reformer, Catherine Bauer, wrote “The premises underlying the most successful forward-pointing housing developments are not the premises of capitalism [or] inviolate private property.” It was no coincidence that Bauer also included photographs of government-owned apartments in Soviet Moscow.

The design of Pruitt-Igoe’s modernist garden of towers would, instead, reflect the reformer’s hubris that planners, financed by government, could build a better neighborhood.”

Biden’s Plans To Fix the Pay Gap Won’t Actually Help Women

Posted on by Lone Candle

“evidence that this actually helps women is mixed. Meanwhile, such restrictions would have unintended consequences.

“For example, employers who can’t ask about prior salary might assume that a female candidate would accept less money than a man, because women make less on average,” as The New York Times has previously noted. In this scenario, a ban on salary history discussions could lead to women getting lowballed in job offers.

Salary history bans could also cost people—particularly women and younger workers—some job offers. It’s not hard to imagine an employer choosing to hire someone whose salary requirements seem slightly lower than an equally qualified candidate with higher requirements. In this case, prior salary disclosure could mean the difference between getting a job or not.

In other cases, where an employer has a strong preference for a particular candidate, the company may be prepared to offer a higher salary than the baseline in order to recruit them. Without knowing the candidate’s salary history, however, the employer may be lost as to what to offer. They might offer lower than the candidate currently makes, leading the candidate to reject the job that could have otherwise been a good fit.

Which is all to say that surely some women may actually benefit from past salary disclosure—especially now that young women are out-earning their male counterparts.

In general, letting employers and prospective employees exchange more information, not less, seems likely to lead to the best matches and the most satisfaction.”

…

“Today’s rhetoric about wider disparities in male and female incomes tends to 1) rely on research looking at incomes across professions and positions and 2) ignore explanations other than discrimination that might explain pay disparities—things like gender differences in types of work, work schedules, and years in the workforce. Politicians and media then use this distorted picture to spawn outrage and get kudos for addressing the issue, even if nothing they’re doing can actually “fix” the complicated causes behind disparities.

There may be a broader discussion to have about whether female-heavy industries are undervalued or how choosing to have children may harm women’s salary prospects more than men’s. But the issue is nowhere near the simplistic narrative that many modern progressives often make it out to be, in which sexist bosses and companies simply choose to pay women less than men for the same work and everything can be fixed with federal mandates.”

How I (and US policymakers) got inflation wrong

Posted on by Lone Candle

“At the time I wrote my July 2021 piece, “Don’t worry about inflation,” a prescient copy editor noted that this headline might look bad if I was wrong and inflation got increasingly worse. I responded that I stood by it, and if I was wrong, I would write a groveling follow-up piece.

So here we are.”

…

“I unfairly dismissed the most boring, Econ 101 explanation for why inflation happens: that there was too much money sloshing around for the amount of stuff the economy was able to produce — meaning the price of that stuff went up.”

…

“Past stimulus checks during non-pandemic episodes have been disproportionately spent on durable goods, rather than services, suggesting that the stimulus checks might have accelerated this phenomenon just as the virus did. And because prices of goods tend to be less “sticky” than prices of services (meaning they tend to rise and fall more easily), this especially contributed to inflation.

This surge in spending led to big, well-publicized shortages in certain areas, most famously cars, as demand for durable goods outstripped the economy’s ability to produce them (sick workers limiting production was a factor, too, if a smaller one). That provoked localized price spikes on a few goods. And because oil producers slowed production in expectation of a big post-Covid recession, they too struggled to keep up with demand, so gas prices rose — which Putin’s invasion of Ukraine only worsened.

For a while, many commentators thought you could wave off inflation fears by saying it was just limited in a few sectors. But at this point, an “inflation in a few places” theory doesn’t really fly.

Some goods, like oil and cars, have specific narratives like a chip shortage or low drilling that could explain inflation. But as Bloomberg’s John Authers has detailed, inflation is still rising even if you exclude those goods. The Dallas Fed’s “trimmed mean” inflation measure, which purposely removes “outliers” where prices are rising extremely fast or extremely slow from the data, started to shoot up recently, too.”

…

“Due to a combination of rapidly growing wages through all of 2021, plus trillions in government fiscal support, there has just been too much money around combined with insufficient goods and services to spend it on.

That’s led to not just inflation but accelerating inflation, as wage increases contribute to price increases and higher expectations of future inflation contribute to higher immediate inflation. That’s why you’ve started to see inflation in categories beyond just gas and cars. It’s a situation similar to what NAIRU would predict, except I would argue it’s not really about low unemployment.”