I’m not particularly worried about ordinary inflation because I remain confident that the Fed governors have the tools to address it and will be willing to use them. The editors of the generally pro-Democratic Washington Post, however, are clearly becoming nervous about the Congressional Democrats’ willingness to spend with little regard to the size of the public debt or actual economic fundamentals:

EVEN BEFORE the U.S. and world economies have fully emerged from the near-depression induced by the needed public health response to covid-19, a new worry is already coming to the fore: inflation. The idea, broadly, is that the massive $1.9 trillion U.S. fiscal support package, coupled with the Federal Reserve’s aggressive bond-buying and interest-rate cutting, will stimulate the economy beyond what is needed to restore production to pre-pandemic levels, resulting in tight markets for everything from labor to lacrosse sticks — and corresponding price increases.

This is not a fringe view, but a serious one voiced by serious economists such as former treasury secretary Lawrence H. Summers. And yet the people responsible for making sure the United States never again sees inflation on the scale of the 1970s — the Federal Open Market Committee — reject it. The Fed unanimously voted Wednesday to keep monetary policy on its present course, which seeks to boost inflation to the annual target of 2 percent and keep it there, on average, over years, even if it means running above that level for extended periods.

Here’s the meat of their editorial:

The catch is that some of the structural factors that limited wage and price inflation for the past quarter-century — notably the integration of China into global commerce, and the massive increase in the supply of labor that it created — are not only diminishing but shifting into reverse. If such developments are creating a more inflationary environment than the Fed now estimates, the U.S. central bank’s plans will be disrupted, and it will confront inflation much sooner than it, and the markets, are currently projecting. Once destabilized, inflation expectations have a way of getting out of control — fast.

They go on to give a shout out to the Phillips Curve without mentioning it by name, if only to dismiss it. When I was taking economics courses, the Phillips Curve, an inverse relation between inflation and unemployment, was treated as Holy Writ. Since then it has not received empirical support.

What concerns me are the other risks that present policy brings:

• Increasing income and wealth inequality
• Catastrophic loss of confidence in U. S. credit
• The political and civil unrest that might come from the previous two risks

The Fed doesn’t have the tools to deal with any of those and I’m skeptical that the Congress has the political will to address them should they materialize.

I want to commend to your attention a piece by Thomas Frank at The Guardian. In the piece Mr. Frank, a Democrat and no Trump supporter, analyzes some currents trends and sees them in a way closely aligned with the way I see them. Here’s its kernel:

What explains the clampdown mania among liberals? The most obvious answer is because they need an excuse. Consider the history: the right has enjoyed tremendous success over the last few decades, and it is true that conservatives’ capacity for hallucinatory fake-populist appeals has helped them to succeed. But that success has also happened because the Democrats, determined to make themselves the party of the affluent and the highly educated, have allowed the right to get away with it.

There have been countless times over the years where Democrats might have reappraised this dumb strategy and changed course. But again and again they chose not to, blaming their failure on everything but their glorious postindustrial vision. In 2016, for example, liberals chose to blame Russia for their loss rather than look in the mirror. On other occasions they assured one another that they had no problems with white blue-collar workers – until it became undeniable that they did, whereupon liberals chose to blame such people for rejecting them.

And now we cluck over a lamentable “information disorder”. The Republicans didn’t suffer the landslide defeat they deserved last November; the right is still as potent as ever; therefore Trumpist untruth is responsible for the malfunctioning public mind. Under no circumstances was it the result of the Democrats’ own lackluster performance, their refusal to reach out to the alienated millions with some kind of FDR-style vision of social solidarity.

Or perhaps this new taste for censorship is an indication of Democratic healthiness. This is a party that has courted professional-managerial elites for decades, and now they have succeeded in winning them over, along with most of the wealthy areas where such people live. Liberals scold and supervise like an offended ruling class because to a certain extent that’s who they are. More and more, they represent the well-credentialed people who monitor us in the workplace, and more and more do they act like it.

What all this censorship talk really is, though, is a declaration of defeat – defeat before the Biden administration has really begun. To give up on free speech is to despair of reason itself. (Misinformation, we read in the New York Times, is impervious to critical thinking.) The people simply cannot be persuaded; something more forceful is in order; they must be guided by we, the enlightened; and the first step in such a program is to shut off America’s many burbling fountains of bad takes.

However, I do want to correct him. Progressives are not liberals. Liberals are mostly over 90 at this point. They voted for Hubert Humphrey and Adlai Stevenson. Walter Mondale (93) is a liberal. Similarly, nearly all conservatives are over 80. Those donning the mantles of liberalism or conservatism are wearing false colors. Most are pragmatic politicians saying whatever they need to say to get votes. Some are left or right populists. The rest are either Left Bolsheviks or Right Bolsheviks.

In an op-ed in the Wall Street Journal economist David Neumark provides strong evidence for the adverse consequences a $15/hour national minimum wage:

A recent Congressional Budget Office report estimated that 1.4 million jobs would be lost if a new $15 federal minimum wage is signed into law. Advocates were quick to dismiss the CBO’s conclusion. “It is not a stretch to say that a new consensus has emerged among economists that minimum wage increases have raised wages without substantial job loss,” said Heidi Shierholz of the Economic Policy Institute, which has also circulated a letter signed by economics Nobel laureates and others making the same claim.

As I show in a recent extensive survey of research on minimum wages and job loss in the U.S., this is simply not true. Most studies find that a minimum wage reduces employment of low-skilled workers, especially the lowest earners most directly affected by raising the minimum wage.

There are conflicting individual studies of the effects of minimum wages on employment. That there is disagreement shouldn’t be surprising. Economics is a social science, not a natural one. Studies of minimum wages and job loss are not laboratory experiments. They can’t be replicated and so can’t be expected to yield exactly the same results.

He further explains his literature review:

To provide an accurate reading of the research, Peter Shirley and I surveyed the authors of nearly all U.S. studies estimating the effects of minimum wages on employment published in the past 30 years. We asked them to report to us their best estimate of the employment effect, measured as the “elasticity,” or the percent change in employment for each 1% change in the minimum wage. Most authors responded, and in the few cases in which they did not, we pulled this estimate from their study.

The results are stark. Across all studies, 79% report that minimum wages reduced employment. In 46% of studies the negative effect was statistically significant. In contrast, only 21% of studies found small positive effects of minimum wages on employment, and in only a minuscule percentage (4%) was the evidence statistically significant. A simplistic but useful calculation shows that the odds of nearly 80% of studies finding negative employment effects if the true effect is zero is less than one in a million.

Across all the studies, the average employment elasticity is about minus-0.15, which means, for example, that a 10% increase in the minimum wage reduces employment of the low-skilled by 1.5%. Extrapolating this to a $15 minimum wage, this 107% increase in the states where the federal minimum wage of $7.25 now prevails would imply a 16% decline in low-skilled employment (broadly consistent with the recent CBO study). That sounds like a substantial job loss.

It’s true that some workers would experience higher incomes, and that, on net, incomes of low-wage workers would probably rise. But that doesn’t mean the minimum wage is the best way to help low-wage workers or low-income families, as research clearly demonstrates that a large share of income gains from a higher minimum wage flows to families with higher incomes. An alternative policy—the Earned Income Tax Credit—targets benefits to lower-income families far more effectively, is proven to reduce poverty, and creates rather than destroys jobs.

Other observation include that more recent studies do not show better outcomes, as has sometimes been claimed.

He concludes:

The consensus of economic research on the effects of minimum wages points clearly to job loss, and policy makers should consider this job loss in weighing the potential costs and benefits of a sharp increase in the minimum wage.

Not addressed in the studies or by the advocates of a sharply higher minimum wage are the indirect effects, for example the effect of minimum wage multiple contracts. “Definitely” is a pretty strong word. My conclusion from all of this is that the path we’ve been on, in which state and local minimum wages are being set significantly above the national minimum wage, is the right course.

That didn’t take long. The Biden Administration’s COVID-19 “relief bill” is already being challenged in court. The editors of the Wall Street Journal remark:

The $1.9 trillion bill marketed as Covid relief includes $350 billion in federal aid to states and localities. While states can use the money to increase spending, Congress decreed that they can’t use it to cut taxes. “A state or territory shall not use the funds,” the bill says, “to either directly or indirectly offset a reduction in the net tax revenue” from a new law or regulation.

Because the mandate applies to “indirect” revenue offsets, states are at risk of violating the law for any tax reduction “during the covered period,” which stretches through 2024. Ohio’s lawsuit by Attorney General Dave Yost argues that “this coercive offer of federal funds violates the Constitution.”

Since money is fungible it’s darned hard to keep states accountable in this way. There are no prohibitions in the legislation, for example, on the states using the money to increase public employee pay or make public employee pension payments rather than borrowing money to do those things. That makes aid to state and local governments backdoor subsidies to public employee unions.

While that may not be the intention, it’s precious hard to avoid state and local governments from using the money that way.

The editors of the Washington Post want the Biden Administration to “go bi climate change”:

The danger is imminent. The world cannot afford another round of nice-sounding proposals followed by inaction. Congress must go big on climate change.

And people wonder why the editors of the Wall Street Journal are worried about the budget deficit. Go big on COVID-19 relief; go big on infrastructure spendintg; go big on climate change. I would prefer small, efficient, effective, and incremental with solid performance metrics. At least you can figure out whether the course on which you’re heeded is going where you want to go and, if it’s not, change course.

They boost the Clean Futures Act:

One plan, the sprawling Clean Future Act, released earlier this month by the leaders of several House committees, would have the country reach net-zero greenhouse emissions by mid-century, starting with massive decarbonization of the electricity sector over the next decade. The bill would require utilities to derive increasing amounts of their electricity from clean sources, which include renewables, nuclear power and, for a limited time and at a discounted rate, natural-gas-fired power plants. The bill would invest in electric car infrastructure, compensate coal country for lost jobs and ask states to develop emissions-cutting plans that would address any areas federal programs failed to cover.

As Chesterton waggishly put it, anything not worth doing is not worth doing well. Unless China and India decide to drastically change the trajectories of their own carbon emissions very quickly rather than in 20 years, whatever we do won’t make much difference. That’s the thing about carbon emissions. Where it’s emitted matters less than how much is emitted. And all of the building that’s being proposed to transition from our present methods of generating electricity to “clean sources” means we will be emitting more carbon than would otherwise be the case not less.

As I’ve pointed out before at the present rate of adoption of electric vehicles we will never stop using internal combustion engines. If 100% of vehicles sold were suddenly EVs, it would take 20 years before the overwhelming preponderance of vehicles on the road were EVs—that’s how long it takes for the entire U. S. vehicle fleet to turn over.

IMO given the realities power generation, present emissions, worldwide trends in emissions, and the enormous costs involved if we were to “go big” on anything it should be in putting other mitigation strategies in place than in setting a goal of net zero emissions by 2050.

And I haven’t even touched on Jevons Paradox, scalability of production of EVs, or maintaining baseline power.

In an op-ed in the New York Times China correspondent Ian Johnson proposes some small steps for beginning to heal the rift in Chinese-American relations:

One, the Biden administration should offer to restart the Peace Corps and Fulbright scholarship programs in China, two key ways that Americans have learned about the country over the past decades. The Trump administration canceled both as part of an effort to isolate China. All that accomplished instead was to hurt America’s ability to train a new generation of scholars and analysts.

Two, in exchange for this, the U.S. government should stop vilifying China’s Confucius Institutes as sinister propaganda machines. These are largely cultural centers and much like educational outposts from other countries trying to push a good image of themselves. American universities should prevent Confucius Institutes from offering accredited courses — no university should allow a foreign government to set its curriculum — but the centers should be able to function off campus, much like Germany’s Goethe Institutes or British Councils do.

Three, the Biden administration should allow back into the United States some of the scores of Chinese journalists expelled by the Trump administration last year — provided that Beijing also agrees to welcome again accredited journalists from American news organizations and commits to not harassing them.

The Trump administration’s measures gutted America’s ability to understand China. China, by contrast, still has many reporters and diplomats, and tens of thousands of students in the United States.

Four, the U.S. government should lift restrictions on visas for Chinese Communist Party members wanting to travel to the United States. The policy was crafted to protect Americans from the C.C.P.’s supposedly malign influence. But the party counts some 90 million members, the majority of whom are civil servants doing normal jobs, not followers of some evil cult that needs to be kept at bay.

Finally, China should be invited to reopen its consulate in Houston, which the Trump team closed last year in retaliation for alleged espionage. In return, the Chinese government would allow the United States to reopen its consulate in Chengdu, which Beijing had closed in retaliation.

I don’t object to any of those measures in principle. But the devil, as they say, is in the details. Historically, the U. S. has been terrible at tying its actions to corresponding actions by other parties. That’s understandable. Everything we do has a constituency whose livelihood depends at least in part on it and they speak louder than anybody else. I think there are a number of things we should be doing he leaves unmentioned as we try to mend fences. We should do a thorough, eyes wide open, unstinting examination of Chinese espionage in the U. S. and the role of visiting scholars and the Confucius Institutes in it for example.

I also think that Mr. Johnson underestimates American knowledge of China. The United States has more native speakers of Mandarin than any country other than China or Thailand. We understand China just fine. We just don’t pay attention to what we know or act on it which are U. S. political problems only tangentially related to China and not unique in our relations with other countries.

Last week I stumbled across this post at FiveThirtyEight, found it thought-provoking, and wanted to share some of the observations it sparked. The background is that the folks at FiveThirtyEight drew a whole bunch of different Congressional district maps, compared them, and evaluated the results. From the post there that pointed me to the “Atlas”:

No single map can fulfill all the criteria we looked at — more competitive elections or more “normal-looking” districts, for example. Depending on the desired outcome, each of the different maps could represent the “right” way to draw congressional district boundaries. If you haven’t explored the maps in our Atlas Of Redistricting yet, we hope you’ll do that now. Below are the details of how we made and analyzed all of them.

I think there’s one basic question to ask: what do all of their maps tell us about our current Congressional districts? I think two things. The first is that the most obvious way to explain our present Congressional maps is that in states with Republican-dominated state legislatures they’re drawn to help Republicans, i.e. “Republican gerrymanders”, and in states with Democratic legislatures they’re drawn to help Democrats.

But lo! and behold, several things emerge in turn from that. The first is that the only districting methods that ends up with a number of Democratic representatives greater than or equal to the present number are the present one and the Democratic gerrymander. That result which may be counterintuitive to some is a consequence of something that is just as true at the state level as at the national level: we don’t vote at large.

And that’s not symmetric on the Republican side. Many methods of drawing districts, e.g. proportional representation, compact districts, competitive districts, etc. wind up producing more Republican representatives rather than fewer.

Which brings me to my next observation. As I have pointed out before the strategy of drawing districts is to concentrate political, racial, or ethnic minorities in a very few districts and other dilute them. Any scheme for drawing districts other than the present districts produces more black representatives than are sent to Washington at present.

So if you’re looking for racism in our politics you needn’t turn to Republican-run states. Look no farther than the large states with Democratic majorities in their legislatures. I say this as someone who lives in the state with one of the most gerrymandered districts in the nation: the Illinois 4^th Congressional district which is not only racist but, what’s worse, obsolete. But for the bizarre barbell-shaped district Illinois, drawn with the explicit intention of electing a Hispanic representative, Illinois would undoubtedly be sending more Hispanics to Washington than we do now.

Mitch McConnell’s reaction to plans among some Democrats to ditch the Senate filibuster are garnering a certain amount of attention. From his op-ed in the Wall Street Journal:

Imagine a world where every single task requires a physical quorum of 51 senators on the floor—and, by the way, the vice president doesn’t count. Everything that Democratic Senates did to Presidents Bush and Trump, everything the Republican Senate did to President Obama, would be child’s play compared with the disaster that Democrats would create for their own priorities, if they broke the Senate. Even the most mundane tasks of our chamber—and therefore of the Biden presidency—would become much harder, not easier, in a postnuclear 50-50 Senate.

If the Democrats break the rules to kill Rule 22 on a 50-50 basis, then we will use every other rule to make tens of millions of Americans’ voices heard. Perhaps the majority would come after the other rules in turn. Perhaps Rule 22 would be only the first of many to fall, until the Senate ceased to be distinct from the House in any respect.

Even so, the process would be long and laborious. This chaos wouldn’t open up an express lane for the Biden presidency to speed into the history books. The Senate would be more like a 100-car pileup—nothing moving as gawkers watch.

And then there’s the small problem that majorities are never permanent. The last time a Democratic majority leader was trying to start a nuclear exchange— Harry Reid in 2013—I offered a warning. I said my colleagues would regret it a lot sooner than they thought. A few years and a few Supreme Court vacancies later, many of our Democratic colleagues admitted publicly that they did.

If the Democrats kill the legislative filibuster, history would repeat itself, but more dramatically. As soon as Republicans wound up back in control, we wouldn’t stop at erasing every liberal change that hurt the country. We’d strengthen America with all kinds of conservative policies with zero input from the other side.

How about a nationwide right-to-work law? Defunding Planned Parenthood and sanctuary cities on day one? A whole new era of domestic energy production. Sweeping new protections for conscience and the right to life of the unborn? Concealed-carry reciprocity in all 50 states and the District of Columbia. Massive hardening of security on our southern border?

Even now, we saw during amendment votes days ago that certain common-sense Republican positions enjoy more support in the current Senate than some of the Democratic committee chairmen’s priorities—and this is with them in the majority.

The pendulum would swing both ways, and it would swing hard.

Speaking of collegiality.

I’ve said before that I think that the Harry Reid Senate was the worst of my memory. Reid’s use of what was called “the nuclear option” figured strongly in that assessment. You don’t just evaluate performance based on presumed good intentions but on what the actual results are and the precedents established. Ditching the filibuster might be a tactical success but it would be a strategic disaster.

I want to put in my two cents on James Joyner’s observations about our broken federal system. He attributes the problems to a loss of collegiality among the members of Congress:

What’s lacking is basic respect for ones colleagues. It’s simply impossible to work together to find common ground. And yet Senators are openly contemptuous of one another and of the opposite-party leadership even in casual conversations with reporters.

I’ve remarked on that myself, noting how it parallels similar changes in the practice of law but I think there are more basic problems. As both of our two major political parties drift away from being the “catch all” parties they’ve always been to becoming programmatic parties fundamental conflicts in goals would seem to be baked in.

But I don’t think it stops there. I don’t know where to date the change but I do know it hasn’t always been this way. I pointed it out here more than 15 years ago. The Democrats had changed from being the other party to being an opposition party. I believe now as I said then I don’t believe there is room in our system for an opposition party. The Democrats were an opposition party to the Bush Administration; the Republicans an opposition party to the Obama Administration; the Democrats were then an opposition party to the Trump Administration; now the Republicans are an opposition party to the Biden Administration. Maybe it all goes back to Bill Clinton’s impeachment but it doesn’t go back any farther than that. I note that there was bipartisan support for the No Child Left Behind Act of 2001.

And I see other things as well like a basic lack of understanding about how you gain support from people. When people help to build something, they’re more likely to support it. When you confront them with a finished piece of legislation which they have had no role in writing, reject the possibility of any amendments, and the only choices are take it or leave it, you are not building support.

Is that a cause or an effect of the loss of collegiality to which James points? I think it’s more a loss of political skills which I attribute to the engineering of majorities through the creation of safe districts and exploitation of targeted advertising.