Sunday, April 30, 2017

Studying for our political economic literacy test: would your Representative in Congress pass?

HERE at Brad DeLong's site, Grasping Reality With All Tentacles, is a transcript of a very interesting recent talk by four economists moderated by Eduardo Porter (who writes for the NYT):   David Autor (Economist at MIT specializing on the economic impact of technological change and the global economy), Ann Harrison (professor of management, business economics, and public policy at Wharton), Brad DeLong (a political economist at Berkeley), and Paul Krugman.

The entire discussion is worth reading.  They cover the reasons behind the reduction of manufacturing in the U.S. from a high of 38% of the economy during World War Two, to 8.6% today.  They look at technological change, our strange and dysfunctional macroeconomic policies since the 1980's, the effect of trade deals, and the effect of China's rise.  

They touch on tariffs and free trade, educational policy, unionization, the role of the social safety net, minimum wage legislation, and the Earned Income Tax Credit.  

It's a lot to chew off. It's like a mini-seminar to prepare you for a political economics literacy test! 

Brad DeLong ends with a pitch for the idea of Universal Basic Income. We should not think of this as a "handout," he says: we should think about it more like Mitt Romney thinks about his inheritance.  
Let me make a plea for UBI. The argument against Universal Basic Income is always that it is a "handout", and people don't want handouts. You would have to sell it as something that is not "welfare". 
After my grandfather Bill Lord moved to Florida and became a construction company boss and real estate speculator, he did well: he was briefly the richest man between Tampa and Orlando. Ever since the money from the Lord trusts has boosted my consumption by about $10,000 a year. That has been my UBI. It has been quite welcome at times, and always convenient.

I don't see this as "welfare", as making me a "loser," as offending my "dignity"—even though I had nothing to do with the invention of the Wellman-Lord desulfurization process or any other value created by his accomplishments, and I would accept the argument that he was overcompensated for them. Similarly, Mitt and Ann Romney do not think in any way that they are loochers—losers and moochers—from their UBI, which came from the stock American Motors had given Mitt's father George to incentivize him, which stock they could sell to boost their standard of living when they went to BYU. 
The problem with UBI and with the welfare state is one of perception and of perception of who is deserving and undeserving. Inheritance in America today is not tainted. I think UBI should not be tainted either—and I think Mitt and Ann Romney would agree, if only they would step back and think a little...
This UBI observation here is the bonus. Read the whole article: can you pass the literacy test?

Follow me on Twitter @RolandNikles 

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