"The insistence on using whatever data they happen to have on hand as the proper measure of human flourishing brings to mind the metaphor of the drunk looking for his car keys under the streetlight. But at least the drunk knows he has not found them. Economists just pick up whatever rock they find illuminated in a puddle and declare success.
A better project for economists in the coming years would be to take seriously their claim that they are engaged in a scientific enterprise and get back to the basic task of observation. Rather than rejecting facts that fail to align with their theory, they should be studying the actual experiences of actual households and then considering what metrics they need to create and what data they need to collect if they want to track and analyze actual well-being. This would put them back in the role of serving, rather than dictating to, the public. Maybe that sounds less fun. It would be a lot more useful."
This was my suspicious, but in my naivete I assumed that given the stakes for future generations a more broad, analytical, collegial back and forth would take place. The higher the stakes the more you want to be challenged to make accurate decisions with the least information available.
This was a little insulting to scientists. Most scientists would have selected a topic, say housing or rent, in specific state and analyzed it from every angle with as much data as was available going back as long as possible to see the trends. I dont think economics has always been like this. I think the post 2000 digital economy is much harder to measure. That's a LOT of forensic accountants.
Regarding corporations, my prediction is that we are moving towards a parallel politically based economy. Red state companies will be a non woke, lightly regulated, low taxed economic model that would be more free market. Blue state companies will be public good, high tax, high regulation companies striving for DEI accolades. Consumers will choose based on which economy they prefer to transact with.
It’s already started with companies moving to Texas, Florida, etc., that are free to focus on profit and products and the companies staying behind in blue states promoting their DEI credentials and equity. They will look much more socialist and unionized.
My opinion on the results will be what we see now with blue states losing tax revenue and raising taxes on those still living there. Infrastructure will deteriorate and budget deficits will grow. Crime will grow due to law enforcement leaving and the democrats politicians groveling for federal handouts.
What's the policy conclusion? What data DOES Cass wish to see collected?
Here are three:
1) Disaggregated WAGE indexes. [What BLS publics is disaggregated remuneration unit value indexes whihc means we never know whether a movement represents a change in wages o entry/exit of people earning different wages from the group being reported on.]
2) TIPS (Treasury Inflation Protected Securities) in more shorter tenors. We have 5-year and 10-year TIPS which can show expectation of inflation over those periods, but not 1, 2, and 3 year periods.
3) Trillionths, Treasury securities that pay a multiple of one trillionth of the GDP (about $29) in the future. The traded prices of this security would show market expectations of nominal economic growth and combined with TIPS would indicate expectations of real growth.
Including cost of money into inflation is defeating the purpose. People living in debt (a phenomenon fairly unique to just a couple of places, and among rich countries - only to US) are not the default and shouldn't count against inflation measure.
> The average wage went from $28 in 1972 (in 2022 dollars) to… $28 in 2022, because employers did not have to offer $29.
(Quoting the linked-to piece rather than this piece, but the ideas are roughly the same.) It is... good? It is why we need UBI?
For purposes of when to stimulate and when to moderate aggregated demand, the Fed claims to use the PCE. For purposes of workers real income (IF we had proper wage indexes) would be the CPI. For how grumpy people feel about inflation maybe include the cost of financing. :)
The answer to the place vs idea question is Yes but the beliefs are held by different people and they are irreconcilable. This is why the divisions cannot be fixed other than by partition.
If anyone knows what is going on in the economy, it isn't the Fed. Either they have some servant do their shopping or they are too rich to care. The headline economic statistics are cooked. They need to be restored and different market baskets established for different groups. Probably the most pressing as the population ages is a senior market basket. Less education, more health care. More travel for a while and then a crash. Less housing assuming research shows that retirees don't have mortgages as should be the case but may not. Income is probably strongly bifurcated by class.
"The insistence on using whatever data they happen to have on hand as the proper measure of human flourishing brings to mind the metaphor of the drunk looking for his car keys under the streetlight. But at least the drunk knows he has not found them. Economists just pick up whatever rock they find illuminated in a puddle and declare success.
A better project for economists in the coming years would be to take seriously their claim that they are engaged in a scientific enterprise and get back to the basic task of observation. Rather than rejecting facts that fail to align with their theory, they should be studying the actual experiences of actual households and then considering what metrics they need to create and what data they need to collect if they want to track and analyze actual well-being. This would put them back in the role of serving, rather than dictating to, the public. Maybe that sounds less fun. It would be a lot more useful."
This was my suspicious, but in my naivete I assumed that given the stakes for future generations a more broad, analytical, collegial back and forth would take place. The higher the stakes the more you want to be challenged to make accurate decisions with the least information available.
This was a little insulting to scientists. Most scientists would have selected a topic, say housing or rent, in specific state and analyzed it from every angle with as much data as was available going back as long as possible to see the trends. I dont think economics has always been like this. I think the post 2000 digital economy is much harder to measure. That's a LOT of forensic accountants.
Yes:
https://arkominaresearch.substack.com/p/is-us-economy-in-recession?r=1r1n6n
Regarding corporations, my prediction is that we are moving towards a parallel politically based economy. Red state companies will be a non woke, lightly regulated, low taxed economic model that would be more free market. Blue state companies will be public good, high tax, high regulation companies striving for DEI accolades. Consumers will choose based on which economy they prefer to transact with.
It’s already started with companies moving to Texas, Florida, etc., that are free to focus on profit and products and the companies staying behind in blue states promoting their DEI credentials and equity. They will look much more socialist and unionized.
My opinion on the results will be what we see now with blue states losing tax revenue and raising taxes on those still living there. Infrastructure will deteriorate and budget deficits will grow. Crime will grow due to law enforcement leaving and the democrats politicians groveling for federal handouts.
What's the policy conclusion? What data DOES Cass wish to see collected?
Here are three:
1) Disaggregated WAGE indexes. [What BLS publics is disaggregated remuneration unit value indexes whihc means we never know whether a movement represents a change in wages o entry/exit of people earning different wages from the group being reported on.]
2) TIPS (Treasury Inflation Protected Securities) in more shorter tenors. We have 5-year and 10-year TIPS which can show expectation of inflation over those periods, but not 1, 2, and 3 year periods.
3) Trillionths, Treasury securities that pay a multiple of one trillionth of the GDP (about $29) in the future. The traded prices of this security would show market expectations of nominal economic growth and combined with TIPS would indicate expectations of real growth.
[https://thomaslhutcheson.substack.com/p/improvements-in-macroeconomic-data]
Including cost of money into inflation is defeating the purpose. People living in debt (a phenomenon fairly unique to just a couple of places, and among rich countries - only to US) are not the default and shouldn't count against inflation measure.
> The average wage went from $28 in 1972 (in 2022 dollars) to… $28 in 2022, because employers did not have to offer $29.
(Quoting the linked-to piece rather than this piece, but the ideas are roughly the same.) It is... good? It is why we need UBI?
Different "inflations" for different purposes.
For purposes of when to stimulate and when to moderate aggregated demand, the Fed claims to use the PCE. For purposes of workers real income (IF we had proper wage indexes) would be the CPI. For how grumpy people feel about inflation maybe include the cost of financing. :)
Here is a non-paywall version of the piece on Vance. No idea whether this is authorized but lots of people like Real Clear Politics link it.
https://dnyuz.com/2024/07/28/decoding-jd-vances-brand-of-nationalism/
The answer to the place vs idea question is Yes but the beliefs are held by different people and they are irreconcilable. This is why the divisions cannot be fixed other than by partition.
If anyone knows what is going on in the economy, it isn't the Fed. Either they have some servant do their shopping or they are too rich to care. The headline economic statistics are cooked. They need to be restored and different market baskets established for different groups. Probably the most pressing as the population ages is a senior market basket. Less education, more health care. More travel for a while and then a crash. Less housing assuming research shows that retirees don't have mortgages as should be the case but may not. Income is probably strongly bifurcated by class.