Althouse | category: economics



a blog by Ann Althouse

"South Korea recently broke its own record for the world’s lowest fertility rate. Figures released in November..."

"... showed the average number of children a South Korean woman will have in her lifetime is down to just 0.79. That is far below the 2.1 needed to maintain a stable population and low even compared to other developed countries where the rate is falling, such as the United States (1.6) and Japan – which at 1.3 reported its own lowest rate on record. And it spells trouble for a country with an aging population that faces a looming shortage of workers to support its pension system.... [M]ore than $200 billion has been spent trying to boost the population over the past 16 years.... A monthly allowance for parents with babies up to 1-year-old will increase from the current 300,000 won to 700,000 won ($230 to $540) in 2023 and to 1 million Korean won ($770) by 2024.... Government-funded nurseries are free..."

From "South Korea spent $200 billion, but it can’t pay people enough to have a baby" (CNN).

"Lee Jin-song, who has written books about the trend of young people choosing not to get married or have a baby... pointed to a common joke that in South Korea, 'if you are not dating by the time you are 25, you’ll turn into a crane, meaning if you’re single you become non-human.' She said society considers her, and others like her, selfish for not conforming to the traditional expectations of marriage and children, 'neglecting their duties for society only for the sake of their happiness.'"

There's a problem with that pro-child propaganda. To my ear, it conveys the message that you'd should not have children. You're supposed to do it for the good of the group, not for your own happiness, and the more money they throw at you, the more it emphasizes how expensive it will be to have a child. And that crane "joke" is just overtly dehumanizing. 

Even if you want to do what is good for society, how much can your one or 2 children change such a gigantic trend? It's such a huge personal change to have a child, but it has only a tiny effect on the country as a whole. That's why they've resorted to big economic incentives (along with bullying). But it's still not enough. 

A 0.79 birthrate!

"Democratic candidates in competitive Senate races this fall have spent little time... touting... their party’s $1.9 trillion economic rescue package..."

"... which party leaders had hoped would help stave off losses in the House and Senate in midterm elections. In part, that is because the rescue plan has become fodder for Republicans to attack Democrats over rapidly rising prices, accusing them of overstimulating the economy with too much cash.... It was initially seen as Mr. Biden’s signature economic policy achievement.... Some Democrats worry that voters have been swayed by the persistent Republican argument that the aid was the driving factor behind rapidly rising prices of food, rent and other daily staples...."

From "Democrats Spent $2 Trillion to Save the Economy. They Don’t Want to Talk About It. Polls show voters liked direct payments from President Biden’s 2021 economic rescue bill. But they have become fodder for Republican inflation attacks" (NYT).

A lot of this article — by Jim Tankersley — is focused on Senator Warnock. It begins:

In the midst of a critical runoff campaign that would determine control of the Senate, the Rev. Raphael Warnock promised Georgia voters that, if elected, he would help President-elect Biden send checks to people digging out of the pandemic recession.

Mr. Warnock won. Democrats delivered payments of up to $1,400 per person.

But this year, as Mr. Warnock is locked in a tight re-election campaign, he barely talks about those checks.... 
When asked by a reporter why he was not campaigning on an issue that had been so central to his election and whether he thought the payments had contributed to inflation, Mr. Warnock deflected....
I guess if Warnock loses — and if Democrats in general lose — the criticism will be that they failed to emphasize all the money — all our money — they spent to benefit us. But aren't they making the right decision? They don't want to call attention to something they did that at least partially caused the inflation that's troubling us all so much — after we spent all the money they gave us. They can't really say, but didn't you like all that money we gave you? 

But this NYT article seems to say that the Democrats spent tax money in order to acquire votes in the 2022 elections, so it's confounding that the scheme did not work or that they've decided in advance that it won't work and they're not even attempting to follow the scheme to the end.

Now, I'm thinking I have 2 kinds of readers: the ones who are saying why should I know or care about the Madison Public Market and...

... the ones who are saying yes, that's the thing that Althouse questioned that one time and Paul Soglin, the Mayor of Madison, instead of engaging respectfully, decided to attack her big time, so she was forced to resort to reason and mockery?

I'm reading "Madison Public Market all but scrapped, as officials make one last plea to alders for funding" (WKOW).

Here's the post I wrote on January 10, 2017:

"On his blog, Mayor Paul Soglin takes on the UW's conservative blogger Ann Althouse for disparaging the city's proposed public market, mocking it as a liberal creation."

"Soglin extols the benefits the public market will begin to deliver and admonishes Althouse to stop portraying everything in Madison as crafted by liberals and reeking of socialism when, in fact, the plans are crafted by liberals reeking in capitalism."

I'm seeing that this morning in the local paper, The Capital Times, with no reporter's name attached to it. It's an embarrassing misreading of my post, but I don't know whether the misreading is by the Cap Times or the Mayor.

Here's the post of mine from a few days ago. It quotes a fundraising consultant who says she discovered that "people got more and more interested in the project" when she told them it was "about inclusiveness, and having a place for a variety of cultures and ethnicities to come together." My mockery was limited to expressing skepticism about whether people really were interested or merely "conscious of the need to look interested... when someone comes at you with talk of 'inclusiveness' and the 'com[ing] together' of 'cultures and ethnicities.'"

Beyond that, I confessed that "I've never been able to understand" the idea of the public market. That's not mocking the market, just admitting I don't get it. And I really don't get the idea that it's a tool for achieving "racial equity and social justice." I didn't say a word about capitalism and socialism. I'm just doing racial critique and suspicious that people are using racial propaganda to grease some project they want.

So let's take a look at Mayor Soglin's blog:
This weekend Ann Althouse mocked — she is good at that — the Madison Public Market....
What did she do? She used mockery...

Soglin says:
There is good reason why the analysis of the Public Market includes a focus on diversity, inclusiveness, and equity.
The bullet-point list that follows gives a visual impression of an argument, but I can't find it. The recent recession "was bad, and is still challenging, for low income families and individuals," these people need "entry-level jobs," entrepreneurship in food business can provide entry level jobs, and "low-income people of all colors and races" can engage in entrepreneurship. What is the argument? We're going to move toward racial equity with some new food service jobs and new potential to start a food-service business?

Speaking of entrepreneurship, you're not doing very well as an idea entrepreneur, Mayor Soglin. I said I didn't understand the idea. I'm open to listening to an argument, but you are not making it. You're just dropping a disjointed list out there as if the points add up. It's a tad underpants-gnomish.

Soglin proceeds to offer information about markets in other cities. The one in Seattle, he tells us, "is expensive and losing its charm as it is now a major tourist destination." Was it sold as helping the poor and minorities?

The one in Philadelphia is said to be good but related to the railway. Here, Soglin reminds us that — because of Scott Walker — we didn't get a train. So no train-related market for us. What that had to do with helping the poor and minorities, I don't know.

Next, Soglin refers to 3 markets in Minneapolis and York, Pennsylvania. The one in York supports vendors who are "almost all white, reflecting the population of the community." Wouldn't that support the prediction that a public market in 78.9% -white Madison would serve the interests of white people? What is the argument for the market as a racial-progress tool?

I don't think Soglin addresses my questions seriously at all. He dings me for mockery, but my mockery is much more serious than his haphazard dumping of factoids with no substance linking them up into a reasonable argument.

Really, he fails to see that I went easy on him by keeping things light with questions, confessions of inability to understand, and invitations to engage. He did not engage.

And check out his last paragraph:
If Althouse can look beyond her own exclusive world, one reeking in privilege, perhaps she will escape the shackles of her rigid assumption that everything in Madison is crafted by liberals, reeking in socialism. At times these plans are crafted by liberals reeking in capitalism.
He said "reeking" three times. I guess he thinks smelliness is funny. Maybe he's into the metaphor that ideology is odor.

Let's take a closer sniff.

The first "reeking" is my exclusive, privileged world. What world is that? Madison, Wisconsin? The University of Wisconsin? The law school?

Next, I'm accused of having a "rigid assumption that everything in Madison is crafted by liberals, reeking in socialism." That doesn't connect to anything in my post. The rigidity must be in his head. He who smelt it dealt it.

He's afraid, I suspect, that he'll be accused of socialism. But I was expressing skepticism about race-based propaganda for things that don't seem to have anything to do with race.

I didn't hit you over the head with this, Mayor Soglin, but your project seems to be offering something white middle-class people like. And one of the things these people like is the feeling that they are not greedily grasping at something they want, but helping the poor and minorities.

And speaking of liberal self-love, why do you think you smell so good when you're trying to do capitalism? Do you think socialism stinks or do you think you stink of socialism and need to douse yourself with capitalism to get something done? I never talked about capitalism and socialism. I talked about race propaganda, who really benefits, and will this thing really work?

Take a metaphorical shower and come back when you're ready to talk substance, sound argument, and reality.

ADDED: Meade points out that Soglin put a link on "reeking in privilege" in that last paragraph, where he's saying I'm in an "exclusive, privileged world." It goes to a post of mine from yesterday, "Did you watch the Golden Globes last night and hear what the entertainment industry people had to say about Trump?" That's a post making fun of the Hollywood elite that partied with Obama on Saturday and celebrated themselves with awards on Sunday. I was saying we weren't watching the Globes but the Packers game. Well, it is a privilege to live in Wisconsin and root for the Packers, but I don't think that's what he could have meant. I do see that my post used the phrase "reeking privilege." I said:
But I find celebrity talk about presidential politics so compulsively avoidable these days. The celebrities all backed Hillary Clinton. They — in their reeking privilege — seemed to have had their hearts set on 8 more years of glamming it up in the White House.
Does that show me in an "exclusive world"? It's a world anyone can enter. All you've got to do is feel sick of celebrities talking about presidential politics. Come on in! Everyone's welcome. Want to watch the Packers game?

"To see how population stagnation or even decline need not spell disaster, you can look at countries where it’s already occurring..."

"... as Daniel Moss... did last year. Take Japan: 'Despite the caricature of the country as an economic failure in the grip of terminal decline, life goes on,' he wrote. 'True, growth in overall G.D.P. has been fairly anemic in past few decades, but G.D.P. per capita has held up well.' What’s more, he added, Japan’s unemployment rate is very low and has remained so throughout the pandemic.... Japan’s example lends some credence to the view of Kim Stanley Robinson, a widely acclaimed science-fiction writer, who believes that an aging population with a smaller work force could actually lead to economic prosperity. 'It sounds like full employment to me,' he argued.... 'The precarity and immiseration of the unemployed would disappear as everyone had access to work that gave them an income and dignity and meaning.'"

From "U.S. Population Growth Has Nearly Flatlined. Is That So Bad?" by Spencer Bokat-Lindell (in the NYT).

"A majority of the dollars of student loan debt are owed by a small fraction of borrowers who, on average, have high incomes."

"They often borrowed to go to professional schools for degrees in law, medicine and business. They don’t have much trouble handling their payments, and their default rates are low. By contrast, a majority of people holding student debt have moderate incomes and low balances. Many have no degree, having dropped out of a public college or for-profit vocational school after a few semesters. They carry little debt, but they also do not get the benefit of a college degree to help them pay off that debt. Defaults and financial distress are concentrated among the millions of students who drop out without a degree....  A full 30 percent of first-generation freshmen drop out of four-year colleges within three years.... Delinquency and default leave a longstanding blot on credit records, keeping borrowers from buying homes and cars, renting apartments and getting jobs. By allowing borrowers to once again get access to credit, housing and job markets, forgiving loans can therefore have a real effect on lives and the economy.... I once thought forgiveness to be an expensive Band-Aid, a distraction from fundamental reform. But I have seen so little progress on these issues that I now think we must make amends to those we have harmed...."

From "Why I Changed My Mind on Student Debt Forgiveness" by Harvard econprof Susan Dynarski.(NYT).

ADDED: Dynarski fleshes out something I said 5 days ago when someone questioned me for saying, seemingly flippantly, "It's only $10,000":
My point is that the individual borrower only gets $10,000 in relief. It's just a gesture at the problem. It's like when they put $2000 in our bank accounts. Okay. Nice. You appreciate it, but you're basically in the same position.

There are some people for whom $10,000 is the whole thing and they are struggling to pay. For them, isn't it more trouble to try to collect than to just say forget it, go and borrow no more?

I've seen some mockery of the 25-year-old NYT op-ed writer who referred to the "bad vibes" economy.

On August 4th, the NYT published "The Vibes in the Economy Are … Weird. Really Weird" by Kyla Scanlon, who opined:
There is no recession yet. Right now we are in a “vibe-cession” of sorts — a period of declining expectations that people are feeling based on both real-world worries and past experiences. Things are off. And if they don’t improve, we will have to worry about more than bad vibes.
Instapundit quoted the Ace of Spades take, "New York Times Publishes Op-Ed From 25-Year-Old Female 'Economics Influencer' Absolving Biden of Blame for Economy and Instead Putting It Where It Belongs: On the 'Bad Vibes' The Public Is Putting Out About the Economy, Man."

I'm only writing about this to say that the 25-year-old did not introduce this "bad vibes" take to the NYT. The NYT has a senior economics correspondent named Neil Irwin, who writes at the NYT page called  The Upshot. Last December, he had a column called "What We Learned About the Economy in 2021/For once, the government tried overheating the economy. For better and worse, it succeeded." 
In surveys, Americans are remarkably unsatisfied with economic conditions. The growth numbers have been good. The vibes have been bad."
On July 29, Irwin was on an Axios podcast titled "Biden vs. the bad vibes economy."  There, he said:
I think what Chair J. Powell was saying at this press conference was very much the conventional wisdom of professional economists, which is that as of right now, we've had strong enough job growth, enough good things happening in the economy that this is not technically a recession yet. Uh, the question I asked and the question he answered was, do you believe we are currently in a recession? That's not the same thing as do you think we will be in a few months. Um, nobody's quite sure where this goes in a few months, but right now the, the jobs numbers and other, uh, numbers have been too strong. What matters is how Americans feel, how they're able to earn an income, live their daily lives, not have kind of soul-crushing inflation that saos [sic] away their paychecks. Until that changes, I think that the vibes, whatever we wanna call it, are still gonna be bad and the communications is a second order issue.

So I don't think "bad vibes" is the kind of talk you get when you let a 25-year-old speak. I think it's a phrase older analysts use too. In fact, "bad vibes" has been Boomer slang since the 60s.

Did Scanlon write a good enough op-ed to deserve to be in the NYT even though she's young? That's a question to be answered without down-rating her for saying "bad vibes."

As for the distinction between what the economy really is and what people feel it is — I will leave that to be bantered about by econ geeks. But I have the impression — I don't know but I feel — that the feeling about the economy is a big part of what the economy is. And those in power and those out of power will have different ways of talking about that as they try to influence economics and politics. 

They're all trying to influence, so is there any reason to put "economics influencer" in quotes when speaking about young Ms. Scanlon? Neither she nor the Times called her that. In fact, when I google her name and "economics influencer," I get little more than the Ace of Spades headline linked above. So the quotes are just scare quotes.

"The problem may be that the Biden economy boomed *too much*, feeding inflation, and that it now needs to cool off, which may involve a recession (but hasn’t yet)."

"But the basic fact is that so far the Biden economy has added 9 million jobs. So it has been a jobs boom, whatever else you may say."

Said Paul Krugman, quoted in "NY Times columnist Paul Krugman blasted for touting ‘Biden boom’" (NY Post).

"More people are cancelling their video subscriptions to save money in the face of the cost of living squeeze, with under-24s most likely to walk away...."

"Now, in a reversal of previous trends, the decline is being driven by younger audiences as they turn to free alternatives such as the BBC iPlayer, ITV Hub and TikTok. Household budgets are under intense pressure, with prices rising by 9.1 per cent a year, the highest inflation rate for 40 years, and with the Bank of England warning that inflation could reach 11 per cent within months.... According to Tom Harrington, of Enders Analysis, life is only going to get tougher for the platforms because 'it isn’t just their direct competitors but every other household expense they have to worry about...."

"Uber paid high-profile academics in Europe and the US hundreds of thousands of dollars to produce reports that could be used as part of the company’s lobbying campaign."

"The Uber files, a cache of thousands of confidential documents leaked to the Guardian, reveal lucrative deals with several leading academics who were paid to publish research on the benefits of its economic model.... Using techniques common in party political campaigns, Uber targeted academics and thinktanks to help it construct a positive narrative, namely that it created well-paid jobs that drivers liked, delivered cheap transport to consumers and boosted productivity.... Scholars were excited about Uber’s data because it gave them rare real-time evidence about the effect of prices on markets – one of the key issues among liberal economists arguing for free markets."
Now, I'm thinking I have 2 kinds of readers: the ones who are saying why should I know or care about the Madison Public Market and...

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