Tag Archives: economic growth

2020 in Review

2020 has been quite a year for the U.S. and the world, but you don’t need me to tell you that! My work and family life was disrupted, but I have been lucky enough not to lose any family members or close friends to Covid-19 so far. If anyone reading this has lost someone, I want to express my condolences.

Now I’ll get right down to some highlights of my 2020 posts.

Monthly Highlights from 2020

Most frightening or depressing stories:

  • JANUARY: Open cyberwarfare became a thing in the 2010s. We read the individual headlines but didn’t connect the dots. When you do connect the dots, it’s a little shocking what’s going on.
  • FEBRUARY: The Amazon rain forest may reach a tipping point and turn into a dry savanna ecosystem, and some scientists think this point could be reached in years rather than decades. Meanwhile, Africa is dealing with a biblical locust plague. Also, bumble bees are just disappearing because it is too hot.
  • MARCH: Hmm…could it be…THE CORONAVIRUS??? The way the CDC dropped the ball on testing and tracking, after preparing for this for years, might be the single most maddening thing of all. There are big mistakes, there are enormously unfathomable mistakes, and then there are mistakes that kill hundreds of thousands of people (at least) and cost tens of trillions of dollars. I got over-excited about Coronavirus dashboards and simulations towards the beginning of month, and kind of tired of looking at them by the end of the month.
  • APRIL: The coronavirus thing just continued to grind on and on, and I say that with all due respect to anyone reading this who has suffered serious health or financial consequences, or even lost someone they care about. After saying I was done posting coronavirus tracking and simulation tools, I continued to post them throughout the month – for example herehereherehere, and here. After reflecting on all this, what I find most frightening and depressing is that if the U.S. government wasn’t ready for this crisis, and isn’t able to competently manage this crisis, it is not ready for the next crisis or series of crises, which could be worse. It could be any number of things, including another plague, but what I find myself fixating on is a serious food crisis. I find myself thinking back to past crises – We got through two world wars, then managed to avoid getting into a nuclear war to end all wars, then worked hard to secure the loose nuclear weapons floating around. We got past acid rain and closed the ozone hole (at least for awhile). Then I find myself thinking back to Hurricane Katrina – a major regional crisis we knew was coming for decades, and it turned out no government at any level was prepared or able to competently manage the crisis. The unthinkable became thinkable. Then the titans of American finance broke the global financial system. Now we have a much bigger crisis in terms of geography and number of people affected all over the world. The crises may keep escalating, and our competence has clearly suffered a decline. Are we going to learn anything?
  • MAY: Potential for long-term drought in some important food-producing regions around the globe should be ringing alarm bells. It’s a good thing that our political leaders’ crisis management skills have been tested by shorter-term, more obvious crises and they have passed with flying colors…doh!
  • JUNE: The UN just seems to be declining into irrelevancy. I have a few ideas: (1) Add Japan, Germany, India, Brazil, and Indonesia to the Security Council, (2) transform part of the UN into something like a corporate risk management board, but focused on the issues that cause the most suffering and existential risk globally, and (3) have the General Assembly focus on writing model legislation that can be debated and adopted by national legislatures around the world.
  • JULY: Here’s the elevator pitch for why even the most hardened skeptic should care about climate change. We are on a path to (1) lose both polar ice caps, (2) lose the Amazon rain forest, (3) lose our productive farmland, and (4) lose our coastal population centers. If all this comes to pass it will lead to mass starvation, mass refugee flows, and possibly warfare. Unlike even major crises like wars and pandemics, by the time it is obvious to everyone that something needs to be done, there will be very little that can be done.
  • AUGUST: We just had the 15-year anniversary of Hurricane Katrina, a major regional crisis that federal, state, and local governments failed to competently prepare for or respond to. People died, and decades later the recovery is incomplete. Coronavirus proves we learned nothing, as it is unfolding in a similar way on a much larger and longer scale. There are many potential crises ahead that we need to prepare for today, not least the inundation of major cities. I had a look at the Democratic and (absence of a) Republican platforms, and there is not enough substance in either when it comes to identifying and preparing for the risks ahead.
  • SEPTEMBER: The Covid recession in the U.S. is pretty bad and may be settling in for the long term. Demand for the capital goods we normally export (airplanes, weapons, airplanes that unleash weapons, etc.) is down, demand for oil and cars is down, and the service industry is on life support. Unpaid bills and debts are mounting, and eventually creditors will have to come to terms with this (nobody feels sorry for “creditors”, but what this could mean is we get a full-blown financial panic to go along with the recession in the real economy.
  • OCTOBER: Global ecological collapse is most likely upon us, and our attention is elsewhere. The good news is we still have enough to eat (on average – of course we don’t get it to everyone who needs it), for now.
  • NOVEMBER:  It seems likely the Clinton-Bush-Obama-Trump U.S. foreign wars may just grind on endlessly under Biden. Prove us wrong, Joe! (I give Trump a few points for trying to bring troops home over the objections of the military-industrial complex. But in terms of war and peace, this is completely negated and then some by slippage on nuclear proliferation and weapons on his watch.)
  • DECEMBER: The “Map of Doom” identifies risks that should get the most attention, including antibiotic resistance, synthetic biology (also see below), and some complex of climate change/ecosystem collapse/food supply issues.

Most hopeful stories:

  • JANUARY: Democratic socialism actually does produce a high quality of life for citizens in many parts of the world. Meanwhile, the hard evidence shows that the United States is slipping behind its peer group in many measures of economic vibrancy and quality of life. The response of our leaders is to tell us we are great again because that is what we want to hear, but not do anything that would help us to actually be great again or even keep up with the middle of the pack. This is in the hopeful category because solutions exist and we can choose to pursue them.
  • FEBRUARY: A proven technology exists called high speed rail.
  • MARCH: Some diabetics are hacking their own insulin pumps. Okay, I don’t know if this is a good thing. But if medical device companies are not meeting their patient/customers’ needs, and some of those customers are savvy enough to write software that meets their needs, maybe the medical device companies could learn something.
  • APRIL: Well, my posts were 100% doom and gloom this month, possibly for the first time ever! Just to find something positive to be thankful for, it’s been kind of nice being home and watching my garden grow this spring.
  • MAY: E.O. Wilson is alive and kicking somewhere in Massachusetts. He says if we want to save our fellow species and ourselves, we should just let half the Earth revert to a natural state. Somewhat related to this, and not implying my intellect or accomplishments are on par with E.O. Wilson, I have been giving some thought to “supporting” ecosystem services in cities. When I need a break from intellectual anything, I have been gardening in Pennsylvania with native plants.
  • JUNE: Like many people, I was terrified that the massive street demonstrations that broke out in June would repeat the tragedy of the 1918 Philadelphia war bond parade, which accelerated the spread of the flu pandemic that year. Not only does it appear that was not the case, it is now a source of great hope that Covid-19 just does not spread that easily outdoors. I hope the protests lead to some meaningful progress for our country. Meaningful progress to me would mean an end to the “war on drugs”, which I believe is the immediate root cause of much of the violence at issue in these protests, and working on the “long-term project of providing cradle-to-grave (at least cradle-to-retirement) childcare, education, and job training to people so they have the ability to earn a living, and providing generous unemployment and disability benefits to all citizens if they can’t earn a living through no fault of their own.”
  • JULY: In the U.S. every week since schools and businesses shut down in March, about 85 children lived who would otherwise have died. Most of these would have died in and around motor vehicles.
  • AUGUST: Automatic stabilizers might be boring but they could have helped the economy in the coronavirus crisis. Congress, you failed us again but you can get this done before the next crisis.
  • SEPTEMBER: The Senate Democrats’ Special Committee on the Climate Crisis had the courage to take aim at campaign finance corruption as a central reason for why the world is in its current mess. I hate to be partisan, folks, but right now our government is divided into responsible adults and children. The responsible adults who authored this report are the potential leaders who can lead us forward.
  • OCTOBER: We have almost survived another four years without a nuclear war. Awful as Covid-19 has been, we will get through it despite the current administration’s complete failure to plan, prevent, prepare, respond or manage it. There would be no such muddling through a nuclear war.
  • NOVEMBER: The massive investment in Covid-19 vaccine development may have major spillover effects to cures for other diseases. This could even be the big acceleration in biotechnology that seems to have been on the horizon for awhile. These technologies also have potential negative and frivolous applications, of course.
  • DECEMBER: The Covid-19 vaccines are a modern “moonshot” – a massive government investment driving scientific and technological progress on a particular issue in a short time frame. Only unlike nuclear weapons and the actual original moonshot, this one is not military in nature. (We should be concerned about biological weapons, but let’s allow ourselves to enjoy this victory and take a quick trip to Disney Land before we start practicing for next season…) What should be our next moonshot, maybe fusion power?

Most interesting stories, that were not particularly frightening or hopeful, or perhaps were a mixture of both:

  • JANUARY: Custom-grown human organs and gene editing and micro-satellites, oh my!
  • FEBRUARY: Corporate jargon really is funny. I still don’t know what “dropping a pin” in something means, but I think it might be like sticking a fork in it.
  • MARCH: I studied up a little on the emergency powers available to local, state, and the U.S. federal government in a health crisis. Local jurisdictions are generally subordinate to the state, and that is more or less the way it has played out in Pennsylvania. For the most part, the state governor made the policy decisions and Philadelphia added a few details and implemented them. The article I read said that states could choose to put their personnel under CDC direction, but that hasn’t happened. In fact, the CDC seems somewhat absent in all this other than as a provider of public service announcements. The federal government officials we see on TV are from the “Institute of Allergies and Infectious Diseases”, which most people never heard of, and to a certain extent the surgeon general. I suppose my expectations on this were created mostly by Hollywood, and if this were a movie the CDC would be swooping in with white suits and saving us, or possibly incinerating the few to save the many. If this were a movie, the coronavirus would also be mutating into a fog that would seep into my living room and turn me inside out, so at least there’s that.
  • APRIL: There’s a comet that might be bright enough to see with the naked eye from North America this month. [Update: It wasn’t. Thanks, 2020.]
  • MAY: There are unidentified flying objects out there. They may or may not be aliens, that has not been identified. But they are objects, they are flying, and they are unidentified.
  • JUNE: Here’s a recipe for planting soil using reclaimed urban construction waste: 20% “excavated deep horizons” (in layman’s terms, I think this is just dirt from construction sites), 70% crushed concrete, and 10% compost.
  • JULY: The world seems to be experiencing a major drop in the fertility rate. This will lead to a decrease in the rate of population growth, changes to the size of the work force relative to the population, and eventually a decrease in the population itself.
  • AUGUST: Vehicle miles traveled have crashed during the coronavirus crisis. Vehicle-related deaths have decreased, but deaths per mile driven have increased, most likely because people drive faster when there is less traffic, absent safe street designs which we don’t do in the U.S. Vehicle miles will rebound, but an interesting question is whether they will rebound short of where they were. One study predicts about 10% lower. This accounts for all the commuting and shopping trips that won’t be taken, but also the increase in deliveries and truck traffic you might expect as a result. It makes sense – people worry about delivery vehicles, but if each parcel in the vehicle is a car trip to the store not taken, overall traffic should decrease. Even if every 5 parcels are a trip not taken, traffic should decrease. I don’t know the correct number, but you get the idea. Now, how long until people realize it is not worth paying and sacrificing space to have a car sitting there that they seldom use. How long before U.S. planners and engineers adopt best practices on street design that are proven to save lives elsewhere in the world?
  • SEPTEMBER: If the universe is a simulation, and you wanted to crash it on purpose, you could try to create a lot of nested simulations of universes within universes until your overload whatever the operating system is. Just hope it’s backed up.
  • OCTOBER: There are at least some bright ideas on how to innovate faster and better.
  • NOVEMBER: States representing 196 electoral votes have agreed to support the National Popular Vote Compact, in which they would always award their state’s electoral votes to the national popular vote winner. Colorado has now voted to do this twice. Unfortunately, the movement has a tough road to get to 270 votes, because of a few big states that would be giving up a lot of power if they agreed to it.
  • DECEMBER: Lists of some key technologies that came to the fore in 2020 include (you guessed it) mRNA vaccines, genetically modified crops, a variety of new computer chips and machine learning algorithms, which seem to go hand in hand (and we are hearing more about “machine learning” than “artificial intelligence” these days), brain-computer interfaces, private rockets and moon landings and missions to Mars and mysterious signals and micro-satellites and UFOs, virtual and mixed reality, social media disinformation and work-from-home technologies. The wave of self-driving car hype seems to have peaked and receded, which probably means self-driving cars will probably arrive quietly in the next decade or so. I was surprised not to see cheap renewable energy on any lists that I came across, and I think it belongs there. At least one economist thinks we are on the cusp of a big technology-driven productivity pickup that has been gestating for a few decades.

That’s a lot to unpack, and I’m not sure I can offer a truly brilliant synthesis, but below are a few things that are on my mind as I think through all this.

We Americans affirmed that we care about our parents and grandparents (then failed to fully protect them).

One thing I think we learned is that we still value human lives more than a cold, purely economic calculation might suggest, including the lives of our elderly parents and grandparents. (Though we had significant failures of execution when it came to actually protecting people – more on that later.) We have had this debate before in the U.S., for example when thinking about how much to invest in environmental and safety regulations as I was reminded of by this Planet Money podcast. At one point, politicians (can you guess from which party) proposed valuing the lives of senior citizens at lower rates than everyone else. The backlash was fierce and instant, and the proposal was withdrawn. This year, we did not really have that debate – it was simply accepted, for the most part, that we would be willing to endure significant economy-wide pain to try to protect our parents and grandparents.

I kind of liked how Mr. Money Mustache put it back in April. He gave a “worst case scenario” with 3 million deaths and a “best case scenario” with 200,000 deaths, and the reality is on track to be somewhere in between.

In the worst case, our public officials would all downplay the risk of COVID-19, and we’d keep working and traveling and spreading it freely. We’d maximize our economic activity and let the disease run its course…

In the more compassionate case which we are currently following, we drastically reduce the amount of contact we have with each other for a few months, which cuts the number of deaths in the US down from 3-6 million, down to perhaps 200,000. In exchange, our economy shrinks by several trillion dollars (it was about 21 trillion in 2019) for a year or more.

Assuming we are preventing 3 million early deaths, this means our society is foregoing about one million dollars of economic activity for each person’s life that we extend and frankly, it makes me happy to know we are capable of that.

Mr. Money Mustache

The leaders of some countries like Russia, Brazil, and even Sweden seem to have chosen to accept the consequences of business as usual. Most other countries have chosen to try to save human lives at the expense of short-term economic activity, and some executed this strategy much more effectively than others. In the U.S. and UK, we seem to be bumbling idiots who feel some compassion for one another.

The United States has been slipping for awhile, and in 2020 we faltered.

The U.S. continues to slip below average among its developed country peers in many statistical categories like life expectancy, violence, incarceration, suicide, poverty, and public infrastructure. I picture us like a horse that used to be leading the race, then slipped into the middle of the leading pack, and has now drifted toward the back of the leading pack and is continuing to lose ground. Keep slipping and we would no longer be part of the leading pack.

But then came Covid-19, our horse faltered, and all the other horses went thundering past, leaving us in last place. With the possible exception of the UK, we had the least effective response in the world. Like I said, I think a few countries like Russia, Brazil, and Sweden basically chose to accept the consequences of a limited response, and that is different than a failed response (though not to the people who died or whose loved ones died). We tried to respond, and it turned out our government was unprepared and incompetent even compared to developing countries.

So what happened? Some particular failing of the Anglo-American countries doesn’t explain it, because Canada and Australia both did pretty well. Our lack of a public health system (or even universal access to private care) doesn’t explain it, because the UK, Canada, and Australia all have similar systems to each other and divergent outcomes.

The difference between the extraordinary low rates in Asia, and the higher rates in Europe and the Americas is particularly stark. There are a couple things that I think may explain it. First is good airport screening. I traveled in Asia during the swine flu pandemic, and the screening is robust. The U.S. obviously has to beef up its health infrastructure at international airports and other border crossings (yes, there is a certain irony here that is lost on anti-immigrant types.) Part of this is also beefing up the data systems that track who is coming in from where, where they are going and what their status is. It became obvious within weeks that the CDC’s databases were a complete failure.

I think beyond border screening and data management, the other big difference between East and West is that Asian countries were willing to restrict physical movement and enforce quarantine, whereas western countries mostly were not. Had I exhibited symptoms while I was traveling in Singapore or Thailand during the swine flu, either country would have detained me in a government facility (with three meals a day and wi-fi, one would hope) for 14 days. Asian countries have also been willing to shut down domestic airports, train systems, and highways at times. Most western countries are simply not willing to do this. In the U.S., I think it is partly a matter of law and politics, but also a stupid idea that it would be “too expensive” when quite obviously it would have saved trillions of dollars in the long run. We simply don’t have the political will, the institutional mechanisms, or the basic competence. Covid-19 was a borderline crisis – a lot of people will lose cherished parents and grandparents but it is not an existential threat to our country’s survival. The U.S. needs to plan now to quarantine effectively in an even worse pandemic or god forbid, an incident involving biological weapons.

A few words on government agencies. Hurricane Katrina came up a few times in the monthly picks above. That was a major failure of federal, state, and local governments in the U.S. to plan, respond, and rebuild after a disaster. Before that, I would have assumed FEMA was up to the task, as they seem to have been in the past. Most people’s faith in the CDC was similar or even greater, and they turned out to be bumbling fools. The U.S. will need to fund its public agencies, stock them with competent, well-trained technocrats, and appoint talented political leaders to integrate them with the rest of society if they are going to function competently in the future.

In a hurricane, FEMA basically rolls into your city and takes charge, for better or worse. Early on, there was speculation that the CDC might try to do something similar in a disease outbreak. That didn’t happen. We will also need to adequately fund and train state and local agencies, if we are going to continue to put the lion’s share of the burden on them in a decentralized disaster like this. We could just get rid of the states and have the federal government work directly with metro areas, but this seems like a pretty pie in the sky idea politically.

What other government agencies do we have faith in that might have turned into rotten hollow logs while we weren’t paying attention? The Treasury and Federal Reserve do in fact seem to know what they are doing, which has saved us a couple times now in the last couple decades. We assume the military can fight a war if they need to. We assume the Department of Agriculture can feed us. Are we sure?

The democratization of propaganda.

Governments in general, and the U.S. government in particular, are having trouble getting messages out to their citizens. We used to worry about governments and big business controlling the media to put out purely ideological or purely profit-driven messages. Now anyone in the world can pretty much say anything anytime. People have trouble telling which messages are truthful and which are more reliable than others. In the U.S., this is combined with low trust in government and low trust in experts, and the result is that people either didn’t receive important messages about public health, or received a variety of conflicting information and noise and didn’t reach reasonable conclusions reading to reasonable decisions.

We hear a lot about “following the science” and “listening to scientists”, but this is really about policy communication not science communication. Scientists are trained to communicate uncertainty to each other. Often though, the uncertainty is low enough that it is clear one course of action has better odds of a good outcome than others. Media do not communicate this well – they tend to focus on the uncertainty statements scientists make, even when uncertainty is low and the best course of action is clear. The public is not prepared to process this information in a way that will lead to reasonable conclusions and decisions.

So we need to try to educate children to evaluate the source of information and think critically about whether it makes sense in the context of what they know. We need to educate them about uncertainty and decision making. We need to train journalists better to communicate scientific information but especially policy choices. Regulating social media companies might play some small role in this, but in the U.S. at least we don’t want to see a move toward censorship.

Back to the CDC. When Covid-19 hit, I was expecting the CDC to step in and dominate communications from the beginning on the issue. They needed to use all the tools modern advertising has to get messages across. I would have trusted what they said, and I think a lot of people would. If they had seized the initiative, it would have been hard for other voices to compete, and we might be in a better place now. Unfortunately, they have probably suffered a permanent loss of credibility both through poor communication and inadequate action, but better communication would definitely have helped. Make this one more U.S. institution that has lost credibility in my eyes as I have gotten older – Congress, the State Department, and the New York Times after weapons of mass destruction (I never trusted intelligence agencies), the military after the failures in Afghanistan and Iraq (I’m not saying I trusted them per se, but I thought they were good at fighting wars), FEMA after Hurricane Katrina (and more recently the horrific non-response in Puerto Rico), and now the CDC and federal public health establishment.

I have come to respect local public health authorities more through all of this. I actually work in the same building as my local public health agency, and know some people who work there, but I never really saw the connection to the larger health care system or my daily life before this. Part of the federal government’s communication strategy should be to package crystal clear messages for delivery by trusted local individuals like public health workers, family doctors, and school nurses.

Preparing for the big (and small) risks

Covid-19 has caused me to think even more about risk management. A major pandemic was something we knew was virtually certain to happen at some point, and we knew the consequences could be severe. And yet we still failed to adequately plan, prepare, and respond. There are a few other things in this category, like (obviously) another pandemic, a major earthquake, and sea level rise. Then there are risks where we are not sure of the probability, but the consequences could be catastrophic, like nuclear and biological war, ecological collapse, and major food shortages. (Alien invasion? No, I’m not really taking this seriously, but along with things like “gray goo” it should be on the list and discussed, providing a rational basis for taking action or not.) Then there are things that are certain to happen but are geographically limited (storms, fires, floods) or steadily kill a few people here and there adding up to a lot over time (car crashes, air pollution, poor nutrition). I am not sure where some risks fit in, for example cyberattacks or antibiotic resistance – but this is the point of gathering the information and having the discussions in a rational framework. In a rational world, a risk management framework provides a way to allocate finite resources (money, effort, expertise, research) to planning, preparing, mitigating, or simply choosing to accept each of these.

The state of scientific and technological progress (is the Singularity near yet?)

I had a decent technology list under “most interesting post” for December, so I won’t repeat it here.

Above, I find myself referring to the Covid vaccine as a “moon shot”. It is clearly an example of how a big government push can get a new technology over the finish line and bring it into widespread use quickly. I am wondering though if it is a true example of accelerating a scientific breakthrough, an example of accelerating application of a scientific breakthrough to new technology, or simple a case of government correcting a market failure. We had been hearing about mRNA vaccine technology for awhile, and we know a vaccine was developed for SARS but not widely deployed. We have also been hearing for awhile that drug companies were still growing basic childhood vaccines in chicken eggs, and not investing heavily in the mRNA technology, because the market demand and profit potential was not there in the rich countries to make it worth their while. So this was at least partially a case of the U.S. and other governments making that market failure go away by simply paying for everything and simply transferring the profits to those companies. I am not saying this is bad – we do it for arms manufacturers all the time, so why not vaccines?

Vaccines for HIV, dengue fever and other similar mosquito-borne diseases would be nice. One solution to antibiotic resistance might be bacteriophages – viruses tailored specifically to infect and kill specific bacteria. It seems like this technology could be applied to this. If antibiotic resistance is really the medium- to long-term emergency some say it is, maybe this should be a top priority.

This technology is also scary. It is the ability to create a custom organism that can go into a person’s body and have a specific desired effect. Vaccines are obviously a benign application, but somebody, somewhere, sometime will use this technology for evil. This seems like a near-existential risk on the horizon that needs to be dealt with.

I am going to say no, the Singularity is not imminent in 2021. Then again, the idea is that if at some point we hit the knee of the curve on technology and productivity, it will seem to accelerate all at once, because that is the nature of exponential change. If that happens, we will shrug and say we knew it all along. The trick is to find ways to drive innovation and progress while managing the risks that could temporarily but repeatedly set back or permanently derail that path, and without destroying our planetary ecosystem in the process. I am not ready to put odds on what outcome we are headed for, but I am hoping 2021 will at least bring a gradual return to the pre-Covid status quo, and allow us to set the stage for the future.

If anyone has actually read my ramblings all the way to this point, or just skipped to the end, Happy New Year!

a new “science of progress’

This article in the Atlantic says we need a “new science of progress”. It’s an interesting philosophical question – the universe is all around us, its secrets there for us to reach out and understand. The knowledge that exists to discover is not changing, and yet we seem to only be able to discover it in fits and starts. Are there things we could do to discover it faster? Well, there is something called the scientific method. There is something called technology. The field of economics certainly tries to study progress in a systematic way. How best to educate and train human beings is a perennial field of research. Maybe we need to mash all these together somehow, then add hefty doses of system thinking and data science? Or maybe we just need to find the really smart, innovative, unconventional thinkers and figure out how to harness their genius better?

This is exactly what Progress Studies would investigate. It would consider the problem as broadly as possible. It would study the successful people, organizations, institutions, policies, and cultures that have arisen to date, and it would attempt to concoct policies and prescriptions that would help improve our ability to generate useful progress in the future.

Along these lines, the world would benefit from an organized effort to understand how we should identify and train brilliant young people, how the most effective small groups exchange and share ideas, which incentives should exist for all sorts of participants in innovative ecosystems (including scientists, entrepreneurs, managers, and engineers), how much different organizations differ in productivity (and the drivers of those differences), how scientists should be selected and funded, and many other related issues besides.

The Atlantic

September 2020 in Review

Most frightening and/or depressing story:

  • The Covid recession in the U.S. is pretty bad and may be settling in for the long term. Demand for the capital goods we normally export (airplanes, weapons, airplanes that unleash weapons, etc.) is down, demand for oil and cars is down, and the service industry is on life support. Unpaid bills and debts are mounting, and eventually creditors will have to come to terms with this (nobody feels sorry for “creditors”, but what this could mean is we get a full-blown financial panic to go along with the recession in the real economy.

Most hopeful story:

  • The Senate Democrats’ Special Committee on the Climate Crisis had the courage to take aim at campaign finance corruption as a central reason for why the world is in its current mess. I hate to be partisan, folks, but right now our government is divided into responsible adults and children. The responsible adults who authored this report are the potential leaders who can lead us forward.

Most interesting story, that was not particularly frightening or hopeful, or perhaps was a mixture of both:

  • If the universe is a simulation, and you wanted to crash it on purpose, you could try to create a lot of nested simulations of universes within universes until your overload whatever the operating system is. Just hope it’s backed up.

James K. Galbraith on the coronavirus economy

Here is how James K. Galbraith, an economist at the University of Texas, explains the effects of coronavirus on the U.S. economy.

  • The global market for U.S. exports has shrunk drastically. The U.S. exports high-tech capital goods like airplanes and weapons.
  • The U.S. oil industry is pretty much shut down because hydraulic fracturing is not cost-effective at current prices, which are caused by low global demand.
  • Car sales are down because people are driving less, and their cars are going to last longer.
  • The service economy is largely shut down. He says it will not reboot quickly because many services are basic luxury goods, things people have been convinced to want but don’t necessarily need, and things that people can do at home if they really want or have too. To certain extent, people have gotten used to doing things at home, and there is also the problem that many people have lost jobs (in the service industry) and will not have extra income to spend on luxury goods.
  • The service industry business model typically depends on very high occupancy (i.e. crowding) to be viable. Businesses are starting to fail and will continue to fail. Once commercial districts start to have high vacancy, they tend not to come back quickly.
  • Unpaid bills and debts are starting to mount, and this will eventually become a problem for creditors and investors.

Here are his solutions, along with my thoughts in parentheses.

  • Redirect idle industries that export capital goods to internal goods such as public infrastructure. (Makes sense, although it’s not necessarily the same people and equipment. Retooling and retraining would be necessary.)
  • A federal jobs guarantee in industries like teaching and home health care. (Makes some sense, but it makes sense to let the private sector lead in markets that are functioning well. The trick is identifying which sectors like education represent genuine market failures.)
  • Nationalization (or the local government equivalent) of some firms and industries that can’t survive at the reduced volumes. (yuck, in general, but maybe industries where this already exists to some extent, like utilities and transportation.)
  • Domestic manufacturing (maybe, but makes sense to focus on industries where we have a competitive advantage, plus those with value for risk management, resilience, robustness – certainly food, medical equipment, etc.)
  • Just have a universal health care system like all other advanced countries. (For crying out loud, just do it now!)
  • Debt forgiveness, especially student and medical debt. This transfers some wealth from creditors to debtors. He says this will occur in either a controlled or uncontrolled way, so we might as well pick controlled. He says major financial reforms might be necessary, like turning banks into public utilities. (Sounds good to me, but can’t happen without major campaign finance reform.)

Richard Florida’s plan for Philadelphia

Richard Florida and another dude I hadn’t heard of (but he’s local) have a plan for post-pandemic Philadelphia, and it goes something like this:

  • Focus heavily on medical and biotech R&D and startups, where we are a major center.
  • Upgrade workforce skills to participate in this industry.
  • Local procurement policies, especially from minority businesses.
  • Do something to fill vacant store fronts.
  • Do something about poverty.
  • Raise the minimum wage.
  • Develop “concrete actionable strategies” to do these things.

This all sounds pretty good to me. It’s short on specifics of course. We need to grow the economy and create professional jobs somehow without alienating the anti-gentrification crowd. Then tax revenue could increase and just maybe you could do something about poverty. Poverty is the tough nut to crack because there may just not be enough money to go around within a single political jurisdiction, although there probably is plenty to go around in the metro area as a whole, and certainly in the state and country as a whole.

I think professional management of city services would also help. Philadelphia should be a first class international city, but in addition to the income and education inequities it is held back by a personality that is too accepting of amateurism and mediocrity, and too unwilling to look at what is working elsewhere and adapt it. This is not such a tough nut to crack, in my view. Government, businesses, educational institutions, and the public worker unions could get together and probably come up with a plan to upgrade services significantly while saving money, building skills, and creating jobs in the process. This would be a win-win-win for everyone.

The Republican Party Doesn’t Stand for Anything!

I said I was going to look at the Republican Party Platform.

I have voted for Republican candidates at the state and local level at times in the past. I am sympathetic to pro-business, pro-growth arguments at times. I think that some countries have overreached in terms of taxation and regulation at times. I tried to give the Republican Party the benefit of the doubt. BUT…

Today I confirmed that THERE IS NO REPUBLICAN PARTY PLATFORM. They didn’t meet to discuss one, and didn’t adopt one, in 2020. They are for whatever Trump says, and against whatever Obama and the Democratic Party say. They have no ideas, no policy proposals. They simply don’t stand for anything! This is not propaganda. I am not making this up. This is what their website literally says. Just to make sure I wasn’t missing something, I went to the Republican National Committee website, and clicked on the link to the party platform from there. Here’s what is says:

WHEREAS, The RNC has unanimously voted to forego the Convention Committee on Platform, in appreciation of the fact that it did not want a small contingent of delegates formulating a new platform without the breadth of perspectives within the ever-growing Republican movement…

WHEREAS, The RNC, had the Platform Committee been able to convene in 2020, would have undoubtedly unanimously agreed to reassert the Party’s strong support for President Donald Trump and his Administration

WHEREAS, The RNC enthusiastically supports President Trump and continues to reject the policy positions of the Obama-Biden Administration, as well as those espoused by the Democratic National Committee today; therefore, be it

RESOLVED, That the Republican Party has and will continue to enthusiastically support the President’s America-first agenda;

RESOVLVED [sic], That the 2020 Republican National Convention will adjourn without adopting a new platform until the 2024 Republican National Convention

The Republican Party

Okay, fine, let’s look at the 2016 platform then, and compare it to the policy priorities of my pretend party platform.

  • Anti-corruption? No! They are literally against any limits on the purchasing of influence by the rich and powerful. p. 12.
  • A major childcare, education, and training commitment? No! The health and welfare of children is a paramount responsibility of the government…right up to the point where they are born. From that point, childcare is up to parents alone, preferably two heterosexual parents, and the government will not and should not interfere. Parents should have a choice of schools, which sounds reasonable, but in practice this means defunding the universal public education system. Make sure white people are not discriminated against in college admissions. The government should not provide student loans and higher education should be privatized as much as possible.
  • A major public infrastructure and private capital investment commitment? A major research and development commitment? They talk about technology. They talk about startups. I’ll give them some points for talking about the electric grid, which Democrats don’t mention. They don’t really see an active government role in any of these things, let alone an active funding role. They are maybe open to some funding for R&D in the private health care industry.
  • Universal health care? No! Continue to rely on the failed private market place that provides poor outcomes at the world’s highest prices, for those who are able to obtain care at all.
  • A major risk management program? No, but remember I didn’t give the Democrats a high score on this. I’ll give them some points for talking about food security. I’ll give them some points for talking about cybersecurity. They talk a lot about coal. I wonder if they would still talk about coal so much if they adopted a new platform? They state that the IPCC is a political body, not a scientific one. They reject international agreements on carbon emissions. They want to double down in the war on drugs. They are generally for more military spending, more nuclear weapons, and against arms control agreements. Iran, China, and maybe Russia are the enemies. They are just generally against much involvement in international organizations.
  • New revenue to support investment? No, they’re just generally against taxes.
  • Unemployment, disability, retirement? No, they want to monkey with social security.

I tried to be objective and read the document with fresh eyes. I am generally disgusted by it. This is a party with no ideas for improving the country, and I would not entrust them with leadership of anything. I hope they crash and burn in 2020, and reemerge as a more moderate, pro-business and pro-growth party.

Doughnut Economics

Doughnut Economics is a new attempt to communicate the goal of an economy that works for humans while not exceeding the natural limits of the planetary system it is embedded in. You want to be in the dough part. If you are in the hole, you are within planetary boundaries but you are poor, starving, unwell, or otherwise not benefiting from the economy that is working for at least some other people. If you are outside the doughnut entirely, you are outside planetary boundaries and the planetary system will not be able to continue supporting the economic system (including you, and everyone else) indefinitely.

The majority of intelligent and educated people on the planet do not understand these concepts. We need a critical mass of people, certainly leaders and decision makers, to understand the problem before we have much hope of solving it. I support new and novel attempts to communicate these ideas. This one doesn’t quite seem fully coherent to me in terms of stocks and flows, and I think if we taught children about stocks and flows from a young age they would grow up better able to understand systems in terms that aren’t so dumbed down.

automatic stabilizers are not boring!

Slate says automatic stabilizers are boring, and then follows up with a long article on how great they would be. They would have kicked in for both the 2008 recession and the current one, without the months of arguing and lost time.

Things like unemployment insurance are obvious, but I like to think about opportunities for making investments we know we need to make anyway. Like infrastructure investments, capital investments, research and development, childcare and education and training. All of these create jobs now while providing payoffs in the future. When the private sector falters, the public sector kicks into a higher gear and carries the ball for awhile. Then the private sector recovers and debts can be paid back, or a surplus can even be built up. But once again, it’s too late to do it right this time around. It’s time to start planning for the next time around.

June 2020 in Review

In current events, the coronavirus crisis in the U.S. is spinning out of control as I write this in early July. I made a list of trackers and simulation tools that I have looked at. Asian countries, even developing countries, pretty much have it under control, Europe is getting it under control, and the U.S. and a few other countries are melting down. Some voices are very pessimistic on the U.S. economy’s chances to come back. So of course I’m thinking about that, but I don’t have all that many novel or brilliant ideas on it so I’m choosing to write about other things below. Most frightening and/or depressing story:
  • The UN just seems to be declining into irrelevancy. I have a few ideas: (1) Add Japan, Germany, India, Brazil, and Indonesia to the Security Council, (2) transform part of the UN into something like a corporate risk management board, but focused on the issues that cause the most suffering and existential risk globally, and (3) have the General Assembly focus on writing model legislation that can be debated and adopted by national legislatures around the world.
Most hopeful story:
  • Like many people, I was terrified that the massive street demonstrations that broke out in June would repeat the tragedy of the 1918 Philadelphia war bond parade, which accelerated the spread of the flu pandemic that year. Not only does it appear that was not the case, it is now a source of great hope that Covid-19 just does not spread that easily outdoors. I hope the protests lead to some meaningful progress for our country. Meaningful progress to me would mean an end to the “war on drugs”, which I believe is the immediate root cause of much of the violence at issue in these protests, and working on the “long-term project of providing cradle-to-grave (at least cradle-to-retirement) childcare, education, and job training to people so they have the ability to earn a living, and providing generous unemployment and disability benefits to all citizens if they can’t earn a living through no fault of their own.”
Most interesting story, that was not particularly frightening or hopeful, or perhaps was a mixture of both:
  • Here’s a recipe for planting soil using reclaimed urban construction waste: 20% “excavated deep horizons” (in layman’s terms, I think this is just dirt from construction sites), 70% crushed concrete, and 10% compost

IMD World Competitiveness Ranking

The United States fell from 3rd to 10th in the IMD World Competitiveness Ranking this year, after being 1st just a couple years ago. Asian tigers (Singapore, Hong Kong) and Scandinavia/Northern Europe (Denmark, Switzerland, Netherlands, Sweden, Norway) make up most of the top 10, when Canada and UAE making the cut, and Taiwan just edged out at #11.

For the second year in a row, the USA failed to fight back having been toppled from its number one spot last year by Singapore, and coming in at 10th (3rd in 2019). Trade wars have damaged both China and the USA’s economies, reversing their positive growth trajectories. China this year dropped to 20th position from 14th last year.

IMD

City-states tend to do well, so my quick reaction is that it might make more sense to compare Singapore and Hong Kong to, say, the New York City or Toronto metro areas rather than the U.S. and Canada as a whole.