Supply And Demand

Understanding supply and demand is at the very basis of Economics 101, and thanks to the pandemic, we are seeing a “real world” example of what happens when demand surges, outstripping supply–or at least, outstripping the ability to satisfy demand promptly. For example, the supply-chain problems that have raised prices and fears of inflation have been exacerbated by the gusher of spending that is attributed to demand that was pent-up due to COVID restrictions.

Ezra Klein recently revisited the consequences of imbalances between supply and demand in a column for the New York Times. He focused on the dilemma posed by subsidies–not the pernicious subsidies of corporate farmers or fossil-fuel companies, but well-meaning efforts to help needy American families.

Many of progressivism’s great dreams linger on the demand side of the ledger. Universal health care promises insurance that people can use to buy health care. Food stamps give people money for food. Housing vouchers give them money for rent. Pell Grants give them money for college. Social Security gives them money for retirement. The child tax credit gives them money to care for their children. The minimum wage and the earned-income tax credit give workers more money. A universal basic income would give everyone more money.

Great. Or maybe not…

The problem is that if you subsidize the cost of something that there isn’t enough of, you’ll raise prices or force rationing. You can see the poisoned fruit of those mistakes in higher education and housing…

Klein quotes from a recent paper issued by the Niskanen Center–a think tank I have previously cited, and one  that consistently turns out clear-eyed, impressive research.

We are in an era of spiraling costs for core social goods — health care, housing, education, child care — which has made proposals to socialize those costs enormously compelling for many on the progressive left,” Steven Teles, Samuel Hammond and Daniel Takash write.

There are sharp limits on supply in all of these sectors because regulators make it hard to increase supply (zoning laws make it difficult to build housing), training and hiring workers is expensive (adding classrooms means adding teachers and teacher aides, and expanding health insurance requires more doctors and nurses) or both. “This can result in a vicious cycle in which subsidies for supply-constrained goods or services merely push up prices, necessitating greater subsidies, which then push up prices, ad infinitum,” they write.

The Niskanen paper advises Republicans to stop focusing on “backward-looking deficit reduction strategies based on budgetary gimmicks or dead-on-arrival cuts to existing entitlements.” Instead, it urges conservatives to tackle costs, pointing out that, far too often, Republican proposals to cut government spending “are just shell games that shift costs onto individuals.”

The conservative enthusiasm for moving Medicare beneficiaries onto (often more expensive!) private plans “risks being little more than an accounting trick — a purely nominal change in ‘who pays’ that would do little to address the underlying sources of cost growth.

What is needed, according to Klein, the Niskanen authors and others quoted in the article, is a new focus on innovation, and public policies that encourage it.

Klein says progressives are finally figuring this out, most  clearly when it comes to climate.  Biden’s agenda would increase the supply of renewable energy and advanced batteries and build the supply of carbon-neutral transportation options. Environmentalists understand that markets alone cannot solve the climate crisis, and Democrats are coming to recognize that the same is true for much else on the progressive docket.

Klein shares a quote from a member of Biden’s Council of Economic Advisors.

The transportation, rail, public transit and port investments will reduce efficiency-killing frictions that keep people and goods from getting to markets as quickly as they should,” they wrote. “The child and elder care investments will boost the labor supply of caretakers. The educational investments in pre-K and community college will eventually show up as higher productivity as a result of a better-educated work force.”

As he concludes:

A list like this could go on. It’s not clear whether it’ll be in the reconciliation bill, for instance, but Biden has proposed an expansive plan to increase housing supply in part by pushing local governments to end exclusionary zoning laws. And in California, that’s exactly what’s happening, as I wrote a few weeks back. A decade ago, progressives talked often of making housing affordable, but they didn’t talk much about increasing housing supply. Now they do. That’s progress.

Yes. As Aaron Bastani, another author Klein quotes, puts it, “the world we should want requires more than redistribution. It requires inventions and advances that render old problems obsolete and new possibilities manifold.”

Getting to that world will require overcoming the fear of change that is roiling the world we currently inhabit.

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The More Things Change…

As life in these United States has gotten steadily less civil and more hostile, I have had increasing “flash-backs” to a scene from the movie “An American President.” The scene is near the end of the film; it’s a press conference where the President (played by Michael Douglas) finally has had it with Bob Rumson, the candidate from the opposing party. The entire speech is great, but this is the dialogue that sticks with me:

We have serious problems to solve, and we need serious people to solve them. And whatever your particular problem is, I promise you Bob Rumson is not the least bit interested in solving it. He is interested in two things, and two things only: making you afraid of it, and telling you who’s to blame for it.

The speech especially resonated with me (and undoubtedly with other members of historically marginalized populations), thanks to centuries of experience with being the scapegoats for society’s ills. Jewish history, for example, has made me an especially nervous observer of the GOP’s QAnon cult, with its uncanny echoes of  Nazi propaganda.

As someone named Hunter posted to Daily Kos,

The “QAnon” movement is not a set of new conspiracy theories, but a recasting of some of the most popular neo-Nazi, white supremacist, antisemitic themes of the last century for broader conspiracy consumption. Nazi-era antisemitic conspiracy theories declared that “Jews” were secretly controlling the world, that they were working to undermine governments and cultures, and that they drank the blood of children in secret rituals.

QAnon’s version is identical: A shadowy cabal of “globalists” is secretly controlling the world, is working to undermine governments and cultures (for example, through a “great replacement” of Americans with new nonwhite immigrants, as supposedly funded by wealthy Jewish American George Soros), and is secretly trafficking children to harvest compounds from their blood. The most bizarre of Nazi and neo-Nazi themes have found eager new homes in the brains of supposed “real” Americans who have invariably settled on the same targets and solutions as their neo-Nazi enablers: Round up the “globalists”—meaning liberals, socialists, Democrats, those who fight for LGBT rights, those who treat immigrants with decency—and jail them. “Lock them up.” Purge them.

Observers have been warning that the movement has begun exhibiting  a less-veiled antisemitism.

Recently, John Sabal, identified as an “influential QAnon promoter” recommended a notoriously neo-Nazi film to his followers–a film identifying Jews as the architects of communism, World Wars I and II, and the sabotage of Naziism. “Europa – the Last Battle” is a 10-part film that claims Jews created Communism and deliberately started both world wars as part of a plot to found Israel by provoking the innocent Nazis, who were only defending themselves. Sabal told his 70,000 followers that it was “The most important historical film of all time.” (When Vice News reported the recommendation, Sabal claimed he hadn’t actually watched the film and didn’t know it was anti-Semitic. Right.)

As Vice also reported

While this film has been shared by some of QAnon’s more fringe and extremist figures, the fact Sabal feels emboldened to share it so publicly is a testament to how antisemitic thinking has become normalized within the movement…

When one follower did attempt to criticize Sabal for posting the link, other members of the channel quickly attacked that user, claiming they were some sort of undercover agent of the “deep state.”

Others credulously claimed the user criticizing Sabal had misunderstood the film: “I’m sorry that’s what you took away from our neo-Nazi film. It’s really about how killing the Jews is necessary and good because they’re not real Jews,” one of Sabal’s followers wrote.

QAnon believers are an increasingly important part of the GOP.  When the Sabal story broke, he was preparing to host a conference featuring a significant number of Republican lawmakers, including two sitting Arizona Representatives, Wendy Rogers and Sonny Borrelli. Multiple Republican candidates were scheduled to speak, including candidates from the swing states of Michigan, Arizona, and Nevada.

This is not an isolated example. As Hunter noted in his post,

Conservatism in general is increasingly flirting with antisemitic speech and candidates: In Idaho, a Republican with a long history of antisemitic speech, one who claims “all Jews are dangerous,” is enjoying his local party’s support for joining the local school board.

Call it QAnon. Call it fascism, Nazism, racism. It’s all about fear of the “other”–all about having someone else to blame for what is wrong with one’s life. People of color, Jews, Muslims, LGBTQ folks…you know–“those people.”

After WWII, we can’t claim ignorance of where this sort of thinking leads.

I used to think it couldn’t happen here. I was wrong.

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Hear Ye, Hear Ye…

For those of us desperate for any good news, any glimmer of hope that America might eventually emerge from the purgatory into which we’ve been plunged by the MAGA party, a newsletter from the Brennan Center recently offered that glimmer. (No link, sorry.)

On September 30, President Biden announced ten more federal court nominees, bringing the administration’s total number of nominees to 53. Biden also announced four nominees to serve on local D.C. courts.

Biden’s eighth slate of nominees includes two civil rights lawyers and three current or former public defenders. Several of the nominees, if confirmed, would also mark historic firsts: the first Asian American man on the Western District Court of Washington, the first Asian American woman on the Southern District Court of California, and the first Hispanic district court judge in Ohio.

According to CNN, more than 25% of Biden’s nominees to date are Black, 21% are Hispanic or Latino, and 23% are Asian American or Pacific Islanders. Close to 75% are women. In addition, 32% of Biden’s judicial nominees are former public defenders and 25% are civil rights lawyers.

Biden is confirming judges at a rate faster than any other president at this point in their term since Richard Nixon, according to Bloomberg Law. Sixteen of Biden’s judicial nominees have been confirmed so far.

I feared–and still fear–that Mitch McConnell and Donald Trump had ensured a generation in which the federal courts would be lost to principles of justice and equality. After all, they did manage to elevate a number of ideological and, frequently, demonstrably unqualified partisans to those courts. The Biden Administration is clearly aware of the need to ensure the ongoing integrity of the courts, and equally aware of the need to populate the bench with Americans who are both competent and representative of the country as a whole.

So–good news. I’ll take it.

Unfortunately, all the emerging reports about America’s courts are not as positive as that one. That same newsletter relayed the conclusions of an investigation by the Wall Street Journal that found 130 federal judges had violated U.S. law and judicial ethics by “overseeing court cases involving companies in which they or their family owned stock.”

The Journal reported that between 2010 and 2018, 129 federal district court judges and two federal appellate judges had failed to recuse themselves from 685 cases in which they or their families had a financial conflict, and that approximately two-thirds of the rulings subsequently favored the judges’ or their family’s financial interests.

One of the reasons for this country’s current angst is the public’s loss of trust in the institutions of American government. Trump certainly accelerated suspicion of government bureaucrats with his paranoia about the “deep state,” and he fed a wide variety of conspiracy theories, but much of the loss of trust preceded him. (My book, Distrust American Style, was published in 2009, and the phenomenon was anything but new.) Confidence in the administration hit an all-time low under Trump (and for good reason), but Congress has been utterly feckless for well over a decade.

The courts were, for a time, the holdout.

With McConnell’s success in remaking the Supreme Court into an instrument of partisanship, and four years of appointments of partisan hacks  (mostly White men) to the federal bench, those of us who’ve been paying attention lost hope that the courts would salvage constitutional principles–or at the very least, stem the tide.

I doubt that the Biden Administration has the political capital to do what very clearly needs to be done: either enlarge the Supreme Court or impose limits on Justices’ terms of service. Scholars of the judiciary have been advocating various mechanisms for expanding  the Court for years–far preceding McConnell’s mischief–for reasons of efficiency; they’ve also been advocating term limits in recognition of the fact that Justices live much longer than they used to. (Terms of 18 years, the usual recommendation, would probably be long enough to insulate Justices from political pressure– the original reason for lifetime appointments.)

In the absence of meaningful structural change, the nakedly partisan makeup of the Supreme Court is likely to keep trust in the courts low–leaving discontented citizens with nowhere to turn for redress of grievances.

Of course, speaking of “redress of grievances,” we might remind folks that there is this thing called the ballot box…

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Speaking Of Florida…

Speaking of Florida…

Ron DeSantis–the delusional and dangerous governor of Florida–is evidently doubling down on his insistence that government has no business protecting the public health via vaccine mandates.

According to The Week,

Florida Gov. Ron DeSantis (R) on Thursday stepped up his fight against the White House over COVID-19 restrictions, calling for a special legislative session so the state’s Republican-dominated Legislature can block President Biden’s vaccine mandates. “We have an opportunity here to take additional action, and I think we have to do it,” said DeSantis, who also has vowed to challenge Biden’s mandates in court. “I think we have got to stand up for people’s jobs and their livelihoods.” Florida House Speaker Chris Sprowls said his office had not received details on the plan for a special session. Biden in September said his administration would impose vaccine mandates on federal workers and businesses with more than 100 employees, prompting criticism from Republicans who said getting vaccinated should be a personal choice.

I don’t have any special insight into whether DeSantis is really as stupid as he sounds, or whether he has decided that his political future rests with the delusional Trumpian base of the GOP, but this latest bit of theater is driving rational observers over the edge.

The hypocrisy is bad enough. This sudden libertarianism is jarring, coming as it does from Republicans who have waged culture war on behalf of government’s right to dictate everything from citizens’ right to smoke weed to who they can marry and and how they must reproduce.

What is especially infuriating, however, is the insistence that protecting others from serious illness and possible death should be a matter of “personal choice.”

As most readers of this blog are aware, I spent six years as the Executive Director of Indiana’s ACLU. I came to that position as a libertarian Republican (a category that no longer exists in the GOP, despite these sudden dishonest exhortations about “personal choice.”) I was–and am–a believer in what is called the libertarian premise, the  Enlightenment construct that says citizens are entitled to pursue their own telos, their own life goals–in today’s jargon, entitled to “do their own thing” and make their own “personal choices”–so long as they do not thereby harm the person or property of a non-consenting other, and so long as they are willing to accord an equal liberty to others.

The legitimacy of government action rests on those caveats.

There can certainly be arguments about what constitutes sufficient harm to justify government rules and regulations. Those arguments have been especially relevant to so-called “victimless crimes.” We distinguish, for example, between the guy who gets drunk in the privacy of his own home and the guy who gets drunk and takes to the road in his car. People who smoke in their own homes and cars are free to do so, but we have regulated smoking in public places ever since medical science discovered that passive smoke  endangers others. We argue whether the gambler who sustains losses poses a threat to others sufficient to legitimize laws against gambling, and whether the driver who doesn’t “buckle up” endangers anyone but himself.

The argument that vaccination is a “personal choice” doesn’t fall into that category.

Previous epidemics have not spawned similar, widespread debates about government’s right–actually, government’s duty–to protect public health. American courts, including the Supreme Court, have upheld both vaccination and quarantine mandates, because they are most definitely not matters of personal choice. A decision to forego vaccination for a non-medical reason is a declaration of disregard for ones fellow-citizens. Period.

If today’s insane Republicans want to risk their own lives in order to make a political statement, I’m fine with that. When they want to risk the lives of other people, not so much.

In Florida, a large percentage of the population is composed of elderly folks who are particularly vulnerable to the pandemic, That makes DeSantis’ opposition to vaccination especially heinous. He isn’t protecting “personal choice;” he’s signaling his willingness to add to the 59,000+  deaths the state has already suffered from COVID.

He has made a “personal choice” to elevate politics over morality.He’s despicable.

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A Different Kind Of Florida Man

“Florida man” has become a comedy label, a phrase recognizing the ubiquity of stories about someone from the Sunshine State doing something idiotic or bizarre (but definitely funny).

Business Insider, however, recently had a different sort of “Florida man” story, and it’s worth pondering.

As businesses across the country advertise for workers, as “we are hiring” signs proliferate and every day brings complaints from businesses that tell us they are struggling to find employees, a Florida man decided to test their claims. He submitted at least two applications every day in September, taking care, as he told the magazine, to apply only for positions for which he was qualified.

Joey Holz had watched as business after business complained that the availability of government stimulus money was keeping workers at home and out of the job market. The complaint–and the attribution of the scarcity to government largesse–“was so ubiquitous that he joined a ‘No one wants to work’ Facebook group.”

He said he found it hard to believe that government money was keeping people out of the labor force, especially when the end of expanded federal unemployment benefits did not seem to trigger a surge in employment. The expanded benefits ended in September, but 26 states ended them early in June and July.

“If this extra money that everyone’s supposedly living off of stopped in June and it’s now September, obviously, that’s not what’s stopping them,” he said. Workers have said companies struggling to hire aren’t offering competitive pay and benefits.

So Holz, a former food-service worker and charter-boat crewman, decided to run an experiment.

Holz spent a month applying for jobs, mostly at businesses whose employers had been vocal about a lack of workers . He kept track of those applications in a spreadsheet. After submitting 28 applications, he had received exactly nine email responses, one follow-up phone call, and one interview. That interview was with a construction company that had advertised a full-time job focused on site cleanup paying $10 an hour.

But Holz said the construction company instead tried to offer Florida’s minimum wage of $8.65 to start, even though the wage was scheduled to increase to $10 an hour on September 30. He added that it wanted full-time availability, while scheduling only part time until Holz gained seniority.

None of the companies that bothered to respond were paying over $12 an hour.

On September 29, after submitting 58 applications, Holz posted to Twitter about his saga, saying, ” y’all aren’t desperate for workers, you just miss your slaves.” The post went viral.

Holz acknowledged that his results may not be representative of the larger labor challenges in the country, since his search was local and targeted the most vocal critics of stimulus spending.

Holz is actually employed, and he noted that–despite the media focus on businesses that say they are struggling to hire–his own boss had experienced no staffing issues during the pandemic.

“Nobody leaves those positions because he takes care of his people,” Holz said, referring to his boss.

There is a larger lesson to be learned from the experiment run by this particular “Florida man,” if employers are willing to learn it. Research by the Economic Policy Institute confirms that lesson.

The author of the linked article concedes that, in a large and complex labor market like that of the U.S., there will periodically be pockets of bona fide labor shortages. But the article goes on to confirm “Florida man’s” conclusion: a far more common reason for such shortages is the reluctance of employers to pay enough to attract workers. “Employers post their too-low wages, can’t find workers to fill jobs at that pay level, and claim they’re facing a labor shortage.” A more precise formulation would be “I can’t find the workers I need at the wages I want to pay.”

The EPI analysis also points out that

when restaurant owners can’t find workers to fill openings at wages that aren’t meaningfully higher than they were before the pandemic—even though the jobs are inherently more stressful and potentially dangerous because workers now have to deal with anti-maskers and ongoing health concerns—that’s not a labor shortage, that’s the market functioning. The wages for a harder, riskier job should be higher.

“Florida man” proved the point…

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