Here are some excerpts:
"In February 2021, the Chicago University IGM Forum asked a panel of
distinguished economists if President Biden’s proposal of a federal
minimum wage of $15 per hour – a level whose ratio to the average wage
is in line with the levels in other countries – would lower employment
for low-wage workers: 45 per cent either agreed or strongly agreed it
would; only 14 per cent disagreed. This, despite a preponderance of
research that has shown no meaningful disemployment effects of raising
minimum wages.
...
"If even the simple supply-and-demand curve, a staple of the orthodox neoclassical framework, fails on something so fundamental as wages and employment, why do economists cling to it? And why do policymakers keep listening to them?
"Perhaps the answer to the first question lies in the second. In 2009, the then US president Barack Obama appointed Cass Sunstein as his regulation tsar, with a remit to help cut automotive emissions. Sunstein argued a carbon tax on fuel was the most efficient way to influence people’s behavior because that’s what the neoclassical dogma says. The fact that the tripling of fuel prices in the previous decade had not fundamentally changed Americans’ car purchasing patterns apparently did not merit consideration.* Neither did the fact that other regulatory measures imposed in Europe had led to a far larger increase in fuel economy with only a modest price signal via higher fuel prices.
"In 2020, the UK government appointed Mark Carney – a former governor at the Bank of Canada and the Bank of England – as climate change adviser. Carney was quick to declare the problem to be essentially a mispricing of the cost of emitting carbon. Neither Sunstein nor Carney are experts in climate economics, let alone climate change. But being economists, both men believed they knew how the world worked and therefore had the toolkit to provide solutions to the world’s gravest and most complex problems. Political leaders believed them. In effect, their self-confidence made them more employable."
...
"If even the simple supply-and-demand curve, a staple of the orthodox neoclassical framework, fails on something so fundamental as wages and employment, why do economists cling to it? And why do policymakers keep listening to them?
"Perhaps the answer to the first question lies in the second. In 2009, the then US president Barack Obama appointed Cass Sunstein as his regulation tsar, with a remit to help cut automotive emissions. Sunstein argued a carbon tax on fuel was the most efficient way to influence people’s behavior because that’s what the neoclassical dogma says. The fact that the tripling of fuel prices in the previous decade had not fundamentally changed Americans’ car purchasing patterns apparently did not merit consideration.* Neither did the fact that other regulatory measures imposed in Europe had led to a far larger increase in fuel economy with only a modest price signal via higher fuel prices.
"In 2020, the UK government appointed Mark Carney – a former governor at the Bank of Canada and the Bank of England – as climate change adviser. Carney was quick to declare the problem to be essentially a mispricing of the cost of emitting carbon. Neither Sunstein nor Carney are experts in climate economics, let alone climate change. But being economists, both men believed they knew how the world worked and therefore had the toolkit to provide solutions to the world’s gravest and most complex problems. Political leaders believed them. In effect, their self-confidence made them more employable."
...
*Local note: Californians still build our cities as sprawl--a design pattern that eliminates walking. Every trip of any significance must be in an auto, and every driving-age adult must own a car--perhaps the most regressive "tax" known to man. Even the walk to a transit stop is often uncomfortable, even unsafe, and not enough potential customers live within a walk of the stops to make transit economically viable, never mind the buses come only every three hours.
The Sacramento region has 20 years worth of unbuilt infill, yet local governments continue to approve outlying, commute-lengthening development. This is because land speculators can purchase agricultural land for a few thousand dollars an acre, then, when they get the development entitlements, sell that same land to builders for 50 - 100 times what they paid for it. A 5,000% - 10,000% gross return on investment is a powerful motivator.
The market-favored solution to commute-lengthening sprawl, validated by Berkeley planner Robert Cervero, is mixed use (offices and neighborhood commerce among the residences), mixed-income (multi-family among the single family), pedestrian-friendly development. People actually pay premiums to live in such neighborhoods, even if the homes are not new... See the McKinley Park neighborhood for one. (Cervero advises a slight increase in density from McKinley Park's to make the thing work best.)
In better news, the state of California now mandates pedestrian- and bicycle-friendly "Complete Streets" for all new development, and focuses on minimizing vehicle miles traveled rather than congestion reduction. For a look at how "planning" actually works locally, see this (from 1993 Business Journal), or take a look at Steve Keen's Debunking Economics: The Naked Emperor Dethroned. (Sorry, not an easy read.)
Personally, I'd compare our current (neoclassical, neoliberal) economics to someone who wants to guide their automobile by turning the rear view mirror. It's not just futile, it's dangerous.
--Mark Dempsey
No comments:
Post a Comment
One of the objects if this blog is to elevate civil discourse. Please do your part by presenting arguments rather than attacks or unfounded accusations.