Relevant and even prescient commentary on news, politics and the economy.

The Death of Dick Day

The Death of Dick Day

I learned a few days ago that Richard (Dick) Hollis Day died about a month ago.  There is no obit yet, so I do not have exact dates of birth or death, but communicating with an old mutual friend who knows his oldest son, apparently he succumbed to dementia and related problems that had him declining over the last several years at his home in Cambria, California.  He was born in 1933, but not sure of exact date, so he was either 87 or 88.  

Dick was somebody I think underappreciated by the economics profession who in my view played an important role on several fronts, both intellectually and in other ways. I shall note a prominent one of the latter being that he was he founding editor in 1981 of the Journal of Economic Behavior and Organization (JEBO), with me replacing him in that position in 2001 (lasting until end of 2010).  This “heterodox but respected” journal was very much his creation, and he published many papers that have since become highly respected although unpublishable in top journals back then.  The first in the first issue was one on new institutional economics by Nobelist Oliver Williamson and the second was the paper on mental accounting that was cited by the Nobel Committee when Richard Thaler received the prize.  It is the case that many ideas he championed back then have now become much more respectable, such as new institutional economics and behavioral and experimental economics, especially after the Nobel awards in 2001 and 2002 respectively for George Akerlof and Vernon Smith.

A Recent Correlation Regarding Political “Leadership” And The Coronavirus

A Recent Correlation Regarding Political “Leadership” And The Coronavirus

 The recent correlation I have noticed, with others commenting on it also, is that some of the most prominent nations with the most rapidly rising rates of coronavirus infections are led by somewhat authoritarian leaders who have recently dismissed the threat of it and engaged in policies that may have encouraged its spread.  The most dramatic examples are India, Brazil, and the Philippines.  

Last year India did not do too badly. It had only one wave, which was pretty well controlled by vigorous lockdown policies that sent many migrant workers from cities to villages. Increasingly authoritarian Indian prime minister, Narendra Modi, he who is imposing Hindutva on the nation and suppressing various dissident voices. This apparent success led to a lot of complacency, with this marked by Modi holding mass rallies prior to upcoming elections, especially a sensitive one in West Bengal where Modi’s BJP is trying to take control of the state government.  But now there has been a dramatic outbreak of the coronavirus, setting records for the most infections in a day of any nation, topping 400,000. Reports have it that hospitals are overwhelmed, and Modi is facing serious criticism.

So Much For May Day

So Much For May Day

 Today is May Day. An ancient point of the Gaelic calendar marking spring, it was long marked by pagan fertility celebrations and rites, dancing around May poles and the like, with many variations on this in different countries. The day became associated with the worker’s movement in 1886 when in Chicago a movement for the 8-hour work day involved many demonstrations and strikes and ultimately a riot in Haymarket Square in Chicago that culminated in a bombing and a massacre (with both police and workers killed), followed by trials and executions of various anarchists and activists. The actual date if the massacre was on May 4, but May1 became associated with the event, and it spread to become the leading International Worker’s Day, despite competition from rivals such as Labor Day in September in the US.  Ironically both of them were started by socialists and in the US, but somehow in the US Labor Day came to be favored by more conservative interests and was made the legal holiday, with May Day the day celebrated by socialists in other parts of the world.

Robert Mundell And Supply Side Economics

Robert Mundell And Supply Side Economics

 The death of Nobel Prize winner Robert A. Mundell at age 88 has brought forth much discussion about his work and legacy.  Most of this discussion, such as several columns by Paul Krugman, have commented favorably on the work for which he was officially given the prize, several papers he wrote in the late 1950s and early 1960s while he was at the IMF.  These papers, drawing on the experience of his native Canada at the time as a nation with a floating exchange rate and open to capital flows with the neighboring and domineering US at a time when most major economies had fixed exchange rates, laid the foundation for the now textbook Mundell-Fleming model of international open macroeconomics, A crucial insight now universally accepted was of the “impossible trinity” that a nation cannot simultaneously have a fixed exchange rate, and independent monetary policy, and open capital flows. This certainly drew on Canada’s experience and explained why it went against the rest of the world to have floating exchange rates.

Bellwether Bullard versus Sirenic Summers

Bellwether Bullard versus Sirenic Summers

 So this is about the now getting to be passe topic of what will happen to inflation this year, with Larry Summers having gone out of his way to make a lot of noise in criticizing the expansionary fiscal policy partly passed but partly still under consideration in Congress as threatening a possible outbreak of 60s-70s style inflation at an entrenched much higher rate than we are seeing now.  He has put the probability of that at about a third, but considers this to be high enough to call for the Biden fiscal policy to be cut back in order to avoid that one third chance of a serious increase in the rate of entrenched inflation.

This forecast has not been accepted by the leading economic policymakers, notably Treasury Secretary Janet Yellen and Fed Chair Jerome Powell, as well as the various lesser lights at the CEA and elsewhere in the Biden administration.  Their official line is that it looks like we shall see an increase in the rate of inflation, and the latest monthly report does have it over 2 percent now, but with this likely to come back down later in the year or by early next year. This is seen to be due to much of the uptick aggravated by supply issues related to pandemic, especially in global shipping, although also with some specific sectors hitting bottlenecks, with all this crashing against rising demand with GDP growth projected at over 6 percent for the year.  But they see the supply issues becoming resolved with the fading of the pandemic and there not being mechanisms in place to entrench the higher rate of inflation, with those at the Fed even hoping that inflation expectations might end up “centered around the 2 percent target rate,” which the Fed has not been able to get to on a sustained basis.

Where’s The Beef?

Where’s The Beef?

 Well, as we increasingly understand how environmentally damaging producing beef is, quite aside from lots of other issues, the proper issue should probably be, “nowhere.”  But back in the early 1980s a fast food outlet, Wendy’s (I originally said Arby’s) ran an ad with this line that indicated that the beef was at their outlet while their competitors just did not have the real beef, what all potential customers really wanted.  Wendy’s has never been all super successful although somewhat so, but many considered this to be an effective ad that appealed to lots of people.

So during the campaign for the Democratic nomination for president in 1984 when “New Democrat” Gary Hart took the lead in polls with his appeal to high tech and a certain sleek cool, his chief rival Walter Mondale threw this ad line at him regarding what he considered to be the superficial nature of Hart’s positions and appeal, “Where’s the beef?”  It was viewed as an appeal to working-class Dems and labor unions not likely to gain from the high tech oriented policies pushed by Hart. His remark made a splash and seems to have slowed Hart’s momentum and helped Mondale’s campaign, who would eventually get the nomination, although what finally did Hart in for sure was a sex scandal that erupted around him.  In any case, while I have seen some sneer now upon his death at Mondale’s use of this ad line, it may well have symbolized that Mondale did have a depth Hart did not.  Of course, many dismiss Mondale because he went down to massive defeat in the election against Reagan, taking only DC and his home stare of Minnesota.  But in that year following the highest rate of GDP growth we have seen since in the US no Dem was going to defeat Reagan’s “Morning in America” campaign.  Mondale ran a noble but hopeless campaign.

Keeping Fingers Crossed As US Commits To Removing Military From Afghanistan

Keeping Fingers Crossed As US Commits To Removing Military From Afghanistan

 Yes, President Biden has bitten the bullet to remove US troops from Afghanistan by the 20th anniversary of the 9/11 attack that triggered our initial entry into that nation for our longest war.  Of course, we shall not quite be fully out as not only will there still be some Marines guarding the embassy in Kabul, but probably covert CIA forces will continue to operate and drone bombing will probably continue and possibly even continue the expansion that has been going on for some time, with over 7000 bombs dropped on the nation by the US in 2019 according to Juan Cole.  But, hey, still looking good.

Needless to say many are upset and whining and worrying.  David Ignatius in WaPo worries that the Taliban will take Kabul after a bloody war and allow al Qaeda or ISIS to establish themselves there, saying that the worst thing would be for the US to have to go back in again after having left the way we went back into Iraq after ISIS grabbed lots of territories after we left there.  But Biden has been through these discussions and decisions and was long reported to want out from Afghanistan way back when Obama was increasing troop levels up to about 100,000, with them now down to just a few thousand.  Most of the withdrawal has already happened, and with Trump having promised a May 1 withdrawal an effort to go back on that with lots of conditions would probably trigger an upsurge of Taliban attacks on US troops, making a mess of things.

Of Battenbergs, Brexit, and Brogues

Of Battenbergs, Brexit, and Brogues

 So, Philip Mountbatten, born Philip Schleswig-Holstein-Sonderbutg-Glucksburg, Duke of Edinburgh, Prince Consort of the United Kingdom, and many other titles, died peacefully at age 99 on April 9 about 2 months shy of making it to 100.  I am not going to either praise him or poke at him, with his long history that contains many things on both sides of that open to judgment.  Certainly he was part of a colonialist monarchy, but them most of its empire broke up and went away during the period he was in his position in the British monarchy.  I am more interested in some related items, noting initially that all sorts of people will be making lots of silly tings out of this ,starting with Brian Kilmeade of Fox News who somehow has decided that it is all the fault of Harry and Meghan having their interview with Oprah Winfrey. Not.

I do not think it triggered his death, which seems to have been coming for some time and almost happened during his recent long stay in the hospital.  But I am noting the odd coincidence that the day before he died saw the worst outbreak of violence in Northern Ireland in decades, possible since the famous Easter Peace agreement came about, which led to a long largely peaceful period between the two sharply split communities in Northern Ireland.  What is sad to me is that I especially saw this coming as an outcome of Brexit since visiting Belfast four years ago, taking a train from Dublin to there and back, no notice of crossing the border at all either way.  We took a tour around the formerly “troubled” neighborhoods, now troubled again.  One does not hear much about them, especially given how quiet they have been for so long. But there are still high walls in places with unpleasant graffiti on them and numerous signs that the people on each side of those walls really do not like each other much and have sharply conflicting memories about what happened back then, even as all then were saying they supported the peace agreement.

Congress Steadily Degenerating

Congress Steadily Degenerating

 I doubt this will surprise anybody, aside from those who might have hoped that Dems retaking formal control of both houses of Congress, if by narrow margins (with that margin shrinking in the House due to the 2020 election).  But I have a more direct source for this conclusion.

I received a visit today from my niece and her family at our house about two hours southwest of Washington.  She is Erica Werner, a longtime reporter for the Washington Post who has covered economics issues that Congress deals with.  She has been high enough up at WaPo that when some of the major budget issues were being debated and passed, she was the lead author of the top front page story for several days in a row there.  She also covered the passage of the ACE at Congress back when that happened.  Anyway, she has been reporting on Congress for quite a few years and knows the people there inside out and really up close.

Good Signs On Renewing US-Iran JCPOA Nuclear Deal

Good Signs On Renewing US-Iran JCPOA Nuclear Deal

 One should probably not get too optimistic yet, although I have been getting quite worried about it, but a report in today;s New York Times seems to indicate that via the rather indirect negotiations going on in Vienna the US and Iran may have worked out a mutually acceptable path of actions that will lead to both nations getting back into compliance with the JCPOA, which the US pulled out of for no good reason in 2018 due to former President Trump.  President Biden has said he intended to get back into the deal, and after a bunch of delays, it looks like it might actually be happening before the forthcoming Iranian presidentrial election in June, thought likely to lead to the replacement of current Iran President Rouhani, who negotiated the original deal in 2015, with somebody likely to take a harder line. So, about time.

Barkley Rosser