Inflation Worries and the 1970s

 The debate over the proper size of the Covid bill often gets into inflation--will a bigger federal debt cause greater inflation.  I've commented somewhere that while any inflation will take a while to show up, based on our experience in the 1970s it takes a long time for policymakers to react and fight it.  

Expanding on that--we do have the experience of the 70's to guide us, and we know that very high interest rates a la Paul Volcker will stifle inflation albeit at the cost of a recession.  Another factor I'd consider--in the 70's unions had more power than now.  The industrial sector was much more important in the economy, and unions had considerable power in that sector.  I think it's also true that union contracts had been written in a way to cope with inflation, at the cost of adding to inflationary pressures. Globalization has come a long way since the 70s, so presumably it's harder for an economy to go its own way and inflate.  Finally, a big part of the inflation then was the effect of OPEC finding its power, resulting in much higher prices for oil.  Today we don't have any cartel with similar power over a critical factor in the economy, and oil specifically and energy generally are less important economically.

Should Democrats Go Hard and Fast?

 Part of Ezra Klein's argument in this New Yorker interview is Democrats should push harder than they did in the Obama administration to fulfill their promises.

I've just completed Obama's  "A Promised Land".  Part of the criticism is that the stimulus package should have been bigger and more obvious--issue checks rather than changing deductions for example. Part of the argument is don't let the filibuster stop you.

I'm not sure I buy that. Go too far too fast and you don't get Joe Manchin and Jon Tester reelected, you don't get Doug Jones elected, etc.

But it seems each administration is trying to avoid the mistakes of the last administration (of the same party). For example:

• Clinton administration designed a healthcare package without consulting Congress and it failed.  Obama administration spent (wasted?) a lot of time and energy dealing with Congress on ACA
• Biden administration is aiming to improve healthcare fixing Obamacare's problems.
• Bush administration had an aggressive foreign policy trying to restructure Iraq and Afghanistan.  The Obama administration backed away from that.  

Of course today's progressive wing of the Democratic party reminds me of the McGovern wing of the party 1968-76, which led us to defeat and long years out of power in the White House.

And my attitudes towards the $1.9 trillion Covid bill are swayed by memory of the the inflation of the 1970's.

We will see.

Ebbs and Flows

One thing which seems to occur and recur is a pattern of ebbs and flows.  In this case I'm thinking about race. In the 1950's the emphasis was on integration, the idea that our American problems would be cured by ensuring that all legal barriers to full participation.  Hence, the emphasis on civil rights.  This was building on the program of the NAACP.  The Black Muslims, the Nation of Islam, was separatist.

In the 1960s and 70's with Stokely Carmichael  and other leaders the Black Power movement emerged, with Malcolm X contesting with Martin Luther King.  As I remember it the issue was partly at least whether whites could be trusted, or wehther blacks would do better by strengthening the black community.  It may have been a reaction to what happened to black teachers and other professionals during integration.

While these lines of division seem to an outsider like me to have blurred over the 50 years since, I think we can still see those impulses working today. And this post at Boston 1775 shows them working then--black Congregationalists establishing their own church.

Voting With Their Feet in 1758

Prof. Somin at Volokh Conspiracy has a book and a bunch of blog posts on the theme of people voting with their feet--moving from one state to another or one country to another.  As a libertarian he's all for it. 

It's not new, as I discovered when reading the Anderson "Crucible of War" on the Seven Years War.  Interesting bit in it--the Massachusetts legislature wrote to the British regarding the demands for more troops for 1759 campaign, recruiting for which would require paying enlistment bonuses.  They complained that taxes were already so high that people were leaving Massachusetts for better places.

Of course 270 years later Massachusetts is still wealthy and still a high tax state.

Health Providers and Vaccine

 Had my dental appointment today.  It's a pain, but at my age I need to be careful with my teeth, something I wasn't during most of my life.

I am puzzled--my dental hygienist was commenting on the provision of vaccines to pharmacies.  I wasn't quick on the draw--about 2 hours later I think to wonder--has she not received her vaccine shot?  I thought that category would be close to the top.

Telephones with TV = Zoom Meetings

 I wrote earlier on my memories of various trials of adding pictures/TV to the telephone--all of which failed.  

GovExec has a piece which may summarize the change from the pandemic:

"“The most important outcome of the pandemic wasn’t that it taught you how to use Zoom, but rather that it forced everybody else to use Zoom,” Autor told me. "We all leapfrogged over the coordination problem at the exact same time.” Meetings, business lunches, work trips—all these things will still happen in the after world."

It's an important point--just knowing that people with whom you need to communicate use the new method is great.  It's rather like 20 years ago when you knew someone might have an email address, but maybe they only remembered to check it once in a blue moon, so you'd use the telephone instead of email.  

Snow Days?

 Reston got maybe 3 inches of snow, more to the north and east of us.  The TV news is running their usual scroll of schools which are closed  I'm not clear whether these are all schools doing in-person teaching, or whether the snow is impacting remote learning.  I know there's been speculation the experience the pandemic has given us with remote learning means no more snow days, but has that become a fact?

CCC and Climate Change--Carbon?

 No sooner had I written yesterday's post on CCC's past Politico issued this piece on the corporation's possible future--Vilsack might have his lawyers come up with a theory to justify using CCC funds for climate change work, specifically a carbon bank.

😉

MFP Revisited and CCC

 Three academics at U of Illinois examine some issues of the Market Facilitation Program.  As they say at one point, the questionable legality of the program is academic, because Congress didn't challenge it when they gave the Commodity Credit Corporation more money.

A history of CCC would be interesting. It was created under the New Deal, following examples from WWI and the Hoover administration of using government corporations to gain administrative flexibility, particularly IMO to evade the requirement for yearly appropriation bills passed by Congress.

USDA bureaucrats during my time used it creatively.  The administrative people used CCC authorities to go around the Government Printing Office rules to get fast printing of forms and directives when we were implementing new legislation and disaster programs.

In 1983 IIRC the Reagan administration used it for a disaster program for Texas counties which was part of a deal to get conservative Texas Democrats (which used to exist) in the House to vote for legislation.

Also in 1983 there was the Payment-in-Kind program, which used creative lawyering to transform CCC loan collateral into payments for farmers to divert acreage from production.

As computers came along, the procurement and IT people used CCC financing for computer equipment, setting off a 10-15 year battle with the Congress which ended with Congress tightening the restrictions on ASCS/FSA buying of computers.

After I retired there were further special programs authorized--I think by both the Bush and Obama administrations, but I don't remember the specifics.

Greenhouses Versus Vertical Farms

 This Post article on AppHarvest illustrates the difference between the two:

• Greenhouses are horizontal, basically relying on the sun for the energy to warm the house and grow the plants. Because they're land intensive, they aren't typically found in cities.  Like self-storage facilities they need to be close to their markets but far enough away to enjoy lower land costs.  Because their energy cost is low(er) as is their construction cost, they can be used to grow more nutrient intensive plants (as tomatoes in the piece).
• Vertical farms are vertical, basically relying on electricity for the energy to warm the facility and grow the plants. Because they minimize land costs, they can be sited in cities, minimizing the cost of transporting their produce.  But because of the cost of electricity and construction, low nutrient greens and herbs are their sweet spot.

Both types of facilities can benefit from technological advances, like computer management of the growing and harvesting process.  They can both appeal to producers by offering pesticide and insecticide free produce. They both are vulnerable to disease/pests from their concentrated production.