This stuff gets funnier all the time. Janet Yellen reminds me of the Wizard of Oz.
Remember the good old days when words had meaning? For example, government policies could be of several kinds.
Aggregate demand policy was all about stimulating people's desire to spend. Poverty policy was aimed at reducing poverty. Energy policy was all about promoting more energy while environmental policy attempted to undo harm to the environment. Supply-side policy attempted to shift the nation's supply curve, usually through lower tax rates that created more incentive for people to work and innovate.
It was all pretty clear. And then the Wizard, I mean Janet Yellen comes along and obscures everything. The title of the article in the Wall Street Journal was Janet Yellen Views Biden Policies as Modernized Supply-Side Economics: In a Speech to the World Economic Forum, Treasury Secretary says the White House is aiming to increase labor supply and boost worker productivity.
Modernized supply-side economics? What does "modernized" mean? Is it not enough to say they are trying supply-side policy? Maybe not. That would be misleading. The Biden/Yellen supply-side policies have as much to do with supply-side as I have to do with dancing tights. If what they are trying to say is that their supply-side policies are different than the past ones -- then for sure that fits. Their modern supply-side policies are a very long way from what we tried in the 1970s.
Consider what they include under the umbrella of supply-side.
Social programs such as paid family leave, child care, education, and infrastructure.
Programs for climate change.
A global corporate minimum tax.
The common phrase employed by Yellen for these programs is that they increase labor supply, and or raise productivity while reducing inequality.
Old style programs that reduced taxes on capital and/or deregulated industries are old fashioned and don't work, according to Yellen. What she really means is that if they worked they might have tilted the distribution of income and therefore they are not part of her modern approach.
Clearly the bottom line for Yellen is not that they are supply-side policies. The bottom line is that they are part of a plan to redistribute income. I agree that some of the programs she mentions might have supply-side effects, but clearly they are not thought of in those terms and there is little to no historical data or experience to suggest that they do.
Infrastructure sounds like typical supply-side policy. But even with that one -- she is very clear it has to be infrastructure that makes incomes more equal. Let's build a new subway. But make sure we build it in such a way that incomes are made more equal. No equality -- no subway! Maybe subway builders can't do that. After all, they succeed by making good subways. Not by making incomes more equal.
It sounds good to say that subsidizing childcare is going to make it easier for the family to provide more labor hours to the economy. But why not tell the truth? We don't know. What Yellen does know is that this is a typical welfare transfer to help people at the low end of the income distribution. Maybe she thinks it sounds cool to pretend that she cares about the supply-side of the economy. But we all know the truth. She is what she always was. She is a part of the Biden administration whose goals are driven by global warming and income distribution. Tell it like it is Janet.
First, creating jobs when the availability of skilled people remains low thereby increasing the cost of labor. It may however, improve the national infrastructure. However, politicians love to trade favors when it comes to government funded programs like this. Who knows what will be traded. Then there is the social policy. This is a tough one. I can understand supporting or funding jobs and helping educate the people who would do them but who supports their children who do not attend school. What about the ones old enough to go to school? The system was based in the past on need, like crippled care takers but not across the board. A well thought out plan has to not just provide funding for the family without any guidelines.
ReplyDeleteQuick story: My wife taught in a high school where over 60% were on free or reduced lunch. I 15 year old had no living family that earned an income. He often slept in an old car. But he studied and trained for for sports. At 16 he was on the varsity football team. He made all state and signed with FSU. He graduated with a teaching degree, became a teacher and coach....helping and inspiring others
Dear LSD. It’s difficult . . . nay . . . impossible . . . to take anyone in the current administration seriously. Yepper, the border is closed. Yepper, inflation is not a problem. Yepper, Afghanistan withdrawal a success. Yepper, the check’s in the mail. Yepper, gunna fix Covid. It wud be generous . . . gracious, even . . . to say they’re simply confused . . . in over their headz . . . but they’re not. They’re smart . . . even intelligent maybe . . . (‘cept sleepy, creepy, lying, plageris’n, basement-dwell’n Joe . . . the quintessential buffoonish dunce) . . . so ya gotta realize they’re just out-right boldface lying. And increase the labor supply? Huh? With 10 million yob openings and 4.5 million leaving their yobz (latest report), huh? Plenty-0-yobz ‘n folkz available to fill’m. Ain’t no shortage-0-labor. Yellen be ly’n through her fat face.
ReplyDeleteYer kerect say’n Yellen’s “Modern Supply Side Econ” (sic) is ‘bout as far removed from reality as you swigg’n JD ‘n danc’n in tights to ‘When You Wish Upon a Star.’ Wud wuv to see you in tighty tight tights! Maybe even a tu-tu? Cheerz . . . one ‘our to ‘appy ‘our!