The Economic Consequences of the Pandemic

John Quiggin12 Comments

That’s the title of a book I’ve agreed to write for Yale University Press (their editorial director) Seth Ditchik commissioned my previous two books, Zombie Economics and Economics in Two Lessons when he was at Princeton UP.

When we first discussed the book, I took the view that most of the writing would have to be done after November, since the outcome of the US presidential election would be crucial to developments in the US and globally. I’m now working on the assumptions that
(a) Biden will be the next president
(b) he will have a workable majority in Congress.
(c) mainstream Democrats recognise the need for radical change, and Biden will align with the mainstream position as he always has done

The first of these assumptions was problematic until recently, but seems safe enough to work on now. The third, I’ll leave for comments.
That leaves the question of a workable majority. Roughly speaking, I mean that the Dems have enough votes in the Senate to abolish or restrict the filibuster and pass the kind of program I’ll be advocating (allowing for a couple of defections, that would be 52 or more). Winning that many seats is still a stretch on current polling, but not out of reach.

The immediate question is that of how to get rid of the filibuster. Doing so pre-emptively would be problematic in all sorts of ways. Biden needs to start with the 2008 Obama playbook of reaching out across the aisle in the spirit of bipartisanship. But unlike in Obama’s case, once the proffered hand (or perhaps elbow bump) of friendship is slapped down, as it surely will be, Biden needs to point to his electoral mandate and whip up the necessary votes. Obama realised this, to some extent, in his second term, but by then he had a hostile Congress.

More concretely, I’d suggest starting with health care. Biden should call on the Repubs to drop their endless campaign against Obamacare, and work together on fixing the health systme. He should start with a proposal to expand Medicaid to all states, with incentives redesigned to get around (at least arguably) the Supreme Court’s 2012 ruling that States had to have a “genuine choice”. Biden should offer the Repubs a chance to have a say in the framing of the legislation with the aim of bringing the country together.

Politically, this ought to be a no-brainer for the Repubs. The fact that Oklahoma voters just passed a referendum to expand Medicaid over the opposition of the governor, ought to make it clear that this is a fight they can’t win. But given that they are still fighting to abolish Obamacare, it seems unlikely that they will see this.

Even if Congress passes the legislation, it could still be invalidated by the Supreme Court. But, unlike 2012, this would be a fight that Roberts couldn’t win, since Congress could keep tweaking the law and sending it up again. Repeated rulings in favor of the Republicans on an issue where they have almost no public support https://www.kff.org/medicaid/poll-finding/data-note-5-charts-about-public-opinion-on-medicaid/ would provide the ideal case for expanding the Court so as to nullify the Gorsuch and Kavanagh appointments.

This isn’t the only test case Biden could use. But it seems like an obvious place to start.

Trumpism after Trump

John Quiggin29 Comments

Predicting election outcomes is always risky (for example, the People’s Action Party could lose the current election in Singapore), but life involves taking some risks. So I’m going to predict that Trump is going to lose in November, and lose badly*. He is far behind in the polls, substantially further than in 2016. More relevantly perhaps, the resurgence of the pandemic in Arizona, Florida and Texas has ended any chance that the economy will be successfully reopened and the pandemic clearly under control by November, not to mention giving the citizens of those states very personal reasons to vote against him.

What will happen to Trumpism after Trump’s defeat, in the US and globally? Here are some very disorganised thoughts.

A big part of Trump’s appeal is that he is a winner, and a big part of Trumpist mythology comes from wins against the odds, as with Brexit and Johnson and, more periphally, with the re-election of the Morrison government in Australia (which had the good sense to dump most of its ideology for the duration of the crisis, but is now returning to its roots). With that gone, Trump’s support will be much weakened So, the stage will be set for a fight in which the hard neoliberals who controlled the party before Trump attempt to reassert themselves, breaking with Trump’s explicit racism while still trying to keep the Repubs white voting base behind them.

On the other hand, Trump has lots of supporters who will refuse to accept the reality of a defeat (not enough, I think, and particularly not enough in positions of power, for him to stop the election or overturn its result). And there are more competent Trumpists, in the mould of Viktor Orban, keen to push an ethnonationlist, racist and authoritarian policy program without Trump’s clownish demagoguery.

Internationally, a defeat for Trump probably won’t make much difference to the ethnonationalist voting base of the Trumpist right. That base has always been there, ready to turn out whenever some other group can be identified as the enemy. But it will, I think, have a significant effect on the right wing of the political class. Some of them will find themselves outside the bounds of legitimate discussion (this is already happening in a small way in Australia), while others will engage in some quick reinvention.

The big question is whether hard neoliberalism can recover. On the one hand, the financial sector still has huge economic power, which usually translates into political power. And the common-sense economics of the Swabian housewife still retains its grip on many. On the other hand, just about everything that is identified with hard neoliberalism (globalisation of trade and financial flows, the hypertrophic growth of the financial sector, trickle-down economics and more) is massively unpopular. That’s particularly true of those under 40, who never experienced the illusory prosperity of the 1990s, or the crises of the 1970s (minor by comparison with the last decade, but a massive shock to expectations conditioned by the postwar boom).

The best hope for the US right is that Biden and the Democrats are unable to fix the catastrophic mess they will inherit. More on this soon, perhaps.

  • I meant to have a footnote about the possibility of Trump rejecting the election outcome, but covered it with a parenthetical statement.

Monday Message Board

John Quiggin36 Comments

Back again with another Monday Message Board.

Post comments on any topic. Civil discussion and no coarse language please. Side discussions and idees fixes to the sandpits, please. If you would like to receive my (hopefully) regular email news, please sign up using the following link


http://eepurl.com/dAv6sX You can also follow me on Twitter @JohnQuiggin, at my Facebook public page   and at my Economics in Two Lessons page

STEM (from Twitter via spooler)

John Quiggin8 Comments

A striking thing about Tehan’s university reform. Conservatives hate science even more than humanities, & feeling is mutual. Every scientist I know loathes them. Polling says my colleagues are a good sample. Only 6 per cent of US scientists are Republicans (huffingtonpost.com.au/entry/only-six…)

Rightists like technological goodies, but even there they want to fight culture wars, against renewable energy for example. In this context, is there a non-racist version of the “cargo cult” trope? It would be applicable here.

Twitter thread here

The simple but difficult physics of losing weight

John Quiggin28 Comments

Following up this CT post on health living,, everyone has their own story and their own health. That’s true, but we are all subject to the same physical laws. So, here’s my story and some thoughts on the physics.

I managed to lose about 12 Kg over a couple of years, almost entirely through exercise.

The basic physics is simple
(1) weight loss = (kilojoules burnt – kilojoules consumed)*k,
(2) kilojoules burnt = base metabolism + work done

where k ≃ 0.025 is a constant reflecting the rate at which your body converts kilojoules of food energy into kilograms of fat. If you can alter the right hand side of (1) through any combination of diet and exercise then you will lose weight.

The problem is that altering either of these, or even altering while holding the other constant is really hard. Dieting makes you tired and slows your metabolism. Exercise increases your appetite, and also encourages you to flop once you stop exercising. All that’s because your body isn’t evolved to lose weight easily. Hunger and fatigue are both adaptations to stop you doing that. And, even if you can shift (1) enough to lose some weight, (2) puts a limit on how much you can lose. Balance is restored by the fact that your lighter body takes less energy to maintain and move around.

The crucial thing is to find some change for which you have both the willpower to adopt it initially and the willingness to maintain it indefinitely. For me, as I said, that’s been exercise. I aim to burn 4000 kj (about 1000 calories) a day in addition to base metabolism, which implies about 100 minutes of vigorous aerobic exercise. That’s logistically feasible for someone with flexible working hours and no kids at home, but very difficult otherwise. And it takes a long while to get to the point where you really enjoy it. That’s why the experts mostly recommend working on diet. But, if you can manage it, I think exercise is the better way to go.

Sandpit

John Quiggin16 Comments

A new sandpit for long side discussions, conspiracy theories, idees fixes and so on.

To be clear, the sandpit is for regular commenters to pursue points that distract from regular discussion, including conspiracy-theoretic takes on the issues at hand. It’s not meant as a forum for visiting conspiracy theorists, or trolls posing as such.