Chang's work is tedious screeching. He rails against a mythical version of econ from the 70s at Chicago.
> Almost half of US families can't afford basics like rent and food
> Nearly 51 million households don't earn enough to afford a monthly budget that includes housing, food, child care, health care, transportation and a cell phone, according to a study released Thursday by the United Way ALICE Project. That's 43% of households in the United States.
This is a classic case of "I'm going to cite bad statistics and blame X without explaining its causal relevance or why not-X would be better."
Consider how U.S. education spending per student has ballooned over the last few decades, while outcomes have stayed flat (and in some cases deteriorated).
Not the parent, but how about all of Western Europe?
As much as economics wants to tout itself as a science, when confronted with real world examples of what works, tested in real countries over the past 75 years, it just retreats into some dressed-up version of American Exceptionalism to explain the failing of its own prescriptions.
You're going to have to be more specific. What about "all of Western Europe"?
> As much as economics wants to tout itself as a science
Is this going to be a game of definitions? What qualifies as a "science", in your view? Do you consider sociology to be a science? Psychology? Ecology? Geology? Anthropology? Archaeology? History? Linguistics?
> tested in real countries over the past 75 years
Which 75-year-old policies are you referring to, exactly?
> it just retreats into some dressed-up version of American Exceptionalism
What you could possibly mean by economics being a "dressed-up version of American Exceptionalism" is honestly a complete mystery to me.
> to explain the failing of its own prescriptions.
Which prescriptions are you referring to?
“Do you have any reason to believe that higher taxes and spending will lead to better outcomes, or higher net societal welfare?”
...And the historical example of Western European social democracies like France, Germany, and the Scandinavian states prove this.
>Which 75-year-old policies are you referring to, exactly?
Nationalized healthcare, massive investments in public transportation and education, higher welfare floors and labor protections.
United States: $10,348
Switzerland: $7,919
Germany: $5,550
Netherlands: $5,385
Austria: $5,227
Belgium: $4,839
France: $4,600
United Kingdom: $4,192
See [2] for a breakdown by country of government/compulsory healthcare spending as a percentage of GDP: https://imgur.com/a/BzaVX6w. The U.S. comes out on top, by far. Has it ever occurred to you that maybe the problems with U.S. healthcare won't be solved by pouring more money into it, but rather by addressing systemic issues with the way it works?
Regarding education:
The United States spends more than other developed nations on its students' education each year... Spending, of course, only tells part of the story and does not guarantee students' success. The United States routinely trails its rival countries in performances on international exams despite being among the heaviest spenders on education... The average first-year high school teacher in the United States earns about $38,000. OECD nations pay their comparable educators just more than $31,000... Among all educators, U.S. payrolls are competitive. The average high school teacher in the United States earns about $53,000, well above the average of $45,500 among all OECD nations. [3]
The United States spent $12,300 per FTE student at the elementary/secondary level, which was 29 percent higher than the average of $9,600 for OECD member countries reporting data... At the postsecondary level, total government and private expenditures on education institutions as a percentage of GDP by the United States (2.7 percent) were higher than the OECD average (1.6 percent) and were higher than those of all other OECD countries reporting data. [4]
Again, has it ever occurred to you that maybe the problems with U.S. education won't be solved by pouring more money into it, but rather by addressing systemic issues with the way it works?
[1] https://www.healthsystemtracker.org/chart-collection/health-...
[2] https://data.oecd.org/healthres/health-spending.htm
[3] https://www.cbsnews.com/news/us-education-spending-tops-glob...
Education in the US suffers from a similar problem because of its patchwork and variable system of state and federal funding, much of which was specifically designed to disadvantage the poor and minorities.
All your data points show is that privatizing and applying inconsistent distribution regimes to what should be public goods makes them more costly, less efficient, and produce worse outcomes in aggregate.
Wrong. I specifically linked to data showing government healthcare spending, not private healthcare spending (https://imgur.com/a/BzaVX6w). Read again.
> Education in the US suffers from a similar problem because of its patchwork and variable system of state and federal funding, much of which was specifically designed to disadvantage the poor and minorities.
I don't disagree with this. There are other important factors, of course.
...that they pay in the context of a privatized healthcare system, largely to cover the disabled, elderly, and chronically unwell, who the privatized system sees as a profit center.
I don’t understand what you can’t or refuse to understand about this. Of course the pay more under this arrangement. They would pay less if they covered everyone and the system was nationalized, which, again, the historical example of Western Europe proves to be true.
[1] https://money.cnn.com/2018/06/01/news/economy/may-jobs-repor...
> an indicator that our current ideology... is broken
Read the very article you linked to:
The jobless rate ticked down to 3.8% in May, another sign of the strong economy and tight labor market. That tied the lowest unemployment rate since 1969. Since then, the only other time unemployment was this low was in April 2000. "It fell for all the right reasons. We had more people coming into the labor market. We saw employers digging deeper into the pool of unemployed," said Josh Wright, chief economist at the software firm iCIMS. The jobs report painted a picture of an economy with opportunities for almost everyone. Black unemployment fell to a record low, and the gap between black and white unemployment shrank to the narrowest ever measured. Job openings are at a record high, and businesses are hungry for workers. That has helped underrepresented Americans find jobs. The unemployment rate among African-Americans and Asian-Americans has been steadily declining. It has also dropped among low-education workers and even teenagers. Over the past year, the unemployment rate among 16- to 19-year-olds has fallen from 14.1% to 12.8%.
Not to mention you haven't established the connection to "low taxes, limited regulation" that you claim. Others could equally claim the problem is that taxes and regulation are too high. This is a classic case of "I'm going to cite bad statistics and blame X without explaining the causal connection with X or whether the alternative would be better."
But the combination means that there's a problem, because in a free market you would expect the opposite: in times of low unemployment, companies would need to increase wages to attract employees. That this is not happening is a blow against the justification of the current "low taxes, limited regulation" ideology (that it creates free markets), because the labor market doesn't behave like a free market.
Fewer regulations leads to lower unemployment.
Lower taxes leads to lower unemployment.
Lower real wages leads to lower unemployment.
Economists believe that the unemployment rate can dip even further because there's still slack in the job market.
Productivity and inflation are lower than in previous periods of growth, and economists believe that has kept a lid on wages. The erosion of workers' bargaining power has also played a role. Another explanation: Employers are turning to new workers — such as younger people and those just re-entering the job market — to fill positions vacated by better-paid veteran workers who are either retiring or taking new positions elsewhere. Economists are confident that wages will keep climbing as competition for workers grows. Dozens of companies have already announced pay hikes and more attractive benefits to lure workers. On Thursday, Costco said it would raise starting wages for US employees by $1, to a minimum of $14 an hour.
What do you find unsatisfactory about these explanations?
> But the combination means that there's a problem, because in a free market you would expect the opposite: in times of low unemployment, companies would need to increase wages to attract employees. That this is not happening is a blow against...
It sounds like you’re setting up a strawman and attacking it. See above.
> because the labor market doesn't behave like a free market.
No one believes the labor market is or behaves like a free market. Again, this is a strawman.
There isn't "still" slack, the slack is growing as the laborforce participation rate is lower today than it was in 2013. How can it be in a "booming" economy that fewer people want to work and real wages are also falling? I haven't seen an economic explanation for this.
>The erosion of workers' bargaining power has also played a role.
A result of de-regulation, no?
>What do you find unsatisfactory about these explanations?
The lack of evidence that they are more than just theories, I want the data.
The labor force participation rate is currently about 62.8%. In 2013, it was at most about 63.8%, only 1 percent higher [1].
> How can it be in a "booming" economy that fewer people want to work and real wages are also falling?
Real average hourly earnings for June 2013 were $10.31 [2]. Real average hourly earnings for June 2018 were $10.76 [3]. Real earnings increased over that period. So what are you referring to, exactly?
> I haven't seen an economic explanation for this.
This reminds me of a how a creationist says “Well, I haven't seen an explanation for this" and proceeds to dismiss an entire field.
> The lack of evidence that they are more than just theories, I want the data.
Lack of evidence about what? Be specific.
[1] https://tradingeconomics.com/united-states/labor-force-parti...
[2] https://www.bls.gov/news.release/archives/realer_07162013.ht...
[3] https://www.bls.gov/news.release/archives/realer_07122018.ht...
This 1% difference works out to 1.6 million fewer people in the laborforce, that is a problem. Especially, when I keep reading about how the economy is doing great compared to other post-Recession years. If this is true, why aren't people re-joining the laboforce? If the labor market is squeezed for talent, as companies and JOLTS [1] data would have us believe, why aren't they raising wages to lure workers? The fact that they aren't is not a good sign of economic fundamentals.
>Real average hourly earnings for June 2013 were $10.31. Real average hourly earnings for June 2018 were $10.76. Real earnings increased over that period. So what are you referring to, exactly?
Correct, since 2013, real wages are up 0.7% annually. I am referring to how real wages have fallen since the tax law was enacted. This is notable because the tax cut was specifically sold on the promise it would increase worker's wages[2]. Why haven't wages risen since the tax cut when they were rising before the cut?
>This reminds me of a how a creationist says “Well, I haven't seen an explanation for this" and proceeds to dismiss an entire field.
Like someone who uses an anecdote about Costco raising wages by $1 as evidence the labor market is great while dismissing real wage contraction?
>Lack of evidence about what? Be specific.
Evidence that any of the "reasons" outlined for slow wage growth are true.
[1] https://www.bls.gov/news.release/jolts.nr0.htm
[2] https://www.bloomberg.com/view/articles/2018-07-18/trump-s-t...
They could do so, but they'd probably somehow have to account for the fact that both taxes and regulation are substantially lower than periods of broader prosperity.
Source?
you could also argue the underdevelopment of the third world by washington consensus (free market) policies
oh and banking/finance deregulation (pre/post-glass-stegall) of the great depression, s&l crisis, and the most recent financial crisis
i really don't know how to feel about milton friedman, i like the negative income tax and he support georgism. he's really a liberal, but such a huge spokes person for the seemingly detrimental policies enacted after the collapse of keynesianism in the 70s
What does this have to do with the Chicago school or libertarianism?
> you could also argue the underdevelopment of the third world by washington consensus (free market) policies
I have no idea where you got this from. The evidence indicates the complete opposite. Free markets and free trade are a boon to developing countries.
China's economic liberalization reforms (agricultural decollectivization, privatization of industry, elimination of price controls, protectionist policies, and regulations) lifted millions out of abject poverty. India's economic liberalization reforms (making the economy more market-oriented, expanding the role of private investment, reducing import tariffs, deregulation of markets, reduction of taxes, and greater foreign investment) similarly led to a vast reduction in poverty and extraordinary economic growth, particularly in sectors opened to competition.
> the seemingly detrimental policies enacted after the collapse of keynesianism in the 70s
Which policies are you referring to, and why do you think they were detrimental?
Regarding the Great Depression, I suggest you read what Friedman had to say about it.