Growth And Free Soloing Podcast - Barokong

I did a podcast for The Indicator , a NPR Planet Money podcast, free associating  on the free solo blog post. What does free solo illustrate about the process of economic growth? Fun. Cardiff Garcia is a good well-informed interviewer. (Chicago Booth Review also spiffed up the blog post to a more readable essay.)
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Two Videos - Barokong

My Hoover colleague Russ Roberts just finished a nice video on inequality: Among other takeaways, he stresses that the people who were rich in 1980 are not the same people or even families who are rich now. It is not true that "the rich got richer." He also tracks individuals through time, and poor individuals got richer to.  There is a lot more economic mobility in the US than the standard talking points. The video is part of Hoover's Policy Edinitiative, and comes with lots of background information. I'll be curious to hear your comments. A few months ago I went to the Friedberg Economic Institute to give an evolving talk I call "Free to grow" bringing together various themes of this blog and other writing. It's not nearly as polished as Russ's, and I'm still struggling to keep it under 10 hours! (Click here to see the video.) The Friedberg Institute is a nascent free-market oriented organization in Israel. It mostly sponsors talks and classes for undergraduates, and for alumni of their program. As a result it is forming a club of sorts of talented and interesting young Israelis interested in economic freedom. If you're in Israel, check it out, and if you're invited to talk there, accept!
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Free Solo And Economic Growth - Barokong

We recently watched "Free Solo", the great movie about Alex Honnold's free (no aids, no ropes) solo climb of El Capitan. Among many other things, it got me thinking about economic growth. The abilities of terbaru day rock climbers are far beyond those of just a generation ago. The Wikipedia history of El Capitan starts with a 47 day climb in 1958, using pitons, ropes, and all sorts of equipment, and continues through development of routes and techniques to Alex's three hour romp up the face. Why wasn't it done long before? There is essentially no technology involved. Ok, a bit. Alex is wearing modern climbing boots, which have very sticky rubber. But that's it. And reasonably sticky rubber has been around for a few hundred years. There is nothing technological that stopped human beings from climbing much like this thousands of years ago. Alex, transported to 1890, might not have free soloed El Capitan without his current boots, but he would have climbed a lot more big walls than anyone else. Clearly, there has been an explosion in human ability to climb rocks, just as there has been in human productivity, our knowledge of how to do things, in more prosaic and more economic activities. And, reading the history, the rate of improvement has grown over time. I think that in studying economic growth, we (and especially we in the Silicon Valley) focus way too much on gadgets, and too little on the simple fact of human knowledge of how to do things. Southwest Airlines' ability to turn an airplane around in 20 minutes, compared to the hour or so it took in the 1970s, and still does at many larger airlines, is just as much an increase in productivity as installing the latest gadget. Growth is about the knowledge of how to do things, only sometimes embodied in machines. Free solo is a great example of the pure advance of ability, from a pure advance of knowledge, completely untethered from machines. And the same patterns emerge that growth theorists tell us about. Knowledge externalities  When one person learns how to do something, and can and does communicate that knowledge to others, then the others can quickly benefit from knowledge and the group advances. Alex, like Newton, climbed from the shoulders of giants. Just how do you get up El Capitan? There are now many established routes. A "route" is, as the movie made clear, a succession of incredibly tiny holes cracks and ledges in a 3000' face of rock, that experienced climbers figure out how to stitch together. Alex didn't have to figure all that out, and chose an established route. Likewise, nobody in 1958 had any idea that you could hang by your thumbs and fingers to exploit little pieces of rock. This knowledge, demonstrated in the movie, emerged from the community of rock climbers and boulderers over time. Alex is incredibly good at it, but he learned from others. Knowledge transmission  Everyone is all upset about intellectual property these days, but nobody patents anything in rock climbing. (There is some patentable technology in the devices people use to climb with ropes, and that has enabled free climbing, but it's really not central.) The knowledge gets produced, which is costly to the perorangan producing it, and then passed on, where it is much easier to learn than it is to innovate, and the whole group gets better. Once a piece of knowledge is produced it is in society's interest to pass it on as quickly as possible. The whole IP business trades a later reduction in growth -- slowing adoption while the innovator gets to earn some rents -- for the idea that these rents are vital to creating knowledge in the first place. But lots and lots of productivity-increasing knowledge -- most, I would hazard -- is created like new hand-holds or new routes, for free. There are other social institutions that promote the creation and dissemination of knowledge, and rock climbing is full of them. The size of the group and the cost of transmitting information  The key insight of terbaru growth theory is that, as a result of the process described above, the larger the group studying any dilema, the faster knowledge advances. If 1000 people are figuring out how to climb, and each of their good ideas disseminates through the group, each member of the group gets to use new ideas more quickly than if there are 100 people doing it. (I think our models don't pay enough attention to the dissemination question. Most new ideas are bad, so the process of sifting through new ideas, figuring out which are good and bad, refining them, is a lot of what a group does, and all that and learning takes time and effort. The world does not just have one individual innovating at great expense, then the rest learn for free. Academics, who spend a lot of time reading hard papers, writing referee reports and comments that distill the ideas, throwing most new ideas out, distilling again to teach, see that every day!) The move makes clear, that the world of rock climbing has expanded vastly since the 1950s. Bouldering is a weekend recreation for thousands, unlike dedicated mountain climbing in the 1950s. No surprise then that the rate of knowledge creation is higher. The size of the group is limited also by its ability to communicate. I locate the beginning of growth and science with Gutenberg. (An idea also unpatented and quickly improved on and copied.) Printing means that if you run a costly experiment, then you can share that with a much larger group, and a much larger group can discuss and refine the idea. If you can only share it by word of mouth or handwritten note, few will learn of it and be able to use it. So, similarly, I would say in the end that rock climbing is much more advanced than before because of technology -- but the technology of communication. First, the technology of print and media -- notice the magazine covers in the movie. And now, the technology of the internet. Each new idea in rock climbing is accessible quickly all over the world. Without that large group of interested people, this communal knowledge would not have advanced so far. Which gives me hope, in the end, for growth. We just unleashed a reduction in the cost of communication larger than Gutenberg created.  The group of people studying any problem is much larger, and the number of problems that can be effectively studied by groups of efficient scale (1000 - 10000 seems to be the size of an academic field before it splinters into subfields, and the same seems to be true of recreation) has exploded, the fraction of the human population that can work together on any masalah has exploded. At least the possibility is there. It still took 200 years from Gutenberg to the scientific revolution, and lots can go wrong along the way. The movie, of course, is about the psychology of extreme danger. But I'll leave that for another day.
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Automation And Jobs - Barokong

I am often asked to opine about whether automation will destroy all the jobs. Yes, we talk about tractors, which brought farm employment from something like 70% of the country at the beginning of the 20th century to about 3% today. And cars, which put the horse drivers out of business. And trains, which put the canal boats out of business. A more recent case occurred to me. This is what offices looked like in the 1950s and 1960s: Embed from Getty Images Typing Pool. Source: Getty Images This is a "typing pool." There used to be basketball-court sized rooms that looked like this, all over the place, staffed almost exclusively by  women. Then along came the copier -- many of these women are copying documents by typing them over again with a few sheets of carbon paper -- the fax machine, the word processor, the PC. And that's just typing. Accounting involved similar roomfuls of women with adding machines. Filing disappeared. Roomfuls of women used to operate telephone switchboards, now all automated. This memory lives on in the architecture of universities. All the old buildings have empty hutches for secretaries. If you are prognosticating in about 1970, and someone asks, "what will happen now that women want to join the workforce, but office automation is going to destroy all their jobs?" It would be a pretty gloomy forecast. What actually happened: Female labor force increased from 20 million to 75 million. The female participation rate increased from below 35% to 60%. Women's wages relative to men rose -- they moved in to higher productivity activities than typing the same memo over a hundred times. Businesses expanded. And no, 55 million men are not out on the streets begging for spare change. Civilian Labor Force Level: Women Civilian Labor Force Participation Rate: Women I'm simplifying of course. And surely some people with specific skills -- shorthand, typing without making mistakes, and so on -- who could not retrain didn't do as well as others. But the magnitude of the phenomenon is pretty impressive. Update.  So did women just take all the men's jobs? As MC points out, the male labor force participation rate did decline, from 87.5 to 70.0. That's a big, worrisome decline. But it's 15 percentage points, while the women's increase was 25 percentage points. But even if women are moving in and men are moving out of employment, that does make the case that you don't just look at who has what jobs now threatened by automation! The typing pool got better jobs. Please (please!) keep in mind the point here. No, this is not a post about all the ills of the labor market, and "middle class" America, and all the rest. Yes, there are plenty. The narrow point is, will automation mean that all the jobs vanish. In this case, even combined with a large expansion of the people wanting to work, it did not. Also the male labor force expanded from 45 million to 82 million. So the idea that there is a fixed number of jobs and if women take them men lose them is not true.
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Consumption Vs. Gdp - Barokong

Random Critical Analysis has a really interesting blog post from a while ago, on the difference between consumption and income as measures of well being.  The level of data analysis and detail on that blog is really impressive. The narrow question is whether the US spends "too much" on healthcare. A counterargument has always been, what else should we spend money on? As a society gets wealthier, it's natural to spend more on health care, just as we spend more on art, travel, and so forth. (The counterargument to that is, whether we spend more or less is beside the point. The point is a dysfunctional regulated oligopoly is charging way too much for what we get. It's not so bad to spend this much, it's bad to get such a bad deal.) So, the question is not whether the US spends more on health care, the question is whether we spend more on health care relative to a measure of our standard of wealth.  Using GDP as a rough proxy, we spend a lot more on health care relative to GDP than other countries. But, the larger point of the blog post, on which I'll focus -- consumption is not GDP (income). Americans are far better off relative to other countries than we think we are. See the graph: Source: Random Critical Analysis The actual standard of living -- consumption -- is higher in the US than in any of these other countries. Many of them have higher GDP. What's going on? Well, Ireland, for example, hosts a lot of international companies. These chalk up a lot of GDP in Ireland -- a lot seems to be "produced" in Ireland -- but much of it does not go to Irish people. Similarly Switzerland and Luxembourg. Much of the difference shouldn't last forever of course. How does the US consume more than we produce (GDP)? We borrow from abroad, and run trade deficits. Eventually that lending must be paid back. (Or at least those lending it to us hope so. We'll see.)  Norway is the opposite. They produce a lot of oil, but use the results to save abroad in their sovereign wealth fund, which eventually they can draw on to finance consumption. (Or so they hope, also.) In the meantime, though, the difference between income and consumption is quite large. This difference is even more important in the cross-section. Income variation is often transitory -- you might have a bad year -- and consumption lasts longer.  People in bad years draw down savings, borrow, or get help from relatives. Most of all, super-rich people save a lot. So inequality of consumption -- of actual standard of living -- is much smaller than inequality of one-year income or wealth. RCA anticipates your first objection this consumption measure includes government transfers, subsidies, etc, notably including the vast majority of healthcare and education spending, as Actual Individual Consumption (AIC) does. Since some people earlier seemed to miss to this point, I’ll repeat: the only form of consumption excluded from AIC is that which cannot be attributed directly to individuals or households, i.e, collective expenditures by government like military procurement and the like. I.e. the one thing that is also much larger in the US. And RCA adds nice confirmation. The average US person lives in twice as much space as the average european. And To the narrow question, US healthcare expenses look out of line compared to GDP but not at all relative to consumption. (Note the cool dynamic graph) The post has lots more beautiful graphs on consumption and health care expenditures. But the main point -- consumption, not income (and especially not one year's income) is a much better measure of living standards -- is larger, and my point, so I'll stop here. Oh, and I still think we're getting a massively raw deal from our inefficient health care system. As is much of europe.
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Long Run Fed Targets - Barokong

What should the Fed's long-run interest rate target be? The traditional view is that the glide path should aim at 4% -- 2% real plus 2% inflation. 3%? One big question being debated right now is whether the "natural'' real rate of interest -- r* or "r-star" in econspeak -- has declined below 2%. Over the long run, the Fed cannot control the real rate of interest -- that comes from how much people want to save and what opportunities there are for investment, i.e. the marginal product of capital. So, if the real rate of interest is now permanently lower, say 1%, then one might argue that the glide path should aim for 3% long-run interest rate -- 1% real plus 2% inflation sasaran -- not 4%. Janet Yellen recently came to Stanford and gave a very interesting speech that talked in part about a lower r-star, and seemed to be heading to something like this view. See the picture: Source: Federal Reserve. (She also talked a lot about Taylor Rules, seeming to move much closer to John Taylor's view of how to implement monetary policy. See interesting coverage on John Taylor's blog. On r*, seeMeasuring the Natural Rate of Interest Redux by Thomas Laubach and John C. Williams for a central paper on r*. Henrike Michaelis and Volker Wieland have an interesting post on r* and Taylor rules, also commenting on Ms. Yellen's speech.) Of course, cynics will say that it's just the latest excuse not to raise rates. But these are serious arguments which should be considered on their merits. 0%? Should the glidepath head to 3% interest rates? Maybe not. How about zero? Long ago, Milton Friedman explained the "maksimal quantity of money,'' which is really the optimal interest rate. It is zero. Peramazero in St. Louis Fed President Jim Bullard's colorful terminology. At interest rates above zero, people hold less cash, and spend time and effort collecting bills early, paying them late, and so on. This is all a waste of time. Also, taxes on rate of return are a bad idea. With all rates of return that much lower, the tax distortion is that much lower. With 0% interest rates, and correspondingly lower inflation, infaltion-induced capital gains taxes vanish. So maybe the glidepath should be to 0% interest rate, not 3%.  If the natural real rate is 1%, then inflation should be -1%. In this line of thinking, the long-run interest rate is what counts directly. It is not a sum of a natural rate and an inflation target. Variation in the natural rate takes care of itself in variation in inflation. 4% ? Why not? The primary reason often given is that interest rates at zero cannot go substantially below zero, at least without banning cash and many other gyrations of our monetary and financial system. So, if the interest rate is near zero, the Fed does not have "headroom" to stimulate the economy in a recession. I don't necessarily agree that this is so important, but let's go with it for a moment. Additionally, conventional Keynesian policy analysts worry about a "deflation spiral," if the Fed can't lower rates. I'm not convinced this is a persoalan either, as recent experience and new Keynesian models don't spiral, (recent paper here), but again we're here today to flesh out the arguments not to adjudicate them. (A correspondent points out Sticky Leverage by João Gomes, Urban Jermann and Lukas Schmid, and Optimal long-run inflation with occasionally binding financial constraints by Salem Abo-Zaid as two papers pointing to desirable positive long-term inflation and thus long-term nominal rates to keep away from the zero bound. Both have financing constraints as well.) Both arguments for "headroom" above zero however seem to imply a direct nominal interest rate target, not inflation plus real rate. If the Fed needs four percentage points of headroom (2% real + 2% inflation) then it needs four percentage points of headroom (1% real + 3% inflation), no? So, from the maksimal quantity vs. zero bound-headroom argument it does not follow obviously that the interest rate target should move up and down with the ``natural rate.'' Permatwo? The question is, why is there a direct role for the inflation sasaran? Why is that 2%, and then we add r* the long run real rate, to deduce the nominal rate glide point? I think the answer is this: prices and wages are felt to be sticky, especially downward. That's the second argument against the Friedman rule: its steady deflation is said to require people to change prices and wages downward. That is said to cause disruption. OK (maybe), no Friedman-optimal deflation. But why then 2% rather than 0% inflation? Quality and pi star One argument there is that inflation is overstated due to quality improvements. 2% is really 0%. The issue: Suppose the iphone 6 turns in to the iphone 7, and costs $100 more. How much of that is inflation, and how much of that is that the iphone 7 is $100 better? Or maybe $200 better, so we are actually seeing iphone deflation? The Bureau of Labor Statistics makes heroic efforts to adjust for this sort of thing, but the consensus seems to be that inflation is still overstated by something like 1-2%. Some reading on this: TheBoskin Commission Report suggested the CPI is overstated by about 1%, as of 1996. Mark Bils,Do Higher Prices for New Goods Reflect Quality Growth or Inflation? argued that it's a good deal more. Mark measured that sales move quickly to new models, which they would not do if it were a price increase after controlling for quality. But Mark's analysis was limited to consumer durables, where quality has been increasing quickly. Many other CPI categories, especially services, are likely less affected.  Philippe Aghion, Antonin Bergeaud, Timo Boppart,  Pete  Klenow and Huiyu Li'sMissing Growth from Creative Destruction suggest there is another 0.5%-1% overall because of goods that just disappear from the CPI. (This post all started with discussion following Pete's presentation of the paper recently.) This is good news. Nominal GDP growth = real GDP growth + inflation. Nominal GDP growth is relatively well measured. If inflation is 1% overstated, then real growth is 1% understated. It also means our real interest rates are mismeasured. If 2% inflation is really 0% inflation, then 1% interest rates are really +1% real rates, not -1% real rates. But back to monetary policy. Suppose that 2% inflation is really 0% inflation due to quality effects. Does that mean we should have a 2% long run inflation rate target? I don't think so. Again, the motivation for a positive inflation sasaran is that there is some economic damage to having to lower prices. But during quality improvements of new goods, nobody has to lower any prices. They are new goods! No existing good has to have lower prices. In fact, actual sticker prices rise. There is a deeper point here. Not all inflations are equal. One purpose of the CPI is to compare living standards over time. For that purpose, quality adjustments are really important. Another purpose of the CPI is to determine if people have to undergo whatever the pain is associated with lowering prices. For that purpose, quality adjustments are irrelevant. (On both prices and wages, we also should remember the huge churn. Lots of prices and wages go up, lots go down. The perorangan is not the average. Changing the average one or two percentage points doesn't change that many individual prices.) In sum,  the argument that quality improvements mean 2% inflation is really 0% inflation does not argue that therefore the inflation target should be 2% because otherwise people have to lower prices. They don't. Standard-of-living inflation is not the right measure for costs-of-price-stickiness inflation. In price stickiness logic, the Fed should be looking at a CPI measure with no quality adjustments at all!  (At least in this simplistic analysis. This is an invitation to academic papers. If new and old goods are Dixit-Stiglitz substitutes, what are the costs of price stickiness with quality improvements?) (Update: my correspondent points to "On Quality Bias and Inflation Targets" by Stephanie Schmitt Grohé and Martín Uribe.) So the argument for a separate inflation sasaran much above zero seems to be weak to me. We're back to Friedman rule vs. headroom, which argues for a direct nominal interest rate sasaran. Since I'm not much of a fan of headroom, I lean to lower values. Leaving aside price-stickiness, I'm still sympathetic to a price level target on expectations grounds. If the quality adjusted CPI is the same forever, then we have a CPI standard, the value of a dollar is always constant, and long-run uncertainty decreases. We don't shortern the meter 2% every year. For this purpose, we do want the quality-adjusted CPI, and for this purpose the inflation target is primary. An interest rate target would have to rise and fall with r*. Real rate variation r* is the real rate. There really is no reason that the "natural" real rate only varies slowly over time. Interest rates crashed in a month 2008 because real rates crashed -- everyone wanted save, and nobody wanted to invest. The Fed couldn't have kept rates at 6% if it wanted to. So, the procedures used to measure r*, like those used to measure potential output, are a bit suspect. They amount to taking long moving averages, and assuming that "supply" shocks only act slowly over time. More deeply, typical maksimal monetary policy discussions use a Taylor rule funds rate = r* + 1.5 ( inflation - sasaran) + 0.5 (output gap) and recommend active short run deviations from the Taylor rule if there are "supply shocks" i.e. r* shocks. Just how the Fed is supposed to distinguish "supply" from "demand" shocks is less clear in reality than the models, which presume shocks are directly visible. A "secular stagnation" fan might say that the moving averages used to measure r* are instead picking up eternally deficient "demand," like a driver with his foot on the brake complaining of headwinds. Bottom line As often in policy, we argue too much about the external causes and not enough about the logic tying causes to policy. r* may or may not have declined. But it does not follow that the glidepath nominal rate should be r* plus 2% inflation sasaran. Maybe the glidepath should be 0% nominal rate or 4% nominal rate independent of r*.  You see lots of mechanisms and tradeoffs worthy of modeling.
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Miserable 21St Century - Barokong

Nicholas Eberstadt in Commentary, (HT Marginal Revolution) offers a revealing look at what's wrong with "middle" America's stagnation. Read the whole thing, but the following snapshot jumped out at me. He starts with a review, probably familiar to readers of this blog, of the sharp decline in work rates, even among prime-age men and women. As of late 2016, the adult work rate in America was still at its lowest level in more than 30 years. To put things another way: If our nation’s work rate today were back up to its start-of-the-century highs, well over 10 million more Americans would currently have paying jobs. Why are so many not working, not studying for work, and not even looking for work? What is going on in their lives? One answer: The opioid epidemic of pain pills and heroin that has been ravaging and shortening lives from coast to coast is a new plague for our new century... According to [Alan Krueger's] work, nearly half of all prime working-age male labor-force dropouts—an army now totaling roughly 7 million men—currently take pain medication on a daily basis. I think Krueger had a different idea in mind: that they are in pain, indicated by medication, so can't be expected to work. How the explosion in disability jibes with a much safer workplace is an interesting puzzle to that view. Eberstadt has a different interpretation, and the lovely thing about facts is they are facts, not interpretations. We already knew from other sources (such as BLS “time use” surveys) that the overwhelming majority of the prime-age men in this un-working army generally don’t “do civil society” (charitable work, religious activities, volunteering), or for that matter much in the way of child care or help for others in the home either, despite the abundance of time on their hands. Their routine, instead, typically centers on watching—watching TV, DVDs, Internet, hand-held devices, etc.—and indeed watching for an average of 2,000 hours a year, as if it were a full-time job. But Krueger’s study adds a poignant and immensely sad rincian to this portrait of daily life in 21st-century America: In our mind’s eye we can now picture many millions of un-working men in the prime of life, out of work and not looking for jobs, sitting in front of screens—stoned. (Mark Aguiar, Mark Bils, and Kewin Charles and Erik Hurst have a new paper coming soon, which I just saw presented, "Leisure Luxuries and the Labor Supply of Young Men", with some more facts about time-allocation of non-working young men. They emphasize cheaper and better video games and leave out drugs.) But how did so many millions of un-working men, whose incomes are limited, manage en masse to afford a constant supply of pain medication? Oxycontin is not cheap. As Dreamland carefully explains, one main mechanism today has been the welfare state: more specifically, Medicaid, Uncle Sam’s means-tested health-benefits acara. Here is how it works (we are with Quinones in Portsmouth, Ohio): "[The Medicaid card] pays for medicine—whatever pills a doctor deems that the insured patient needs. Among those who receive Medicaid cards are people on state welfare or on a federal disability acara known as SSI. . . . If you could get a prescription from a willing doctor—and Portsmouth had plenty of them—Medicaid health-insurance cards paid for that prescription every month. For a three-dollar Medicaid co-pay, therefore, addicts got pills priced at thousands of dollars, with the difference paid for by U.S. and state taxpayers. A user could turn around and sell those pills, obtained for that three-dollar co-pay, for as much as ten thousand dollars on the street." You may now wish to ask: What share of prime-working-age men these days are enrolled in Medicaid? According to the Census Bureau’s SIPP survey (Survey of Income and Program Participation), as of 2013, over one-fifth (21 percent) of all civilian men between 25 and 55 years of age were Medicaid beneficiaries. For prime-age people not in the labor force, the share was over half (53 percent). And for un-working Anglos (non-Hispanic white men not in the labor force) of prime working age, the share enrolled in Medicaid was 48 percent. By the way: Of the entire un-working prime-age male Anglo population in 2013, nearly three-fifths (57 percent) were reportedly collecting disability benefits from one or more government disability acara in 2013. Disability checks and means-tested benefits cannot support a lavish lifestyle. But they can offer a permanent alternative to paid employment, and for growing numbers of American men, they do. The rise of these programs has coincided with the death of work for larger and larger numbers of American men not yet of retirement age. We cannot say that these programs caused the death of work for millions upon millions of younger men: What is incontrovertible, however, is that they have financed it—just as Medicaid inadvertently helped finance America’s immense and increasing appetite for opioids in our new century. The VA has also been a part of getting veterans addicted to pain killers. If you dozed off, the main point: Half of non-working prime age men take daily pain medication. Half of non-working prime-age people are in Medicaid, which pays for re-sellable opiates. Three-fifths of non-working prime age Anglos receive disability payments . The latter benefits disappear if you take a job, or if you move, a steep disincentive that Nick does not mention. I knew the story, but was not really clear on the magnitude. Half. An advantage of government-subsidized drugs Nick points out: crime is down. However, our criminal justice system offers another barrier to employment and advancement: ...rough arithmetic suggests that about 17 million men in our general population have a felony conviction somewhere in their CV. That works out to one of every eight adult males in America today. In the understatement of the year, we might guess that their odds in the real America are not all that favorable. The bottom line And when we consider some of the other trends we have already mentioned—employment, health, addiction, welfare dependence—we can see the emergence of a malign new nationwide undertow, pulling downward against social mobility. Actually looking at people's lives in this way is devastating to the nostrum that "inequality" is mysteriously increasing and just needs more transfers, or its just a lack of "jobs" which can be brought back by left-wing "demand" or right-wing trade restrictions. people inside the bubble are forever talking about “economic inequality,” that wonderful pelatihan construct, and forever virtue-signaling about how personally opposed they are to it. By contrast, “economic insecurity” is akin to a phrase from an unknown language. This is I think an inartful choice of language. I hear "insecurity" a lot from the left, for example just how it is that obese people have trouble paying for food. And, Orwellian language or not, they do have a point. "Insecurity" is not the core of the problem. "Barriers to Advancement" sounds too old fashioned. "Caught in the web of awful disincentives" is more accurate but does not sing. The abstraction of “inequality” doesn’t matter a lot to ordinary Americans. ...The Great American Escalator is broken—and it badly needs to be fixed. With the election of 2016, Americans within the bubble finally learned that the 21st century has gotten off to a very bad start in America. Reading the Weekend New York Times , especially the Review , I think this is actually false. Americans within the bubble are still foaming at the mouth with Trump Derangement Syndrome. But when they get a grip, Welcome to the reality. We have a lot of work to do together to turn this around.
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