Covid relief and the Mae West principle

Why we shouldn't worry about overdoing it.

View in browser|nytimes.com Continue reading the main story February 2, 2021 Natanael Evangelista, an undocumented cook who decided to become a delivery worker after losing his job to the pandemic, waits to complete his final delivery order of the morning.Jose A. Alvarado Jr. for The New York Times By Paul Krugman Opinion Columnist My latest column is about the Republican counteroffer to Joe Biden's proposed rescue package, and why it's grotesquely inadequate. I guess I got a bit fire-and-brimstone on the topic, but I'd argue that G.O.P. bad faith deserves it. While the Republican offering is criminally underpowered, however, is it possible that Biden's plan overdoes it? Could the extensive aid to families, businesses, and state and local governments end up being more than needed? Yes, it could, although we don't know that for sure; it depends on how long the pandemic lasts, and how quickly the economy rebounds once we get herd immunity. Maybe we're overdoing it, maybe not. But this seems like a good time to invoke the Mae West doctrine: "Too much of a good thing can be wonderful." Seriously, while an inadequate response to the pandemic would mean vast suffering, there don't seem to be major risks associated with an economic program that turns out, in retrospect, to have been bigger than necessary. To see why, think about what it would mean for the Covid-19 package to have been "too big." The story would go like this: vaccination proceeds rapidly, and the new strains of the coronavirus don't prove as problematic as some fear; meanwhile, infection rates come down rapidly, perhaps in part because with the change in administrations the federal government is finally enforcing mask-wearing where it can and encouraging it where it can't. Continue reading the main story ADVERTISEMENT As a result of all this, affluent consumers — who have, on average, done fairly well during the pandemic, but have been saving at very high rates because of limited opportunities to spend — release a lot of pent-up demand. Consumer spending is further boosted by all the aid in the Biden rescue package. And so the economy booms. How much might it boom? Some of the bank newsletters I get are suggesting something not far short of the "morning in America" boom of 1983-84, when the economy briefly posted growth rates of around 8 percent. And it wouldn't take much of that to push us all the way to full employment and beyond, into the realm of inflationary overheating. If that happens — which is by no means guaranteed — we might look back and say that the rescue package was, in hindsight, bigger than it needed to be. But how much of a problem is that? Everything we know says, not much. First of all, fiscal policy — trying to steer the economy with changes in spending and taxes — isn't the only game in town. Monetary policy — changes in interest rates, which the Federal Reserve can achieve (roughly speaking) by changing the money supply — is also in the mix. And while the Fed can't cut rates from here, because they're already zero, it can easily raise them to head off excessive inflation. Continue reading the main story ADVERTISEMENT Now, the Fed probably won't rush to do that, for good reason. Very low unemployment rates do seem to lead to a rise in inflation (the famous Phillips curve), but there's a lot of research indicating that this curve is "very flat" in the short run. That is, running the economy hot will lead to rising inflation, but it's a slow process, and there's plenty of time to rein it in. Also, we won't know how hot we can run the economy until we try it. Few economists thought 3.5 percent unemployment was achievable until it actually happened. As Ms. West said, too much of a good thing can be wonderful. So yes, the rescue plan might overshoot, but there's not much harm if it does. On the other hand, an inadequate plan would lead to vast, unnecessary suffering. So we actually want the plan to be bigger than we expect we'll need, just in case. I joined my colleague Ezra Klein on his podcast last week to discuss the current state of America's economy and why, as I tell Ezra, this is not a conventional recession. I hope you'll listen. Continue reading the main story ADVERTISEMENT Quick Hits About the Phillips curve. The new Treasury secretary has been advocating a "high-pressure," low unemployment economy for years. Consensus views about how hot economies can run are generally worthless. I was going to write about GameStop; until I do, this is good. Feedback If you're enjoying what you're reading, please consider recommending it to friends. They can sign up here. If you want to share your thoughts on an item in this week's newsletter or on the newsletter in general, please email me at krugman-newsletter@nytimes.com. Facing the Music Giving a new meaning to world musicYouTube Soumaya Keynes of The Economist has a musical side, which isn't sufficiently separate from her day job. IN THE TIMES Biden Wants the Biggest Stimulus in Modern History. Is It Too Big? Supporters of a 'hot' economy see a chance to correct the mistakes of the last recession. Others see danger. By Neil Irwin The Most Important Thing Biden Can Learn From the Trump Economy A "hot" economy with high deficits didn't cause runaway inflation. By Neil Irwin U.S. Economy Is Healing, but Budget Office Says Workers Have a Long Way to Go New projections from the independent Congressional Budget Office fuel Republicans' calls for "targeted" economic aid — and Democrats' push to go big. By Jim Tankersley The conversation Raise Your Hand if You Were Expecting Biden to Be a Revolutionary The president has been much more left-wing out of the gate than many predicted. What comes next? By Gail Collins and Bret Stephens Read the full Opinion report here. Continue reading the main story Need help? Review our newsletter help page or contact us for assistance. You received this email because you signed up for Paul Krugman from The New York Times. To stop receiving these emails, unsubscribe or manage your email preferences. Subscribe to The TimesGet The New York Times app Connect with us on: Change Your EmailPrivacy PolicyContact UsCalifornia Notices The New York Times Company. 620 Eighth Avenue New York, NY 10018

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On Tech: America stinks at video games?

Young video game pros from abroad are being lured to play in the United States.

View in browser|nytimes.com Continue reading the main story February 1, 2021 America stinks at video games? China's Suning team attended the opening ceremony of the League of Legends world championship final in Shanghai last year.Hector Retamal/Agence France-Presse — Getty Images By Shira Ovide It was a coming-of-age moment for American soccer when David Beckham, the British superstar player, signed with a team in Los Angeles nearly 15 years ago. Hu Shuo-Chieh might become the Beckham of American e-sports, the term for competitive video games as a spectator sport. My colleague Kellen Browning wrote about stars like Hu from Taiwan and other countries where e-sports are bigger than big. Kellen spoke with me about what it's like for these button-mashing pros who are coming to America, and why the United States is a second-rate country in the world's biggest competitive video game. Shira: I know some readers will wonder: People pay to watch strangers play video games against one another? This is a job? Explain how big this is. Kellen: Competitive video games started decades ago with games like StarCraft, particularly in Asia. Now it's global and huge, especially for a game played on personal computers called League of Legends. Nearly 46 million people watched online for at least part of the world championship in Shanghai, China, last October. Three million people tried to buy tickets to watch in person. E-sports aren't as big in the United States, but they're still popular. The company that owns the League of Legends competition has said that it's among the most popular professional sports leagues for people between 18 and 34 years old. And the fervor of fans is like that of a conventional sport. People buy jerseys, pro video game players do commercials and the competition is fierce. And Americans are not great at competitive League of Legends? No. The best teams and players are in South Korea, Taiwan and China, and some in Denmark, Spain and France. U.S. teams get trounced when they go to international competitions. One reason that North American e-sports teams are recruiting foreign players is to improve on the world stage. How much can these foreign stars make? Hu — who goes by the name SwordArt — signed a record-setting contract, at least for Western e-sports leagues, at $6 million over two years. Over all, the average salary for a starting lineup player in North American leagues is $460,000. The big names can make much more. Continue reading the main story ADVERTISEMENT These guys — and they're almost all men — tend to burn out fairly young, especially in countries where they practice up to 18 hours a day. They might retire at age 25 because they have repetitive stress injuries or can't click buttons as fast as they used to. What is it like for these young video game pros to move to American teams? It can definitely be a culture shock. It helps that players on the same team will often train together, commonly in Los Angeles. Many teams provide translators and help with housing and visas. But it can definitely be challenging for those who struggle with English or learning to drive. Some players have left after a season or two because they're homesick or have made enough money to quit. Confess, Kellen: What are your favorite games and who are your favorite e-sports pros? I like to play Age of Empires, a PC game in which people compete to build a historical civilization. I play a little NBA 2K. But the only e-sports I watch are the ones I write articles about. If you don't already get this newsletter in your inbox, please sign up here. Continue reading the main story ADVERTISEMENT TIP OF THE WEEK Better video calls for cheap Brian X. Chen, the personal technology columnist for The New York Times, has inexpensive hacks to try if you're sick of looking at your blurry face on web video calls or sounding like you're underwater: Many of us have been riding the Zoom struggle bus. Our video quality looks grainy, and our audio sounds crummy. What to do? One option is ordering a high-quality webcam and microphone, but a lot of gear for work or school from home has been sold out during the pandemic, and the demand has pushed prices higher. Mics are also expensive splurges for one task. So here's a cheap remedy: Make use of what you have. The front-facing cameras on modern smartphones and tablets tend to be far better quality than the web cameras built into most laptops. So for video calls, try propping up your phone or tablet against something in your home, like a lamp or a stack of books. You can shove a book under your phone's case to get a better viewing angle. You could also buy a low-cost stand. Continue reading the main story ADVERTISEMENT For sound, just use a decent headset. The earbuds that came with your phone usually have a good-enough microphone. If you really want a new pair, I recommend investing in good wireless earbuds because they're versatile. When you're not using them for video calls, they could come in handy on a jog or for regular phone calls. Before we go … An internet horror story: My colleague Kashmir Hill has a chilling tale about people whose online reputations were ruined by one woman and why it's been so hard to stop such "super-spreaders" of slander. The online smear campaigns also show the consequences of a contentious internet law that protects websites from lies posted by their users. The cesspool in Facebook groups: The Wall Street Journal reported that Facebook's researchers last year found that about 70 of the 100 most active U.S. forums for politics and related issues were overrun by misinformation, harassment or calls for violence. The company recently said (again) that it would overhaul Facebook groups. "We have to cherish our own lives": The deaths of two young workers at a Chinese e-commerce company, and the self-immolation of a delivery driver for another, have reopened debate over the power of China's tech giants and the demands they impose on employees, my colleague Vivian Wang reports. Hugs to this Here are pandas from the National Zoo sledding and rolling their big bodies down snowy hills. (I spotted this thanks to my colleague Cecilia Kang.) We want to hear from you. Tell us what you think of this newsletter and what else you'd like us to explore. You can reach us at ontech@nytimes.com. If you don't already get this newsletter in your inbox, please sign up here. Continue reading the main story Need help? Review our newsletter help page or contact us for assistance. You received this email because you signed up for On Tech with Shira Ovide from The New York Times. To stop receiving these emails, unsubscribe or manage your email preferences. Subscribe to The TimesGet The New York Times app Connect with us on: Change Your EmailPrivacy PolicyContact UsCalifornia Notices The New York Times Company. 620 Eighth Avenue New York, NY 10018

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