2021年3月9日 星期二

Goldilocks and the inflation bears

Will the 2022 economy be just right?
A sign calling on Congress to provide Covid-19 relief displayed on North Capitol Street in Washington, D.C.Stefani Reynolds for The New York Times
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By Paul Krugman

Opinion Columnist

So the American Rescue Plan is actually happening. Given the scale of what has just been accomplished and the difference it will make to millions of lives, any personal sense of relief for those of us who don't need (and won't get) financial help is, of course, irrelevant. But maybe it's worth pointing out just how gratifying this whole process has been for those of us with bitter memories of the great Obama undershoot, when what was billed as a massive stimulus actually fell drastically short of what was needed.

One source of gratification is, of course, the fact that the basics of the plan came through intact — it wasn't watered down in a vain attempt to win over moderate Republican senators (who basically don't exist). Even a couple of weeks ago smart people — like economists at major banks — were assuring me that the final plan would be a lot smaller than the original ask of $1.9 trillion. It wasn't.

There was, to be fair, one big fail: no minimum wage hike, let alone the proposed $15. But that always looked like a long shot. I assume that it will get put forth as stand-alone legislation, and we'll see whether Republicans are willing to vote against such an overwhelmingly popular measure. But overall, Senate Democrats were remarkably successful at going big.

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There was, however, another source of gratification, at least for nerds like me: the stupidity level in the economic debate was astonishingly low compared with what went down in 2009-2010. Where were the cable TV ranters and op-ed writers predicting hyperinflation, the collapse of the dollar, frogs, boils and three days of darkness?

OK, there were a few of them out there, but they were hard to find. Instead, the usual suspects were preoccupied with the threat of cancel culture.

There was, of course, debate about the appropriateness of the Biden plan — mainly about whether it was so big that it would overheat the economy, causing inflation. But this dispute was like something out of another era: a real argument between smart, well-informed economists (all of whom, probably not accidentally, are more or less on the center left). When I debated Larry Summers — he's worried about overheating, I'm not — we were arguing from a shared set of facts and even a largely shared conceptual framework.

Indeed, I almost felt like pinching myself to be sure I was awake. This was what I thought I was signing up for all those years ago when I chose economics as a profession; instead, I mostly find myself arguing with zombies. So this was a nice break.

Of course, I'm right and Larry is wrong, although I would say that, wouldn't I? And time will tell.

For what it's worth, however, with the passage of the Biden plan the business economists regularly surveyed by Bloomberg have ratcheted up their forecasts for growth this year — and what they seem to be predicting is a Goldilocks economy.

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Let me explain: The average forecast calls for 5.5 percent growth from the fourth quarter of 2020 to the fourth quarter of 2021. That sounds like a lot. But the Congressional Budget Office estimates that in late 2020 we had a 3 percent "output gap" — a shortfall below the economy's potential. And growth is chasing a moving target, because standard estimates say that the economy's potential is growing around 2 percent a year. So the average forecast says that by the end of this year we'll be just about at potential — not too cold, not too hot, but just right.

Some forecasts disagree, of course. Goldman Sachs is more optimistic (and so am I), predicting 7.7 percent growth. But Goldman also believes that the output gap is 6 percent, not 3. So they're also predicting Goldilocks.

Now, all forecasts are wrong. Also, some prices probably will spike because of temporary bottlenecks: prices of commodities like oil and copper have been surging.

Overall the next year is looking remarkably good. Any euphoria some of us might be feeling (but are economists even capable of euphoria?) will no doubt evaporate as tougher problems arise. But let's enjoy this Goldilocks moment.

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Quick Hits

I'm sometimes embarrassed at how much I use Excel. But it turns out to be a work of genius.

Democrats learned from the mistakes of the last crisis. Britain's Tories haven't.

Fox News couldn't be bothered to talk about stimulus, given the more pressing issue of Dr. Seuss.

Never mind oil and copper: There's a feta cheese shortage.

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Facing the Music

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2021年3月8日 星期一

On Tech: What went right in the 2020 election

It wasn't all a mess. Here's how the government and tech companies tamed foreign interference.

What went right in the 2020 election

Rad Mora

A lot went wrong after the 2020 election in the United States. But here's one thing that went right during it: A risk everyone worried about — foreign election interference — mostly failed.

That showed what is possible when government officials and technology companies are laser focused on a problem, effectively coordinate and learn from their past mistakes.

But the false narrative that the election was stolen, culminating in a mob attack on the U.S. Capitol, also pointed to the limits of those efforts. The Russians or the Chinese didn't delegitimize our election. We did it to ourselves.

Today, I want to explore the glass half-full view. The largely averted threat of foreign election meddling was a success that shouldn't be overlooked.

What went wrong the last time

Let me first remind you what happened around the 2016 election. Russian hackers pilfered documents from the Democratic National Committee and tried to muck around with state election infrastructure. Digital propagandists backed by the Russian government also fanned information on Facebook, Instagram, YouTube and elsewhere that sought to erode people's faith in voting or inflame social divisions.

Powerful American institutions — notably local, state and federal government officials as well as large internet companies — were slow to tackle the problem or had initially dismissed it. The effect of the hacking and trolling wasn't clear, but the worry was that foreign governments would regularly seek to disrupt U.S. elections and that it would contribute to Americans' lack of trust in our systems and with one another.

What happened in 2020

Some foreign governments, including Russia and Iran, tried to disrupt our elections again, but it mostly didn't work. The same U.S. institutions and digital defenses that failed four years earlier largely held strong this time.

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"The progress that was made between 2016 and 2020 was remarkable," said Camille François, chief innovation officer at Graphika, a firm that analyzes manipulation of social networks.

What changed in government and tech

One major shift after 2016 was that federal government officials and the state and local officials who run elections overcame initial mistrust to collaborate more effectively on voting threats. Matt Masterson, who until recently was a senior adviser on election security for the Department of Homeland Security, said coordination was the biggest change that helped shore up digital defenses in election management systems.

"This is as good as the federal government has worked on any issue in my experience," Masterson said.

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He also credited efforts in states, notably Georgia, that created paper trails of ballots that could be audited quickly and provide more visibility into the vote counting to help increase people's trust in the election process.

The tech companies, François said, shifted to acknowledge their blind spots. For the first time, online powers including Facebook wrote policies specifically tackling foreign government meddling and put people in charge of stopping it. They also made it harder for foreign trolls to use some of their 2016 tactics, such as buying online advertisements to circulate divisive messages widely.

Social media companies also started to publicly announce when they found campaigns by foreign governments that were used to mislead people online. François said that helped researchers and journalists better assess the techniques of foreign propagandists — and the shared knowledge helped internet companies stop trolling campaigns before they had a big impact.

Cooperation improved between government and tech companies, too. There were regular meetings between major internet companies and the federal officials responsible for election protection to share information. And internet companies began to tell the public when the U.S. government tipped them off about foreign interference on their websites.

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Both François and Masterson said that an "aha" moment was the response to Iran's effort to intimidate voters during the fall. National security officials said then that Iran had obtained some Americans' voter-registration data, most of which was publicly available, to send deceptive messages that threatened voters.

Because they were ready for threats like this, officials were able to make connections between voter intimidation in multiple states, identify the source of the menacing messages, inform election officials across the country and tell voters what was happening — all in about a day.

"That couldn't have happened in 2016, and it likely couldn't have happened in 2018," Masterson said. "That was what we had all trained for."

What's next

While internet companies and the U.S. government caught up to the kinds of interference they faced in 2016, they failed at confronting the even trickier challenge of a campaign led by the president himself to cast doubt on the election process despite no substantial evidence. And foreign cyber attacks and online propaganda efforts certainly haven't stopped.

But it could have been much worse. A lot went right in the election because powerful institutions took the risk of foreign hacking and trolling seriously and rose to the challenge. That's a hopeful lesson for future elections, the pandemic and other crises.

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Before we go …

  • It's a weird time to become rich: My colleague Erin Griffith writes that a booming market in tech stocks and I.P.O.s has created a conundrum for newly wealthy technologists. Buying a Ferrari in the middle of a pandemic might be tacky and pointless, so instead they're paying for Snoop Dogg to lead cooking classes on Zoom or piling into luxury vans for road trips.
  • How online shopping affected these smaller businesses: Amy Haimerl spoke to owners of a grocery store in Michigan, a fitness studio and other smaller businesses about shifting their operations to online shops during the pandemic. For some of them, e-commerce helped them stay afloat, but for others it was more hassle than help.
  • Kids spending more time online is … complicated: Screen time "as a concept to track meticulously, to fret and panic about, to measure parents' worth in — is no longer considered a valid framework in a pandemic world," a Washington Post writer said.

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