Policy in a time of political madness

When bad things happen to good governments.

View in browser|nytimes.com Continue reading the main story June 8, 2021 U.S. Treasury Secretary Janet Yellen (top right) and other finance chiefs attending the first day of the Group of 7 finance ministers meeting in London on June 4.Stefan Rousseau/Agence France-Presse, via Pool/Afp Via Getty Images By Paul Krugman Opinion Columnist Warning: Today's newsletter will be kind of meta. It's a meditation on what people like me, and more important, fine public servants like Janet Yellen, are even doing in an era when malign insanity seems all too likely to swallow our nation. Today's column was about Yellen's impressive achievement in getting Group of 7 governments to agree in principle to new rules that should greatly reduce the ability of multinational corporations to avoid taxes. It's really good stuff, a model of both good economic policy and effective economic diplomacy. It points the way to a potential future of greater policy fairness and more resources available to deal with society's needs. But will that potential future materialize? What if by 2025 America is back in the hands of Trumpists — either Donald Trump himself or someone who managed to gain the Republican nomination by emulating all his worst qualities? Clearly this could happen — not just because voters might choose a Trumpist, or because the Electoral College might deliver the White House to the popular-vote loser as it did in 2016 (and almost did in 2020), but because Republican states might simply declare Trump or his stand-in the winner no matter what the voters say. Continue reading the main story ADVERTISEMENT Anyone paying attention to national affairs knows that a nightmarish outcome that might mean the end of American democracy is all too possible. So what's a public servant — or, vastly less important, but relevant to yours truly, an economist/pundit whose beat is public policy — supposed to do? Is there even any point in advocating for and implementing good policy? There are two facile answers. One of them is that governments can reap political rewards for good policy if they try hard enough to explain to voters what they're doing. The other is that good policy will lead to good outcomes, and in a democracy voters will reward success. Both of these strike me as political equivalents of "do what you love, the money will follow" — which is, of course, terrible advice for most people, who must do jobs they don't especially love if they want to make a decent living. I mean, policymakers and those who follow policy should do their best to explain what they're doing in ways large numbers of people can understand; to a large extent that's basically my job at The Times (which, I have to admit, I love. Do as I say, not as I do). But I also write a lot about the persistence of zombie ideas that should have died long ago in the face of logic and evidence, but keep shambling around. Many of us do our best to kill these zombies or at least limit their spread, but their persistence bodes ill for the ability of even the clearest explanation of policy to break through to a mass audience. Continue reading the main story ADVERTISEMENT Oh, and 23 percent of Republicans believe that the world is controlled by Satan-worshipping pedophiles. Can we talk to such people about international tax policy? OK, most people aren't that out of it. But serious political scientists find that voting behavior mainly reflects social identities and partisan loyalties, not issues. As for voters rewarding successful policy, to the extent that the economy affects elections, that effect seems to come mainly from short-term performance — how fast the economy is growing in the year or less before the election — which has very little to do with the overall quality of policy, and may not be much affected by policy at all. Add to this the real chance that what voters want may not even matter in 2024. So is there any point in even arguing for good policies? Yes, so long as you don't have illusions about saving the world. The detective novelist Raymond Chandler published a wonderful essay about writing, "The Simple Art of Murder," in which he argued among other things that no matter how important your theme, what mattered was what you could do with it: "Some very dull books have been written about God, and some very fine ones about how to make a living and stay fairly honest." The point is that there are many people trying to save democracy, and rightly so. But meanwhile things like tax policy must be made, and it's still important that we try to do it right. Continue reading the main story ADVERTISEMENT And I might add a speculation, which political scientists should feel free to mock. I suspect, or at least hope, that while the specifics of policy have very little political effect, a general sense of competence may bring political rewards — perhaps especially after the clown show of the past four years. So I guess we should all do the best we can, even though you have to be oblivious not to realize that political catastrophe may overtake everyone's best efforts. Programming note: The newsletter will be off next week. After the hiatus, it will be back in your inbox on June 22. Quick Hits The economy affects elections. But it's mostly just the very recent rate of growth. Which mainly reflects policy by the Fed, not the president. Election theft: not a fantasy anymore. LISTEN: Narratives of the American economy often focus on employers. What would change if they were to focus on workers? On today's episode of The Ezra Klein Show, the policy scholar Jamila Michener discusses the American economy's trenchant reliance on poverty, the potential and limitations of universal basic income, and the political disenfranchisement of the poor. You can listen to the episode here. 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 Music makes it more OK, anyway.YouTube OK is too much to ask; better, maybe. IN THE TIMES Biden Administration Moves to Unkink Supply Chain Bottlenecks A swath of recommendations calls for more investments, new supply chains and less reliance on other countries for crucial goods. By Katie Rogers and Brad Plumer At Once Diminished and Dominating, Trump Begins His Next Act The former president spoke on Saturday to the North Carolina Republican convention as he resumes political speeches and rallies. By Annie Karni and Maggie Haberman Workers Are Gaining Leverage Over Employers Right Before Our Eyes "Employers are becoming much more cognizant that yes, it's about money, but also about quality of life." By Neil Irwin Hot Vax Summer Is Looking Lukewarm The latest jobs report suggests that getting the economy back up to speed is not going to be effortless. By Neil Irwin SUBSCRIBE TODAY New York Times Opinion highlights a range of perspectives and voices. This work is made possible with the support of subscribers. Please consider supporting The Times with this special offer. 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. 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On Tech: YouTube isn’t the music villain anymore

YouTube seems to have shown that it's possible to both upend an industry and help make it stronger.

View in browser|nytimes.com Continue reading the main story June 8, 2021 YouTube isn't the music villain anymore Timo Lenzen By Shira Ovide YouTube has long been the most popular music service in the world. What's changed is that YouTube isn't the Darth Vader of the music industry anymore. For years, some artists and suits at record companies loved the zillions of clicks that music videos got on YouTube, but they complained that the site, owned by Google, didn't generate enough money for them or didn't do enough to stop rip-offs. Those grievances haven't gone away entirely, but they have mostly gone quiet. Why? A big reason is that YouTube figured out ways to generate enough cash to make many people in the music world happy — or at least content enough for now. The question is whether YouTube has achieved a lasting peace or a temporary one. If it persists, YouTube might have achieved something that few internet companies have: a relatively healthy relationship with an established industry that it simultaneously helps and disrupts. Let me step back to the years when YouTube was in the music industry's doghouse. The industry powers regularly trotted out a public relations shorthand, the "value gap," for what they said was YouTube's paltry financial contribution to the music industry relative to the popularity of music on the site. They were fond of pointing to figures showing that vinyl records generated more income for the music business than YouTube did. Continue reading the main story ADVERTISEMENT Mostly, YouTube made musicians, songwriters and record labels money the Google way: It sold advertisements in or adjacent to music-related videos and split the cash with the people and companies behind the songs. The power brokers in the industry said it was peanuts. Fast forward to last week, when YouTube disclosed that it paid music companies, musicians and songwriters more than $4 billion in the prior year. That came from advertising money and something that the industry has wanted forever and is now getting — a cut of YouTube's surprisingly large subscription business. (YouTube subscriptions include an ad-free version of the site and a Spotify-like service to watch music videos without any ads.) The significance of YouTube's dollar figure is that it's not far from the $5 billion that the streaming king Spotify pays to music industry participants from a portion of its subscriptions. (A reminder: The industry mostly loves Spotify's money, but some musicians say that they're shortchanged by the payouts.) Subscriptions will always be a hobby for YouTube, but the numbers show that even a side gig for the company can be huge. And it has bought peace by raining some of those riches on those behind the music. Record labels and other industry powers "still don't looooove YouTube," Lucas Shaw, a Bloomberg News reporter, wrote this week. "But they don't hate it anymore." Continue reading the main story ADVERTISEMENT The YouTube turnabout may also show that complaining works. The music industry has a fairly successful track record of picking a public enemy No. 1 — Pandora for awhile, Spotify, YouTube, and more recently apps like TikTok and Twitch — and publicly browbeating it or playing one rich company against another to get more money or something else they wanted. It's not YouTube's turn in the hot seat anymore, but I don't know if it's for good. Mark Mulligan, a music industry analyst and consultant, and my colleague Ben Sisario told me that some of the same old gripes are bubbling below the surface. Music power players still believe that YouTube pays far too little per click compared with other digital music services. And they fear that YouTube devalues songs everywhere because it doesn't do enough to stop pirated versions. But just maybe, YouTube has shown that it's possible for digital companies to both upend an industry and make it stronger. That's a rarity. Think about the resentment that many news organizations and websites have about Facebook and Google, restaurants' uneasy reliance on food delivery apps and Netflix's awkward marriages with entertainment companies. Maybe time and cash can achieve a measure of peace. If you don't already get this newsletter in your inbox, please sign up here. Continue reading the main story ADVERTISEMENT SUBSCRIBE TODAY If you've found this newsletter helpful, please consider subscribing to The New York Times — with this special offer. Your support makes our work possible. Before we go … The end of "too good to be true." Uber, DoorDash and Airbnb have for years had the cash to subsidize the cost of their convenience services. Now, writes my colleague Kevin Roose, those youngish companies need to turn a profit and this, along with pandemic-related oddities in the economy, is pushing up the prices for Ubers, scooters and Airbnb rentals. A peek into how the richest Americans aren't like the rest of us: ProPublica got its hands on data on the tax returns for some of America's richest people, including tech billionaires, and identified those who used legal means to pay income taxes that were a tiny fraction of their growing fortunes. Amazon's Jeff Bezos, for example, paid no federal income taxes in 2007 and 2011, and Tesla's Elon Musk did the same in 2018, ProPublica reports. It pioneered ways to make a living online: Wired writes about the legacy of Twitch, the livestreaming service that created ways for people to collect money from doing stuff online through tips and subscriptions in return for acknowledgment and connection. For better or worse, without Twitch there may have been no "creator economy" of Substack writers, Instagram influencers or Patreon podcasters. Hugs to this Happy birthday to good dogs Charlie and Silas, who look adorable in their sparkly crowns. 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. You can also read past On Tech columns. 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