2021年7月6日 星期二

Eternal voodoo: They just can’t quit tax cuts

Zombie economics in a time of insurrection.
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By Paul Krugman

Opinion Columnist

Don't make a big deal out of one month's employment numbers! That's been a cardinal rule of short-term economic analysis and good economic journalism as long as I've been in the business. Month-to-month numbers are noisy in the best of times. They're especially noisy now, as documented in a recent blog post from Joe Biden's Council of Economic Advisers: The pandemic and its aftermath have thrown things like normal seasonal patterns out of whack, so what looks like a big number, good or bad, may well just be random measurement error.

The council has been urging us to focus on three-month averages, which is a reasonable if imperfect fix. As of a month ago the three-month average showed employment growing at an annual rate of 4.54 percent; the latest report raised that to 4.7 percent. Both are very good numbers; leaving aside the wild pandemic-related swings of 2020, we haven't seen this kind of growth since 1984. But your assessment of how we're doing shouldn't have changed much.

What actually happened, of course, was a huge change in the tone of media economic coverage — and an even huger change in the tone from Republicans. Before Friday's report, they were all denouncing Biden for presiding over a weak economy. As soon as the new number came out, they swung 180 degrees and began touting the economy's extraordinary success, which they said was a dramatic vindication of … Donald Trump's 2017 tax cut.

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This wasn't the first time we've seen this story — or the second, or the third, or …. In fact, it's behavior that goes back to the Clinton years. When Bill Clinton raised taxes in 1993, Republicans en masse declared that a depression was imminent. When the economy boomed instead, they insisted that credit for the good economy of the late 1990s be given to Ronald Reagan's 1981 tax cut. Applying the same time lag to Reagan-era developments would imply giving credit for the 1983-84 boom to Lyndon Johnson, but somehow that wasn't part of the argument.

Now, it's not news that there is, in fact, not a shred of evidence in favor of claims that tax cuts have magical effects. Here, for example, is a picture of taxes and job growth over the decade before Covid-19 hit:

The actual tax changes were bigger than the picture shows: Barack Obama also introduced new taxes to pay for the Affordable Care Act, and Trump's tax cut was largely focused on corporate profits. But you see that there were two big changes in tax policy. Do you also see the big economic downshift after Obama raised taxes and the big upshift after Trump cut them? Neither do I.

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Nor is it news that tax-cut fanatics will always find a way to excuse the failure of their predictions: Anything good that happens to the economy is a delayed payoff to past tax cuts.

What is news, and something I find somewhat surprising, is that the G.O.P. is still doing this stuff with everything else going on. It's not that the party is coming to its senses — quite the opposite. We're talking about a party with some members who believe that Jewish space lasers have been setting forest fires and Italian satellites were used to switch vote counts. More important, we're talking about a party that has basically decided that its opponents can never legitimately win elections and that violent attempts to overthrow election results are no big deal, or maybe even justified.

And in the middle of all this they still have time for voodoo economics?

OK, a couple of explanations for what's going on.

One is the Upton Sinclair principle: It's difficult to get people to understand something when their salaries depend on their not understanding it. The G.O.P. was once a party run to serve the interests of plutocrats who fanned white rage to win elections; now the white rage has taken over. But it still depends on plutocrats' money, so despite all the talk of "populism" it remains committed to an ideology that justifies redistributing income upward.

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Another is the intellectual insularity of right-wing politicians. I'd be curious to know how many Republicans in Congress have ever seen a chart like the one above, showing no break in economic performance after Trump took office, or know that America gained more jobs under Clinton than it did under Reagan. My guess is very few: They aren't numbers guys, they don't know much about economic history, and the people they talk to always claim that the Reagan expansion was unmatched until the Trump boom.

Furthermore, they probably imagine that what they hear from right-wing think tanks represents mainstream economic opinion and are almost surely unaware that a great majority of professional economists rejects the idea that tax cuts pay for themselves and believes that tax rates have little impact on economic growth.

Anyway, it's almost reassuring to see that in the midst of the greatest challenge to democracy since the Civil War, right-wing zombie economics is still shambling along, eating brains.

Quick Hits

The White House analysis of last Friday's report.

Lumber prices were one of the things feeding inflation fears. But they're plunging.

Have we hit the speed limit on job growth?

What did the 2017 tax cut accomplish, anyway?

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Facing the Music

These days the taxman doesn't have the resources to audit superstars.

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On Tech: We need remote work for everyone

The ability to work online shouldn't be a nice-to-have for a select few, but an option for all.

We need remote work for everyone

The ability to work online shouldn't be a nice-to-have for a select few, but an option for all.

Vivek Thakker

One promise of technology is that it is a great equalizer. But the reality hasn't been quite that simple.

The infusion of technology into more industries is one factor that has led to a division of the American work force between promising jobs with good salaries and low-wage work with less possibility of advancement. My colleague Ben Casselman recently wrote about the pandemic causing more companies to use automation, which could eliminate jobs and erode bargaining power, particularly for lower-paid service workers.

Remote work could further widen the divide if it sticks around as another legacy of the pandemic. Professionals with desk jobs might have the option to untether themselves, at least part time, from a physical work location. But you can't butcher cattle, take care of children or repave a highway by Zoom.

Apple has plans for a new pilot program that might show that there could be a more democratic path for remote work. The company said that it would experiment with letting its retail store employees work partly outside a store location, Bloomberg News reported last week. Even before the coronavirus, more customer service jobs had been shifting from call centers to remote at least part of the time, too.

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It's an intriguing sign that technology could make the option of remote work available to more than just professionals, who are a minority of the American work force. Only about one in six U.S. employees have been working remotely during the pandemic.

I will acknowledge that Apple might be an outlier, and that working for one of its retail stores is different from other kinds of in-person work. Apple store workers can offer technical advice or handle online sales without being face-to-face with customers. That's not as easy for people employed in most other retail jobs, or in health care, manufacturing, construction and restaurants.

But one thing we should take away from this pandemic is that it most likely won't be the last crisis that disrupts normal life. It's good if more people, businesses, governments and technologists are thinking now about how to make it possible to do more activities temporarily online — not as a nice-to-have for a select few, but as a necessity for everyone.

That requires tackling America's unequal and ineffective internet system and changing the mind-sets of employers and employees about working away from a job location. And it might require technologies to reimagine remote work for more kinds of workers. Schools were forced to go online in an emergency, and it didn't go very well for many people. But we might not have a choice if future pandemics, climate change-related wildfires or other emergencies again interrupt school, work and life.

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The good news is that technology has already made a leap like this before — from the professional classes to everyone. Computers used to be confined to beige boxes that sat on office desks. Now almost every business and worker relies on technology in some form every day — for better and sometimes for worse.

To prepare for a future that might be marred by more crises that force us apart, we should focus on technologies that make it possible for people to be apart and still muddle through as best as we can online.

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TIP OF THE WEEK

It's a bad time to buy a new phone

Unless you accidentally broke your phone during holiday weekend celebrations, it might not be a great idea to buy a new smartphone right now. Brian X. Chen, the consumer technology columnist for The New York Times, explains why.

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Now is the best time to wait to buy a shiny new phone. Similar to clothing, tech products have seasonality. Companies typically release their big phone upgrades in the fall, ahead of the holiday shopping season.

That means if you bought the current model iPhone 12 or Pixel 5 today, you might feel disappointed in a few months when Apple and Google release the successors to those phones and cut prices on previous models.

There are some safer buys right now. Generally, anything released in the last six months probably isn't due for a refresh until next year. Apple typically releases new models of its tablets in the spring, for example, so now is a fine time to grab a new iPad. But it may still be better to wait because retailers often slash prices on tablets during Black Friday.

My advice: Keep thy credit cards in your wallet. In the meantime, you can revisit my column on how to make your tech last longer by taking steps like installing a fresh battery, doing a deep clean and decluttering your data. You might end up changing your mind altogether about buying something new.

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Before we go …

  • The Chinese government is the boss. Didi, the large on-demand ride company in China, was pulled off the country's app stores because China's internet regulator said it was concerned over how the company handled customer data. My colleague Ray Zhong writes that orders affecting Didi and two other tech companies that recently went public in the United States show that China's authorities are calling the shots in business.
  • Where there's a will (and money), there's a way: My colleague Erin Woo reports on start-ups that are pitching companies on technologies to make it easier or more productive for office jobs to go remote. One start-up makes an owl-shaped speaker that stands in for a remote worker during a meeting and "automatically zooms in on the person who is speaking."
  • The snapshots of text on your phone are not all pointless clutter. "If memories are what make us human, then our screenshots tell a story about who we are in the digital age," Clio Chang writes for The New York Times Magazine.

Hugs to this

Amazing catch, kid! Thanks to an On Tech reader — Scott Lewis in Ellensburg, Wash. — for suggesting this highlight from a recent baseball game in Pittsburgh. Here's more about that talented fan, 11-year-old Christian Gale.

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