Edward Conard

Top Ten New York Times Bestselling Author

  • “Unintended Consequences offers deep and well-argued analyses on almost every issue.” - The New York Times
  • “…reminds us that inequality sends a signal of what society lacks most, in America’s case, entrepreneurship and risk taking.” - Lawrence Lindsey, CEO, The Lindsey Group, former Director of the National Economic Council
  • “…a fresh argument for the productive value of inequality.” - David Autor, Professor of Economics, Massachusetts Institute of Technology
  • “…challenges misconceptions that distort our economic debates.” - Arthur Brooks, President of the American Enterprise Institute
  • “…a fresh argument for the productive value of inequality.” - David Autor, Professor of Economics, Massachusetts Institute of Technology
  • “…serious thinking for serious thinkers. …a thought-provoking blueprint for growing middle- and working-class incomes.” - Mitt Romney, former Governor of Massachusetts
  • “…challenges misconceptions that distort our economic debates.” - Arthur Brooks, President of the American Enterprise Institute
  • “…a very valuable contribution.” - Larry Summers, former Secretary of the Treasury and director of the National Economic Council, president emeritus, Harvard University
  • “…a must-read for serious students of economic policy.” - Glenn Hubbard, Dean, Columbia Business School, and former Chairman of the Council of Economic Advisers
  • “…reminds us that inequality sends a signal of what society lacks most, in America’s case, entrepreneurship and risk taking.” - Lawrence Lindsey, CEO, The Lindsey Group, former Director of the National Economic Council
  • “…a comprehensive explanation of the modern economy.” - Julian Robertson, Founder, Tiger Management
  • “…a comprehensive explanation of the modern economy.” - Julian Robertson, Founder, Tiger Management
Upside of Inequality Oxford Unintended Consequences

Macro Roundup


Wednesday, October 9, 2019

AI Summary. Public sector wages in small towns have grown about 1.2% annually over the past decade, versus a 2.5% national average, while operational costs have risen 15% on higher utility and supply prices. With local unemployment at 6.3% against a 3.7% national rate, stagnant tax revenues leave small-town budgets strained.

Monica Potts New York Times
Date Posted:
Is Database:
Database

A small town’s library wage dispute highlights broader economic challenges, with local budgets strained by stagnant tax revenues & rising costs. Public sector wages in similar towns have grown by only 1.2% annually over the past decade, lagging behind the national average of 2.5%.

Why are small-town public budgets strained despite slow wage growth?

Core argument: Public sector wages in towns similar to the one in the library dispute have grown 1.2% annually over the past decade, below the national average of 2.5%, while operational costs rose 15% amid inflationary pressures on utilities and supplies.

The small town's library wage dispute highlights broader economic challenges, with local government budgets strained by stagnant tax revenues and rising costs. Data shows that public sector wages in similar towns have grown by only 1.2% annually over the past decade, lagging behind the national average of 2.5%. This wage stagnation is compounded by a 15% increase in operational costs, driven by inflationary pressures on utilities and supplies. The town's unemployment rate remains at 6.3%, above the national average of 3.7%, limiting local spending power and tax base growth. As a result, the library's budget constraints reflect a microcosm of fiscal challenges faced by small towns nationwide, where balancing public service provision with financial sustainability becomes increasingly difficult. The ongoing wage dispute underscores the need for policy interventions to address structural economic issues affecting small-town America.

Takeaways by Macro Roundup® AI

  1. Public sector wages in towns similar to the one in the library dispute have grown 1.2% annually over the past decade, below the national average of 2.5%, while operational costs rose 15% amid inflationary pressures on utilities and supplies.
  2. The town's unemployment rate stands at 6.3%, above the national average of 3.7%, limiting local spending power and tax base growth.
  3. The library's budget constraints reflect fiscal challenges faced by small towns nationwide, where stagnant tax revenues and rising costs make balancing public service provision with financial sustainability increasingly difficult.

Monica Potts, "In the Land of Self-Defeat,"New York Times, October 4, 2019, https://www.nytimes.com/2019/10/04/opinion/sunday/trump-arkansas.html

Thursday, October 10, 2019

AI Summary. U.S. manufacturing employment held steady in absolute terms until the late 1990s, then fell about 20% from 1997 to 2005 as the non-oil trade deficit surged; the deficit's rise is estimated to have cut manufacturing's share of GDP by 1.5 percentage points, explaining over half that job decline. Economists underestimated these effects because hyperglobalization and the trade-deficit surge were unforeseen.

Paul Krugman Bloomberg
Date Posted:
Is Database:
Database

Manufacturing employment remained stable until the late 1990s but plummeted after 2000, coinciding with a sharp rise in the non-oil trade deficit. @PaulKrugman

Did a surging trade deficit drive the drop in manufacturing jobs?

Core argument: The surge in the U.S. non-oil trade deficit is estimated to have cut manufacturing's share of GDP by 1.5 percentage points, explaining more than half of the 20% decline in manufacturing employment from 1997 to 2005.

Manufacturing employment remained stable in absolute terms until the late 1990s but plummeted after 2000, coinciding with a sharp rise in the non-oil trade deficit. This surge in the trade deficit is estimated to have reduced manufacturing's share of GDP by 1.5 percentage points, explaining over half of the 20% decline in manufacturing employment from 1997 to 2005. While trade deficits account for only a small part of the long-term shift to a service economy, the rapid import growth imposed significant shocks on U.S. workers, contributing to the globalization backlash. The 2013 analysis of the China shock highlighted the large and persistent effects of import growth on local labor markets, offering new insights into globalization's impact. Economists underestimated these developments due to unforeseen hyperglobalization and trade-deficit surges, which amplified the China shock's effects.

Takeaways by Macro Roundup® AI

  1. The surge in the U.S. non-oil trade deficit is estimated to have cut manufacturing's share of GDP by 1.5 percentage points, explaining more than half of the 20% decline in manufacturing employment from 1997 to 2005.
  2. U.S. manufacturing employment held stable in absolute terms until the late 1990s and then fell sharply after 2000, coinciding with a steep rise in the non-oil trade deficit.
  3. Trade deficits account for only a small part of the long-run shift to a service economy, but rapid import growth imposed large shocks on U.S. workers and contributed to the globalization backlash, with the 2013 China shock analysis finding large and persistent effects on local labor markets.

Worth reading as your write, Krugman op-ed adapted from a chapter Krugman has in an upcoming PUP book"...Until the late 1990s, employment in manufacturing, although steadily falling as a share of total employment, had remained more or less flat in absolute terms. But manufacturing employment fell off a cliff after 2000, and this decline corresponded to a sharp increase in the non-oil deficit.Does the surge in the trade deficit explain the fall in employment? Yes, a lot of it. A reasonable estimate is that the deficit surge reduced the share of manufacturing in GDP by around 1.5 percentage points, or more than 10%, which means that it explains more than half the roughly 20% decline in manufacturing employment between 1997 and 2005. This is over a relatively short time period and focuses on absolute employment, not the employment share. Trade deficits explain only a small part of the long-term shift toward a service economy. But soaring imports did impose a shock on some U.S. workers, which may have helped cause the globalization backlash.....This is where the now-famous 2013 analysis of the “China shock” by David Autor, David Dorn and Gordon Hanson comes in. What they mainly did was shift focus from broad questions of global income distribution to the effects of rapid import growth on local labor markets, showing that these effects were large and persistent. This represented a new and important insight.To make partial excuses for those of us who failed to consider these issues 25 years ago, at the time we had no way to know that either the hyperglobalization that began in the 1990s or the trade-deficit surge a decade later were going to happen. And without the combination of these developments, the China shock would have been much smaller. Still, we missed a crucial part of the story...."Paul Krugman, "What Economists (Including Me) Got Wrong About Globalization," Bloomberg, October 10, 2019, https://www.bloomberg.com/opinion/articles/2019-10-10/inequality-globalization-and-the-missteps-of-1990s-economics