Thursday, May 17, 2018

Thursday Evening Links

This and that for your Thursday reading.

- Alex Boutilier discusses the glaring gap between hype and reality when it comes to tech sector jobs. And Virgina Eubanks writes about the futility of expecting miracles from algorithms in allocating grossly insufficient funding for social programs.

- Meanwhile, Dean Baker argues that if anybody should face the prospect of workfare, it's the financial-sector profiteers who enrich themselves while offering poor service managing public assets such as pensions.

- Geoffrey Stevens warns Ontario voters not to once again saddle their province with the mindset which brought them Walkerton and other avoidable tragedies. And Vjosa Isai's report on toxic chemicals in Canadian baby products should instead confirm the need for far stronger protection of the public against corporate irresponsibility.

- And Rachel Cohen discusses the findings of Alex Taborrok, a libertarian economist who wanted to prove a connection between regulations and economic stagnation - but instead demonstrated that one has nothing to do with the other:
(F)or the first time, economists could more confidently measure federal regulations over time and by industry. In theory, that would make it easier to build the case that regulations were hurting the economy.

For his first paper using the database, Tabarrok decided to analyze the effect of federal regulation on “economic dynamism”—a catch-all term referring to the rate at which new businesses launch and grow, and at which people switch jobs, lose jobs, or migrate for work. There has been a notable and somewhat mysterious decline in dynamism over the last few decades. The rate at which start-ups form is half of what it was forty years ago, the fraction of workers who bounce from one job to another—a sign of competitive labor markets—has plunged, productivity has slowed, and adult employment remains well below its early-2000 peak.

Armed with RegData, Tabarrok and Goldschlag set out to show that regulations were at least partly to blame. But they couldn’t. There was simply no correlation, they found, between the degree of federal regulation and the decline of business dynamism. The decline was seen across many different industries, including those that are heavily regulated and those that are not. They tried two other independent tests that didn’t rely on RegData, and came to the same conclusion: an increase in federal regulation just could not explain what was going on.
Indeed, the new paper undermines one of the most deeply held convictions of the American right, one that unites libertarians like Tabarrok with mainstream conservatives: that regulations inevitably impose “deadweight loss” on the economy and are therefore an enemy of economic growth. This idea has been a mainstay of Republican politics since the Reagan era, and the Trump administration has taken to deregulation with missionary zeal. In fact, it’s probably the policy objective that the administration has pursued most successfully—rolling back the Clean Power Plan, repealing net neutrality, freezing the fiduciary rule, and on and on.

The premise that regulations come at the expense of economic activity—that we must always make trade-offs between safety and jobs—is so pervasive that even the American left tends to accept it, defending regulations as necessary evils to promote other social goods. Yet there has never been strong evidence that these trade-offs actually exist. To the contrary, federal regulations have often driven growth and innovation, whether it’s fuel standards spurring new electric cars and solar energy, or the Dodd-Frank law causing an entirely new industry—financial technology—to appear out of whole cloth.
- Finally, Marie Burge criticizes the P.E.I. Liberals' latest efforts to avoid a fair referendum on electoral reform.

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