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Eric Kramer



Articles by Eric Kramer

Good decision, big institutional problem on minimum wage work-around

4 days ago

From WAPO:

Senior Democrats are abandoning a backup plan to increase the minimum wage through a corporate tax penalty, after encountering numerous practical and political challenges in drafting their proposal over the weekend, according to two people familiar with the internal deliberations. . . .

Economists and tax experts have said that the tax outlined by Sanders and Wyden could be easily avoided and difficult to implement, with large corporations able to reclassify workers as contractors to avoid potential penalties. “I would be extremely nervous about trying out a brand new idea like this with virtually no vetting,” Jason Furman, a former Obama administration economist, said on Twitter on Friday.

The good news here is that the Democrats

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Let’s take a big, second bite at the mass testing apple

20 days ago

We made many mistakes in our response to the coronavirus over the past year.  One of the most critical was our failure to massively expand our capacity to produce coronavirus tests and masks and other PPE.  As many economists including Paul Romer noted last spring, mass testing and wide distribution of high quality masks would probably have allowed us to crush the virus and return to something close to normal life even in the absence of a vaccine.  Given that it was far from clear when or even if an effective vaccine would arrive, a large investment in mass testing and PPE production seemed like a no-brainer, but we didn’t do it.  This was one of the most serious and easily avoidable errors in our covid response. 

But what about now?  President

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Economic insecurity, redux

21 days ago

Several comments on my last post on the economic difficulties of the people who attacked the Capitol took aim at their characters in one way or another.

I certainly do not want to defend the Capitol invaders in any way.  I think they should be vigorously prosecuted.  However, it is critically important to step back from the violent horror of the assault and think strategically about how we can use public policy to reduce the risk of political violence and democratic failure.  And that means thinking about conditions that influence people, not simply focusing on their character defects (they’re stupid, they’re selfish, they’re racist, etc.).  Whatever character flaws the insurrectionists have, they or others like them will have the same flaws next

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Score one for the economic insecurity theory of Trump . . .

23 days ago

From the WAPO:

Despite her outward signs of success, Ryan had struggled financially for years. She was still paying off a $37,000 lien for unpaid federal taxes when she was arrested. She’d nearly lost her home to foreclosure before that. She filed for bankruptcy in 2012 and faced another IRS tax lien in 2010.

Nearly 60 percent of the people facing charges related to the Capitol riot showed signs of prior money troubles, including bankruptcies, notices of eviction or foreclosure, bad debts, or unpaid taxes over the past two decades, according to a Washington Post analysis of public records for 125 defendants with sufficient information to detail their financial histories.

The group’s bankruptcy rate — 18 percent — was nearly twice as high as

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Score one for the economic insecurity theory of Trump . . .

23 days ago

From the WAPO:

Despite her outward signs of success, Ryan had struggled financially for years. She was still paying off a $37,000 lien for unpaid federal taxes when she was arrested. She’d nearly lost her home to foreclosure before that. She filed for bankruptcy in 2012 and faced another IRS tax lien in 2010.

Nearly 60 percent of the people facing charges related to the Capitol riot showed signs of prior money troubles, including bankruptcies, notices of eviction or foreclosure, bad debts, or unpaid taxes over the past two decades, according to a Washington Post analysis of public records for 125 defendants with sufficient information to detail their financial histories.

The group’s bankruptcy rate — 18 percent — was nearly twice as high as

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Three cheers for child benefits!

23 days ago

Let’s discuss something worth getting really excited about, the Biden/Romney child tax credit/child allowance proposals.  These proposals would make life much better for poor children and their parents.  A lot better.  Neither proposal goes as far as I would like, but they would be a real improvement and could be made more generous over time.

I will briefly describe the proposals and then discuss the political changes that may have paved the way for a major shift in social policy.

What the proposals do

To see just how exciting these proposals are, it helps to remember what is wrong with our current system of support for families with children, which is centered on a partly refundable Child Tax Credit (actually, two credits) and the Earned

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Three cheers for child benefits!

23 days ago

Let’s discuss something worth getting really excited about, the Biden/Romney child tax credit/child allowance proposals.  These proposals would make life much better for poor children and their parents.  A lot better.  Neither proposal goes as far as I would like, but they would be a real improvement and could be made more generous over time.

I will briefly describe the proposals and then discuss the political changes that may have paved the way for a major shift in social policy.

What the proposals do

To see just how exciting these proposals are, it helps to remember what is wrong with our current system of support for families with children, which is centered on a partly refundable Child Tax Credit (actually, two credits) and the Earned

Read More »

Information or propaganda? More Cowen on minimum wages

25 days ago

Today Tyler Cowen posted this:

Remember the proposals for a $15 federal minimum wage?

Employment would be reduced by 1.4 million workers, or 0.9 percent, according to CBO’s average estimate…

That is from the new CBO report.

Here is a bit more context:

In an average week in 2025, the year when the minimum wage would reach $15 per hour, 17 million workers whose wages would otherwise be below $15 per hour would be directly affected, and many of the 10 million workers whose wages would otherwise be slightly abovethat wage rate would also be affected. At that time, the effects on workers and their families would include the following:Employment would be reduced by 1.4 million workers, or 0.9 percent, according to CBO’s average estimate;

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Information or propaganda? More Cowen on minimum wages

25 days ago

Today Tyler Cowen posted this:

Remember the proposals for a $15 federal minimum wage?

Employment would be reduced by 1.4 million workers, or 0.9 percent, according to CBO’s average estimate…

That is from the new CBO report.

Here is a bit more context:

In an average week in 2025, the year when the minimum wage would reach $15 per hour, 17 million workers whose wages would otherwise be below $15 per hour would be directly affected, and many of the 10 million workers whose wages would otherwise be slightly abovethat wage rate would also be affected. At that time, the effects on workers and their families would include the following:Employment would be reduced by 1.4 million workers, or 0.9 percent, according to CBO’s average estimate;

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Tyler Cowen does political romance on minimum wages and covid relief

26 days ago

James Buchanan, one of the most influential free-market conservatives of the past half century, chastised liberals (progressives) for being romantic about politics.  His work on Public Choice Theory urged us to look at “politics without romance”.

Buchanan was right.  Being overly romantic about politics can lead to serious error, but this error is by no means limited to liberals. 

Case in point:  Tyler Cowen has recently been criticizing Democratic proposals to raise the minimum wage to $15 per hour, and the $1.9 trillion covid relief/stimulus package proposed by President Biden.  In both cases, he treats complicated questions of political strategy as if they were blackboard exercises in economic theory, totally ignoring politics.

Let’s start

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Tyler Cowen does political romance on minimum wages and covid relief

26 days ago

James Buchanan, one of the most influential free-market conservatives of the past half century, chastised liberals (progressives) for being romantic about politics.  His work on Public Choice Theory urged us to look at “politics without romance”.

Buchanan was right.  Being overly romantic about politics can lead to serious error, but this error is by no means limited to liberals. 

Case in point:  Tyler Cowen has recently been criticizing Democratic proposals to raise the minimum wage to $15 per hour, and the $1.9 trillion covid relief/stimulus package proposed by President Biden.  In both cases, he treats complicated questions of political strategy as if they were blackboard exercises in economic theory, totally ignoring politics.

Let’s start

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Trump on his own terms

January 20, 2021

David Hopkins has an interesting take on the failure of Trump’s presidency:

Regardless of these challenges, the general verdict on Trump among historians and political scientists, reporters and commentators, and most of the Washington political community (including, at least privately, many Republicans) is guaranteed to range from disappointment and mockery to outright declarations that he was the worst president in American history. And there is little reason to expect that the information yet to emerge about the internal operations of the Trump administration will improve his reputation in the future. Instead, it’s far more likely that there are stories still to be told about the events of the last four years that history will find just as

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Libertarian David Henderson on Trump

January 9, 2021

Yesterday, David Henderson, a libertarian economist associated with Hoover and econlib, had a post at econlib suggesting that Trump has been unfairly accused of fomenting violence.  I was going to stick a link to Henderson’s piece in the comments to my earlier post on the libertarian reaction to storming of the Capitol.  But when I looked this morning, the post was gone.  I believe this has happened before with Henderson (I am almost certain this has happened at econlib, I am not sure the author was Henderson, but I believe it was him). 

In any event, the now missing post was captured by my blog reader, and I thought I’d share Henderson’s disingenuous, obtuse, narrow, decontextualized, and legalistic defense of Donald Trump here for the record.

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Double standards in policing

January 8, 2021

Many have noted, correctly, that there is a clear double standard in how the police treated the right-wing protesters at the Capitol on Wednesday and how they treated Black Lives Matter demonstrators this summer.  This is indeed a huge problem and I hope to comment further on it soon.  Here I simply want to point out a second double standard that has not to my knowledge received attention:  the quick, forceful response of legislators to the breakdown of law and order at the Capitol, compared to the generally dilatory efforts at police reform this summer. 

Police reform advocates should press the Democrats hard to move police reform legislation quickly in the new Congress.  As things stand now, there are two standards for police reform.  A strict

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Libertarians: Hey look, it’s Haley’s comet!

January 8, 2021

How are libertarian lovers of liberty responding to the assault on democracy and the rule of law that took place in the Capitol Wednesday?

Over at Marginal Revolution, Tyler Cowen speaks out eloquently against Trump’s anti-democratic behavior.  Just kidding!  In a post entitled “That was then, this is now” Cowen reminds us about the terrorist attack on Congress by Puerto Rican nationalists in 1954.  But there is no analogy between a terrorist attack by a politically powerless minority (as bad as that is) and a mob attempting to subvert American democracy at the behest of a sitting President who just lost an election.  No analogy at all.

Cowen also has a post bemoaning the failure of the Capitol police to secure Congress, and a post quibbling

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Impeachment now?

January 7, 2021

What about impeachment?  There is no question that Congress can impeach Trump for his role in encouraging today’s assault on Congress.  What are the arguments for and against? 

For impeachment:

There is a real possibility that Trump will do something dangerous in the final days of his presidency.

If he is impeached and convicted, he could be barred from running for President again. 

Presumably impeaching him would have some precedential / deterrent value going forward.

Against impeachment:

A politically divisive impeachment would divert attention from Trump’s now oh-so-evident wrongdoing and breath new life into the grievance narrative that motivates him and his base.  It could bolster his political support.  It could also fail.

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Why resign?

January 7, 2021

Several White House aides and policymakers have resigned in the past 24 hours.  Frankly, I don’t get it. 

First, it’s way too late to salvage your reputation.  Second, at this point you can (arguably) do more to protect your reputation by saying that you are staying to prevent Trump from doing something crazy in the final days of his presidency.

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The events at the Capitol

January 7, 2021

The events at the capitol today are horrifying, and to many of us seem like the natural outcome of Trumpism and the morally degenerate enabling of the Republican party.  But the events today may well end up strengthening our democracy.

I suspect that Trump has badly overplayed his hand.  The images of thugs running loose through the capital will horrify a significant part of Trump’s law and order base.  In the court of public opinion, this will be worse than Charlottesville.  His appeal for peace emphasizing his election grievances will not help much; it was the least he could have done, another Trump hostage video.  

Trump will also lose at least some support from Republican pols.  This was bound to happen anyway, but today’s events will

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Status quo bias and vaccine supplies

December 26, 2020

Here is a simple thought experiment on the use of scarce vaccine supplies.Suppose that we had tested the Pfizer/Moderna vaccines with one dose per person and discovered that they were 85% effective at preventing covid-19. However, due to an administrative error, we gave some people two doses, and when we analyzed the data it turned out that a two-dose regimen was 95% effective at preventing covid-19. Only 200 million doses of vaccine will be available over the next six months. Under these circumstances, the idea that we should switch from our initial vaccination plan of one dose per person to two doses would be regarded as insane. It is clearly better to give 200 million people 85% protection than it is to give 100 million people 95% protection.

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Yes, let’s vaccinate twice as many people against covid-19

December 24, 2020

I am very sympathetic to Robert Waldmann’s argument that we should give twice as many people one dose of the new Pfizer/Moderna vaccines, at least until supply constraints are eased, instead of following the FDA approved vaccination protocol and giving everyone two doses right from the beginning. What follows is a rough way of thinking about the logic and perhaps the magnitudes involved. Let me emphasize that this is just a finger exercise and I am not an epidemiologist, but with those important caveats I will share my work.Here are my assumptions. The reproduction number of the virus is currently 1. This means that if behavior, transmissibility, and natural and vaccine acquired immunity are all unchanged, the number of people getting infected

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Paying people to get vaccinated?

December 14, 2020

Apparently there are proposals circulating to pay people to get vaccinated. (Summary here.) The pro/con story is familiar enough. Monetary incentives might increase the uptake rate; but they might also increase suspicion and backfire, or at least not be very effective. Given the large cost involved – the number cited in the linked article is $1,000, which could cost well over a hundred billion depending on eligibility – a small increase in vaccination rates might not be worth it.

Here is an alternative suggestive. When people get vaccinated, give them cash cards worth $100 that can only be used to purchase restaurant food for 10 days, beginning 5 days after they get vaccinated. The framing of this might be more positive than a simple cash

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I have covid . . .

December 14, 2020

I’m fairly certain I picked it up this past Tuesday.   Wednesday night I had a slight throat-clearing cough.  Not sure if this was covid related or not.  Saturday I had a fever of 100.5, along with some achiness.  I got tested on Saturday and received the positive test result on Sunday.  Last night was a bit worse than the night before.  I had chills and aches.  When I am not sick I am usually more or less pain free; when I get a cold or flu all my old aches and pains come back for an encore.  That happened last night.  In addition, the cough moved into my lungs and became deeper, and I got just a bit wheezy.  This morning with the help of acetaminophen I feel pretty good – if you dropped me into my body without telling me that I had covid it might

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Credit where credit is due

December 6, 2020

I am often critical of libertarian economist Donald Boudreaux. This morning, I sent him an email criticizing a post of his in which he cited a study claiming that pcr tests for covid have a false positive rate of 80% or more. I pointed out that this is obvious nonsense, since overall test positivity rates, which include both false and true positives, have generally been in the 4% to 10% range. I also criticized him quite harshly for passing this (mis)information on in an uncritical manner. To his considerable credit, he published my comment in full on his blog and removed the link from his initial post.

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Where do libertarians stand on race? Glad you asked.

November 25, 2020

Almost all Americans agree that the government should not actively discriminate against blacks and other racial groups, and most believe that private race discrimination should be prohibited as well.  Many people would go further and support efforts to reduce the large racial disparities that persist in America despite formal legal injunctions against discrimination.  Some believe that schools and employers have a responsibility to eradicate subtle forms of discrimination and to create environments in which black students and employees can reach their potential.  Some believe that individuals should “call out” specific acts that are racially insensitive or biased.  Many believe that government policy should be sensitive to the unequal burdens that facially

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How much should we trust the polls?

October 28, 2020

Matthew Yglesias has a good discussion of why the poll-based models that give Biden a high probability of winning are probably right, despite the well-known polling errors in 2016.  Nonetheless, it seems reasonable to believe that the poll based models (538, The Economist) are overstating Biden’s chances, for several reasons.
Turnout this year will be unusually difficult to predict.  How will the surge in mail in balloting affect turn out?  Will it lead to a large increase in voting, likely favoring Democrats, or are many voters likely to leave their ballots on the dining room table, or mail them in too late to be counted?  Will weather effects on voting have a partisan slant (in either direction, potentially), given that Republicans are more likely to

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A shot across the Court’s bow

October 27, 2020

From Mark Tushnet:
Here’s a thought in the event that there is a Biden appointed commission on court reform.  What about a Joint Resolution on Judicial Power: “No court shall hold a federal statute unconstitutional unless it concludes that the statute is manifestly unconstitutional.”
Tushnet discusses this suggestion and some limitations here.
I am somewhat sympathetic to this idea.  I certainly agree with the substantive idea that underlies it; we have way too much judicial review of social and economic legislation in this country.  Tushnet’s proposal is not at all a cure for conservative judicial activism by the Roberts Court, but it sends the right message:  “We’re on to you.  We know what you’re doing:  using specious legal reasoning to reach results

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Yes, there is a Republican ideology. That is the problem . . .

October 26, 2020

From the NYT editorial board:
Of all the things President Trump has destroyed, the Republican Party is among the most dismaying.
“Destroyed” is perhaps too simplistic, though. It would be more precise to say that Mr. Trump accelerated his party’s demise, exposing the rot that has been eating at its core for decades and leaving it a hollowed-out shell devoid of ideas, values or integrity, committed solely to preserving its own power even at the expense of democratic norms, institutions and ideals.
Tomato, tomahto. However you characterize it, the Republican Party’s dissolution under Mr. Trump is bad for American democracy.
A healthy political system needs robust, competing parties to give citizens a choice of ideological, governing and policy visions. More

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Let’s make a coronavirus deal?

October 20, 2020

Latest on the relief negotiations is here.  Short version, Pelosi and Mnuchin are still negotiating over a $1.9 trillion bill; McConnell is floating the idea of a $500 billion dollar bill, but it is far from clear he can or even wants to pass anything.
If Pelosi can get to a deal with Mnuchin, that’s great.  I still think that the House should pass a bill with or without sign off from Mnuchin and challenge Trump and Senate Republicans to pass it.
But I would add now that the House should consider passing a $500 billion bill and calling McConnell’s bluff.  Part of the impetus for hanging tough on a big bill was to limit the ability of Senate Republicans to sabotage a Biden presidency by withholding any further relief (which they would surely do).  But it

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Christie, never forget

October 16, 2020

Chris Christie:
“I believed when I entered the White House grounds, that I had entered a safe zone, due to the testing that I and many others underwent every day,” Mr. Christie said in the statement. “I was wrong. I was wrong not to wear a mask at the Amy Coney Barrett announcement and I was wrong not to wear a mask at my multiple debate prep sessions with the president and the rest of the team.”
So, what should we make of this?  Is it a genuine change of heart after a brush with death, or a convenient time to scurry like a rat off a sinking ship?  And how could Christie believe that safe zone crap?  Did he wear a mask at the grocery store?
Regardless, anyone public figure who failed to oppose Trump should never be trusted or forgiven.  They betrayed us,

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The stimulus negotiations

October 16, 2020

A good discussion of the current state of play is here.  The short version is Speaker Pelosi and Treasury Secretary Mnuchin are negotiating over a package of $2 trillion or so, McConnell plans to introduce a very limited $500 billion package that he may or may not actually have votes to pass (he may just be giving his members up for re-election a messaging opportunity), and Trump has declared that he wants Pelosi and Mnuchin to go bigger.
My take is that it is time for Pelosi to call Trump’s bluff.  She should pass a $2 trillion or so package, with or without final sign off from Mnuchin, making a nominal concession or two to Trump, and tell the truth:  “Everyone knows what is going on here.  The Democrats have been trying to get more relief to the American

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