Thursday, November 15, 2018

Blndering Policies

There are no magic wands.  Some issues are simply complicated and difficult.

For example, if you want to create new jobs going forward, the logical approach would be to identify the industries that will be creating those jobs and supporting them.  Of course that requires some idea of what those industries might be.

The long term answer isn't to wistfully look at the past and try to recreate the jobs that used to exist, as we are apparently trying to do.

Coal is old renewable is new.

If someone could actually find a way to economically use coal in a non environmentally damaging way, it would be wonderful since we have so much of it, but the odds of that are slim. It also wouldn't create a lot of new jobs since most coal mining is now much more dependent on machines than people although of course people are still somewhat involved.

Building up renewable energy sources like wind and solar would require significant development and new technology, both of which translate into jobs.

Speaking of development, we need to develop or repair our infrastructure to move forward.  This would create a lot of jobs, but after we gave the tax cuts to the industries that would benefit from infrastructure improvements we don't have the money to do it.  Using it to build a wall instead of internal infrastructure would be insane. the wall has not long term economic benefit.

Something that does have long term economic benefits is trade.  The more trade the better and yes the trade should be conducted on a level playing field.  However trade is also a complex issue.  Actions taken often have multiple consequences, many of them unintended.  Increase the cost of some components used by an industry that exports goods, it may make their cost too high, leading to loss of market share and reduced exports.  Retaliatory actions also are problematic.

Trade generally requires less government involvement, and the involvement needs to be surgically precise.  Is China stealing trade secrets?  Address that issue with specific actions, don't start a trade war that hurts many Americans (and Chinese too).

We seem ill equipped to approach most issues as we conduct policy based on late night thoughts, that are almost always a poor substitute for good analysis.  Almost always.

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