Yesterday I posted on the Zoom talk that Biden CEA chair Cecilia Rouse gave to a Stanford audience last Thursday. Here’s Part II. Part III will come tomorrow.

11:40: Rouse notes the dramatic drop in compensation in the labor market from February 2020 to April 2020, “when we asked everybody to go home.”

Not quite accurate. There wasn’t a lot of “asking” going on. It was mainly telling. While I found Rouse to be someone I would find very likeable if I met her, I see that she has already picked up, in just over 13 months on the job, this government-speak way of describing government coercion.

 13:58: Rouse deals with the real GDP growth numbers that had just come in that morning at -1.4 percent on an annual basis. She states that imports subtract from GDP. I’m sure she knows that that’s not literally true; she’s simply explaining the arithmetic. She points that one of the factors was reduced investment in inventories and another was reduced government spending (yay!). She also notes that consumption and investment expenditures grew at a 3.7 percent annual rate and so the news isn’t that bad. I agree. Incidentally, I pointed this out to someone at pickleball who is almost spring loaded to criticize Biden but who also “gets” economics—and he got it.

15:50: The computer systems that are used to pay out unemployment insurance in many states are “quite antiquated.” “They run on software such as COBOL and FORTRAN.” Yes, really. FORTRAN was created in 1957, COBOL in 1959. That meant that it wasn’t easy to have a federal program giving federal unemployment benefits to people without giving way too much to many. She admits what a number of establishment economists admitted at the time, namely, that plussing up people’s state unemployment benefit with additional federal benefits of $600 per week gave millions of people more money in unemployment than they had earned while employed. Rouse concludes that “our unemployment system needs some investment.” True. And are many of the state governments doing that? She didn’t say.

18:00: Discussion of vaccines and positive externalities. Cost per life saved of $50K, assuming that the number of lives saved in the U.S. is one million. (I’m quite skeptical of her million lives saved number.) But the $50K is trivial relative to value of life. I haven’t checked her data.

21:00: Climate change.

22:00: Rouse implicitly attributes increase in wildfires to climate change.

23:20: Rouse says, using British data, that there’s not a big tradeoff between economic growth and using carbon taxes to reduce carbon usage.

24:00: Increased inequality.

27:20: Immigration can play an important role in expanding the labor force. Immigrants often are innovators. Also they are often complementary with U.S. labor, increasing productivity. The CEA estimates that due to Trump’s immigration policies and the pandemic, we have about one million fewer immigrants than we otherwise would have had.

28:30: Administration can make reforms without Congress by catching up on renewing green cards and ensuring an adequate number of H-2B visas and H1-B visas. To maintain our economic growth, we’re going to have to welcome immigrants. Good for her.

As I noted, Part III is tomorrow.

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