This result was surprising, sure to get lots of news coverage:
It shows that despite a rise in measured capital-labor ratios, labor-augmenting technical change in the US has been sufficiently rapid that effective
capital-labor ratios have actually fallen in the sectors and industries that account for the largest portion of the declining labor share in income since 1980
Paper is here. This paper, interestingly, has implications for the debate over Chamley-Judd vs. Picketty-Saez and optimal capital gains taxation. I think.
Elsewhere, Amy Finkelstein and colleagues find that Medicaid does not quite deliver dollar-for-dollar value. I am going to make a bold prediction that I never thought would be possible in my lifetime – by the time I am 60 years old, the U.S. will have moved to a system of basic-income guarantees for a large portion of the population. Now, I wouldn’t bet that it would actually replace things like Medicaid, which it ought to, but the basic income I see as on the way.
Our baseline estimates of Medicaid’s welfare benefit to recipients per dollar of government spending range from
about $0.2 to $0.4, depending on the framework, with at least two-fifths – and as much as four-fifths – of the value of Medicaid
coming from a transfer component, as opposed to its ability to move resources across states of the world. In addition, we estimate that
Medicaid generates a substantial transfer, of about $0.6 per dollar of government spending, to the providers of implicit insurance for
the low-income uninsured.
Our family visited the Kennedy Space Center on Friday. Were I more interested in blogging I would put together a series of posts on the space program, but I am lazy. A couple of things. First, we REALLY wanted to see the SpaceX launch, which was originally scheduled for Friday and then rescheduled as we were making the drive to the center. We were never told, and it was hard to find news releases, why the launch was rescheduled – the weather was good the day we were there. Second, go to the Space Center, despite any of your misgivings about governments and so on, the place is just awesome, the exhibits are well done, and there is a great mix of education and entertainment to be had, at least if you like this sort of thing. The Shuttle Atlantis display as well as the enormous Saturn V rocket display are pretty breathtaking. Third, the center does not do a great job telling visitors about the failures and risks of space travel (it pays a bit of attention to the latter, but not in a way that visitors really grasp – going to an exhibit makes it feel like space travel is routine). But I think something like 5% of all rocket launches explode or go of-track, it would be nice if people knew this.
Related, as you probably know, the SpaceX launch yesterday was a disaster – with the rocket exploding before the first-stage had completed its separation about 20 miles in the air. I am not going to look around too hard, but I am SURE that this explosion, on top of the most recent other two, will bring out of the woodwork the folks who believe that this event “proves” that it is a mistake to trust space missions to commercial interests who are doing space travel at cut-rate pricing and gutting the American space program – or something along those lines.
Fourth, and related to the above, no mention anywhere is made of the extreme cost overruns and mismanagement at NASA. Look, I am a space romantic, and love it, and when I step foot on the grounds I quickly forget my instincts. But our space program is famously inefficient – with the cost of the Shuttle program escalating to something like FOUR times as much as initially planned (close to $200 billion) and the details of what was understood prior to each shuttle explosion not really being clearly and honestly presented to us outsiders.
Fifth, if you walk around the Space Center, I urge you to pay attention on each exhibit to who was responsible for building the various components of each rocket, capsule, arm, suit, etc. You will find that the projects were scattered across the country – with, for example, the external fuel tank for the shuttles (the bright orange thing in the niddle) being made in New Orleans, with the solid rocket boosters made in Utah, etc. Now, I am sure that there are different places with different expertise and we should take advantage of comparative advantage, blah blah blah, but it is pretty evident that NASA contracts sprinkle patronage (that’s not the right word) pretty much throughout the country – a smart way to build and maintain support in all 50 states.
But, I am not in the mood to be cranky, if I were, I’d blog about Pope Francis seeking the advice of Naomi Klein on how to move forward with our economy and the environment. I read the entire encyclical in my car ride from Florida and was struck by how little it discussed that the very things that the “Church” seems to be worry about have been ameliorated by the very forces it is condemning. The document lacked subtlety and nuance – I am sure there is an explanation. But man oh man, if anything is going to drive me out of the Catholic Church for good, that kind of a document might be it.
Have a nice week and 4th of July. We are still allowed to celebrate the 4th of July, right?