Four Areas of the Economy – Four Views on Them

What American economic segments have been analyzed over the past four months?

One thing dragging us down over the past several years is tariffs.  About that, David Wallace-Wells asked, in the New York Times on May 22^nd, “Can Biden Actually Win This Trade War?”  I mentioned this massive increase, which was actually “a unilateral quadrupling” on Chinese electric vehicle duties, on a post about EV’s.  It seemed destructive for a president who seemed to badly want Americans to get away from gasoline and diesel cars, and, per the author here, “it’s not just EVs.  Five years after blasting (then-President Donald) Trump for imposing tariffs on Chinese exports, Biden raised them – on aluminum, steel, lithium batteries, solar cells and semiconductors, among other products.”  The damage to other environmentally favorable efforts is also great, as China’s production shares of related items include “84 percent of the world’s solar modules… 89 percent of the world's solar cells… 97 percent of its solar wafers and ingots, 86 percent each of its polysilicon and battery cells, 87 percent of its battery cathodes, 96 percent of its battery anodes, 91 percent of its battery electrodes and 85 percent of its battery separators.”  Although various “Democratic policymakers” say we should “avoid growing entirely dependent on China for clean energy,” “industrial policy isn’t guaranteed to work,” and “Trump’s imposition of tariffs on Chinese solar-panel exports in 2018 may have meaningfully slowed American renewable rollout.”  The extra charges have real potential to continue doing that.

Something around for many decades and worsening every year gets concern of various strengths every so often, but there are reasons, per Paul Krugman on June 6^th in the New York Times, “Why You Shouldn’t Obsess About the National Debt.”  Although, per usdebtclock.org, it is now almost $35 trillion, or over $100,000 per citizen, Krugman calls it “a lot less scary than many imagine if you put it in historical and international context,” and making it “sustainable wouldn’t be at all hard in terms of the straight economics; it’s almost entirely a political problem.”  As a share of GDP, the author said “it’s roughly the same as it was at the end of World War II,” and is now “considerably lower” than Japan’s.  We could “stabilize debt as a percentage of G.D.P. for the next 30 years” by raising taxes or reducing spending only 2.1%.  So, the money we owe is real, but it may be dormant instead of a looming threat.

Do we have “A towering real estate crisis” (Andrew Ross Sorkin, The New York Times DealBook, June 12^th)?  “The $2.4 trillion office building sector” has been hit by “sky-high interest rates and a pandemic-induced shift to remote work,” as “tenants are reducing or vacating office space to landlords at a record clip.”  As a result, “developers are looking to repurpose empty offices,” although “conversions are expensive, and not all buildings can be easily retrofitted.”  This problem may be worse than it seems, as the pendulum I have documented which swings back and forth between businesses favoring remote and in-office work is approaching the latter maximum, so it will be almost one complete cycle before office demand increases substantially, if it does at all.  Accordingly, a surplus of commercial space will seem to this generation like a permanent problem, so it needs permanent solutions.

I’m used to issuing the AJSN and basing my views using information I trust, so was not happy to see “Reliability of U.S. Economic Data Is in Jeopardy, Study Finds” (Ben Casselman, The New York Times, July 9^th).  Per an American Statistical Association report, while “government statistics are reliable right now,” “that could soon change,” due to “shrinking budgets, falling survey response rates and the potential for political interference.”  Responses to the Current Population Survey, one of two providing the foundation for “the unemployment rate and other labor force statistics,” have dropped from “nearly 90 percent” ten years ago to “about 70 percent in recent months,” and those to “other government surveys” are down also.  As for the third problem, “there are few legal provisions ensuring that the statistical agencies can operate independently,” and an author of the report called for ““legislation to make this issue of professional autonomy statutory.””  We will see, and weakness here will depend on the result of the upcoming presidential election.  The same will affect the previous three items as well – along with a great deal more.