The full Planet Money debate on infrastructure between Robert Frank and Russ Roberts has been posted as the latest EconTalk. Even going in with the expectation that I was going to disagree with Roberts more than I would agree with him, I was shocked by the weakness of his arguments. He attacked straw men (we shouldn’t spend more money on infrastructure because San Francisco doesn’t need a second Golden Gate Bridge?) and didn’t really answer Frank’s most effective points. At one point he agreed that spending money to repair bridges and roads is worthwhile, but he also said that the federal government shouldn’t spend money to fund these projects because if they would have been funded already if they were really worthwhile projects. And the most persuasive Frank point, that our borrowing costs are as low as they will ever be and that spending money today can save money in the future (because repairing an aging bridge might cost us $6 million today, but repairing a collapsed bridge 20 years from now might cost $30 billion) basically went unchallenged. I’m scoring this one for Frank; more from him on road repair here.
Tim Duy comments on this Josh Lehner piece comparing the current recovery to past recoveries from financial crises. Duy notes that the work of Kenneth Rogoff and Carmen Reinhart on the difficulty of post-financial crisis recovery has been used as an excuse for inaction by policymakers when it should have been seen as a demand for more forceful action. I think this gets it exactly right, and I also think that the appeal of the structural unemployment theory is that it offers a similar excuse. It allows policymakers to say that they did everything that could be done, and the rest is the fault of the nature of the crisis or workers with mismatched skills.
Laura D’Andrea Tyson writes about income inequality and educational opportunity. The key part: “The United States is caught in a vicious cycle largely of its own making. Rising income inequality is breeding more inequality in educational opportunity, which results in greater inequality in educational attainment. That, in turn, undermines the intergenerational mobility upon which Americans have always prided themselves and perpetuates income inequality from generation to generation. This dynamic all but guarantees a permanent underclass.”