Micro Vs. Macro

The drive of sclerotic growth is the major economical policy enquiry of our time. The iii large explanations are 1) We ran out of ideas (Gordon); 2) Deficient "demand," remediable past times to a greater extent than financial stimulus (Summers, say) 3); Death past times a M cuts of cronyist rule in addition to legal economical interference.

On the latter, nosotros by in addition to large select stories in addition to only about estimates for private markets, non easy-to-use  government-provided statistics. But in that location are lots of stories.

Here is ane day's Wall Street Journal reading spell waiting for a plane final Saturday:

1) Holman Jenkins,

... unbridled rent seeking.  That’s the term economists utilization for exercising regime ability to create private gains for political purposes. 

Channelling Jefferson,

Mr. Obama’s depository financial establishment policy dramatically consolidated the banking industry, which the regime routinely sues for billions of dollars, amongst the proceeds partly distributed to Democratic activist groups. 

His consumer-finance way manufactured imitation evidence of racism against wholesale auto lenders inwards gild to facilitate a billion-dollar shakedown.

 His airline policy, urged past times labor unions, led to a major-carrier oligopoly, amongst rising fares in addition to profits. 

His FDA is seeking to extinguish pocket-sized e-cigarette makers for the practice goodness of Big Tobacco in addition to Big Pharma (whose smoking-cessation franchise is threatened past times inexpensive in addition to relatively prophylactic electronic cigarettes). 

His National Labor Relations Board, past times undermining the ability of independent franchisees, is working to cartelize the fast-food manufacture for the practice goodness of organized labor.

Summing up,

We could larn on. Mr. Obama’s ain Council of Economic Advisers complains nearly the increasing cartelization of the United States of America of America economy—as if this were non a natural output of regulation. In a much-noted Harvard Business Review piece this spring, James Bessen, an economist, lawyer in addition to software entrepreneur, cites increased “political rent seeking” to explicate the puzzle of rising corporate profits inwards the absence of labor creation in addition to economical growth.

The truth is, regime playing neutral arbiter over the private economic scheme doesn’t attain rents. H5N1 stable in addition to predictable regulatory organisation produces exclusively mingy or non-existent rents.

2) Uber cast activity buffet

Federal jurist Edward Chen on Th rejected a $100 ane M m village inwards a cast activity alleging that Uber misclassified drivers equally independent contractors. That’s a large pot of cash, but the jurist says the ride-hailing companionship tin hold upwardly raided for billions more....Judge Chen complained, however, that the village required cast members to drib all employment-related claims (e.g., minimum wage, residuum in addition to repast breaks in addition to workers’ compensation) ...he village would select pre-empted at to the lowest degree xv lawsuits for employment-related claims equally good equally cases “before diverse administrative bodies such equally the NLRB.”...the village would select scotched lawsuits brought nether California’s Private Attorneys General Act—known amid businesses equally the “bounty hunter law”—that lets private attorneys litigate labor, security in addition to wellness code violations on behalf of the state. California pays the lawyers’ fees in addition to keeps 75% of the bounty. The state’s Labor & Workforce Development Agency carped that the statutory penalties against Uber could plough over off $1 billion.  

Uber brings flexible occupation to thousands, in addition to dramatically ameliorate in addition to cheaper rides to consumers in addition to businesses. Whatever y'all intend of contractors vs. employees, zippo inwards this improves productivity in addition to economical growth, or encourages the needed massive investment towards self-driving ubers.

3) You don't demand a dentist to fill upwardly a cavity Whether (cheaper, less licensed) dental therapists volition hold upwardly allowed to supply basic services peculiarly inwards pitiful areas where in that location are no dentists.

4) How Obama’s FDA Keeps Generic Drugs Off the Market

 One of the biggest factors fueling the angst over drug prices inwards the United States of America of America is that only about older medicines that should hold upwardly sold cheaply equally generics are soundless priced real high, oft owing to a dwindling number of generic competitors ..in recent years the Food in addition to Drug Administration has imposed on generic firms many of the same costly requirements that the way applies to branded-drug makers.  

In 2003...we estimated that it cost less than $1 ane M m for a theater to file a generic-drug application. ...Today, filing a generic application requires an average of nearly $5 ane M m in addition to tin cost equally much equally $15 million.... 

For generics filed inwards 2009, the median review fourth dimension exceeds iii years. Yet generics launched inwards 2015 took nearly 4 years for the FDA to approve, since less than 2% of applications were approved on their showtime submission.    

H5N1 novel FDA draft regulation...would forcefulness the generics to clutter their drug labels amongst defensive advisories to avoid “failure to warn” lawsuits. Legal fees stemming from the rule would add together over $5 billion to annual health-care costs, rising to $8.6 billion past times 2024, ...

And this is only ane morning's reading of ane paper's sentiment department spell sipping java at the airport. Even the New York Times is waking upwardly to the apres-Obama regulatory deluge.

As these stories build clear, the job is non benevolent but ham-handed interventionism. The problem, much tougher, is best described equally "cronyism." H5N1 veneer of populace role stifles markets, to drive profits to connected parties inwards render for political support.

Can nosotros actually screw upwardly every unmarried marketplace but larn into all upwardly amongst "demand?" The "ideas" in addition to "stimulus" approaches presume everything else inwards the economic scheme is working only fine. Is investment actually deadening exclusively because in that location are, fundamentally, only no skilful ideas to invest inwards whatever more?

The deeper economical number is whether "macro" in addition to "growth" outcomes actually tin hold upwardly separated from "micro" distortions inwards each market.