Real World Economics: Elections have consequences; here are some

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Edward Lotterman

In 63 days we will vote in the most momentous presidential elections of most of our lifetimes. The underlying political fundamentals seem clear to many on both sides, and many voters likely have already made up their minds.

But, for those still weighing the options, a structured review of the two candidates’ economic proposals may help. That the economy is the key issue has been ballyhooed for months. Both candidates have advocated actions they would take.

But regardless of how attractive any of these proposals seem on the surface, voters should consider the following factors:

• Legislative feasibility — is there any chance of passage of any of these ideas by our dysfunctional Congress?

• Political divisiveness — how sharply is our nation split? Does any powerful bloc, even if small, oppose any measure? Does any gain advantage inordinately?

• Administrative lag — once passed, how long would it take to put the measures into operation? How long until voters see any real effects of their choice?

• Adjustment costs — how would households and businesses have to change their daily practices in response?

• Transaction costs — what new, perhaps unseen costs would have to be borne by someone because of the measure? For taxes, would this be the “excess burden” of cost to society beyond the tax paid.

• Fairness or justice — would the change make our divided society more just or more unjust?

• Financial market reaction — would adopting or implementing the new measure roil financial markets in our nation or globally?

Now, let’s start with a simple example, the exemption of service workers’ tips from income taxation, and weigh it against the above criteria. Given that both major party candidates support this, let’s assume congressional passage would be easy. Divisiveness would be near zero. Implementing the change would entail relatively small changes to tax regulations and forms. Employers and taxpayers could rely on updates to their payroll or tax return preparation software. Financial markets would not blink an eye.

Transaction costs, however, would be large. Creating a separate class of effectively tax-exempt earners would create large incentives to find ways to transform wages into tips. The current plague of payment device screens suggesting large tips in bakeries or for oil changes would burgeon. The IRS would struggle to stay ahead, and rich Wall Street brokers could somehow style their fees as tip income. Such distortions would impose “dead weight costs” on the efficiency of the economy, unperceived by the general public, but real nevertheless.

Now let’s weigh Democratic nominee Kamala Harris’ proposal to raise the child tax credit in the personal income tax from the current $2,000 to $3,600. This is popular with the public and could pass the House but perhaps not the Senate. As with the tip income exclusion, implementation would be easy. It is not divisive and would have little lag in seeing real effects. Household budgets would adjust smoothly to the increased net take-home pay.

There would be little drag on the economy. More importantly, it would move in the direction of returning individual income taxes to where they were 70 years ago, one that only a minority of households would pay. Contrary to 2012 GOP candidate Mitt Romney’s fretting about “only 47 percent of Americans paying taxes,” that number was even lower in much of the past. The $600 exemption per household member that prevailed for years meant that a single earner with a spouse and three children seldom paid tax. A large proportion of farmers fell into this group as well as workers earning median wages in manufacturing. There would be little change in excess burden. Most people would see it as just and financial markets would ignore it.

Those two are easy. But larger and more key proposals are not.

Harris has put anti-price-gouging laws at the center of her platform. Most economists, including me, think this one of the stupidest ideas to come down the pike in decades. However, we also know that thinking this is somehow “communist” is silly. Rather, it typifies the mercantilism that economics pioneer Adam Smith railed against and which continues to scourge the economies of many poor countries.

First, the measure is politically divisive. Odds of getting it through any Congress after this election approach zero. Looking at past history, including World War II, simply writing rules to get anywhere near accomplishing the anti-gouging goal without costly economic distortions would take months. A large bureaucracy would be needed to investigate violations, so it would require problematic ongoing budget appropriations.

This would be mirrored in the private sector as companies set up divisions to manage compliance. Time and money would be spent on litigation. Then, assuming all these pre-implementation hurdles are surmounted, there are after-effect unintended consequences that would hurt the consuming public. Shortages of goods would develop along with black markets. Opinions on fairness of justice would be sharply divided. And it is all intended to solve a problem that is disappearing. Annualized increase in Consumer Price Index inflation over the last quarter is 1.7% for all purchases and 1.3% for food.

Again, other considerations aside, the key drawback of an anti-gouging law would be the difficulty of really getting it operational before the end of Harris’ term in office. The measure is popular in polls of the general population, but experience shows opinions would quickly diverge once in operation. All this is largely moot because the chances of passage and enactment are low indeed.

Now let’s look at one of Republican Donald Trump’s signature ideas. About the only positive thing to say about Harris’ anti-gouging plan is that it isn’t as nutty as Trump’s proposal to impose 10% tariffs on all imports and 60% on those from China. The revenue, he suggests, might even be used for a complete substitution of personal income taxes.

Chances of Trump’s proposed tariffs actually getting passed through any Congress, even one with GOP majorities in both houses, are even lower than Harris’ pet measure. In his first term, Trump was able to impose some tariffs using loopholes in overall trade laws created by Democrats largely to force GOP presidents to limit imports from Japan. But Trump’s wholesale uprooting of 90 years of trade policies and institutions could not be done by executive order.

Some in the public do support his tariff boosts in the abstract. But as realization of the magnitude of impacts becomes apparent, opposition would grow. As with the Smoot-Hawley tariff a century ago, other nations would retaliate. Inflation would rise, the world economy would shrink.

Adjustment costs would be huge. U.S. export sectors, especially agriculture, medical technology, heavy ag and construction equipment and airplanes would be hit hard. Even if domestic production of raw materials and finished goods currently imported had a miraculous revival, prices of nearly all merchandise would soar. Yes, the Federal Reserve could step in, assuming economist Milton Friedman’s argument that a central bank can smother price rises with extremely tight money — but the cost would be extreme, a 1930s-style fall in output and rise in unemployment. The poor would suffer more than the rich.

And then there are the side-on impacts: Financial markets would fear this measure as Dracula fears sunlight and the Holy Cross. Big money donors to GOP candidates would dry up if the measure were even introduced. The GOP would quickly come to heel and legislation would be strangled in the Senate and perhaps the House. But markets around the world would remain jittery.

This gets us about halfway through the Trump and Harris agendas. Look for more next week.

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St. Paul economist and writer Edward Lotterman can be reached at stpaul@edlotterman.com.

Skywatch: Summer stars hanging in there with Saturn on the rise

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This month, summer officially ends, but plenty of summer constellations are still playing on stage in our nightly celestial theater. As a bonus, sunsets are earlier, so your stargazing time is expanding! The autumnal equinox this year is on Sept. 22 at 12:44 Universal time. That’s when the sun shines directly over the Earth’s equator. Days and nights are nearly equal in length.

We have two evening planets available all this month. The bright cloud-covered planet Venus has now officially become an “evening star,” appearing briefly in the low southwest sky after evening twilight before it sets. On Sept. 4, 5 and 6, the new crescent moon will be hanging around the planet named after the Roman goddess of love.

(Mike Lynch)

The best early-evening planet available this month, though, is Saturn. On Sept. 7, Saturn reaches what’s known as opposition when Saturn and  Earth are at their minimum distance from each other this year, around 805 million miles. Believe it or not, that’s considered close for Saturn. To the naked eye, Saturn will appear as a moderately bright star barely above the east horizon after evening twilight. It’s easy to spot since it’ll be the brightest star-like object in that part of the sky. As tempting as it is to train your telescope on Saturn early in the evening, you’re better off waiting until at least 10 or 11 p.m. to let it get higher in the sky. You’ll get a much clearer view. When a planet or any other telescope target is close to the horizon, the thicker layer of Earth’s atmosphere has a significant blurring effect.

I hesitate to bring this up, but maybe, just maybe, we’ll get to see a comet with the naked eye the last few early mornings of September. It’s Comet Tsuchinshan-ATLAS, which was discovered early last year. No one really knows for sure how bright it’ll be. It may even disintegrate by then as it gets closer to the sun. If it all works out, the comet will appear just above the east-southeastern horizon in the morning twilight, about 45 minutes before sunrise. Keep up with your Sky Guide app for all the latest on Tsuchinshan-ATLAS.

Summer constellations still dominate much of the sky. The asterism known as the summer triangle is nearly overhead in the early evening. It comprises the three brightest stars you can see near the zenith. It’s a great tool to help you navigate that part of the sky because the three stars — Vega, Altair, and Deneb — are all the brightest stars in their respective constellations, Lyra the Harp, Aquila the Eagle, and Cygnus the Swan, otherwise known as the Northern Cross. From those three constellations, you can branch out with your eyes to find other surroundings, fainter constellations like the delightful Delphinus the Dolphin, and several others.

In the low south-southwest sky are the classic constellations Scorpius the Scorpion and Sagittarius the Archer. Scorpius actually looks like a scorpion. Sagittarius is also known as the “Little Teapot” because that’s what it really resembles.

If you’re stargazing in the dark countryside, you’ll see a milky band of ghostly light that bisects the sky, running in an arc from the low southern sky up to the zenith and then down to the northern horizon. That’s the Milky Way band, made up of the combined light of the billions and billions of stars that make up the plane, or the thickest part, of our own Milky Way Galaxy. The center of our home galaxy is in the direction of the spout of the Sagittarius teapot. If it weren’t for opaque interstellar gas and dust, that part of the Milky Way band would be much brighter. If you want to treat yourself, lie back in a reclining lawn chair with binoculars and slowly pan the entire Milky Way band from horizon to horizon. You’ll love it!

The Big Dipper is hanging by its handle in the northwest sky, outlining the derrière and tail of the constellation Ursa Major, the Great Bear. The fainter Little Dipper, also known as Ursa Minor, is standing on its handle, and at the end of the handle is Polaris, a moderately bright star also known as the North Star.

In the northeast, look just below the bright W that outlines Cassiopeia the Queen, and you’ll see the first of the autumn constellations, Pegasus the Winged Horse. Just look for the “Great Square,” or the diamond of four brighter stars rising in the east that outline the torso of the flying horse. Andromeda and Aries are also on the rise in the early evening.

Enjoy the longer nights of September stargazing! They’re magical!

Mike Lynch is an amateur astronomer and retired broadcast meteorologist for WCCO Radio in Minneapolis/St. Paul. He is the author of “Stars: a Month by Month Tour of the Constellations,” published by Adventure Publications and available at bookstores and adventurepublications.net. Mike is available for private star parties. You can contact him at mikewlynch@comcast.net.

 

Literary pick for Sept. 1

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William Cope Moyers shared the story of how he recovered from near-fatal drug and alcohol addiction in “Broken,” his bestselling 2006 book. He told of being hauled out of a Harlem crack house by his father, journalist and former White House Press Secretary Bill Moyers.

(Courtesy of Hazelden Publishing)

William Moyers’ new book, “Broken Open,” is something of a sequel subtitled “What painkillers taught me about life and recovery.” It comes at a time when it’s critically needed. The CDC reports that from 1999 to 2021, nearly 280,000 people died in the U.S. from overdoses involving prescription opioids.

After a stay at Hazelden Betty Ford Foundation in Center City, Moyers took the long journey to recovery with the help of the 12-step program and the Alcoholics Anonymous community. He joined the foundation in 1996 as a policy analyst and is now the organization’s vice president of public affairs and community relations. He became the face of Hazelden Betty Ford treatment facilities, traveling everywhere speaking about recovery in large venues and more intimate meetings.

Moyers, who lives in St. Paul, had been sober for two decades when he had an affair and his marriage was ending, leaving him to parent two teenage sons and a preteen daughter.

“My home life was crumbling. I was exhausted and unable to say no,” he writes. “I was successful by some measures, but much of my life — the part people didn’t see and I didn’t share — was far from uplifting or inspiring. People sought and celebrated me as an example of the peace and joy that come from healthy sobriety, but in some ways, I felt like an imposter. My success was skin-deep, my happiness incomplete.”

In 2012 Moyers went to the dentist for major work on his mouth and was given pain pills that he immediately loved so much he lied to get prescriptions filled by different doctors. He never took the right amount, swallowing multiple pills instead of the one prescribed. As his “fierce” cravings increased, he continued to work and didn’t share his secret addiction with anyone. Finally, a specialist put him on Suboxone. The drug took away his craving and he wanted to share his experience with the world. At a big meeting attended by his bosses and others important in the recovery field, he tried to tell his large audience about how the drug took away his cravings. But, as articulate as he is, he couldn’t find the right words. He kept saying he had a “run-in” with pills, minimizing his problem.

There was backlash. Some in the AA community felt betrayed, believing that taking meds was “a crutch,” and “a relapse is a relapse.” His bosses and colleagues asked why he hadn’t come to them.

Throughout his sober life, Moyers had been an adherent of abstinence-based recovery. Now he asked himself questions. Was he abstaining when he took a drug to calm opioid cravings? What does “relapse” mean? Was it necessary for him to go “back to square one” as some AA followers suggested? He struggled to articulate how to integrate the ways he successfully faced drug/alcohol addiction with a different method of recovery for pain pill addiction.

Moyers answers some of these questions near the end of his new book:

“Today, I can happily attest to a pair of truths that once seemed impossible to reconcile: the program and fellowship of Alcoholics Anonymous saved me, and so did Suboxone. AA provided a place of safety and acceptance, and a path to follow … the Twelve Steps helped me understand how to be human and whole again after cocaine and alcohol had hollowed me out and ground me into pieces. Two decades later, Suboxone gave me a new kind of freedom. Opioids had invaded and overpowered what I thought was a secure sobriety and trapped me in a cycle of craving and chaos. Dr. Frenz’s prescription gave me clarity and courage enough to reclaim my recovery and begin rebuilding my life with renewed honesty and passion.”

“Broken Open” is published by Hazlelden Publishing in conjunction with the 75th anniversary of Hazelden Betty Ford Foundation. Moyers will discuss his book at 6 p.m. Thursday, Sept. 5, at Next Chapter Booksellers, 38 S. Snelling Ave., St. Paul.

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Artist profile: Budding St. Paul playwright saw own choreopoem for Black teens produced this summer

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At 15 years old, Junie Edwards put pen to paper and wrote a play centering mental health in the Black teenage experience.

A year later, Edwards pitched it to Pillsbury House and Theatre in Minneapolis and, after two years of persistence, the play was developed at Pillsbury.

St. Paul playwright Junie Edwards (Courtesy of Erica Morrow)

A Pick For The Hair Of Black Kids Who Don’t Wanna Be Gangstaz” was staged July 18-21 at Pillsbury. It’s a choreopoem that tells the story of six teenage poets who, in taking a break from rehearsing for a performance, share their deepest secrets or worst fears with one another. In doing so, they bond and process trauma together.

Edwards’ imagining of the play came from their own lived experiences.

“It’s an unapologetically Black story,” said Edwards, a recent graduate of the St. Paul Conservatory for the Performing Arts.

“Writing (the characters) wasn’t hard because all their stories are either something that I’ve been through, something that I’ve seen or something that I would have gone through if I had stayed in a cycle of trauma,” Edwards said.

What’s a choreopoem?

Choreopoem, a play that adds elements of music, poetry, lighting and other forms of active expression, originates from the African-American community, according to the National Museum of African American History and Culture.

Director Lester Mayers said “A Pick For The Hair Of Black Kids Who Don’t Wanna Be Gangstaz” is believed to be the first produced choreopoem by a Black teenager. Mayers said smaller scaled performances like this often do not receive the funding they deserve.

“I am sorry and sad to say that programs all across this world rarely include spaces for actors of this demographic and generation to have a chance to tell their stories, so kudos to Pillsbury for leading that conversation but also for showing people that it can be done,” Mayers said.

Highlighting mental health

Subjects the show covers include physical abuse, parental negligence and fear of the police along with other topics that pertain to both Black and individual experiences.

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Edwards said growing up, their father was not a large part of their life. As a child Edwards had a lot of energy, always wanted to try new things and was uniquely expressive. It was Edwards’ mother who saw their talent, who saw them as an artist, they said. She began putting Edwards in art programs and schools. Though Edwards wanted to be an actor, their mother believed they were a powerful writer.

“She’s stepped up and shown me that love doesn’t have to come from two parents, love can be from one and love can be unconditional,” Edwards said. “That’s what she’s been trying to show me, as I’ve been growing into a young adult.

Working collaboratively

When Edwards initially asked Pillsbury Theater’s artistic producing director Signe Harriday if they could get their play on the theater’s stage, Edwards was offered instead with an opportunity to host a workshop for the performance. Through the workshop, Edwards got connected to Brooklyn-born creative artist Mayers, who would direct the performance.

Lester Mayers, director of “A Pick For The Hair Of Black Kids Who Don’t Wanna Be Gangstaz.” (Courtesy of Lester Mayers)

“I define myself as a storyteller who goes where the story is,” Mayers said.

During the workshop, the actors asked, “When are we gonna do this again?” and a fire was lit in Edwards to move their work into production. Edwards continued to refine their writing with Mayers, submitted the show to theaters across Minnesota and the two became a team.

“Junie’s passionate about the work as I am passionate about the work, and when you get two passionate cooks in the kitchen, every ingredient is life or death,” Mayers said.

Working collaboratively, the two were able to mesh their individual styles together and listen intently to each other’s feedback. Edwards said that working with Mayers allowed them to let go of their work, and trust Mayers’ creative direction. They said Mayers would add nuance that made their work feel more powerful than it did before and gave them the grace to experiment.

“For me it was a liberating experience,” Mayers said. “I like when people trust me, and I like when people are not afraid to challenge me. Junie did both of those things.”

The inspiration

Edwards’ choreopoem is inspired by Ntozake Shange’s Broadway musical, “For Colored Girls Who Have Considered Suicide/When The Rainbow Is Enuf.”

Edwards believes that a long title is poetic, and though their mother was concerned about whether or not the title could be abbreviated, Edwards did not share the sentiment.

“Every single word in the title just means something, and it’s powerful in that sense,” Edwards said.

Edwards and Mayers designed the experience to be a “Black space,” one that provided both the actors and audience with pockets of healing. Interludes like jump-roping, sporadic beat making and laughter were integrated to allow people to breathe and process, as they watched the actors talk through trauma. During the show, hums could be heard by audience members when a line resonated with them.

“There are many things in this script that are so Black, and it’s like that on purpose,” Edwards said.

Ensuring that the actors were actually teenagers was a necessity for Edwards. They said that too often when teenagers are represented in the media, they’re portrayed as social media obsessed, lacking in layers with little emotional presence and played by adult actors. They also expressed that writers rooms for teenage shows often exclude the Black narrative, or are written by non-Black voices.

“Our stories aren’t told, and if they are, they’re not told correctly,” Edwards said.

What the future holds

Both Edwards and Mayers have left Minnesota for New York. Edwards will be studying playwriting at Marymount Manhattan College and Mayers will teach at Ramapo College of Contemporary Arts while continuing to pursue creative endeavors (see the latest at lestermayers.com/upcomingz).

Edwards plans to continue writing plays that will grow with them. As this choreopoem centers teenagers, they imagine that as they age their shows will surround topics that relate to their stage of life.

“Though our voice is powerful and we’re able to use it, the power is taken away from us when people don’t listen,” Edwards said. “So how do I make people listen? How do I try to encourage people to open up their hearts?”

For Edwards, who describes themselves as “a playwright who creates a healing space for African-Americans in their writing,” this is the first of many productions they have envisioned will do just that.

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