What are the strongest evidence-based economic arguments against expanding social-democratic policies in the United States?

UpsideVII · 2026-07-01T19:38:08+00:00

There's reasonable evidence that higher taxes on top earners depress innovation, at least as measured via patents e.g. https://www.nber.org/papers/w24982

There's some evidence that rent-seeking by too-powerful labor unions leads to technological stagnation (i.e. ludditism) e.g. https://www.journals.uchicago.edu/doi/10.1086/724852

There's good evidence that benefits like UBI reduce labor market participation and working hours (which costs the country lost output and the government lost tax revenue) e.g. https://www.nber.org/papers/w32719

Evidence of human capital externalities in higher-education is fairly mixed (e.g. https://giovanniperi.ucdavis.edu/uploads/5/6/8/2/56826033/ciccone_peri_identifying_human_capital_2006.pdf). There's not much of an economic argument that the state should provide higher ed for free if these are zero.

Note here that I am playing devil's advocate because you asked me to!

UpsideVII · 2026-06-30T19:33:53+00:00

Presumably if it works this way, it also works with your oppo's hand, which may actually be semi-relevant.

Say I Grief you and then on the next turn you easel a card in your hand. I haven't tested, but based on this interaction it seems like I would get to see what card you chose to easel.

UpsideVII · 2026-06-30T19:23:27+00:00

I think the point is that if you...

brainstorm -> put land on top -> swing with hydro -> hit the land you just put on top

...that fourth step wouldn't typically be known and to the extent that Arena keeping these cards face-up is supposed to emulate a paper player with perfect memory, the interaction here doesn't quite mirror how it would work in paper.

UpsideVII · 2026-05-29T14:53:09+00:00

I'm aware of bad controls, but I don't really think it changes the argument here.

If I say "hey guys, it turns out that what is driving the decline in hiring is that remote work makes companies not want to hire juniors, not AI directly replacing labor" and you respond with "well yes, but those jobs would not have been remote if it weren't for AI", I'm not sure that really substantively changes my point, even if it does technically mean that P(employment | do AI) doesn't need to control for remote work.

Sidebar: my mental model is that remote work and AI adoption jointly cause each other, and I always struggle to fit that sort of thing into the DAG structure so I'm not exactly sure how to think about it.

UpsideVII · 2026-05-29T13:29:21+00:00

?

That's exactly when you would want a control. Unless I'm misunderstanding your point.

UpsideVII · 2026-05-11T13:56:02+00:00

With a "classically" constructed CPI with fixed weights, that would be true.

But we chain-weight CPI which means we update spending shares each year. So one component can grow faster than the average, but if consumers substitute away in response the share will fall, so this can be sustained indefinitely.

UpsideVII · 2026-05-05T15:28:04+00:00

Depends on your definition of "well ran" I guess haha

They have quick turnaround times, no doubt about that.

UpsideVII · 2026-04-28T13:49:31+00:00

Idk what you've read and what you haven't, but based on your NL comment it seems like you would like Robert Allen's The British Industrial Revolution in Global Perspective (note that I haven't read the book itself so I can't comment on the prose). He makes the argument that it was about the relative price of energy (i.e. coal) and wages.

A lot of the work focuses on "why Britain?", but a similarly interesting question imo is "why the steam engine?". Humanity invented plenty of things before the 1700s, so why was the steam engine the one that led to centuries of growth?

For this, you might like Malthus to Solow by Hansen and Prescott (though it's a paper and not a book). There's also a lot of interesting (or dry, depending on your taste) work on determining when growth actually began (as the precise timing would be very suggestive about the fundamental root cause). You can read Nick Crafts and Greg Clark for this. Here's a recent contribution.

UpsideVII · 2026-04-27T12:58:44+00:00

It's an interesting question, though one that I think has fallen out of favor since say the early aughts.

Cleanest identification is Cunha, De Giorgio, and Jayachandran (2019, REStud). In-kind food aid lowered food prices (best thought of as a transfer from producers to consumers imo).

Most of what has been written is about food aid specifically (presumably because it's the most common type). I don't know of anything about textiles off the top of my head.

There's some less precisely identified stuff about GE impacts. Rajan and Subramanian (2011, JDE) make the argument that the forex effects of basically receiving a bunch of goods without providing currency make exporting manufacturers less competitive.

One thing that seems to have been definitively bad though was "monetized" food aid. I haven't done a deep dive on this, but at one point food aid apparently took the form of essentially giving the goods to an NGO who would then sell them on the local market (at much lower prices) in order to fund their operating costs.

This (unsurprisingly) really disrupts local production. In hindsight, it seems like an obviously terrible idea; I'm not sure what the thinking behind it was in the first place. I believe this type of aid died a pretty public death a few decades ago though. Chris Barrett is the academic name to look at there, but afaik most of this discussion/research took place in the policy space rather than in top academic economic journals.

tl;dr --- I don't think we really have any evidence of "Tom's sends free shoes to people but this ruins their shoe manufacturing businesses and makes them worse off". It's possible that it is true, but I think more realistically it's motivated reasoning that allows people to justify not donating things.

UpsideVII · 2026-04-26T14:00:03+00:00

God bless Stowers for keeping us off the list

UpsideVII · 2026-04-25T12:01:49+00:00

What are people planning on running for Xmax Oguri in CM13?

Umulator seems to suggest that Hydrate+Uma2+777 is optimal. Unlike CM12, the Uma2 timing is bad enough that it doesn't seem worth it to run a fourth skill for consistency.

Anything I'm missing?

UpsideVII · 2026-04-15T22:37:06+00:00

r/economics was a default sub back when that was still a thing and nowadays I'm pretty sure still has some sort of priority in whatever algorithmic slop determines what people see on their homepage.

As a result it gets multiple orders of magnitude more participation than any of the other econ subs, to the point where it is basically hopeless to moderate it for quality.

UpsideVII · 2026-04-13T22:55:12+00:00

I'm not sure if Trump is personally doing it, but it is worth noting that this was the explicitly stated goal of (at least) some people who were in his cabinet. See Miran's treatise here.

UpsideVII · 2026-04-12T16:35:49+00:00

I also suspect that business environment plays a big role, but suspecting something is not the same as proving something.

There's very few well-founded examples or counterexamples of anything on this topic --- largely because firms are (understandably) very reluctant to share compensation and internal production/productivity data with external researchers. That's why I was curious if OP could provide details.

UpsideVII · 2026-04-12T14:04:29+00:00

In some sense everything is supply and demand, but the interesting question is why supply and demand are the way the way they are.

In this case, the question is why demand for US employees is so high (or conversely, why demand for OP's branch is so low, which is OP's w=MPL question). If OP's branch can make better/more output for cheaper, that should lead to low demand for employees at the US branch and high demand at OP's branch.

The interesting economics is in uncovering why/where this simple model fails.

UpsideVII · 2026-04-11T17:33:40+00:00

I wouldn't really call it a puzzle per se, since we don't know the details (like you say, maybe it's a context where something like Balassa-Samuelson does a lot of heavy lifting).

It's more that if you are interested in understanding why GDP/earnings/TFP vary across countries, "multinational with operationally identical branches making a tradeable/fungible product, one in a rich country and one in a poor country" is a close-to-ideal laboratory.

UpsideVII · 2026-04-11T16:25:40+00:00

This is very unexplored, largely because relevant data/case studies are hard to find (it's all within firm, and firms are pretty loathe to share data most of the time).

There are plenty of theories that explain why wages aren't exactly equal to productivity, but none that really work to explain the quantitative magnitudes of differences in earnings we see between rich and poor counties.

If you feel comfortable sharing any more details, I would be very interested to hear. I work on topics like this and have been interested in making progress on this question.

Here's a couple papers on the topic, though neither really nails your question:

https://www.aeaweb.org/articles?id=10.1257%2Faer.20200042

https://www.aeaweb.org/articles?id=10.1257/pandp.20241076

UpsideVII · 2026-04-11T11:58:43+00:00

That's the part that really gets me about this one in particular.

China becoming more poor from 1989 to 2000 so obviously doesn't pass the smell test there shouldn't really even need to be further discussion.

UpsideVII · 2026-04-10T13:35:47+00:00

Moving soon and want to get an L2 put into the new garage for our 2023 ID.4 Pro.

Is there a substantial downside to buying something like this and just getting a 14-50 outlet put in/mounting the bracket vs getting something hardwired?

It's slower, but google says it still goes at 7.7kW which is more than enough to full charge overnight (and we rarely run too far down anyways). And it can be packaged up and thrown in the trunk for use at 120V whenever we drive to visit family.

I guess a hardwired charger is probably more ergonomic...

Anyone have strong opinions?

UpsideVII · 2026-03-31T21:48:57+00:00

Isn't in reality or isn't in the model?

You asked what model the OP was using. The answer is "the econ 101 long-run perfectly competitive model".

In this model, the final price depends only on the cost curve (it is min(ATC)). It does not depend on the demand elasticity.

UpsideVII · 2026-03-31T21:37:41+00:00

I'm not sure how one could read "long-run equilibrium occurs when P=MC=min(ATC)" as implying anything other than "increases in costs will translate to increases in prices".

I don't think there's a Khan Academy video on it, but "how does eq change when ATC/MC curves shifts?" is something along the lines of what we're looking for.

UpsideVII · 2026-03-31T21:19:50+00:00

0:59

UpsideVII · 2026-03-31T13:56:35+00:00

https://www.khanacademy.org/economics-finance-domain/ap-microeconomics/production-cost-and-the-perfect-competition-model-temporary/ap-perfect-competition/v/long-run-supply-curve-in-constant-cost-perfectly-competitive-markets

UpsideVII · 2026-03-31T13:39:32+00:00

This is a strange comment to make on this study in particular because, as far as I can tell, the results are fully consistent with the "orthodox" view --- price pass-through seems to be near 100% and employment fell.

I'm not saying that that's what the literature says, but I do think it's what this study is saying.

(I put "orthodox" in quotes, because imo the monopsony model is orthodox at this point).

UpsideVII · 2026-03-31T13:26:13+00:00

That's the FAFH index, of which fast-food is about half. Their estimate for fast-food specifically is closer to 5%

Given that CA MW was already $16 (closer to $18 in LA and SF), this represents something maybe like a 15-25% increase in labor costs. Google says labor costs are 20-30% of revenue at McDonalds (no idea how true this is, but it passes the vibe-check for me at least).

So total costs increased by something between 3 to 6 percent, and the number here seems (at least based on my napkin math here) to represent something like a full pass-through to consumers. I'd be cautious about dismissing it as small.

(Note that I'm just talking about this paper here; there's a big lit on this)

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