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Brad DeLong: Worthy reads on equitable growth, November 17–23, 2020

Summary:
Worthy reads from Equitable Growth: 1. Read Bill Baer, Jonathan B. Baker, Michael Kades, Fiona M. Scott Morton, Nancy L. Rose, Carl Shapiro, & Tim Wu, “Restoring competition in the United States,” in which they write: “The incoming administration and the 117th Congress present an important opportunity to rethink fundamental questions surrounding U.S. antitrust laws and their enforcement. We need a new, bolder vision for competition policy. Antitrust enforcement must optimize deterrence, and promoting competition must be a priority across the government, not just for antitrust enforcers … Three fundamental changes [needed are] … Devote resources to the passage of new antitrust legislation and increase resources for antitrust enforcement … Revitalize antitrust enforcement with a

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Worthy reads from Equitable Growth:

1. Read Bill Baer, Jonathan B. Baker, Michael Kades, Fiona M. Scott Morton, Nancy L. Rose, Carl Shapiro, & Tim Wu, “Restoring competition in the United States,” in which they write: “The incoming administration and the 117th Congress present an important opportunity to rethink fundamental questions surrounding U.S. antitrust laws and their enforcement. We need a new, bolder vision for competition policy. Antitrust enforcement must optimize deterrence, and promoting competition must be a priority across the government, not just for antitrust enforcers … Three fundamental changes [needed are] … Devote resources to the passage of new antitrust legislation and increase resources for antitrust enforcement … Revitalize antitrust enforcement with a focus on strengthening deterrence … Commit to a “whole government” approach to competition policy.”

2. Read Aaron Kesselheim, “How to bring down the price of drugs such as the novel coronavirus therapy remdesivir,” in which he writes: “This issue brief discusses the ownership and costs of prescription drugs, as well as potential policy initiatives in this area, through the lens of one prescription medication, the antiviral drug remdesivir.”

Worthy reads not from Equitable Growth:

1. I plead for more expansionary fiscal policy in “The Siren Song of Austerity,” in which I write: “Among the many lessons of the 2008 financial crisis and its aftermath in the United States is that there is no good reason to start worrying about debt when unemployment remains high and interest rates low. The hasty embrace of austerity derailed the last recovery, and it must not be allowed to do so again: Ten years and ten months ago, U.S. President Barack Obama announced in his 2010 State of the Union address that it was time for austerity. ‘Families across the country are tightening their belts and making tough decisions,’ he explained. ‘The federal government should do the same.’ Signaling his willingness to freeze government spending for three years, Obama argued that, ‘Like any cash-strapped family, we will work within a budget to invest in what we need and sacrifice what we don’t.’ So great was the perceived need for austerity that he even vowed to ‘enforce this discipline by veto,’ just in case congressional Democrats had something else in mind.”

2. This is extremely destructive, pointless, and stupid. With coronavirus cases rising rapidly, with uncertainty rife, and with Congress gridlocked, the U.S. Treasury should not be in the business of putting caltrops in front of the Federal Reserve. Read James Politi and Colby Smith, “US Treasury refuses to extend some of Fed’s crisis-fighting tools,” in which they write: “The U.S. Treasury has decided not to extend several emergency lending facilities set up by the Federal Reserve at the start of the coronavirus pandemic, prompting a rare expression of disappointment from the central bank, which warned that the economy remained “strained and vulnerable.” In a letter to Fed chairman Jay Powell on Thursday, Steven Mnuchin, Treasury secretary, asked the central bank to return unused funds from five emergency programs that are set to expire in late December.”

Bradford DeLong
J. Bradford DeLong is Professor of Economics at the University of California at Berkeley and a research associate at the National Bureau of Economic Research. He was Deputy Assistant US Treasury Secretary during the Clinton Administration, where he was heavily involved in budget and trade negotiations. His role in designing the bailout of Mexico during the 1994 peso crisis placed him at the forefront of Latin America’s transformation into a region of open economies, and cemented his stature as a leading voice in economic-policy debates.

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