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Articles by JW Mason
After the Rent Freeze
With the failure of Eric Adams’s last-ditch effort to stack the Rent Guidelines Board (RGB), Mayor Zohran Mamdani is now in a position to fulfill his promise to freeze the rent. The nine-member RGB sets maximum rent increases for New York’s million-plus rent-regulated apartments, determining rents for over half of the city’s renters.
Political Parties Are Illegal in the United States
This is a guest post by Michael Kinnucan. A longstanding concern on the US electoral left is the issue of “candidate accountability” – if we elect a left-wing candidate, how can we be sure that he or she will stay true to our politics while in office? It’s a big problem. One solution regularly proposed is that the left needs to break with the Democrats and build a third party.
At Dissent: Industrial Policy without Nationalism
(This piece was published in the Fall 2024 issue of Dissent.) In the first two years after Biden’s election, there was considerable enthusiasm on the left for the administration’s embrace of a larger, more active economic role for the federal government. I was among those who saw both the ambitions of the Build Back Better bill and the self-conscious embrace of industrial policy as an unexpectedly sharp break with the economic policy consensus of the past thirty years.
China’s Economic Growth Is Good, Actually
(I write a monthlyish opinion piece for Barron’s. This one was published there in June. My previous pieces are here.) Once upon a time, the promise of globalization seemed clear. In an economically integrated world, poor countries could follow the same path of development that the rich countries had in the past, leading to an equalization of global living standards.
Keynes and Socialism
(Text of a talk I delivered at the Neubauer Institute in Chicago on April 5, 2024.) My goal in this talk is to convince you that there is a Keynesian vision that is much more radical and far-reaching then our familiar idea of Keynesian economics. I say “a” Keynesian vision. Keynes was an outstanding example of his rival Hayek’s dictum that no one can be a great economist who is only an economist. He was a great economist, and he was many other things as well.
The Future of Health Care Reform
This is a guest post by Michael Kinnucan. The Collapsing Center and Solidifying Periphery of the US Healthcare System Contrary to what most people on the US left might tell you, there’s nothing intrinsically impossible about building a healthcare system that provides universal coverage on the foundation of employer-sponsored insurance. Germany and France and several other countries have done it, and we could do it too.
In Praise of Profiteering
Of the usefulness of the concept, that is. In my comments on inflation, I’ve emphasized supply disruptions more than market power. But as I’ll explain in this post, I think the market power or profiteering frame is also a valid and useful one. Thanks in large part to Lindsay Owens and her team at the Groundwork Collaborative, the idea that corporate profiteering is an important part of today’s inflation is getting a surprising amount of traction, including from the administration.
Revisiting the Euro Crisis
The euro crisis of the 2010s is well in the past now, but it remains one of the central macroeconomic events of our time.But the nature of the crisis remains widely misunderstood, not only by the mainstream but also — and more importantly from my point of view — by economists in the heterodox Keynesian tradition. In this post, I want to lay out what I think is the right way of thinking about the crisis. I am not offering much in the way of supporting evidence.
Varieties of Industrial Policy
I was on a virtual panel last week on industrial policy as derisking, in response to an important new paper by Daniela Gabor. For me, the conversation helped clarify why people who have broadly similar politics and analysis can have very different feelings about the Inflation Reduction Act and similar measures elsewhere. There are substantive disagreements, to be sure.
At Barron’s: Are Low Rates to Blame for Bubbles?
(I write a monthly opinion piece for Barron’s. These sometimes run in the print edition, which I appreciate — it’s a vote of confidence from the editors, and means more readers. It does impose a tighter word count limit, though. The text below is the longer version I originally submitted. The version that was published is here. All of my previous Barron’s pieces are here.) The past year has seen a parade of financial failures and asset crashes.
At Jacobin: Yes, We Should Support Industrial Policy and the Green New Deal
(This piece was published by Jacobin on April 6, 2023, in response to the Dylan Riley post linked in the first paragraph. The version below adds a few unimportant footnotes and one somewhat important paragraph that I forgot to write before submitting it — the one about halfway through that mentions Oskar Lange.) A few days ago, Dylan Riley wrote a post on New Left Review’s Sidecar blog that provoked a furious response on twitter.
At Barron’s: Do Interest Rates Really Drive the Economy?
(I write a more-or-less monthly opinion piece for Barron’s. This is my contribution for March 2023; you can find the earlier ones here.) When interest rates go up, businesses spend less on new buildings and equipment. Right? That’s how it’s supposed to work, anyway. To be worth doing, after all, a project has to return more than the cost of financing it.
At Barron’s: The Fed’s View of the Economy Matters for More than Monetary Policy
(I write a monthly opinion piece for Barron’s. This is the most recent one; you can find earlier ones here.) Has the inflationary fever broken at last? The headline Consumer Price Index, which was rising at a 17 percent annual rate last June, actually fell in December. Other measures show a similar, if less dramatic, slowing of price growth. But before we all start congratulating the Federal Reserve, we should think carefully about what else we’re signing up for.
Keynes on Newton and the Methods of Science
I’ve just been reading Keynes’ short sketches of Isaac Newton in Essays in Biography.
What Does It Mean to Say that Inflation Is Caused by Demand?
There has been a lot of debate about whether the high inflation of 2021-2022 has been due mainly to supply or demand factors. Joe Stiglitz and Ira Regmi have a new paper from Roosevelt making the case for supply disruptions as the decisive factor. It’s the most thorough version of that case that I’ve seen, and I agree with almost all of it. I highly recommend reading it. What I want to do in this post is something different.
Who Pays for Inflation? | Samir Sonti & JW Mason
The inflation of the past year has reshaped the political economic landscape in the United States and around the globe. While the IMF and World Bank echo UN calls about the recession risk of globally-synchronized rate hikes, the debate over the causes—and definition—of inflation continues to be unsettled. As does the question of the politics of inflation and its distributional impacts—who benefits and who pays.
Demand, Supply, Both, or Neither?
One way current debates over inflation sometimes get framed is whether it’s driven by supply or demand. Critics of the ARPA and other stimulus measures point to various lines of evidence to suggest that rising prices are coming from the demand side, not the supply side; and of course you can find the opposite arguments among its defenders.
What Is the Stock Market For?
Elon Musk’s pending purchase of Twitter is an occasion for thinking, again, about what function stock markets perform in modern capitalism. The original form of wealth in a capitalist society is control over some production process. If you become a wealthy capitalist, what this means at the outset is that you have authority over people engaged in some particular form of productive activity.
Inflation, Interest Rates and the Fed: A Dissent
Last week, my Roosevelt colleague Mike Konczal said on twitter that he endorsed the Fed’s decision to raise the federal funds rate, and the larger goal of using higher interest rates to weaken demand and slow growth. Mike is a very sharp guy, and I generally agree with him on almost everything. But in this case I disagree. The disagreement may partly be about the current state of the economy.
No Maestros: Further Thoughts
One of the things we see in the questions of monetary policy transmission discussed in my Barron’s piece is the real cost of an orthodox economics education. If your vision of the economy is shaped by mainstream theory, it is impossible to think about what central banks actually do. The models taught in graduate economics classes feature an “interest rate” that is the price of goods today in terms of identical goods in the future.
At Barron’s: There Are No Maestros
(A week ago, I had an opinion piece in Barron’s, which I am belatedly posting here. I talk a bit more about this topic in the following post.) In today’s often acrimonious economic debates, one of the few common grounds is reverence for the Fed.
Climate Policy from a Keynesian Perspective
(This is the extended abstract for a piece I am writing for “The Great Turnaround,” a collection of essays on the economics of decarbonization from ZOE-Institute for Future-fit Economies and the Heinrich Böll Foundation.) In the world in which we live, large-scale cooperation is largely organized through payments of money.
“Inflation is bad. But mass unemployment would have been worse.”
(Lauren Melodia and I had an op-ed in the Nov. 21 Washington Post, challenging the idea that today’s inflation means that the stimulus measures of the past year and half were too large. I’m posting it here as well.) As we think about rising prices today, it’s important not to lose sight of where we were not so long ago. In the spring of 2020, much of the economy abruptly shut down. Schools and child-care centers closed.
Thread by @JWMason1 on Thread Reader App
Here is one way to think about the inflation we are seeing now. (a thread) Over much of the past two years, large parts of the economy were unable to operate as normal. Schools and daycares were shut down. Airports were operating at 5 percent capacity. No one was going to the gym or eating in restaurants. You probably remember this! 1/ Though you might have forgotten the scale of it.
“Earnings Shocks and Stabilization During COVID-19”
The other day, I put up a post arguing, on the basis of my analysis of the income data in the Current Population Survey, that the economic disruptions from the pandemic had not led to any reduction in real income for the lowest-income families. This is the opposite of the Great Recession, and presumably earlier recessions, where the biggest income losses were at the bottom. The difference, I suggested, was the much stronger fiscal response this time compared with previous downturns.
A C-Shaped Recovery?
The coronavirus crisis has been different from normal recessions in many ways, but one of the most important is the scale of the macroeconomic response to it.
What’s the Matter with (Quasi-)Monetarism?
Let’s start from the top. What is monetarism? As I see it, it’s a set of three claims. (1) There is a stable relationship between base money and the economically-relevant stock of money. [1] That is, there’s a stable relationship between outside money and inside money. (2) There is a stable velocity of money, so we can interpret the equation of exchange MV = PY (or MV = PT) as a behavioral relationship and not just an accounting identity.
The Politics of Pay-Fors: A Simple Framework
One of the central economic debates among progressives is over the necessity or desirability of accompanying new public spending with similar-sized tax increases. In recent years perhaps the most visible, or at least the most heated, instances of this debate have been around Modern Mone(tar)y Theory. But the debate itself is broader and older.
Inflation for Whom?
A point I’ve been emphasizing about inflation (see here and here) is that it is just an average of price changes; it doesn’t have any independent existence. One implication of this is that there is not, even in principle, a true inflation rate. Pick any basket of goods and measure their prices over time; that is an inflation rate. The “all urban consumers” basket used by the BLS for the headline CPI inflation rate is a useful benchmark, but it’s just one basket among others.
Alternative Visions of Inflation
Like many people, I’ve been thinking a bit about inflation lately. One source of confusion, it seems to me, is that underlying concept has shifted in a rather fundamental way, but the full implications of this shift haven’t been taken on board. I was talking with my Roosevelt colleague Lauren Melodia about inflation and alternative policies to manage it, which is a topic I hope Roosevelt will be engaging in more in the later part of this year.
At Age of Economics: How Should an Economist Be?
The website Age of Economics has been carrying out a series of interviews with economists about what the purpose of the discipline it is, and what its relationship is to capitalism as a historical social system. I believe there will be 52 of these interviews, one each week over the course of 2021. Earlier this spring, they interviewed Arjun Jayadev and myself. You can watch video of the interview here. I’ve pasted the transcript below. Q: Why does economics matter?
At Roosevelt: Reimagining Full Employment
Mike Konczal, Lauren Melodia and I have a new report out from the Roosevelt Institute, on what true full employment might look like in the United States. This is part of a larger project of imagining what an economic boom would look like.
A new macroeconomics?
[On Friday, July 2, I am taking part in a panel organized by Economics for Inclusive Prosperity on “A new macroeconomics?” This is my contribution.] Jón Steinsson wrote up some thoughts about the current state of macroeconomics. He begins: There is a narrative within our field that macroeconomics has lost its way. While I have some sympathy with this narrative, I think it is a better description of the field 10 years ago than of the field today.
How to have a roaring 2020s without wild inflation
How to have a roaring 2020s without wild inflation, Opinion - THE BUSINESS TIMES
The Roaring 2020s: Further Reading
Mike Konczal and I have a piece in the New York Times arguing that the next few years could see a historic boom for the US economy, if policy makers recognize that strong demand and rising wages are good things, and don’t get panicked into turning toward austerity. Mike and I and our colleagues at the Roosevelt Institute are planning a series of papers on “planning for the boom” over the coming year.
The Persistence of Demand
Here’s the very short version of this very long post: Hysteresis means that a change in GDP today has effects on GDP many years in the future. In principle, this could be because it affects either future aggregate demand or potential output. These two cases aren’t distinguished clearly in the literature, but they have very different implications.
Video: The Macro Case for the Green New Deal
(Earlier this week, I gave a virtual presentation at an event organized by the Roosevelt Institute and the Green New Deal Network. Virtual events are inferior to live ones in many, many ways. But one way they are better, is that they are necessarily on video, and can be shared.
Finance, Money and Cow Clicking
Finance and its derivatives like financialization, are like many political economy categories: they’re a widely used term but lack an agreed-upon definition. One often encounters formulations like “financialization means the increasing role of financial motives, financial markets, financial actors and financial institutions.” That isn’t very helpful! Let me offer a simple definition of finance, which I think corresponds to its sense both for Marx and in everyday business settings.
What Drives Trade Flows? Mostly Demand, Not Prices
I just participated (for the last time, thank god) in the UMass-New School economics graduate student conference, which left me feeling pretty good about the next generation of heterodox economists.
The American Rescue Plan as Economic Theory
So, this happened. Some people are frustrated about the surrender on the minimum wage, the scaled-back unemployment insurance, the child tax credit that should have been a universal child allowance, the fact that most of the good things phase out over the next year or two. On the other side are those who see it as a decisive break with neoliberalism.
The Deflationary Bloc | Yakov Feygin
“An effective way to write the history of the last thirty years of the twentieth century,” economist Albert Hirschman wrote in 1985, “may well be to focus on the distinctive reactions of various countries to the identical issue of worldwide inflation.” Writing just as the global “great inflation” of the 1970s was abating, Hirschman couldn’t have foreseen how right he was.
Money and Cryptocurrencies
(This is an edited and expanded version of a talk I gave in Trento, Italy in June 2018, on a panel with Sheila Dow.) The topic today is “Digital currencies: threat or opportunity?” I’d like to offer a third alternative: New digital currencies like bitcoin are neither a threat or an opportunity. They do not raise any interesting economic questions and do not pose any significant policy problems.
The Coronavirus Recession Is Just Beginning
(A couple days ago I gave a talk — virtually, of course — to a group of activists about the state of the economy. This is an edied and somewha expanded version of what I said.) The US economy has officially been in recession since February. But what we’ve seen so far looks very different from the kind of recessions we’re used to, both because of the unique nature of the coronavirus shock and because of the government response to it. In some ways, the real recession is only beginning now.
Far Too Low for Far Too Long
by JW Mason So, what caused the economic and financial crisis of 2007-whenever? It’s an open question. Presumably we’ll continue to argue about it until the next crisis (or until the Moon Men invade.) But right now let’s talk about one possible story, or really family of stories: that the root cause of the crisis is that interest rates were too low for too long.
Posts in Three Lines, Coronavirus Edition
I haven’t been able to write as much about the current situation as I would like to. Personally, I am doing fine. My wife and I are lucky to have some of the most secure jobs in the country – we are both public university professors — and we’re all healthy and as comfortable as can be expected under the circumstances, and we have access to outdoor space. But we also have two children who are now home all day, both of them young enough to need more or less constant attention.
Posts in Three Lines, Coronavirus Edition
by JW Mason My articles My books Follow on:Twitter Summary: I haven’t been able to write as much about the current situation as I would like to. Personally, I am doing fine. My wife and I are lucky to have some of the most secure jobs in the country – we are both public university professors — and we’re all healthy and as comfortable as can be expected under the circumstances, and we have access to outdoor space.
What Should be Universal and Free?
In the US, as in manycountries, local governments often provide fire protection. In general — there are exceptions, but they’re still rare enough to make news — this is a free service, available to everyone who lives in whatever jurisdiction provides it. No one has to sign up or pay for coverage. To most people, I suppose, this is a normal and reasonable thing to do. One effect of fire protection is to stop peoples’ homes from burning down.
Considerations on Rent Control
(On November 13, I was invited to testify before the Jersey City city council on rent control. Below is an edited version of my testimony.) My name is J. W. Mason. I have a Ph.D. in Economics from the University of Massachusetts at Amherst, I am an assistant professor of economics at John Jay College of the City University of New York, and I am a Fellow at the Rosevelt Institute. My goal today is to present some general observations on rent regulation from the perspective of an economist.
“On money, debt, trust and central banking”
The central point of my Jacobin piece on the state of economics was meant to be: Whatever you think about mainstream macroeconomic theory, there is a lot of mainstream empirical and policy work that people on the left can learn from and engage with — much more than there was a decade ago. Some of the most interesting of that new work is from, and about, central banks. As an example, here is a remarkable speech by BIS economist Claudio Borio.
Acquisitions as Corporate Money Hose
Among the small group of heterodox economics people interested in corporate finance, it is common knowledge that the stock market is a tool for moving money out of the corporate sector, not into it. Textbooks may talk about stock markets as a tool for raising funds for investment, but this kind of financing is dwarfed by the payments each year from the corporations to shareholders.
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