New Regulations Pushed by Union Allied with de Blasio Will Limit New NYC Hotels

(p. A8) Mayor Bill de Blasio and other New York City leaders are pushing a controversial plan to drastically restrict hotel development, a move that the mayor’s own experts fear could endanger the city’s post-pandemic recovery and cost billions in lost tax revenue.

. . .

The Council is expected to approve the plan in time for Mr. de Blasio to see it become law before he leaves office this year. Once it is in place, developers fear that few, if any, new hotels would be built.

. . .

“We flag that to continue with this proposal could be seen as contrary to economic recovery principles and sound planning,” Marisa Lago, the director of the planning department, wrote last year in the memo to City Hall.

But Mr. de Blasio’s views hew closer to those of another group: the hotel workers union that endorsed his 2020 presidential campaign, pouring $440,000 into ads to bolster his ill-fated candidacy.

The union, the Hotel Trades Council, has long pushed to limit the construction of new hotels, which are often nonunion. Its calculation has been that limiting the development of such hotels, which typically offer less-expensive lodging than existing full-service hotels, would tend to increase hotel room prices generally and bolster the higher-end hotels where many of its workers are employed.

. . .

In most of the city, developers are free to build hotels in areas that are zoned for such use. Under a special approval process, building hotels would become far more challenging, said Moses Gates, vice president of housing and neighborhood planning at the Regional Plan Association, an influential nonprofit planning group. No other type of routine development currently gets the kind of scrutiny that Mr. de Blasio is proposing for hotels, he said.

“Hotels would be the only common land use which would always need City Council approval to be built, no matter what,” Mr. Gates said.

. . .

The Hotel Trades Council’s support of a special permit process for new hotels may seem counterintuitive, since it is effectively opposing the growth of jobs in the industry that it represents. Union hotel jobs in New York City provide one of the few pathways to the middle class for workers with no college education.

“Labor generally is in favor of employment and of growth, but especially jobs in their own sector,” said Harry C. Katz, a professor of collective bargaining at Cornell University.

But mid-market hotels that serve middle-class tourists are hard to unionize, union and industry experts say. If citywide special permits are adopted, as is expected, the hotel union would most likely use its political leverage to pressure Council members to only accept new hotels that use union labor.

For the full story, see:

Dana Rubinstein and J. David Goodman. “A Plan to Limit New Hotels in New York Meets Resistance.” The New York Times (Wednesday, April 28, 2021): A8.

(Note: ellipses added.)

(Note: the online version of the story has the date April 27, 2021, and has the title “A $7 Billion Mistake? New York Seeks to Curb New Hotels.”)

The research co-authored by Stone and mentioned above was described in:

Stone, Brian, Jr., Evan Mallen, Mayuri Rajput, Carina J. Gronlund, Ashley M. Broadbent, E. Scott Krayenhoff, Godfried Augenbroe, Marie S. O’Neill, and Matei Georgescu. “Compound Climate and Infrastructure Events: How Electrical Grid Failure Alters Heat Wave Risk.” Environmental Science & Technology (published online in advance of print on April 30, 2021).

Hundreds of Thousands at Risk From Blackouts That Shut Off Air Conditioning

(p. A15) Because both heat waves and blackouts are becoming more frequent, “the probability of a concurrent heat wave and blackout event is very likely rising as well,” Dr. Stone said.

So Dr. Stone, along with a team of eight other researchers — from Georgia Tech, Arizona State, the University of Michigan and the University of Guelph in Ontario, Canada — set out to gauge the human health consequences when power failures coincide with heat waves.

. . .

Crucially, the researchers wanted to know how hot the insides of homes would get under those conditions — something that Dr. Stone said had never been tried before.

. . .

The results were alarming. In Atlanta, more than 350,000 people, or about 70 percent of residents, would be exposed to indoor temperatures equal to or greater than 32 degrees Celsius (89.6 degrees Fahrenheit), the level at which the National Weather Service’s heat classification index says heat exhaustion and heat stroke are possible.

In Detroit, more than 450,000, or about 68 percent, would be exposed to that indoor temperature. In Phoenix, where a vast majority of residents rely on air-conditioning, the entire population would be at risk — almost 1.7 million people.

Even without a blackout, some residents in each city lack access to air-conditioning, exposing those residents to dangerous indoor temperatures during a heat wave. Those numbers range from 1,000 people in Phoenix to 50,000 in Detroit, based on the characteristics of their homes, the authors found.

That exposure is most pronounced for the lowest-income households, who are 20 percent less likely to have central air-conditioning than the highest-income households.

For the full story, see:

Christopher Flavelle. “Blackouts Are Growing Threat to U.S. Cities.” The New York Times (Tuesday, May 4, 2021): A15.

(Note: ellipses added.)

(Note: the online version of the story was updated May 5, 2021, and has the title “A New, Deadly Risk for Cities in Summer: Power Failures During Heat Waves.”)

The research co-authored by Stone and mentioned above was described in:

Stone, Brian, Jr., Evan Mallen, Mayuri Rajput, Carina J. Gronlund, Ashley M. Broadbent, E. Scott Krayenhoff, Godfried Augenbroe, Marie S. O’Neill, and Matei Georgescu. “Compound Climate and Infrastructure Events: How Electrical Grid Failure Alters Heat Wave Risk.” Environmental Science & Technology (published online in advance of print on April 30, 2021).

Automation Tools Assist, but Do Not Replace, Surgeons

(p. D4) Using many of the same technologies that underpin self-driving cars, autonomous drones and warehouse robots, researchers are working to automate surgical robots too. These methods are still a long way from everyday use, but progress is accelerating.

. . .

The aim is not to remove surgeons from the operating room but to ease their load and perhaps even raise success rates — where there is room for improvement — by automating particular phases of surgery.

Robots can already exceed human accuracy on some surgical tasks, like placing a pin into a bone (a particularly risky task during knee and hip replacements). The hope is that automated robots can bring greater accuracy to other tasks, like incisions or suturing, and reduce the risks that come with overworked surgeons.

During a recent phone call, Greg Hager, a computer scientist at Johns Hopkins, said that surgical automation would progress much like the Autopilot software that was guiding his Tesla down the New Jersey Turnpike as he spoke. The car was driving on its own, he said, but his wife still had her hands on the wheel, should anything go wrong. And she would take over when it was time to exit the highway.

“We can’t automate the whole process, at least not without human oversight,” he said. “But we can start to build automation tools that make the life of a surgeon a little bit easier.”

. . .

. . . the Berkeley researchers have been working to automate their robot, which is based on the da Vinci Surgical System, a two-armed machine that helps surgeons perform more than a million procedures a year. Dr. Fer and his colleagues collect images of the robot moving the plastic rings while under human control. Then their system learns from these images, pinpointing the best ways of grabbing the rings, passing them between claws and moving them to new pegs.

But this process came with its own asterisk. When the system told the robot where to move, the robot often missed the spot by millimeters. Over months and years of use, the many metal cables inside the robot’s twin arms have stretched and bent in small ways, so its movements were not as precise as they needed to be.

Human operators could compensate for this shift, unconsciously. But the automated system could not. This is often the problem with automated technology: It struggles to deal with change and uncertainty. Autonomous vehicles are still far from widespread use because they aren’t yet nimble enough to handle all the chaos of the everyday world.

. . .

Many obstacles lie ahead, scientists note. Moving plastic pegs is one thing; cutting, moving and suturing flesh is another. “What happens when the camera angle changes?” said Ann Majewicz Fey, an associate professor at the University of Texas, Austin. “What happens when smoke gets in the way?”

For the foreseeable future, automation will be something that works alongside surgeons rather than replaces them.

For the full story, see:

Cade Metz. “When the Robot Wields the Scalpel.” The New York Times (Tuesday, May 4, 2021): D4.

(Note: ellipses added.)

(Note: the online version of the story has the date April 30, 2020, and has the title “The Robot Surgeon Will See You Now.”)

Salt Lake City’s ‘Robustly Redundant Labor Market’

(p. B1) As the pandemic raged through the U.S. in 2020, no metropolitan area in the country expanded the size of its labor force more on a percentage basis than Utah’s capital. It also had the lowest average unemployment rate and the highest share of people working or looking for jobs. These signs of strength helped it rank first among 53 large metro areas in an annual examination of U.S. labor markets conducted by The Wall Street Journal, after ranking No. 4 in 2019.

Other cities that emerged as beacons to job seekers and businesses during the pandemic were, like Salt Lake City, located far from the coasts. Hubs in the Southwest and Midwest such as Austin, Denver, Indianapolis and Kansas City minimized employment losses, kept unemployment relatively low and retained and attracted workers in a year when the U.S. lost more than 9 million jobs.

Some benefited from technology jobs that became even more critical during a time of isolation for many Americans, while others relied on older corners of the economy that were also in high demand. Workers gravitated to these places due to the job opportunities, lower costs and a quieter lifestyle that appealed to some migrants from bigger population centers who were now allowed to work remotely.

The losers were tourist hot spots such as Las Vegas or densely-populated cities such as New York, Los Angeles and Chicago that lost workers as the coronavirus spread. Even once-hot tech hubs of San Francisco, Raleigh, N.C., and Boston suffered de-(p. B8)clines. Some of these laggards were more aggressive with their business lockdowns, allowing rival metros with fewer restrictions and lower costs to capitalize on the chaos.

. . .

Salt Lake City wasn’t immune from the spread of Covid-19, but it was able to avoid multiple shutdowns that crippled other cities. It did so partly because of a shared local effort to keep businesses open. The local chamber of commerce and state health department partnered on a campaign where participating local companies committed to having their employees maintain distance from others, wear masks and stay home when they are sick.

. . .

“It appears to be exceptionally friendly to business here,” Mr. Mulligan said. His company, Pubtelly LLC, sells software to sports bars and similar establishments to manage content playing on their TVs. The Salt Lake area has a healthy (p. B9) mix of growing startups and well-established companies, he said, plus a strong local university network that serves as a pipeline for younger talent.

If his current venture doesn’t pan out, Mr. Mulligan said he would be happy to stay in the Salt Lake area, either working for a local company or launching another business. “I don’t see a challenge with either going to work for someone else, or forming a company with others,” he said.

For the full story, see:

Danny Dougherty, Hannah Lang, and Kim Mackrael. “The New American Boomtowns.” The Wall Street Journal (Saturday, April 10, 2021): B1 & B8-B9.

(Note: ellipses added.)

(Note: the online version of the story has the date April 9, 2021, and has the title “Where Can You Find a New Job? Try These U.S. Cities.”)

Mundell Thought Low Taxes Nourish Entrepreneurs

(p. B11) Robert A. Mundell, a Nobel Prize-winning economist whose theorizing opened the door to understanding the workings of global finance and the modern-day international economy, while his more iconoclastic views on economic policy fostered the creation of the euro and the adoption of the tax-cutting approach known as supply-side economics, died on Sunday [April 4, 2021] at his home, a Renaissance-era palazzo that he and his wife restored, near Siena, Italy.

. . .

. . . he provided intellectual grounding for lowering the top tax rates on the rich, whose advocates rallied under the banner of supply-side economics and won over many right-leaning politicians and policymakers in the United States, Britain and elsewhere while drawing the scorn of more progressive economists, who disputed the notion that cutting taxes for the wealthy was the best way to spur economic growth.

“Supply-side economics made the argument that steeply progressive tax rates reduced the size of the pie to be distributed,” Professor Mundell said in a 2006 interview with the American Economic Association. “The poor might be better off with a smaller share of a larger pie than with a larger share of a small pie.”

To encourage a growing economy, he argued for keeping the maximum tax rate under 25 percent. “The stimulus and rewards of the entrepreneurial group must be fed and nourished,” he said in a 1986 interview.

His ideas were promoted with evangelical fervor in the 1970s particularly by Arthur Laffer, an economist who became known for the “Laffer curve,” postulating that lower tax rates would generate higher government revenues, and Jude Wanniski, an editorial writer for The Wall Street Journal, whose opinion pages took up Professor Mundell’s cause after a series of lunches and dinners at a Lower Manhattan restaurant, Michaels 1, which were later described by Robert Bartley, The Journal’s opinion editor, in his book “The Seven Fat Years” (1992).

For the full obituary, see:

Tom Redburn. “Robert Mundell, a Father of the Euro and Reaganomics, Dies at 88.” The New York Times (Tuesday, April 6, 2021): B11.

(Note: ellipses, and bracketed date, added.)

(Note: the online version of the obituary was updated April 6, 2021, and has the title “Robert A. Mundell, a Father of the Euro and Reaganomics, Dies at 88.”)

The book by Bartley mentioned above is:

Bartley, Robert L. The Seven Fat Years: And How to Do It Again. New York: Free Press, 1992.

China’s Economic Surge Not Shared by Consumers and Small Businesses

(p. B1) Factories are whirring, new apartments are being snapped up, and more jobs are up for grabs. When China released its new economic figures on Friday, they showed a remarkable postpandemic surge.

The question is whether small businesses and Chinese consumers can fully share in the good times.

China reported on Friday that its economy grew by a jaw-dropping 18.3 percent in the first three months of the year compared with the same period last year. While the figure is steep, it is as much a reflection of the past — the country’s output shrank 6.8 percent in the first quarter of 2020 from a year earlier — as it is an indication of how China is doing now.

A year ago, entire cities were shut down, planes were grounded and highways were blocked to control the spread of a relentless virus. Today, global demand for computer screens and video consoles that China makes is soaring as people work from home and as a pandemic recovery beckons. That demand has continued as Americans with stimulus checks look to spend money on patio furniture, electronics and other goods made in Chinese factories.

China’s recovery has also been powered by big infrastructure. Cranes dot city skylines. Construction projects for highways and railroads have provided short-term jobs. Property sales have also helped strengthen economic activity.

But exports and property investment can carry China’s growth only so far.

. . .

(p. B3) A slow vaccination rollout and fresh memories of lockdowns have left many consumers in the country skittish.  . . .  When virus outbreaks occur, the Chinese authorities are quick to put new lockdowns in place, hurting small businesses and their customers.

. . .

Families continue to save at a higher rate than they did before the pandemic, something that worries economists like Louis Kuijs, who is head of Asian economics at Oxford Economics. Mr. Kuijs is looking at household savings as an indication of whether Chinese consumers are ready to start splurging after months of being stuck at home.

“More people still seem to not go all the way in terms of carefree spending,” he said. “At times there are still some lingering Covid concerns, but there is perhaps also a concern about the general economic situation.”

. . .

Mr. [Jinqiu] Li, who is recently married and has a baby at home, is still choosing to save instead of spend. He had planned to work for the family business, but it has been hit by the pandemic and he doesn’t think there is much opportunity for him if he stays.

“The whole family has some sense of crisis,” Mr. Li said. “Because of the pandemic and because of family business, I have a sense of crisis.”

For the full story, see:

Alexandra Stevenson and Cao Li. “China’s Gain Is Hardly Felt by the People.” The New York Times (Friday, April 16, 2021): B1 & B3.

(Note: ellipses, and bracketed first name, added.)

(Note: the online version of the article has the date April 15, 2021, and has the title “China’s Economy Is Booming. Shoppers Are Skittish Anyway.” The quote starting “More people” appeared in the print, but not in the online, version of the article.)

The Wealthy Benefit More from Lower Corporate Tax Rates than from Lower Income Tax Rates

(p. A18) The main cause of the radical decline in tax rates for very wealthy Americans over the past 75 years isn’t the one that many people would guess. It’s not about lower income taxes (though they certainly play a role), and it’s not about lower estate taxes (though they matter too).

The biggest tax boon for the wealthy has been the sharp fall in the corporate tax rate.

. . .

Since the mid-20th century, however, politicians of both political parties have supported cuts in the corporate-tax rate, often under intense lobbying from corporate America. The cuts have been so large — including in President Donald Trump’s 2017 tax overhaul — that at least 55 big companies paid zero federal income taxes last year, according to the Institute on Taxation and Economic Policy. Among them: Archer-Daniels-Midland, Booz Allen Hamilton, FedEx, HP, Interpublic, Nike and Xcel Energy.

The justification for the tax cuts has often been that the economy as a whole will benefit — that lower corporate taxes would lead to company expansions, more jobs and higher incomes. But it hasn’t worked out that way. Instead, economic growth has been mediocre since the 1970s. And incomes have grown even more slowly than the economy for every group except the wealthy.

For the full commentary, see:

David Leonhardt. “‘A Dirty Little Secret’: Corporate Tax Rates and the Very Rich.” The New York Times (Thursday, April 8, 2021): A18.

(Note: ellipsis added.)

(Note: the online version of the commentary has the same date as the print version, and has the title “Corporate Taxes Are Wealth Taxes.” Where the print and online versions differ, the passages above follow the print version.)

Productivity Pessimist Robert Gordon Becomes More Optimistic

(p. A2) After a decadelong drought, worker productivity might be about to accelerate thanks to pandemic-induced technological adoption, which could lift economic growth and wages in coming years while staving off inflation pressure.

. . .

Robert Gordon, a professor at Northwestern University who has studied productivity and living standards during the past century, said productivity growth slowed after 2005 because the payoff from computers faded and new inventions such as smartphones and tablets didn’t revolutionize business operations. In 2015 he had predicted productivity growth of only 1.5% a year over the next 25 years. Recent developments have made him more optimistic, and he expects annual productivity growth of about 1.8% this decade.

A shift toward e-commerce should push up productivity by eliminating workers needed in bricks-and-mortar stores, Mr. Gordon said. Videoconferencing should also help, though the public-transit sector could offset some of the gains because buses and rail transit will carry fewer riders, he said.

. . .

Remote work could deliver a one-time 4.7% lift to productivity after the pandemic, though a large share of the growth will stem from shortened commutes that government productivity data won’t fully capture, according to a working paper from Stanford University’s Nicholas Bloom and co-authors.

For the full commentary, see:

Sarah Chaney Cambon. “Productivity Looks Ready to Pick Up.” The Wall Street Journal (Saturday, April 5, 2021): A2.

(Note: ellipses added.)

(Note: the online version of the commentary has the date April 4, 2021, and has the title “U.S.’s Long Drought in Worker Productivity Could Be Ending.”)

Gordon’s pessimistic old views were most fully expressed in his much-discussed:

Gordon, Robert J. The Rise and Fall of American Growth: The U.S. Standard of Living since the Civil War. Princeton, NJ: Princeton University Press, 2016.

The working paper co-authored by Bloom is:

Barrero, Jose Maria, Nicholas Bloom, and Steven J. Davis. “Why Working from Home Will Stick.” Working Paper, April 1, 2021.

Krugman Argues Costly Universal Basic Income (UBI) Not Justified by Automation

(p. A22) [Andrew] Yang’s claim to fame is his argument that we’re facing social and economic crises because rapid automation is destroying good jobs and that the solution is universal basic income — a monthly check of $1,000 to every American adult. Many people find that argument persuasive, and one can imagine a world in which both Yang’s diagnosis and his prescription would be right.

But that’s not the world we’re living in now, and there’s little indication that it’s where we’re going any time soon.

Let’s do a fact check: Are we actually experiencing rapid automation — that is, a rapid reduction in the number of workers it takes to produce a given amount of stuff? That would imply a rapid rise in the amount of stuff produced by each worker still employed — that is, rapidly rising productivity.

But that’s not what we’re seeing. In fact, the lead article in the current issue of the Monthly Labor Review, published by the Bureau of Labor Statistics, is an attempt to understand the productivity slowdown — the historically low growth in productivity since 2005. This slowdown has been especially pronounced in manufacturing, which has seen hardly any productivity rise over the past decade.

. . .

The recently enacted American Rescue Plan gave most adults a one-time $1,400 payment, at a cost of $411 billion.

. . .

. . . the Yang proposal to pay $12,000 a year would cost more than eight times as much every year — well over $3 trillion a year, in perpetuity. Even if you aren’t much worried about either debt or inflationary overheating right now (which I’m not), you have to think that sustained spending at that rate would both cause problems and conflict with other priorities, from infrastructure to child care.

For the full commentary, see:

Paul Krugman. “Andrew Yang Hasn’t Done the Math.” The New York Times (Friday, April 16, 2021): A22.

(Note: ellipses, and bracketed first name, added.)

(Note: the online version of the commentary has the date April 15, 2021, and has the same title as the print version.)

Zoning Regulations Restrict Building Affordable Homes

(p. A25) Although zoning may seem like a technical, bureaucratic and decidedly local question, in reality the issue relates directly to three grand themes that Joe Biden ran on in the 2020 campaign: racial justice, respect for working-class people and national unity. Perhaps no single step would do more to advance those goals than tearing down the government-sponsored walls that keep Americans of different races and classes from living in the same communities, sharing the same public schools and getting a chance to know one another across racial, economic and political lines.

Economically discriminatory zoning policies — which say that you are not welcome in a community unless you can afford a single-family home, sometimes on a large plot of land — are not part of a distant, disgraceful past. In most American cities, zoning laws prohibit the construction of relatively affordable homes — duplexes, triplexes, quads and larger multifamily units — on three-quarters of residential land.

For the full commentary, see:

Richard D. Kahlenberg. “Zoning Is a Social Justice Matter.” The New York Times (Tuesday, April 20, 2021): A25.

(Note: the online version of the commentary has the date April 19, 2021, and has the title “The ‘New Redlining’ Is Deciding Who Lives in Your Neighborhood.”)

Mundell and Laffer Agreed High Taxes Hurt Poor

(p. A12) Robert A. Mundell began to make his name in the 1960s as a maverick economist eager to challenge his more orthodox colleagues. He ended up influencing mainstream economic policy in the U.S. and Europe in profound ways that few of his peers could have imagined.

. . .

Dr. Mundell’s influence on U.S. economic policy also dates to the 1960s. He was teaching at the University of Chicago when he met Arthur Laffer in 1967. Dr. Laffer, a Stanford-educated economist, later recalled their first meeting as a shock. “In walked a sallow, tousle-headed, pipe-smoking figure wearing a faded trench coat belted with a clothesline cord,” Dr. Laffer wrote.

The disheveled Dr. Mundell and the buttoned-down Dr. Laffer agreed that steeply progressive taxes were deterring investment and employment in ways that hurt the poor.

In the 1970s, Dr. Mundell argued that the U.S. should defy conventional economic wisdom by raising interest rates to protect the dollar’s value while reducing taxes to stimulate the economy. “I knew I was in the minority,” he said in an 1988 interview. “But I thought my vote should count much more than the others because I understood the subject.”

Dr. Laffer introduced Dr. Mundell and his ideas to Jude Wanniski and Robert Bartley of The Wall Street Journal editorial pages, whose work influenced Republican politicians including Jack Kemp and Mr. Reagan.

For the full obituary, see:

James R. Hagerty. “Canadian Economist Inspired U.S. Tax Cuts.” The Wall Street Journal (Saturday, April 6, 2021): A12.

(Note: ellipsis added.)

(Note: the online version of the obituary has the date April 9, 2021, and has the title “Robert Mundell Helped Inspire U.S. Tax Cuts and the Euro.” In the last paragraph quoted above, the online version mentions Jack Kemp. The print version did not.)