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Economics

Les aventures de la Maison Blanche au Pays des Merveilles

Nov 2, 2022 Michael J. Boskin

STANFORD – L'administration du Président américain Joe Biden dessert à la fois la sécurité économique, la sécurité énergétique et la sécurité nationale des États-Unis en publiant des déclarations et des évaluations irréalistes sur chacun de ces sujets. Dans le contexte actuel de grands bouleversements en matière d'élaboration des politiques (même s'il est de coutume pour chaque administration d'exagérer quelque peu selon son style), les affirmations trompeuses deviennent plus problématiques.

Je ne parle pas d'erreurs grossières de jugement, comme la croyance mal inspirée qui a coûté des points à l'administration, selon laquelle la hausse de l'inflation était « transitoire ». Il y a plusieurs niveaux possibles de désinformation politique : depuis celui de l'administration Biden, qui a défendu à plusieurs reprises certaines déclarations ridicules (le retrait d'Afghanistan ayant a été un succès) et qui rejette les accusations sur autrui (la hausse du prix du carburant est dû à la « hausse des prix de Poutine ») à celui de ses prédécesseurs Donald Trump et Bill Clinton, qui s'appuient sur l'obscurcissement sémantique à l'heure de choisir selon leur fantaisie des données sur la pandémie.

Plus récemment, Biden et Alejandro Mayorkas, le Secrétaire à la Sécurité intérieure des États-Unis, ont affirmé à plusieurs reprises que la frontière sud des États-Unis était sûre, tout en sachant pertinemment que ce n'est pas le cas. Les propres données de l'administration du mois dernier, dont la publication a été retardée, révèlent un nombre record de 2,4 millions d'interpellations de patrouilles frontalières pour l'année fiscale, ainsi que près d'un demi-million de migrants illégaux qui ont échappé à une interpellation.

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Michael J. Boskin

Writing for PS since 2009
92 Commentaries

Michael J. Boskin is Professor of Economics at Stanford University and Senior Fellow at the Hoover Institution. He was Chairman of George H.W. Bush’s Council of Economic Advisers from 1989 to 1993, and headed the so-called Boskin Commission, a congressional advisory body that highlighted errors in official US inflation estimates.

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0 Comments on this paragraph, 12 Comments on this article

Cary Fraser Nov 6, 2022

War inevitably provokes changes across the international system and triggers the recalibration of policy and power within and among states. Neither Russia nor the USA has been able to overcome the policy trauma of intervention in Afghanistan. It remains to be seen - as in the cases of the Korean and Vietnam wars - what will emerge from the struggle over Ukraine.
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gordon bjork Nov 3, 2022

A very balanced comment on the "spin" of the Biden administration and the failure to educate the public on the realities of trade-offs in public policy. What the politicians tell us reflects their commitment to their "bases" and their belief that "all of the public can be fooled some of the time and some of the public can be fooled all of the time..."
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Mirek Fatyga Nov 3, 2022

https://www.ft.com/content/837c3863-fc15-476c-841d-340c623565ae
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Mirek Fatyga Nov 3, 2022

First (and maybe foremost) Mr Boskin from Heritage Foundation accusing anyone of squandering credibility is, shall we say, rich. We are standing today at the bitter end of "Market Uber Alles" social experiment, tirelessly promoted by Mr Boskin and his confederates. We are looking at the economy which is succumbing to debt loads that have ballooned under this regime as labor got crushed and it's income was replaced by debt. The total debt load of the US, relative to GDP, doubled since 1980, as did the private debt. Public debt tripled as the government is trying (likely in vain) to keep the country from complete collapse, back into the absurdity of permanent Great Depression from which US barely escaped once before through WW2. All of this is literally threatening the end of the Republic as the disenchanted public turns to demagogues for answers to their, seemingly permanently and without recourse, deepening misery.

Now, having said the above, I am not a friend of global warming theory and it's influence on Democratic politics. US is not alone in this delusion, Europe is far worse, but Democrats champion it here. This can be laid on them.

At the same time, cancellations of pipelines are the proverbial red herring. The reality is that US shale patch is not increasing production as they once had been simply because they burned through ~300 billion US$ while they were at it and are now happy to cash in on high prices. This is an actual fact. Further reality is that shale oil cannot be refined in the US since it is a light grade oil and big oil has not built a single new refinery since ~1970-ies. Hence, unlike with natural gas, US has to continue to import oil products at world market prices which further means that any increase of oil production in the US helps US consumer only to an extent that it affects world markets and these are big and hungry markets. Adding LNG terminals in the US would actually have an effect of increasing natural gas prices for the US consumer as US prices would be trending towards equilibrium with world markets and these are big and hungry markets. Mr Boskin, as a learned economist, ought to know that.

The reality that underlies all of this is scarcity of essential commodities worldwide because of XX-th century exponential population growth. If one wanted to extend North American oil consumption per capita to 8 billion people, world oil production would have to go up by ~600%. To the EU level, by ~300%. Once again, as a learned economist, Mr Boskin ought to know that. What this all means is that all the green transition is essential to the survival of the country, indeed the whole world, even if being done for wrong reasons. If done for the right reasons it could have been done better, more intelligently, but something is better than nothing, which drill baby drill is. Nothing.

So, in conclusion, if Mr Boskin endeavors to be an economist again, rather than a propagandist for the manifestly failed philosophy, we may talk again. Until this day arrives: talk to the hand.
- K Harris Nov 3, 2022
  
  Who would want to extend North American oil consumption to 8 billion people? How would you even do that? Ship oil to countries who have zero way to use it because they have neither the economy nor the productivity of North America? Why? Energy use is coordinated worldwide with productivity. Countries differ greatly in their energy needs.
  - Mirek Fatyga Nov 4, 2022
    
    very telling comment. I should say, very Anglo-American. Bringing civilization to the natives kind of a thing.
    
    In the last 20 years China became the largest importer of oil in the world. In practical terms, China brought ~US worth of middle class consumers to world markets. India is often forgotten but she is trying to rise as well. India has a population of 1.4 billion that is still rising.
    
    The 600% or 300% illustrates the scope of the problem. It is clearly impossible to bring the US level of oil consumption to the entire world, not even the EU level. World oil production is very unlikely to triple.
    
    So, even though developing countries will be forced to use less oil per capita, just by their shear numbers they will continue to drive the demand for oil higher which, on average, will drive prices higher. Of course there can be downward price fluctuations brought about by world events, like the pandemic or a global financial crisis, but the overall trend can only be up until there are real alternatives that can be commercialized at a reasonable cost. I assure you that the Internal Combustion Engine, the jet engine and the refining technology are well established and available to all, not just the US or EU.
    
    There are two consequences to this supply-demand imbalance. In the developed world there is a relentless downward pressure on living standards that cannot be really changed by policy responses, political posturing notwithstanding. In the developed world, for example in China, there is an invisible lid on development that can be had. This may very well be part of the reason for recent crackdowns in China as apparatchiks can count and are anticipating social unrest.
    
    Both trends, in the developed and developing worlds, are socially destabilizing. It is one of the reasons, in addition to generational amnesia, for the resurgence of Fascism throughout the world. Needless to say, in the world full of nuclear weapons, this may be the last resurgence of Fascism that will ever happen.
    - K Harris Nov 4, 2022
      
      If one wanted to do the impossible is what you mean? Hmmm, then your original comment makes no sense. Who, exactly is proposing extending US energy consumption worldwide? Hint: no one. If your response is now no one as well, then your original comment was inane. Sometimes hyperbole is a bad idea.
      
      China and India are not the world. They are two countries. Energy use coordinates with productivity. Worldwide, including India and China. There’s no way around this no matter how hard you try. Developing countries will of course use less oil per capita, again that was my point. Interesting that you equate “civilization” with oil use though. Perhaps that’s a tad mercenary of you?
      
      Btw, I love the Anglo-American bit of racism/xenophobia tossed in gratuitously. If only you knew how far off you are.
      - Mirek Fatyga Nov 4, 2022
        
        the world wants to consume, whether you like it or not. And the developed world has to share, whether it likes it or not.
        
        China and India represent 30% of world population. They are not just two countries. Sooner or later Africa will want to consume as well.
        
        My Anglo-American comment reflects the reality of western conceit that the world is forever revolving around them. Who cares whether you want to extend the world oil consumption to 8 billion people? It is up to the 8 billion to decide what they want. And they want to live better and consume more.
        
        K Harris Nov 4, 2022
        
        No, the world doesn’t “want to consume” but it does want things that energy enables. That’s where you make your mistake. China and India are indeed two countries. It wasn’t me bemoaning extending North American energy usage to 8 billion people, it was you. And you clearly have a problem with it. As productivity rises in countries, they will use more energy. Just a fact. Productivity is a good thing in my view, not a bad thing. Who cares if you are twisted up over others using more energy. Perhaps your western conceit should be examined because you are perfectly illustrating the concept.
        
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      - Mirek Fatyga Nov 4, 2022
        
        the world wants to consume, whether you like it or not. And the developed world has to share, whether it likes it or not.
        
        China and India represent 30% of world population. They are not just two countries. Sooner or later Africa will want to consume as well.
        
        My Anglo-American comment reflects the reality of western conceit that the world is forever revolving around them. Who cares whether you want to extend the world oil consumption to 8 billion people? It is up to the 8 billion to decide what they want. And they want to live better and consume more.
        
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