Baumol, the debt ceiling, and what to do about parliamentarism
It’s been warmer and sunnier back here in D.C. than it was last week in Los Angeles, but I guess that’s life for you.
Some more good vibes beyond my personal weather triumphs: Milan is celebrating the end of his first year of college, rent inflation has probably peaked, Donald Trump was finally held legally accountable for something, Dianne Feinstein is back in the Senate, and college tuition is now falling.
Polytropos: Baumol cost disease— a side effect of growth that drives up the expenses of low-productivity industries as they have to compete for inputs with higher-productivity counterparts— seems to fall particularly heavily on public or publicly-funded sectors like education, childcare, healthcare, and law enforcement. If these sectors remain as stubbornly labor-intensive as they’ve been over the last forty-odd years, governments will have to spend more and more on them to provide the same level of service.
If improving productivity in these areas remains an intractable …