The Short March Back to Inflation

Date: 04‑02‑2021

Source: The Wall Street Journal By Michael D. Bordo and Mickey D. Levy

Like today, policy makers of the 1960s had bigger worries than prices. Then a spike crushed the economy.

There is a long history of high budget deficits being associated with inflation, and Washington’s current profligate spending and the Federal Reserve’s expansive monetary policy may be pushing the U.S. down that path. In the U.S. and world‑wide, the link between deficits and inflation has been most apparent during wartime, as the fiscal burdens of combat spur central banks into inflationary financing. But there are also peacetime instances. Now, after a decade of modest inflation that has made many expect it will always stay low, a rise in inflation may come as a surprise.

Sounding the alarm about inflation is out of vogue. Skeptics point out that high deficit spending, zero interest rates and unprecedented quantitative easing didn’t spur inflation in the decade after the 2008‑09 financial crisis. That experience has left a strong impression on makers of monetary and fiscal policy.

Who Is Andy Jassy? Jeff Bezos Acolyte Moves From Cloud to Amazon CEO

Date: 03‑02‑2021

Source: The Wall Street Journal

Incoming chief executive turned Amazon’s cloud computing into industry, company’s most profitable business

Andy Jassy has been the chief architect and evangelist of Amazon Web Services.

Andy Jassy, the Amazon. com Inc. leader who is set to take over as chief executive from founder Jeff Bezos later this year, is a longtime acolyte of his boss who helped come up with the tech giant’s most profitable idea: cloud‑computing.

Since Amazon Web Services launched in 2006, Mr. Jassy, 53, has been its chief architect and evangelist, building the business from a nascent idea that was widely questioned in the technology community to a multibillion‑dollar business that dominates the internet.

After joining Amazon in 1997 and helping what was then a small online bookseller to expand its catalog to CDs, he began shadowing Mr. Bezos as a technical assistant in the early 2000s. In 2003, he found himself in a brainstorming session in Mr. Bezos’ living room. There, they cooked up the idea together to build the cloud‑computing platform now known as AWS.

Why Is China Cracking Down on Alibaba?

Date: 03‑02‑2021

Source: Project Syndicate by Angela Huyue Zhang

Angela Huyue Zhang is Director of The Center for Chinese Law and Associate Professor at the University of Hong Kong. Her book Chinese Antitrust Exceptionalism: How the Rise of China Challenges Global Regulation will be published by Oxford University Press in March. 

The Chinese authorities‘ antitrust action against the e‑commerce giant appears arbitrary. The perception that the same business practices are treated in drastically different ways when policy priorities shift will not bolster investor confidence in China’s thriving internet firms.

HONG KONG – Since the Chinese authorities suddenly halted fintech conglomerate Ant Group’s planned initial public offering in autumn 2020, its parent company, e‑commerce king Alibaba, has been facing harsh regulatory scrutiny. On Christmas Eve, China’s antitrust authority announced that it was investigating the firm’s exclusive business practices. And Alibaba’s founder, Jack Ma, recently eased concerns regarding his fate by appearing in public for the first time since last October, when he delivered a speech criticizing financial regulation in China.

The mere announcement of the investigation into Alibaba wiped more than $100 billion off the firm’s market value overnight. Given the Chinese government’s huge regulatory power, investors are rightly anxious about Alibaba’s prospects. But the government’s sudden and aggressive move against the firm also reveals much about the regulatory regime’s weaknesses.

Give Workers a Fighting Chance

Date: 03‑02‑2021

Source: Project Syndicate by Daron Acemoglu

Daron Acemoglu, Professor of Economics at MIT, is co‑author (with James A. Robinson) of Why Nations Fail: The Origins of Power, Prosperity and Poverty and The Narrow Corridor: States, Societies, and the Fate of Liberty.

 At a time when businesses are awash in technologies capable of replacing human labor, the US tax code is encouraging them to embrace excessive levels of automation – even to the point where it is no longer efficient to do so. Rarely before has the deck been stacked so fully against workers.

CAMBRIDGE – The first months of US President Joe Biden’s administration will be defined by the efforts to contain COVID‑19 and deliver vaccinations on a mass scale. Over the medium term, however, the economy will determine the administration’s success. Here, Biden has indicated that tax reform will be a high priority, and he has released plans to address long‑running fiscal problems such as federal government revenue shortfalls and the tax system’s loss of progressivity. But these proposals do not yet go far enough to address a major fault line in the tax code: the excessively favorable treatment of capital income (profits and returns on financial assets and savings).