Good bosses, bad economists and the curse of the Premier League Top of the Charts 31 July 2020 Torsten Bell Afternoon all, Local lockdowns are all the rage – this time for the North West. We’d better get used to it. In a stroke of genius planning/solidarity we’re heading for a campsite in the North West tomorrow. On the plus side it’ll provide something more interesting to worry about than the (inevitable) rain. In some ways I should have seen it coming – did we really think the rest of the country was going to let the North West get away with having all three top spots in the Premier League? In case you’re sceptical of this forecasting method I’ve got one more word for you: Leicester (5th in the league). And Londoners shouldn’t be getting smug. The capital has three teams in the top eight and, on the most recent data, 439 cases between 16th and 22nd July – up from 370 the previous week. The downside of camping (beyond the kids in your face at 6am) is that TOTCs is also taking a break for the next two weeks. I know this will be hard, but if we’ve learnt anything from the last four months it’s that the British people can endure significant hardships and get through it. So have a great fortnight free of economic reads, and we’ll see you and your inboxes again on 21st August. Torsten Chief Executive, Resolution Foundation Disgraceful science. We’ve touched before on the toxic culture many experience within the world of economics, but this week a very personal set of reflections on that culture from Claudia Sahm (former Fed staffer, now Director of macroeconomic policy at the Washington Center for Equitable Growth) is worth reading, and reflecting on. The piece is about the US economics profession (she notes that there is just one Black economist that works at the Fed, out of 406), but there is plenty for all of us to worry about concerning the diversity of economics here. On this side of the Atlantic we definitely do on occasion see weirdly aggressive behaviour in some economics seminars or parts of the economic policy making landscape. The fact that any of these behaviours are ever thought of as normal is bad for us all as humans, for public debates and for policy advice. Education superpower. You’ll remember rows about whether some schools were driving up their league table performance by excluding poorer performing pupils (either from the schools entirely or from taking exams). But does something similar lie behind Canada’s stellar performance in the cross country, and high profile, PISA education rankings? Yes, is the answer from new research examining Canada’s high achievement/low educational inequality scoresheet. The authors show that the Canadian sample only covers around half of the 15-year-old population, compared to over 90 per cent in countries like Finland, Estonia, Japan and South Korea, with high rates of student exclusions and absentees. The conclusion is that Canada’s performance is likely to in reality be much nearer the middle of the pack. The lessons? Don’t compare apples and pears. And by all means move to Canada, just don’t do it only for the schools. Better bosses. Getting a good boss really matters A LOT for how well an organisation performs. That’s the message from new research examining the impact of bosses on workers’ performance. It examines workers in a large US tech firm, finding that when workers move from an average to good boss, productivity can rise by 50 per cent. As management skills of bosses improve, employees are also less likely to leave. In fact, a good boss is shown to do more for worker performance than having good co-workers. This is definitely not the evidence I have been long looking for to take at least some credit for all the great work Resolution Foundation researchers do… Road to inflation? The dominant, but far from universal, view among economists is that high inflation is not today’s economic problem as unemployment rises and people are saving rather than spending. But it’s always worth considering alternative views, so read this thought-provoking blog from Dario Perkins on the potential for an inflation episode. Key points: 1) we have far less certainty about how inflation works than we once did 2) what we do know from history is that inflation norms can be subject to significant and fairly sudden regime changes 3) it’s possible to imagine a recovery from this global recession that sees big ongoing macro stimulus combining with lasting supply shocks (and central banks that are prepared to allow inflation to overshoot) to cause fast price rises. Personally I think it’s unlikely – but it’s certainly not impossible. Difficult change. There’s a lot of crystal ball gazing out there at present, telling us that covid will be the moment of a magical transition to a better economy. Hopefully it will, but I do worry that this stuff tends to be written by people not imminently losing their jobs from the huge shock we are just in the early stages of. So a new piece from Jean Pisani-Ferry is worth reading for a more balanced take on post-covid opportunities and challenges. His basic argument = yes the small government, free-market template of the last four decades is gone, with less support for globalisation and more for carbon reduction. But history shows us that transitions between forms of capitalism are far from easy. The transition to carbon neutrality will not be cost-free, while it and less reliance on international goods will mean different, and less, consumption. Life these days. luckily, is generally not the “nasty, brutish and short” affair Hobbes referred to, but economic change can certainly be hard and long. Best to be honest about that. Chart of the Week LOne of the many discombobulating aspects of the covid crisis is how it has completely upended how we spend our time. Our paid and unpaid working hours are up in the air, while many people have found themselves with more free time, but with fewer ways to spend it. But, as our Chart of the Week from a recent RF report shows, time use isn’t just overhauled in crises, it evolves over time as social norms change. Compared with the mid-1970s, women are doing more paid work (especially those in high-income households who are doing an extra two hours per day). Men, in contrast, are doing less paid work (those in low-income household are doing three hours less per day) and more unpaid work. Everyone’s doing more childcare and sleeping, which means (almost) all of us have got less leisure time for socialising or hobbies. So, while the quality of TV, pub food and professional football have improved vastly over the past 40 years, the reality of work, rest and care in modern Britain means we’ve got far less time to enjoy them.
