1. Back in late June, I was surprised to receive an email from a White House staffer who was unknown to me asking if I would consider a job as a member of the President’s Council of Economic Adviser. I said yes, although I don’t think I sounded very enthusiastic.

My perception is that the CEA is not a significant body. At least since the Clinton Administration, it seems to me that whatever power over economic policy that is not wielded by the Fed or Treasury is wielded by an Economic Council under the President that is not the CEA.

Even though the CEA job might be meaningless from an influence perspective, it could be an opportunity to meet various people in government and to travel and speak to various groups. But in a COVID world, those benefits are reduced and/or offset by costs. That is what made it hard for me to sound enthusiastic.

Working for the Trump Administration would make me a pariah among some people. I see that as a mark against those people, not against me.

Anyway, I spoke with the staffer on the phone and he said I would be interviewed the following week. That was the last I heard of the matter–no interview ever took place.

Meanwhile, last month I accepted another position, in the child care sector. One of my daughters moved in with her husband and their new baby. They view us as the child care providers least likely to bring the virus into the family. I saw no reason to question their judgment. I really enjoy babies. These days when people ask how I am doing, I say that I am having a good pandemic.

2. Last month, I wrote an essay about economic policy in the current environment and sent it to a think tank. Never did hear back, so I will paste it in here.

Achieving Economic Recovery from the Pandemic

The current economic policy response to the COVID pandemic appears to be “keep applying fiscal and monetary stimulus until there is a vaccine.” We think that this effort is mostly misguided. Instead, we offer a sense of where the economy can be headed and how it can get there.

As we see it, America will never go back to operating exactly the way it did prior to the pandemic. In adapting to the virus, people have become better at dealing with work, health care, shopping, and education with less in-person interaction. We might say that Americans have invested in “remote capital,” including equipment, software, norms, rules, and tactics for getting things accomplished while we try to minimize direct contact. We have encountered many drawbacks to using these long-distance techniques, but we also have discovered enough advantages that we will not readily go back to our pre-COVID ways.

In thinking about the economy going forward, we focus on three opportunities.

Reconfigure the mix of day care and instruction in K-5 education.
Adapt health care and health insurance to differences in location between doctor and patient and between employee and employer
Re-purpose commercial real estate, allowing entrepreneurs to find profitable uses of surplus retail and office space.

Government’s role in promoting these opportunities is not to provide direction or control. Instead, governments at all levels need to adapt regulations so that they do not inhibit the transition that the market would try to carry out.

K-5 education

At the outset of the school year, the big question in many communities is whether schools will open at all. That is because our large school districts, beholden to powerful teachers’ unions, are mal-adapted to the virus situation.

Meanwhile, enterprising parents of younger children have come up with the solution of creating “pods” in which a small group of students supervised by the parents, often with the help of a professional educator. While not scalable in its current form, this ingenious idea can help us re-think K-5 education, in light of the following :

School for young children is a combination of day care and instruction.
For working parents, day care is important. For these parents, the traditional school that shifts to on-line learning for part of the day represents a huge reduction in service provided.
But with the increase in telework, and the consequent decline in commuting time, parents can be more flexible about providing day care.
Professional educators do not have to provide day care.
Most teachers are not very skilled at online instruction

One scenario for the future is to have day care provided in small groups, as in the “pods.” Instruction would follow structures created by companies with expertise in child development. Each “superstar” online teacher could end up reaching thousands of students. But at the same time parents and/or professional day care providers would participate in the instructional process, by supervising and supplementing children’s online learning.

To enable such a scenario, government would have to shift from being a provider of schools to being a provider of funds for parents to obtain day care and instruction for their children. It would have to set standards for training day care providers so that they are able to collaborate with suppliers of online education to enable children to learn. It would have to offer programs that assist parents who struggle with low incomes and/or children with special needs. It would have to allow various schooling models to evolve and compete with one another.

Health Care and Health Insurance

As more people work remotely, and as doctors integrate tele-medicine with in-person care, our regulatory system becomes increasingly anachronistic. We should eliminate the barriers to providing health insurance across state lines as well as the barriers to providing medical care across state lines.

The current fee-for-service compensation practices encourage doctors to schedule in-person visits, even if tele-medicine or email consultations would be more efficient. We need to encourage alternative compensation systems.

Perhaps medical care would be provided most effectively by having medical technicians do most of the in-person patient contact while highly-trained physicians deal with most of their patients remotely. If so, then we should adapt health insurance regulations, compensation systems, and regulations related to medical practice accordingly.

Re-purpose Commercial Real Estate

Going forward, the demand for retail space and for office space seems likely to be lower than what one would have projected previously. Meanwhile, we have under-built housing by as much as one million units per year for ten years. Also, the demand for warehouses and fulfillment centers is likely to rise.

In order to convert commercial real estate to better uses, local zoning regulations will have to be more flexible. Cities should reduce the steps involved in getting permission to re-purpose real estate.

Where will the jobs come from?

The economy seems destined to shed many restaurants, retail establishments, hotels, and other businesses that thrived when in-person interaction was the norm. As some of our activities migrate on line, some of the jobs that have been lost in recent months will not be coming back. Moreover, the reconfiguration that we are anticipating in education and health care will reduce the demand for workers who were trained to work in the traditional ways in those sectors.

But the vision of small-scale day-care centers would require hundreds of thousands of day-care workers trained to help with instruction. This would in turn create a need for workers to organize and execute the training.

Where will business opportunities come from?

The contrast between the dire plight of many small businesses and the strong stock-market performance of a few tech firms may create the impression that going forward many fewer people will be able to live the American dream of owning their own business, and instead the economy will be dominated by the tech giants. But this dystopia is not inevitable.

The businesses that provide trained daycare providers could be small businesses. The businesses that provide medical technicians that do the in-person diagnostic and therapeutic procedures in health care could be small businesses. The businesses that provide the construction workers to re-purpose commercial real estate could be small businesses.

Lowering the cost of regulatory and tax compliance

One way to promote job creation and small business formation is to lower regulatory and tax compliance. Small businesses cannot afford the overhead required to comply with myriad regulatory mandates. For example, in health care, small offices have become difficult for doctors to maintain, as the cost of complying with requirements for electronic medical records and other mandates have driven them to fold their practices into hospitals or other large health care organizations.

Large firms can offer the same health insurance coverage to workers in many states. Small firms cannot do so. As noted earlier, the rise of remote work should lead to revision of how health insurance is regulated.

If we want more people to work, then we should reduce the tax on labor. That means cutting the payroll tax and using other taxes instead.