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Preview: Grasping Reality with Opposable Thumbs

Grasping Reality with Both Hands: bradford-delong.com:



If you would rather just see Highlighted Posts...



Updated: 2017-12-25T16:14:40-08:00

 




2017-12-15T07:34:53-08:00

**Note to Self**: This is your reminder: * 178.4 million people are represented by the 48 senators who caucus with the Democrats. * 144.1 million people are represented by the 52 senators who caucus with the Republicans. * 65.9 million people voted for Hillary Rodham Clinton and Tim Kaine to be their president and vice president * 63.0 million people voted for Donald Trump and Mike Pence to be their president and vice president.



Some Fairly-Recent Must- and Should-Reads...

2017-12-18T07:17:57-08:00

1. **Alan Cole**: @AlanMCole on Twitter: "Don't think this one's gonna pay for itself, guys... 2. **Free Exchange**: A decade after it hit, what was learnt from the Great Recession?: "The success of those policies, and the relatively bearable recession that resulted, allowed governments to avoid more dramatic interventions... 3. **Economist**: Women and economics: Inefficient equilibrium: "Donna Ginther... has found telling evidence that women... in economics... face a thicker glass ceiling... 4. **Barry Eichengreen**: [Two Myths About Automation](https://www.project-syndicate.org/commentary/two-myths-about-automation-by-barry-eichengreen-2017-12): "Robots, machine learning, and artificial intelligence promise to change fundamentally the nature of work... 5. **JEC**: The Taxonomy of Oligarchs: "Rich people in America have the luxury of indulging an astonishing variety of self-destructive fantasies... ---- **Recent Highlighted**: 1. [Tax Foundation Score of the Tax "Reform" Conference Report](http://www.bradford-delong.com/2017/12/tax-foundation-score-of-the-tax-reform-conference-report.html#more) 2. [Deer in the Headlights](http://www.bradford-delong.com/2017/12/deer-in-the-headlights.html#more) 3. [An Appeal to the Republican-Supporting Plutocrats of America](http://www.bradford-delong.com/2017/12/an-appeal-to-the-republican-supporting-plutocrats-of-america.html#more) 4. [Notes on Gerald Friedman](http://www.bradford-delong.com/2017/12/notes-on-gerald-friedman.html#more) 5. [The Great Depression from the Perspective of Today, and Today from the Perspective of the Great Depression: Hoisted from 2013](http://www.bradford-delong.com/2017/12/the-great-depression-from-the-perspective-of-today-and-today-from-the-perspective-of-the-great-depression-hoisted-from-2013.html#more) ---- **Some Fairly-Recent Links**: * **Noah Smith**: Sorry, But Economics Isn't 'Astrology for Dudes': "The dismal science can explain lots of things with data and theory. Astrologers explain nothing..." * **Dan Shaviro**: Start Making... Alan Cole: @AlanMCole on Twitter: "Don't think this one's gonna pay for itself, guys... Free Exchange: A decade after it hit, what was learnt from the Great Recession?: "The success of those policies, and the relatively bearable recession that resulted, allowed governments to avoid more dramatic interventions... Economist: Women and economics: Inefficient equilibrium: "Donna Ginther... has found telling evidence that women... in economics... face a thicker glass ceiling... Barry Eichengreen: Two Myths About Automation: "Robots, machine learning, and artificial intelligence promise to change fundamentally the nature of work... JEC: The Taxonomy of Oligarchs: "Rich people in America have the luxury of indulging an astonishing variety of self-destructive fantasies... Recent Highlighted: Tax Foundation Score of the Tax "Reform" Conference Report Deer in the Headlights An Appeal to the Republican-Supporting Plutocrats of America Notes on Gerald Friedman The Great Depression from the Perspective of Today, and Today from the Perspective of the Great Depression: Hoisted from 2013 Some Fairly-Recent Links: Noah Smith: Sorry, But Economics Isn't 'Astrology for Dudes': "The dismal science can explain lots of things with data and theory. Astrologers explain nothing..." Dan Shaviro: Start Making Sense: Under the new tax bill, lose money before tax but make money after-tax: "Our revised Tax Games report should be out within a day or two. (The original is still here.)..." Mamta Badkar: Kashkari cites inflation, flattening yield curve for dissent: "Kashkari has now voted against rate rises three time this year.... 'In response to our rate hikes, the yield curve has flattened significantly, potentially signaling an increasing risk of a recession'..." JEC: The Next New Macro: "I have my own notions about the best way forward.... I could easily be wrong.... Maybe we'll be able to retire the Robert E. Lucas Jr. Award For Derailing An Entire Discipline without ever bestowing it on a second recipient.[...]




2017-12-18T09:42:28-08:00

**Should-Read: JEC**: The Taxonomy of Oligarchs: "Rich people in America have the luxury of indulging an astonishing variety of self-destructive fantasies... >...Thus far, the worst "ideas" of the American oligarchic class have been blissfully free of consequences. (More specifically, free of consequences for the oligarchs themselves, which is of course what really matters to oligarchs.) But over the last decade or so, a new fantasy has captured the imaginations of a faction of America's oligarchic class: the notion that American oligarchs can make common cause with the oligarchs of countries like China, Saudi Arabia, and, especially, Vladimir Putin's Russia.... Once again, it will probably fall to America's liberals to save the imbecilic rich from their own idiocy and malice. 'Twas ever thus.... >The basic political idea which drives oligarchs of all stripes is that wealth and power go together, and, more importantly, that is is a desirable feature to be sought and preserved in any political system. And in this, the oligarchs of America and the oligarchs across the sea share values and vision. But there is a crucial difference apparently overlooked by all to many oligarchs of the American variety. Namely, that American oligarchs are, with a few exceptions,...



An Appeal to the Republican-Supporting Plutocrats of America

2017-12-18T09:35:38-08:00

**Comment of the Day: JEC**: An Appeal to the Republican-Supporting Plutocrats of America: "I've written more about this in my own space, but the short version is: 'Would somebody please remind the plutocrats that they are not the kleptocrats' natural allies; they are the kleptocrats' natural prey?'... >...Kleptocrats enrich themselves by expropriating plutocrats. Why folks like the Kochs and the Mercers imagine that a Putin-style strongman would permit them to keep their money continues to mystify me. But I suppose that Wilhelmine aristocrats imagined that Hitler would save them from the evils of Bolshevism, so perhaps illusory hope is what plutocracy is made of.



Weekend Reading: Richard Thaler: Behavioral Economics

2017-12-18T08:40:17-08:00

**Weekend Reading: Richard Thaler**: Behavioral Economics/a>: "Exactly 100 years ago, the JPE was poised to be at the forefront of the field that would eventually come to be called behavioral economics... >...[but] the subsequent editors of the JPE did not take up [Clark's] call to arms. Behavioral economics papers have made only scattered appearances in the journal in the subsequent century.... The editors gave us a limited amount of space for these essays, but that has not proved to be a major problem for the topic to which I was assigned. I cannot say for sure whether the small number of behavioral economics papers published in the JPE was a shortage of supply or demand, but there are entire branches of behavioral economics that have not made (much of) an appearance.... It will be a shame if the JPE does not include more behavioral research in its pages. I suggest the editors all read that paper by John Maurice Clark... ---- Full essay: **Weekend Reading: Richard Thaler**: Behavioral Economics/a>: "Exactly 100 years ago, the JPE was poised to be at the forefront of the field that would eventually come to be called behavioral economics... >...John Maurice Clark, a JPE editor,... Weekend Reading: Richard Thaler: Behavioral Economics/a>: "Exactly 100 years ago, the JPE was poised to be at the forefront of the field that would eventually come to be called behavioral economics... ...[but] the subsequent editors of the JPE did not take up [Clark's] call to arms. Behavioral economics papers have made only scattered appearances in the journal in the subsequent century.... The editors gave us a limited amount of space for these essays, but that has not proved to be a major problem for the topic to which I was assigned. I cannot say for sure whether the small number of behavioral economics papers published in the JPE was a shortage of supply or demand, but there are entire branches of behavioral economics that have not made (much of) an appearance.... It will be a shame if the JPE does not include more behavioral research in its pages. I suggest the editors all read that paper by John Maurice Clark... Full essay: Weekend Reading: Richard Thaler: Behavioral Economics/a>: "Exactly 100 years ago, the JPE was poised to be at the forefront of the field that would eventually come to be called behavioral economics... ...John Maurice Clark, a JPE editor, University of Chicago faculty member, and son of John Bates Clark, authored the lead article of the January 1918 issue titled “Economics and Modern Psychology: I.” (Part II appeared in the next issue.) His message was a simple one: “The economist may attempt to ignore psychology, but it is a sheer impossibility for him to ignore human nature. … If the economist borrows his conception of man from the psychologist, his constructive work may have some chance of remaining purely economic in character. But if he does not he will not thereby avoid psychology. Rather he will force himself to make his own, and it will be bad psychology” (4). A few years later Clark left Chicago to take the position his father had once held at Columbia, and it seems fair to say that the subsequent editors of the JPE did not take up his call to arms. Behavioral economics papers have made only scattered appearances in the journal in the subsequent century. As Herbert Simon once said, the term behavioral economics is a bit strange. “What ‘non-behavioral’ economics can we contrast with it?” he asked (Simon 1987, 221). One answer to this question is the style of economics that the JPE is perhaps best known for: price theory à la Chicago School led by the intellectual giants Gary Becker, Milton Friedman, and George Stigler. Becker’s research goal was to apply the standard tools of maximizing behavior to study a wide variety of topics that were not then part of the domain of economics including addiction, crime, discrimination, marriage, divorce, childbearing, and soc[...]




2017-12-18T07:26:06-08:00

**Should-Read: Thomas Robert Malthus**: PPrinciples of Political Economy Considered with a View to Their Practical Application: "We cannot too highly respect and venerate that admirable rule of Newton, not to admit more causes than are necessary... but the rule itself implies, that those which really are necessary must be admitted... >...Before the shrine of truth, as discovered by facts and experience, the fairest theories and the most beautiful classifications must fall. The chemist of thirty years ago may be allowed to regret, that new discoveries in the science should disturb and confound his previous systems and arrangements; but he is not entitled to the rank of philosopher, if he does not give them up without a struggle, as soon as the experiments which refute them are fully established.... There are many important propositions in political economy which absolutely require limitations and exceptions.... The frequent combination of complicated causes, the action and reaction of cause and effect on each other, and the necessity of limitations and exceptions in a considerable number of important propositions, form the main difficulties of the science, and occasion those frequent mistakes which it must be allowed are made in the prediction of results. >To explain myself...




2017-12-18T07:18:59-08:00

**Should-Read: Free Exchange**: A decade after it hit, what was learnt from the Great Recession?: "The success of those policies, and the relatively bearable recession that resulted, allowed governments to avoid more dramatic interventions... >...of the sort which, after the 1930s, gave the world half a century of (relative) economic calm. By reducing the need for radical innovation, the speed and efficacy of the response left the world economy less reformed and so vulnerable to the same forces that made the crisis possible in the first place. Several shortcomings stand out. In dealing with the Depression, governments ultimately discarded the gold standard, the global currency regime that helped propagate the disaster.... That would be less troubling had the world made itself more robust to future crises.... The stabilisation policies used in the Great Recession were vastly superior to those of the Depression. But today’s governments have done a worse job of learning from experience than did their forebears.... The Depression enabled radical change by discrediting untrammelled capitalism and the elites who supported it.... Ten years on, the hopes of radical reform are all but dashed. The sad upshot is that the global economy may have the opportunity to relearn the...




2017-12-18T07:18:06-08:00

**Should-Read: Alan Cole**: @AlanMCole on Twitter: "Don't think this one's gonna pay for itself, guys:" >**John Buhl**: @jbuhl35 on Twitter: "Because of the nonstop work of @ScottElliotG @NKaeding and others, we have a dynamic score of the conference committee version of the #TaxReformBill Full report to come later today." **Alan Cole**: @AlanMCole on Twitter: "1.7% change in long-run GDP is a pretty bad score from @taxfoundation all things considered, given how large the tax cut is. One problem is they got rid of the shortened asset life for structures in conference..."




2017-12-18T07:18:02-08:00

**Should-Read: Economist**: Women and economics: Inefficient equilibrium: "Donna Ginther... has found telling evidence that women... in economics... face a thicker glass ceiling... >...tenure... achieve[d]/// at a rate 12 percentage points below that of men.... even after adjusting (as much as possible) for differences in family circumstances and publication record. In American universities women who achieve tenure are promoted to full professor within seven years at a rate of 29% compared to 56% for men. Adjusting for other factors, Ms Ginther still finds a gap of 23 percentage points. In other social and natural sciences such differences are a thing of the past.... >There is every chance that that this lack of diversity constrains or distorts the field’s intellectual development.... If, on the other hand, women have a similar range of innate potential and inclination towards the subject as men, but are avoiding or leaving it because it treats them worse, then the burden is on economists to change. And that is the way that the evidence currently points.... >The women who graduate in economics go into PhD programmes at roughly the same rate as men; they tend to drop out of them at the same rate, too. But once they...




2017-12-18T07:17:59-08:00

**Should-Read: Tim Duy**: Is The Fed Finishing 2017 On A Dovish Note?: "An important implication falls out of this analysis: Relative to the 2018 economic forecast changes, the projected path of policy is dovish... >...This can be explained by the surprising inflation weakness over the past year. Policymakers now believe a return to full employment requires an extended period of activity in excess of that consistent with full employment...



Tax Foundation Score of the Tax "Reform" Conference Report

2017-12-18T06:18:22-08:00

**Alan Cole**: @AlanMCole on Twitter: "Don't think this one's gonna pay for itself, guys:" >**John Buhl**: @jbuhl35 on Twitter: "Because of the nonstop work of @ScottElliotG @NKaeding and others, we have a dynamic score of the conference committee version of the #TaxReformBill Full report to come later today." **Alan Cole**: @AlanMCole on Twitter: "1.7% change in long-run GDP is a pretty bad score from @taxfoundation all things considered, given how large the tax cut is. One problem is they got rid of the shortened asset life for structures in conference..." ---- The rules of thumb I find myself applying to Tax Foundation numbers these days are: 1. Their “small open economy with perfect capital mobility” assumptions together bias and triple the long run boost to the level of GDP relative to the baseline. The US is a large economy: global interest rates are not unaffected by it. International capital mobility is not perfect: home bias is a huge thing. 2. Their “1/e time to the long run is 10 years” assumption biases and doubles their estimate of the initial growth rate boost.. 3. Their failure to distinguish between Gross Domestic Product and national income causes an additional substantial bias that...



Deer in the Headlights?

2017-12-17T19:13:45-08:00

Susan Collins on _Meet the Press_, December 4, 2017: >**SUSAN COLLINS:** Apply [that] to [the] four-tenths of one percent increase in the GDP generates revenues of a trillion dollars, a trillion dollars.... I’ve talked four economists, including the Dean of the Columbia School of Business and former chairs of the councils of economic advisors and they believe that it will have this impact. So I think if we can stimulate the economy, create more jobs, that does generate more revenue... >**CHUCK TODD:** But why isn't there a single study? I'm going to show you three studies that we have, sort of a liberal one, a centrist one, and a conservative one right up there. The most conservative one, the most pro-economic growth argument, still adds $516 billion to the deficit over ten years... >**SUSAN COLLINS**: Well, talk to economists like Glenn Hubbard and Larry Lindsey and Douglas Holtz-Eakin, who used to be head of the C.B.O. And they will tell you otherwise. So I think you will find that economists just don't agree on this... The fourth economist—if he is indeed a former chair of the Council of Economic Advisers—must by process of elimination be either Greg Mankiw or Eddie...



An Appeal to the Republican-Supporting Plutocrats of America

2017-12-17T19:13:39-08:00

OK. It appears likely that you will “win” this round. It appears more likely than not that the tax “reform“ bill will pass, and thus that you will redistribute an extra 0.5 percent of national income from the bottom 90% to your 0.1%-0.01%—depending on how exclusively you define yourselves—selves. That will move your share of America’s resources devoted to satisfying your desires up to 5-10%, from a baseline of back in the 1970s of 1.5-3%. Nearly all of your children will be fellow plutocrats. Many of your grandchildren will be plutocrats. But odds are more than half of your great grandchildren will not. Since, as far as your needs and desires are concerned, your money is simply a way of keeping score, shouldn’t you be focusing more of your energy and attention on making a better America for those of your great grandchildren who will not be plutocrats to live it? Yes. And you are doing a very lousy job of that. Moreover, you are also doing a profoundly lousy job at creating America in which your grandchildren those of your great grandchildren who will be plutocrats will be secure. Respect for the rule of law and confidence that the...



An Appeal to the Republican-Leaning Entrepreneurial, Enterprising, and Lucky White Christian Upper Middle Class of America

2017-12-17T19:07:39-08:00

Your Jewish, African-American, Hispanic-American, and Asian American brothers and sisters do not need to hear this, so I address myself to you. You and your predecessors have been the backbone of America’s Republican Parry since the Great Depression. Your predecessors did not give up hope and faith in the America of individual opportunity and the market economy during the Great Depression. They were always suspicious of oversocialism, overtaxation, overredistribution, overunionization, and overbureaucratization as pursued by Democrats using the Great Depression as a club to beat up those saying “wait a minute“ in response to policy proposals that advanced the interests of Democratic Party clients. And so they, and with the passage of time you, became the backbone of the Republican Party in America: its funders, its local leaders, the subscribers to it periodicals, the soil in which its candidates would grow, the social millieu in which Republicans could be confident that they were good people and right on the issues. And, with the election of Ronald Reagan, your predecessors won more than half the argument. And so America embarked on a special and different path from the North Atlantic social democracies which has led us to our current impasse. It...




2017-12-17T08:04:02-08:00

**Must-Read**: This is the kind of thing that every Republican economist who ever wants to opine on economic policy and be received in polite society at any time in the future should be writing today, about their colleagues who are shilling, loudly or softly, directly or indirectly, for the tax "reform" bill: **Brad DeLong**: Notes on Gerald Friedman: Larry Summers's and my decision to set our hysteresis parameter η = 0.1 as the central case was merely a calculation followed by a belief and then extended by a guess. But the argument was strengthened by... American economic history.... To me, back in the winter of 2016, projections finding large benefits that made sense only under an assumption of η = 0.4 thus seemed four times as large as was in fact likely to be the case. The world seemed to be telling us that η = 0.1 instead. It seemed—and it seems—to me that overpromising the benefits of even the best policies is not a good business to get in. Somebody like Irving Kristol could unashamedly take the Public Interest he edited and use it as a vehicle to publish things he really did not believe could possibly be true:...



Notes on Gerald Friedman

2017-12-17T07:34:26-08:00

**J. Bradford Delong**: Notes on Gerald Friedman: Since 2010 fiscal policy austerity has been a disaster for both Europe and the United States. But how much better could things be? How much good could be done by a restoration of a sensible fiscal policy? I take a sensible fiscal policy to be one that, in the words of Abba Lerner, recognizes the first principle of functional finance... >to keep the total rate of spending in the country on goods and services neither greater nor less than that rate which at the current prices would buy all the goods that it is possible to produce… concentrat[ing] on keeping the total rate of spending neither too small nor too great, in this way preventing both unemployment and inflation… I think a sensible fiscal policy entailing larger deficits and much more aggressive federal spending on investment—and remember that improving public health and the human capital of twelve year olds are just as good “investments” as big pieces of useful infrastructure, and much better than border walls—would do a lot of good. Gerald Friedman thinks that it would do about four times as much good in the long run as I do. Let me...




2017-11-29T12:28:32-08:00

**Should-Read: Nicholas Crafts**: [The Postwar British Productivity Failure](https://warwick.ac.uk/fac/soc/economics/research/workingpapers/2017/twerp_1142_crafts.pdf): "British productivity growth disappointed during the early postwar period... >...inadequate investment in equipment and skills but also... inefficient use of inputs. Weak management, dysfunctional industrial relations, and badly-designed economic policy were all implicated. The policy framework was partly the result of seeking low unemployment through wage restraint by appeasement of organized labour. A key aspect was weak competition. This exacerbated corporate governance and industrial-relations problems in the British ‘variety of capitalism’ which sustained low effort bargains and managerial incompetence. Other varieties of capitalism were better placed to achieve fast growth but were infeasible for Britain given its history...




2017-12-16T18:11:54-08:00

**Should-Read**: Friedrich von Hayek was very clear that a market distribution of income has little to do with "deserve", even putting to one side the idea that perhaps we have not done anything to "deserve" our talents and our industriousness. IMHO, the conservative deference to wealth is rooted not in any moral claim to the justice of wealth distributions but rather to a very different claim—that churn is simply bad: **Brink Lindsey and Steve Teles**: [The Conservative Inequality Paradox](https://niskanencenter.org/blog/news/op-ed-conservative-inequality-paradox/): "Conservatives have two intellectual commitments that are increasingly incompatible... >...They believe that the American economy is clogged up with crony-capitalist corruption that hands out special favors and protections to organized interests. They also hold that economic inequality—in particular, the surging share of total income earned by those at the very top—is morally justified by the rights of property and the tendency of free markets to raise living standards overall.... If our economy really is riddled with cronyism, then the beneficiaries must have pocketed large amounts of ill-gotten loot. The existing distribution of income and wealth, therefore, does not deserve the deference it would be due if all gains were derived from spontaneous, unregulated market transactions. Call it the conservative inequality paradox:...



For the Weekend: O Come Emmanuel

2017-12-16T08:30:29-08:00

width="600" height="338" src="https://www.youtube.com/embed/DPHh3nMMu-I" frameborder="0" allowfullscreen>





2017-12-16T08:26:49-08:00

**Should-Read: Danny Yagan**: [EMPLOYMENT HYSTERESIS FROM THE GREAT RECESSION](https://eml.berkeley.edu/~yagan/Hysteresis.pdf): "This paper uses U.S. local areas as a laboratory to test whether the Great Recession depressed 2015 employment... >..Exposure to a 1-percentage-point-larger 2007-2009 local unemployment shock caused working-age individuals to be 0.4 percentage points less likely to be employed at all in 2015, evidently via labor force exit. These shocks also increased 2015 income inequality. General human capital decay and persistently low labor demand each rationalize the findings better than lost job-specific rents, lost firm-specific human capital, or reduced migration. Simple extrapolation suggests the recession caused most of the 2007-2015 age-adjusted employment decline...




2017-12-16T08:28:53-08:00

**Should-Read: Barry Eichengreen**: [Two Myths About Automation](https://www.project-syndicate.org/commentary/two-myths-about-automation-by-barry-eichengreen-2017-12): "Robots, machine learning, and artificial intelligence promise to change fundamentally the nature of work... >...Everyone knows this. Or at least they think they do... [that] more jobs than ever are threatened... that previously safe jobs are now at risk.... All jobs, even those of doctors, lawyers, and professors, are being transformed. But transformed is not the same as threatened. Machines, it is true, are already more efficient than legal associates at searching for precedents. But an attorney attuned to the personality of her client still plays an indispensable role in advising someone contemplating a messy divorce whether to negotiate, mediate, or go to court. Likewise, an attorney’s knowledge of the personalities of the principals in a civil suit or a criminal case can be combined with big data and analytics when the time comes for jury selection. The job is changing, not disappearing. These observations point to what is really happening in the labor market. It’s not that nurses’ aides are being replaced by health-care robots; rather, what nurses’ aides do is being redefined. And what they do will continue to be redefined as those robots’ capabilities evolve from getting patients out of...




2017-12-16T08:29:02-08:00

**Should-Read: Nathan Jensen**: [Exit options in firm-government negotiations: An evaluation of the Texas chapter 313 program](http://equitablegrowth.org/working-papers/exit-options-negotiations/): "A unique economic development incentive program in the state of Texas that holds almost all elements of bargaining constant... >...leaving only the ability of firms to walk away from a given location during the bargaining process.... I document the extent to which firms that chose to locate in Texas made their decisions independent of this special economic development program. My findings suggest that only 15% of the firms participating in the program would have invested in another state without this incentive. The majority of these projects, and incentive dollars, were allocated to firms already committed to investing in Texas. Case studies of over 80 projects reveal that in many cases it was an open secret that companies had already committed to their investment locations prior to receiving the incentive. This implies the that structure of the program encourages the overuse of incentives...




2017-12-16T08:29:05-08:00

**Should-Read: James Kwoka**: [U.S. antitrust and competition policy amid the new merger wave](http://equitablegrowth.org/report/u-s-merger-policy-amid-the-new-merger-wave/): "This dramatic and well-documented increase in concentration raises the question about its causes... >...Could it simply be the unfortunate side effect of the rise of information technology and network industries that typically do not support numerous firms? It’s certainly the case that those sectors of the economy have grown in visibility and importance, yet consolidation has affected lots of other, more traditional industries as well. Perhaps, then, the decline in competitiveness is due to the increased prevalence of barriers to entry used by incumbent firms to forestall competition by others. There is certainly evidence of this as well—some cited by CEA—but again, this appears to be localized in specific sectors. A third possible explanation is the role of antitrust policy, specifically the ways in which it has changed and permitted the emergence of ever-larger firms...."




2017-12-16T08:29:10-08:00

**Should-Read: Ben Orlin**: [The Three Barriers to Deep Thinking in School](https://mathwithbaddrawings.com/2017/12/06/the-three-barriers-to-deep-thinking-in-school/): "Three crude reasons why deep thinking fails to bloom... >...and the hardy but colorless perennial of “rote learning” surfaces instead. [1] As students, we seek the cognitively easier path.... [Rather than] (1) think about specific cases; (2) look past their superficial differences to the underlying similarity; (3) articulate a general principle; and (4) translate your discovery into algebraic notation... just learn a rule for moving symbols around.... [2] As a teacher, I seek the administratively easier path.... Symbol-pushing isn’t just easier for students. It’s easier for me. It takes less planning before class, less improvisation during class, and less mop-up with struggling students afterwards. To help a room of students think deeply—that’s no easy task. To help them learn superficial facts and mechanical rules? Well, that’s a heck of a lot easier.... [3] As assessors, we seek clear-cut standards by which to rank students.... Tests are written to be “objective” and “fair,” which means they ask for scripted performances of technical skills rather than for flexible improvisation. On such tests, deep thinking can be more an impediment than an aid. So what is there to be done? How do...




2017-12-15T18:48:06-08:00

**Should-Read: Jacob Levy**: [Black Liberty Matters](https://niskanencenter.org/blog/black-liberty-matters/): "'How is it that we hear the loudest yelps for liberty among the drivers of negroes?'... >...This was Samuel Johnson’s bitter rhetorical question about the American revolution, and the conflict it identifies has never been far from the surface of American political and intellectual life. Compared with the societies of 18th and 19th century Europe, the United States was unusually obsessed with the idea of liberty and unusually economically dependent on slave labor. Sometimes Americans like to tell ourselves that the revolutionary idea of liberty is what finally made abolition possible two generations later, but that sidesteps the paradox that the U.S. was one of the last countries to abolish slavery, and did so only after a decades-long expansion. >The great historical sociologist Orlando Patterson provided an important answer to Johnson’s question in his landmark study Freedom in the Making of Western Culture. Across the centuries, from ancient Greece to modern America, “people came to value freedom, to construct it as a powerful shared vision of life, as a result of their experience of, and response to, slavery or its recombinant form, serfdom, in their roles as masters, slaves, and nonslaves.” >It is precisely...




2017-12-16T08:33:02-08:00

**Live from the American Libertarians' Self-Made Gehenna**: [When is the Volokh Conspiracy](http://reason.com/volokh) going to publish its piece on "Judge Alex 'But I Call My Male Clerks into Chambers and Pinch Their Nipples too!' Kozinski and the Background Villains in the Novels of Courtney Milan", with sympathetic commmentary by Susan Estrich?



The Great Depression from the Perspective of Today, and Today from the Perspective of the Great Depression: Hoisted from 2013

2017-12-15T11:00:38-08:00

**Hoisted from 2013**: The Great Depression from the Perspective of Today, and Today from the Perspective of the Great Depression: J. Bradford DeLong U.C. Berkeley and NBER September 2013 :: University of Missouri—Columbia ---- ####1. Introduction#### The past six years have seen an interesting dual shift in economics and economic history. Six years ago economists were a highly confident, aggressive, and arrogant bunch. We believed that we understood how modern market economies worked. We believed that we knew how to keep them running with both low and stable inflation and at fairly high levels of prosperity, relative to their technological productive potential. It happened—as it had always happened whenever economics had thought that they had it figured out—we were wrong. We were wrong, as we have discovered over the past six years as people attempted to do economic policy, that we had misjudged how to reliably keep economies running at a high level of prosperity. And we had misjudged how to reliably keep economies running at a high level of prosperity because we had misjudged what the Great Depression was. The fact that we had a faulty vision of the Great Depression was a caused of the policy errors and... Hoisted from 2013: The Great Depression from the Perspective of Today, and Today from the Perspective of the Great Depression: J. Bradford DeLong U.C. Berkeley and NBER September 2013 :: University of Missouri—Columbia 1. Introduction The past six years have seen an interesting dual shift in economics and economic history. Six years ago economists were a highly confident, aggressive, and arrogant bunch. We believed that we understood how modern market economies worked. We believed that we knew how to keep them running with both low and stable inflation and at fairly high levels of prosperity, relative to their technological productive potential. It happened—as it had always happened whenever economics had thought that they had it figured out—we were wrong. We were wrong, as we have discovered over the past six years as people attempted to do economic policy, that we had misjudged how to reliably keep economies running at a high level of prosperity. And we had misjudged how to reliably keep economies running at a high level of prosperity because we had misjudged what the Great Depression was. The fact that we had a faulty vision of the Great Depression was a caused of the policy errors and macroeconomic disaster of our day, And the fact that following the policy course that we did did not cure the problems of today has led us to revise our view of the Great Depression. Thus we were doubly wrong, but now—we hope—we have it right. Our demonstrated wrongness means that a substantial amount of what economists like me were teaching, both about the structure of the economy today and about the Great Depression, was wrong. A consequence of the past six years is that we economists need to rip up a substantial part of our lecture notes—both the modern macro lectures on proper policy during business cycles, and also our economic history lectures about the Great Depression. Six years ago we economists saw the Great Depression as something the Federal Reserve system could, should, and ought to have stopped dead in its tracks at its beginning. But, we would have said six years ago, the Federal Reserve did[...]




2017-12-15T09:01:06-08:00

**Should-Read: Jerry Taylor** (2016): [Is There a Future for Libertarianism?](https://niskanencenter.org/blog/is-there-a-future-for-libertarianism/): "The Rand Paul campaign and its (admittedly uneven) agenda of social tolerance, military restraint, and fiscal conservatism is little more than a very small pile of smoking embers... >...Paul was crushed by candidates caught up in a bidding war to meet voter demands for nativism, know-nothing economics, know-nothing Dr. Strangelove foreign policy, and bigotry. Libertarian-minded Americans have every reason, once again, to cry in their beer. Why is the oft-prophesied libertarian moment in American politics so elusive?... Bryan Caplan... consumers in the marketplace of ideas... demand comfort and entertainment, not strict morality or empirical truth. While there is some validity to what Caplan says, he is too quick to conclude that libertarian ideas are true but simply too vexatious to bear.... >Years ago, libertarian political theorist Jeffrey Friedman... a devastating critique. The bundled libertarian product...is an incoherent vacillation between a theory of rights that most people do not accept and lazy, unpersuasive utilitarian arguments for laissez faire capitalism. And he’s right. Moreover, the kind of libertarianism that is hostile to social insurance sits uncomfortably with our moral intuition. So much of who we are and where we end up is...




2017-12-15T08:53:22-08:00

**Should-Read: Guido Menzio and Shouyong Shi**: [Efficient Search on the Job and the Business Cycle](https://web-facstaff.sas.upenn.edu/~gmenzio/linkies/MS2.pdf): "A model of directed search... in which transitions... between unemployment and employment and across employers are driven by heterogeneity in the quality of firm-worker matches... >...Agents’ value and policy functions are independent of the endogenous distribution of workers across employment states. Hence, the model can be solved outside of the steady state and used to measure the effect of cyclical productivity shocks on the labor market. Productivity shocks... generate large fluctuations in workers’ transitions, unemployment, and vacancies when matches are are experience goods, but not when matches are inspection goods...




2017-12-15T07:26:48-08:00

**Must-Read**: Ahem! If Robert Barro seriously and carefully thought the long-run boost to national income from the tax "reform" bill was 7% rather than the 3% of the [Nine Republican Economists Being Unprofessional](http://www.bradford-delong.com/2017/11/monday-smackdown-nine-republican-economists-being-unprofessional-on-tax-reform-edition.html), he should have said so then. It is not good to say now: "our critics are right and we should have divided by 25 rather than 10 to get an 0.12% per year growth boost rather than an 'as much as 0.3%' growth boost, so let me multiply the 3% by 25 to get 7%". That is neither "serious" nor "careful". It is, instead, delivering a piece that nails the 0.3% per year growth boost that the Republican political spinmasters have settled on as the talking point. Larry and Jason, please do not ascribe "seriousness" and "carefulness" to work unless it is both serous and careful. I do not believe either the work of the [Nine Republican Economists Being Unprofessional](http://www.bradford-delong.com/2017/11/monday-smackdown-nine-republican-economists-being-unprofessional-on-tax-reform-edition.html) or to the work of [Robert Barro alone here](https://www.project-syndicate.org/onpoint/how-us-corporate-tax-reform-will-boost-growth-by-robert-j--barro-2017-12) qualifies: **Jason Furman and Larry Summers**: [Robert Barro’s Tax-Reform Advocacy: A Response](https://www.project-syndicate.org/onpoint/robert-barro-s-tax-reform-advocacy-a-response-by-jason-furman-and-lawrence-h--summers-2017-12): "Now Barro has provided Project Syndicate with an analysis that uses his own estimates to conclude that the long-run level of output would increase by 7%......




2017-12-15T04:53:29-08:00

**Live from the Primate Research Lab**: Truth!: **A.Benítez-Burraco**: [@abenitezburraco on Twitter](https://twitter.com/abenitezburraco/status/941563223815475205): "Chimps and bonobos help others achieve their goals by giving them needed objects, opening locked door and releasing rewards. Interestingly, while chimps help mainly in response to signals of need, bonobos also help proactively ." **Marcy Wheeler**: [@emptywheel on Twitter](https://twitter.com/emptywheel/status/941649445921480704): "Also, both chimps and bonobos have been known to shred copies of Ayn Rand to create bed litter for their friends..."




2017-12-15T04:31:48-08:00

**Live from the Self-Made Gehenna of the Grand Old Perverts**: How Alex Kozinski's career survived the naked-women-painted-like-cows episode is beyond me: **Joanna Grossman**: [@JoannaGrossman on Twitter](https://twitter.com/joannagrossman/status/939542418638147584): "When I clerked on the Ninth Circuit, Kozinski sent a memo to all the judges suggesting that a rule prohibiting female attorneys from wearing push-up bras would be more effective than the newly convened Gender Bias Task Force. His disrespect for women is legendary..."



An Appeal to the Kansas Congressional Delegation: Jerry Moran, Pat Roberts, Roger Marshall, Lynn Jenkins, Kevin Yoder, and Ron Estes

2017-12-13T20:27:45-08:00

**Live from the Roasterie**: Nothing has happened to Kansas since the start of 2011 like the tech boom of the late 1990s, which Kansas shared in and which pushed its share of national employment up (before returning to normal), or the housing boom of the mid 2000s, which Kansas did not share in and which pushed its share of national employment down (before returning to normal). The only important things to happen to Kansas since the start of 2011 has been Brownbackism and the conversion of Kansas into Brownbackistan. And now one out of seventeen jobs that one would expect to see in Kansas today is simply gone. That is a huge negative impact for a state government to have on prosperity and growth. And now the Republican Party wants to lead the rest of America down that same road: pass-through tax preferences, major revenue cuts followed by cuts in public services and investment, the works. Others who have not been paying attention might have some excuse for overlooking the fact that historical and recent experience tells us that this policy mix is bad for the economy. You do not. You have seen it already. You owe it to your...




2017-12-13T20:01:37-08:00

**Live from the Hot and Dry Santa Barbara Area**: I do wish that they would distinguish where it is a grass-and-brush fire from where it is a forest fire. Grass and brush fires do not have a great deal of oomph should they run up against settled areas. Forest fires do:




2017-12-13T18:09:27-08:00

**Must-Read**: Looking back at my archives, it is clear to me that I have written too little about the good and too much about the bad Friedrich von Hayek. Not, mind you, that I wrote anything wrong: when he was bad, he was horrid. But when he was good he was very, very good. And if I want to argue for interpretive charity for James Buchanan and Nancy MacLean—and I think I do—I should be willing to apply it to Friedrich von Hayek: **Samuel Bowles, Alan Kirman, and Rajiv Sethi**: [Reflections on Hayek](http://voxeu.org/article/reflections-hayek): "Hayek pioneered the informational view of markets in which prices are messages... >...his dynamic vision of the economy provides the basis of an alternative to the equilibrium methodology that today underpins the economics of information.... Hayek drew a sharp contrast between his approach and general equilibrium theory.... As he put it, the “argument in favour of competition does not rest on the conditions that would exist if it were perfect” (Hayek 1948: 104). Instead, his case for competitive markets rested on the idea that competition was a “procedure for discovering facts which, if the procedure did not exist, would remain unknown or at least would not be...




2017-12-13T18:01:19-08:00

**Live from the Orange-Haired Baboon Cage**: A tribe of incompetent grifters. But the Donald mistake is more serious: writing the wrong month for your birthdate is **very** hard to do without **major** cognitive decline: **Leonard Greene**: [Why Melania, Ivanka & Jared's mayoral election votes didn't count](http://www.nydailynews.com/news/politics/melania-ivanka-jared-mayoral-election-votes-didn-count-article-1.3692124): "resident Trump and his family of New Yorkers were not in the Big Apple Nov. 7 when voters went the polls, so they voted by absentee ballot... >...Or at least they tried to... by absentee ballot. "If any of the information is missing it is invalid," a Board of Elections official said.... Jared Kushner didn’t mail his ballot back at all.... Ivanka... didn’t mail it until Election Day—which was too late to be counted.... The President’s ballot... the date of birth on his application was a full month off. Trump, 71, was born on June 14, 1946, but his ballot application lists his birthday as July...



Brad DeLong and Charlie Deist on Austrian Economics

2017-12-13T17:35:32-08:00

**Charlie Deist**: [**Brad DeLong** on Austrian Economics](https://medium.com/@rzadek/the-keynesian-critique-of-abct-ed46daf70d2a): **Charlie Deist**: Good morning everyone, and welcome to the Bob Zadek Show. I’m Charlie Deist, Bob’s producer, once again filling in for Bob, who will be back next week to discuss the topic of morality and capitalism. Are the two compatible? Is a moral citizenry required for a capitalist system, or is it the inverse? Is capitalism the only system that does not require a moral citizenry? I also want to wish our listeners a “seasonally-adjusted greetings.” The adjustment is both my filling in, and my special series here on the business cycle. When we talk about economics, we often refer to seasonally-adjusted statistics—business cycles fluctuate up and down, not only in these longer boom and bust cycles, but also throughout the year. Around Christmas time, consumers are running off to the store to buy the latest gadgets and gizmos, so we see a temporary spike in spending. Last week I was joined by Robert Wenzel, who is a self-described Austrian economist. That does not mean that he is of Austrian nationality—it means he follows the ideas of libertarian economists such as Friedrich Hayek, and Ludwig von Mises. These were 20th-century economists who...




2017-12-13T17:12:15-08:00

**Should-Read**: The Republican Party somehow, over the last sixty years, lost its status as the party of people for whom the market economy and creative destruction were working and were going to work. It became the party of those who thought they had something to lose—plutocrats and their feckless heirs who fear being creatively destroyed, or fear they may be asked if they want jalapeños on their pizza, or fear they will be outcompeted in the market by hungry people from Chiapas who have already traveled hundreds and hundreds of miles to try to build a better life: **Michael Tomasky**: [Republicans Have Lost Touch With Blue America](https://www.thedailybeast.com/republicans-have-lost-touch-with-blue-america): "Blue America... is the America that produces the vast majority of our innovators and thinkers and scientists and creative people... >...This is the America that creates most of the nation’s wealth. Hillary Clinton... won only 15 percent of the country’s 3,100-odd counties, but the 472 counties she did win account for 64 percent of GDP. This is the America that invents and designs and engineers; the America where there already really is so much winning. >Republicans don’t know this America. They don’t represent it.... >Republicans know the Americans they represent: rural people and...




2017-12-13T17:12:18-08:00

**Should-Read**: The Aetna-CVS vertical combination is about sharing information, yes. But is it about sharing information to improve care? Or is it about sharing information to figure out ways to underwrite your coverage pool via plan design and advertising?: **David Anderson**: [Aetna, CVS and data thoughts](https://www.balloon-juice.com/2017/12/04/aetna-cvs-and-data-thoughts/): "This is a risk adjustment data gold mine... >...Aetna has a kick-ass data team. They have huge and deep data sets that they control. It is quite likely that a significant chunk of their risk adjusted covered lives in 2018 have shown up in some point in their data bases in the past decade. An individual who is now insured by Aetna Medicare Advantage in Texas may have had an amputation claim from Aetna Medicaid in Pennsylvania that is dated in 2009. That is valuable information to build and curate a risk adjustment optimization list. However there are always serious holes in the Aetna list.... This is where CVS comes in. There is a good chance that CVS has filled some prescriptions for people who do not show up in Aetna’s data banks.... >The other side... is that Aetna will have far more granular level information on their markets. This will influence plan design,...




2017-12-13T16:45:27-08:00

**Should-Read**: I really, really resent people calling this "populism". There were two populist moments—one in late nineteenth-century America, focused on policies to make the forgotten man of America better off via railroad regulation, unions, effective antitrust, and monetary expansion via the free coinage of silver at a ratio of 16-to-1. The second was post-World War II Latin America and its push for a rapid wage increase high-pressure economy stabilized via financial repression. You can argue as to whether the policies advocated would have made the economy better or worse off—I say "both" and "it depends". But the movement had nothing in common with the ethnic-animosity anti-rootless cosmopolite "Herrenvolk"-affirming plutocratic looting spree now going on in America, or, indeed, with analogous movements in Europe (where not even the plutocrats but rather a lumpenoverclass_ of politically well-connected grifters stand to benefit. Call it fascism. It was never populism. And Catherine Rampell has no excuse for supposing it ever was: **Catherine Rampell**: [Populism died on Saturday](https://www.washingtonpost.com/opinions/populism-is-dead/2017/12/04/ca75496c-d857-11e7-a841-2066faf731ef_story.html): "In the end, only those on the populist right successfully took over a major political party, and later the country... >...But what did they win, really? Did they get the great economic de-rigging they demanded? A fair...




2017-12-13T16:45:43-08:00

**Should-Read**: A veritable Samson armed with the jawbone of an ass—that is, the standard public finance model of capital-income taxation—Robert Waldmann wreaks havoc on the intellectual hosts of the Philistines by the mere expedient of taking the view that the most useful way to use the model is to ask what it tells us is optimal policy from a random initial starting position, rather than what optimal policy will be after a long period of optimal adjustment has passed. Very smart. But not of great interest because it brings with it unwelcome political conclusions to the overwhelming bulk of those who are etched up to follow the argument; **Robert Waldmann** (2008): [Optimal Capital Income Taxation It Is](https://docs.google.com/viewer?a=v&pid=sites&srcid=ZGVmYXVsdGRvbWFpbnxyb2JlcnR3YWxkbWFubnxneDo3NmYxZDEzZWY1MjYyNzRm): "The simplest... standard growth... aK model with optimizing consumers with logarithmic utility... >...or... Cass-Koopmans with Cobb-Douglas production and logarithmic utility.... The distribution of wealth is unequal at time 0. A utilitarian state would want to redistribute income... first best... with a lump sum transfer... rule that out by setting an upper limit on... tax [rates].... What is the best policy?... Tax capital income at the maximum... until perfect equality is achieved.... [Then] there is no more reason to tax and taxes are zero.......




2017-12-13T16:45:35-08:00

**Should-Read**: Back in 2015, I thought "cognitive dictatorship" was simply ludicrous. I should have been paying more attention to Breitbart, Drudge, and Fox News. I should have been paying more attention to the Brexiteers. I should have remembered more of the history of the Late Stuart dynasty—the Popish Plot, the warming-pan, and so forth: **Charlie Stross** (2015): [The Present in Deep History](http://www.bradford-delong.com/2017/09/the-present-in-deep-history-charlies-diary.html): "I'm more worried about what I used as a throw-away in 'Glasshouse' as 'cognitive dictatorships'... >...systems which impose dictated limits on the thinkable thoughts by control of information streams or actual direct brain interfaces. People inside a cognitive dictatorship wouldn't see it as bad; quite possibly they wouldn't even notice the limits on their freedom of cognition, it's just that some ideas would be repugnant or difficult to express semantically in a manner that could be transmitted to other people. Doesn't sound too bad? Consider if the suppressed ideas included abstractions like freedom, emotions reinforcing undesirable primate behavior patterns like love, or the idea that one shouldn't have to work at whatever one's employer deems appropriate in order to live... ---- **Sultan Mahmud of Ghazni**: "I'ma let you finish, but Ernest Gellner had this nailed in _Plough, Sword,...



However This Ends, That This Is This Close Is Just So Awful, Awful, Awful!

2017-12-12T18:22:25-08:00

May I, for one, say that I am overwhelmingly embarrassed at the older white men from the South I have as fellow citizens in this country: Such easily-grifted morons!




2017-12-12T12:25:42-08:00

**Must-Read: John Maynard Keynes**: [The General Theory of Employment, Interest, and Money](http://gutenberg.net.au/ebooks03/0300071h/printall.html): "The austere view, which would employ a high rate of interest to check at once any tendency in the level of employment to rise appreciably above the average of; say, the previous decade... >...is, however, more usually supported by arguments which have no foundation at all apart from confusion of mind. >It flows, in some cases, from the belief that in a boom investment tends to outrun saving, and that a higher rate of interest will restore equilibrium by checking investment on the one hand and stimulating savings on the other. This implies that saving and investment can be unequal, and has, therefore, no meaning until these terms have been defined in some special sense. >Or it is sometimes suggested that the increased saving which accompanies increased investment is undesirable and unjust because it is, as a rule, also associated with rising prices. But if this were so, any upward change in the existing level of output and employment is to be deprecated. For the rise in prices is not essentially due to the increase in investment: it is due to the fact that in the short period...



Hoisted from the Archives: Night Thoughts on Dynamic Scoring

2017-12-11T13:04:05-08:00

**Should-Read**: I say it is time to promote this guy to Admiral: AdmiralPAYGO!: **Ed Lorenzen**: [@CaptainPAYGO on Twitter](https://twitter.com/CaptainPAYGO/status/940294164847185920): "The Treasury Department dynamic 'analysis' of tax reform makes a mockery of dynamic analysis and does a disservice to those who advocate for serious dynamic estimates ..." **Brad DeLong**: [@de1ong on Twitter](https://twitter.com/de1ong/status/940307702537895936): This is a surprise? Static analysis was always about making a bias-variance tradeoff: A static analysis would be biased, but have lower mean-squared error because the "dynamic" terms would inevitably be overwhelmingly large-magnitude political-partisan-lobbyist-ideologue noise: **Hoisted from the Archives from 2015**: [Night Thoughts on Dynamic Scoring](http://www.bradford-delong.com/2016/09/hoisted-from-three-months-ago-night-thoughts-on-dynamic-scoring.html): **Live from DuPont Circle**: Last Thursday two of the smartest participants at the Brookings Panel on Economic Activity conference—Martin Feldstein and Glenn Hubbard—claimed marvelous things from the enactment of JEB!'s proposed tax cuts and his regulatory reform program. They claimed: * that it would boost economic growth over the next ten years by 0.5%/year (for the tax cuts) plus an additional 0.3%/year (for the regulatory reforms). * that it would leave the U.S. economy in ten years producing $840 billion more in annual GDP than in their baseline. * that over the next ten years faster growth would produce an average of 210 billion...




2017-12-11T13:04:03-08:00

**Should-Read**: I say it is time to promote this guy to Admiral: AdmiralPAYGO!: **Ed Lorenzen**: [@CaptainPAYGO on Twitter](https://twitter.com/CaptainPAYGO/status/940294164847185920): "The Treasury Department dynamic 'analysis' of tax reform makes a mockery... >...of dynamic analysis and does a disservice to those who advocate for serious dynamic estimates ... This is a surprise? Static analysis was always about making a bias-variance tradeoff: A static analysis would be biased, but have lower mean-squared error because the "dynamic" terms would inevitably be overwhelmingly large-magnitude political-partisan-lobbyist-ideologue noise: [Night Thoughts on Dynamic Scoring](http://www.bradford-delong.com/2016/09/hoisted-from-three-months-ago-night-thoughts-on-dynamic-scoring.html)




2017-12-11T11:45:29-08:00

**Live from the Gehenna That is the Right-Wing Legal Community**: Combine Alex Kozinski with Ed Crane and company, and one is reminded of John Stuart Mill's "not that conservatives are stupid, but the stupid tend to be conservative". Not that libertarians are predators and sociopathic bullies, but that predators and sociopathic bullies tend to be libertarians: **Paul Campos**: [Judge Alex Kozinski](http://www.lawyersgunsmoneyblog.com/2017/12/alex-kozinski): "All of this has been known, at least in its broad details, for a long time in the elite legal academic circles that send vulnerable young people off to clerk for sadistic bullies like Kozinski... >...Women law students were warned routinely to steer clear of Kozinski, even though he is one of a handful of so-called “feeder” judges, who send large numbers of their clerks on to clerk for the Supreme Court. (ETA: As Bianca Steele points out in comments, “routinely” doesn’t mean “consistently” or “universally”—Bond herself was, by her own account, told nothing). Clerking for the Supreme Court is a huge boost for all kinds of high status academic careers, so avoiding Kozinski because they didn’t want to be sexually harassed (and perhaps worse—we’ll see) was bad for women as a class.... >Three days after this story broke,...



Monday Smackdown: Treasury Document Translation: Steve Mnuchin Is Not a Professional Treasury Secretary. He and His Personal Staff Are Grifters

2017-12-11T08:54:08-08:00

1. The U.S. Treasury's Office of Tax Policy (OTP) and Office of Tax Analysis (OTA) agree with the Congress's Joint Committee on Taxation (JCT) that the Republican Senate tax "reform" bill as written will raise the debt by 1.5 trillion dollars over the next decade, and boost growth by 0.08% per year 2. OTP does not believe that growth will be 2.9% per year over the next decade. 3. If growth were to be boosted from the baseline 2.2% per year over the next decade to 2.9% as a result of the tax "reform", it would pay for itself. But it won't. 4. No office in the Treasury Department is willing to go on record as having written this one-page document. 5. No official in the Treasury Department is willing to go on record as having written this one-page document. 6. Not even Steven Mnuchin has put his name on this one-page document. ---- Shame on all Republican economists who have enabled or are currently enabling this farce...




2017-12-11T08:29:40-08:00

**Must-Read: Naomi Janowitz**: [Office Hour Podcast](https://officehourucdpodcast.com/): "NAFTA with Special Guest Brad DeLong... ...




2017-12-11T06:13:42-08:00

**Should-Read**: But is this—global—productivity slump really like any of the previous—much more local—productivity slumps? A very promising intellectual exercise to do in prospect, but I am going to find Barry and ask him what we really learn from it: **Barry Eichengreen, Donghyun Park, and Kwanho Shin**: [The Global Productivity Slump:  Common and Country-Specific Factors](http://www.mitpressjournals.org/doi/abs/10.1162/asep_a_00544): "Productivity growth is slowing around the world... >...In 2015, the growth of total factor productivity (TFP) hovered around zero for the fourth straight year, down from 1 percent in 1996–2006 and 0.5 percent in 2007–12. In this paper we identify previous episodes of sharp and sustained decelerations in TFP growth using data for a large sample of countries and years. TFP slumps are ubiquitous:  We find as many as 77 such episodes, depending on definition, in low-, middle- and high-income countries. Low levels of educational attainment and unusually high investment rates are among the significant country-specific correlates of TFP slumps, and energy-price shocks are among the significant global factors... ---- >**Barry Eichengreen**: I remain a techno-optimist. I see no evidence that the progress of science and technology is slowing down. What I see is the need to further reorganize how enterprises interact with their customers and...