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



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Updated: 2017-10-01T20:19:19-07:00

 



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

2017-08-28T15:25:24-07:00

1. **Ezra Klein**: Graham-Cassidy could’ve been the GOP’s best Obamacare replacement: "Instead, Lindsey Graham and Bill Cassidy wrote the worst plan yet... 2. **Noah Smith**: The Racism of the Rust Belt: "Wow. This article about the Rust Belt is amazing... 3. **Carmen Reinhart and Vincent Reinhart**: The Fear Factor in Today’s Interest Rates: "The theory of “rare disaster risk” has progressed considerably in recent years, owing to the work of the Harvard economist Robert Barro... 4. **Alan Beattie**: As they unwind QE, central banks must come clean about inflation: "The Fed has tightened policy and the BoE is now prefiguring a rise. Neither can point at serious signs of inflationary pressure... 5. **Blakeley B. McShane _et al._**: Abandon Statistical Significance: "The status quo is a lexicographic decision rule in which any result is first required to have a p-value that surpasses the 0.05 threshold... ---- **Some Fairly-Recent Links**: 1. **Cathy O'Neil**: My TED talk is live! 2. **Dylan Scott**: Graham-Cassidy now guts Obamacare even more: "Senate Republicans are desperately hunting for votes for repeal..." 3. **Charlie Warzel**: Mark Zuckerberg Can’t Stop You From Reading This Because The Algorithms Have Already Won: "And the machines are running the asylum..." 4. **Òscar...



What Is the Trump Administration's U.S. Tax Cut Plan Likely to Look Like?: Not So Fresh at Project Syndicate

2017-09-25T07:24:19-07:00

Supply-Side Amnesia : In the spring of 1980, Martin Feldstein co-taught (with Olivier Blanchard) the second-best macroeconomics class I ever took. (The best was a class I took from Olivier alone three years later.) From 1982-1984 Martin Feldstein served in Ronald Reagan's cabinet as Chair of the President's Council of Economic Advisers. There he waged an effective if lonely bureaucratic war for the proposition that the size of the Reagan tax cut of 1981 had been a big policy mistake, and that America would suffer if that mistake was not repaired. That position was unpopular inside the Reagan White House: chief-of-staff James Baker tried to get everybody on to the page of delay, in the hope that something would turn up, and avoid the administration having to admit that its signature tax-cutting initiative was, at least in part, a mistake. James Baker and company won the political debate. The U.S. budget deficit created by the Reagan tax cuts was not tamed until Bill Clinton in 1993—over the unanimous objections of every Republican in the House and in the Senate—put the spending and revenue trends on trajectories that did not diverge but converged. In the meantime, from 1982 to 1993, the...



Links for the Week of September 24, 2017

2017-09-24T07:15:05-07:00

**Must-Reads**: 1. **Joshua Gans**: Danny Kahneman on AI versus Humans: "At our AI conference last week, Nobel Laureate Danny Kahneman was commenting on a paper by Colin Camerer: 2. **Ezra Klein**: Graham-Cassidy could’ve been the GOP’s best Obamacare replacement: "Instead, Lindsey Graham and Bill Cassidy wrote the worst plan yet... 3. **George Akerlof** (1979): The Case against Conservative Macroeconomics: An Inaugural Lecture: "The old classical economics bases its case against the efficacy of fiscal policy on the low interest elasticity of money demand... 4. **Josh Bivens and Dean Baker** (2016): The Wrong Tool for the Right Job: "Raising interest rates is a poor strategy for managing asset bubbles... ---- **Should-Reads**: * **Matt Yglesias**: The staggering hypocrisy of Bill Cassidy and Lindsey Graham: "Bill Cassidy... safe seat in Louisiana, could... have spent the past six months... * **Nick Bunker**: Weekend reading: “Discussing distributional tables” edition: "The decline in the start-up firms across the U.S. economy is now a well-documented and troubling trend. Ben Casselman reports... * **John Cole**: Damn I Love The Jag and the Jet and the Mansion: "Graham/Cassidy... bad policy... will devastate many GOP states... hurt tens of millions... * **Nisha Chikhale**: Expanding the Earned Income Tax Credit is... Must-Reads: Joshua Gans: Danny Kahneman on AI versus Humans: "At our AI conference last week, Nobel Laureate Danny Kahneman was commenting on a paper by Colin Camerer: https://digitopoly.org/2017/09/22/kahneman-on-ai-versus-humans/ Ezra Klein: Graham-Cassidy could’ve been the GOP’s best Obamacare replacement: "Instead, Lindsey Graham and Bill Cassidy wrote the worst plan yet... https://www.vox.com/policy-and-politics/2017/9/20/16333384/graham-cassidy-obamacare-health-care George Akerlof (1979): The Case against Conservative Macroeconomics: An Inaugural Lecture: "The old classical economics bases its case against the efficacy of fiscal policy on the low interest elasticity of money demand... http://delong.typepad.com/2553741.pdf Josh Bivens and Dean Baker (2016): The Wrong Tool for the Right Job: "Raising interest rates is a poor strategy for managing asset bubbles... http://cepr.net/images/stories/reports/bubbles-2016-05.pdf Should-Reads: Matt Yglesias: The staggering hypocrisy of Bill Cassidy and Lindsey Graham: "Bill Cassidy... safe seat in Louisiana, could... have spent the past six months... https://www.vox.com/policy-and-politics/2017/9/19/16330094/cassidy-graham-hypocrisy Nick Bunker: Weekend reading: “Discussing distributional tables” edition: "The decline in the start-up firms across the U.S. economy is now a well-documented and troubling trend. Ben Casselman reports... http://equitablegrowth.org/equitablog/weekend-reading-discussing-distributional-tables-edition/ John Cole: Damn I Love The Jag and the Jet and the Mansion: "Graham/Cassidy... bad policy... will devastate many GOP states... hurt tens of millions... https://www.balloon-juice.com/2017/09/23/damn-i-love-the-jag-and-the-jet-and-the-mansion/ Nisha Chikhale: Expanding the Earned Income Tax Credit is worth exploring in the U.S. tax reform debate : "The Grow American Income Now, or GAIN, Act proposed by Rep. Khanna and Sen. Brown... http://equitablegrowth.org/equitablog/value-added/expanding-the-earned-income-tax-credit-is-worth-exploring-in-the-u-s-tax-reform-debate/ Jacob Levy: Black Liberty Matters: "'How is it that we hear the loudest yelps for liberty among the drivers of negroes?'... https://niskanencenter.org/blog/black-liberty-matters/ Matthew Yglesias: : The economy really is broken — but we know how to fix it: "The top 5 percent includes all the members of Congress and all of the donors and lobbyists and business leaders whom members of Congress speak to... https://www.vox.com/2017/9/19/16319416/broken-economy Joseph E. Stiglitz: The Revolution of Information Economics: The Past and the Future: "The economics of information has constituted a revolution in [...]



Monday DeLong Smackdown: Noah Smith: Free Speech on Campus

2017-09-25T07:26:11-07:00

**Noah Smith**: Speech on campus: A reply to Brad DeLong: "On Twitter, I wrote that I disagreed with Brad's ideas about speech on college campuses... >...Brad then requested that I write my ideas up in the form of a DeLong Smackdown. So here we go. >Brad's post was written in a particular context - the recent battles over right-wing speakers at Berkeley. More generally, the alt-right has been trying to provoke conflict at Berkeley, seeing an opportunity to gain nationwide sympathy. The murder of Heather Heyer by Nazis, and general white supremacist street violence, has turned the national mood against the alt-right. The alt-righters see (correctly) that the only way to recover rough parity is the "both sides" defense - in other words, to get people so worried about left-wing street violence that they equivocate between left and right. To this end, they are trying to stir up the most obvious source of potential leftist street violence: Berkeley. >Brad, who works at Berkeley, is far closer to the action, and knows far more about the details on the ground than I do. For example, he noticed this flyer: >I am naturally coming at this from an outside perspective. Thus, my...



For the Weekend: Stephen Vincent Benet: The Devil and Daniel Webster V

2017-09-24T13:59:35-07:00

**For the Weekend: Stephen Vincent Benet**: The Devil and Daniel Webster V : "But till you make a bargain like that, you've got no idea of how fast four years can run... >By the last months of those years, Jabez Stone's known all over the state and there's talk of running him for governor—and it's dust and ashes in his mouth. For every day, when he gets up, he thinks, "There's one more night gone," and every night when he lies down, he thinks of the black pocketbook and the soul of Miser Stevens, and it makes him sick at heart. Till, finally, he can't bear it any longer, and, in the last days of the last year, he hitches his horse and drives off to seek Dan'l Webster. For Dan'l was born in New Hampshire, only a few miles from Cross Corners, and it's well known that he has a particular soft spot for old neighbours. >It was early in the morning when he got to Marshfield, but Dan'l was up already, talking Latin to the farm hands and wrestling with the ram, Goliath, and trying out a new trotter and working up speeches to make against John C....



Procrastination on September 23, 2017

2017-09-23T10:21:36-07:00

**Over at [Equitable Growth](http://EquitableGrowth.org): Must- and Should-Reads:** * **Nick Bunker**: Weekend reading: “Discussing distributional tables” edition: "The decline in the start-up firms across the U.S. economy is now a well-documented and troubling trend. Ben Casselman reports... * **Joshua Gans**: Danny Kahneman on AI versus Humans: "At our AI conference last week, Nobel Laureate Danny Kahneman was commenting on a paper by Colin Camerer: * **John Cole**: Damn I Love The Jag and the Jet and the Mansion: "Graham/Cassidy... bad policy... will devastate many GOP states... hurt tens of millions... * **Nisha Chikhale**: Expanding the Earned Income Tax Credit is worth exploring in the U.S. tax reform debate : "The Grow American Income Now, or GAIN, Act proposed by Rep. Khanna and Sen. Brown... * **Jacob Levy**: Black Liberty Matters: "'How is it that we hear the loudest yelps for liberty among the drivers of negroes?'... * **Matthew Yglesias**: : The economy really is broken — but we know how to fix it: "The top 5 percent includes all the members of Congress and all of the donors and lobbyists and business leaders whom members of Congress speak to... * **Joseph E. Stiglitz**: The Revolution of Information Economics: The Past and...



(Late) Monday Smackdown: Reliable Republican Avik Roy Says: CBO's Score of Graham-Cassidy Will Be the Same as Its Score of BCRA

2017-09-19T05:33:24-07:00

**Sigh**: See what I meant about Monday Smackdowns? **Such** a target-rich environment... **Must-Read**: There are, as is always the case these days, a lot of lies in Avik Roy's latest on health care "reform". But there is one nugget of important truth. Here it is: **Avik Roy**: Take Two: Inside Bill Cassidy's Plan To Replace Obamacare: "Because Graham-Cassidy repeals Obamacare’s individual mandate, and the Congressional Budget Office views the individual mandate as driving the majority of Obamacare’s coverage expansion, the CBO is likely to view Graham-Cassidy the same way it has viewed other GOP bills..." That means that when the CBO's assessment of GC is completed, it will show something like: * 22 million on net losing insurance for the first public draft of BCRA; * 19 million on net losing insurance for the February draft of the AHCA; * 24 million on net losing insurance for the March draft of the AHCA; and * 23 million on net losing insurance for the House-passed version of the AHCA. Even Avik Roy says so. And when even he is making an admission against interest rather than evading and obfuscating, you can take it to the bank. It may well be worse:...



Arshama the Boss from Hell; or, "Questioned Forcefully, and a Severe Sentence Will Be Produced for You..."

2017-09-15T10:54:11-07:00

And now, moving from the twenty-first century back 2500 years to a much earlier age of information technology: John Ma —much peace and strength attend him!—reminds me of his "accessible edition of some letters of a member of the Achaimenid elite, the actual satrap of Egypt", Prince Arshama, quite possibly the great-grandson of King of Kings Darayavush I, writing in the late 400s B.C. to various of his subordinates : * the Persian Artavanta on the ground on Egypt, who appears to be serving more-or-less in a public law capacity—recognizing property rights, and inflicting and remitting punishments. * the Egyptian Nakhthor, bailiff of Arshama in more-or-less a private management capacity. * the Persian Armapiya, commanding armed forces in Egypt, concerning his unwillingness to follow the instructions of Psamšek, who appears to be another of Arshama's bailiffs in Egypt. * plus some others, and a few letters from others to Nakhthor as well... Arshama sounds like the boss from hell: threatening people with being "questioned forcefully, and a severe sentence will be produced for you" appears to be his favorite thing to say. Nakhthor sounds like he is trying to grab what he can and live an easy life. And yet...



Do "They" Really Say: "Technological Progress Is Slowing Down"?

2017-09-15T09:32:10-07:00

**Consider the 256 GB memory iPhone X**: Implemented in vacuum tubes in 1957, the transistors in an iPhoneX alone would have: * cost 150 trillion of today's dollars: one and a half times today's global annual product * taken up a hundred-story square building 300 meters high, and 3 kilometers long and wide * drawn 150 terawatts of power—30 times the world's current generating capacity ---- iPhoneX: * 4.3 billion transistors in the A-11 * 2,199,023,255,552 bits in the 256 GB memory—each of which needs a transistor (and a capacitor) * Let's say 2.5 trillion transistors... * And you can buy 256 GB of memory for $100—of which, say, 1/4 is the cost of a transistor. * So, say, 125 dollars' worth of transistors in an iPhoneX How much would it have cost you to buy a vacuum tube sixty years ago, back in 1957? * Well, in 1959 you could buy a one-byte—8-bit—Phister 366 for 65 dollars * So, say, 8 dollars a bit. * 8 dollars in 1957 is 60 dollars today via the GDP deflator * 8 dollars in 1957 is 160 dollars today as a share of U.S. nominal GDP per capita * 8 dollars in...



Time for Me to Take Another Look at Nancy MacLean's "Democracy in Chains"!

2017-09-14T07:34:49-07:00

Suggestions?... :-) **Should-Read: Nancy MacLean**: DEMOCRACY IN CHAINS: THE DEEP HISTORY OF THE RADICAL RIGHT'S STEALTH PLAN FOR AMERICA : "As 1956 drew to a close, Colgate Whitehead Darden Jr., the president of the University of Virginia, feared... >...second Brown v. Board of Education ruling, calling for the dismantling of segregation in public schools with “all deliberate speed.” In Virginia, outraged state officials responded with legislation to force the closure of any school that planned to comply.... Darden... could barely stand to contemplate the damage.... Even the name of this plan, “massive resistance,” made his gentlemanly Virginia sound like Mississippi. On his desk was a proposal, written by the... chair of the economics department... James McGill Buchanan [who] liked to call himself a Tennessee country boy. But Darden knew better.... >Without mentioning the crisis at hand, Buchanan’s proposal put in writing what Darden was thinking: Virginia needed to find a better way to deal with the incursion on states’ rights represented by Brown. To most Americans living in the North, Brown was a ruling to end segregated schools—nothing more, nothing less. And Virginia’s response was about race. But to men like Darden and Buchanan, two well-educated sons of the South... Suggestions?... :-) Should-Read: Nancy MacLean: DEMOCRACY IN CHAINS: THE DEEP HISTORY OF THE RADICAL RIGHT'S STEALTH PLAN FOR AMERICA http://amzn.to/2voi3qD: "As 1956 drew to a close, Colgate Whitehead Darden Jr., the president of the University of Virginia, feared... ...second Brown v. Board of Education ruling, calling for the dismantling of segregation in public schools with “all deliberate speed.” In Virginia, outraged state officials responded with legislation to force the closure of any school that planned to comply.... Darden... could barely stand to contemplate the damage.... Even the name of this plan, “massive resistance,” made his gentlemanly Virginia sound like Mississippi. On his desk was a proposal, written by the... chair of the economics department... James McGill Buchanan [who] liked to call himself a Tennessee country boy. But Darden knew better.... Without mentioning the crisis at hand, Buchanan’s proposal put in writing what Darden was thinking: Virginia needed to find a better way to deal with the incursion on states’ rights represented by Brown. To most Americans living in the North, Brown was a ruling to end segregated schools—nothing more, nothing less. And Virginia’s response was about race. But to men like Darden and Buchanan, two well-educated sons of the South who were deeply committed to its model of political economy, Brown boded a sea change on much more.... Federal courts could no longer be counted on to defer reflexively to states’ rights.... The high court would be more willing to intervene when presented with compelling evidence that a state action was in violation of the Fourteenth Amendment’s guarantee of “equal protection”.... States’ rights... were yielding in preeminence to individual rights. It was not difficult for either Darden or Buchanan to imagine how [the Warren] court might now rule if presented with evidence of the state of Virginia’s archaic labor relations, its measures to suppress voting, or its efforts to buttress the power of reactionary rural whites by underrepresenting the moderate voters of the cities and suburbs of Northern Virginia. Federal meddling could rise to levels once unimaginable. James McGill Buchanan was not a member of the Virginia elite. Nor is there any explicit evidence to suggest that for a white southerner of his day, he was uniquely racist or insensitive to the concept of equal treatment. And yet, somehow, all he saw in the Brown decision was coercion. And not just in the a[...]



Latter-Day Deipnosophists Watch...

2017-09-14T07:56:59-07:00

**Latter-Day _[Deipnosophists][]_**: Lunch at the _[Slanted Door][]_: with Charlie Jane Anders, Annalee Newitz, and Noah Smith: Links relevant to what I remember of the conversation: [Deipnosophists]: https://en.wikipedia.org/wiki/Deipnosophistae [Slanted Door]: http://www.slanteddoor.com * Neanderthals and tar * Lagomorpha Leporidae * **Daniel Abraham**: The Cambist and Lord Iron * **Graydon Saunders**: * The March North * A Succession Of Bad Days * Safely You Deliver * **N. K. Jemisin**: * The Hundred Thousand Kingdoms : The damnedest riff on Jane Eyre that I have ever read: "Mr. Rochester has a wife yet living"; but it's a three-way; only she isn't; living, that is; or maybe she is; and you are her! * The Broken Earth: The Fifth Season | The Obelisk Gate | The Stone Sky * **Robin Sloan**: Sourdough * **Carlo Ginsberg**: The Night Battles: Witchcraft and Agrarian Cults in the Sixteenth and Seventeenth Centuries * Psilopsybin * Caffeine * Nicotine * Alcohol * Theobromine * Lysergic acid diethylamide * Tetrahydrocannabinol * **Joseph Cummins _et al._**: Month of Birth and Child Height in 40 Countries : replication crisis... * **Phil Hoffman**: Why Did Europe Conquer the World? * Teaching notes: * **Aldo Schiavone**: The End of the Past: Ancient Rome and the... Latter-Day Deipnosophists: Lunch at the Slanted Door: with Charlie Jane Anders, Annalee Newitz, and Noah Smith: Links relevant to what I remember of the conversation: Neanderthals and tar https://arstechnica.com/science/2017/09/neanderthals-were-distilling-tar-200-thousand-years-ago-in-europe/ Lagomorpha Leporidae https://en.wikipedia.org/wiki/Leporidae Daniel Abraham: The Cambist and Lord Iron http://podcastle.org/2009/05/06/pc051-the-cambist-and-lord-iron/ Graydon Saunders: The March North https://www.goodreads.com/book/show/21801573-the-march-north A Succession Of Bad Days https://www.goodreads.com/book/show/25635541-a-succession-of-bad-days Safely You Deliver https://www.goodreads.com/book/show/29418615-safely-you-deliver N. K. Jemisin: The Hundred Thousand Kingdoms http://amzn.to/2jpYdHu: The damnedest riff on Jane Eyre that I have ever read: "Mr. Rochester has a wife yet living"; but it's a three-way; only she isn't; living, that is; or maybe she is; and you are her! The Broken Earth: The Fifth Season http://amzn.to/2w9X8tl | The Obelisk Gate http://amzn.to/2xxQX2J | The Stone Sky http://amzn.to/2wqrP97 Robin Sloan: Sourdough http://amzn.to/2wr2LhT Carlo Ginsberg: The Night Battles: Witchcraft and Agrarian Cults in the Sixteenth and Seventeenth Centuries http://amzn.to/2wq4mF0 Psilopsybin https://en.wikipedia.org/wiki/Psilocybin_mushroom Caffeine https://en.wikipedia.org/wiki/Caffeine Nicotine https://en.wikipedia.org/wiki/Nicotine Alcohol https://en.wikipedia.org/wiki/Alcohol Theobromine https://en.wikipedia.org/wiki/Theobromine Lysergic acid diethylamide https://en.wikipedia.org/wiki/Lysergic_acid_diethylamide Tetrahydrocannabinol https://en.wikipedia.org/wiki/Tetrahydrocannabinol Joseph Cummins et al.: Month of Birth and Child Height in 40 Countries http://economics.ucr.edu/repec/ucr/wpaper/201703.pdf: replication crisis... Phil Hoffman: Why Did Europe Conquer the World? http://amzn.to/2jrff83 Teaching notes: http://www.bradford-delong.com/2016/07/philip-hoffman-why-did-europe-conquer-the-world-the-economic-history-research-frontier-a-great-recent-books-approach.html Aldo Schiavone: The End of the Past: Ancient Rome and the Modern West http://amzn.to/2jsp2Lp Peter Heather: The Fall of the Roman Empire: A New History of Rome and the Barbarians http://amzn.to/2y6FGTV Chris Wickham: The Inheritance of Rome: Illuminating the Dark Ages 400-1000 http://amzn.to/2h4kzKq Bryan Ward-Perkins: The Fall of Rome: And the End of Civilization http://amzn.to/2wqfBNw William Rosen: Justi[...]



After the Guns of August: Max Weber: Hoisted from Ten Years Ago

2017-09-13T08:09:33-07:00

**Hoisted from Ten Years Ago**: After World War I: Weber: Marxism, liberalism, and what we will here call "nationalism"—just to be polite... * We've talked about Marxism... * We've talked about classical liberalism... * We haven't talked about "nationalism"... We read Norman Angell: We did not read Max Weber: nationalism as social-darwinist doctrine: >Max Weber, "The National State and Economic Policy": [W]e all consider the German character of the East as something that should be protected, and that the economic policy of the state should enter into the lists in its defense. Our state is a national state, and... we have a right to make this demand.... >[T]he economic struggle between the nationalities follows its course even under the semblance of 'peace'. The German peasants and day-labourers of the East are not being pushed off the land in an open conflict by politically-superior opponents. Instead, they are getting the worst of it in the silent and dreary struggle of everyday economic existence, they are abandoning their homeland to a race which stands on a lower level, and moving towards a dark future in which they will sink without trace. >There can be no truce even in the economic struggle for...



September 11, 2001: Sixteen Years After...

2017-09-11T05:41:09-07:00

**The Onion**: Hijackers Surprised To Find Selves In Hell: "JAHANNEM, OUTER DARKNESS—The hijackers who carried out the Sept. 11 attacks on the World Trade Center and Pentagon expressed confusion and surprise... >...Monday to find themselves in the lowest plane of Na'ar, Islam's Hell. >"I was promised I would spend eternity in Paradise, being fed honeyed cakes by 67 virgins in a tree-lined garden, if only I would fly the airplane into one of the Twin Towers," said Mohammed Atta, one of the hijackers of American Airlines Flight 11, between attempts to vomit up the wasps, hornets, and live coals infesting his stomach. "But instead, I am fed the boiling feces of traitors by malicious, laughing Ifrit. Is this to be my reward for destroying the enemies of my faith?" >The rest of Atta's words turned to raw-throated shrieks, as a tusked, asp-tongued demon burst his eyeballs and drank the fluid that ran down his face. >According to Hell sources, the 19 eternally damned terrorists have struggled to understand why they have been subjected to soul-withering, infernal torture ever since their Sept. 11 arrival. >"There was a tumultuous conflagration of burning steel and fuel at our gates, and from it stepped...



Hoisted from 2013: Yet MOAR Bad-Faith Intellectual History: Keynes's "In the Long Run We Are All Dead" Is Not a "Carpe Diem" Argument...

2017-09-06T08:00:55-07:00

**Hoisted from 2013**: Apropos of David Glasner and John Maynard Keynes's: >Now "in the long run" this is probably true.... But this _long run_ is a misleading guide to current affairs. _In the long run_ we are all dead. Economists set themselves too easy, too useless a task if in tempestuous seasons they can only tell us that when the storm is long past the ocean is flat again... **2013**: Why Did Keynes Write "In the Long Run We Are All Dead"? Weblogging : "Niall Ferguson: >**An Open Letter to the Harvard Community**: Last week I said something stupid about John Maynard Keynes. Asked to comment on Keynes’ famous observation “In the long run we are all dead,” I suggested that Keynes was perhaps indifferent to the long run because he had no children, and that he had no children because he was gay. This was doubly stupid. First, it is obvious that people who do not have children also care about future generations. Second, I had forgotten that Keynes’ wife Lydia miscarried... Niall is wrong. His suggestion was not doubly stupid. There is more. Niall speaks of Keynes's "In the long run we are all dead" as if it...



Supply-Side Amnesia: Live at Project Syndicate

2017-09-06T07:34:43-07:00

**[Project Syndicate][]**: Supply-Side Amnesia: While in the White House, Feldstein waged a persuasive but lonely bureaucratic campaign against the Reagan administration’s 1981 income-tax cuts, arguing that they had been too big, and would prove economically painful if not corrected.... If Feldstein’s warning had been heeded in 1982-84, America would be stronger and happier today. I was thus dismayed at his recent expression of optimism that under today’s Republican-led Congress, “a tax reform serving to increase capital formation and growth will be enacted,” while arguing that “any resulting increase in the budget deficit will be only temporary”... **Read MOAR at [Project Syndicate][]** [Project Syndicate]: https://www.project-syndicate.org/commentary/republican-tax-cuts-budget-deficit-by-j--bradford-delong-2017-09



Intermediate Macroeconomics U.S. Dashboard

2017-09-06T05:47:28-07:00

**Live from Federal Reserve Economic Data**: Brad DeLong's FRED Economic Statistics Dashboard : What I want my Econ 101b students to see and think about before they come to class next January:



The Kansas Republican Governance Experiment. Or Is That "Governance 'Experiment'"? Or Is That "'Governance' Experiment"?

2017-09-06T09:53:35-07:00

Just look at this: Kansas is—in some strong sense—unbelievably loony. No sooner does Sam Brownback manage to plant his behind in the Governor's chair in Topeka, KS than does Kansas's share of American nonfarm jobs and people start to drop like a stone. It is not so much absolute net flight—there were 1.397 million nonfarm jobs in Kansas at the last business cycle peak in April 2008; there are 1.400 million nonfarm jobs in Kansas today. But Kansas has seen none of the country's net employment growth over the past decade: the jobs it lost in the 2007-2009 recession it has barely recovered, while the country has recovered what was lost and has added on almost as many more in addition. There is no sense in which the share of U.S. nonfarm employment in Kansas was in any sort of long-run decline: the employment share was strongly up at the start of the 1990s, flat in the mid-1990s, up and down into the 2000s, down in the mid-2000s, up again in the late 2000s. But since Brownback took the chair over from Kathleen Sibelius and Mark Parkinson, it has been down, down, down, down. A fall of 6%-points in the... Just look at this: Kansas is—in some strong sense—unbelievably loony. No sooner does Sam Brownback manage to plant his behind in the Governor's chair in Topeka, KS than does Kansas's share of American nonfarm jobs and people start to drop like a stone. It is not so much absolute net flight—there were 1.397 million nonfarm jobs in Kansas at the last business cycle peak in April 2008; there are 1.400 million nonfarm jobs in Kansas today. But Kansas has seen none of the country's net employment growth over the past decade: the jobs it lost in the 2007-2009 recession it has barely recovered, while the country has recovered what was lost and has added on almost as many more in addition. There is no sense in which the share of U.S. nonfarm employment in Kansas was in any sort of long-run decline: the employment share was strongly up at the start of the 1990s, flat in the mid-1990s, up and down into the 2000s, down in the mid-2000s, up again in the late 2000s. But since Brownback took the chair over from Kathleen Sibelius and Mark Parkinson, it has been down, down, down, down. A fall of 6%-points in the relative share of employment in little more than six short years is astonishing in its rapidity. Nothing like this was seen before. Yes, Kansas's share of U.S. nonfarm employment shrank from 1995-2003 under Republican Governor Graves, but there ups as well as downs—and the net shift was strong. Yes, Kansas's share of nonfarm employment grew under both Graves's Democratic predecessor Finney and his successors Sibelius and Parkinson—but there were downs as well as ups. It is only under Brownback that it has been down, down, down, down. You can argue how much of it is hostility to immigrants and strangers. How much of it is the profoundly un-Christian cast of a "Christian" government, and how much of it is the collapse of public services. But it has been effective. My friend Dan Davies says that the best proof that there is a skill and art of management comes from the fact that nobody doubts that there is such a thing as gross mismanagement. Similarly, the best proof that there is such a thing as good technocratic government leading to shared prosperity and equitable growth is... Brownback, and his acolytes and supporters, in Kansas: You can't blame this on farm or oil or natural gas booms or busts. You can't blame this on "globalization" or whatever. It is what it is. The Kansas City Star sums it up: Kansas City Star: Kansas will spend years paying for Gov. Sam Brownback’s po[...]



Understanding Washington DC in an Age of Trump

2017-09-05T05:48:59-07:00

If I were you, if I were trying to understand Washington, DC today, I would hold tight to four points: 1. The United States government is a 1700s Enlightenment Era complicated mechanical device that is easily knocked out of alignment and into paralysis. 2. Since 1980, the Republican Party has increasingly elected presidents who are not executives to manage the government and policy but rather communicators to reassure a broad range of voters–increasingly and notably those who are traditionally in the Americas called the _descamisados_–that the Republican Party understands and likes them. 3. This has worked both very well and very badly for the Republican Party: * This has worked both very well for the Republican Party as an institution and for the policies it believes are good for the United States under President Reagan, when the management of government was in the hands of the very impressive George Shultz and James Baker. * This worked not so well under President George W. Bush, for the Richard Cheney and Donald Rumsfeld to whom the management of the government was committed, and who had been very impressive as aides to President Ford in the 1970s, had both aged several bridges too...



Inequality of Opportunity: May I Have My Context Back, Please?: Hoisted from 2007

2017-09-05T05:20:07-07:00

Jeebus, Greg. Context, please! The whole point of inheritance—financial, cultural, sociological—is precisely not to give everyone "the same shot". Inequality of Result + "inheritance" = Inequality of Opportunity. And that's not a good thing. Unless, that is, you think that you choose your parents, and should benefit if you were smart enough to choose them wisely... **Hoisted from February 12, 2007**: May I Have My Context Back, Please? : Ummm... Greg? Greg?! GREG!! Greg Mankiw writes: >Greg Mankiw's Blog: More on Inequality: Ben Bernanke gives a talk on inequality, concluding that >>the challenge for policy is not to eliminate inequality per se but rather to spread economic opportunity as widely as possible. >By contrast, Brad DeLong concludes >>An unequal society cannot help but be an unjust society. >These quotations go to the heart of the policy divide behind right and left. The key question: To what extent is inequality of outcomes a source for concern in and of itself? People will always differ in productivity. Should policymakers act to offset these innate differerences, or should their goal be to give everyone the same shot and not be surprised or concerned when outcomes differ wildly? To a large extent, policymaking often...



Worth Reading from Grasping Reality: Late December 2006

2017-09-03T19:44:15-07:00

* The Stern Review on Global Climate Change Once Again : Bill Nordhaus has placed his critique... in yellow covers: it is now NBER working paper 12741 at (available for free at ... 2006-12-30 * The Future of the Equity Premium: SUMMARY: PRELIMINARY AND INCOMPLETE : But we do not see any signs that Ms. Market has moved to eliminate past mistakes. The real return on the 20-year U.S. Treasury inflation-protected bond is 2.1%, while the current annual earnings yield on the S&P composite stock market index is 5.7%. These numbers suggest an expected equity premium today of 3.6%, lower than the 6% premium equity return of Mehra and Prescott (1985), but far, far higher than the value of 0.25% per year of Mehra's (2003) baseline representative-agent model for a coefficient of relative risk aversion of 2... 2006-2-26 * The Robert Heinlein Wars, Part MDCCLXIV : John Scalzi watches as Dave Itzkoff begins another round of the Heinlein Wars.... I would dispute Scalzi's claim that either Glenn Reynolds or Spider Robinson has "thoughts" on this issue. I would characterize them as having "reflexes." I think I had some "thoughts" on this issue some 10^8 seconds ago: The Starship Troopers novel...



Data Science, Computer Literacy, and the Skill of Writing with a Fine Chancery Hand...

2017-08-30T16:20:00-07:00

About a month and a half ago I decided that there was really no place in any of my classes for my "what you really ought to know about doing economics" lecture : it would be either incomprehensible (because students would not understand it) or unnecessary (because students would already know it). I have been thinking about whether I should have a "leveraging your brain in the twenty-first century for fun and profit using computers" lecture. And I have tentatively decided that I am stuck in the same dilemma: what I have to say will either be incomprehensible and not understandable, or unnecessary and boring because known: ---- Cf.: How to think like an economist (if, that is, you wish to): * * *



Using Computers and Data Science Here in the Twenty-First Century...

2017-09-08T02:34:16-07:00

# 2017-08-30 (More than a) Few Words About "Computer Literacy" in the Twenty-First Century... ---- ## 2017-08-13 Educational Technologies Here at Berkeley ---- ### Why We Are Moving to Computer Problem Sets The Economics Department is responding to the current Berkeley budget crisis by enforcing a work speedup on our GSI section leaders * Instead of teaching 2 sections of 30 for a 50% GSI salary * They will be teaching 3 sections of 25 * They are underpaid anyway * Hence we need to offload the problem set grading part of their job onto our machines... This is an opportunity and a challenge * The opportunity: you have to learn (or remember) a little Python for simple programming exercises * The challenge: you have to learn (or remember) a little Python for simple programming exercises * The opportunity: you learn how to do more things in problem sets * The challenge: we can demand that you do more things in problem sets * The opportunity: you will master important tools ---- ### Why We Are Moving to Computing Four stages in the western European academic intellectual tradition 1. The Visible College: Scribal literacy and Roman numeracy 2. The Invisible... 2017-08-30 (More than a) Few Words About "Computer Literacy" in the Twenty-First Century... 2017-08-13 Educational Technologies Here at Berkeley https://www.icloud.com/keynote/0yKJfOMN5SvDtK_K7tjWAstcA Why We Are Moving to Computer Problem Sets The Economics Department is responding to the current Berkeley budget crisis by enforcing a work speedup on our GSI section leaders Instead of teaching 2 sections of 30 for a 50% GSI salary They will be teaching 3 sections of 25 They are underpaid anyway Hence we need to offload the problem set grading part of their job onto our machines... This is an opportunity and a challenge The opportunity: you have to learn (or remember) a little Python for simple programming exercises The challenge: you have to learn (or remember) a little Python for simple programming exercises The opportunity: you learn how to do more things in problem sets The challenge: we can demand that you do more things in problem sets The opportunity: you will master important tools Why We Are Moving to Computing Four stages in the western European academic intellectual tradition The Visible College: Scribal literacy and Roman numeracy The Invisible College: Print literacy and Arabic numeracy The Republic of Letters: Enlightenment critical thinking and the scientific method The Unseen University... Data Science Wizard skills as the equivalent today of the chancery hand of the fourteenth century... Data Science as Today's Equivalent of the Chancery Hand Needed: anecdotes and data Data so that we can tell whether the stories we hear (and the stories we tell) are in any sense representative Anecdotes—case studies—thick description—so that we can understand what the not-atypical cases and patterns really are   Data Science wizard skills needed for handling Big Data (and small data) Datasets Web scraping Statistical analysis Emergence Simulation Presentation   Anecdotes Read stuff But, these days, so much to read! We are not just writing the history of Europe from the archive of Venetian ambassadors' reports back to the Serenissima anymore, are we? Cf. Leopold von Ranke and his use of the Relazione: Gino Benzoni http://surface.syr.edu/cgi/viewcontent.cgi?article=1213&context=libassoc Point-and-click simply does not scale... Data science skills es[...]



Ethnicism: The New (or Maybe an Old?) Socialism of Fools

2017-08-30T06:34:26-07:00

Economists' theories—at least the economists' theories that I think are relatively well grounded—predict that globalization should have little effect on the broad distribution of income but should, instead, tend to lift all boats... **[READ MOAR at Project Syndicate][]** [READ MOAR at Project Syndicate]: https://www.project-syndicate.org/commentary/anti-globalization-socialism-of-fools-by-j--bradford-delong-2017-08 Note that here I want to sharply distinguish "globalization" on the one hand from the elimination of tariffs and non-tariff barriers on the other. With high tariffs, and under substantial non-tariff barriers, those who own the factors of production needed to make the protected commodities shelter and profit from the politically-generated rents that they have used their levers over politics to obtain. As the extremely sharp Dani Rodrik frequently points out here , theory predicts that eliminating tariffs and non-tariff barriers does produce net gains, yes, but it also produces large redistributions—and the smaller the initial level of the tariff or non-tariff barrier eliminated, the larger do the redistributions loom relative to the net gains. "Globalization", however—at least as I define it here—is a different process. "Globalization" is the knitting together of the world via sharp technologically-driven reductions in transportation and communication costs. Yes, with "globalization" they—foreign producers—can learn how to make stuff more efficiently and...



Sacramento, Galveston, Houston

2017-09-04T16:00:06-07:00

I suspect that somewhere out there—somewhere with a quantum wave function amplitude perhaps as large as ours—there is a well dredged Sacramento Ship Channel extending from the busy Port of Sacramento—second busiest on the West Coast behind Long Beach—down to the Golden Gate. In that branch of reality, Sacramento was not buried under ten feet of water in January 1862: >California’s new Governor, Leland Stanford, was to be inaugurated on January 10 [1862], but the floodwaters swept through Sacramento that day, submerging the city. Citizens fled by any means possible, yet the inauguration ceremony took place at the capital building anyway, despite the mounting catastrophe. Governor Stanford was forced to travel from his mansion to the capital building by rowboat. Following the expedited ceremony, with floodwaters rising at a rate of one foot per hour, Stanford rowed back to his mansion, where he was forced to steer his boat to a second story window in order to enter his home. Conditions did not improve in the following weeks. California’s legislature, unable to function in the submerged city, finally gave up and moved to San Francisco on January 22, to wait out the floods... >>—**B. Lynn Ingram** (2013): California Megaflood: Lessons...



A Reason—a Small Reason, But a Reason—Why the Quality of Republican Policy Governance in America Has Fallen So Low

2017-08-20T19:26:57-07:00

On Twitter : The hard-working and intelligent Jim Tankersley sends me to: >Reihan Salam : "The best 'Why I'm running' statement I've ever read from a GOP candidate": Randy Boyd: Why I'm Running . But Boyd is a joke: Boyd's Goal #1: >Complete the Drive to 55... 55 percent of the population has some credential past high school by the year 2025. We are only at 39 percent now... That's 8 years. At the moment (roughly) 0.5% of Volunteers are gaining their Associates degree every year. So doesn't attaining that goal require (roughly) immediately quintupling to 2.5% of Volunteers the number of Volunteers getting Associates degrees every year? Where is the proposed **immediate** quintupling of the state university system to make this possible? And where are the financing channels and resources to induce people to attend? Goal #2: >To Be #1 in the Southeast for High Quality Jobs... by reduc[ing] restrictions, regulations and red tape. Sometimes the way government helps business the most is to just get out of the way... Reducing the size of government is supposed to attract high-quality employers away from Atlanta and Miami and the Research Triangle? What is the mechanism supposed to be here? Goal...



Information Technology and the Future of Society

2017-08-14T11:09:03-07:00

**Hoisted from 2001**: Information Technology and the Future of Society (My Bekeley CITRIS Kickoff Talk) : For perhaps 9000 years after the beginnings of agriculture the overwhelming proportion of human work lives were spent making things: growing crops, shearing sheep, spinning yarn, weaving cloth, throwing pots, cutting down trees, copying books, and so on, and so forth. Technology did improve enormously over those 9000 years: contrast the clothes-making technology at the disposal of Henry VIII of England with that of Rameses II of Egypt three thousand years before; contrast the triple-crop paddy-irrigated rice- and water-control-based agriculture of the Yangtze Delta in eighteenth-century China with the scratch-the-soil-with-a-hoe agriculture of two thousand years before. But as Thomas Robert Malthus first wrote in the 1790s, rising populations had put enough pressure on scarce natural resources to offset the benefits of better technology and keep living standards nearly constant for the people if not for the elite: American President Thomas Jefferson in 1803 A.D. certainly enjoyed a higher standard of living than Roman Consul Marcus Tullius Cicero in 63 B.C. But did Jefferson's slaves enjoy a higher standard of living than Cicero's? A large amount of archeological evidence has not yet found significant differences....



What Do Econ 1 Students Need to Remember Most from the Course?: Hoisted from 2010

2017-08-08T09:33:25-07:00

**Hoisted from 2010**: What Do Econ 1 Students Need to Remember Most from the Course? : Economics deals with those things that we want but that are "scarce".



The New Socialism of Fools: Fresh at Project Syndicate

2017-08-07T10:52:38-07:00

**Project Syndicate**: The New Socialism of Fools by J. Bradford DeLong : BERKELEY – According to mainstream economic theory, globalization tends to “lift all boats,” and has little effect on the broad distribution of incomes. But “globalization” is not the same as the elimination of tariffs and other import barriers that confer rent-seeking advantages to politically influential domestic producers. As Harvard University economist Dani Rodrik frequently points out, economic theory predicts that removing tariffs and non-tariff barriers does produce net gains; but it also results in large redistributions, wherein eliminating smaller barriers yields larger redistributions relative to the net gains. Globalization, for our purposes, is different. It should be understood as a process in which the world becomes increasingly interconnected through technological advances that drive down transportation and communication costs...[Read MOAR at Project Syndicate][] [Read MOAR at Project Syndicate]: https://www.project-syndicate.org/commentary/anti-globalization-socialism-of-fools-by-j--bradford-delong-2017-08



Who Gets a Seat at the Table?: More Dred Scott v. Sanford Blogging: Hoisted from the Archives from 2007

2017-08-05T10:27:12-07:00

**Hoisted from the Archives**: More Dred Scott v. Sanford Blogging for 2007's Martin Luther King Jr. Holiday Weekend! : Mark Graber has gotten himself to the right of John C. Calhoun. This is a position painful and ludicrous for a twenty-first-century American legal academic to assume. It is a position so painful and ludicrous that it should induce any twenty-first-century American academic to undertake an agonizing reappraisal—particularly over Martin Luther King holiday weekend. But Mark Graber doesn't. Let's turn the mike over to him: >[A] fundamental principle of an empirically realistic constitutional theory ought to be that constitutional bargains survive only when interpreted, however creatively, in ways that create opportunities for mutually beneficial cooperation [between the parties].... Of course, members of [the North] will have the luxury of knowing, as civil war wracks their country, that [the slavemasters of the South] was the party responsible for abandoning the constitution. This, however, is unlikely to reduce their casualities.... >Constitutional bets made by one generation... should not be enforceable against the next when the result is a sharp imbalance in the benefits.... Constitutions are best interpreted in ways that enable all parties... to believe that they are better off continuing to cooperate...



Paul Gigot of the Wall Street Journal Predicts the Failure of Clintonomics: A Historical Document from 1993

2017-08-04T04:22:33-07:00

Paul Gigot of the Wall Street Journal Predicts the Failure of Clintonomics: A Historical Document from 1993 : One evasion in Ken Auletta's piece on the _Wall Street Journal_ stands out: his quoting without comment of Norman Pearlstine's claim that Paul Gigot “was a first-rate reporter... He was not. Here was my first encounter with Gigot's reporting--in this case, reporting on me, one of the heads of Alicia Munnell's staff at the U.S. Treasury in 1993. Damned if I know what Paul Gigot is talking about when he says of my boss that: "Alicia Munnell is in denial, even though her staff has calculated that Mr. Feldstein is right." I think "Mr. Feldstein is right" might mean "upper-bracket tax collections fell in fiscal 2001 (because of the recession)," rather than what Gigot wants you to think it means--that "the tax-rate hikes of 1990 discouraged work and put us on the far side of the Laffer curve." If that's not what Gigot means, he's making s--- up: I was there. I was Alicia Munnell's staff. I made the calculations. And I know: **Paul A. Gigot**: Oops! Weren't We Going to Soak The Rich? 9 July 1993: "On his way out the...



Open Letter from 1470 Economists (Including Me) on Immigration

2017-08-03T09:30:31-07:00

Open Letter from 1470 Economists (Including Me) on Immigration : Dear Mr. President, Majority Leader McConnell, Minority Leader Schumer, Speaker Ryan, and Minority Leader Pelosi: The undersigned economists represent a broad swath of political and economic views. Among us are Republicans and Democrats alike. Some of us favor free markets while others have championed for a larger role for government in the economy. But on some issues there is near universal agreement. One such issue concerns the broad economic benefit that immigrants to this country bring. As Congress and the Administration prepare to revisit our immigration laws, we write to express our broad consensus that immigration is one of America’s significant competitive advantages in the global economy. With the proper and necessary safeguards in place, immigration represents an opportunity rather than a threat to our economy and to American workers. We view the benefits of immigration as myriad: * Immigration brings entrepreneurs who start new businesses that hire American workers. * Immigration brings young workers who help offset the large-scale retirement of baby boomers. * Immigration brings diverse skill sets that keep our workforce flexible, help companies grow, and increase the productivity of American workers. * Immigrants are far more...



Yes: The CBO's Growth Forecasts Are Not Unreasonable...

2017-08-02T04:59:48-07:00

The Trump administration (I won't say "Donald Trump", because I am not convinced that Donald Trump knows what the Congressional Budget Office is) wants people to take on the CBO's projections that real GDP growth is likely to average a hair less than 2 percent per year. And professional Republicans John Cogan of Stanford, Glenn Hubbard of Columbia, John Taylor of Stanford, and Kevin Warsh of Stanford [deliver](http://www.hoover.org/sites/default/files/research/docs/on_the_prospects_for_higher_economic_growth_0.pdf). Michael Strain provides them with a warning—which they do not and will not heed: **Michael Strain**: Stop Bashing the CBO, Republicans: "**A word to the wise from a fellow conservative: Expert analysis isn't your problem; bad legislation is...** >...The nonpartisan agency... was the subject of a bizarre attack ad by the White House last month. Mick Mulvaney, President Donald Trump’s budget director, has publicly questioned whether “the day of the CBO” has “come and gone.” Former House speaker Newt Gingrich recently advocated: “Abolish CBO. It is totally destructive. It is totally dishonest.” Last week, members of the House Freedom Caucus authored amendments that would cut the CBO’s funding in half and eliminate the division responsible for producing cost estimates of legislation.... The GOP is unwise to delegitimize the CBO even out of...



Public Spheres for the Trump Age: No Longer Fresh at Project Syndicate

2017-07-31T17:27:58-07:00

: Let me take a break in this column from our usual economics to worry about our institutions: What have we to say—to hope and fear—about the role and the future of the independent—ideologically and intellectually—university? We care because universities perform two crucial roles. They transmit our civilization to the young. And they are the only place where productive thought about both the long-run and the short-run advantage and destiny of the human race can take place. Truth be told, the world's for-profit media enterprises were never up to the task of nurturing a robust and constructive "public sphere" (in the sense of Jürgen Habermas ) in which humanity could discuss and debate our very important issues of how to govern ourselves and where to focus our collective talents. Their news and advocacy articles are inevitably annexes to what really matter to the funders: advertising. Thus they will be under enormous pressure either to please their niche base as much as possible or avoid offense to the broad majority. Even Walter Lippmann ultimately put more of his ultimate trust in a secular priesthood of scholars and other public intellectuals—at think tanks, at intellectually and ideologically independent universities, and in an...



Clueless DeLong Was Clueless About What Was Coming in 2007 and 2008: Hoisted from the Archives

2017-07-31T05:10:46-07:00

**From November 2008**: Why I Was Wrong... : Calculated Risk issues an invitation: >Calculated Risk: Hoocoodanode?: Earlier today, I saw Greg "Bush economist" Mankiw was a little touchy about a Krugman blog comment. My reaction was that Mankiw has some explaining to do. A key embarrassment for the economics profession in general, and Bush economists Greg Mankiw and Eddie Lazear in particular, is how they missed the biggest economic story of our times.... >This was a typical response from the right (this is from a post by Professor Arnold Kling) in August 2006: >>Apparently, the echo chamber of left-wing macro pundits has pronounced a recession to be imminent. For example, Nouriel Roubini writes, "Given the recent flow of dismal economic indicators, I now believe that the odds of a U.S. recession by year end have increased from 50% to 70%." For these pundits, the most dismal indicator is that we have a Republican Administration. They have been gloomy for six years now... >Sure Roubini was early (I thought so at the time), but show me someone who has been more right! And this brings me to Krugman's column: Lest We Forget >>Why did so many observers dismiss the obvious signs...



More on the Kaiping Mines: Hoisted from Ten Years Ago

2017-07-30T07:52:30-07:00

**Hoisted from Ten Years Ago**: More on the Kaiping Mines: Jonathan Spence's Asides, and Albert Feuerwerker's Review of Ellsworth Carlson : China specialists see and can almost touch an alternative history in which late-nineteenth century China managed to match the political and economic achievements of Meiji Japan, and in which China stood up economically, politically, and organizationally at the same pace of the Japan that won its short victorious war against Russia in 1905, negotiated as an equal with Britain and the U.S. over warship construction in 1921, and was perhaps the eighth industrial power in the world by 1929. In his _In Search of Modern China, for example, Jonathan Spence praises the nineteenth century_ for its: >Confucian statesmen whose skill, integrity, and tenacity helped suppress the rebellions... showed how imaginatively the Chinese could respond to new challenges... managed to develop new structures to handle foreign relations and collect customs dues, to build modern ships and weapons, and to start teaching international law and the rudiments of modern science.... It was true that there remained complex problems... rural militarization... local autonomy over taxation... landlord abuses... bureaucratic corruption... bellicose foreign powers.... But with forceful imperial leadership and a resolute Grand Council,...



(Early) Monday Smackdown/Hoisted: John Cogan, Tobias Cwik, John Taylor, and Volker Wieland's Reputational Bet on Fiscal Policy Is Due, and They Are Bankrupt...

2017-07-30T07:55:49-07:00

Apropos of [Simon Johnson's](http://www.bradford-delong.com/2017/07/must-read-the-smart-and-honest-simon-johnson-likes-the-trumpists-and-cogan-hubbard-taylor-and-warshs-3year-real-n.html), [Charlie Steindel's](http://www.bradford-delong.com/2017/07/comment-of-the-day-charles-steindel-monday-smackdown-republican-economists-burn-yet-more-of-their-reputations-departme.html), and my... distaste... for the 3%/year growth fake forecasts of [Cogan, Hubbard, Taylor, and Warsh](http://www.bradford-delong.com/2017/07/comment-of-the-day-charles-steindel-monday-smackdown-republican-economists-burn-yet-more-of-their-reputations-departme.html)... Let me say that in Taylor's case, at least, this type of bullshit misrepresentation of what we know and what the evidence says has now been going on for a very long time: I, at least, am as tired of it as are the more senior real economists who are John Taylor's peers. Why John Taylor thinks he is still entitled to call himself an "economist" is beyond me. It has been beyond me for eight years: **Hoisted from the Archives from May 1, 2009**: John Cogan, Tobias Cwik, John Taylor, and Volker Wieland's Reputational Bet on Fiscal Policy Is Due, and They Are Bankrupt : In March I got a note from Ward Hanson asking me to come down here to Stanford and talk about: >the impact of the Stimulus Bill on jobs creation... the contrast between the Romer/Bernstein estimates of the benefits of the stimulus plan versus... Cogan, Taylor et al. that estimate/argue that there will be very little benefit.... I've got agreement from the "Taylor group" to present, as well as Martin Giles of the Economist...



Battle Over Globalization

2017-07-28T07:45:56-07:00

**Brad DeLong**: (経済教室)グローバル化を巡る攻防(下)偏りない成長で不安払拭 市場経済の経験を生かせ B・デロング カリフォルニア大学バークレー校教授  :日本経済新聞 (**Battle over globalization (down) Uneasy with unbiased growth Leverage the experience of market economy...



Monday Smackdown: Republican Economists Burn Yet More of Their Reputations Department...

2017-07-24T10:19:13-07:00

**Must-Read**: The quick and careful [Justin Fox][] is unhappy with—and makes me aware of [this]. All I can say is: unprofessional I would not have thought that it was an argument that could be maintained by any economist of reputation—even though, as John Stuart Mill once said, "what was affirmed by Cicero... [of] philosophy...may be asserted without scruple of the subject of political economy—that there is no opinion so absurd as not to have been maintained by some person of reputation". I don't think that this is an opinion. And the cost to your reputation—I'm looking at you, John Taylor, and you, Glenn Hubbard, and you Kevin Warsh—may well exceed whatever your current positive balance is plus your available credit limit: **John F. Cogan, Glenn Hubbard, John B. Taylor, and Kevin Warsh**: On the Prospects for Higher Economic Growth: "Productivity growth declined in the 1970s, rose markedly through the 1980s and 1990s, and fell again sharply in recent years. The data are not supportive of the popular contention that the United States is in the midst of a long-term decline in productivity growth..." [Justin Fox]: https://www.bloomberg.com/view/articles/2017-07-20/yes-financial-crises-do-bring-hangovers [this]: http://www.hoover.org/sites/default/files/research/docs/on_the_prospects_for_higher_economic_growth_0.pdf Here is the post-WWII quarterly productivity growth rate scatter: Here is the...



What Should We Be Ready to Do After the Next Nuclear Fire?...

2017-07-22T08:29:55-07:00

I was never able to get anybody interested in publishing this when I wrote it and shopped it around ten years ago. I do wonder why: it is, I think, rather important... After the Next Nuclear Fire... : In the early 1980s the U.S. NSA--or perhaps it was the Defense Department--loved to play games with Russian air defense. They would send probe planes in from the Pacific to fly over Siberia. And they would watch and listen: Where were the gaps in Russian sensor coverage? How far could U.S. planes penetrate before being spotted? What were Russian command-and-control procedures to intercept intruders? And so on, and so forth. Then, one night, September 1, 1983, the pilot of Korean Air Lines Flight 007 to Seoul mispunched his destination coordinates into his autopilot, and sent his plane west of its proper course, over Siberia, where Russian fighters--confident that they had finally caught one of the American spyplane intruders napping--blew it and its hundreds of civilian passengers out of the sky. With some glee the Reagan administration claimed that the Russians had deliberately shot down a civilian airliner because they were barbarians and terrorists and wanted the world to know that they were...



A Teaching Note on Barro's (2005) "Rare Events and the Equity Premium" and Rietz's (1988) "The Equity Premium: A Solution"

2017-07-21T11:03:17-07:00

**J. Bradford DeLong** (2007): A Teaching Note on Barro's (2005) "Rare Events and the Equity Premium" and Rietz's (1988) "The Equity Premium: A Solution" : Robert Barro should have called his 2005 "Rare Events and the Equity Premium" paper something like "Rare Events and the Low Riskfree Rate" instead... Barro's paper follows Rietz (1988) and uses the possibility of future disastrous falls in economy-wide consumption and in payouts on equities to explain the high premium equity return relative to bonds, and the low real return on bonds as well. The primary channel is not what you probably think: it is not that the fear of future catastrophe depresses the price and hence raise the in-sample--we here in the United States haven't seen the real catastrophes the lurk out there--average return to equities. The primary channel is that fear of future catastrophe raises desired savings to carry purchasing power forward in time in case of need. But, since assets are in fixed supply in the Lucas-tree model Barro uses, this outward shift in savings demand drives the prices of real bonds up and the returns on real bonds down. It also--for risk-aversion parameters greater than one--drives the prices up and the...



Hoisted from 2007: Clive Crook vs. "Populist" Democrats: The Brain-Eater Surfaces

2017-07-21T07:38:04-07:00

The puzzle about just how and why the brain eater ate Clive Crook's brain—how it was that, starting about a decade ago, one of the most interesting (and intelligent) of the Tories simply lost his grip on reality—remains, to me at least, a mystery. Here I am hoisting from one of the first full-blown signs of it in 2007. A little background: By 2008 the brain-eating was overwhelming. For example we had Clive Crook on the "huge success" of the nomination of Sarah Palin—meaning, that is, that she was highly qualified to be Vice President and would attract lots of new votes to the McCain-Palin ticket: **Clive Crook** (2008): Democrats must learn some respect: "The problem in my view is less Mr Obama and more the attitudes of the claque of official and unofficial supporters that surrounds him... >...If only the Democrats could contain their sense of entitlement to govern in a rational world, and their consequent distaste for wide swathes of the US electorate, they might gain the unshakeable grip on power they feel they deserve.... But the fathomless cultural complacency of the metropolitan liberal rules this out. The attitude that expressed itself in response to the Palin nomination...



Reading Notes for Robert Skidelsky: "Keynes: A Very Short Introduction"...

2017-07-19T12:32:50-07:00

**John Maynard Keynes**: John Maynard Keynes was brought up a classical liberal and a classical economist. He believed in free trade, economic progress, cultural uplift, and political reason. He then found himself working for the British Treasury during World War I, unable to stop what he thought were disastrous post-World War I political decisions. He then found himself watching as the classical economic mechanisms he had been taught to admire all fell apart. He then picked himself up. After World War I Keynes used what power he had to—don't laugh—try to restore civilization. He had, all things considered, amazing success and an amazing impact. In Skidelsky's—powerful and I believe correct--interpretation, Keynes before 1914: >believed (against much evidence, to be sure) that a new age of reason had dawned. The brutality of the closure applied in 1914 helps explain Keynes’s reading of the interwar years, and the nature of his mature efforts... to restore the expectation of stability and progress in a world cut adrift from its nineteenth-century moorings... (ES, page xv) Thus he then spent the rest of his life arguing that, if only statesmen would be farsighted and clever enough, they could put Humpty-Dumpty back together again: the world...



World War II at the Operational Level: The Fall of France 1940 (Prompted by the Forthcoming Release of "Dunkirk")

2017-07-21T07:43:35-07:00

Will the "Dunkirk" movie be any good? I cannot say that I am optimistic. But if you want to understand the bigger picture, here is my take on it: ---- **From**: My Very Short Take on World War II... : How are we to understand World War II? One way is to take a look at the first three major campaigns—the Polish campaign of September 1939, the French campaign of May-June 1940, and the first six months of the Russian campaign from June 22 to the end of 1941. In the 1939 Polish campaign, the Nazis lost 40,000 soldiers killed and wounded. The Poles lost 200,000 killed and wounded. The Poles also lost about 1,000,000 taken prisoner. In the 1940 French campaign, the Nazis lost 160,000 soldiers killed and wounded. The allies lost 360,000 soldiers killed and wounded. And the allies also lost 2,000,000 soldiers taken prisoner. In the first six months of the 1941 Russian campaign, the Nazis lost 1,000,000 soldiers killed and wounded. The Russians lost 4,000,000 soldiers killed and wounded. And the Russians lost 4,000,000 soldiers taken prisoner. The Nazis were simply better, tactically, at the business of war then any of their enemies. They understood dive...



Clueless DeLong Was Clueless: Hoisted from the Archives from 2007: The Domestic Macroeconomic Outlook: February 28, 2007

2017-07-18T13:43:06-07:00

**Clueless DeLong Was Clueless**: Hoisted from February 2007: The Domestic Macroeconomic Outlook: February 28, 2007 : It looks like I'm not going to get to give my short talk on the domestic macroeconomic outlook up at Lake Tahoe this weekend: That's too bad, because such talks quickly grow stale. One of the major points of my schtick is that the macroeconomic outlook rarely changes suddenly, so that 90% of the time it is perfectly OK to say, "things are like they were, only three months ago." Nevertheless such talks have a very short half life: people like to know how the most recent news affects things, even if the usual answer is "not much"--except, of course, for those turning points where things do change a great deal, and which we usually see clearly only in retrospect. I was going to hit three big points: **The Great Moderation**: * The business cycle is smaller than it used to be * Fewer recessions in industrial production * Largely good luck * But are there structural causes--better financial intermediation, et cetera? * We don't really know: * Why shallower recessions in industrial production? * Is the Federal Reserve is doing a much better... Clueless DeLong Was Clueless: Hoisted from February 2007: The Domestic Macroeconomic Outlook: February 28, 2007 http://www.bradford-delong.com/2007/02/the_domestic_ma.html: It looks like I'm not going to get to give my short talk on the domestic macroeconomic outlook up at Lake Tahoe this weekend: That's too bad, because such talks quickly grow stale. One of the major points of my schtick is that the macroeconomic outlook rarely changes suddenly, so that 90% of the time it is perfectly OK to say, "things are like they were, only three months ago." Nevertheless such talks have a very short half life: people like to know how the most recent news affects things, even if the usual answer is "not much"--except, of course, for those turning points where things do change a great deal, and which we usually see clearly only in retrospect. I was going to hit three big points: The Great Moderation: The business cycle is smaller than it used to be Fewer recessions in industrial production Largely good luck But are there structural causes--better financial intermediation, et cetera? We don't really know: Why shallower recessions in industrial production? Is the Federal Reserve is doing a much better job of responding to recessions in real time? How has, in large part, the Federal Reserve has not let itself get wedged into a situation where it feels it can't respond to recession because inflation is still uncomfortably high? Does it matter that industrial production matters less for the economy as a whole? It used to be that fluctuations in the harvest were a really big deal for the macroeconomy Someday, somebody will write: "it used to be that fluctuations in industrial production were a really big deal for the macroeconomy"-[...]



Clueless DeLong Still Clueless, But Slightly Less So: Hoisted from Ten Years Ago: High-Grade Structured Credit, and Time for the Fed to Start Cutting Interest Rates

2017-07-19T09:19:51-07:00

**Clueless DeLong Still Clueless—Albeit Slightly Less So**: High-Grade Structured Credit, and Time for the Fed to Start Cutting Interest Rates: Hoisted from Ten Years Ago : BondDad writes: >Daily Kos: $10 Billion Hedge Fund Now WORTHLESS: $10 Billion Hedge Fund Now WORTHLESS: From CBS Marketwatch: >>A Bear Stearns Cos. hedge fund that made leveraged bets in the subprime mortgage market is worth nearly nothing, according to two people briefed by the investment bank. Investors have been waiting for Bear to update them on the High-Grade Structured Credit Enhanced Leveraged Fund and a larger, less leveraged fund called the High-Grade Structured Credit Fund. The Wall Street Journal reported on Tuesday that the larger High-Grade Structured Credit Fund is worth roughly 9% of its value at the end of April. >bonddad's diary :: For those of you catching up on this story, here's the short version. About 2-3 weeks ago, Bear Stearns announced that two hedge funds invested primarily in the structured finance area (Collateralized Debt Obligations and Collateralized Loan Obligations) were experiencing record redemption requests. The problem with these requests is the fund was heavily leveraged -- meaning they had borrowed a ton of money. Reports have the leverage ratio at...



The Most Mendacious Graph the Wall Street Journal Ever Published: Paul Gigot and Kevin Hassett Smackdown/Hoisted from 2007:

2017-07-22T08:11:37-07:00

...Thanks, Paul Gigot! Thanks, Kevin Hassett! **Hoisted from 2007**: Most Dishonest Wall Street Journal Editorial Ever : Yes, it's the Wall Street Journal editorial page reporting more American Enterprise Institute-quality research from Kevin Hassett. This is the most mendacious ever. Mark Thoma is on the case. Here's the graph: Here is the accompanying text: [We're Number One, Alas][]: "The nearby chart shows the Laffer Curve effect from business taxation. Tax receipts tend to fall below their optimum potential when corporate tax rates are so high that they lead to the creation of loopholes and the incentive to move income to countries with a lower tax rate. Ireland is the classic case of a nation on the "correct side" of this curve. It has a 12.5% corporate rate, nearly the lowest in the world, and yet collects 3.6% of GDP in corporate revenues, well above the international average. The U.S., by contrast, with its near 40% rate has been averaging less than 2.5% of GDP in corporate receipts. Kevin Hassett, an economist at the American Enterprise Institute who has studied the impact of corporate taxes, says the U.S. 'appears to be a nation on the wrong side of the Laffer Curve:...