J. Bradford DeLong's Blog, page 1154

Playing with GGraph: Basic Market Equilibrium Calculator--GGraph Version

Basic Market Equilibrium Calculator--GGraph Version

Confronted with any competitive market supply and demand situation, you want immediately to know the answers to four questions:

What is the equilibrium price at which the commodity is sold?
What is the equilibrium quantity sold?
What is the consumer surplus--how much is the existence of the market worth to buyers collectively?
What is the producer surplus--how much is the existence of the market worth to the sellers collectively?

If we are willing to assume linear demand and supply curves, we specify the behavior of demanders and suppliers with two parameters each:

The maximum willingness-to-pay of the consumer who wants the commodity most.
The number of additional units bought for each $1 drop in the price.

And:

The minimum willingness-to-supply of the producer who can make the commodity cheapest.
The number of additional units sold for each $1 increase in the price.

Specify those four numbers under "basic conditions" below, click the "Solve the Model" button, and you will know what you need to know...

<-- Maximum willingness to pay
<-- Additional customer demand from cutting price by $1
<-- Minimum willingness to supply
<-- Additional producer supply from raising the price by $1

Solve the Model

the price <-- The equilibrium price
the quantity <-- The equilibrium quantity
the consumer surplus <-- The equilibrium consumer surplus
the producer surplus <-- The equilibrium producer surplus

Draw the Graph

Memo: delong$ python -m SimpleHTTPServer 8000

Noted for Your Morning Procrastination for September 5, 2014

Over at Equitable Growth--The Equitablog

Claims that the Bulk of the Post-2008 Decline in Labor Force Participation Are "Structural" Need to Surmount a Very High Bar Indeed: Friday Focus for September 5, 2014 - Washington Center for Equitable Growth
Another "Meh" Employment Report... - Washington Center for Equitable Growth
Lunchtime Must-Read: Daniel Kuehn: Study Design and the Minimum-Wage Debate - Washington Center for Equitable Growth
Lunchtime Must-Read: Gerard Roland and Yuriy Gorodnichenko: Putin’s Endgame - Washington Center for Equitable Growth
If You Have--But You Really Should Make--Copious Spare Time to Educate Yourself About Big Data and Statistical Computing... - Washington Center for Equitable Growth
The hazards of underemployment - Washington Center for Equitable Growth
The inequitable mortgage interest tax deduction - Washington Center for Equitable Growth

Plus:

Things to Read on the Morning of September 5, 2014 - Washington Center for Equitable Growth

Must- and Shall-Reads:

Dana Goldstein: The Teacher Wars: A History of America's Most Embattled Profession

 

Gerard Roland and Yuriy Gorodnichenko: Putin’s endgame: "To Putin’s surprise, the Ukrainian government and army have put up serious resistance to his earlier moves. The level of popular support for his people’s republics in the East has also been surprisingly low.... The possible outcomes: (1) Ukraine continues fighting without any material help from the West.... (2) Ukraine continues fighting, the West radically tightens economic sanctions and gives more economic help to Ukraine.... (3) Ukraine continues fighting, the West radically tightens economic sanctions, gives more economic help to Ukraine, and provides military help. While Mr Putin has spent copious amounts of oil dollars to modernise the Russian army, it is no match for Western forces. Even if the West does not send troops to Ukraine and limits military support to supplies of weapons and intelligence, the Ukrainian forces will be able to have an upper hand in combat and it will be a matter of time before they retake the east of Ukraine.... It may take many thousands of lives on both sides before the war is over (scenario 1), or the war may end soon. The tally largely depends on the West’s policy response.... The West’s policy of appeasement has so far been utterly ineffective..."

Daniel Kuehn: Study Design and the Minimum-Wage Debate: "Studies that match labor markets experiencing a minimum-wage increase with an appropriate comparison labor market... tend to find that minimum-wage increases have little or no effect on employment.... Studies that do not match labor markets experiencing a minimum-wage increase with a comparison labor market tend to find that minimum-wage increases reduce employment.... Labor market policy analysts strongly prefer studies that match 'treatment' with 'comparison' cases in a defensible way over studies that simply include controls and fixed effects in a regression model..."

Paul Krugman: Dangerous for Evil: "2009, when I was lamenting bad ideas from freshwater economists and Justin Fox was dismissing them as having no influence on policy.... It turned out that the bad ideas mattered a lot.... The Keynesian policy consensus... was fragile.... Republicans in the US, Germany, and the Trichet-era ECB were strongly anti-Keynesian by instinct. They were temporarily bowled over by the vocal Keynesian consensus... but were ready to grab hold of seemingly credentialed people willing to offer justifications for austerity and hard money. And a quorum of economists obliged. Alesina-Ardagna... good enough to give the austerians an intellectual fig leaf.... Reinhart-Rogoff and the 90 percent of doom. Having John Cochrane insist that Keynesian economics had been proved wrong and nobody was teaching it helped the austerian case even though it was completely untrue; so did having Robert Lucas accuse Christy Romer of being intellectually corrupt. Bad economic ideas didn’t really drive bad policy, but they acted as enablers for bad policy instincts. And the people who promulgated these bad ideas therefore have a lot to answer for."

Jonathan Chait: Economist Denounces One-Sided Slavery Account: "The Economist reviews The Half Has Never Been Told: Slavery and the Making of American Capitalism, by Edward Baptist. Not having read the book, I cannot credibly assess it. I do have enough familiarity with the basic facts to know that The Economist's reviewer’s argument that the book is fatally biased seems a little... off: 'Mr Baptist has not written an objective history of slavery. Almost all the blacks in his book are victims, almost all the whites villains. This is not history; it is advocacy.' I can think of reasons other than ideological bias to explain why almost all the black people would be victims, and the white people villains, in a book about white people who captured black people and subjected them to torture, rape, murder, humiliation, and oppressive forced labor. Unless The Economist wants to suggest that there were overlooked cases of deserved slavery, it seems pretty intuitive that the black people are mostly going to be victims in a book about slavery. It also seems like the white people are inevitably not going to come off terribly well, either, in a book about slavery. Sure, there were plenty of white people who had nothing to do with slavery, but they may not feature so heavily in a book about slavery."

Richard Mayhew: En bancing on Halbig "Noted a---- and Washington Post blogger Jonathan Adler’s quest to deny poor people the freedom of getting subsidized health insurance that could improve their well-being was dealt another blow... 'the U.S. Court of Appeals for the D.C. Circuit granted rehearing en banc in Halbig v. Burwell....' Oral argument is scheduled for December 17.  In all likelihood, an opinion would not issue before mid-to-late Spring.... En banc rehearings only occur... to... re-affirm a high priority decision or to correct what the majority of that circuit believes to be a monumental f-----. Halbig is a monumental f-----. Vacating Halbig means there is no Circuit disagreement at this time, so the Supremes are highly unlikely to grant cert for the Oklahoma King case..."

Cosma Shalizi (2012): No, Really, Some of My Best Friends Are Data Scientists: "If, however, the name 'statistician' is avoided because that connotes not a powerful discipline which transforms profound ideas about learning from experience into practical tools, but, rather, a meaningless conglomeration of rituals better conducted with twenty-sided dice, then we as a profession have failed ourselves and, more importantly, the public, and the blame lies with us. Since what we have to offer is really quite wonderful, we should not let that happen."

The Economist: American slavery: Blood cotton: "How slaves built American capitalism: Apology: In our review of The Half Has Never Been Told: Slavery and the Making of American Capitalism by Edward Baptist, we said: 'Mr Baptist has not written an objective history of slavery. Almost all the blacks in his book are victims, almost all the whites villains.' There has been widespread criticism of this, and rightly so. Slavery was an evil system, in which the great majority of victims were blacks, and the great majority of whites involved in slavery were willing participants and beneficiaries of that evil. We regret having published this and apologise for having done so. We are therefore withdrawing the review but in the interests of transparency, anybody who wants to see the withdrawn review can click here."

And Over Here:

Across the Wide Missouri: American Red-State Politics: You Really Could Not Make This Stuff Up: Bobby Jindal--and More!: Live from The Roasterie CCCXXIV: September 5, 2014 (Brad DeLong's Grasping Reality...)
Across the Wide Missouri: American Red-State Politics: You Really Could Not Make This Stuff Up: Bobby Jindal--and More!: Live from The Roasterie CCCXXIV: September 5, 2014 (Brad DeLong's Grasping Reality...)
Over at Equitable Growth: Claims that the Bulk of the Post-2008 Decline in Labor Force Participation Are "Structural" Need to Surmount a Very High Bar Indeed: Friday Focus for September 5, 2014 (Brad DeLong's Grasping Reality...)
Liveblogging World War I: September 5, 1914: The Decision to Turn and Fight at the Marne (Brad DeLong's Grasping Reality...)
Self-Aggregation and Curation for September 4, 2014: A Baker's Dozen (Brad DeLong's Grasping Reality...)

Should Be Aware of:

Gillian Tett: An unequal world is an uncharted economic threat: "What is really interesting about this year’s WEF report... [is] a furtive debate bubbling about income inequality.... If a country (such as America) is becoming polarised, in other words, does this make it less likely to grow?... Since the global economic crisis of 2008, western growth rates have been disappointing.... What is also evident is that inequality has grown in the past few decades in America and many other rich countries. The issue is not simply that wealth has become concentrated (as Thomas Piketty, the French economist, explains in his bestselling book, Capital in the Twenty-First Century). Wage inequality has increased, too.... Then there is the thorny issue of social cohesion and political stability.... Perhaps the biggest single contribution that groups such as the WEF can now make is the simplest: talk loudly about data voids and force governments to collect better data on inequality in America and elsewhere. Particularly if the level of inequality keeps growing..."

Robin Harding: Inequality rises in US despite recovery: "The boom in the stock market and a recovery in house prices fuelled large gains in the wealth of the richest, with the share of assets held by the top 3 per cent of households rising from 51.8 per cent in 2007 to 54.4 per cent in 2013.... Real pre-tax incomes fell in every part of the income distribution except the very top, as income was redistributed upwards. Average incomes for the decile of households rose by 10 per cent from $361,500 to $397,500. Families at the bottom of the income distribution saw continued substantial declines in average real incomes between 2010 and 2013, continuing the trend observed between the 2007 and 2010 surveys.... An important reason for the rising wealth share of the richest was the surge in asset prices that has seen the S&P 500 rally by more than 100 per cent from its trough to trade above 2,000. But again, Fed economists said that is not the whole story.... Ownership rates of housing and businesses fell substantially between 2010 and 2013. For families in the bottom 50 per cent, participation in retirement plans kept falling, further reducing their asset ownership."

Over at Equitable Growth: Claims that the Bulk of the Post-2008 Decline in Labor Force Participation Are "Structural" Need to Surmount a Very High Bar Indeed: Friday Focus for September 5, 2014

Over at Equitable Growth: Claims that most of the decline in labor-force participation since 2008:

are "structural" have always seemed to me to run aground, hole themselves, and sink on the reef that is the 25-54 labor-force participation rate. I have been reading the 25-54 labor-force participation rate since 1980:

as showing three things: READ MOAR:

First, a steep increase from feminism from 1980-1990:

Second, a plateau or perhaps very slow decline from incipient "peak male" and higher post-graduate education rates from 1990 to 2008, with participation bulging because of cyclical factors during the boom of the late 1990s and slumping because of cyclical factors during the jobless recovery of the mid-2000s:

And, third, a collapse starting with the 2008 financial crisis driven by the awful cyclical state and labor-side hysteresis resulting therefrom:

The claim that what has happened to 25-54 participation since 2008 is simply a continuation and acceleration of structural trends that had been ongoing since 1990 would have to surmount a very high bar indeed for me to find it credible:

Nor do I see a credible gender-difference story: we need a structural account for both an acceleration in the "peak male" decline in male 25-54 activity and for the pullback--without changing fertility behavior--in female activity from the values it has had since 1995:

And if there is a 2%-point gap between 25-54 participation today and a "structural" projection back in 2008 of what it would be today, doesn't that tell us a lot about the size of structural shifts since 2008 in the broader adult employment-to-population ratio?

Liveblogging World War I: September 5, 1914: The Decision to Turn and Fight at the Marne

From Barbara Tuchman: The Guns of August:*

Through France as through Belgium the Germans left a blackened and defiled path as they passed. Villages were burned, civilians shot, homes looted and torn, horses ridden through rooms, artillery wagons dragged across gardens, latrines dug in the family burial plot of the Poincarés at Nubécourt. Kluck’s IInd Corps passing through Senlis, twenty-five miles from Paris, on September 2, shot the Mayor and six other civilian hostages. A stone marker, just outside the town on the edge of a field where they are buried, bears their names: EUGÈNE ODÈNE Mayor EMILE AUBERT Tanner JEAN BARBIER Carter LUCIEN COTTREAU Café waiter PIERRE DEWERDT Chauffeur J-B. ELYSÉE POMMIER Baker’s helper ARTHUR RÉGANT Stonecutter.

September 2 was a happy day for General von Hausen who found himself billeted in the Château of the Comte de Chabrillon at Thugny on the Aisne. Occupying the countess’ bedroom, the General was delighted to discover from examination of her visiting cards that she was née Comtesse de Lévy-Mirepois in her own right, which caused him to sleep with that much extra pleasure in her bed. After dining on pheasant obtained by his supply officers who organized a shoot in the park of the château, Hausen counted the countess’ table silver and left an inventory of it with an old man in the village. That night Moltke, who after a second look had developed qualms about the flank that Kluck’s inward wheel was exposing to Paris, issued a new General Order. As in the matter of the left wing, it showed his uncertain hand. It ratified Kluck’s turn by ordering the First and Second Armies to “drive the French armies in a southeast direction away from Paris.” At the same time it attempted to guard against a possible danger by ordering Kluck’s army to follow “in echelon behind the Second Army” and make itself “responsible for the flank protection of the Armies.” In echelon! To Kluck the insult was worse than putting him, as OHL had done before, under Bülow’s orders. The grim-visaged Attila with rifle in one hand and revolver in the other, the pace-setter of the right wing, was not going to stay behind anybody.

He issued his own orders to the First Army “to continue its advance over the Marne tomorrow [September 3] in order to drive the French southeastward.” He considered it sufficient for purposes of protecting the flank exposed to Paris to leave behind him his two weakest units: the IVth Reserve which was minus a brigade left back at Brussels and the 4th Cavalry Division which had suffered heavily in the fight against the British on September 1.R To halt the marching wing on the very threshold of victory seemed stark madness to the War Minister, General von Falkenhayn, who within two weeks was to be Moltke’s successor as Commander in Chief. “Only one thing is certain,” he wrote in his diary for September 5. “Our General Staff has completely lost its head. Schlieffen’s notes do not help any further so Moltke’s wits come to an end.”

It was not Moltke’s wits but German time that was running out. In the French troop movements Moltke correctly saw a danger developing upon his outer flank and took a proper and sensible measure to meet it. His Order had only one flaw: it was late. Even then it might have been in time had it not been for one man in a hurry—Gallieni. Reports of the Paris aviators, at daybreak on September 4, showed him it was “vital to act quickly.” The rear of Kluck’s curved march to the southeast presented a clear target to Maunoury’s Army and to the British if a joint attack could be launched in time. At 9:00 A.M., before obtaining Joffre’s consent, he sent preliminary orders to Maunoury: “My intention is to send your army forward in liaison with the English forces against the German flank. Make your arrangements at once so that your troops will be ready to march this afternoon as the start of a general movement eastward by the forces of the Paris camp.” As soon as he could Maunoury was to come to confer personally in Paris. Gallieni then set himself to obtain an “immediate and energetic” decision from Joffre.

Between them lay the remnants of an old relationship as commander and subordinate. Both were conscious of Gallieni’s official designation as Commander in Chief if anything happened to Joffre. Aware that Joffre resisted and resented his influence, Gallieni counted less on persuading him than on forcing his hand. To that end he had already called Poincaré in Bordeaux to say he thought there was a “good opening” for resuming the offensive at once. At 9:45 he put through a call to GQG, the first of a series of which he was later to say, “The real battle of the Marne was fought on the telephone.” General Clergerie conducted the conversation with Colonel Pont, Chief of Operations, as Gallieni would not talk to anyone less than Joffre and Joffre would not come to the phone. He had an aversion to the instrument and used to pretend he “did not understand the mechanism.” His real reason was that, like all men in high position, he had an eye on history and was afraid that things said over the telephone would be taken down without his being able to control the record. Clergerie explained the plan to launch the Sixth Army and all available forces of the Paris camp in an attack on Kluck’s flank, preferably north of the Marne, in which case contact could be made on September 6; alternatively on the south bank which would require a day’s delay to allow Maunoury to cross over. In either case Clergerie asked for an order to put the Sixth Army on the march that evening. He urged Gallieni’s belief that the moment had come to end the retreat and return the whole army to the offensive in combination with the Paris maneuver.

GQG was left to come to a decision. Contrary to GQG’s willingness to sacrifice the capital, Gallieni from the beginning was motivated by the conviction that Paris must be defended and held. He viewed the front from the point of view of Paris and with no direct knowledge of the situation of the field armies. He was determined to seize the opportunity Kluck’s swerve offered him, believing that his own move must and would precipitate a general offensive. It was a bold, even a rash, design, for without fully knowing the situation of the other armies he could not fairly judge the chances of success. Gallieni did not think there was a choice. It may be he had a great commander’s instinctive feel for his moment; it is more likely he felt France would not have another.

At 11:00 A.M. Maunoury arrived for briefing; no answer had yet come from Joffre. At noon Clergerie telephoned again. Meanwhile in the school at Bar-sur-Aube where GQG was installed, officers of the Operations staff, crowding in front of the wall map, animately discussed Gallieni’s proposal for a combined offensive. The terrible trampling of French military hopes in the past month had instilled caution in the hearts of some. Others were as fervent apostles of the offensive as ever and had an answer for every counsel of caution. Joffre was present, listening to their arguments recorded by his aide-decamp, Captain Muller. “Troops at the end of their strength? No matter, they are Frenchmen and tired of retreating. The moment they hear the order to advance they will forget their fatigue. A gap between the Armies of Foch and de Langle? It will be filled by the XXIst Corps coming from Dubail’s Army. Unpreparedness of the armies to attack? Ask the field commanders; you will see how they will answer. Cooperation of the English? Ah, that’s more serious. One cannot give their Commander orders; one has to negotiate, and time is short. But the important thing is to seize the occasion, for it is fugitive. Kluck can still repair his mistake, and the movements of the Sixth Army will certainly draw his attention to the dangers to which he has exposed himself.”

Without having contributed a word, Joffre went to consult Berthelot in his office and found him opposed to the plan. The Armies could not suddenly face about, he argued. They should complete the planned retreat to a strong defensive line and allow the Germans to penetrate more deeply into the net. Above all, the numerical superiority which was wanted could not be achieved until the two corps coming from the Lorraine front had time to come into position. Silent, astride a straw-bottomed chair facing Berthelot’s wall map, Joffre considered the problem. His plan for an ultimate return to the offensive had always included using the Sixth Army in an attack on the enemy’s right flank. Gallieni, however, was precipitating matters. Joffre wanted the extra day for the reinforcements to come up, for the Fifth Army to prepare, and for more time in which to secure the cooperation of the British. When Clergerie’s second call came through, he was told that the Commander in Chief preferred attack on the south bank of the Marne, and when Clergerie demurred about the delay he was told “the delay of a day will mean more forces available.” Joffre now faced the greater decision: whether to carry out the planned retreat to the Seine or seize the opportunity—and the risk—and face the enemy now.

The heat was overpowering. Joffre went outside and sat down in the shade of a weeping ash in the school playground. By nature an arbiter, he collected the opinions of others, sorted them, weighed the personal coefficient of the speaker, adjusted the scale, and eventually announced his verdict. The decision was always his. If it succeeded his would be the glory; if it failed he would be held responsible. In the problem now before him the fate of France was at stake. During the past thirty days the French Army had failed in the great task for which it had been preparing for the past thirty years. Its last chance to save France, to prove her again the France of 1792, was now. The invader was forty miles from where Joffre sat and barely twenty from the nearest French Army. Senlis and Creil, after Kluck’s Army had passed over, were in flames and the Mayor of Senlis dead. If the French turned now before the armies were ready—and failed?

The immediate requirement was to find out whether they could be made ready. As the Fifth Army was in a crucial position, Joffre sent a message to Franchet d’Esperey: “It may be advantageous to give battle tomorrow or the day after with all the forces of the Fifth Army in concert with the British and the mobile forces of Paris against the German First and Second Armies. Please advise whether your army is in a condition to do this with a chance of success. Reply immediately.” A similar query was sent to Foch who stood next to Franchet d’Esperey and opposite Bülow. Joffre continued to sit and think under the tree. For most of the afternoon the ponderous figure in black tunic, baggy red pants, and army-issue boots from which, to the despair of hisR aides, he had banished the affectation of spurs, remained silent and motionless.

Meanwhile Gallieni, taking Maunoury with him, left Paris at one o’clock to drive to British Headquarters at Melun on the Seine, twenty-five miles to the south. In response to his request for British support he had received a negative reply from Huguet who reported that Sir John French “adopts the counsels of prudence of his Chief of Staff,” Sir Archibald Murray, and would not join an offensive unless the French guaranteed defense of the lower Seine between the British and the sea. Driving past the lines of southbound cars fleeing Paris, the two French generals reached British Headquarters at three o’clock. Kilted sentinels presented arms smartly; soldiers were busily typing indoors; but neither the Field Marshal nor his principal officers could be found, and the Staff appeared “confounded” by the situation. After a prolonged search Murray was located. Sir John French, he said, was away inspecting the troops; he could give no idea when he was expected to return. Gallieni tried to explain his plan of attack and why British participation was “indispensable,” but he could feel all the while the Englishman’s “great reluctance to share our views.” Murray kept repeating that the BEF was under the formal orders of its Commander in Chief to rest, reorganize, and await reinforcements, and he could do nothing until his return. After more than two hours of discussion during which Sir John French still did not appear, Gallieni succeeded in persuading Murray to write down a summary of the plan of attack and proposals for joint British action which “he did not appear to understand very well.” Before leaving he secured a promise that Murray would notify him the moment his Chief returned.

At the same time another Anglo-French conference was taking place thirty-five miles up the Seine at Bray from which Sir John French was also absent. Anxious to repair the frayed relations left by Lanrezac, Franchet d’Esperey had arranged for a meeting with the Field Marshal at Bray at three o’clock. He wore for the occasion the ribbon of a Knight Commander of the Victorian Order. On reaching Bray his car was stopped by a French sentinel who reported an urgent message waiting for the General at the telegraph office. It was Joffre’s query about the coming battle. Studying it, Franchet d’Esperey strode up and down the street, waiting in growing impatience for the British. After fifteen minutes a Rolls-Royce drove up with an “enormous Highlander” next to the chauffeur, but instead of the florid little Field Marshal in the back seat, “a tall devil, very ugly with an intelligent, expressive face” emerged.

Wilson who was accompanied by the British Chief of Intelligence, Colonel Macdonogh. They had been delayed on the way when, seeing a Parisian lady in distress by the roadside, Wilson gallantly took time to provide gas for her car and maps for her chauffeur. The group retired to a room on the second floor of the Mairie with the Highlander posted as sentinel outside. Macdonogh lifted a heavy cloth to peer under the table, opened a door leading to an adjoining bedroom, looked under the bed, punched the quilt, opened the closet, and sounded the walls with his fist. Then, in answer to a question from Franchet d’Esperey about the situation of the British Army, he unfolded a map showing the exact positions, marked in blue arrows, of the enemy on his front and gave a masterly analysis of the movements of the German First and Second Armies. Franchet d’Esperey was impressed. “You are our ally—I shall keep no secrets from you,” he said, and read aloud Joffre’s proposal. “I am going to answer that my army is prepared to attack,” and, fixing his visitors with eyes of steel, “I hope you will not oblige us to do it alone. It is essential that you fill the space between the Fifth and Sixth Armies.” He then outlined a precise plan of action which he had worked out in his head in the brief quarter-hour since receiving the telegram. It was based on the assumption, arrived at independently, of attack by Maunoury’s Army north of the Marne on September 6. Wilson, concerting again with an energetic French general as he once had with Foch, readily agreed. Disposition of the two armies, the given line each was to reach by morning of September 6, and the direction of attack were decided.

Wilson warned there would be difficulty in obtaining consent from Sir John French and especially from Murray, but promised to do his best. He left for Melun while Franchet d’Esperey sent a report of their agreement to Joffre...

Self-Aggregation and Curation for September 4, 2014: A Baker's Dozen

A Baker's Dozen of Things Most Worth Reading from the Past Two and a Half Weeks:

One of the gems of the internet is Daniel Davies, now a retired country gentleman of leisure. Read him! http://tinyurl.com/ohhbhnt. Plus: http://tinyurl.com/pupf236
You should be reading Jonathan Chait: America's Best, Most Substantive, and Most Accurate Center-Left Polemicist: http://tinyurl.com/k34h63l
You should be reading Sam Wang: he is providing more information about the race for senate control in a smaller space than others trying to do the modeling thing: http://tinyurl.com/ml895zn
You should read the pick-up internet symposium "Why the Love of Hard Money?" that sprang into being this week: http://tinyurl.com/km9zmno. And you should read my reflections five years ago--five years ago!--on Justin Fox's erroneous confidence that the good guys had the hard-money guys who hadn't done their homework on the run: http://tinyurl.com/oks6uhd
If you live in the United States, you should start getting ready to see the solar eclipse of August 21, 2017: http://tinyurl.com/qecsr7o
Clinging tight to Naive Keynesianism is the only way to have a chance of understanding the macroeconomy these days: http://tinyurl.com/pev5g3c
The principal obstacle to American prosperity springing from the blue states: rampant NIMBYism: http://tinyurl.com/lj4s6n5 | http://tinyurl.com/o54gc49
Among all the nations of the North Atlantic, Americans are uniquely deluded about the state of inequality in their country: http://tinyurl.com/mp6b352. I do know that one of the most important features of American exceptionalism is that Americans by and large regard themselves not as working people oppressed by The Man, but as temporarily embarrassed millionaires. But this is absurd.
It's no longer The Financial Crisis or The Great Recession. It's now the Lesser Depression. And in five years it will no longer be The Lesser Depression but instead we will call it: The Greater Depression: http://tinyurl.com/lazmtfn | http://tinyurl.com/md6sw6v
From 1914: The War on Belgium: http://tinyurl.com/k7yswhy | http://tinyurl.com/lqfbg7a | http://tinyurl.com/l9mrvhb. The remarkable speed with which the Kaiser's Germans in 1914 began the wholesale massacre of Belgians is the most powerful piece of evidence that German culture needed to experience the fire and death of 1914-1918 and 1942-1945 in order to even begin creating the possibility of a German national state that would be a good neighbor.
Part of the more than two-century struggle of Artemas Ward and his descendants to try to get the American people to recognize that John Adams may not have been so clever after all when he decided to try to rope Virginia into the revolutionary cause by superseding Artemas Ward and his Massachusetts officers who had built the American army with a Virginia worthy whose military record in the Seven Years' War had been, to put it very, very politely, most undistinguished: http://tinyurl.com/mngoh3y | http://tinyurl.com/ofovszu
Haruspicy, or perhaps plastromancy, as to why long-term interest rates have not yet begun to "normalize" to whatever the new normal is going to be: http://tinyurl.com/n8ktz7y
Agent-based models are the future of good economic theory, and will always be such--until we enter the New Jerusalem where we have the computer power to run real simulations and the brain power to understand how to thick about the emergent properties such real simulations produce. Maranatha! Rajiv Sethi is very worthy reading: http://tinyurl.com/k3klbo7

*http://tinyletter.com/braddelong
* http://tinyletter.com/braddelong/letters/self-aggregation-and-curation-for-september-4-2014-a-baker-s-dozen

Noted for Your Morning Procrastination for September 4, 2014

Over at Equitable Growth--The Equitablog

Nick Bunker: The inequitable mortgage interest tax deduction - Washington Center for Equitable Growth
Nick Bunker: The (price) illusion of declining investment - Washington Center for Equitable Growth
Marshall Steinbaum: A White Paper on Piketty's Theory of Inequality and its Critics - Washington Center for Equitable Growth* Department of "Huh?!": What Does Money Velocity Tell Us about Low Inflation in the U.S. - Washington Center for Equitable Growth
Does the New Bond Market Conundrum Tell Us Anything? If So, What?: Tuesday Focus for September 2, 2014 - Washington Center for Equitable Growth
Morning Must-Read: Paul Krugman: Money in a Time of Zero Interest Rates - Washington Center for Equitable Growth
Pick-Up Symposium: Why the Love of Hard Money?: Wednesday Focus for September 3, 2014 - Washington Center for Equitable Growth
Afternoon Must-Read: Martin Wolf: Financial Reform: Call to Arms - Washington Center for Equitable Growth
Milton Friedman and David Glasner: Real and Pseudo Gold Standards: Thursday Focus for September 4, 2014 - Washington Center for Equitable Growth
Morning Must-Read: Erica Williams and Chris Mai: State Earned Income Tax Credits and Minimum Wages Work Best Together - Washington Center for Equitable Growth

Plus:

Things to Read on the Morning of Thursday, September 4, 2014 - Washington Center for Equitable Growth

Must- and Shall-Reads:

Tobias Adrian, Richard Crump, Benjamin Mills, and Emanuel Moench: Treasury Term Premia: 1961-
Mark Thoma: How to shock the U.S. economy back to life
Mark Thoma: Objections to Fiscal Policy are Groundless—It Works
Alan Kirman: Demand Theory and General Equilibrium: From Explanation to Introspection, a Journey down the Wrong Road
Cardiff Garcia: “Oops, we raised rates too soon”
Cathy O'Neil: Mathbabe
Robert E. Hall and Charles I. Jones: The Value of Life and the Rise in Health Spending
Radley Balko: How municipalities in St. Louis County, Missouri profit from poverty

 

Paul Krugman: Money in a Time of Zero: "People who spend too much time... [saying] monetary policy doesn’t matter.... Contractionary monetary policy is working just fine; all the central banks that mistakenly decided that it was time to raise rates... [are now] realizing their error and reversing course. But what about the fact that vast increases in the monetary base have failed to do much to the economy?... The irrelevance of the monetary base is... something that happens when you’re in a liquidity trap.... I get annoyed both by people who declare that nobody could have predicted the failure of balance-sheet expansion to cause inflation, and by those who claim that conventional economists like me just don’t understand that money is endogenous. Guys, I laid it all out 16 years ago. And as for the idea that the absence of a clear definition of money, plus the fact that most money is created by financial institutions, means that central banks don’t matter, James Tobin dealt with all that more than fifty years ago.... If you think something deeply disturbing from an analytical perspective has taken place... you basically weren’t paying attention. If you read your Tobin... [and what] Woodford and I had to say about the liquidity trap, you expected to see exactly what we’re seeing."

Erica Williams and Chris Mai: State Earned Income Tax Credits and Minimum Wages Work Best Together: "Lawmakers should look to help working families recover.... They can do this effectively by strengthening their states’ earned income tax credits (EITCs) and minimum wages.  EITCs and the minimum wage are twin pillars of making work pay for families that earn low wages.... Strengthening either... will boost incomes for low-wage working families, but these policy improvements are particularly effective in combination..."

Martin Wolf: Financial reform: Call to arms: "The financial crises and the years of economic malaise that followed represent profound failures of the economy and of policy. Above all, they were failures of understanding.... In retrospect, the insouciance of policy makers about the risks being run seems terrifying. But this also raises a big question now: have they learnt the right lessons for the future?... The target of monetary policy is to keep inflation low and stable, though some central banks (notably the Fed) explain that the aim is the highest level of activity subject to hitting its inflation target.... The financial sector is also to remain broadly the same as before, albeit vastly more tightly regulated and with somewhat higher capital requirements. There is also to be enhanced oversight of the systemic fragility of the financial system under the rubric of macroprudential policy. This new orthodoxy is merely a chastened version of the old. But is it workable?... There are a number of reasons for believing the answer is no First, policy makers rely overwhelmingly on monetary policy as the stabilisation instrument of choice. But monetary policy works via asset prices and credit expansion. This combination certainly risks a repeat of crises.... Second, experience shows that the low inflation targets to which policy makers are committed are not high enough to ensure short-term interest rates can remain above zero in all circumstances.... Third, potential exists for conflict between monetary policy on the one hand and macroprudential policy on the other.... The new regulatory regime is an astonishingly complex response to the failures of this model. But 'keep it simple, stupid' is as good a rule in regulation as it is in life. The sensible solution seems clear: force banks to fund themselves with equity.... A shift away from over-reliance on inflexible debt contracts, with all the fragility they create in the economy, would require complementary policy changes. The existing favourable tax treatment of debt needs to be ended.... The pre-crisis orthodoxy proved defective. The new orthodoxy is an improvement. But it is open to question in important respects. The financial system remains fragile. The risks of further crises are not small. Far greater ambition is needed."

Alex Tabarrok: What has Economics Done for You Lately?: "A very nice talk by Robert Litan on the contributions of economists and economic ideas to the internet economy"

Nick Bunker: Weekend reading: "Jeff Guo on the 'shadow' price of housing and the places where housing is more expensive than you would expect.... What do employers look at when hiring recent college graduates?... It’s internships..... Neil Irwin... the gains that middle-income households... haven’t seen.... Izabella Kaminska on how patent trolls are the new rentier class.... Search models... can help us better understand... recessions..."

And Over Here:

Liveblogging World War II: September 4, 1944: The Sonderkommando Tries to Tell the World What Is Happening at Auschwitz (Brad DeLong's Grasping Reality...)
Krugman, Fox, McCain, Prescott, and Company: Thursday Hoisted from the Archives from Five Years Ago Weblogging (Brad DeLong's Grasping Reality...)
Over at Equitable Growth: Milton Friedman and David Glasner: Real and Pseudo Gold Standards: Thursday Focus for September 4, 2014 (Brad DeLong's Grasping Reality...)
Greg Orman for Senate Majority Leader!: And the Kansas Senate Race Becomes Interesting... (Brad DeLong's Grasping Reality...)
Playing with Google GChart... (Brad DeLong's Grasping Reality...)
Over at Equitable Growth: Pick-Up Symposium: Why the Love of Hard Money?: Wednesday Focus for September 3, 2014 (Brad DeLong's Grasping Reality...)
Liveblogging World War II: September 3, 1944: Brussels Liberated (Brad DeLong's Grasping Reality...)
Is It Really "Inbox Zero" If You Have Snoozed 335 Conversations to "Later"?: Live from The Roasterie CCCXXII: September 3, 2014 (Brad DeLong's Grasping Reality...)
Over at Project Syndicate: When Do We Start Calling This "The Greater Depression"? (Brad DeLong's Grasping Reality...)
Over at Equitable Growth: Why Haven't Long-Term Interest Rates Started to Normalize?: Tuesday Focus for September 2, 2014 (Brad DeLong's Grasping Reality...)
Red States Inflict Suffering on Their Citizens to Spite Obama: Hoisted from 53 and 79 Years Ago/Live from The Roasterie CCCXXI: September 2, 2014 (Brad DeLong's Grasping Reality...)
Liveblogging the American Revolution: September 2, 1776: George Washington Laments (Brad DeLong's Grasping Reality...)

Should Be Aware of:

Liz Bourke: A More Intimate Scale: Ancillary Sword by Ann Leckie
flot/README.md at GitHub
Flot Reference
Richard Mayhew: Utilization in H1 2014
Timesify
Dan Froomkin: Obama Makes Bushism the New Normal
Giffy

Liveblogging World War II: September 4, 1944: The Sonderkommando Tries to Tell the World What Is Happening at Auschwitz

World War II Today: Secret images taken by Auschwitz Sonderkommando smuggled out:

Even as German forces retreated in the east and the west, the Nazi extermination camps were as busy as ever. Trains were still being sent from all round Europe, taking Jews to their deaths. On the 4th September 1944 Anne Frank and her family were stuck in a cattle car somewhere in Germany, en route to Auschwitz from the Netherlands. Inside Auschwitz a small but very significant act of rebellion was taking place. The special squad of prisoners who worked in the gas chambers were smuggling out some pictures of the death camp in action. The ‘Sonderkammando’s duties included sorting out the huge quantities of victims’ property – it is very likely that the camera was acquired in this process. The pictures were snatched covertly. This was the subsequent account of Alter Fajnzylberg:

[S]omewhere about midway through 1944, we decided to take pictures secretly to record our work… From the very beginning, several prisoners from our Sonderkommando were in on my secret: Szlomo Dragon, his brother Josek Dragon, and Alex, a Greek Jew whose surname I do not remember. Some of us were to guard the person taking the pictures.

In other words, we were to keep a careful watch for the approach of anyone who did not know the secret, and above all for any SS men moving about in the area… We all gathered at the western entrance leading from the outside to the gas-chamber of Crematorium V …

Alex, the Greek Jew, quickly took out his camera, pointed it towards a heap of burning bodies, and pressed the shutter… Another picture was taken from the other side of the building, where women and men were undressing among the trees. They were from a transport that was to be murdered in the gas-chamber of Crematorium V.

The film was smuggled out of the camp in a tube of toothpaste to the Polish Resistance on 4th September, with this message:

Urgent. Send two metal rolls of film for 6×9 as fast as possible. Have possibility of taking photos. Sending you photos of Birkenau showing prisoners sent to gas chambers. One photos shows one of the stakes at which bodies were burned when the crematoria could not manage to burn all the bodies. The bodies in the foreground are waiting to be thrown into the fire. Another picture shows one of the places in the forest where people undress before ‘showering’ – as they were told – and then go to the gas-chambers. Send film roll as fast as you can. Send the enclosed photos to Tell – we think enlargements of the photos can be sent further.

Krugman, Fox, McCain, Prescott, and Company: Thursday Hoisted from the Archives from Five Years Ago Weblogging

One that the intelligent and eminent Justin Fox got wrong, not so much at the time but prospectively. The bad actors had a great deal of influence on policy after September 2009…

From the archives: five years ago:

Brad DeLong : Krugman, Fox, McCain, Prescott, and Company: Justin Fox:

Paul Krugman tells how economists got it all wrong: the one big issue I have with the piece is that, while economists certainly got lots of things wrong before the crisis (as did almost all of us), many members of the profession have acquitted themselves pretty well since things turned really ugly last year. Krugman goes on and on about the "freshwater" economists (at the Universities of Chicago, Rochester and Minnesota) and their crazy ideas about perfect markets. But what's telling is that the hardcore freshwaterites have had almost no impact on economic policy for the past year—neither in the Bush months or the Obama ones. Sure, Nobelist Ed Prescott, a former freshwater economist who now teaches in Phoenix and thus should probably be described as a no-water economist, made the statement that:

"I don't know why Obama said all economists agree on [the need for a stimulus bill]," Prescott said. "They don't. If you go down to the third-tier schools, yes, but they're not the people advancing the science."

Unless you believe that pretty much anyplace other than Arizona State University is a third-tier school, this is patently untrue, evidence of the extreme isolation of the remaining true believers in rational expectations and real business cycles and other such elegant but profoundly unhelpful macroeconomic theories developed since the 1960s.

Even some of the true believers seem far more aware than Prescott that the past year's events have challenged their theories—as the University of Chicago's Robert Lucas told me last fall, "everyone is a Keynesian in a foxhole." Among economists with actual influence on policy over the past year—Philip Swagel in the Paulson Treasury, Larry Summers and Christina Romer and Austan Goolsbee and etc. in the current White House—there's been a great willingness to experiment and accept that markets don't always deliver optimal results. The result: an economic recovery that seems to be gaining strength.

So don't totally count the economists out...

Four remarks:

(1) In context Lucas's "everyone is a Keynesian in a foxhole" did not appear to be an endorsement of the position that Keynesian fiscal stimulus might be helpful and an admission that he holds it, but rather much closer to a denunciation of economists for their intellectual weakness in reaching for Keynesian remedies:

Well I guess everyone is a Keynesian in a foxhole, but I don't think we are there yet. Explicitly temporary tax cuts do nothing: people just bank them. Supply side tax cuts are fine with me, but they take time to work and at some point we need the revenue to run the government. I feel the current situation requires a lender of last resort but not a fine tuner.

As, indeed, was clear when Lucas made his big denunciation of Christy Romer (and by implication, Summers and Orszag, and Elmendorf, and Bernanke, and Swagel, and so on) for what I can only characterize as "corruption":

Why a Second Look Matters: The Moody's model that Christina Romer -- here's what I think happened.  It's her first day on the job and somebody says, you've got to come up with a solution to this -- in defense of this fiscal stimulus, which no one told her what it was going to be, and have it by Monday morning. So she scrambled and came up with these multipliers and now they're kind of -- I don't know.  So I don't think anyone really believes.  These models have never been discussed or debated in a way that that say -- Ellen McGrattan was talking about the way economists use models this morning.  These are kind of schlock economics. Maybe there is some multiplier out there that we could measure well but that's not what that paper does.  I think it's a very naked rationalization for policies that were already, you know, decided on for other reasons...

Note what Lucas does not say: He does not say that Christy Romer has a different reading of the evidence than he has. He does not say that Christy Romer has a different assessment of policy risks than he has. He does not say that Christy Romer has a different tolerance of policy risks than he has. He says that she is providing a "very naked rationalization" for economic policies that Obama decided upon for completely non-technocratic political reasons.

Now this is complete garbage.

Christy Romer does have a very different view--she would call her view an evidence-based view--of what fiscal policy does in conditions of extremely low interest rates than Robert Lucas does.

(2) Unfortunately for us these are not fringe figures. To an outsider to academic economics like Justin Fox they may appear to be embarrassing madmen in the attic--and to the extent that that becomes the conventional wisdom then I think the good guys will have won this one. But inside the profession that is not the case.

Robert Lucas is a Nobel Prize winner and the head of the still-dominant school of business-cycle analysis when he claims that Christy Romer (and by implication Ben Bernanke, and Doug Elmendorf, etc.) is providing "very naked rationalization[s]" for politically motivated policies. John Taylor is a former Undersecretary of the Treasury for International Affairs when he claims that forecasters like Mark Zandi and Larry Meyer who find the stimulus to be being somewhat effective are just "repeating what they said in January" because they "haven't looked at the numbers." Edward Prescott is a Nobel Prize winner and head of the second-plae school of business-cycle analysis when he claims that supporters of current economic policies "are not the people advancing the science."

Eugene Fama is the head of the dominant school in finance and perennially on the Nobel Prize short list and he claims that the existence of the savings-investment identity makes it logically impossible for the government to boost the economy via spending--an analytical error that we here at Berkeley teach our freshman not to do for it is, as Paul Krugman calls it, "the most basic fallac[y] in economics--interpreting an accounting identity as a behavioral relationship." John Cochrane is the smartest analyst of aggregate asset prices I know, and yet he too commits fallacies that I had thought were dead since the 1920s when he writes that "every dollar of increased government spending must correspond to one less dollar of private spending. Jobs created by stimulus spending are offset by jobs lost from the decline in private spending. We can build roads instead of factories, but fiscal stimulus can’t help us to build more of both. This is just accounting, and does not need a complex argument about “crowding out.”

Luigi Zingales is one of the smartest young Chicago economists I know of, and yet demonstrates that he has not thought about general equilibrium in even the most cursory sense--has not thought how you analyze a system in which you have to keep straight the three commodities of cash, financial assets, and goods--when he writes that "if a nuclear bomb had destroyed all roads... [would] we [then claim] that to alleviate the economic impact... we should invest in banks[?]... [I]f the problem is the roads, you want to rebuild roads.... And if the problem is the financial sector, you want to fix this and not build roads."

(3) These are not dumb people. But these are people for whom whole blocks of what used to be called "economics"--the monetary history of the nineteenth and the first half of the twentieth centuries, the "lowbrow" theories of 1920-1980 from Fisher, Wicksell, Keynes, and Hicks through Metzler, Tobin, and Friedman--are taboo. They would be demonstrating to their peers that they were not serious highbrow economists if they consulted them, and so when they have to deal as they have in the past two years with Fisher-Wicksell-Hicks issues they approach them with great ignorance and get them wrong.

(4) Were it not for the Republican Party, this would not matter very much. The failure of high brow macro to have anything to say about our current situation--where is the misperception of relative prices that has given us 10% unemployment with both firms and workers being happy with the situation? Where is the technology shock that has pushed aggregate production relative to trend down by 8%--would lead their colleagues in other subdisciplines to draw the natural conclusions, cut back on hiring domestic macroeconomists, and hire more international finance specialists (where the analytical culture is, I think, healthy), microeconomists, historians, and institutionalists instead. The big problem is the interaction of the guys in the attic on the one hand and the Repubican Party on the other.

Had John McCain won the presidential election of 2008, at the start of 2009 he would have in all likelihood proposed a trillion dollar fiscal stimulus bill--3/4 tax cuts and 1/4 aid to states--and he might have picked Tim Geithner for his Treasury Secretary. Democrats would have called for fewer tax cuts, more state aid, and some government infrastructure spending initiatives in the fiscal policy mix, but the need for the government to cushion the recession would have brought them into line. When Obama took office he bid $800 billion for his fiscal stimulus bill--about 1/3 spending, about 1/3 aid to states, about 1/3 tax cuts--thinking that would be a plan that would win broad bipartisan assent. And he was wrong. The Republicans decided to follow the Gingrich strategy: try as hard as they could to make the Democratic president appear a failure by blocking all his initiatives. But you can't block an initiative without a story for why it is bad for the country. And that, all of a sudden, makes the madmen in the attic the favored economic advisors of the Republican Party.

This is, I think, very dangerous. The Republicans will win elections in the future. And when they do will we want Ed Prescott to be running economic policy? He will be.

As of 2014, the only thing I want to add is that I had no clue exactly how strong the political reach of all these economists who had not done their homework would be, and no clue as to how impervious to evidence--how unwilling to even consider marking their beliefs to market--they would be...

Over at Equitable Growth: Milton Friedman and David Glasner: Real and Pseudo Gold Standards: Thursday Focus for September 4, 2014

Over at Equitable Growth: David Glasner has an interesting--but I think flawed--note on the very interesting Milton Friedman paper "Real and Pseudo Gold Standards"--which David thinks is flawed:

David Glasner: Real and Pseudo Gold Standards: Could Friedman Tell the Difference? "One of the first academic papers by Milton Friedman that I read...

...was 'Real and Pseudo Gold Standards'... presented to the Mont Pelerin Society... published in the Journal of Law and Economics in October 1961.... In the Mont Pelerin Society.... a perhaps more numerous faction... disdained any monetary system other than the gold standard... the unyieldingly stubborn Ludwig von Mises... the almost equally intransigent... Jacques Rueff.... Friedman was realistic enough to understand that one could not reason with von Mises.... Instead, his strategy was to say that there is only one kind of real gold standard.... Friedman acknowledged that a real gold standard could be defended on strictly libertarian grounds, he argued that a pseudo-gold standard could not, inasmuch as it requires all sorts of market interventions.... READ MOAR

Here is how he put it:

It is vitally important for the preservation and promotion of a free society that we recognize the difference between a real and pseudo gold standard. War aside, nothing that has occurred in the past half-century has, in my view, done more weaken and undermine the public’s faith in liberal principles than the pseudo gold standard.... Those of us who support it in the belief that it either is or will tend to be a real gold standard are mistakenly fostering trends the outcome of which they will be among the first to deplore....

Just to digress for a moment, I will admit that when I first read this paper as an undergraduate I was deeply impressed by his introductory statement, but found much of the rest of the paper incomprehensible. Still awestruck by Friedman, who, I then believed, was the greatest economist alive, I attributed my inability to follow what he was saying to my own intellectual shortcomings. So I have to admit to taking a bit of satisfaction in now being able to demonstrate that Friedman literally did not know what he was talking about...

I think that Friedman's paper has somewhat more coherence than David does. From Milton Friedman's standpoint (and from John Maynard Keynes's) you need microeconomic stability in order for private laissez-faire to be for the best in the best of possible worlds. Macroeconomic stability is:

stable and predictable paths for total spending, the price level, and interest rates; hence
a stable and predictable path for the velocity of money; hence
(1) then achieved by a stable and predictable path for the money stock; and
if (3) is secured by institutions, then expectations of (3) will generate the possibility of (1) and (2) so that if (3) is actually carried out then eppur si muove...

Now there are two different institutional setups that can produce (3):

a monetarist central bank committed to targeting a k% growth rate of the money stock via open-market operations; or
a gold standard in which a Humean price-specie flow mechanism leads inflating countries to lose and deflating countries to gain gold, tightly coupled to a banking system in which there is a reliable and stable money multiplier, and thus in which the money stock grows at the rate at which the world's gold stock grows (plus the velocity trend).

Friedman calls (2) a "pure gold standard". Anything else that claims to be a gold standard is and must be a "pseudo gold standard". It might be a pseudo gold standard either because something disrupts the Humean price-specie flow mechanism--the "rules of the game" are not obeyed--so that deficit countries do not reliably lose and surplus countries do not reliably gain gold. It might be a pseudo gold standard because the money multiplier is not reliable and stable--because the banking system does not transparently and rapidly transmute a k% shift in the stock of gold into a k% shift in the money stock.

Or, in short, to Friedman a gold standard is only a real gold standard if it produces a path for the money stock that is a k% rule. Anything else is a pseudo gold standard.

The purpose of the paper, in short, is a Talmudic splitting-of-hairs. The point is to allow von Mises and Rueff and their not-so-deep-thinking latter-day followers (paging Paul Ryan! Paging Benn Steil! Paging Charles Koch! Paging Rand Paul!) to remain in their cloud-cuckoo-land of pledging allegiance to the gold standard as a golden calf while at the same time walling them off from and keeping them calm and supportive as the monetarist central bank does its job of keeping our fiat-money system stable by making Say's Law true enough in practice.

As such, it succeeds admirably.

Or, at least, I think it does...

Have I just given an unconvincing Straussian reading of Friedman--that he knows what he is doing, and that what he is doing is leaving the theoretical husk to the fanatics von Mises and Rueff while keeping the rational kernel for himself, and making the point that a gold standard is a good monetary policy only if it turns out to mimic a good monetarist fiat-money standard policy? That his apparent confusion is simply a way of accomplishing those two tasks without splitting Mont Pelerin of the 1960s into yet more mutually-feuding camps?

Or was Friedman simply, as David thinks, confused?

You decide...

908 words

Greg Orman for Senate Majority Leader!: And the Kansas Senate Race Becomes Interesting...: Live from The Roasterie CCCXXIII: September 4, 2014

Kansas First News: Taylor withdraws from US Senate race: "A northeast Kansas prosecutor...

...who won the Democratic nomination for the U.S. Senate race in the Primary Election has withdrawn from the race. Shawnee County District Attorney Chad Taylor confirmed with Kansas First News Wednesday afternoon that he has withdrawn from the U.S. Senate Race against Republican Pat Roberts and Independent Greg Orman. Taylor tells Kansas First News that he turned in the papers to withdraw at 4:15 p.m. Wednesday. When asked why, Taylor declined to comment and says he “would do some press later in the week.” This decision comes after it was announced Wednesday morning that Independent U.S. Senate candidate Greg Orman had been endorsed by a group of former moderate Republicans in the Kansas Legislature who are unhappy with the state GOP’s conservative leanings...

Seems to me Greg Orman now has a pretty good chance of becoming majority leader of the Senate next January, if he wishes it...