J. Bradford DeLong's Blog, page 1158

Tuesday Declaration of Summer Book Review Bankruptcy

At the start of summer I put a large pile of books on my desk. "I will write reviews of these this summer", I thought. "They all deserve to be reviewed, and it will be quick and easy to do".

Not going to happen.

I therefore declare book-review bankruptcy and formally and permanently disavow all intention of ever writing reviews of:

An Interesting Ad-Lib from ECB Head Mario Draghi's Jackson Hole Speech: Morning Comment

Joe Weisenthal notes Lorcan Roche Kelly of Agenda Research on an extended ad-lib in Mario Draghi's Jackson Hole speech. Ad lib emphasized; things in the text not mentioned struck through:

Inflation has been on a downward path from around 2.5% in the summer of 2012 to 0.4% most recently.

I comment on these movements about once a month in the press conference, and I have given several reasons for this downward path in inflation, saying it is because of food and energy price declines; because after mid-2012 it is mostly exchange rate appreciation that has impacted on price movements; more recently we have had the Russia-Ukraine geopolitical risks, which will also exert a negative impact on the euro area economy; and of course we had the relative price adjustment that had to happen in the stressed countries as well as high unemployment. I have said in principle most of these effects should in the end wash out because most of them are temporary in nature--though not all of them.

But I also said if this period of low inflation were to last for a prolonged period of time, the risk to price stability would increase. Inflation expectations exhibited significant declines at all horizons. The 5year/5year swap rate declined by 15 basis points to just below 2%--this is the metric that we usually use for defining medium term inflation. But if we go to shorter- and medium-term horizons, the revisions have been even more significant. The real rates on the short and medium term have gone up, on the long term they haven't gone up because we are witnessing a decline in long-term nominal rates, not only in the euro area but everywhere really.

The Governing Council will acknowledge these developments and within its mandate will use also unconventional all the available instruments needed to ensure price stability safeguard the firm anchoring of inflation expectations over the medium to long term.

The speech text says:

The ECB knows that inflation has declined.
The decline in inflation has not led to any decline in expectations of inflation.
THE ECB will, if necessary, within its mandate, use QE and other policies to keep expectations of inflation from declining.

The speech as delivered says:

The ECB knows that inflation has declined.
My usual line is that the decline in inflation is due to temporary factors that will be reversed.
That explanation is now long in the tooth: the longer "temporary" lasts the greater the danger.
In fact, it is too late to "safeguard the firm anchoring of inflation expectations".
Inflationary expectations have already declined.
We will use all the tools we have to reverse this.

Is this deviation a mere line wobble--Draghi going accidentally off-message either because of jet-lag or because his personal view is not the ECB consensus and some of the former leaked out? Is this deviation an audience effect--Draghi seeking to give a speech pleasing to his West Side (of the North Atlantic) audience and thus unimportant, since he will revert to the East Side message assuming his plane avoids Bárðarbunga? Or does it signal a recognition on Draghi's part that the Eurozone is heading for a triple dip, and that if he doesn't assemble a coalition to do much more very quickly to boost aggregate demand we will have to change the name "The Great Recession" to something including the D-word, and he will go down in history as the worst central banker since the 1930s?

I would like to know...

Liveblogging World War I: August 26, 1914: The Flames of Louvain

From Barbara Tuchman, The Guns of August:

On August 25 the burning of Louvain began. The medieval city on the road from Liège to Brussels was renowned for its University and incomparable Library, founded in 1426 when Berlin was a clump of wooden huts. Housed in the fourteenth century Clothworkers’ Hall, the Library included among its 230,000 volumes a unique collection of 750 medieval manuscripts and over a thousand incunabula. The façade of the Town Hall, called a “jewel of Gothic art,” was a stone tapestry of carved knights and saints and ladies, lavish even of its kind. In the church of St. Pierre were altar panels by Dierik Bouts and other Flemish masters. The burning and sack of Louvain, accompanied by the invariable shooting of civilians, lasted six days before it was called off as abruptly as it began.

Everything went smoothly when Louvain was first occupied.... The second day was more strained. A German soldier was shot in the leg, allegedly by snipers. The burgomaster urgently repeated his call upon civilians to surrender arms. He and two other officials were arrested as hostages. Executions behind the railroad station became frequent.... General von Luttwitz, the new Governor of Brussels.... Visited in the course of duty by the American and Spanish Ministers, he said to them, “A dreadful thing has occurred at Louvain. Our General there has been shot by the son of the Burgomaster. The population has fired on our troops.” He paused, looked at his visitors, and finished, “And now of course we have to destroy the city.” Mr. Whitlock was to hear so often the story of one or another German general being shot by the son or sometimes the daughter of a burgomaster that it seemed to him the Belgians must have bred a special race of burgomasters’ children like the Assassins of Syria.

Already word of the flames at Louvain had spread. Stunned and weeping refugees driven from the city told of street after street set on fire, of savage looting and continuing arrests and executions. On August 27 Richard Harding Davis, star of the American correspondents who were then in Belgium, made his way to Louvain by troop train. He was kept locked in the railroad car by the Germans, but the fire had by then reached the Boulevard Tirlemont facing the railroad station and he could see “the steady straight columns of flames” rising from the rows of houses. The German soldiers were drunk and wild. One thrust his head through the window of the car where another correspondent, Arno Dosch, was confined and cried: “Three cities razed! Three! There will be more!”

On August 28 Hugh Gibson, First Secretary of the American Legation, accompanied by his Swedish and Mexican colleagues, went to Louvain to see for themselves. Houses with blackened walls and smoldering timbers were still burning; pavements were hot; cinders were everywhere. Dead horses and dead people lay about. One old man, a civilian with a white beard, lay on his back in the sun. Many of the bodies were swollen, evidently dead for several days. Wreckage, furniture, bottles, torn clothing, one wooden shoe were strewn among the ashes. German soldiers of the IXth Reserve Corps, some drunk, some nervous, unhappy, and bloodshot, were routing inhabitants out of the remaining houses so that, as the soldiers told Gibson, the destruction of the city could be completed. They went from house to house, battering down doors, stuffing pockets with cigars, looting valuables, then plying the torch. As the houses were chiefly of brick and stone, the fire did not spread of itself. An officer in charge in one street watched gloomily, smoking a cigar. He was rabid against the Belgians, and kept repeating to Gibson: “We shall wipe it out, not one stone will stand upon another! Kein Stein auf einander!—not one, I tell you. We will teach them to respect Germany. For generations people will come here to see what we have done!” It was the German way of making themselves memorable....

A wireless statement from Berlin issued by the German Embassy in Washington that, following “perfidious” attack by Belgian civilians, “Louvain was punished by the destruction of the city.” Identical with General von Luttwitz’s statement, it showed that Berlin had no wish for the world to misunderstand the nature of the gesture at Louvain....

On August 30 the process of destroying Louvain was terminated. On the same day an official communiqué of the German Foreign Office affirmed that “the entire responsibility for these events rests with the Belgian Government,” not forgetting the usual claim that “women and girls took part in the fight and blinded our wounded, gouging their eyes out.”

Why did the Germans do it? people asked all over the world. “Are you descendants of Goethe or of Attila the Hun?” protested Romain Rolland in a public letter to his former friend Gerhart Hauptmann, Germany’s literary lion. King Albert in conversation with the French Minister thought the mainspring was the German sense of inferiority and jealousy: “These people are envious, unbalanced and ill-tempered. They burned the Library of Louvain simply because it was unique and universally admired”—in other words, a barbarian’s gesture of anger against civilized things.

Valid in part, this explanation overlooked the deliberate use of terror as prescribed by the Kriegsbrauch, “War cannot be conducted merely against the combatants of an enemy state but must seek to destroy the total material and intellectual (geistig) resources of the enemy.” To the world it remained the gesture of a barbarian. The gesture that was intended by the Germans to frighten the world—to induce submission—instead convinced large numbers of people that here was an enemy with whom there could be no settlement and no compromise.

Belgium clarified issues, became to many the “supreme issue” of the war. In America, said a historian of his times looking back, Belgium was the “precipitant” of opinion and Louvain was the climax of Belgium. Matthias Erzberger, soon to be appointed chief of propaganda when that unhappy necessity forced itself upon Germany, found that Belgium “aroused almost the entire world against Germany.” The argument of his counterpropaganda, that Germany’s conduct was justified by military necessity and self-defense, was, as he admitted with a certain wry regret, “insufficient.” It did the Kaiser little good to take the offensive ten days after Louvain in a telegram to President Wilson saying “my heart bleeds” for the sufferings of Belgium caused “as a result of the criminal and barbarous action of the Belgians.” Their resistance, he explained, had been “openly incited” and “carefully organized” by the Belgian government, compelling his generals to take the strongest measures against the “bloodthirsty population.”

It did little good for ninety-three German professors and other intellectuals to issue a Manifesto addressed “To the Civilized World” proclaiming the civilizing effects of German culture and stating, “It is not true that we have criminally violated the neutrality of Belgium.… It is not true that our troops have brutally destroyed Louvain.” However imposing the signatories—Harnack, Sudermann, Humperdinck, Roentgen, Hauptmann—the mute ashes of the Library spoke louder. By the end of August people of the Allied nations were persuaded that they faced an enemy that had to be beaten, a regime that had to be destroyed, a war that must be fought to a finish. On September 4 the British, French, and Russian governments signed the Pact of London engaging themselves “not to conclude peace separately during the present war.” Thereafter issues hardened. The more the Allies declared their purpose to be the defeat of German militarism and the Hohenzollerns, the more Germany declared her undying oath not to lay down arms short of total victory. In reply to President Wilson’s offer to mediate, Bethmann-Hollweg said the Pact of London forced Germany to fight to the limit of her endurance, and therefore Germany would make no proposals as basis for a negotiated peace. The Allies took the same stand. In this position both sides were to remain clamped throughout the war. The deeper both belligerents sank into war and the more lives and treasure they spent, the more determined they became to emerge with some compensating gain.

An 1862 Extraordinary Rendition in Morocco by my Great^6 Grandfather James DeLong: Live from The Roasterie CCCXVI: August 26, 2014

My Great^6 Grandfather James DeLong left his bones in Wichita, but only after carrying out the first-ever extraordinary rendition on the past of the U.S. government and then getting fired by Abraham Lincoln for being too aggressive in waging the Civil War on all possible fronts...

Morocco–United States Relations--Wikipedia: "During the American Civil War...

...Morocco reaffirmed its diplomatic alliance with the United States. Morocco also became the scene of a colorful foreign relations and political warfare episode involving the Kingdom of Morocco, the United States of America, the Confederate States of America, France, and Great Britain. In 1862 Confederate diplomats Henry Myers and Tom Tate Tunstall were arrested outside the American Consulate in Tangier after making disparaging remarks about the United States and its flag. American consul, James De Long overheard their jeers and asked Moroccan police to seize the men. When word reached Confederate Admiral Raphael Semmes who was acting as the Confederate diplomat in the area, he sent out dispatches to as many neutral diplomats as he had contact with, including the British Consul to Morocco, John Drummond Hay. Semmes asked Hay to get involved and encourage Morocco to release the prisoners, to which Hay responded that he could only convey the message but not offer any recommendation for actions, as offering a recommendation would violate Britain's terms of neutrality. Semmes tried a similar tactic with the French consul, but without success.

Eventually, European citizens living in Morocco rallied outside the American consulate demanding the prisoners' release. During the heat of the protest, American Lt. Commander Josiah Creesey drew his sword, which caused the mob to throw rocks. After the episode, the Moroccan government sent official word to Semmes that they could not meet with him to discuss the situation, because the two nations did not have formal diplomatic relations. Eventually, the Union officials ordered the two prisoners be sent to Fort Warren prison in Boston by way of Cadiz, Spain. Only after the French intervened while the ship was docked in Cadiz did President Abraham Lincoln issue an official order to release the prisoners.

As a result of the affair, Lincoln withdrew consul De Long. Having been irritated by Morocco's response, the Confederate States were never able to recover and manage relations with Morocco. In 1863, the King of Morocco released an official order stating in part:

The Confederate States of America are fighting the government with whom we are in friendship and good relations... if any vessel of the so-called Confederate states enters your port, it shall not be received, but you must order it away on pain of seizure; and you will act on this subject in cooperation with the United States..

For a detailed description of the event, see: Abu-Talib, Mohammed, “Morocco and the American Civil War” in The Atlantic Connection: 200 Years of Moroccan-American Relations 1786–1986, Bookin-Weiner and El Mansour eds. Rabat, Morocco: Edino Press, 1990, pp. 57–69.

Gerald Loftus: Topic In Search of Historian: The US Civil War in Tangier, Morocco: "Civil War era Consul James De Long.

De Long, who served from September 1861 through March 1862, might have been a major player in one of the Civil War's many sideshows, one which President Abraham Lincoln feared could widen to a second front: the seizure of Confederate ships trading with foreign powers. From the Legation website:

Early in the Civil War, Confederate ships called at Tangier. After the Union government called this indiscretion to the attention of the Moroccan authorities, life at the Legation was occasionally disturbed by hostile crowds protesting the U.S. Navy's interference with Moroccan trade. On several occasions it became necessary for U.S. Marines to come ashore to move prisoners which had been taken from Confederate ships, through town to U.S. warships.

In seizures elsewhere, Lincoln thought better of pressing the Union cause.  From The History Place Civil War timeline:

November 8, 1861 - The beginning of an international diplomatic crisis for President Lincoln as two Confederate officials sailing toward England are seized by the U.S. Navy. England, the leading world power, demands their release, threatening war. Lincoln eventually gives in and orders their release in December. "One war at a time," Lincoln remarks.

Okay, we've established that Consul De Long was here from the fall of 1861 through the spring of 1862.  That U.S. Marines landed in Tangier to escort Confederate prisoners to Navy warships.  And that president Lincoln feared that such incidents would lead to a wider war.

Sounds interesting, no?  Worthy of an entry in "Tweeting the Civil War" perhaps? Or maybe the Washington Post's detailed parallel history in honor of the Civil War's 150th Anniversary?

Either of the above would be fine.  But more than a fleeting blog post like this, or an even briefer 140 character Twitter blurb, the history of American diplomatic Civil Warfare appears to be a subject worthy of a proper historical inquiry.

What better place than the research center of TALIM here in Tangier?  In congenial 18th century surroundings, a properly-funded scholar could delve into the American Consulate and American Legation archives of the period.  Explore American actions and Moroccan reactions.

Doesn't anyone else see the timeliness of this topic?  And not just in this 150th Anniversary season.  American engagement with the entire Middle East and North Africa region is not only a matter of the 21st or even 20th centuries.  American interaction in places like Tangier, Algiers, and Tripoli dates back to our earliest days as an independent country.

We'll be here.  So Civil War scholars, start planning your trip to Tangier!

Jamie Jones: Pirates at the Legation: Morocco & the Civil War: "The sultan of Morocco weighed in on the United States Civil War...

...Morocco would side with the Union, against the rebelling Confederate states.  The announcement was subtle but decisive, delivered in the form of an edict about ships entering Moroccan ports.  Because Morocco did not recognize the legitimacy of the Confederate government, it would not allow Confederate ships to enter Moroccan ports. In a letter dated September 23, 1863, the sultan and his ministers issued this order to the bashaws in all the ports of Morocco: 

if any vessel of the so-called Confederate states enters your ports, it shall not be received, but you must order it away at once, as they are not allowed entrance, because we do not know them, and they have no consul by which they may be known to us, or who may act for them; therefore we have prohibited their entrance on pain of seizure; and you will act on this subject in cooperation with the United States vice-consul, in accordance with the treaties and in conformity with our master’s royal order.  And peace.

A ship is a material emblem of its state, and when Morocco closed its maritime ports to the Confederates, it closed the country to the Confederacy at large.

The formal letter offers a glimpse of diplomacy as a polite process carried out in pen and paper.  But the letter was the last stage in a process that began a year and a half earlier when the U.S. Consulate at Tangier (now the Tangier American Legation) played host to two pirates and a noisy riot.  The Civil War’s arrival in Tangier was strange and surprising: an important, if little-known, episode in the history of relations between the U.S. and Morocco.

During the winter of 1862, the U.S. Consul James De Long got word that two Confederate naval officers were visiting town on a short layover.  The men had been sailing with the Confederate raider Sumter, which had been sinking Union ships in the Mediterranean.  When De Long heard that the two men had landed at the port, he acted quickly.  With the assistance of Moroccan police, he arrested the two men, Henry Myers and Thomas T. Tunstall, and held them in irons at a makeshift prison at the Consulate.  His charge?  The two men were treasonous traitors, “pirates” who were bent on destroying the material interests of the United States, of which they were legal citizens. 

Not everyone agreed that the two Confederates were pirates.  In fact, De Long’s peers among the European diplomats in Tangier were outraged.  Europe and England were working hard to maintain neutrality in the U.S. Civil War, in part because they depended so strongly on cotton trade with the southern states.  The consuls and ambassadors in Tangier believed De Long had no authority to enlist Moroccan police, nor to imprison the men.  (It’s hard to imagine the present-day Legation as the site of a prison, however makeshift.)  

Some of the Europeans in Tangier raised a riot and stormed the U.S. Consulate in an attempt to free the prisoners at the Consulate.  In response, Consul De Long wrote scolding letters to foreign ministers and ambassadors of nations all over Europe and to foreign ministers in Morocco.  De Long implored these diplomats and statesmen to punish offending rioters in Tangier and side with the Union against the Confederacy.  The matter of how to respond to De Long was debated in the British Parliament and, likely, in offices throughout Europe.  In short, De Long and his pirates incited a diplomatic crisis.  While Europe and the U.K didn’t budge in their doctrine of neutrality, Morocco agreed to take sides, and the United States strengthened ties with one of its oldest allies.

I wrote about this incident this week in The New York Times’ Civil War blog, Disunion. And it is a special pleasure to tell this story on the TALIM Director’s Blog, where I first became curious about the role of Morocco in the Civil War.  In March 2011, Jerry Loftus wrote an enticing post about a “Topic in Search of a Historian:  The U.S. Civil War in Tangier." I was finishing my Ph.D. dissertation at the time, and dreaming of future projects.  I filed away the idea for my next trip to Morocco.  Now, the project is coming full circle, back to the blog.  And I am delighted to report that there’s enough rich material at TALIM to support the work of many generations of American scholars.

The opportunity to research the U.S. Civil War in Tangier came this past summer.  I spent June exploring in TALIM archives and immersing myself in 19th-century Tangier.  I thumbed through the crumbling, yellowed pages of Al-Mogreb Al-Aksa and the Tangier Gazette. I dipped into Luella Hall’s massive diplomatic history on The United States and Morocco.  I read Charles Sumner’s fiery abolitionist treaty on the horrors of slavery at home and abroad:  White Slavery in the Barbary States.  And I read Coos-Coo-Soo,   a fascinating narrative written by a young woman who spent several years living at the American Legation in the nineteenth century.

The story of De Long and his pirates came alive when I found De Long’s correspondence in FRUS - Foreign Relations of the United States.  De Long describes the riots at the Consulate in lurid detail.  And the correspondence follows the conversation between Moroccans foreign ministers, De Long, and Jesse McMath, De Long’s successor as U.S. Consul in Tangier.

I was struck, when reading, at the way 19th-century Americans often experienced Morocco not as an exotic foreign land, but as a place where they were often reminded of home.  Morocco, with its racial and ethnic diversity—and its racial and ethnic conflicts—was familiar, in a strange way.  And Tangier struck Americans as a place of utterly unique cross-cultural contact, positioned as it was at strange borders, between Africa and Europe, Islam and Christianity, the Atlantic and the Mediterranean.

This past summer, I spent at least as much time walking up and down the hills of Tangier as I did in the archives, looking for traces of the 19th-century world and taking in the daily spectacle of Tangerine geography.  I spent hours at the Phoencian tombs and at Café Hafa, watching ferries and fishing boats and the misty coast of Spain, coming in and out of focus. Before I came to Tangier, I was surprised that the Moroccan city had any place whatsoever in the distant U.S. Civil War.  But in the TALIM archives and on the shores of the Straits, I realized that Tangier has always been a place where the nations of the world play out their battles over national borders and national belongings.

Jamie Jones: The Moroccan Front: "The Civil War arrived in Morocco in February of 1862...

...when two Confederate naval officers took a walk in Tangier. The men, Henry Myers and Thomas T. Tunstall, were on an errand to buy coal and bring it back to their ship, the Sumter, which was laid up for repairs nearby in Gibraltar, a British territory near the southern tip of Spain. Myers and Tunstall hoped to find coal in the Spanish city of Cádiz, but the steamer they took to Spain made a quick stop in Tangier en route.
Before the Sumter landed in Gibraltar, it had been destroying United States commercial ships on both sides of the Atlantic, burning them down to the water. The Sumter’s search-and-destroy missions were part of the Confederate navy’s strategy to weaken Union commerce. By this point in the Civil War, the naval battle had reached the Mediterranean.

Myers and Tunstall had barely set foot in Tangier when the United States consul and a small group of Moroccan police officers arrested the two men. To the consul, James De Long, the Sumter’s officers were pirates: traitorous secessionists attacking the only nation to which they legally belonged. De Long locked them up in a makeshift prison at the consulate.

De Long delighted in his bold patriotic gesture. He wrote in a letter to Secretary of State William H. Seward that “American citizens may talk and plot treason and rebellion at home, if they can, but they shall not do so where I am, if I have the power to prevent it.” (Seward, considerably closer to bloody battle, must have smiled at the consul’s swagger.)

But De Long’s peers in Tangier’s diplomatic community were outraged. They believed that De Long had no jurisdiction to imprison the officers, or to enlist the Moroccan police in capturing and guarding them. A few days after De Long arrested the officers, European expatriates formed a mob to raid the consulate and forcibly free the prisoners. De Long and the Moroccan guards at the consulate held off the rioters.

Rebuffed, several European diplomats took to more conventional channels and asked the sultan of Morocco to censure De Long in order to maintain neutrality in the American Civil War. De Long, on the other hand, demanded that the sultan side with his nation’s old ally and back the Union – Morocco and the United States had been on good diplomatic terms since 1777, when Morocco became the first foreign nation to recognize the newly declared United States. In 1786, Morocco and the United States signed a Treaty of Peace and Friendship to formalize diplomatic relations.

All that good will nearly disintegrated after the incident in Tangier, when De Long threatened a Moroccan foreign minister: “Shall 76 years of uninterrupted friendship that has existed between your government and that of the United States be brought to an end for the sake of pirates?”

In April 1862, the “pirates” Tunstall and Myers were shipped to Boston and imprisoned at Fort Warren. By June, De Long was replaced in Tangier by a new consul, Jesse McMath. McMath picked up the diplomatic volley, and eventually persuaded Morocco to side with the Union against the Confederacy. Sultan Sidi Mohammed IV of Morocco signed a decree on Sept. 23, 1863 prohibiting Confederate ships from entering Moroccan ports.

A sultan’s decree on port admission may seem like a tentative diplomatic gesture, but in such maritime protocol, nations are named and made, unnamed and unmade. The means by which Morocco became the first nation to “recognize” the United States back in 1777 was a similar document signed by an earlier sultan, guaranteeing American ships free admission to Moroccan ports. Every port is a border. To welcome a ship into port is to welcome its home nation into diplomatic relations. The sultan’s decree of 150 years ago, banning Confederate ships from port, disavowed the Confederacy.

Morocco’s importance for those Civil War naval ships was not merely symbolic. Morocco was a comparatively convenient place for North American ships to take on supplies, stop for repairs and monitor traffic in and out of the Mediterranean. In oceanic terms, Morocco is close.

The two nations are close in certain terms of history, too. Americans sometimes see in Morocco a hazy resemblance to their own country. Fifty-five years after the De Long incident, Edith Wharton visited Morocco as a guest of the French colonial administration. Wharton invoked immigration and diversity as the shared heritage of both countries: “For centuries, for ages, North Africa has been what America now is: the clearing-house of the world.”

Morocco also has an extensive history of slavery. Like the United States, Morocco traded in enslaved black West Africans, who came to Morocco across the Sahara. Slavery in Morocco took other forms, too. Morocco was one of the so-called Barbary States, where for centuries European and American sailors captured by pirates were enslaved and ransomed. In his 1853 book “White Slavery in the Barbary States,” the radical abolitionist senator Charles Sumner of Massachusetts depicted North Africa as a disturbing analog to the American South, which he called the “Barbary States of America.”

Statehood and citizenship have always been slippery in Tangier, where even on foggy days you can look across the straits and see another continent and two nations, Spain and Britain. The consulate where De Long held his pirates still stands, although it has ceded its diplomatic function to the embassy in Rabat, the modern capital. Today the old consulate is open to visitors and houses a community center and museum full of treasures. Long a fixture in Tangier’s old city, the old consulate is the only National Historic Landmark outside the United States.

The view from the consulate’s roof terrace takes in the curving sweep of Tangier’s port and the straits beyond. One hundred and fifty years ago, De Long might have stood there to watch the Confederate Sumter burn Union ships. Today, you can stand on a roof in Tangier and watch as fast ferries loaded with tourists glide back and forth across the 14 miles that separate Tangier in Morocco from Tarifa in Spain. To those who attempt the deadly crossing in illegal boats, the straits must appear terribly wide and the watery line that separates nations as invisible as ever.

Tykhe's Nonexistent Urn and Senate Election Probabilities: Over at Equitable Growth: Philosophy of Probability III: the Philosophizing: Tuesday Focus for August 26, 2014

Over at Equitable Growth: Apropos of:

Cosmos Elysée (2009): On the Certainty of the Bayesian Fortune-Teller,

Brad Delong: Elementary Philosophy of Probability and the War on Nate Silver,

Sky Masterson: An Ear Full of Cider,
Adam Elga (2010): Subjective Probabilities Should Be Sharp, and
Brad DeLong: [Tuesday Virtual Office Hours: Follow-Up Questions on the Philosophy of Probability5...

Thrasymakhos: Today we discover that Sam Wang does not seem to be a Bayesian:

Sam Wang: Why you’re wrong to get excited about “60%”: Some people are excited... Nate Silver... [gives] a probability of a GOP [Senate] takeover at 60%. To cut to the chase: I do not think that number means what you think it does...

Thomas Bayes: It is simple. It means that Nate Silver stands ready to bet on Senate control next January at odds of 3-2.

Thrasymakhos: "Stands ready"? READ MOAR

Thomas Bayes: Yes. He stands ready to make a (small) bet that the Majority Leader of the Senate will be a Republican on January 5, 2015 if he gets at least 2-3 odds, and he stands ready to make a (small) bet that the Majority Leader of the Senate will be a Republican on January 5, 2015 if he gets at least 3-2 odds. Since Nate Silver has gained considerable success so far in life by making predictions and laying odds that reality has thereafter validated, his views on the odds are worthy of great respect unless you think you have important private information that he does not or a superior analytical methodology--and you probably should not think that, as those who did think they had better ideas of the odds than Nate Silver in the past are, for the most part, shirtless. What else could it possibly mean? What else could people take it to mean?

Jerzey Neyman: No, no, no! You have got it all wrong! Sam Wang has it right!

Sam Wang: Think of five... tosses... [of] coins are not perfectly fair, and the overall situation is a little unfavorable to Democrats. That is basically the amount of uncertainty expressed in Silver’s probability. Fundamentally, any probability in the 40-60% range is a numerical way of saying “I don’t know.”.... The certainty fallacy. Silver has done something common among paid writers, which is to do what it takes to attract eyeballs. He has rounded a probability that is barely over 50% to make the statement that one side is ahead.... Basically, whenever you see a probability like that, you should mentally say “plus or minus 20%” just to get the right idea...

Thomas Bayes: Now I am confused. So Sam Wang thinks:

Nate Silver should say that the probability of a GDP Senate takeover might be 40%, might be 60%, and might be 80%-that would give people the right idea.
Nate Silver should not say that the probability right now, August 25, 2014, with 71 days to go before the election, of a GDP Senate takeover is 60%--that would give people the wrong idea.
Nate Silver should not say that the probability of a GDP Senate takeover might be 30%, might be 60%, and might be 90%--that would give people the wrong idea.
Nate Silver should not say that the probability of a GDP Senate takeover might be 50%, might be 60%, and might be 70%--that would give people the wrong idea.

Do I have it right?

Jerzey Neyman: Exactly!

Thomas Bayes: May I say that I am having a much harder time understanding what Sam Wang means--when he says that we should say that the probability is in [0.4, 0.8], and not say that the probability is 0.6 or that it is in [0.3, 0.9] or in [0.5, 0.7]--than what Nate Silver means when he says that he thinks the probability is 0.6?

Jerzey Neyman: You may say it. But why should that be hard to understand?

Thomas Bayes: I find it hard to understand how a probability could be something different than it currently is.

Jerzey Neyman: But surely you agree that somebody who knew more than you did about the forthcoming Senate election would have a different estimated probability of Republican takeover than your and Nate Silver's 60%? And that his or her estimate would be a better probability than yours?

Thomas Bayes: Yes, of course. Probabilities are associated with information sets. As information arrives and information sets grow...

Sky Masterson: Including, importantly, growing by adding the information that somebody with an information set much larger than yours wants to make a large bet against against you at your probability...

Thomas Bayes: ...the probability you hold shifts. That's what "learning stuff" means.

Jerzey Neyman: Maybe I can make an analogy that will help you understand. Suppose that there were a large urn full of marbles--red marbles and blue marbles. Suppose that there is a being, named Tykhe, who periodically takes marbles out of the urn at random by a process that will leave only one marble in the urn on November 4, 2014. Suppose that if that one remaining marble is red then a Republican becomes majority leader of the Senate in January 2015, and if that one remaining marble is blue then a Democrat becomes majority leader of the Senate in January 2015. Suppose we know right now that there are 100 marbles left in Tykhe's urn, and that somewhere between 40 and 80 of them are red. Thus we should say that the probability of Republican senate control in the next election is between 40% and 80%. We should not say that the probability is 60% because our knowledge of the urn does not extend to knowing that there are 60 red marbles in it. We should not say that the probability is between 50% and 70% because we do not know that there are not 45 or 75 red marbles in it. And we should not say that the probability is between 30% and 90% because we do know that there are not 30 red marbles in it and not 90 red marbles in it. Is that clear?

Thomas Bayes: But there is no urn...

Thrasymakhos: So, Jerzey and Sam, your position is that we should reserve the word "probability" and use it only to refer to the betting odds of somebody with the superior information set provided by being able to look into Tykhe's urn right now and count the marbles?

Jerzey Neyman: Exactly!

Thomas Bayes: But there is no urn. And there is no being Tykhe...

Thrasymakhos: It does make me wonder. Why do you reserve "probability" for the betting odds that someone who had the information set associated with having counted today's--and not yesterday's, and not tomorrow's, and not last year's, and not November 4's--marbles in Tykhe's urn would offer, and not the betting odds of somebody with a different information set?

Jerzey Neyman: The urn and Tykhe are an analogy. The point of the urn and Tykhe is that the real probabilities are those associated with an observer who understands the generating process, and whose uncertainty is over (a) how exactly some of the details of that generating process have played out to date and (b) the effect of unknowable future events in the generating process.

Thomas Bayes: But there is no urn. And there is no being Tykhe. And there are no marbles...

Mentor: Ah! It is always interesting to see young sophonts with poorly because freshly-evolved brains of a low order of intelligence attempt to wrestle with these conundrums. I am Mentor, of Arisia, an anthology intelligence of a high order. My visualization of the Cosmic All is correct to a tolerance of 2^(-50)--and with a confidence of 2^(-50) I know who will control the senate come January 2015. What you see as unknown details of how the generating process has played out to date are things I know as well as I would know the back of my own hand, were I the kind of being that had hands. What you see as the effect of unknowable future events I can foresee as easily as you can predict how old you will be the next time your birthday falls on a Sunday--or... no, I decided 10,000,000 years ago I would not tell you that and cut off this explanation here...

Thrasymakhos: Seems to me, Sam and Jerzey, that as long as creatures like Mentor exist, all probabilities must be either 2^(-50) or 1-2^(-50).

Jerzey Neyman: But no such creatures as Mentor exist!

Thomas Bayes: But there is no urn. And there is no being Tykhe. And there are no marbles. There are no red marbles. There are no blue marbles...

Mentor: I beg your pardon?

Jerzey Neyman: You are a fictional character in a space opera, not a real being!

Mentor: And what do you suppose you are? Do you think you are real?

Thomas Bayes: But there is no urn. And there is no being Tykhe. And there are no marbles. There are no red marbles. There are no blue marbles. How can the limits of our knowledge about marbles that do not exist in an urn that does not exist manipulated by a being that does not exist have any impact on our probabilities of things that do exist?...

Mentor: I am at least a much-beloved figure in space operas that have had a wide readership for three generations.

Sokrates: Would Sam Wang accept, as a friendly amendment, the proposition that Nate Silver should say not that the probability is between 40% and 80% right now, but that if he could access and fully process all the information that is already out there today it might push the probability down to 40%, it might push it up to 80%, it might keep it the same?

Thrasymakhos: So Mentor's assessments cannot be probabilities because he doesn't exist...

Thomas Bayes: But Nate Silver can't. Nobody can.

Mentor: I can! And more...

Thrasymakhos: Yet the assessments of the nonexistent person looking at nonexistent Tykhe's nonexistent urn are probabilities even though none of the three exist?

Jerzey Neyman: It's just an analogy. Real world probabilities are much more like an unknown but bounded number of different kinds of marbles in urns than they are like Bayesian or Arisian woo-woo!

Sokrates: But if he could...

Thomas Bayes: But he can't. And because he can't, and doesn't know whether doing something he can't do would push it down to 40%, up to 80%, or leave it unchanged, Nate Silver should say that the probability is 60%

Noted for Your Afternoon Procrastination for August 25, 2014

Over at Equitable Growth--The Equitablog

In Which I Go Around, Over and Over Again, in Circles as I Try to Understand What Is Going on in Europe: Monday Focus for August 25, 2014 - Washington Center for Equitable Growth
Morning Must-Read: Paul Krugman: The Rent Is too Damned High - Washington Center for Equitable Growth
Morning Must-Read: David Autor: Skills, education, and the rise of earnings inequality among the “other 99 percent” - Washington Center for Equitable Growth
Morning Must-Read: Branko Milanovic: My Take on the Acemoglu-Robinson Critique of Piketty - Washington Center for Equitable Growth
Morning Must-Read: Jérémie Cohen-Setton: Is this a European U-turn? - Washington Center for Equitable Growth
Morning Must-Read: Jared Bernstein: Chair Yellen Looks Under New Rocks, Finds Same Thing that’s Under Old Rocks - Washington Center for Equitable Growth
Morning Must-Read: Jason Furman and John Podesta: The Cost of Delaying Action to Stem Climate Change - Washington Center for Equitable Growth
Afternoon Must-Read: Sam Wang: In Swing States, Is Obamacare an Asset? Yes - Washington Center for Equitable Growth

Plus:

Things to Read on the Afternoon of August 25, 2014 - Washington Center for Equitable Growth

Must- and Shall-Reads:

James Hamilton: What did quantitative easing accomplish?
Brad DeLong: Noise Trading, Bubbles, and Excess Stock Market Volatility: Noah Smith and Robert Shiller and Andrei Shleifer and Jeremy Greenwood vs. John Cochrane and Gene Fama and Company: Progressive vs. Degenerative Research Programs in Finance
Ivan Werning: Optimal Wealth Taxation: Redistribution and Political Economy
Emmanuel Farhi and Iván Werning: "In a political economy model of bequest taxation. Higher values of r − g lead to higher wealth inequality, resulting in higher and more progressive [optimal] taxes on bequests..."

 

Jared Bernstein: Chair Yellen Looks Under New Rocks, Finds Same Thing that’s Under Old Rocks: "I yield to no one in my admiration for... Janet Yellen. So I was taken aback a bit by a section in her... speech... where she gave a number of reasons why the absence of wage pressures may not, paradoxically, be signaling that considerable slack remains in the job market.... I don’t think that’s the case at all here.... Each of her three reasons look like additional reasons not to slow the economy and preempt wage growth by tightening too soon.... Nominal wage rigidity... implies that until inflation erodes real wages enough to generate more employment demand (i.e., moving down the demand curve), or until there’s enough labor demand to necessitate hiring at current real wage levels (i.e., the demand curve moves out), there’s no reason to tighten.... Structural... forces... reducing labor’s share... [are a reason to promote] very tight labor markets to rebalance 'factor income shares'.... Depressed labor force participation... might lead to wage pressures in the near term, but as labor demand strengthened, those sideliners would get pulled back in which would then dampen those pressures.... Even more so than the other two reasons, this one especially calls for extended monetary support of the job market..."

**Jason Furman and John Podesta: The Cost of Delaying Action to Stem Climate Change: "The report... written under the leadership of Jim Stock.... Immediate action substantially reduces the cost of achieving climate targets. Taking meaningful steps now sends a signal to the market that reduces long-run costs of meeting the target.... The least-cost mitigation path to achieve a given climate target typically starts with a relatively low price of carbon to send these signals to the market, and subsequently increases as new low-carbon technologies are developed and deployed... net mitigation costs increase, on average, by approximately 40 percent for each decade of delay.... If delayed action causes the mean global temperature increase to stabilize at 3° Celsius above preindustrial levels, instead of 2°, that delay will induce annual additional damages of 0.9 percent of global output.... The possibility of abrupt, large-scale, catastrophic changes in our climate increases the need to act.... Enacting meaningful change in climate policy is analogous to purchasing climate insurance..."

Paul Krugman: The Rent Is too Damned High: "It’s true that Texas has had faster job growth.... So have other Sunbelt states with conservative governments.... The answer from the right is, of course, that it’s all about avoiding regulations.... But... there are big problems with this story quite aside from the habit economists pushing this line have of getting their facts wrong.... Wages in the places within the United States attracting the most migrants are typically lower than in the places those migrants come from, suggesting that the places Americans are leaving actually have higher productivity and more job opportunities.... So why are people moving to these relatively low-wage areas? Because living there is cheaper, basically because of housing.... Americans are being pushed out of the Northeast (and, more recently, California) by high housing costs.... Conservative complaints about excess regulation and intrusive government aren’t entirely wrong, but the secret of Sunbelt growth isn’t being nice to corporations and the 1 percent; it’s not getting in the way of middle- and working-class housing supply.... It would be great to see the real key--affordable housing--become a national issue. But I don’t think Democrats are willing to nominate Mayor Bill de Blasio for president just yet."

David Autor: Skills, education, and the rise of earnings inequality among the “other 99 percent”: "The singular focus of public debate on the 'top 1 percent' of households overlooks the component of earnings inequality that is arguably most consequential for the 'other 99 percent' of citizens: the dramatic growth in the wage premium associated with higher education and cognitive ability. This Review documents the central role of both the supply and demand for skills in shaping inequality, discusses why skill demands have persistently risen in industrialized countries, and considers the economic value of inequality alongside its potential social costs. I conclude by highlighting the constructive role for public policy in fostering skills formation and preserving economic mobility..."

Branko Milanovic: My Take on the Acemoglu-Robinson Critique of Piketty: "My brief reaction.... 1) 'Piketty totally neglects institutions.' This is hard to understand since Piketty's explanation for a large part of changes in inequality in the US, France and elsewhere are precisely institutional.... So I really fail to see any validity... the critique is fundamentally dishonest.... First, Acemoglu and Robinson establish the equation Piketty=Marx. Then then criticize Marx for ignoring institutions.... Then, since they have already decided that Piketty is really Marx, they barely give one or two examples of Piketty’s lack of concern with institutions.... 2) 'Lots of inequality increase is due to higher inequality of labor incomes.' This is true especially for the United States and no one disputes it; neither does Piketty. He actually mentions it repeatedly.... 3) Panel regressions... test[ing] whether r-g is correlated with increase in inequality.... They find that the sign of the coefficient is in most cases negative.... The right-hand side variable is not r-g but simply 'g'. This approach is surely wrong.... Only the second set... makes sense. But there, the results are inconclusive. Moreover, there are no controls at all except for the country and year dummies..."

Jérémie Cohen-Setton: Is this a European U-turn?: "Mario Draghi is recognizing that the recovery in the euro area remains uniformly weak and that the euro area fiscal stance was not helping the ECB do its job.... French leaders also reintroduced over the weekend the notion of aggregate demand, a concept they had noticeably moved away from with the 'Pacte de responsabilite'.... Inflation, he noted, has been on a downward path from around 2.5% in the summer of 2012 to 0.4% most recently.... The big news is that Draghi does not (at least now) believe in balanced-budget fundamentalism.... Richard Portes and Philippe Weil write European citizens must hope that their policy makers will recognize that the acute, pressing problem is aggregate demand. Repairing the credit system, implementing serious reforms of state expenditure and taxation, creating more flexible labor markets, finally opening the services market to cross-border competition--all are indeed very important. But they will not liberate the eurozone from stagnation..."

Laura Tyson: The economic and fiscal case for higher US infrastructure spending: "Investment in public infrastructure in the US has plunged to less than 2% of GDP, its lowest level since the federal government started tracking these data in 1992. The American Society of Civil Engineers (ASCE) gives a grade of D+ to infrastructure in the United States.... 42% of urban roads are congested, costing the economy an estimated $101 billion a year in wasted time and fuel consumption. Deficient and deteriorating transit systems impose another $90 billion in annual economic costs.... In lieu of raising the gas tax, Obama has proposed a four-year $302 billion plan to close the existing HTF funding gap, and boost HTF spending by $20 billion a year above current levels. His plan, which relies on using transitional corporate tax revenues raised in conjunction with corporate tax reform, has virtually no chance of becoming law.... Nor does his oft-repeated proposal for a federal infrastructure bank to attract more private funds for infrastructure projects. Confronted with implacable Republican opposition, Obama is relying on what the administration calls a “pen and phone” strategy..."

Eric Maskin and Inequality: Learn, and Be Less Unequal: "Maskin argues that skilled workers in developing countries are coveted by multinational companies and see wage rises. Unskilled workers are ignored.... One recommendation stands out. Unskilled workers in developing countries need better education. 38% of African adults are illiterate.... Some economists (like Mr Maskin) rule out the possibility of unskilled workers paying for their own education, for the simple reason that they cannot afford it... governments and donors should take responsibility..."

Sam Wang: In Swing States, Is Obamacare an Asset?: "Republican governors who bucked their party’s stance and accepted the policy are faring better with voters—in these races, an average of 8.5 percentage points better.... Think of the Medicaid expansion as a 'proxy variable... predictive of stands on many other issues.... If you’re too hard-core or offensive, some of your constituents can get turned off.... Martinez... Kasich... and... Snyder... look as strong as... when they were... elected. All... accepted the Affordable Care Act.... Obamacare is not the political liability it was once thought to be.... To the extent that governors hold on to their offices in close races, it may be because they have focussed on issues that are important to the voters in their states rather than the core views of their party."

And Over Here:

In Which I Go Around, Over and Over Again, in Circles as I Try to Understand What Is Going on in Europe: Over at Equitable Growth: Monday Focus for August 25, 2014 (Brad DeLong's Grasping Reality...)
Liveblogging World War I: August 25, 2014: Samsonov (Brad DeLong's Grasping Reality...)
Monday Rand Paul Self-Smackdown: Rand Paul Explains Why He Would Have Voted Against the Civil Rights Act: Live from the Roasterie CCCXV: August 25, 2014 (Brad DeLong's Grasping Reality...)

Should Be Aware of:

Claudia Wallis: Progress Report: The Teacher Wars by Dana Goldstein
Scott Lemieux: The Fake Disillusionment Con: "Shorter Thomas Frank and Cornel West: I’m going to pretend to be deeply disillusioned that Obama didn’t turn out to be the Scandinavian social democrat there was absolutely no evidence he was..."

 

Iván Werning: A Reappraisal of Chamley-Judd Zero Capital Taxation Results: "Judd (1985) and Chamley (1986) showed that capital should not be taxed in a steady state. I revisit these results and their interpretation. My analysis casts doubt on their applicability. For Judd’s setting, I find that the zero tax steady state is only approached in special cases and, when it is, at a very slow rate, after centuries of high capital taxa- tion. In Chamley’s setting, the zero tax result requires sufficient upfront expropriation of capital and large government wealth accumulation. In contrast to an example in Chamley, I show that taxes may remain positive forever if constrained by a sufficiently low upper bound. Finally, I show that both results are driven by an infinite elasticity in the present value response of savings with respect to an infinitely distant future changes in the interest rate."

David Beckworth: About the Fed Not Trying Hard Enough To Hit Its Inflation Target: "Now this is just a reduced-form relationship, but it is highly suggestive and consistent with my claim from an earlier post that there really is no 2% target. Rather, there is a 2% ceiling to an inflation target corridor. As I showed in that post, the timings of the QE programs tend to line up with this view. The above chart provides further evidence..."

Branko Milanovic: Mr. Piketty and the Classics: "The major contribution of Piketty is, in my opinion,  a (I did not say 'the') general theory... which combines... growth, factoral income distribution and personal income distribution.... The explicit connection from factoral to personal income distribution, substantiated with a  huge amount of empirical evidence, gives to Piketty’s work a new, and unique, value.... To somebody familiar with 15 years  of that literature, there is again, not much new.... But it is the combination... that gives the book its unique color  and importance..."

Steve Benen: Flubbing the details on Perry's indictment: "The exchange was one of my favorite of any Sunday show this year: NOONAN: 'I think, yes, it was local Democratic overreach. It’s just a dumb case. I don’t think it should have been brought. Naturally he looks like someone who is…' STEPHANOPOULOS: 'But the prosecutor is a former Republican, I think.' NOONAN: 'That may be. But when you look at this case, it just looks crazy.' Of course, this is less about what 'may be', and more about what is.... Nine days to get the basic details straight.... Told that her key complaint was based on a falsehood, Noonan didn’t acknowledge her error.... Wayne Slater joked that the Wall Street Journal pundit 'looked confused' by the details she should have known but didn’t.... Democratic officials in Travis County recused themselves from the case, and the prosecutor in this case, Michael McCrum, worked in the Bush/Quayle administration. What’s more, McCrum, who enjoys a solid reputation as a credible attorney, was appointed to oversee this case by a Republican judge. To see this as 'local Democratic overreach' is to simply not understand what happened..."

In Which I Go Around, Over and Over Again, in Circles as I Try to Understand What Is Going on in Europe: Over at Equitable Growth: Monday Focus for August 25, 2014

Over at Equitable Growth: Over in Yurp:

Paul de Grauewe: "[European policymakers] are doing everything they can...

...to stop recovery taking off, so they should not be surprised if there is in fact no take-off. It is balanced-budget fundamentalism, and it has become religious. We know from the 1930s that if everybody is trying to pay off debt and the government then deleverages at the same time, the result is a downward spiral. The rigidities in the European economy have been there for ages. They have absolutely nothing to do with the problem we face today...

Mario Draghi said differently at Jackson Hole last weekend. READ MOAR

But how much of what Mario Draghi said differently in Wyoming last weekend is Draghi tuning his message for we West Siders (of the North Atlantic, that is) while the real policies are made for the benefit of the East Siders? The highly-intelligent and hardworking Jérémie Cohen-Setton provides a précis:

Jérémie Cohen-Setton: Is this a European U-turn?: "Mario Draghi is recognizing that the recovery in the euro area...

...remains uniformly weak and that the euro area fiscal stance was not helping the ECB do its job.... French leaders also reintroduced over the weekend the notion of aggregate demand, a concept they had noticeably moved away from with the 'Pacte de responsabilite'.... Inflation, he noted, has been on a downward path from around 2.5% in the summer of 2012 to 0.4% most recently.... The big news is that Draghi does not (at least now) believe in balanced-budget fundamentalism.... Richard Portes and Philippe Weil write European citizens must hope that their policy makers will recognize that the acute, pressing problem is aggregate demand. Repairing the credit system, implementing serious reforms of state expenditure and taxation, creating more flexible labor markets, finally opening the services market to cross-border competition--all are indeed very important. But they will not liberate the eurozone from stagnation...

Wolfgang Münchau: Draghi is running out of legal ways to fix the euro "The ECB is failing to deliver on its inflation target...

not because it has run out of instruments but because it has based its policy on a poorly performing economic model... [and so] has committed three errors.... The ECB should have embarked on large asset purchases and cut interest rates to zero early on.... Mr Draghi’s promise to buy eurozone government debt... made everybody, including the ECB itself, complacent... [and] ended all crisis resolution. The third mistake was to misjudge the dynamics of the fall in inflation rates late last year.... The ECB should start by ditching the inflation target and replacing it with a price-level target... starting buying equities and junk bonds... subsidise mortgages and consumer credit... fund an investment programme in transport infrastructure, energy networks and scientific research.... All these measures would be effective. Most would be illegal. The one thing the central bank can do without any legal problems would be to drop the silly macroeconomic model--known as the Smets-Wouters model, after its authors--on which it has been relying for too long. My guess is that the ECB will not do any of these...

Eurointelligence: The price we are paying for serial policy errors: "Just as the ECB re-iterated for the millionth time...

...that inflation expectations remain firmly anchored, German 10-year yields defiantly dropped below 1% for the first time ever... the clearest sign yet that the markets are betting against the ECB’s inflation target. The message from the largest and most liquid fixed-interest rate market in Europe is telling us that Inflation expectations have firmly de-anchored.... For us the question is no longer whether inflation expectations have come unstuck. They have. The question is: can they be re-anchored?... Frankfurter Allgemeine and other German newspapers hardly mention any of this--they cover the overshooting French deficit obsessively. The paper’s Paris correspondent has an outraged editorial, which fails to mention that the French economy outperformed the German economy in Q2 (and for the period since the beginning of the eurozone as well)...

And Jeremie Cohen-Setton provides a roundup of the current state-of-play:

Jeremie Cohen-Setton: Europe's Forever Recession: "As the recovery takes hold in the US...

...Europe appears stuck in a never-ending slump....The Economist writes that this week’s figures for the euro-zone economy were dispiriting by any measure.... Matt O’Brien writes that it's been six-and-a-half years, and eurozone GDP is still 1.9 percent lower than it was before the Great Recession began.... Eurointelligence writes that until earlier this year, the eurozone’s macroeconomic development was a core vs. periphery story.... Ambrose Evans-Pritchard writes that it takes spectacular policy errors to bring about such an outcome.... Eurointelligence writes that this is a recession caused by policy failure.... Jeffrey Frankel writes that the peculiar way individual European economies define a recession makes it harder for the public to see that the same wrong policies have been followed.... Antonio Fatas writes the central bank should... communicate its view on how close the economy is to potential output.... Wolfgang Munchau writes that... the eurozone will end up looking like Japan.... Ambrose Evans-Pritchard writes that there is no point negotiating. The European institutions have failed to ensure a symmetric adjustment.... Matt O’Brien writes that the euro is the gold standard with moral authority. And that last part is a problem...

And Simon Wren-Lewis:

Simon Wren-Lewis: Balanced-budget fundamentalism They still teach Keynesian economics in Europe...

...so it is not as if the science is not taught. Nor do I find much difference between the views of junior and middle-ranking macroeconomists working for the ECB or Commission compared to, for example, those working for the IMF.... The mistake academics can often make is to believe that what they regard as received wisdom among themselves will be reflected in the policy debate, when these issues have a strong ideological element or where significant sectional financial interests.... There is a policy advice community that lies between the expert and the politician, and while some in this community are genuinely interested in evidence, others are more attuned to a particular ideology, or the interests of money, or what ‘plays well’... Some in this community might even be economists, but economists who--if they ever had macroeconomic expertise--seem happy to leave it behind. So why does ‘balanced-budget fundamentalism’ appear to be more dominant in Europe than the US?... The dominance of ordoliberalism in Germany... is not so very different to the dominance of neoliberalism within the policy-advice community in the US.... The greater ability of academics in the US (and one in particular) to bypass the policy advice community through both conventional and more modern forms of media. However I suspect a big factor is just recent experience. The US never had a debt funding crisis. The ‘bond vigilantes’ never turned up. In the Eurozone they did.... That is not meant to excuse the motives of those that foster a belief in balanced budget fundamentalism, but simply to note that it makes it more difficult for science and evidence to get a look in...

I am not completely sure what Simon Wren-Lewis means when he says that "the ‘bond vigilantes’... turned up in the Eurozone". They certainly turned up in Greece and elsewhere along the Mediterranean rim. But this always seemed to me to be analogous to a possible (but unseen) debt crisis in Nevada. The sensible reaction--or, rather, not the sensible reaction but a not-insane reaction--would have been to say that the Mediterranean needs to get its structural house in order and that in the meantime Germany will make Eurozone policy and do what is good for Germany. And yet what is going on now in Europe does not seem to be terribly good even for Germany:

It is not any more that the Eurozone is having a normal (or even a sub-normal) recovery in its north and a public and private debt crisis-driven lost decade in the south. And the financiers of Tokyo, New York, London, and Frankfurt certainly now see a 1.3%-point/year break-even on the nominal exchange-rate change and thus break-even on the inflation differential between the U.S. and the Eurozone for the foreseeable future. This is remarkable for two economies that claim to be targeting the same inflation rate--and it is difficult to read the erosion of the U.S. ten-year bond rate over the past year as anything but a loss of confidence that the Federal Reserve will attain inflation as high as its 2%/year inflation target.

And when I think that my worries back in 2010 were that Germany might be unwilling to accept the 4%/year domestic inflation rate required for symmetric adjustment. It's now 1.3%/year--at most...

Liveblogging World War I: August 25, 1914: Samsonov

From Barbara Tuchman, The Guns of August:*

On August 23, the day Ludendorff and Hindenburg arrived in the East, the Russian VIth and XIIIth corps on the right of General Martos captured more villages; General Scholtz, still alone except for some support from the Vistula garrison behind him, backed up a little farther. Ignoring Rennenkampf’s inactivity in the north, Jilinsky continued to rain orders on Samsonov. The Germans on his front were hastily retreating, he told Samsonov, “leaving only insignificant forces facing you. You are therefore to execute a most energetic offensive.… You are to attack and intercept the enemy retiring before General Rennenkampf’s army in order to cut off his retreat from the Vistula.”

This was, of course, the original design, but it was predicated on Rennenkampf’s holding the Germans occupied in the north. In fact, on that date Rennenkampf was no longer in contact with the enemy. He began to advance again on August 23 but in the wrong direction. Instead of moving crabwise to the south to link up with Samsonov in front of the lakes, he moved straight west to mask Königsberg, fearful that François would attack his flank if he turned south. Although it was a movement with no relevance at all to the original design, Jilinsky did nothing to alter it. Operating like Rennenkampf in a complete fog as to the German movements, he assumed they were doing what the Russians had planned on their doing—retreating to the Vistula. Accordingly, he continued to push Samsonov forward....

Scholtz, facing overwhelming numbers, withdrew for some ten miles, establishing his headquarters for the night in the village of Tannenberg. Still harried by Jilinsky who insisted that he must move on to the agreed line where he could cut off the enemy’s “retreat,” Samsonov issued orders to all his corps—the XXIIIrd on the left, the XVth and XIIIth in the center, the VIth on the right—giving their dispositions and lines of march for the following day.... Samsonov’s orders were issued by wireless in clear....

That evening, Hoffmann wrote later, “was the most difficult of the whole battle.” While the staff was debating, a signal corps officer brought in an intercept of Samsonov’s orders for the next day, August 25. Although this assistance from the enemy did not reveal Rennenkampf’s intentions which were the crucial question, it did show the Germans where they might expect to meet Samsonov’s forces. That helped. The Eighth Army made up its mind to throw all its strength into battle against Samsonov. Orders went out to Mackensen and von Below to turn their backs on Rennenkampf and march south at once.

On August 25 the burning of Louvain began...

Liveblogging World War I: August 25, 2014: Samsonov

From Barbara Tuchman, The Guns of August:*

On August 23, the day Ludendorff and Hindenburg arrived in the East, the Russian VIth and XIIIth corps on the right of General Martos captured more villages; General Scholtz, still alone except for some support from the Vistula garrison behind him, backed up a little farther. Ignoring Rennenkampf’s inactivity in the north, Jilinsky continued to rain orders on Samsonov. The Germans on his front were hastily retreating, he told Samsonov, “leaving only insignificant forces facing you. You are therefore to execute a most energetic offensive.… You are to attack and intercept the enemy retiring before General Rennenkampf’s army in order to cut off his retreat from the Vistula.”

This was, of course, the original design, but it was predicated on Rennenkampf’s holding the Germans occupied in the north. In fact, on that date Rennenkampf was no longer in contact with the enemy. He began to advance again on August 23 but in the wrong direction. Instead of moving crabwise to the south to link up with Samsonov in front of the lakes, he moved straight west to mask Königsberg, fearful that François would attack his flank if he turned south. Although it was a movement with no relevance at all to the original design, Jilinsky did nothing to alter it. Operating like Rennenkampf in a complete fog as to the German movements, he assumed they were doing what the Russians had planned on their doing—retreating to the Vistula. Accordingly, he continued to push Samsonov forward....

Scholtz, facing overwhelming numbers, withdrew for some ten miles, establishing his headquarters for the night in the village of Tannenberg. Still harried by Jilinsky who insisted that he must move on to the agreed line where he could cut off the enemy’s “retreat,” Samsonov issued orders to all his corps—the XXIIIrd on the left, the XVth and XIIIth in the center, the VIth on the right—giving their dispositions and lines of march for the following day.... Samsonov’s orders were issued by wireless in clear....

That evening, Hoffmann wrote later, “was the most difficult of the whole battle.” While the staff was debating, a signal corps officer brought in an intercept of Samsonov’s orders for the next day, August 25. Although this assistance from the enemy did not reveal Rennenkampf’s intentions which were the crucial question, it did show the Germans where they might expect to meet Samsonov’s forces. That helped. The Eighth Army made up its mind to throw all its strength into battle against Samsonov. Orders went out to Mackensen and von Below to turn their backs on Rennenkampf and march south at once.

On August 25 the burning of Louvain began...

Monday Rand Paul Self-Smackdown: Rand Paul Explains Why He Would Have Voted Against the Civil Rights Act: Live from the Roasterie CCCXV: August 25, 2014

Your freedom, you see, to exclude people of a race you do not like from a public accommodation--a hotel, a restaurant, a bus service, a retail store--is more freedom than their freedom to spend their money to participate in our societal division of labor just like most people. In fact, their claim that that is a freedom is false--it is not really a freedom at all...

Rand Paul:

The hard part--and this is the hard part about believing in freedom--is that if you believe in the first amendment, for example, you have to, for example, most believers in the first amendment will believe in abhorrent groups standing up and saying awful things. We're here at the bastion of newspaperdom. I'm sure you believe in the first amendment. You understand that people can say bad things. It's the same way with other behaviors. In a free society we will tolerate boorish people who have abhorrent behavior, but if we are civilized people we publicly criticize that and don't belong to those groups or don't associate with those people...