J. Bradford DeLong's Blog, page 117

Hoisted from the Archives: John Holbo (2010): If Those Women Were Really Oppressed, Someone Would Have Tended to Have Freed Them by Then

John Holbo (2010): If Those Women Were Really Oppressed, Someone Would Have Tended to Have Freed Them by Then http://crookedtimber.org/2010/04/13/if-those-women/: "Having made one non-libertarian-related post, I can now say, with a good conscience, that Bryan Caplan has responded to his critics. It is a wonder to behold.... A lot of the trouble here obviously rotates around the issue of systematic social oppression. Caplan barrels straight through like so: 'there���s a fundamental human right to non-violently pressure and refuse to associate with others'.... Caplan doesn���t notice that, even if he���s right about this fundamental human right, he���s no longer even defending the proposition that women were more free in the 1880���s, never mind successfully defending it. He���s defending the proposition that there is a fundamental right, which can be exercised, systematically, to make women much less free, that was better protected in the 1880���s. So if women value this libertarian right more than freedom, they might rationally prefer that sort of society. But even so, they should hardly regard themselves as more free, for enjoying this right. Rather, they should regard themselves as (rationally) sacrificing liberty, a lesser value, for love of libertarianism, a higher value and separate jar of pickles altogether...

...J.S. Mill had some things to say on the subject. From On Liberty:

Like other tyrannies, the tyranny of the majority was at first, and is still vulgarly, held in dread, chiefly as operating through the acts of the public authorities. But reflecting persons perceived that when society is itself the tyrant ��� society collectively, over the separate individuals who compose it ��� its means of tyrannizing are not restricted to the acts which it may do by the hands of its political functionaries. Society can and does execute its own mandates: and if it issues wrong mandates instead of right, or any mandates at all in things with which it ought not to meddle, it practises a social tyranny more formidable than many kinds of political oppression, since, though not usually upheld by such extreme penalties, it leaves fewer means of escape, penetrating much more deeply into the details of life, and enslaving the soul itself.

Protection, therefore, against the tyranny of the magistrate is not enough; there needs protection also against the tyranny of the prevailing opinion and feeling; against the tendency of society to impose, by other means than civil penalties, its own ideas and practices as rules of conduct on those who dissent from them; to fetter the development, and, if possible, prevent the formation, of any individuality not in harmony with its ways, and compel all characters to fashion themselves upon the model of its own. There is a limit to the legitimate interference of collective opinion with individual independence; and to find that limit, and maintain it against encroachment, is as indispensable to a good condition of human affairs, as protection against political despotism.

It is possible to object���I take it Caplan would���that limiting people���s rights to ���act the tyrant��� in a collective, social sense, is illegitimate. But that is not to say that Mill is wrong about the ���fewer means of escape, penetrating much more deeply��� bits. He obviously isn���t. Now of course Caplan does dispute the ���fewer means of escape��� bit, and in the most delightful way. ���Market forces have a strong tendency to weed out discrimination.��� It���s like the old cartoon with the two economists. ���Hey look, 20 dollars.��� ���If that were really there, someone would have found it by now.��� In this case: ���Hey look, oppressed women in 1880.��� Post title writes itself. As a method of doing empirical history, this leaves a lot to be desired, I should think...

#hoistedfromthearchives #moralresponsibility #orangehairedbaboons

Soviet Visuals: "Today in 1983, Lieutenant Colonel Stanis...

Soviet Visuals: "Today in 1983, Lieutenant Colonel Stanislav Petrov prevented a potential nuclear war. During Petrov's shift at the USSR nuclear early warning centre, computers detected incoming missiles from the US. He identified them as a false alarm and did not report them to his superiors...

#shouldread

Hoisted from the Archives: Department of "Huh!?": Raghu Rajan Is a Member of the Pain Caucus, and I Don't Understand Why...

Department of "Huh!?": Back in 2010, there were a great many people for whom I had immense respect who were members of the Pain Caucus. And I still cannot follow what they were thinking at all. Construction had already shrunk fully by late 2007. It remains a great mystery���was it just a Chicago echo chamber in which people did not look at data?:

Raghu Rajan Is a Member of the Pain Caucus, and I Don't Understand Why...: Raghu Rajan: "this recession is not a 'usual' recession. It followed a period of ultra-low interest rates when interest sensitive segments of the economy got a tremendous boost. The United States had far too much productive capacity devoted to durable goods and houses, because consumers could obtain financing for them easily. With households recovering slowly from the overhang of debt resulting from the binge, and with lenders extremely risk averse, it is unrealistic to expect households to spend beyond their means again, and unwise to try to tempt them to do so...

...If households are going to want fewer houses, industries such as construction will have to shrink (as should the financial sector that channeled the easy credit). A significant number of jobs will disappear permanently, and workers who know how to build houses or to sell them will have to learn new skills if they can. Put differently, the productive capacity of the economy has shrunk. Resources have to be reallocated into new sectors so that any recovery is robust, and not simply a resumption of the old unsustainable binge.�� The United States economy has to find new pathways for growth. And this will not necessarily be facilitated by ultra-low interest rates...

But... but... but... construction already shrank!

As of the end of 2010, the construction sector will have shrunk in nominal terms to its size in 1999, when the economy as a whole was only 57% as large as it is today...

As of the end of 2010, the summed deviations of residential construction spending from their long-term trend will be zero: we will have underbuilt relative to trend in late 2007, 2008, 2009, and 2010 by about half again as much as we overbuilt relative to trend in 2003, 2004, 2005, 2006, and early 2007.

#economicsgonewrong #hoistedfromthearchives #macro #paincaucus

Adam Ozimek: _"Okay FOMC tweet storm... https://twitter.c...

Adam Ozimek: _"Okay FOMC tweet storm... https://twitter.com/ModeledBehavior/status/1174386524806438914 The Fed���s pivot to a more dovish stance over the last year is due to multiple factors. One is that the Fed sees an elevated risk of a recession. Given that rates are already low, they���d rather cut early to prevent a downturn than cut late and risk hitting the zero lower bound. The other factors are slower moving. 1st is the stubborn inability of inflation to sustainably hit the target of 2%. 2nd is the closely related trend that the economy is not yet at full-employment. More than the risk of a recession, these slower moving factors provide a stronger basis for cutting rates and are more consequential for understanding the economy today. One reason this is consequential is that labor market slack , and the Fed���s consistent underestimate of it, goes a long way in explaining the troubling inflation trends...

...While the ZLB mattered for the beginning of the recovery, in recent years the failure to consistently hit target inflation is first and foremost a reflection of the Fed���s failure to gauge how far the economy has to improve and set rates and rate expectations accordingly. In addition, that we are not yet at full-employment is an important context for understanding other macroeconomic issues. For example, it helps to understand why wage growth remains modest. It is also potentially consequential for the housing market, which remains a missing piece of the recovery. If labor markets have yet to recover, it is less surprising that housing markets have not either...

#noted

Monday Smackdown/Hoisted from the Archives: Paul Krugman: March of the Peacocks

I was hissed at a Pete Buttigieg fundraiser in August when I said that the Obama presidency had been disappointing. But I do believe this is right, and I think this taking your eye off the good-policy ball in order to strut about peacocking was a major thing that went wrong:

Paul Krugman (2010): March of the Peacocks: "Last week, the Center for American Progress, a think tank with close ties to the Obama administration, published an acerbic essay about the difference between true deficit hawks and showy 'deficit peacocks'. You can identify deficit peacocks, readers were told, by the way they pretend that our budget problems can be solved with gimmicks like a temporary freeze in nondefense discretionary spending. One week later, in the State of the Union address, President Obama proposed a temporary freeze in nondefense discretionary spending. Wait, it gets worse. To justify the freeze, Mr. Obama used language that was almost identical to widely ridiculed remarks early last year by John Boehner, the House minority leader. Boehner then: 'American families are tightening their belt, but they don���t see government tightening its belt.' Obama now: 'Families across the country are tightening their belts and making tough decisions. The federal government should do the same.' What���s going on here? The answer, presumably, is that Mr. Obama���s advisers believed he could score some political points by doing the deficit-peacock strut. I think they were wrong, that he did himself more harm than good. Either way, however, the fact that anyone thought such a dumb policy idea was politically smart is bad news because it���s an indication of the extent to which we���re failing to come to grips with our economic and fiscal problems...

#mondaysmackdown #fiscalpolicy #hoistedfromtharchives

Christopher Federico: Trump as "Replacement-Level Fox New...

Christopher Federico: Trump as "Replacement-Level Fox News Junkie" http://www.lawyersgunsmoneyblog.com/2019/09/trump-as-replacement-level-fox-news-junkie: "One of the best ways of characterizing Trump is that he���s just a replacement-level seventy-something Fox News viewer. He does not have even the level of sophistication you���d find at the high end of the expertise/awareness distribution in the mass public, let alone a bona-fide member of the political elite.... Like any other replacement-level Fox News junkie, he loves the symbolism of toughness.... The problem is that the average old man parked in front of Fox for his daily mainline hit of resentment and identity politics doesn���t have to grapple with the real-world implications of performative toughness. But Trump eventually does, and he fails to grok those implications until he���s beaten over the head with them at the very last minute by one or two of the few non-yes-men he has left (e.g., Dunford, nameless Pentagon lawyers). And in Trump���s somewhat idiosyncratic case, this is compounded by the fact that he combines his penchant for performative toughness with an isolationist streak���and seems to have little consciousness of how the implications of those two things might conflict with one another. The result is strategic incoherence: '"Trump is in a box of his own making", said Philip Gordon.... "He has put in place policies���'maximum pressure' on Iran���guaranteed to provoke an aggressive Iranian response, but he���s not prepared to respond aggressively in turn, and the Iranians know it"'...

#noted

Edward Thompson (1978): The Poverty of Theory, or, An Orr...

Edward Thompson (1978): The Poverty of Theory, or, An Orrery of Errors https://www.marxists.org/archive/thompson-ep/1978/pot/essay.htm: "By 1969 Althusser had narrowed the fully-approved texts to two: the Critique of the Gotha Programme (1875) and the Marginal Notes on Wagner���s ���Lehrbuch der politischen Okonomie) (1880): these alone ���are totally and definitively exempt from any trace of Hegelian influence��� (L. & P. 90). See also Francois George, ���Lire Althusser���, Les temps modemes (May, 1969)...

#noted

David Frum: "Years later, I wrote of the George W. Bush a...

David Frum: "Years later, I wrote of the George W. Bush administration: 'The Bush administration opened with a second Pearl Harbor, ended with a second Great Crash and contained a second Vietnam in the middle'. My own role in the administration was both brief and modest.... Yet because the administration is so widely perceived as unsuccessful, it feels cowardly to remark this truth, as if I were looking for some kind of personal exit. I came away from my Bush experiences with two resolutions : 1) Never to let any group do any iota of my thinking for me. If I lacked the expertise to think something through for myself, then I wouldn't have an opinion about it at all. 2) To devote more of my own personal political thinking to the question of what citizens of a modern nation owe each other. Which is why the headline that is on my mind this day pertains not to the past, but to the present.... Inevitably, the impress of 9/11 must fade. My youngest daughter was born a month afterward.... Her generation will have its own memorial days. We can't bequeath our memories to them, and it would be oppressive if we could. Instead, let's bequeath them a better country, where fewer die by the gun and more have care when they need it...

#noted

This is, I think, A very important observation from Rober...

This is, I think, A very important observation from Robert Waldmann���one that has escaped the mainstream public finance literature. He has convinced me that what the utilitarian math says has always been... misread... in an elementary mistake similar to the "neo-Fisherian" claim that the way to raise inflation is to raise nominal interest rates: it is a fundamental misunderstanding of the properties of the dynamic system:

Robert Waldmann: If one wishes to redistribute from the rich, and also worries about the effect of taxes on wealth on incentives to save, then the correct strategy is to tax at the maximum rate possible until there is no longer any reason to redistribute http://rjwaldmann.blogspot.com/2008/06/optimal-capital-income-taxation-it-is.html. This is a mathematical result based on the most standard economic model. Math doesn't care about Alan Cole's feelings. In a one period model, one must settle for the second best. In an infinite horizon model one eventually gets to first best from now on. It is widely noted that [in a model with T periods] the optimal tax on wealth (and on capital income) goes to zero as T goes to infinity. It is less often noticed that the way this happens is all taxation which serves any [redistributive] purpose is completed as quickly as possible...

...If the state is allowed to accumulate a sovereign wealth fund, it should do so until it can cover all the expenses and provide all the welfare benefits it might wish to provide out of its capital income. Then and only then it should leave private capital income alone. For some parameters, the optimum is achieved with 99% public ownership of the means of production. I stress that this is the standard analysis. If the state isn't allowed to own capital, then the standard result is simply a math mistake which went un-noticed for decades.

Marx had a theory about the failure to get the math right, but I am not a Marxist...

Robert is responding to:

Alan Cole: "I have seen this response several times from wealth tax advocates. Not once have I seen them do anything to help savers or investors at any level of income. Put money away for later and you become a pi��ata for them to beat at with a stick. It's short-termism all the way down...

Nick Beaudrot: "Ah yes, all those 'savers' who 'put money away' until it reaches :checks Warren's plan: $50MM in assets. https://twitter.com/AlanMCole/status/1169610684465913856

#noted

Shira Ovide: Lies-as-a-Service: "I admit that I don't kno...

Shira Ovide: Lies-as-a-Service: "I admit that I don't know what Twitter or Facebook should��do in dealing with potentially harmful propaganda from Chinese officials, or anyone else. Should Facebook, for example, declare that��Philippines President Rodrigo Duterte shouldn't be allowed to have an account��because he or his allies use the social network to��launch vicious online attacks against��critics?��Should Twitter label incendiary tweets from anti-immigrant political parties in Italy as abusive behavior,��as they have (sort of) sought to do with Donald Trump? Should the companies have different rules about the hand-holding they provide to prominent people, depending on whether they're a member of the Kardashian family or a Chinese diplomat?��It's tricky, and I'm not suggesting there are easy answers. But what Shelly and Sarah wrote about gets to the heart of the contradiction in social media companies' approach to potentially harmful or outright false information. They want to be the go-to sources of information online, but they��don't want to be��arbiters of what's true.... Nor do they believe it's practical��to fact-check the billions of tweets and Facebook posts.... Twitter's approach with these Chinese officials, and that of Facebook in places such as the Philippines, seem��to be that potentially harmful state-backed propaganda can be fine, unless those state-linked actors are spreading the propaganda with accounts pretending to be someone else. In that approach, the veracity of the information isn't what matters, nor the harm it causes. What matters is the veracity��of the identity of the accounts behind that information. That is a tough line to walk...

#noted