J. Bradford DeLong's Blog, page 123

One problem here is that strongly progressive taxes, nati...

One problem here is that strongly progressive taxes, national health insurance, expanded social security, and universal basic income are the most effective remedies to inequality and insecurity, yet those who vote for modern-day neo-fascist poliicians vote for politicians who oppose such police, root and branch���maybe not in their rhetoric, but in committee and on the floor where the rubber hits the road. The dominant rhetorical mode is not "we need to help each other through our agency that is the government" but rather "we need to crush our enemies, and then everything will be okay". My view is that equitable growth policies are worth doing for their own sake, but do not expect them to have much purchase in preserving liberal democracy:

Dani Rodrik: What���s Driving Populism?: "If... [fascism] is rooted in... culture and values, however, there are fewer options. Liberal democracy may be doomed by its own internal dynamics and contradictions.... Racism in some form or another has been an enduring feature of US society and cannot tell us, on its own, why Trump���s manipulation of it has proved so popular.... Will Wilkinson... urbanization... creates thriving, multicultural, high-density areas where socially liberal values predominate. And it leaves behind rural areas and smaller urban centers that are increasingly uniform in terms of social conservatism and aversion to diversity. This process, moreover, is self-reinforcing.... The cultural trends... are of a long-term nature, they do not fully account for the timing of the populist backlash.... Those who advocate for the primacy of cultural explanations do not in fact dismiss the role of economic shocks. These shocks, they maintain, aggravated and exacerbated cultural divisions, giving... [fascists] the added push they needed..... The precise parsing of the causes... may be less important than the policy lessons.... There is little debate here. Economic remedies to inequality and insecurity are paramount...

#noted

The extremely sharp center-right economist Ricardo Hausma...

The extremely sharp center-right economist Ricardo Hausmann comes from Venezuela, and has been trying to understand the roots of the collapse of the social contract there. The great fear is that Venezuela is, for us, the canary in the coal mine. His argument is strong, and I think that I have heard his argument before, in Plutarch's understanding of the downward spiral of the last days of the Roman Republic:

Plutarch: _ Life of Tiberius Gracchus_: "This is said to have been the first sedition at Rome, since the abolition of royal power, to end in bloodshed and the death of citizens; the rest though neither trifling nor raised for trifling objects, were settled by mutual concessions, the nobles yielding from fear of the multitude, and the people out of respect for the senate...":

Ricardo Hausmann: How the Failure of ���Prestige Markets��� Fuels Populism: "Given the requirements of today���s technology, dismissing expertise as privilege is dangerous. That's why a well-functioning prestige market is essential to reconciling technological progress and the maintenance of a healthy polity.... Henrich suggests... prestige is payment for the generosity with which the prestigious share their knowledge.... A model of human behavior proposed by George Akerlof and Rachel Kranton.... Rising wage differentials may destroy the equilibrium proposed by Henrich. If the prestigious are already very well paid, and are not perceived as being generous with their knowledge, prestige may collapse. This may be another instance of the incompatibility between homo economicus and community morality emphasized by Samuel Bowles.... The collapse in the prestige equilibrium can do enormous damage to a society, because it may break the implicit contract whereby society uses critical skills. To see why and how, look no further than what has happened in Venezuela...

#noted

It is certainly true that you have to look at both demand...

It is certainly true that you have to look at both demand and supply to figure out what happens in equilibrium. But Milton Friedman's first rule is that supply curves do slope upward. Things have to be very weird indeed for equilibrium effects to do more than modestly attenuate impact effects. Sometimes things are really weird But that is not the way to bet: Raj Chetty: In Conversation: "We talked about moving-to-opportunity.... You might worry that if we help one low-income family move out of a low-opportunity area, do they simply get replaced by another low-income family who moves into that area, so we have essentially a musical chairs phenomenon?... Empirical research has recently mainly been focused on identifying individual-level effects. But trying to figure out how things play out in equilibrium is a very challenging problem, which, I think, is something we should have on our agenda to focus on going forward...

#noted

Filipe��Campante and Edward��L.��Glaeser: Yet Another Tal...

Filipe��Campante and Edward��L.��Glaeser: Yet Another Tale of Two Cities: Buenos Aires and Chicago: "Buenos Aires and Chicago grew during the nineteenth century for remarkably similar reasons. Both cities were conduits for moving meat and grain from fertile hinterlands to eastern markets. However, despite their initial similarities, Chicago was vastly more prosperous for most of the twentieth century. Can the differences between the cities after 1930 be explained by differences in the cities before that date? We highlight four major differences between Buenos Aires and Chicago in 1914. Chicago was slightly richer, and significantly better educated. Chicago was more industrially developed, with about 2.25 times more capital per worker. Finally, Chicago���s political situation was far more stable and it was not a political capital. Human capital seems to explain the lion���s share of the divergent path of the two cities and their countries, both because of its direct effect and because of the connection between education and political instability...

#noted

Liveblogging: The Anglo-Saxon Chronicle: Escwin King of Wessex

The Anglo-Saxon Chronicle (J.A. Giles and J. Ingram trans.): Escwin King of Wessex: "A.D. 674. This year Escwin succeeded to the kingdom of Wessex. He was the son of Cenfus, Cenfus of Cenferth, Cenferth of Cuthgils, Cuthgils of Ceolwulf, Ceolwulf of Cynric, Cynric of Cerdic...

#liveblogging #history #anglosaxonchronicle

Comment of the Day: Kaleberg: "'...the general effect of ...

Comment of the Day: Kaleberg: "'...the general effect of cold war extremism was to delay rather than hasten the great change that overtook the Soviet Union by the end of the 1980s.' - George Kennan. 'The suggestion that any Administration had the power to influence decisively the course of a tremendous domestic political upheaval in another great country on another side of the globe is simply childish. No great country has that sort of influence on the internal developments of any other one.' - also George Kennan. Still, the Cold War was a wonderful piece of myth making. It was the end of history and the start of history. Novus ordo seclorum....

#noted

Fifteen Worthy Reads for September 6, 2018

Worthy Reads from Equitable Growth:

A working paper I thought was very good, but that for some reason did not get a lot of attention: My take was always that this was overwhelmingly that "feminized" occupations have low pay. But Folbre and Smith make a strong case that other causes are also important: Nancy Folbre and Kristin Smith: The wages of care: Bargaining power, earnings and inequality: "The earnings of managers and professionals employed in care industries (health, education, and social services), characterized by high levels of public and non-profit provision, are significantly lower than in other industries...

Another working paper from our past that should have gotten more buzz than it did: Yes, "overeducation" is a thing: Ammar Farooq: The U-shape of over-education? Human capital dynamics & occupational mobility over the life cycle: "The proportion of college degree holders working in occupations that do not require a college degree is U-shaped over the life cycle and that there is a rise in transitions to non-college jobs among prime age college workers...

Applause for our attempt to focus on the broader implications of rising monopoly: Noah Smith: [Economists Gear Up to Challenge the Monopolies(https://www.bloomberg.com/view/articl...): "The antitrust movement is making a comeback.... Think tanks like the Washington Center for Equitable Growth are starting to zero in on the issue as well": Jacob Robbins: How the rise of market power in the United States may explain some macroeconomic puzzles - Equitable Growth: "Gauti Eggertsson, Ella Getz Wold, and I at Brown University argue that these diverse trends are closely connected, and that the driving force behind them is an increase in monopoly power together with a decline in interest rates...

Equitable Growth alumnus makes an excellent catch here: Nick Bunker: Fascinating: "Fascinating dive into the data on industries with above-average earnings in the 90s, but now pay less than average": Andrew Van Dam and Heather Long: How the U.S. economy turned six good jobs into bad ones: "Six industries that provided an above-average weekly paycheck in the 1990s but now pay less than an average wage.... These downgraded jobs have one thing in common: They don���t require a college degree...

Homeowner bankruptcy and foreclosure are liquidity events, not solvency events: Peter Ganong and Pascal Noel: Liquidity vs. wealth in household debt obligations: Evidence from housing policy in the Great Recession: "We use variation in mortgage modifications to disentangle the impact of reducing long-term obligations with no change in short-term payments ('wealth'), and reducing short-term payments with approximately no change in long-term obligations ('liquidity')...

 

Elsewhere than Equitable Growth:

A plea for us to focus on unionization, societal priorities, and worker bargaining power���rather than speculate about "artificial intelligence" trends that are, really, probably fifty years away from achieving criticality: Sarita Gupta, Stephen Lerner, and Joseph A. McCartin: It���s Not the 'Future of Work,' It���s the Future of Workers That���s in Doubt: "Nearly every discussion of labor���s future in mainstream media quickly becomes mired in a group of elite-defined concerns called 'The Future of Work'...

Is shale burning cash because its future is so bright, or because it is a financial bubble grift?: Schumpeter: America���s Shale Firms Don���t Give a Frack About Financial Returns: "Shale fracking... is booming once again... But... the business has burned up cash for 34 of the last 40 quarters.... With the exception of airlines, Chinese state enterprises and Silicon Valley unicorns���private firms valued at more than $1bn���shale firms are on an unparalleled money-losing streak. About $11bn was torched in the latest quarter......

A pointer to a very nice attempt to grapple with how we communicate and listen in the pubic sphere these days: Roland Nikles: News, Reviews & Views: Sovereign of My Opinions: "The unholy intimacy between readers and writers on the Internet, say the N+1 editors, has made op-ed writers of us all...

Jeet Heer: McCain's Funeral: "McCain's funeral was very moving and appropriately political (as befits the funeral of a major political figure)...

This ex-President of the Minneapolis Fed has become one of the very best Fed-watchers and Fed-analysts: Narayana Kocherlakota: The Fed Should Prepare for the Unexpected: "The staff paper downplayed and Powell ignored what I see as the most important risk...

This is correct: Laura McGann: Alexandria Ocasio-Cortez is being held to a higher standard than men: "Male politicians aren���t told to put training wheels back on after a fact check...

Yet, somehow, manufacturing managers learned to understand electricity in the 1920s and 1930s. How? Why? On Kevin's theory, it would be that they were forced to learn or watch their firms disappear in the Great Depression. Alex Field might agree: Kevin Drum: Technology Is the Key to Success, But Probably Not the Technology You Enjoy: "I���d put it more bluntly: unless they���re forced to at the point of a metaphorical gun... service-sector managers are lazy... in a very specific way: they don���t really understand technology...

Learn the right lessons from Scandinavia: Martin Sandbu: What The Nordic Mixed Economy Can Teach Today���s New Left: "Ten years ago, the global crisis laid bare the failures of financial capitalism. This gave the political left an opportunity to win support for its agenda. Yet almost every established centre-left party in the developed world bungled this shot at political dominance...

Sociological distance, present and the legacy of past discrimination, and preventive treatment in Oakland, CA: perhaps 20% of the black-white cardiovascular health gap due to the fact that Black patients are seen by sociologically-distant white doctors: Marcy Alsan et al.: Does Diversity Matter for Health? Experimental Evidence from Oakland: "We study the effect of diversity in the physician workforce on the demand for preventive care among African-American men...

I disagree with Jeff Frankel here: the Federal Reserve has not been doing a good job since 2010. Its central task as of 2010 was to (a) get the U.S. economy rapidly back to full employment at (b) a configuration of economic variables that would give it a short-term safe nominal interest rate of 5% or more so it would have room to properly fight the next recession whenever it should come. You could argue that the rest of the government make it impossible for the Fed to do a good job. But you cannot argue that the Fed should be satisfied with the job it has done since 2010: Jeffrey Frankel: The Depth of the Next US Recession: "Whatever the immediate trigger of the next US recession, the consequences are likely to be severe.... Pro-cyclical fiscal, macro-prudential, and even monetary policies... [leave] authorities are in a weak position to manage the next inevitable shock...

The New Yorker : Dec 02, 1996

Larry Meyer: In John Cassidy: The Decline of Economics: "In our firm, we always thanked Robert Lucas for giving us a virtual monopoly. Because of Lucas and others, for two decades no graduate students are trained who were capable of competing with us by building econometric models that had a hope of explaining short-run output and price dynamics. [Academic economics Ph.D. programs] educated a lot of macroeconomists who were trained to do only two things--teach macroeconomics to graduate students, and publish in the journals...

#noted

Josiah Ober: The Greeks and the Rational: The Discovery o...

Josiah Ober: The Greeks and the Rational: The Discovery of Practical Reasons: "September 19 Lecture 1. Gyges��� Choice: Rationality and Visibility. September 26 Lecture 2. Glaucon���s Dilemma: Origins of Social Order. Lecture 3. Deioces��� Ultimatum: How to Choose a King. Lecture 4. Cleisthenes��� Wager: Democratic Rationality. Lecture 5. Melos��� Prospects: Rational Domination. Lecture 6. Agamemnon���s Cluelessness: Reason and Eudaimonia...

...After earning his PhD in History at the University of Michigan in 1980, Professor Ober took up positions at Montana State University (1980-1990) and Princeton University (1990-2006) before joining the faculty at Stanford, where he is currently Constantine Mitsotakis Professor in the School of Humanities and Sciences, with a joint appointment in Classics and Political Science as well as a courtesy appointment in Philosophy.�� This transdisciplinary position well reflects the ambitious reach of Professor Ober���s scholarship, which ranges from ancient Greece to the contemporary world and across political and economic theory, cultural studies, philosophy, and the history of democratic institutions.

Professor Ober is the author of about 85 articles and a very long list of game-changing books, including Mass and Elite in Democratic Athens (Princeton, 1989), which won the Goodwin Award (for ���best book of the year���) of the Society for Classical Studies (formerly American Philological Association); Democracy and Knowledge (Princeton, 2008), which was named ���Best Book in Classics and Ancient History��� by the Association of Academic Publishers, included in The Independent���s ���Best Ten in History��� list, and shortlisted for the Hessell-Titman Prize; The Rise and Fall of Classical Greece (Princeton, 2015), hailed as ���a major restatement of our understanding of Classical Greece��� and ���like no other history of the ancient world���; and most recently Demopolis: Democracy Before Liberalism in Theory and Practice (Cambridge, 2017), based on the Seeley Lectures he delivered at Cambridge in 2015...

#noted

Fifteen Worthy Reads for September 6

Worthy Reads from Equitable Growth:

A working paper I thought was very good, but that for some reason did not get a lot of attention: My take was always that this was overwhelmingly that "feminized" occupations have low pay. But Folbre and Smith make a strong case that other causes are also important: Nancy Folbre and Kristin Smith: The wages of care: Bargaining power, earnings and inequality: "The earnings of managers and professionals employed in care industries (health, education, and social services), characterized by high levels of public and non-profit provision, are significantly lower than in other industries...

Another working paper from our past that should have gotten more buzz than it did: Yes, "overeducation" is a thing: Ammar Farooq: The U-shape of over-education? Human capital dynamics & occupational mobility over the life cycle: "The proportion of college degree holders working in occupations that do not require a college degree is U-shaped over the life cycle and that there is a rise in transitions to non-college jobs among prime age college workers...

Applause for our attempt to focus on the broader implications of rising monopoly: Noah Smith: [Economists Gear Up to Challenge the Monopolies(https://www.bloomberg.com/view/articl...): "The antitrust movement is making a comeback.... Think tanks like the Washington Center for Equitable Growth are starting to zero in on the issue as well": Jacob Robbins: How the rise of market power in the United States may explain some macroeconomic puzzles - Equitable Growth: "Gauti Eggertsson, Ella Getz Wold, and I at Brown University argue that these diverse trends are closely connected, and that the driving force behind them is an increase in monopoly power together with a decline in interest rates...

Equitable Growth alumnus makes an excellent catch here: Nick Bunker: Fascinating: "Fascinating dive into the data on industries with above-average earnings in the 90s, but now pay less than average": Andrew Van Dam and Heather Long: How the U.S. economy turned six good jobs into bad ones: "Six industries that provided an above-average weekly paycheck in the 1990s but now pay less than an average wage.... These downgraded jobs have one thing in common: They don���t require a college degree...

Homeowner bankruptcy and foreclosure are liquidity events, not solvency events: Peter Ganong and Pascal Noel: Liquidity vs. wealth in household debt obligations: Evidence from housing policy in the Great Recession: "We use variation in mortgage modifications to disentangle the impact of reducing long-term obligations with no change in short-term payments ('wealth'), and reducing short-term payments with approximately no change in long-term obligations ('liquidity')...

nbsp;

Elsewhere than Equitable Growth:

A plea for us to focus on unionization, societal priorities, and worker bargaining power���rather than speculate about "artificial intelligence" trends that are, really, probably fifty years away from achieving criticality: Sarita Gupta, Stephen Lerner, and Joseph A. McCartin: It���s Not the 'Future of Work,' It���s the Future of Workers That���s in Doubt: "Nearly every discussion of labor���s future in mainstream media quickly becomes mired in a group of elite-defined concerns called 'The Future of Work'...

Is shale burning cash because its future is so bright, or because it is a financial bubble grift?: Schumpeter: America���s Shale Firms Don���t Give a Frack About Financial Returns: "Shale fracking... is booming once again... But... the business has burned up cash for 34 of the last 40 quarters.... With the exception of airlines, Chinese state enterprises and Silicon Valley unicorns���private firms valued at more than $1bn���shale firms are on an unparalleled money-losing streak. About $11bn was torched in the latest quarter......

A pointer to a very nice attempt to grapple with how we communicate and listen in the pubic sphere these days: Roland Nikles: News, Reviews & Views: Sovereign of My Opinions: "The unholy intimacy between readers and writers on the Internet, say the N+1 editors, has made op-ed writers of us all...

Jeet Heer: McCain's Funeral: "McCain's funeral was very moving and appropriately political (as befits the funeral of a major political figure)...

This ex-President of the Minneapolis Fed has become one of the very best Fed-watchers and Fed-analysts: Narayana Kocherlakota: The Fed Should Prepare for the Unexpected: "The staff paper downplayed and Powell ignored what I see as the most important risk...

This is correct: Laura McGann: Alexandria Ocasio-Cortez is being held to a higher standard than men: "Male politicians aren���t told to put training wheels back on after a fact check...

Yet, somehow, manufacturing managers learned to understand electricity in the 1920s and 1930s. How? Why? On Kevin's theory, it would be that they were forced to learn or watch their firms disappear in the Great Depression. Alex Field might agree: Kevin Drum: Technology Is the Key to Success, But Probably Not the Technology You Enjoy: "I���d put it more bluntly: unless they���re forced to at the point of a metaphorical gun... service-sector managers are lazy... in a very specific way: they don���t really understand technology...

Learn the right lessons from Scandinavia: Martin Sandbu: What The Nordic Mixed Economy Can Teach Today���s New Left: "Ten years ago, the global crisis laid bare the failures of financial capitalism. This gave the political left an opportunity to win support for its agenda. Yet almost every established centre-left party in the developed world bungled this shot at political dominance...

Sociological distance, present and the legacy of past discrimination, and preventive treatment in Oakland, CA: perhaps 20% of the black-white cardiovascular health gap due to the fact that Black patients are seen by sociologically-distant white doctors: Marcy Alsan et al.: Does Diversity Matter for Health? Experimental Evidence from Oakland: "We study the effect of diversity in the physician workforce on the demand for preventive care among African-American men...

I disagree with Jeff Frankel here: the Federal Reserve has not been doing a good job since 2010. Its central task as of 2010 was to (a) get the U.S. economy rapidly back to full employment at (b) a configuration of economic variables that would give it a short-term safe nominal interest rate of 5% or more so it would have room to properly fight the next recession whenever it should come. You could argue that the rest of the government make it impossible for the Fed to do a good job. But you cannot argue that the Fed should be satisfied with the job it has done since 2010: Jeffrey Frankel: The Depth of the Next US Recession: "Whatever the immediate trigger of the next US recession, the consequences are likely to be severe.... Pro-cyclical fiscal, macro-prudential, and even monetary policies... [leave] authorities are in a weak position to manage the next inevitable shock...