J. Bradford DeLong's Blog, page 129
August 15, 2019
That's a 2.5% reduction in suicides for a 10% rise in two...
That's a 2.5% reduction in suicides for a 10% rise in two dimensions of the safety net. That seems to me to be large effect: William H. Dow, Anna God��y, Christopher A. Lowenstein, and Michael Reic: Can Economic Policies Reduce Deaths of Despair?: "Midlife mortality has risen... largely reflect [ing]increased mortality from alcohol poisoning, drug overdose and suicide.... We leverage state variation in policies over time to estimate difference-in-differences models of drug overdose deaths and suicides, using data on cause-specific mortality rates from 1999-2015.... Higher minimum wages and EITCs significantly reduce non-drug suicides.... Increasing both the minimum wage and the EITC by 10 percent would likely prevent a combined total of around 1230 suicides each year...
#noted
I would say that Martin Wolf grossly understates his poin...
I would say that Martin Wolf grossly understates his point here. It is not just that the case for a sane globalism remains strong. Rather, the case for a sane globalism has never been stronger and grows stronger every day. With each passing day, the world needs more and more powerful international public goods in order to remain healthy and sane, and only globalists have a chance of providing them:
Martin Wolf: The Case for Sane Globalism Remains Strong: "We are now close to eliminating extreme human destitution.... The decline in the proportion of humanity living in absolute poverty, to less than 10 per cent, is a huge achievement. I make no excuses for continuing to support policies and programmes, including trade-oriented development, that helped accomplish this. The notion that it may be necessary to thwart the economic rise of non-western countries, in order to cement western domination, is, in my view, an abomination.... The range of public goods we now need has vastly increased, with the complexity of our economies and societies. For the same reason, ever more of those public goods are global.... That is why the victors of the second world war decided to create effective international institutions. They had experienced unbridled national sovereignty. The outcome had been catastrophic. Nothing since then has rendered global co-operation less essential.... [On] the interface between the global and the national... we have gone too far in some areas and done too little in others.... The globalisation of finance has arguably gone too far.... [But] liberal trade has not been a dominant source of rising inequality within countries. Meanwhile, areas where global co-operation has not gone far enough include business taxation and the environment. The final and perhaps most important of all challenges is containing the natural human tendency to scapegoat foreigners for failures of domestic policy and cleavages among domestic interests.... Blaming ills on foreigners may be a successful diversionary tactic. It is also highly destructive. We must think and act globally. We have no alternative...
#noted
Remember: the Trump-McConnell-Ryan tax cut did absolutely...
Remember: the Trump-McConnell-Ryan tax cut did absolutely nothing to boost investment in America, and thus has no supply-side positive effects on economic growth. And it is another upward jump in inequality: Greg Leiserson: U.S. Inequality and Recent Tax Changes: "Slides from a presentation by Greg Leiserson for a panel 'U.S. Inequality and Recent Tax Changes' hosted by the Society of Government Economists on Tuesday, February 20, 2018. In the presentation, Leiserson argues that the recently enacted Tax Cuts and Jobs Act will likely increase disparities in economic well-being, after-tax income, and pre-tax income...
#noted
Paul Krugman (2015): Artificial Unintelligence: "In the e...
Paul Krugman (2015): Artificial Unintelligence: "In the early stages of the Lesser Depression, those of us who knew a bit about the macroeconomic debates of the 1930s... felt a sense of despair...
...Everywhere you looked, people who imagined themselves sophisticated and possessed of deep understanding were resurrecting 75-year-old fallacies and presenting them as deep insights. A lot of water has passed under the bridge since then.... I feel an even deeper sense of despair.... People are still rolling out those same fallacies, even though in the interim those of us who remembered and understood Keynes/Hicks have been right about most things, and those lecturing us have been wrong about everything. So here���s William Cohan in the Times, declaring that the Fed should ���show some spine��� and raise rates even though there is no sign of accelerating inflation. His reasoning:
The case for raising rates is straightforward: Like any commodity, the price of borrowing money���interest rates���should be determined by supply and demand, not by manipulation by a market behemoth. Essentially, the clever Q.E. program caused a widespread mispricing of risk, deluding investors into underestimating the risk of various financial assets they were buying...
Oh dear. Cohan���s theory of interest rates is basically the old notion of loanable funds.... [But] loanable funds doesn���t determine the interest rate; all it does is define a relationship between interest rates and income.... What determines where we end up on that curve? Monetary policy. The Fed sets interest rates, whether it wants to or not���even a supposed hands-off policy has to involve choosing the level of the monetary base somehow, which means that it���s a monetary policy choice. And how would you know if the Fed is setting rates too low? Here���s where Hicks meets Wicksell: rates are too low if the economy is overheating and inflation is accelerating. Not exactly what we���ve seen in the era of zero rates and QE....
There are arguments that the Fed should be willing to abandon its inflation target so as to discourage bubbles. I think those arguments are wrong���but in any case they have nothing to do with the notion that current rates are somehow artificial, that we should let rates be determined by ���supply and demand���.... Crude misunderstandings along these lines are widespread even among people who imagine themselves well-informed and sophisticated. Eighty years of hard economic thinking, and seven years of overwhelming confirmation of that hard thinking, have made no dent in their worldview. Awesome.
#noted
An absolute must-read, from Leiserson, McGrew, and Koppar...
An absolute must-read, from Leiserson, McGrew, and Kopparam. It is excellent. I would note that it does not get much into the political economy of wealth taxes���that one goal of them is to persuade the wealthy to distribute their wealth, and thus reduce the amount of control over society that they exercise:
Greg Leiserson, Will McGrew, and Raksha Kopparam: Net Worth Taxes: What They Are and How They Work: "New from @equitablegrowth: ���Notably, a business does not pay tax on its assets. Instead, shareholders pay tax on the value of the business.... The revenue potential of a net worth tax in the United States is large, even if applied only to the very wealthiest families. The wealthiest 1 percent of families holds $33 trillion in wealth, and the wealthiest 5 percent holds $57 trillion. The burden of a net worth tax would be highly progressive. The wealthiest 1 percent of families holds about 40 percent of all wealth.... Taxes on wealth���including property taxes, net worth taxes, estate taxes, and capital gains taxes, among others���are ubiquitous in the developed countries that make up the... OECD.... Assets have value because of the income (implicit or explicit) they are expected to generate. As such, taxing wealth through a net worth tax and taxing income from wealth through a tax on investment income can achieve similar ends...
#noted
The labor requirements for this kind of farming were alre...
The labor requirements for this kind of farming were already absurdly low. And one swallow does not make a spring. Nevertheless, the age of intelligent tools draws closer:
Ashley Robinson, Lydia Mulvany, and David Stringer: Robots Take the Wheel as Autonomous Farm Machines Hit Fields: "The first fully autonomous farm equipment is becoming commercially available.... Tractors will drive with no farmer in the cab, and specialized equipment will be able to spray, plant, plow and weed cropland. And it���s all happening well before many analysts had predicted thanks to small startups in Canada and Australia.... Saskatchewan���s Dot Technology Corp. has already sold some so-called power platforms for fully mechanized spring planting. In Australia, SwarmFarm Robotics is leasing weed-killing robots that can also do tasks like mow and spread. The companies say their machines are smaller and smarter than the gigantic machinery they aim to replace. Sam Bradford, a farm manager at Arcturus Downs in Australia���s Queensland.... 'The savings on chemicals is huge, but there���s also savings for the environment from using less chemicals and you���re also getting a better result in the end'...
#noted
I confess I do not see how Tesla is going to survive. BYD...
I confess I do not see how Tesla is going to survive. BYD or some others are going to dominate battery-making. And there will not be that much both valuable and scarce to an automobile besides an efficient battery in the future we are heading for: *Matthew Campbell and Ying Tian: *: BYD, World���s Biggest Electric Car Maker, Looks Nothing Like Tesla: "BYD, which built the battery in your ���90s cellphone, now produces more EVs than anyone���and it wants to sell them to you, soon: On the floor of a cavernous factory in southern China... a sledlike robot scooted into position.... The robot carried a crucial payload: a battery about the size and shape of a double mattress, wrapped in a gray plastic casing. Suddenly, an accordion lift extended upward from the sled and inserted the battery into the car���s undercarriage. Workers in blue jumpsuits and white cotton gloves moved swiftly to the battery���s edges, carrying rivet guns connected by curling red cables to a supply of compressed air. Once the battery was rattled into place, the accordion retracted, sending its robot host scurrying off in search of fresh cargo...
...These newly assembled vehicles, part of a family of SUVs called the Tang that retails from about 240,000 yuan (35,700), are aimed squarely at middle-class drivers in the world���s largest electric vehicle market, China. Their manufacturer, BYD Co., is in turn the No.���1 producer of plug-in vehicles globally... powering, to a significant extent, a transition to electrified mobility that���s moving faster in China than in any other country. Founded in Shenzhen in the mid-1990s as a manufacturer of batteries for brick-size cellphones and digital cameras, BYD now has about a quarter-million employees and sells as many as 30,000 pure EVs or plug-in hybrids in China every month, most of them anything but status symbols. Its cheapest model, the e1, starts at 60,000 yuan (8,950) after subsidies....
Last year, BYD opened one of the world���s largest battery plants, a 10 million-square-foot facility in Qinghai.... This empire has made a billionaire of its founder and chairman, a former government chemist named Wang Chuanfu. It���s also been a boon for another high-net-worth individual, Warren Buffett, whose Berkshire Hathaway Inc. bought a 10 percent stake in BYD a decade ago.... Thanks to generous government subsidies and municipal regulations that make owning an internal combustion vehicle in many cities inconvenient, expensive, or both, China accounts for more than half the world���s purchases of electric cars. More EVs were sold in Shanghai last year than in Germany, France, or the U.K.; the city of Hangzhou, smallish by Chinese standards, had higher sales than all of Japan. Virtually all of Shenzhen���s 20,000 taxis are electric BYDs, compared with fewer than 20 of any make in New York. More than 500,000 electric buses ply Chinese roads, compared with fewer than 1,000 in the U.S.... The Chinese government has said it intends to eliminate fossil fuel-powered vehicles by an as-yet-unspecified date, probably about 2040. Given the scale of the market, China���s demands stand to shape 21st century carmaking every bit as much as the American consumer���s shaped the 20th....
Wang and his colleagues are... proud of the company���s pioneering history, they���re acutely aware that getting somewhere first doesn���t ensure long-term success. BYD may have begun China���s electric revolution; now the carmaker���s leaders have to figure out how to finish it....
Wang was a nobody in Shenzhen, one of thousands of young entrepreneurs angling for a piece of the global supply chain. But he was also an expert in batteries at a moment when they were coming to underpin a fundamental technological shift. As lithium-ion-powered laptops and mobile phones became commonplace in the late 1990s, BYD���s low costs and nimble production methods gradually allowed it and other Chinese companies to unseat Japanese manufacturers as the go-to suppliers.... By the early 2000s, BYD batteries were in Nokia handsets, Black & Decker power tools, Dell notebooks, and even the era���s ultimate status symbol, Motorola���s Razr phone. In 2002 the company went public in Hong Kong. The next year, BYD bought a majority stake in Xi���an Qinchuan Auto Co., a troubled state-owned carmaker....
As Tesla was focusing on the midlife-crisis market, BYD was electrifying less glamorous vehicles and building a business supplying solar panels and other infrastructure. The company began mass-producing electric buses in 2009, and the next year won a 1,000-vehicle order from the province of Hunan. Similarly sized contracts followed, along with smaller deals in cities such as Amsterdam, Frankfurt, and Los Angeles���though the latter deal and another in Albuquerque became embroiled in criticism over mechanical problems that led the New Mexico city to return its BYD buses....
In retrospect, the logic of focusing on big, lumbering vehicles operated by cost-conscious public transport authorities was obvious. Typical car-buyer concerns such as acceleration and top speed are less of an issue for a vehicle designed to stop every few blocks. Nor is range anxiety a factor on fixed routes. Putting commuters on electric buses, the thinking goes, also helps build brand awareness and acceptance for EVs generally. And the possible upsells are manifold: BYD solar generators, BYD energy storage installations, BYD fast chargers, perhaps even a few BYD electric forklifts to shuttle parts around....
Wang concedes that BYD is facing a brutal contest for customer loyalty. But he also professes confidence that the world is on the cusp of a permanent shift to electric mobility and that his company will be out front at home and then abroad.... Wang says he���s argued in conversations with government officials that with the right mix of subsidies, research incentives, and regulatory mandates, China could turn off its last conventional car by 2030. In buses it���s already well on its way, with taxis making rapid progress. Wang says delivery vans and other logistics vehicles could follow soon.... No other large country is prepared to move so fast, least of all the U.S., where the Trump administration has proposed eliminating subsidies for EV purchases and sought to cancel planned improvements to mileage standards....
Before buying a new gasoline car in Shanghai, a purchaser must enter an auction for one of a limited number of license plates, at prices that hovered at about 14,000 each last year, according to BloombergNEF. An EV plate, by contrast, is free. Comparable systems are in place in other big cities. The most important factor in China���s electric boom, however, has been a complex system of government subsidies that in 2018 could provide more than 7,900 for the purchase of a long-range, pure-electric car.... The subsidies, which have cost the government at least 14.9 billion, were always meant to be temporary. They���re now being phased out, on the theory that EVs are a sufficiently mature technology to stand on their own in the marketplace....
If BYD fails to create cars that win customers��� hearts, Wang has a backup plan: returning to the company���s roots as a third-party battery manufacturer, this time for vehicles.... Even this plan is no guarantee of long-term prosperity. Making batteries is a complex, costly, and time-consuming process of painstaking development in return for incremental gains....
In a large BYD bus the batteries alone weigh 2 tons, and they require three to four hours to reach a full load with even the fastest charger���a function of technological limitations that even China and its most powerful companies can���t just wish away. Wang wants BYD to one day be the world���s leading enabler of electric mobility���the Exxon Mobil and General Motors of the gigawatt age, all in one. But beyond China, where a powerful, centralized state has made switching to EVs a national priority, almost no government has yet shown itself willing to make a comparable commitment. China will almost certainly be the country where the EV revolution arrives fastest; what���s not yet clear is how much farther it will spread and how quickly���and whether BYD will be among its winners. With practiced modesty, Wang claims to be far less concerned about the second question than the first. ���My personal success is less important,��� he says. ���The impulse for me is to create a new industry���...
#noted
We do not really know how we would collect and enforce a ...
We do not really know how we would collect and enforce a net-worth tax���but we did not really know how we would collect and enforce a broad income tax either until Milton Friedman came up with payroll withholding. In some ways the administrative burdens of a net-worth tax will be a lot easier since it is designed to catch only the upper tail: Greg Leiserson, Will McGrew, and Raksha Kopparam: Net worth taxes: What they are and how they work - Equitable Growth: "The wealthiest 1 percent of households owns about 40 percent of all wealth.... Taxes on wealth are a natural policy instrument to address wealth inequality and could raise substantial revenue, while shoring up structural weaknesses in the current income tax system...
#noted
Looking Backwards from This Week at 24, 16, 8, 4, 2, 1, 1/2, and 1/4 Years Ago (August 7-August 13, 2019)
MUST OF THE MUSTS: J. Bradford De Long and Lawrence H. Summers: Equipment Investment and Economic Growth: "We use disaggregated data from the United Nations International Comparison Project and the Penn World Table to examine the association between different components of investment and economic growth over 1960���85. We find that producers��� machinery and equipment has a very strong association with growth: in our cross section of nations each percent of GDP invested in equipment raises GDP growth rate by 1/3 of a percentage point per year. This is a much stronger association than can be found between any of the other components. We interpret this association as revealing that the marginal product of equipment is about 30 percent per year. The cross nation pattern of equipment prices, quantities, and growth is consistent with the belief that countries with rapid growth have favorable supply conditions for machinery and equipment. The pattern is not consistent with the belief that some third factor both pushes up the rate of growth and increases the demand for machinery and equipment...
Three Months Ago (May 7-13, 2019):
Where Frank Fukuyama Went Wrong; or, Zombie Fascism!!: Francis Fukuyama wrote an excellent article about how really-existing-socialism���public ownership of the means of production, hopefully leading someday to the free society of associated producers���had crashed and burned, and that the only big idea left about how to organize society was that of liberal market democracy. But Fukuyama made a key mistake: there had been a third option. That is the basically-Roman idea thateach of us is individually a stick, very weak, but if we can unite ourselves in a big bundle of sticks and if we can tie ourselves together in leather thongs, we then become a powerful force that, in the hands of our strong leaders, could bruise our enemies.
Francis Fukuyama thought that this political movement had been dead and buried by 1945. It looks like he was wrong. Very wrong.
If you look at Hungary���as we saw before���if you look at India today���where the government seems to be trying National Hinduism, casting the Muslims of India in the role traditionally ascribed to the Jews���if you look at an awful lot of place, the idea of taking people���s attention on the right believe they aren���t getting their fair share from the system and pointing it at internal or external enemies that you can despise or blame: this seems to be a remarkably powerful movement today.
It appears wherever the rapid economic growth needed to guarantee that pretty much everything thinks "well, I���m living significantly better than my parents" fails. We���ve seen this before. We have come out of this before. But that doesn���t mean we should say this is no big deal. It���s always been a big deal. So far, at least, the United States and Britain, at least, have been very lucky whenever such political movements have arisen. But will we always be lucky? Are we being lucky now?...
Yes, Societal Well-Being Depends on a Very Strong Distributional Bias Along the Lines of "To Each According to Their Need". Why Do You Ask?: At least half of our wealth comes from the ideas and investments of those who are now dead. And as we grow richer, that proportion grows as well. None of the living have any just exclusive claim on any portion of this cornucopian storehouse of technologies. The dead have no just claim on it either: respect for their legacy does not entail honoring their wishes as to its use, if that honoring upsets the principle of equal opportunity. Thus the most bedrock moral-philosophical principal is that more than half of our wealth is held in common for the human community to distribute as it decides is good...
PREVIEW: Economic Growth in Historical Perspective: U.C. Berkeley: Spring 2020: After hearing Ellora Derenoncourt rave about being a TA for Melissa Dell and her Econ 142: The History of Economic Growth, I have decided to go full parasite and stand up my own version of the course for the spring of 2020 here at U.C. Berkeley. Tell me what you think! Here are my notes so far: Course to be at: Teaching Economics: https://delong.typepad.com/teaching_economics/econ-135.html Econ 135: Economic Growth in Historical Perspective...
Note to Self: : If, after the EMP data wipeout and the collapse, future raccoon historians of fascism dig up this statue, they are going to be very confused...
I disagree here: our soft power has been blown up by George W. Bush's and Donald Trump's liking to come off as cartoon villains on the international stage. A large stock of social capital built up by Roosevelt, Truman, Eisenhower, Kennedy, Johnson, Ford, Carter, Reagan, GHWB, Clinton, and Obama has been trashed. Now we are just another normal nation. We need to figure out how to deal with this. Nye hopes that our attractive civil society will win through. But in the age of Trump our civil society is no longer attractive...
For quite a long time now a conservative mode of American politics has been to find a despised other who can be despised to draw attention away from issues of economic well-being. Yet there is a peculiar resistance to naming this. John Holbo deals here with one particular dodge: John Holbo: The Steelwool Scrub���A Fallacy: "It IS unfair to strawman a position by conflating it with its least thoughtful, most irrational, animus-afflicted exponents. Yet descriptively���sociologically���it���s absurd to steelman a socio-cultural order-or-group by conflating its practices and norms with unrepresentative, intellectual outliers...
From 2000: America's Historical Experience with Low Inflation: The inflation of the 1970's was a marked deviation from America's typical peacetime historical pattern as a hard-money country. We should expect America to continue to be a hard-money--low inflation--country in the future, at least in peacetime. The low rate of future inflation that we thus forecast changes the balance of macroeconomic risks and opportunities. The risk of debt-deflation-mediated recessions is somewhat higher because a low trend rate of goods-and-services price index inflation somewhat increases the chances of deflation. But it does not raise such risks as much as one might think... J. Bradford DeLong (2000): America's Historical Experience with Low Inflation, Journal of Money, Credit and Banking 32:4, Part 2: (November), pp. 979-993 http://www.jstor.org/stable/2601154...
Six Months Ago (February 7-13, 2019):
Cosma Shalizi (2007): Those Voices Again...: Hoisted from the Archives: "Q: Do you ever get tired of beating that dead horse? A: It's not dead yet; that horse will keep kicking until the last person who thinks there's something to The Bell Curve is hanged in the entrails of the last Durkheimian. Q: I really did not need that image, thank you very much. So you're perfectly happy to agree that there is genetic variation in the human population which affects the facility with which various cognitive skills are learned, and so mental ability?... Q: Could there be traits under selection in the present? A: I am pretty sure that genes contributing to resistance to malaria, cholera, schistosomiasis and malnutrition continue to be positively selected. Q: Any more interesting suspects? A: The prospects for influenza resistance look bright. Q: You know what I meant. A: You're asking me to pull speculations out of the air.... People are going to think I'm advancing a genetic explanation for the Flynn Effect, when it's much too strong for it to be due to any remotely plausible degree of selection...
Weekend Reading: Trust and the Benefit of the Doubt: "Dietz Vollrath sends us to a classic story from the late Douglas Adams: Douglas Adams: Trust and the Benefit of the Doubt: "This actually did happen to a real person, and the real person was me. I had gone to catch a train. This was April 1976, in Cambridge, U.K....
One Year Ago (August 7-13, 2018):
Ten Years Ago: A Federal Reserve Not Understanding the Situation at All: Occurrences in August 5, 2008, FOMC Meeting Transcript:
322: Inflation
029: Liquidity
029: Spreads
028: Unemployment
011: Crisis
001: Solvency
000: Minsky
000: Lehman
000: Bear-Stearns...
An Outtake from "Slouching Towards Utopia: An Economic History of the Long Twentieth Century": Mass Politics and "Populism"
Nikita Sergeyevitch Khrushchev: to John Fitzgerald Kennedy (1963): "We and you ought not now to pull on the ends of the rope in which you have tied the knot of war, because the more the two of us pull, the tighter that knot will be tied. And a moment may come when that knot will be tied so tight that even he who tied it will not have the strength to untie it, and then it will be necessary to cut that knot, and what that would mean is not for me to explain to you, because you yourself understand perfectly of what terrible forces our countries dispose..."
Two Years Ago (August 7-13, 2017):
Hoisted from 2010: What Do Econ 1 Students Need to Remember Most from the Course? : Economics deals with those things that we want but that are "scarce."... Where things are not scarce (the air, for example), that is not economics. Where we do not care, that is not economics either.... At this point I need to pause and note two facts about the world. Most scarce things that we care about are "rival."... Because commodities are "rival," somebody's use of a particular good imposes an opportunity cost on the rest of society. Because I am using this iPad, there is one fewer iPad for the rest of you to use. My use restricts your opportunities. A good economic system would make me take account in my decision-making of any reduction in your opportunities and resources that might be caused by my actions. This is where the market economy comes in...
Four Years Ago (August 7-13, 2015):
In Which I Agree in Part and Dissent in Part with Paul Romer's Narrative of the Intellectual Collapse of Chicago-School Macro: At this point, Romer ought to say that Solow's and Hahn's criticisms were (a) no more biting in their rhetoric than the criticisms that Stigler, Friedman, and company had been inflicting on their victims at Chicago for a generation, and (b) correct and accurate. He ought to say that Lucas, too, eventually said that his proposed mechanism���that "surprises" in the prices they were offered on the market led them to misperceive their real terms-of-trade���simply did not work theoretically. And Romer ought to say that the evidence that Lucas's mechanism simply did not work had emerged even while Romer was still in graduate school...
Live from Bullwinkle Plaza: It is quite an accomplishment to both be (a) the worst economic forecaster among your peers, and yet (b) engage in no public reflection and discussion of how and why you got the past wrong, and how you are changing your model of the economy in order to get it less wrong when you forecast in the future. Charles Plosser has managed that accomplishment...
Why I Try Not to Blather About China: My Visualization of the Cosmic All Is Incomplete: China has failed to make its allocation of property rights stick in any meaningful sense through the rule of law. Instead, it seems to have adopted a form of industrial neofeudalism. Such a system should not work: The party bosses with special rights to enterprises should find themselves unable to referee disputes among one another. The same shortsighted rent-extraction logic should apply in China as has played out in Eastern Europe, sub-Saharan Africa, Southeast Asia, South Asia, and Latin America. And yet, somehow, it seems to be working in China...
A Very Brief Sokratic Dialogue on Website Redesign | A Now-Extended Non-Sokratic Dialogue on Webite Design: The Honest Broker for the Week of August 3, 2015 | Weekend Reading: Maciej Ceg��owski: Web Design���The First 100 Years:
Eight Years Ago (August 7-13, 2011):
Noah Smith: Greg Mankiw Thinks Obama's Stimulus Worked: A good catch from Noah Smith: "Greg Mankiw thinks Obama's stimulus worked: Greg Mankiw's August 8 appearance on Larry Kudlow. At 3:27, Mankiw says: 'Fiscal policy is going to be a drag going forward as the stimulus wears out���' So what Mankiw seems to be saying is that the Obama stimulus increased economic growth. Note that Mankiw has stated numerous times that he is a 'stimulus skeptic'. In general, he has been coy... said that he doesn't think Obama's stimulus was very effective... linked uncritically to a paper that purported to show that the stimulus destroyed jobs overall"...
Treasury Real Interest Rates Now Negative Out to Ten Years...
How Should Obama Answer the Stock Market's Wake-Up Call? We-Need-Different-Cossacks Department: Three years ago I would have said���I did say���that Ben Bernanke was among the best available candidates for Fed chair and that Tim Geithner was among the best available candidates for Assistant to the President for Economic Policy. Today I think they both suffer from the sunk-costs problem.... They need to... look at the situation with fresh eyes. I don't think they have done that. i don't think they can do that. And yet theirs seem to be the only strong policy voices from people with deep substance-matter expertise that Obama hears. If you were to ask me what thing���aside from the complete and immediate collapse of the Republican Party and the resignation of all of its legislators from both houses of the Congress: if the previous fifteen years had not taught me that Republican politicians have nothing useful to contribute to national governance the last three years would certainly have done so���would most give me confidence that America would surmount this current economic crisis, it would be personnel changes to put qualified people who saw the world as it was in the summer of 2009 into the key economic jobs...
At the Economist's Economics by Invitation: We Need Different Cossacks Round II: "ow��Romer, Summers, and Orszag are gone. Their successors���Goolsbee, Sperling, and Lew���are extraordinary capable civil servants, but are not nearly as loud policy voices and lack the substantive issue knowledge of their predecessors. The two who are left, Geithner and Bernanke, are the two who did not see the world as it was in mid-2009. And they do not seem to have recalibrated their beliefs about how the world works���they still think that they were right in mid-2009, or should have been right, or something. I fear that they still do not see the situation as it really is. And I do not see anyone in the American government serving as a counterbalance...
Policy Proposals to Boost Employment in Obama's 2010 State of the Union Address: I must say I don't know what quadrant Andrew Sabl is in these days.... The two new policy proposals of Obama's 2010 State of the Union: the Simpson-Bowles Commission, and a federal spending freeze. Yes, there were 24 mentions of "jobs" and only 14 mentions of "deficit", but the only (small beer) thing Obama asked for that might have actually reduced the unemployment rate was his plea for the Senate to pass the House employment bill...
Ta-Nehisi Coates Goes to Gettysburg: The Unmasterable Burden of the Past Department: Grant at Appomattox Courthouse: 'My own feelings��� were sad and depressed. I felt like anything rather than rejoicing at the downfall of a foe who had fought so long and valiantly, and had suffered so much for a cause, though that cause was, I believe, one of the worst for which a people ever fought, and one for which there was the least excuse..." I think that is the answer to the questions Ta-Nehisi Coates is asking at Gettysburg.... The crux of the issue, I think, is that even in a democracy���especially in a democracy perhaps, for democracies tend to be naive about power���people trust their leaders, and loyalty and trust are virtues along with courage and a willingness to be the sharp end of the spear when the needs of the many require it. The fact that the leaders were evil men and the culture in which the boys���and even the officers���were raised was an evil culture does not completely erase the fact that on June 3, 1863 five thousand young Virginian men risked and lost everything in the sincere belief that the future of Virginia required that they do deeds of violence that day.... As President von Weizsacker of Germany said: "We need and we have the strength to look truth straight in the eye���without embellishment and without distortion.... The greater honesty we show in commemorating this day, the freer we are to face the consequences with due responsibility.... The vast majority of today's [German] population��� cannot profess a guilt of their own for crimes that they did not commit���. But their forefathers have left them a grave legacy. All of us, whether guilty or not, whether old or young, must accept the past. We are all affected by its consequences and liable for it"...
Twelve Years Ago (August 7-August 13, 2007):
Slouching Towards Utopia: The Economic World of the Twentieth Century: Pre-WWI China: I have a problem. Any history of the world economy in the twentieth century needs a section on China at the start of the century to balance the section on China at the end. Yet I am not well-qualified to write such a section. And I don't think the section I have is particularly good. Any suggestions?...
Tobin Harshaw of the New York Times: "I Am Not Authorized to Explain Why I Am Not Authorized...": As you may recall, last Friday there was a lot of discussion about revisions to the GISS global warming series of estimated average temperatures in the United States���a revision that changed the hottest year to date from 1998 (which in the old data was 1/100 of a degree hotter than 1934) to 1934 (which in the new data is 2/100 of a degree hotter than 1998) http://delong.typepad.com/sdj/2007/08/why-oh-why-ca-1.html. One surprising thing was that the New York Times's Opinionator weblog http://opinionator.blogs.nytimes.com/,.. went way overboard.... "Among global warming Cassandras, the fact that 1998 was the 'hottest year on record' has always been an article of faith.... James Hansen, the climate scientist who has long accused the Bush administration of trying to ���silence��� him.... [A] Y2K bug played havoc with some of the numbers.... Michael Ashe... explains.... "The changes are truly astounding. The warmest year on record is now 1934. 1998 (long trumpeted by the media as recordbreaking) moves to second place.... [T]he effect on the U.S. global warming propaganda machine could be huge..." This surprised me: "effect... huge," "havoc," the scare quotes around "silence," "data meltdown," et cetera seemed very out of place for a three-one-hundredths of a degree shift���either complete mendacity or total innumeracy, or both...
The Subprime Meltdown Hits Quant Hedge Funds: If you had asked me where the subprime meltdown was going to hit first, I would never have guessed "heavy-quant hedge funds." Yet so it has...
Reporters Should Be Subject-Matter Experts and Honest Brokers: The pressure point is "most reporters aren't subject-matter experts." Why not? Replace non-subject-matter expert reporters with expert subject-matter reporters who have reputations as honest brokers. You need both: subject-matter expertise, and a willingness to be an honest broker interested in informing readers rather than a propagandist or a stenographer. The Washington Post should throw Nell Henderson out the window and buy its Federal Reserve coverage from the Wall Street Journal and Jackie Calmes. The New York Times should throw Michael Gordon out the window and buy its Iraq coverage from Steve Negus of the Financial Times and Nancy Youssef and Leila Fadel of McClatchy...
Today Is a Great Day in Finance! That is, it is a great intellectual day for those of us who are friends of and committed to the intellectual project of Shleifer and Vishny, for today one of their theories is made flesh, and stomps about Wall Street like Godzilla: Andrei Shleifer and Robert W. Vishny (1997), "The Limits of Arbitrage," Journal of Finance, 52:1, pp. 35-55. "Abstract: Textbook arbitrage in financial markets requires no capital and entails no risk. In reality, almost all arbitrage requires capital, and is typically risky. Moreover, professional arbitrage is conducted by a relatively small number of highly specialized investors using other people's capital. Such professional arbitrage has a number of interesting implications for security pricing, including the possibility that arbitrage becomes ineffective in extreme circumstances, when prices diverge far from fundamental values. The model also suggests where anomalies in financial markets are likely to appear, and why arbitrage fails to eliminate them...
David Rees: Shorter Michael Ignatieff: "'It was right for me to support the Iraq war when I was an academic, because academics live in outer space on Planet Zinfandel, and play with ideas all day. But now, as a politician in a country that opposed the war, I'll admit I screwed up, because politicians must deign to harness the wild mares of whimsy to the ox-cart of cold, calculated reality.' There is more. It is, Ezra Klein says, the greatest essay ever published on anything. There is more. A lot more...
Assimilation: George Borja.... Whenever I read things like this, I cannot help but think that they are completely turned around. All over the world ministers of culture are frightened because their citizens who have not moved to the United States are "assimilating" to American culture and values���and they are. People who are in America assimilate even faster���albeit not as rapidly as we would, ideally, wish...
The Woosung-Shanghai Railway of 1876: D.C. Boulger, China, Chapter XXIII, The Reign of Kwangsu.... David Pong (1973), "Confucian Patriotism and the Destruction of the Woosung Railway," Modern Asian Studies 7:4 http://links.jstor.org/sici?sici=0026-749X%281973%297%3A4%3C647%3ACPATDO%3E2.0.CO%3B2-W...
Sixteen Years Ago (August 7-13, 2003):
Human Mental Augmentation: Archive Entry From Brad DeLong's Webjournal: But, Henry, it's too late. Our selves have already been infinitely extended. What has happened to the Third Chimpanzee over the past million years has already created gulfs between us and our chimpanzee and bonobo evolutionary siblings that dwarf any future Singularity. Think of trying to explain your own life to one of your African Plains Ape ancestors of the past���even those that already had upright posture, opposable thumbs, serious stone toolmaking, and language.
And if serious toolmaking and language didn't do it, agricu lture did. And if agriculture didn't do it, writing did. And if writing didn't do it, large-scale social organization did. And if large-scale social organization didn't do it, metallurgy did. And if metallurgy didn't do it, large-scale environmental manipulation (i.e., building cities) did. And if LSEM didn't do it, printing did. And if printing didn't do it, steam-power did. And if steam-power didn't do it, the second industrial revolution did. And if the SIR didn't do it, modern information technologies did.
One thing is clear along this journey: after each stage, very few people want to go back. Henry Farrell's life would be impoverished were he to find himself switched with some eighth-century monk in a scriptorium, spending his days preparing vellum and ink and copying out Matthew, Mark, Luke, John, Paul, Augustine���and little else.
So isn't the way to bet that our descendants will marvel at how limited our capabilities were?...
The Invention of Tradition: Listening to a tape about the life of Stephen Foster, 1826-1864. A Pittsburgh boy, a ninth child, born, schooled, and lived in Pittsburgh pretty much his entire life. Yet this guy from Pittsburgh created an amazing amount of what we now think of as southern and western folk music: "The Old Folks at Home", "My Old Kentucky Home", "Old Black Joe", "Massa's in the Cold, Cold Ground", "Oh, Susannah!", "Camptown Races", and others. What's a guy from Pittsburgh doing writing songs about the Swanee River? About Kentucky plantation mansions? About mining camps? And--most interesting--his songs seem to have been very popular not just in the relatively urbanized east, but in the south and west as well. The people they were written about seem to have grabbed them up with both hands as (idealized) depictions of how things were. And the (relatively) urbanized and urbane easterners grabbed onto them too--as authentic windows into the raw, alien, but exciting and fascinating cultures of the Slave South and the Wild West...
On the Pacific Crest Trail: The marching song of the Pacific Crest Trail: "Everywhere we go/People want to know/Who we are/So we tell them:/We are the unacclimated/The feeble feeble unacclimated/Unacclimated to the high country/With too few red cells in our blood...
I'm Not as Smart as I Thought I Was: Ah. I thought���from GDP and aggregate hours data���that we would have a 4% per year productivity growth quarter in the spring of 2003. I was wrong: we had a 5.7% per year productivity growth quarter. It is amazing that nonfarm business hours worked can fall���and fall at a 2.2% annual rate���in a quarter in which nonfarm business output can rise at a rate of 3.4% per year. If only we had demand rising fast enough to employ more rather than fewer people, the performance of the American economy would be truly amazing...
Productivity Growth Trends: This business cycle has been different. There was no sustained decline in productivity growth during the recession--there was little if any labor hoarding, and thus little slack of employed-but-underutilized labor to fuel rapid productivity growth numbers as the recovery begins. But it is very hard to look at the figure and think that we are still in the long productivity-growth slowdown period that began in the mid-1970s...
Alan Murray Wonders Why We Are Ruled by These Liars: The Wall Street Journal's Alan Murray bangs his head against the wall at the Bush Administration which has "willfully deceived the public and Congress about the costs of the Iraqi war and its aftermath... [and] continue[s] to do so..."
Only in California...: "With more than 100 different candidates on the ballot for the California governor recall election (thus making it conceivable that the winner will be somebody with a plurality of 20%���now that's a mandate for the exercise of legitimate political authority you), my fair state of California has recaptured the proud title of Doofus State that Florida had snatched away with its impressive performance in the 2000 presidential election...
False Advertising: Archive Entry From Brad DeLong's Webjournal: Ebbetts Pass is not a pass. It should be called "Ebbetts Saddle that is marginally lower than the highest Sierra Nevada peaks, but that should not be driven by the faint of heart and acrophobic, especially not in a poorly-made Ford Taurus with 130,000 miles on it and a twice-rebuilt transmission"...
The Tip of the Whip That Is the Business Cycle: Archive Entry From Brad DeLong's Webjournal: The most cyclically-sensitive sectors of all���the tip of the whip that is the business cycle���makes the equipment needed to make the capital goods that firms purchase in order to produce durable goods. One firm in particular���Applied Materials���is the preeminent manufacturer of the equipment needed to make high-tech capital goods. And so today investing in Applied Materials is, as the Financial Times writes, a clean and highly leveraged bet on the strength of America's current anemic business-cycle recovery���a bet only for those with "iron nerves"...
"Grant, Oh Gods...": I've been reading Dan Simmons (2003), Ilium (New York: HarperCollins: 0380978938):"Hector stretched his arms towards his son, but the boy cried and grabbed for his nurse, scared at the fierce sight of his father's armor, and especially at the nodding horse-hair plume on Hector's helmet. Hector and Andromache laughed. And Hector took the gleaming helmet from his head and put it aside on the ground. Then he took his dear child, kissed him, and bounced him in his arms, all the while praying to Zeus and all the gods: 'Grant, oh gods, that this boy, my son, with whom I am well pleased, may be like me���first in glory among the Trojans! Strong and brave like me, Hector, his father! And grant, oh gods, that Scamandrius, son of Hector, may one day rule all Ilium in power and glory. And grant that all men shall say, "He is a better man than his father!" This, oh gods, is my prayer, and I ask no other boon from thee"...
I Deeply Resent the Way This Administration..._: It was Teresa Nielsen Hayden who said: "I deeply resent the way this administration makes me feel like a nutbar conspiracy theorist." Here Jeffrey Sachs succumbs to the belief that the real reason for the invasion of Iraq was to get enough military ground power in place to give the U.S. the capability to conquer and occupy Saudi Arabia in 72 hours...
Bush-League Implementation: Last February Daniel Davies asked if there was any reason to think that the Bush adventure in Iraq would not be a SNAFU.... Now comes Daniel Drezner to say that the Bush Administration has created and is unlikely to be able to fix the SNAFU that is the reconstruction of Iraq...
"Sustainable Growth": IMHO, the Fed should still be worrying about the economy's inability to show "sustainable growth". The economy's "sustainable growth rate" looks to be something north of 3.5% per year: it's not clear to me whether or not the unemployment rate would fall if real GDP growth were a steady 3.5% per year. And it's not clear to me that we are on track for growth faster than 3.5% per year over the next couple of years...
Google Calculator: Google calculates that the speed of light is 1.8026175 �� 10^12 furlongs per fortnight... The scary thing is that (tonight at least) it is faster than launching a calculator from the dock...
A Worrisome Trend...: You may say that anybody who puts "hot stuff" or "tabloid" in the subject line of an email message deserves what he gets (even if he is my father)--or that it is Eudora's fault for not having a "whitelist" of senders--and that spam-control technology will stay ahead of spamsters' ingenuity. But I find this worrisome. I don't need to add "check my spam mailbox for non-spam messages" to my list of daily tasks...
Yes! Telecom Price Wars!: To us economists, prices ought to be signals of social scarcity. We overbuilt fiber-optic networks, we have ample wireless bandwidth, and so telecom capacity is definitely not scarce. So it should fall through the floor���and it is...
The Information Age Means Fiercer Competition_: The Information age means increasing returns to scale���write-once, run-everywhere. But it also means that it is easier to get... information. Which means that all of the hassle and ignorance factors that produced local monopoly power are bypassed. Which means fiercer competition and better deals for consumers...
It Is 10 PM. Do You Know Where Your Laundry Is?: When things communicate���or at least, broadcast their identity and their location: "News: RFID chips sent to the dry cleaners: Chipmaker Texas Instruments on Monday announced a wireless identity chip for clothing which can survive the dry cleaning process...
What Is Wrong with Thomas Sowell?: Thomas Sowell rants about how migration data covering the 1995-2000 period show that the California state government is killing California's economy: "The real voting: The latest census data show���for the first time���that more Californians have been moving to other states than people in other states have been moving to California. Between 1995 and 2000, California had a net loss of more than 600,000 people to other states. People are voting with their feet. California's total population has not gone down, however. Immigrants have replaced Americans. Apparently California is still considered to be preferable to Mexico or Central America.... One reason is that California's politicians are following a strategy which has worked well politically in New York City���milking the productive people in order to support the unproductive, whose votes count just as much and are easier to get. This may be killing the goose that lays the golden egg, but that is all right politically, so long as the goose doesn't die before the next election..." But the 1995-2000 period Sowell references--the one during which Americans "voted with their feet" against California���saw employment grow by 14% in California (as opposed to 12% in the rest of the country). The 1995-2000 period saw real gross state product in California grow by 27% (as opposed to by 21% in the rest of the country). To call the California economy between 1995 and 2000 a failure doesn't pass the laugh test...
Give Credit Where Credit Is Due: Greg Ransom raves against what he sees as a Federal Reserve devoted to "reducing the value of money": "The Fed moves to continue its ongoing devaluation of the currency, voting to keep interest rates artificially low.... Behind all this is the Krugman/ "Keynes" theory of "deflation".... The Fed���and the economics profession generally���is overrun by witch doctors and astrologists, not scientists or even competent dentists..." Leave to one side the fact this is not a Federal Reserve devoted to reducing the value of money: the inflation rate under Greenspan has been less than under any Fed Chair since the days of Herbert Hoover. Focus, instead, on the fact that it is definitely not the "Krugman/'Keynes' theory of deflation." The theory is Irving Fisher's... Milton Friedman and Anna Schwartz's... and Ben Bernanke and Mark Gertler's (analyzing the effect of a falling price level on interest rate spreads). Bernanke and Gertler may well get Nobel Prize's someday for their work on deflation and the "credit channel." Paul Krugman won't.... Why slight Bernanke and Gertler���and Fisher, and Anna J. Schwartz, and Milton Friedman? Is it because Ransom doesn't want to explicitly call Ben Bernanke and Milton Friedman "witch doctors"? Is it because his core audience knows little economics and less about the history of economic thought, but breaks into hives at the mention of "Paul Krugman"? Whatever the reason, a bad move...
Signs of a Weak Labor Market: I think the NBER made a mistake in going for an "output" rather than an "employment" definition of the business cycle...
One Hundred Interesting Mathematical Calculations, Puzzles, and Amusements: Number 18: Sunscreen: Suppose that 1/100 of the genes controlling our ancestors' skin color 1000 generations ago had been a gene for low melanin, and suppose ���for those of us of northern European descent���today 99/100 of our genes are genes for low melanin. What does that tell us about the strength of selection pressure and the differential survival rates of low- and high-melanin genes in the icy boreal forests of northern Europe over the past 1000 generations?...
The Economist Is Unhappy at the U.S.-E.U. Trade "Deal"l: Better than nothing, but not much better than nothing, is what the Economist says. I find this infuriating. The AFL-CIO provides a large share of funding for the Democratic Party. The AFL-CIO was scarred for life when the Reagan deficits of the 1980s pushed up the value of the dollar and devastated many union-heavy manufacturing industries. The AFL-CIO now fears free trade greatly���and this makes making progress on free trade very, very difficult when a Democrat is president. Nevertheless, Bill Clinton worked hard and made a lot of progress toward a better world. By contrast, building momentum for freer trade in a Republican administration should be as easy as falling off a log. But the Bush Administration can't even fall off a log reliably...
Laurence H. Meyer: "Ah. If I were a rich trader of fixed-income securities rather than a poor academic, this is a service I would buy: "Laurence H. Meyer's Monetary Policy Insights". Larry Meyer is very smart, very thoughtful, and very good at making what he has to say sound fascinating: I've never seen anyone fall asleep at an LHM seminar...
Twenty Years Ago (August 7-13, 1999):
Twenty-Four Years Ago (August 7-13, 1995):
J. Bradford De Long and Lawrence H. Summers: Equipment Investment and Economic Growth : "We use disaggregated data from the United Nations International Comparison Project and the Penn World Table to examine the association between different components of investment and economic growth over 1960���85. We find that producers��� machinery and equipment has a very strong association with growth: in our cross section of nations each percent of GDP invested in equipment raises GDP growth rate by 1/3 of a percentage point per year. This is a much stronger association than can be found between any of the other components. We interpret this association as revealing that the marginal product of equipment is about 30 percent per year. The cross nation pattern of equipment prices, quantities, and growth is consistent with the belief that countries with rapid growth have favorable supply conditions for machinery and equipment. The pattern is not consistent with the belief that some third factor both pushes up the rate of growth and increases the demand for machinery and equipment...
#highlighted #weblogs #hoistedfromthearchives
Fairly Recently: Must- and Should-Reads, and Writings... (August 15, 2019)
No Longer Fresh at Project Syndicate: Is Plutocracy Really the Biggest Problem?
Project Syndicate: America���s Superpower Panic
Talking Points: For Squawk Box: Business, Politics, Investors and Traders: 7:45 AM EDT 2019-08-24
The Flight to Safety in Asset Markets Has Now Become a Thing in Itself...
Liveblogging: The Anglo-Saxon Chronicle: Egelbert: "A.D. 650. This year Egelbert, from Gaul, after Birinus the Romish bishop, obtained the bishopric of the West-Saxons...
Liveblogging: The Anglo-Saxon Chronicle: Death of Oswald: "A.D. 642. This year Oswald, king of the Northumbrians, was slain by Penda, king of the Southumbrians, at Mirfield, on the fifth day of August; and his body was buried at Bardney...
Wikipedia: Charlie Dent
Duncan Black: Healthy Country: "I really don't see a way forward which isn't 'no deal Brexit' though no deal Brexit isn't a real thing. It just means 'we didn't bother to solve all the problems we have to start solving piece by piece now'...
Appian: The Macedonian Wars: "Flamininus came into conference with Philip a second time at the Malian gulf.... The Greeks asked the Roman Senate to require Philip to remove from their country the three garrisons which he called 'the fetters of Greece': the one at Chalcis, which threatened the Boeotians, the Euboeans, and the Locrians; the one at Corinth, which closed the door of the Peloponnese; and the third at Demetrias, which lay, as it were, in ambush for the Aetolians and the Magnesians. The Senate asked Philip's ambassadors what the king's views were respecting the garrisons. When they answered that they did not know, the Senate said that Flamininus should decide the question and do what he considered just. So the ambassadors took their departure from Rome. Flamininus and Philip, being unable to come to any agreement, resumed hostilities...
Simon Wren-Lewis: There Is No Mandate for No Deal
Wikipedia: Ferghana horse
Wikipedia: War of the Heavenly Horses: "The War of the Heavenly Horses or the Han���Dayuan war was a military conflict fought in 104 BC and 102 BC between the Chinese Han dynasty and Dayuan (in Central Asia, around Uzbekistan, east of Persia). The result was Han victory...
Paul Krugman (1987): Adjustment in the World Economy
Fred Hoyle: Ossian's Ride
Wikipedia: Li Bai: "Li Bai, Li Po, Li Bo, Ri Haku have been all used in the West, but are all written with the same characters. His given name, (���), is romanized by variants such as Po, Bo, Bai, Pai. In Hanyu Pinyin, reflecting modern Mandarin Chinese, the main, colloquial equivalent for this character is B��i; B�� is the literary variant and is commonly used...
Squawk Box: Business, Politics, Investors and Traders: "'Squawk Box' is the ultimate 'pre-market' morning news and talk program, where the biggest names in business and politics tell their most important stories. Anchored by Joe Kernen, Becky Quick and Andrew Ross Sorkin, the show brings Wall Street to Main Street. It's a 'must see' for everyone from the professional trader to the casual investor...
The Art of the Lingnan School, ���������������������������
Steve Jobs *(2007): Introducing The iPhone At MacWorld 2007
Michael Pettis: Real Growth in China is Less than Half of Reported Growth
Jamie Powell: A Delirious Defence of Uber: "What���s the counterargument here? Well, we soon find out: 'In other words, this company isn't losing money. It's the opposite. It's gathering in enormous sums: Gross bookings were up 31% to nearly $16 billion. Revenue was up 14% to $3.2 billion. Riders increased 30% to 99 million. It's difficult to look at those numbers and conclude that Uber is dysfunctional.' But the Business Insider article just told us that it is losing money: 1.6bn in six months.... Revenue growth, in and of itself, is only impressive when combined with positive economics. With an ebitda margin of negative 28.6 per cent last quarter, Uber is still a long way off proving that its business model works sustainably. For completion���s sake, here are the final few paragraphs.... 'Uber did increase its various operational expenses, such as marketing, R&D, and salaries & admin costs. But those are all costs that Uber can control, and cut in the future if need be. For now, the company is investing in its own growth. In other words, this company is still behaving like an "early stage" tech start-up���albeit on a vast scale. This company has a LONG way to go before it tops out. (Think about Facebook when it reached 1 billion people and everyone thought Facebook would slow down.) Investors are idiots for selling their stock right now.' Uber is a decade old global brand whose core business���ride-sharing���is now growing at just 2 per cent. It is also betting heavily that its smaller business lines, such as food delivery and freight, will be a source of future growth. In other words, it���s acting less like a start-up, and more like a legacy tech company scrambling for new growth. Think Oracle, IBM or perhaps even the modern-day Apple. Notice the difference, however. All of these companies have 'cash cow' products which help to keep the buybacks and dividends flowing, as well as funding future bets. Uber on the other hand... Look, there���s something to be said for the hysterical way quarterly results are sometimes reported by the press. After all they often contain a lot of noise and, in isolation, are not that indicative of how a business is really doing. But let���s not pretend Uber���s financials, to date, show a company gathering in cash ���'in enormous sums'...
I still don't understand whether Scaramucci has had a genuine Road-to-Damascus moment or whether he has decided that the wind has shifted, and there is more money to be earned via affinity fraud by being anti-Trump than pro-Trump. In either case, it is information that this is happening: Anthony Scaramucci: The Mooch Says GOP Needs Someone To Replace Trump On The Ticket: "So you and Alisyn have often asked me that and people say, okay, where's the red line where you break from your support from somebody. Because remember, loyalty is symmetrical. It's not asymmetric. What I said to you last week was, geez, this is really polarizing. this is very divisive. As a supporter of his, I would caution we not go in this. You brought up stochastic terrorism. I brought up how this charged rhetoric coming from the bully pulpit of the presidency could lead to some unintended tragic consequences. All I said was, 'I wish the president would stop doing that.' One scintilla of criticism, you get this sort of backlash. And so for me, it's one step too far with the racial charging of his rhetoric and his twitter feet. and you could say, okay, the only reason you're breaking from him now is that he went after you specifically on Twitter. And I'll accept that. I think that to me was a big turning point because I'm looking at that saying, wait a minute. I'm out here supporting him. The guy fired me two years ago. I have been super loyal to this guy, super loyal to the president's agenda. But there's something wrong with the guy as a leader if he can't take constructive criticism or advice from people that have been super loyal to him...
Walter Scheidel: A Comparative Perspective on the Determinants of the Scale and productivity of Maritime Trade in the Roman Mediterranean: "The scale and productivity of maritime trade is a function of environmental conditions, political processes and economic development that determine demand, and more specifically of trading costs. Trading costs are the sum of transportation costs (comprised of the cost of carriage and the cost of risk, most notably predation), transaction costs and financing costs. Comparative evidence from the medieval and early modern periods shows that the cost of predation (caused by war, privateering, piracy, and tolls) and commercial organization (which profoundly affects transaction and financing costs as well as the cost of carriage) have long been the most important determinants of overall trading costs. This suggests that conditions in the Roman period were unusually favorable for maritime trade. Technological innovation, by contrast, was primarily an endogenous function of broader political and economic developments and should not be viewed as a major factor in the expansion of commerce in this period...
Jacob L. Vigdor: Is Urban Decay Bad? Is Urban Revitalization Bad Too?: "Many observers argue that urban revitalization harms the poor, primarily by raising rents. Others argue that urban decline harms the poor by reducing job opportunities, the quality of local public services, and other neighborhood amenities. While both decay and revitalization can have negative effects if moving costs are sufficiently high, in general the impact of neighborhood change on utility depends on the strength of price responses to neighborhood quality changes. Data from the American Housing Survey are used to estimate a discrete choice model identifying households' willingness-to-pay for neighborhood quality. These willingness-to-pay estimates are then compared to the actual price changes that accompany observed changes in neighborhood quality. The results suggest that price increases associated with revitalization are smaller than most households' willingness to pay for neighborhood improvements. The results imply that, in general, neighborhood revitalization is more favorable than neighborhood decline...
Another of the long-time right-wing affinity-fraud grifters, S.E. Cupp, decides that it is time to leave the good ship SS. Trump & National Rifle Association: Ed Mazza: Conservative Pundit S.E. Cupp Quits The NRA, Makes Powerful Plea For Gun Control: "The former 'NRA Mom' now says 'we must do something'.... S.E. Cupp.... 'I am so sick and tired of participating in this predictable cycle of politics, where a mass shooting happens, the left calls for new gun laws���some meaningful, some unproductive���the right yells "slippery slope" and hides behind the Constitution....' She said that in the past, she���s defended the NRA and its members and argued against stricter gun laws. But not this time: 'I am no longer an NRA member. Being right no longer feels righteous because in the wake of more mass shootings, acts of senseless violence that sent innocent people running for their lives, leaving children orphaned, loved ones dead on the ground, we must do something about guns'... universal background checks, gun violence restraining orders, raising the minimum age for gun purchases to 21, banning 100-round drums, fixing the National Instant Criminal Background Check System, and mental health programs in schools. And she said some people, including domestic abusers and those who make violent threats, 'should never have access to a gun of any kind, period'...
I really do not understand this: if it were to be optimal policy to cut by 50 bp in a month, it is certainly optimal policy to cut by 25 bp now and probably optimal policy to cut by 50 bp now: Tim Duy: Another Portion of Yield Heading Toward Inversion: "Neither of the today���s developments���'easing' trade tensions or higher inflation���should prevent the Fed from easing at next month���s meeting.��I suspect though that they make it hard for the Fed to justify a 50bp cut in September.��If the economy needs a more aggressive Fed response up front to prevent recession, then a lower chance of that outcome... should induce the longer end of the yield curve to flatten further and then invert...
Important to today, I think, is that the aliens in Ossian's Ride are refugees: Henry Farrell: Ossian���s Ride: "In 1959 the famous British astronomer Fred Hoyle published his novel, Ossian���s Ride... a future Ireland miraculously transformed into a technological superpower.... Hoyle wasn���t really interested in talking about Ireland.... Instead, he wanted to score points in an internal fight over British identity... responding to the Christian apologist C.S. Lewis, who regularly denounced Hoyle as a secular atheist on radio and had written his own science fiction novel, That Hideous Strength, a decade before. The villain of Lewis���s book was a sinister institute called NICE, which Satanic aliens wanted to impose contraception, lesbianism, secularism and surrealist art on an unsuspecting Britain.... Hoyle riposted with a novel where rational and benevolently ruthless aliens used an organization called ICE to pull the priest-ridden republic next door into the technological age. His satirical portrait of Ireland told British readers that the world was being transformed around them, and that even their most backwards seeming neighbor would outstrip them if they didn���t embrace modernity. The irony of history is that Hoyle���s parody is now the truth...
Alberto Gallo: "US 2-10yr yield curve inverts as macro data keeps weakening, central banks continue to embrace loose policy and bond investors rush to buy any oasis left in the yield desert...
Benito Cereno: The Untold Truth of the Holy Grail: "After settling into Jerusalem, the Templars protected pilgrims on their way in and out of the city. Over time, the group of knights grew to be a powerful military order for the church. Kings from all around Europe gave the knights land and lordships, so they wound up super rich and bought the island of Cyprus. Though they were valiant fighters known for their bravery, the Templars became just as well known for proto-banking skills. They invented paying by check. That may not sound as exciting as hiding messages in Da Vinci paintings, but it was a pretty big achievement. Pilgrims could give the Templars however much money they'd need in the Holy Land. It would be safer with the group of fearsome knights than a bunch of regular folks walking through the desert. So, the Templars would give the pilgrims a promissory note and make sure all the money would be waiting for them when they got there. They moved enough gold that the Templars became the most powerful bankers in the land. Again, this is probably not the kind of thing that would go in a summer blockbuster, but it's one of the few things we know for sure about the Templars...
New York Times reporters, editors, and owners go extra-easy on Trump, Republicans in general, and other right-wingers because they agree with them and want them in power: Duncan Black: Because We Agree With Them: "A perfect distillation of 'we must obey critics on the Right, and get VERY VERY MAD AT CRITICS ON THE LEFT.' 'In regard to the debate on how to cover race, some staffers inside The Times agreed wholeheartedly with Baquet's approach. "Using that language is a turn off to some readers," one said. "And there are a lot of people that think The Times is too liberal, and when you start throwing words like that around, people will accuse us of editorializing."'... [That] doesn't make any sense. Journalists who say these things aren't scared of conservatives. They agree with them. Left wing criticism makes them mad because they don't agree with left wing critics. It's that simple. They aren't worried that they're 'editorializing' the other way...
Wikipedia: Adventure Time: "The series follows the adventures of a boy named Finn (voiced by Jeremy Shada) and his best friend and adoptive brother Jake (John DiMaggio)���a dog with the magical power to change shape and size at will. Finn and Jake live in the post-apocalyptic Land of Ooo...
Adventure Time: Everything's Jake
LEAFtv: How to Troubleshoot a Salt Mill: "Open up the mill. Discard the contents. Clean the mill and grinding mechanisms with a small dry brush. Wipe the body of the mill with rubbing alcohol. Air dry all parts for at least 24 hours. Add dry rock or sea salt to the salt mill. Include a few grains of rice to absorb any moisture. Lubricate the threaded part of the mill, lightly using cooking oil and fingers. Prevent salt corrosion and increase the ease of assembly. Adjust for the desired coarseness of salt by tightening or loosening the screw that connects to the grinding mechanism. Reassemble the mill. Test by turning the grinder knob. Store the salt mill in a cool, dry place...
Wikipedia: Forest of Galtres
Wikipedia: Morehouse College
Jessica Yadegaran: Critically-acclaimed Tartine Bakery coming to Berkeley: "Hold on to your butter knives, bread lovers. San Francisco���s Tartine Bakery has announced its first location in the East Bay. This summer, James Beard award-winning pastry chef Elizabeth Prueitt and her husband and co-owner Chad Robertson will open a cafe and bakery inside Berkeley���s historic Graduate Hotel...
Wikipedia: House of Neville
Kirk Stark: State and Local Taxation
bCourses: Economic Theory--Macro (Fall 2018): "Readings: Textbook Second Edition: http://delong.typepad.com/delong-olney-2nd-ed-chs-1-3-1.pdf http://delong.typepad.com/delong-olney-2nd-ed-chs-4-5.pdf http://delong.typepad.com/delong-olney-2nd-ed-chs-6-8.pdf http://delong.typepad.com/delong-olney-2nd-ed-chs-9-12.pdf http://delong.typepad.com/delong-olney-2nd-ed-chs-13-end.pdf...
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