J. Bradford DeLong's Blog, page 138

This is brilliant. It has, I think the implication that a...

This is brilliant. It has, I think the implication that a lot of people in rich areas are not benefitting from the region's wealth���which is what David Author found in his Ely Lecture: Robert Manduca: National Income Inequality in the United States Contributes to Economic Disparities Between Regions: "In 1980, just 12 percent of Americans lived in metropolitan areas with a mean family income more than 20 percent higher or lower than the national average. By 2013, more than 30 percent did. Today a handful of metros���cities such as San Francisco and Washington, DC���have mean family incomes 40 percent or 50 percent greater than average and more than double the average incomes in many rural areas.... Most previous research has emphasized the role of income sorting.... I show, however, that a much bigger portion of the growing disparities is due to rising income inequality at the national level...

#noted

The interesting fact here is that the U.S.-owned contribu...

The interesting fact here is that the U.S.-owned contribution to global value chains is increasingly becoming "stateless": it is not the U.S. that is providing intellectual property services to kick-off the production process, but rather the Cayman Islands. How much international tax arbitrage and evasion is contributing to the polarization of wealth remains unclear to me. But I do find it deeply worrisome:

Mark Thoma sends us to: Brad Setser: Vietnam Looks To Be Winning Trump's Trade War: "Vietnam, like China really doesn���t import very many manufactures from the United States. That���s partially a function of the fact that the value added in Vietnam is often low, and thus Vietnam cannot afford a lot of top of the line U.S. capital goods (yet). But it is also a function of the fact that many of the global value chains that generate large (often offshore) profits for U.S. firms don���t give rise to that much U.S. production these days.��There just isn���t much sign that the Asian value chains stretch back to include U.S. factories and workers. Fabless semiconductor firms that design chips likely��export their designs to a low tax jurisdiction before they license their designs��to an Asian contract manufacturer. The rise in Vietnam's exports hasn't been associated with a commensurate rise in exports from the United States to Vietnam...

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A reminder that eliminating trade barriers and boosting t...

A reminder that eliminating trade barriers and boosting trade through reducing tariffs, reducing quotas, and harmonizing regulations is one of the two things (along with deficit reduction at full employment when interest rates are high) we know how to do to materially and significantly boost prosperity in the medium run. Yes, it has an impact on income distribution. But everything has an impact on income distribution. Focusing your policies for equity on trade restrictions is counterproductive. Yes, Thea Lee, I see you:

Doug Irwin: Does Trade Reform Promote Economic Growth? A Review of Recent Evidence: "The findings from recent research have been remarkably consistent. For developing countries that are behind the technological frontier and have significant import restrictions, there appears to be a measurable economic payoff from more liberal trade policies... economic growth... roughly 1.0���1.5 percentage points higher... cumulated to about 10���20 percent higher income after a decade. The effect is heterogeneous across countries, because countries differ in the extent of their reforms and the context in which reform took place. At a microeconomic level, the gains in industry productivity from reducing tariffs on imported intermediate goods���inputs used to produce final goods���are even more sharply identified. They show up time and again in country after country. Some questions remain about how much of the economic growth following trade reform can be attributed to trade policy changes alone, as other market reforms are sometimes adopted at the same time. Even if the reduction of trade barriers accounts for only a part of the observed increase in growth, however, the cumulative gains from reform appear to be substantial. As Estevadeordal and Taylor (2013, 1689) ask, 'Is there any other single policy prescription of the past twenty years that can be argued to have contributed between 15 percent and 20 percent to developing country income?'...

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The Blocked Southern and Midwestern Global Warming Conversation

I find myself thinking about XXXXXX and her points about experiential, personal narrative hooks, and about XXXXXX today and XXXXXX yesterday on effects on the United States.

As I said yesterday, the U.S. climate is, on average, marching north by 4 miles a year. And it is becoming more variable: thermodynamics tells us that a system with more energy will over time occupy more configuration states, and in the U.S. midwest the extra configuration states are predominantly hotter, wetter configuration states: rather than hot dry air moving northeast from the deserts, hot wet air is moving northwest from the Gulf of Mexico. Witness this year's floods in the Mississippi, Missouri, and Arkansas watersheds. Yet in the U.S Midwest the factual conversation drawing of the links between climate change���screw it: global warming���global warming and weather disasters that farmers and workers and bosses and power-brokers in Malawi and Mozambique have, farmers and workers and bosses and power-brokers in Davenport, IO, are unwilling even to begin.

I made a pitch to the XXXXXX XXXXXX XXXXXX XXXXXX XXXXXX about five years ago that the highest and best use of their money was to start documenting the links between global warming and four state-area agriculture. No traction at all: collecting facts was viewed as, in some way, dangerous. I keep thinking about how in a lot of America the public sphere of factual discussion and debate is profoundly broken. I can think of nothing to do other than keep trying to roll the boulder up the hill, and keep saying to myself: "we must imagine Sisyphus happy". And I look across the table at XXXXXX XXXXXX and I ask him for help.

#aspen #globalwarming #highlighted #orangehairedbaboons #publicsphere

I think that this, from Bloomberg, is a misinterpretation...

I think that this, from Bloomberg, is a misinterpretation of what the Federal Reserve is currently doing. I do not think that it "hinted it may cut again this year". They said that future moves would be data-dependent���which could mean keeping them the same, could mean cutting further, could mean deciding that Eric and Esther are right and raising the rate back: Christopher Condon: Fed Cuts Rates by Quarter Point and Signals Potential for More: "The Federal Reserve reduced interest rates for the first time since the financial crisis and hinted it may cut again this year to insulate the record-long U.S. economic expansion from slowing global growth... voted... to lower the target range for the benchmark rate by a quarter-percentage point to 2%-2.25%.... 'In light of the implications of global developments for the economic outlook as well as muted inflation pressures, the committee decided to lower' rates, the Federal Open Market Committee, led by Jerome Powell, said in a statement following a two-day meeting in Washington.... 'Uncertainties' about the economic outlook remain. Officials also stopped shrinking the Fed���s balance sheet.... Kansas City Fed President Esther George and Boston's Eric Rosengren voted against the cut...

#noted

At a conference I am at, my fellow berkeley professor and...

At a conference I am at, my fellow berkeley professor and former President's Council of Economic Advisor's Chair Laura D. Tyson gave a powerful endorsement and shout-out to this book by my fellow Berkeley professor Barry Eichengreen, as the best survey of the history and prospect of what he calls "populism" and I would call "neo-fascism": Barry Eichengreen: The Populist Temptation: Economic Grievance and Political Reaction in the Modern Era: "Focuses on the global resurgence of populism today and places it in a deep context.... Populists tend to thrive most in the wake of economic downturns, when it is easy to convince the masses of elite malfeasance. Yet while there is more than a grain of truth that bankers, financiers, and 'bought' politicians are responsible for the mess, populists' own solutions tend to be simplistic and economically counterproductive. Moreover, by arguing that the ordinary people are at the mercy of extra-national forces beyond their control���international capital, immigrants, cosmopolitan globalists���populists often degenerate into demagoguery and xenophobia. There is no one solution... [but] there is an obvious place to start: shoring up and improving the welfare state.... America's patchwork welfare state was not well equipped to deal with the economic fallout that attended globalization and the decline of manufacturing in America.... Lucidly explaining both the appeals and dangers of populism across history, this book is essential reading for anyone seeking to understand not just the populist phenomenon, but more generally the lasting political fallout that follows in the wake of major economic crises...

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These numbers on the human costs of the Supreme Court's N...

These numbers on the human costs of the Supreme Court's NFIB vs. Sibelius decision are only about one-quarter of what I had feared: Scott Lemieux: Matters of Life and Death: "15,000 people died in three years because Republican states refused to accept the Medicaid expansion.... And let us not forget that this was all made possible by the intervention of the Supreme Court, based on arguments so weak that, as Joan Biskupic���s new bio finds, John Roberts himself initially rejected them.... 'Regarding the expansion of Medicaid for poor people, all four liberal justices... voted to uphold the program... punctured... arguments that Congress had exceeded ints spending power and its ability to attach conditions.... In the private March 30 conference, Roberts also voted to uphold the Medicaid expansion...

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The claim from Donald Trump's supporters was that the Rya...

The claim from Donald Trump's supporters was that the Ryan-McConnell-Trump tax cut would produce faster growth, even though it was inequitable. But that hope appears to have been vain: Dan Drezner: Donald Trump Is Sanctioning the U.S. Economy: "Second-quarter GDP growth was only 2.1 percent... 'far short of the 3 percent target that President Trump has repeatedly promised. Data revisions released Friday wiped away what had been a prized talking point for the White House: G.D.P. grew 2.5 percent for all of 2018, down from the 3 percent previously reported'... [and] a far cry from Larry Kudlow���s 2018 claim that GDP growth would top 4 percent for a few quarters.... Trump has unwittingly sanctioned the U.S. economy... has made himself the uncertainty engine for those interested in investing in the United States. And the effects are starting to be felt. In the second quarter, business investment was -0.6 percent. As in, negative.... Part of the problem is the drying up of foreign direct investment.... How will Trump react to the growth news? It is possible that he will respond in a mature fashion...

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This is my fear: that it is already the case substantial ...

This is my fear: that it is already the case substantial chunks of our current government are illegitimate: Betty Cracker: We���ll Get to ���Votes Were Changed��� Eventually: "Remember how the reporting on Russian intel���s attempt at US vote-diddling began? On Twitter, Soonergrunt sums it up: 'First it was ���they never got into any states'. Then it was 'they got in but couldn���t access voter info'. Then it was 'they saw voter info but couldn���t do anything'. Now it���s 'they could but didn���t do anything' Next it���s...

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I do not think that they "hinted it may cut again this ye...

I do not think that they "hinted it may cut again this year". They said that future moves would be data-dependent���which could mean keeping them the same, could mean cutting further, could mean deciding that Eric and Esther are right and raising the rate back: Christopher Condon: Fed Cuts Rates by Quarter Point and Signals Potential for More: "The Federal Reserve reduced interest rates for the first time since the financial crisis and hinted it may cut again this year to insulate the record-long U.S. economic expansion from slowing global growth... voted... to lower the target range for the benchmark rate by a quarter-percentage point to 2%-2.25%.... 'In light of the implications of global developments for the economic outlook as well as muted inflation pressures, the committee decided to lower' rates, the Federal Open Market Committee, led by Jerome Powell, said in a statement following a two-day meeting in Washington.... 'Uncertainties' about the economic outlook remain. Officials also stopped shrinking the Fed���s balance sheet.... Kansas City Fed President Esther George and Boston's Eric Rosengren voted against the cut...

#noted