J. Bradford DeLong's Blog, page 141

Liveblogging: The Anglo-Saxon Chronicle: A.D. 617: Edwin the Son of Ella

The Anglo-Saxon Chronicle (J.A. Giles and J. Ingram trans.): Edwin the Son of Ella: "A.D. 617. This year was Ethelfrith, king of the Northumbrians, slain by Redwald, king of the East-Angles; and Edwin, the son of Ella, having succeeded to the kingdom, subdued all Britain, except the men of Kent alone, and drove out the Ethelings, the sons of Ethelfrith, namely, Enfrid. Oswald, Oswy, Oslac, Oswood. Oslaf, and Offa.

A.D. 624. This year died Archbishop Mellitus.

A.D. 625. This year Paulinus was invested bishop of the Northumbrians, by Archbishop Justus, on the twelfth day before the calends of August.

A.D. 626. This year came Eamer from Cwichelm, king of the West-Saxons, with a design to assassinate King Edwin; but he killed Lilla his thane, and Forthere, and wounded the king. The same night a daughter was born to Edwin, whose name was Eanfleda. Then promised the king to Paulinus, that he would devote his daughter to God, if he would procure at the hand of God, that he might destroy his enemy, who had sent the assassin to him. He then advanced against the West-Saxons with an army, felled on the spot five kings, and slew many of their men.

This year Eanfleda, the daughter of King Edwin, was baptized, on the holy eve of Pentecost. And the king within twelve months was baptized, at Easter, with all his people. Easter was then on the twelfth of April. This was done at York, where he had ordered a church to be built of timber, which was hallowed in the name of St. Peter. There the king gave the bishopric to Paulinus; and there he afterwards ordered a larger church to be built of stone...

#liveblogging #history #anglosaxonchronicle

Martin Wolf: States Create Useful Money, but Abuse It: "W...

Martin Wolf: States Create Useful Money, but Abuse It: "What then are the problems with MMT?... Suppose holders of money fear that the government is prepared to spend on its high priority items, regardless of how overheated the economy might become... fear that the central bank has also become entirely subject to the government���s whims.... They are then likely to dump money.... The focus of MMT���s proponents on balance sheets and indifference to expectations that drive behaviour are huge errors.... If politicians think they do not need to worry about the possibility of default, only about inflation, their tendency may be to assume output can be driven far higher, and unemployment far lower, than is possible without triggering an upsurge in inflation...

#noted

Note to Self: Is there somebody I should read who has tho...

Note to Self: Is there somebody I should read who has thought deeply and powerfully about these issues?: Homer's Odyssey Blogging: "Like Little Birds... They Writhed with Their Feet... But for No Long While...": I love [David] Drake. I love the Odyssey. But I am distressed to find myself somewhat more sympathetic than I want to be with Plato's recommendation that only "hymns to the gods and praise of famous men" be allowed in the Just City because allowing more would lead to sensation and melodrama and would excite the baser instincts of men. And I have now opened up the following can of worms: How do we educate people to read���listen���watch���properly, so that they become their better rather than their worse selves? Mind you, I do not wish that the Odyssey were otherwise (or that David Drake wrote otherwise). But I do wish we teachers taught better how to read���and listen���and watch...

#notetoself #books #moralresponsibility #berkeley


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Comment of the Day: Yes, the failure modes of making jam ...

Comment of the Day: Yes, the failure modes of making jam are pretty scary: Graydon on Homer's Odyssey and David Drake's Hammer's Slammers: "Like Little Birds... They Writhed with Their Feet... But for No Long While...": "I think you're missing the central thing about Drake's writing. It is not so much that, yeah, these are not the best circumstances and our feels are in abeyance; that happens, that's depicted. But among that depiction you get what I think of as the essential Drake thing, which is a vehicle crew. They may not like each other much; they may not, in some senses of the word, trust one another. But they are entirely predictable to one another, and reliable. And it's that obligation of reliability that lets people get their head out of hell, whether as imperfectly as Danny Pritchard does it or as entirely as the protagonist of Redliners does. (You can see much the same flavour of reliable between Gunnar and Brennu-Nj��ll)...

...In terms of common elements, Drake's characters are moderns or post-moderns; they are there in an environment with state and post-state actors. Their battles are in that anonymous impersonal context of abstractions like commodity prices. If they are to have anything in common with Odysseus or Telemachus, persons of a time when the notion of "king" was doubtful and all authority was personal authority, it has to be something basic.

I think the notion of insecurity management is more fundamental than basic; it's much or most of why we're a band-forming primate. (Orangutans are not, most gibbons are not; band-forming is not a primate requirement.) In Heroic Age���any heroic age���societies, your insecurity is���if you are not one already���how you stay out of "women, cattle, and slaves", because in there, anyone can do anything to you; your insecurity is vast. (It's pretty silly to pretend that the slave women had an option of refusing the suitors; the idea being reinforced its that it's better to get yourself killed turning the suitor down, because when the master returns you will as surely die, and less honorably. I doubt the slave women thought was a sensible construction of their circumstances.)

You don't get an understanding of anything important about insecurity management���that fear is in you, so killing fear means killing yourself; that you are helpless, but maybe not hapless; that it is not so much "bare is back without brother behind it" as "lone monkeys die"���in the abstract, by study, or by reading. You get it by doing actually dangerous things[0] in groups.

Much effort has gone into preventing any such thing for anyone we'd call "educated" for a few generations now, and this is a mistake. If you have no personal experience of the whole band-forming process, this might benefit the randite myth of the individual and it certainly benefits the corporate desire to prevent any ganging up on problems by the prey animals, but it does not benefit you at all.

Education could do with much, much more of "theory informs; practice convinces." If you want people to exhibit empathy for those whose state is not theirs and whose expertise is different, you need to make most of education involve failure; do this material thing at which you are unskilled. Allowing education to be narrow, and to avoid all reminder that the world is wider and that to a first approximation everyone is utterly incompetent, just encourages arrogance. Arrogance is terrible insecurity management; it makes the other monkeys less inclined to help you. (Yes of course we should overtly teach both insecurity management and band forming best practices in simple overt language.)

[0]I do not mean "fight in a war"; I mean "use power tools", "split wood/use an axe", "build something to keep the rain off and sleep under it", "assemble a pontoon bridge", "portage in haste", "use a wood-fired oven", "make jam" (think about the failure modes for a minute), and such like; all of these things can hurt or kill you, and at group scales you can't possibly take sufficient care of yourself by yourself. Such activities don't usually do us any harm because we're pretty good at being a band-forming primate and working out social mechanisms to control the collective machinery of our effort...

#commentoftheday




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Any journalist writing about Boeing's 737 MAX who is not ...

Any journalist writing about Boeing's 737 MAX who is not telling their readers to go read the Seattle Times coverage by Dominic Gates and Mike Baker is committing journalistic malpractice, and should find another line of work: Dominic Gates and Mike Baker: The Inside Story of MCAS: How Boeing���s 737 Max System Gained Power and Lost Safeguards...

#noted

Sebastian Doerr, Jos��-Luis Peydr��, and Hans-Joachim Vot...

Sebastian Doerr, Jos��-Luis Peydr��, and Hans-Joachim Voth: Failing Banks and Hitler's Path to power: "Polarised politics in the wake of financial crises echo throughout modern history, but evidence of a causal link between economic downturns and populism is limited. This column shows that financial crisis-induced misery boosted far right-wing voting in interwar Germany. In towns and cities where many firms were exposed to failing banks, Nazi votes surged. In particular,��places exposed to the one bank led by a Jewish chairman registered particularly strong increases of support���scapegoating Jews was easier with seemingly damning evidence of their negative influence...

#noted

Looking Backwards from This Week at 24, 16, 8, 4, 2, 1, 1/2, and 1/4 Years Ago

Three Months Ago (April 24-30, 2019):

SEDAC: Population Estimation Tools:

 

It is very common to attribute the collapse of Roman Republican institutions and the rise of Imperial dictatorship to a loss of moral virtue on behalf of the Roman electorate���who are supposed to have fallen prey to demagogues and voted for bread-and-circuses as the underlying foundations of liberty collapsed underneath them. That story is not true. Here Sean Elling sends us to Edward Watts on the real story���recently enriched plutocracy breaking political norm after political norm in an attempt to disrupt what had been the normal grievance-redressing operation of the system: Sean Illing: Mortal Republic: Edward Watts on what America can learn from Rome���s collapse...

Rosa Luxemburg: "Freedom only for the supporters of the government, only for the members of one party... is no freedom at all. Freedom is always and exclusively freedom for the one who thinks differently.... All that is instructive, wholesome and purifying in political freedom depends on this essential characteristic, and its effectiveness vanishes when ���freedom��� becomes a special privilege...

Edmund Wilson (1940): Trotsky, History, and Providence: Weekend Reading: "These statements make no sense whatever unless one substitutes for the words history and dialectic of history the words Providence and God.... There sometimes can turn out to be valuable objects cast away in the garbage-pile of history.... From the point of view of the Stalinist Soviet Union, that is where Trotsky himself is today; and he might well discard his earlier assumption that an isolated individual must needs be 'pitiful' for the conviction of Dr. Stockman in Ibsen's Enemy of the People that 'the strongest man is he who stands most alone'...

The Knot of War 1870-1914: An Intake from "Slouching Towards Utopia?: An Economic History of the Long Twentieth Century 1870-2016"

Henry Farrell and Bruce Schneier: Information Attacks on Democracies: "Democracies, in contrast, are vulnerable to information attacks that turn common political knowledge into contested political knowledge. If people disagree on the results of an election, or whether a census process is accurate, then democracy suffers. Similarly, if people lose any sense of what the other perspectives in society are, who is real and who is not real, then the debate and argument that democracy thrives on will be degraded. This is what seems to be Russia���s aims in their information campaigns against the U.S.: to weaken our collective trust in the institutions and systems that hold our country together. This is also the situation that writers like Adrien Chen and Peter Pomerantsev describe in today���s Russia, where no one knows which parties or voices are genuine, and which are puppets of the regime, creating general paranoia and despair...

 

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Six Months Ago (January 24-30, 2019):

Commonwealth Club: Annual Economic Forecast Event (January 25, 2019): Relevant Files

Trying to blame poor nonwhite people and social democratic governance for the faults of Wall Street seemed to me several bridges too far back a decade ago. Yet Steve Moore and Larry Kudlow seem to have gained rather than lost influence on the right from their eagerness to do so. They very sharp Barry Ritholtz takes exception: Barry Ritholtz (2016): No, the CRA Did Not Cause the Financial Crisis...

Everyone who gets a C in first-semester statistics knows that if your sample is random you do not have to double the number of data points when the population doubles.... Fake and fuzzy math in the service of trying to lowball civilian war deaths is not just stupid. It is evil: Stephen Moore (2006): 655,000 War Dead? A Bogus Study on Iraq Casualties: "I was surprised to read that a study by a group from Johns Hopkins University claims that 655,000 Iraqis have died as a result of the war.... Another study in Kosovo cites the use of 50 cluster points, but this was for a population of just 1.6 million, compared to Iraq's 27 million...

Adam Tooze attributes to me the idea that many of the problems of the past decade stem from the fact that we had "the wrong crisis"���and that we then in large part reacted to the crisis we had expected but did not in fact have. But I think this point is more Matt's than mine: Matthew Yglesias (2012): The Crisis We Should Have Had: "The US economy from 2002-2006... someday soon, the capital flows would come to an end... the value of the dollar would crash, restraining inflation would require high interest rates, and the US economy would feature a period of painful restructuring.... Sections of Tyler Cowen���s The Great Stagnation are about the crisis we should have had... Spence���s The Next Convergence... Stiglitz��� recent Vanity Fair article... Mandel���s piece on the myth of American productivity.... I can name others.... An awful lot of the Obama agenda has been about efforts to address the crisis we should have had. That���s why long-term fiscal austerity is important and why there was no ���holy crap the economy���s falling apart, let���s forget about comprehensive reform of the health, energy, and education sectors��� moment back in 2009...

Adrian Wooldridge Is... the Vicar of Bray!: October 27, 2004: "[Bush's] presidency has been momentous���two terms rolled into one, by any decent reckoning... transformed American policy... transformed American conservatism... shifted power dramatically in favor of social conservatives... the radicalism of America's post-Sept. 11 foreign policy... spreading democracy to an area of the world where the Reaganites feared to tread... the greatest Republican party builder since William McKinley..." January 15, 2009: "[Bush] leaves the White House... one of the least popular and most divisive presidents... approval rating... stuck in the 20s... catastrophic collapse in America���s reputation... deep recession.... Bush family name... now so tainted... poisoned by his own ambition... [the] 'timeless fraternity boy' wanted to be a great president... hated anything that was 'small ball'..."

Note to Self: A Comment on Development Engineering: With respect to "doing good versus doing well"... From an economist's point of view, the economy is a decentralized societal calculating machine. It... tries, in a utilitarian way, to increase social welfare���which it roughly defines as summing everybody's well-being, with each person's well-being weighted by their lifetime wealth.... 'Doing well' [is] achieved by increasing resources that produce things for which rich people have a serious Jones. Serving the global poor is not going to do that. So making a living serving the poor requires focusing on one of two things: (1) Finding an organization���a government or an NGO���that is willing to some degree to commit resources to bend this market logic of "to those who have, more shall be given". (2) Find some people who have skills and resources and industry that are somehow blocked from the sight of the world market, and figure out a narrow strategic intervention that will makes those resources visible���and hence valuable...

 

A Year Ago (July 24-30, 2018):

The Meiji Restoration: A Probable In-Take for "Slouching Towards Utopia?: An Economic History of the Long 20th Century"

Announcing the John Bell Hood-Max von Gallwitz Society!: "Dedicated to celebrating the memory of two field commanders who may well have been the worst in history...

The Good 2016 Election Map

Ancient Technologies of Organization and Mental Domination, Clerks, Linear B, and the Potnia of Athens

Homer's Odyssey Blogging: "Like Little Birds... They Writhed with Their Feet... But for No Long While..."

 

Two Years Ago (July 24-30, 2017):

Public Spheres for the Trump Age: No Longer Fresh at Project Syndicate: A university is a safe space for ideas in which they can be expressed. A space is also a safe space in which ideas can be evaluated and judged���and in which we can change and are strongly encouraged to change out our old ideas for those that rational discussion and debate leads us to judge as better. And a university is also a safe space for scholars to grow and develop. Summers is right to note that "a liberal education that does not cause moments of acute discomfort is a failure." Summers is wrong to fail to note that much student acute discomfort comes from attempts to deny that students belong at the university and from attempts to prematurely close down discussion. And faculty should be encouraged���strongly encouraged���to attend seminars where they think hard about when and how and if they should say things like "meritocracy is a good thing", given who their students are, where they come from, what their preparation is���and, indeed, the origins of the term as a label for something the sociologist who coined the term thought was a bad thing indeed...

Monday Smackdown: Every Time I Try to Get Out, They Pull Me Back In... Clive Crook Edition: "So after a pep talk from Noah Smith Saturday night about how it is time to become kinder and gentler���to look for opportunities to praise for being smart people who in the past I have criticized for being really really really dumb���I wake up Monday morning, and I wince because Duncan Black has been reading the once-thoughtful Clive Crook again: "People is weird... 'let's shoot ourselves in the face just to prove our gun works'..." is really four standard deviations kinder and gentler than this deserves...

Clueless DeLong Was Clueless About What Was Coming in 2007 and 2008

(Early) Monday Smackdown/Hoisted: John Cogan, Tobias Cwik, John Taylor, and Volker Wieland's Reputational Bet on Fiscal Policy Is Due, and They Are Bankrupt...: "Apropos of Simon Johnson's, Charlie Steindel's, and my... distaste... for the 3%/year growth fake forecasts of Cogan, Hubbard, Taylor, and Warsh... Let me say that in Taylor's case, at least, this type of bullshit misrepresentation of what we know and what the evidence says has now been going on for a very long time.... Tuesday afternoon I sat down to reread Romer and Bernstein (2009), which I had read before, and Cogan, Cwik, Taylor, and Wieland (2009), which I had not, and I ran into a problem. On page 2 Cogan et al. write that their Figure 1 shows how Romer and Bernstein think government spending affects the economy along with "exactly the same policy change... in another study... by one of us [John Taylor]... the results are vastly different".... This surprised me. I had talked to Christy. I had talked to Jared. I knew that their intention had been to pull standard models off the shelf and use them. So I dug���and found that Cogan et al.���s claim of ���exactly the same policy change��� was simply wrong.... My first thought was, ���this is embarrassing���none of four coauthors of Cogan actually read Romer-Bernstein. Sloppy.��� Then I got to page 5.... Cogan et al. know perfectly well that the policy changes are not ���exactly the same.��� They just say they are.... The offer that if Cogan, Taylor, and company shape up and recall intellectual standards they can come back into the game is now withdrawn...

 

Four Years Ago (July 24-30, 2015):

David Glasner: Milton Friedman���s Cluelessness about the Insane Bank of France: "Friedman was not alone in his cluelessness. F. A. Hayek, with whom,��apart from their common belief in the price-specie-flow fallacy, Friedman shared almost no opinions about monetary theory and policy, infamously defended the Bank of France in 1932: 'France did not prevent her monetary circulation from increasing by the very same amount as that of the gold inflow���and this alone is necessary for the gold standard to function...' Thus, like Friedman, Hayek completely ignored the effect that the monumental accumulation of gold by the Bank of France had on the international value of gold. That Friedman accused the Bank of France of violating the ���gold-standard rules��� while Hayek denied the accusation simply shows,��notwithstanding the citations by the Swedish Central Bank of the work that both did on the Great Depression when awarding them their Nobel Memorial Prizes, how far away they both were from an understanding of what was actually going on during that catastrophic period...

Depression's Advocates: Back in the darker days of late 2008 and 2009, I had one line in my talks that sometimes got applause, usually got a laugh, and always made people more optimistic. Because the North Atlantic had lived through the 1930s, I would say, this time we will not make the same mistakes policymakers made in the 1930s. This time we will make our own, different���and hopefully lesser���mistakes. I was wrong. The eurozone is making the mistakes of the 1930s once again. And it is on the point of making them in a more brutal, more exaggerated, and more persistent form than they were made back in the 1930s.... I did not see that coming...

 

Eight Years Ago (July 24-30, 2011):

The Phasing Out of the 2009 Recovery Act and the Recoveryless Recovery: Had the Recovery Act been continued, our average rate of GDP growth over the past three quarters would have been not 1.3%/year but instead 2.7%/year. I had thought that Christina Romer had gotten a commitment from Obama in 2009 that there would be "no 1937s": no premature phase-out of fiscal stimulus before the recovery was well established...

Sixty-Odd Slides

 

Sixteen Years Ago (July 24-30, 2003):

Vexilla Regis Prodeunt Inferni: Patrick Nielsen Hayden and Matthew Yglesias pause to watch the Pope and his entourage go by in the great carnival that is the human parade, and their jaws drop in disbelief, and they are moved to fits of rage���or, in Matthew Yglesias's case, to accusations of "shoddy thinking" (which is as close to rage as he gets to rage): Electrolite: "I'm not actually back home yet, but some things leave one too agog not to blog. In this morning's New York Times, here's the Vatican fulminating over the idea of granting gay people the same legal rights as anyone else...

Shorting Poindexter: Tom Maguire wonders why it was that proponents of DARPA's Policy Analysis Markets played up the idea of the U.S. government funding trading pits in bioweapons attacks on Israel and assassinations of foreign leaders, rather than talking about forecasting indexes of political stability and economic output...

Post-Austrian = Post-Keynesian?: After tormenting Tyler Cowen, Daniel Davies decides that post-Austrian Tyler and post-Keynesian Daniel are really long-lost brothers: "Crooked Timber: Dumb it up, Tyler! : ...Both Tyler and myself are quite a long way outside the mainstream of neoclassical economics. He's basically an Austrian, I'm a Post-Keynesian. And in fact, Tyler's particular brand of 'New' Austrianism is very close to Post-Keynesianism indeed...

Divergent Expectations: MSN's Jim Jubak worries about the striking divergence between the (relatively pessimistic) expectations of consumers and the (relatively optimistic) expectations of Wall Street analysts. He seems to come down on the side of consumers: he thinks that the confirming numbers one would expect to see if analysts' forecasts of a strong second-half recovery were coming true are hard to find...

How Stupid Does National Review Think We Are?: "This time its Stephen Moore���he who can't count���of the Club for Stagnation.... Does Moore really suppose that his readers are too dumb to remember that the Great Depression was already 3 1/2 years old when Franklin D. Roosevelt took office in March 1933? That the unemployment rate in 1933 was already 25%���its Great Depression nadir?...

The Economist on Global Climate Change: The Economist sets out the challenge of global warming, and what we need to start doing about it. Most of the article is smart, but there is a sentence at the end that makes me wonder if the Economist's writers should be allowed to run loose without keepers. When they look at George Bush, Dick Cheney, Tom DeLay, and Bill Frist, do they really believe that there is "hope that today's peacetime politicians may rise to the occasion"���even a glimmer of hope���or are they just being ironic?...

The Ugly Chicken Feet of Collectivism: Citizens and others, this month's excursion into political philosophy takes us to the Tug Boat Potemkin, where they are worrying about whether a libertarian can be philosophically consistent and still go out for (Chinese brunch) dim sum...

High-Tech Investment: There will be another telecom investment boom, someday...

More on DARPA's Policy Analysis Market: I sense a little tension here. If the stakes are too small to create moral hazard, why should experts spend their time and money in the market? Markets are good information-aggregators because they offer those with good information the chance to make a healthy profit. I will be interested to see how well it does���when somebody with a thicker skin than DARPA funds this, that is. I think it will create useful knowledge about information aggregation mechanism...

You Do Need a Weatherman: This is probably the last generation for which this is true, but it's still the case that the health of the Indian economy depends on the quality of the monsoon...

More Lies, This Time from National Review: Donald Luskin picks up on the Andrew Sullivan chorus: "Paul Krugman's worst nightmare is coming true.... "His hopes for recession seem to be receding." Now everybody who has been reading Paul Krugman knows that he has been spending a substantial chunk of his time pushing for more stimulative economic policies to avoid any return of recession...

Costly California Recall Election: I would like the state of California to pay as little interest as possible. However, bond traders���at least those quoted by the New York Times���see the recall election as a bizarre extra source of risk, and they are going to demand higher interest rates from California bonds...

Excellent News for Ozone Man: No, the ozone layer is not becoming thicker. But at least it is now becoming thinner at a slower rate...

Moral Hazard: DARPA's ideas to research whether derivative markets will produce good forecasts of future politico-military events is an interesting idea in how to aggregate information.... However, there is the... moral hazard problem. I mean, people who offer fire insurance have a moral hazard problem. This might create a much bigger such problem...

Things Are Always Worse Than You Think They Are Department: We knew that 1980s CIA Director William Casey was an out-of-control maniac. We did not know that he was providing Pakistan's ISI with support and encouraging them to launch cross-border raids into the Soviet Union to blow up gasoline storage tanks, destroy electric power stations, and attack border guard posts...

iPod: The most important thing about the iPod is not that it is portable.... What is it, then? It is that it is concentrated music, essence of music...

Blithe Unconcern: DeLong tries and fails to figure out why the Bush Administration makes the economic policy decisions it does...

The Return of the Budget Deficit: John F. Irons interprets the return of budget deficits...

Anne Applebaum on Ann Coulter: Anne Applebaum on Ann Coulter.... "Whatever side this woman is on, I don't want to be on it...

Notes: Some Historical Questions: Some historical questions I want to find the answers to...

Needed: Bigger Laptop Batteries...

D���-!: Bad news this morning about the U.S. business cycle...

2000 Election County by County: Alas! It's a misleading red-blue map, not the more informative and accurate purple-purple one...

A Clever Plan Indeed: Charles Dodgson finds confirmation of his idea that everything stupid the White House does is really part of a very clever plan...

Excellent! The County-by-County Purple Map: The industrious Ogged, a prince among truffle-hunting internet pigs, turns up...

Mastering the Art of French Cooking: "Jefferson's will directed that Joe Fossett should be give his freedom, effective in July 1827���presumably because he was a favorite slave as well as Sally Hemings's half-nephew. Six months before that... his wife and his children [had been] sold to the highest bidder at the auction of Monticello's 'negroes'. It could have been worse: Edy and their two youngest children were bought by... Joe's brother-in-law.... Two teenaged daughters were also sold to Charlottesville residents... the Fossett family had survived the Monticello auction with only three of the children lost to an unknown fate. And ten years later Joe Fossett, free Negro, having by hard work and various financial maneuvers managed to buy back his wife Edy and the children still living with her... legally emancipated them...

Virginia Statute of Religious Freedom: Preamble

Reading the Soul of Thomas Jefferson: Across two centuries, E.M. Halliday attempts a close reading of Thomas Jefferson's soul. This kind of thing usually goes very badly. Halliday's reading, however, is remarkably persuasive...

Mervyn King Coos Like a Sucking Dove: With its new Governor, Mervyn King, at its head, the Bank of England cuts interest rates...

The Wedge Between Output and Employment Growth: Alan Beattie of the Financial Times writes about the productivity-boom generated wedge between output growth and employment growth. I would be surprised if there were any employment growth at all in America over the next year unless real GDP growth exceeds 3.5% per year...

False Advertising: Suppose you colored states not by which candidate their electoral votes were cast for, but by who their citizens voted for. Suppose you mixed X% Democratic blue with Y% Republican red. What would it look like? It would look like this...

The Long-Term Budget Outlook: Brookings's Bill Gale talks turkey about the long-term fiscal-policy mess George W. Bush and company have gotten us into...

Locking the Barn Door: Will this do any good? Will this make Wall Street less willing to play along the next time an Enron appears? I don't know... "WSJ.com - JP Morgan, Citigroup to Pay $255 Million in Enron Case: NEW YORK ��� JP Morgan Chase and Citigroup agreed Monday to pay a total of $255 million for their roles in Enron's manipulation...

Raita: Recipes: Raita. We'll be making a lot of this now that the Ten-Year-Old has decided to be vegetarian...

Len Burman et al. on the Alternative Minimum Tax: Of all the things that need to be done to the U.S. tax code, perhaps the most urgent is the need to fix the Alternative Minimum Tax���the AMT. If you needed yet another example of the Bush White House's lack of concern for the substance of policy, its ignorance of the AMT is a good place to look...

Imperialism: A User's Manual: Rudyard Kipling writes about how this "colonization" business actually works where the rubber meets the road...

Bearers of Bad Tidings: AP's Tom Raum notices an interesting pattern.... "One curious fact stands out. Some who gave President Bush unwelcome information that turned out to be accurate are gone..

More Good Business-Cycle News: Well. It's starting to look good���as if we may finally get a healthy recovery, in production at least...

Notes: In the Shadow of Malthus...

Yes, Virginia, There Is a Law of Large Numbers: All those who believed William Bennett���and disbelieved the law of large numbers���when he claimed he had come out "close to even" in his gambling need to mark their beliefs to market...

The Good Things in Life: "Wendell Berry comes out foursquare in favor of the good things in life: short life expectancy, chronic malnutrition, plague, and poverty...

Technorati Is Remarkable II: Christopher Lydon makes my enthusiasm for Technorati look like weak tea...

Andrew Sullivan = Noam Chomsky: I had an epiphany this evening, an epiphany provoked by reading Andrew Sullivan immediately after reading something smart by the highly intelligent Tom Nichols of the Naval War College. Nichols wrote, appropos of Noam Chomsky: "What many of us find objectionable, however, is Chomsky's fundamental hypocrisy and dishonesty.... Chomsky's writing is meant to mislead and to distort.... He is a practitioner of the Big Lie approach to political debate: if a falsehood is stated baldly and loudly enough, it'll get by.... Here's a gem from the New Mandarins (1967): "Three times in a generation American technology has laid waste a helpless Asian country," that is, Japan, Korea, and Vietnam. This is a statement that is so simplistic and dishonest one can only marvel at Chomsky's audacity in saying it. Imperial Japan, helpless? North Korea, rolling its tanks to the Pusan perimeter and coming within a whisker of conquering the peninsula, helpless? But Chomsky is smart enough to know one thing: if he puts it on the printed page, some less perceptive reader will assume it to be true, and the propaganda will have worked its purpose...

Land Reform in Brazil: This may turn into Lula da Silva's biggest problem...

Technorati Is Remarkable: David Sifry's Technorati is remarkable!...

The Durability of the Social-Insurance State: Peter Lindert thinks hard about just why it is that the high-tax high-benefit social-insurance states of the twentieth century appear to have managed to redistribute income and provide enormous amounts of social services and social insurance without suffering any measurable penalty in terms of their rates of economic growth. He may well be right. It's certainly worth thinking about...

Crude Life Expectancy Estimates: For the world for the last 2000 years...

The Demographic Transition: The shape of the demographic transition since 1820...

Books: Witness: Whittaker Chambers (1952), Witness (New York: Random House: 0895267896)...

Smart Matter, Smart Muffins: This morning I found myself staring at something called a "Smart Morning Carrot Muffin." I found myself wondering what offensive-warfare, target-acquisition, and information-processing capabilities it had. Clearly I have been rereading too many Ken MacLeod novels too rapidly...

Microsoft Quality Software: Microsoft's Slate is supposed to dump a nicely-formatted text email of its "Today's Papers" column into my email box sometime around 4:00 AM Pacific Time each morning. The email message below appears to have started its odyssey at 2:46 AM PT. But it showed up in my email inbox at 9:15 PM PT���having thus spent 18 1/2 hours in transit...

Where's My Stuff?: The future really is here. It's just not evenly distributed yet. This will only be really important to me when each of my books knows what it is. Those are the only things I regularly fail to find...

Stephen Roach Talks About the Output Gap...

Bernanke Speech on Monetary Policy in a Low Inflation Environment: He sees the Federal Reserve's principal weak point as a possible inability to convince private market participants that the Federal Reserve intends to keep short-term rates as low for as long as it in fact intends to...

When Chomskyites Attack!: Ed Herman claims that Chomsky's defense of Nazi sympathizer Robert Faurisson was "solely a defense of the right of free speech and that from beginning to end that was all the struggle was about for Chomsky." PUH-LEEAAZE! Chomsky did not write that Faurisson was a Nazi sympathizer whose right to free speech needed to be defended on Voltairean principles. Chomsky wrote that Faurisson seemed to be "a relatively apolitical liberal" who was being smeared by zionists who���for ideological reasons���did not like his "findings." Herman then repeats the lie by claiming that Faurisson's critics were "unable to provide any credible evidence of anti-Semitism or neo-Naziism." Feh!...

Yay! Good Employment News!: The first not-bad news about employment in five months...

Notes: Time to Learn About the Asbestos Cluster������: One of the most mammoth of the many failures of our common law-based legal system has been the extraordinary mess created by asbestos litigation...

Germany on the Eve of the Great Depression: The second saddest book on my bookshelf was published in 1928, by the British publisher Methuen. The book's title was Republican Germany: An Economic and Political Survey. It was written by two British political scientists: H. Quigley and R.T. Clark. In the introduction the authors wrote that they were fortunate because they had a single, central, powerful theme: the coming-to-maturity of the post-World War I German republic...

 

Twenty-Four Yeares Ago (July 24-30, 1995):

Farewell to Treasury

Are All Economic Hypotheses False?

The Bubble of 1929: Evidence from Closed-End Funds

The Marshall Plan: History���s Most Successful Structural Adjustment Program

Have Productivity Levels Converged?: Productivity Growth, Convergence, and Welfare in the Very Long Run

J. P. Morgan and His Money Trust

Equipment Investment and Economic Growth: How Strong Is the Nexus?

The Survival of Noise Traders in Financial Markets

Macroeconomic Policy and Long-Run Growth

The Marshall Plan as a Structural Adjustment Program

Did J. P. Morgan���s Men Add Value?: An Economist���s Perspective on Financial Capitalism

In Defense of Henry Simons��� Standing as a Classical Liberal

December 1992 Economic Outlook: "Memorandum for Transition Macroeconomics Director Lawrence Summers. From: Brad DeLong. Date: December xx, 1992. Subject: Deficit Reduction and the Short-Run Macroeconomic Outlook...

The Size and Incidence of the Losses From Noise Trading

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#highlighted #weblogs

Very nice review of a very good���if very cranky, and ver...

Very nice review of a very good���if very cranky, and very much subject to not-invented-here syndrome���book. I still am unclear about the "three rungs" of Pearl's Ladder, however, largely because I do not think you can talk about causation at all without counterfactuals, except by fooling yourself: Lisa R. Goldberg: Review of Dana Mackenzie and Judea Pearl: The Book of Why: The New Science of Cause and Effect: "Pearl���s work on causal inference is often described as 'influential', and it is especially appreciated by computer scientists, but it is not the only approach...

...Statisticians tend to rely on the Neyman (or Neyman-Rubin) potential outcomes model.... Propensity scores are matched in an attempt to balance inequities between treated and untreated subjects. Since no subject can be both treated and untreated, however, the required estimate of impact can be formulated as a missing value problem.... Many economists favor models by James Heckman, whose concept of ���fixing��� resembles, superficially at least, the do operator that Pearl uses.... It is this reviewer���s opinion that the differences among these approaches to causal inference are far less important than their similarities....

Consider the 2007 study by Nicholas Christakis and James Fowler claiming that obesity is contagious. The claim was controversial because the mechanism of social contagion is hard to pin down, and because the study was observational. In their paper, Christakis and Fowler upgraded an observed association, clusters of obese individuals in a social network, to the assertion that obese individuals cause their friends, and friends of their friends, to become obese. It is difficult to comprehend the complex web of assumptions, arguments and data that comprise this study. It is also difficult to comprehend its nuanced refutations by Russell Lyons and by Cosma Shalizi and Andrew Thomas, which appeared in 2011.

There is a moment of clarity, however,in the commentary by Shalizi and Thomas, when they cite Pearl���s theorem about non-identifiability in particular graphical models. Using Pearl���s results, Shalizi and Thomas show that in the social network that Christakis and Fowler studied, it is impossible to disentangle contagion, the propagation of obesity via friendship, from the shared inclinations that led the friendship to be formed in the first place.

The top rung of the Ladder of Causation concerns counterfactuals, like the one posed by Daniel Kahneman and Amos Tversky in their study of how we explore alternative realities...

#shouldread

A Year Ago on Equitable Growth: Fifteen Worthy Reads On and Off Equitable Growth for July 26, 2018

TOP MUST REMEMBER: What I call 'Bob Rubin's End-of-Meeting Questions'. Ask them! They really work!: Annie Duke: Thinking in Bets: Making Smarter Decisions When You Don't Have All the Facts: "In fact, questioning what you see or hear can get you eaten. For survival-essential skills, type I errors (false positives) were less costly than type II errors (false negatives). In other words, better to be safe than sorry, especially when considering whether to believe that the rustling in the grass is a lion. We didn���t develop a high degree of skepticism when our beliefs were about things we directly experienced, especially when our lives were at stake...

We economists spend a lot of time looking at aggregates and averages���Trevon Logan likes to quote Robert Fogel on how counting is our secret game-changing analytical technique. But it is as important to get thick description of what happens to individual people's lives, so that you know what your aggregate and average numbers mean: Blythe George: ���Them old guys... they knew what to do���: Examining the impact of industry collapse on two tribal reservations: "Using 46 in-depth interviews conducted on the Yurok and Hoopa Valley reservations...

GDP has its place in our national public-sphere conversation because a new number is released roughly once a month���each quarter of the year has its own GDP number, and the Commerce Department's Bureau of Economic Analysis releases "advance", "second", and "third" estimates for each quarter, and then there are benchmarking revisions. To attain an equal place in public-sphere consciousness, the distributional national accounts component would have to appear also once a month. And it is not clear to me how to do that: Equitable Growth: Measuring U.S. economic growth: "The measurement of GDP has fostered a national fixation on 'growing the pie' that ignores how growth is distributed...

Back in the 1990s we in the Clinton administration put Breyer on the Supreme Court in the belief that the Court needed somebody who genuinely understood antitrust. But the Republican justices have given him zero deference, even though he knows the issues and they do not. And this is an increasing problem: Fiona Scott Morton: [There is a lot to fix in U.S. antitrust enforcement today(https://equitablegrowth.org/there-is-...): "Last month���s court decision allowing AT&T Inc. to acquire Time Warner Inc. is an example of the inability of our current system of courts and enforcement.... Judge Richard Leon demonstrated a lack of understanding of the markets, the concept of vertical integration, corporate incentives, and the intellectual exercise of forecasting what the unified firm would do... a poor decision...

It has always seemed to me that the sharp Josh Bivens is engaging in some motivated reasoning here: "[1] Putting pen-to-paper on trade agreements contributed nothing to aggregate job loss in American manufacturing. This is almost certainly true.... [2] The trade agreements we have signed are mostly good policy and have had only very modest regressive downsides for American workers. This is false." How am I supposed to reconcile [1] and [2] here?: Josh Bivens (2017): Brad DeLong is far too lenient on trade policy���s role in generating economic distress for American workers on Brad DeLong (2017): NAFTA and other trade deals have not gutted American manufacturing���period: "I could rant with the best of them about our failure to be a capital-exporting nation financing the industrialization of the world...

It seems highly likely that more money for teachers (and less money for financiers and specialists) would produce a richer and a happier America: Meg Benner, Erin Roth, Stephenie Johnson, and Kate Bahn: How to Give Teachers a $10,000 Raise: "While CAP believes that a new federal investment is necessary to dramatically improve teacher pay, other efforts at the federal, state, and local levels are essential to maximize compensation for all teachers...

I continue to fail to find a single credible competitor in terms of providing the highest quality daily tickler-to-read list than Mark Thoma: Mark Thoma: _Economist's View

At least as true now as it was when Galbraith began saying it half a century ago. John Kenneth Galbraith (1963): Wealth and Poverty: "The modern conservative... not even especially modern...is engaged... in one of man���s oldest, best financed, most applauded, and, on the whole, least successful exercises in moral philosophy. That is the search for a superior moral justification for selfishness...

Perhaps the biggest hole in growth economics is its inability to properly wrestle with the problem of how to build and entertain the communities of engineering practice that have the externalities that fuel so much of economic growth. The 2% per year rate of growth of labor efficiency seen over the past century comes from somewhere, after all. If it comes from activities like R&D and science that together consume 2% of national income, that is a 60%/year net rate of return on such activities. We badly need to understand more about them: Pierre Azoulay, Erica Fuchs, Anna Goldstein, Michael Kearney: Funding Breakthrough Research: Promises and Challenges of the "ARPA Model": "The Advanced Research Projects Agency (ARPA) model for research funding has... spread...

What I call 'Bob Rubin's End-of-Meeting Questions'. Ask them! They really work!: Annie Duke: Thinking in Bets: Making Smarter Decisions When You Don't Have All the Facts: "In fact, questioning what you see or hear can get you eaten. For survival-essential skills, type I errors (false positives) were less costly than type II errors (false negatives). In other words, better to be safe than sorry, especially when considering whether to believe that the rustling in the grass is a lion. We didn���t develop a high degree of skepticism when our beliefs were about things we directly experienced, especially when our lives were at stake...

We really do not know what effect a trade war would have on the global economy. All of our baselines are based off of what has happened in the past, long before the age of highly integrated global value chains. It could be small. It could be big. The real forecast is: we just do not yet know: Dan McCrum: Trade tension and China : "The war on trade started by the Trump administration is percolating through the world's analytical apparatus.... Tariffs could be bad for the global pace of economic activity, but only if the economic warfare escalates...

A very interesting paper. My first reaction is that the effect of salt iodization is just too large���that iodine deficiency in utero is highly unlikely to rob you of 11% of your lifetime income. Thus I suspect that something has gone wrong with the identification. But I cannot figure out what. Great kudos to Nguyen and company for being willing to put this out there for us to look at: Achyuta Adhvaryu, Steven Bednar, Anant Nyshadham, Teresa Molina, Quynh Nguyen: When It Rains It Pours: The Long-run Economic Impacts of Salt Iodization in the United States: "In 1924, The Morton Salt Company began nationwide distribution of iodine-fortified salt...

Nils Gilman: "A largely hereditary elite is anathema to the principles of meritocracy. But this much must be said: an elite that is secure in its prerogatives has a strong incentive to focus on the care and feeding of the system...

Tim Duy: Powell Wants to Create Some Mystery Around Fed Meetings: "A slower or faster pace of rate hikes, an extended pause, or even a��cut are all possibilities at this point...

Yet another nail in the coffin of the idea that watching the lecture in-person can be made optional and education improved: Martin��R.��Edwards and Michael��E.��Clinton: A study exploring the impact of lecture capture availability and lecture capture usage on student attendance and attainment: "Lecture capture is widely used within higher education as a means of recording lecture material for online student viewing...

This, somehow, does not seem like it lies within the scope of economists' comparative advantage. But do psychologists, sociologists, and political scientists do better?: Roland B��nabou, Armin Falk, Jean Tirole: Narratives, Imperatives, and Moral Reasoning: "By downplaying externalities, magnifying the cost of moral behavior, or suggesting not being pivotal, exculpatory narratives...

#equitablegrowth #hoistedfromthearchives #noted #weblogs

Betty Cracker: We���ll Get to ���Votes Were Changed��� Ev...

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...'...

#noted