J. Bradford DeLong's Blog, page 172

There is lots that seems to me to be smart in this piec...

There is lots that seems to me to be smart in this piece by Mervyn King, and a lot that seems to me to be not smart at all. The claim that a second referendum would not work because "it is no longer possible to confine the options, as in 2016, to a binary choice" is simply ludicrous: there was no "binary choice" on offer in 2016; there never was a "binary choice". Britain could seek a relationship like Norway's, like Switzerland's, like Ukraine's, like Turkey's, or like Korea's���or it could just confront the EU as a standard WTO member. The right path, IMHO, is to say that the first referendum result was corrupted by Boris Johnson's criminal or near-criminal misrepresentation and by the absence of a definition of "Brexit", and to rerun the referendum as a binary choice between remain on the one hand and the May plan on the other. And, indeed, Mervyn King's hope for a general election in which the "two main parties... [present] clear opposing positions on Brexit" would be that���if Labour would admit that it prefers remain, and if the Conservatives would get behind the May plan. But neither party will.

The May plan, with the backstop, deprives Britain of its voice in Brussels's decisions and in return gives Britain the power to kick Poles out of the country at will. That is what the Conservative membership wants���probably because what they really want is to kick the Pakistanis out, and gaining the theoretical power to kick Poles out has been sold to them by right-wing neo-fascist demagogues as a good substitute. But the right-wing neo-fascist demagogues objected to the May plan because it put Britain in the position of being a dependent supplicant relative to Brussels���like Canada is to the U.S. What they want is both the power to kick Poles out and the power to veto decisions being made in Brussels���and that is not on offer.

I suspect that what King really wishes���but cannot say, even to himself���is that he really wishes he and his ilk had all supported Blair and Brown rather than Cameron-Osborne-Clegg in 2010, and so had a governing party with competent technocrats who sought a better Britain rather than one populated entirely by grifters and spivs. But he ought to have checked those three dogs for fleas before he lay down with them:

Mervyn King: How Brexit Broke British Politics: "The test of any political system is how it copes with an issue that divides the nation.... There are two requirements for major change in Britain. The first is a public mandate. And the second is a working majority in the House of Commons to implement that mandate. In normal circumstances, a general election is the mechanism by which one party obtains both a public mandate and a majority of seats in the Commons.... In June 2015, the House of Commons voted for a referendum on EU membership.... Voters were told the choice was theirs, and they voted to leave. But there was no parliamentary majority to deliver Brexit, and no vision of what Brexit even meant.... The best way forward would be for the two main parties to develop clear opposing positions on Brexit, and put the disagreement to voters at another general election.... Why not a second referendum?... It is no longer possible to confine the options, as in 2016, to a binary choice on the fundamental issue���in or out...

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The Quarterly Journal of Economics puts its stamp of appr...

The Quarterly Journal of Economics puts its stamp of approval on Cengiz, Dube, Linder, and Zipperer. This makes me even more surprised that the minimum-wage effects wars are till going on. At least for minimum wages near current U.S. levels, there literally is no downside to raising the minimum wage: Arindrajit Dube: On Twitter: "Pleased to announce that our paper quantifying the overall effect of US minimum wages on low-wage jobs is now forthcoming at the Quarterly Journal of Economics...

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Graydon Saunders: Some Assumptions About Cars: "Honda is ...

Graydon Saunders: Some Assumptions About Cars: "Honda is leaving the UK for manufacturing purposes.... Cost scales with parts count, and the drive train parts count in electric drops a couple orders of magnitude.... Honda (and everybody else making cars) is sharply aware of this.... Given current Chinese policy (fairly close to 'electric or death'), the distance from Japan to China, and the fundamental impracticality of shipping anything but Veblen-good luxury vehicles globally in an electric car world, of course Honda is pulling out of Europe. Overall, this is a good thing; that's a good hint we're getting closer to the electric transition for personal vehicles...

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This has become a classic for all wishing to think clearl...

This has become a classic for all wishing to think clearly about progressive income taxation. Note that their conclusions in favor of a high top marginal rate do rest on strong and proper state actions to close loopholes and shut down tax havens:

Thomas Piketty, Emmanuel Saez, and Stefanie Stantcheva (2011): Optimal Taxation of Top Labor Incomes: A Tale of Three Elasticities: "A model where top incomes respond to marginal tax rates through... (1) the standard supply-side channel... the tax avoidance channel, [and] (3) the compensation-bargaining channel through efforts in influencing own-pay setting.... The first elasticity (supply side) is the sole real factor limiting optimal top tax rates. The optimal tax system should be designed to minimize the second elasticity (avoidance) through tax enforcement and tax neutrality... in which case the second elasticity becomes irrelevant. The optimal top tax rate increases with the third elasticity (bargaining) as bargaining efforts are zero-sum in aggregate..... There is a strong correlation between cuts in top tax rates and increases in top 1% income shares since 1975, implying that the overall elasticity is large. But top income share increases have not translated into higher economic growth, consistent with the zero-sum bargaining model. This suggests that the first elasticity is modest in size and that the overall effect comes mostly from the third elasticity. Consequently, socially optimal top tax rates might possibly be much higher than what is commonly assumed...

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Into the Abyss: James David Nicoll on Heinlein's "Starship Troopers": Weekend Reading

Weekend Reading: James David Nicoll: Into the Abyss: "In the spirit of Social Credit leader Camil Samson���s wonderful phrase, 'Ladies and gentlemen, the Union Nationale has brought you to the edge of the abyss. With Social Credit, you will take one step forward', follow me over the edge and into the abyss that is Heinlein���s post-Scribners��work. Scribners rejected 1959���s Starship Troopers, marking the end of what had been a fruitful relationship between the touchy Heinlein and that particular publisher...

...It also foreshadowed the end of his career as an author of books deliberately aimed at young adults. Rereading it, I was reminded of something I was told in Economics 101 way back in 1980: 'don���t try to apply any of this to real��life'.

The book opens as Juan Rico nerves himself to murder alien civilians, ���Skinnies���, as he calls them.Heavily armed and armoured, Rico and his human confederates rampage through the Skinny city, destroying infrastructure and leaving a trail of bodies behind him (including what may be a substantial fraction of the congregation of a church). Weapons used include atomics, although how dirty they are is hard to say. What Rico is doing is no hobbyist spree kill but a sanctioned demonstration of ���firepower and frightfulness,��� what late Wilhelmine Germans once called�����schrecklichkeit���.

The novel then steps back in time to explain how Rico went from being just another one of Heinlein���s incurious teenaged dullards to an enthusiastic war criminal. In the process, it paints an interesting picture of the world Rico lives in, as well as of the contents of Heinlein���s��id.

The Terran Federation is a limited franchise democracy, one where only military1 veterans are allowed to vote.

(1: Heinlein apparently intended or at least convinced himself he intended ���veterans��� to include people whose public service included non-military organizations but there is no textual evidence of this. What I do see are sections like��this: "A term of service isn���t a kiddie camp; it���s either real military service, rough and dangerous even in peacetime��� or a most unreasonable facsimile thereof" and "'Why, the purpose is', he answered, hauling off and hitting me in the knee with a hammer (I kicked him, but not hard), 'to find out what duties you are physically able to perform. But if you came in here in a wheel chair and blind in both eyes and were silly enough to insist on enrolling, they would find something silly enough to match. Counting the fuzz on a caterpillar by touch, maybe. The only way you can fail is by having the psychiatrists decide that you are not able to understand the oath'. 'Oh. Uh ��� Doctor, were you already a doctor when you joined up? Or did they decide you ought to be a doctor and send you to school?' 'Me?��� He seemed shocked. 'Youngster, do I look that silly? I���m a civilian employee'. 'Oh. Sorry, sir'. 'No offense. But military service is for ants'. The doctor clearly sees service as military��service.)

Rico���s family is well-to-do and studiously apolitical, satisfied to be second-class citizens whose only contribution to the state is keeping its economy functioning. Rico���s decision to enlist is a whim; he has never taken much interest in the world around him and certainly has no strong political opinions. Because Rico knows so little about his world to begin with and loves repeating what he is told, Heinlein is able to drop great wodging infodumps about the history of this world into the��text.

While there is an admitted level of risk in military service, most people who sign up serve a term of two years. When Rico takes his oath, he notices that���s not actually what he is pledging to the Federal Service of the Terran Federation. The actual phrasing is ���a term of not less than two years and as much longer as may be required by the needs of the Service������although that last part of the oath would only be applicable if war were��declared.

Humans are not the only entities with starships in this universe and while humans and the Skinnies appear able to coexist, something���we don���t know what, because Rico has the curiosity of a turnip���goes wrong with Bug���human relations, something that becomes painfully obvious when the Bugs ���smear��� Buenos Aires.

(It is a good thing for us neither the Skinnies nor the Bugs happened across the Earth back when humans were running around with black powder weapons or even flint��axes.)

Now Rico is in the Mobile Infantry of the Federal Service for the long haul. Because his mother was visiting Buenos Aires when it was destroyed, Rico is OK with��that.

While Rico does not enjoy training or seeing his comrades killed, he discovers that he is quite suited to life as a soldier. What began as a whim turns into a career that he will stick with for the rest of his��life.

I generally mark the beginning of military science fiction as a coherent sub-genre as somewhere in the 1980s or even the late 1990s. I would classify works like Drake���s Hammers Slammers stories and Haldeman���s The Forever War as ���pre-MilSF���, the way 19th century scientific romances foreshadowed science fiction. Pretty much nobody agrees with me on��that.

Starship Troopers is an interesting case because it contains pretty much every significant characteristic of modern MilSF, from a deep-seated hostility towards unrestricted democracy to an enthusiasm for��atrocities.

As the text itself notes while trying to justify its fictional system, in the real world citizens have been denied the vote on many grounds���class, sex, age, race���and tying the franchise to military service is nothing new and not unique to the US; Canada���s 1917 War-time Elections Act disenfranchised conscientious objectors. The franchise began as the privilege of a few.

(Heinlein was generally pretty steadfastly ignorant about the world outside the US so I am always surprised to see mention of Camp Currie, named for Canadian General Sir Arthur William Currie. The Mobile Infantry basic training facility is fictional and while Currie was an important figure in Canadian history, I wouldn���t expect a foreigner to have ever heard of��him.)

It has with great effort and great sacrifice been slowly extended over time; each extension was accompanied by predictions of doom and subsequent fears that this time the franchise had been extended too far. Heinlein sweeps away those decades of progress with a flourish of his��pen.

Heinlein wrote this screed to limited franchises during the time that the civil rights movement was struggling to end Jim Crow. While he asserts that the Federation is above race prejudice, I wonder how the arguments in favour of limiting the franchise came across in the late 1950s, particularly since Heinlein makes a point of using phrasing that would evoke��it:

The unique ���poll tax��� that we must pay was unheard of.

The book also brings up another controversial notion; ���Lebensraum.��� According to��Heinlein:

All wars arise from population pressure. [���]

Any breed which stops its own increase gets crowded out by breeds which expand. Some human populations did so, in Terran history, and other breeds moved in and engulfed them.

This does not just apply to the human race but to all species. If the humans were to decide to become all ZPG and peaceful, they would be cutting their own��throats:

Soon (about next Wednesday) the Bugs move in, kill off this breed which ���ain���t a gonna study war no more��� and the universe forgets us. Which still may happen. Either we spread and wipe out the Bugs, or they spread and wipe us out���because both races are tough and smart and want the same real estate.

Are there limits to what should be done to find space for one���s descendents? This��passage:

All correct moral rules derive from the instinct to survive; moral behavior is survival behavior above the individual level-as in a father who dies to save his children.

does not make me hopeful that the Federation recognizes any such limits. Neither does the fact that Rico was lobbing atomics into a Skinny��city.

Rico never talks to a Bug so we never get any idea what the Bugs think is going on. Myself, I suspect that the war between human and Bug probably was fated as soon as a Skinny intermediary mentioned to a Bug brain that humans believed things like ���either we spread and wipe out the Bugs, or they spread and wipe us out���. Whatever the Bug proclivities, the Skinnies preferred the Bugs as allies until the humans forced them at gun point to change alleigiance to the human side. Perhaps human opinions such as ���eventually all other races will have to go������ played a role in Skinny��preferences.

When Rico is trying to sign up. he encounters the recruiting frighteners, whose job is to dissuade the unsuitable from signing up. I find myself wondering if the frighteners are equal-opportunity buzz-kills or if they single out certain groups for more focused attention. Women definitely get singled out for special treatment, in the sense that they are subject to service restrictions that prevent them from promotion to Sky Marshall; Sky Marshalls require a broader military background than women are��allowed.

Women do get to be motivationally fridged. There are two examples in this book, Rico���s mom and a baby girl, both killed to provide motivation; Rico���s mother dies so that Rico is very invested in the outcome of the war and the baby dies to support arguments for the death��penalty.

There are hints here and there that while civilians are not subject to the same military code as the soldiers, they still need to watch their step. This bit of dialogue from a��doctor:

but never mind that; you might think I was talking treason, free speech or not.

seems ��� suggestive. As is the assertion by Dubois that humans have no natural rights at��all.

Sadly, while the Federation is officially race-blind, the Chinese don���t seem to benefit from this brotherhood-of-all-mankind theme. One Federation officer is named Wu but generally, when the Chinese are mentioned, it is in comparison to the Bugs, communists whose strength is their faceless hordes. It���s true the Chinese defeated the Western democracies (or forced a stalemate���a defeat and a draw are same thing for manly men who are manly and also men) ��� but the West was morally rotten and falling apart at the time so maybe that should not count fully in the Chinese��favor.

The novel contains an interesting discussion of Sanctuary, an evolutionarily-challenged planet. Because it lacks the radioactive elements Earth was blessed��with:

With its evolutionary progress held down almost to zero by lack of radiation and a consequent most unhealthily low mutation rate, native life forms on Sanctuary just haven���t had a decent chance to evolve and aren���t fit to compete.

Yeah. Heinlein dismisses the local ecosystems with:

Its typical and most highly developed plant life is a very primitive giant fern; its top animal life is a proto-insect which hasn���t even developed��colonies.

I will note that for about the first 90% of its life, Earth wouldn���t have been able to match poor pitiful Sanctuary. In science fiction. biology is the redheaded stepchild that comes to school covered in bruises, a dismissal that is endemic to the��genre.

We get a hint of the angry cane-waving and the endless, endless lectures to come whenever Heinlein drops in an infodump about the effeterocracy that destroyed the West. The secret of civilization isn���t just self-sacrifice for the greater good but also beatings and lots of��them.

���Mr. Dubois,��� a girl blurted out, ���but why? Why didn���t they spank little kids when they needed it and use a good dose of the strap on any older ones who deserved it���the sort of lesson they wouldn���t forget! I mean ones who did things really bad. Why not?���

���I don���t know,��� he had answered grimly, ���except that the time-tested method of instilling social virtue and respect for law in the minds of the young did not appeal to a pre-scientific pseudo-professional class who called themselves ���social workers��� or sometimes ���child psychologists.��� It was too simple for them, apparently, since anybody could do it, using only the patience and firmness needed in training a puppy. I have sometimes wondered if they cherished a vested interest in disorder���but that is unlikely; adults almost always act from conscious ���highest motives��� no matter what their behavior.���

Note the ���a pre-scientific pseudo-professional class.��� This is another Heinlein novel where we are told that there is a science of morality (asserted, but not explained). The book also seems to argue that the rationale for the state doesn���t really matter as long as the state���s continued existence shows that the system works. IMHO, Heinlein is trying to have his cake and eat it too: weapons-grade scienceolium just off-stage and a proof in the form of a fictional society that works because its author willed it��so.

It is probably just as well that Heinlein never fathered children because the more he expounds on how to raise kids, the more I am convinced that it would have been a terrible thing to be Heinlein���s kid. And given what he says about animals, probably not much better to be his��dog.

But Starship Troopersisn���t all mangled biology, war crimes, and interminable hectoring. Heinlein continues a running theme in his previous juveniles by making Rico a Filipino. Possibly because he no longer was answering to Scribners, this not merely strongly suggested but pretty explicit. Ramon Magsaysay is one of Rico���s heroes and while Rico can speak Standard English, the language used around his home is��Tagalog.

Featuring a Filipino as the protagonist of a MilSF novel published in the late 1950s was a bold decision. From around the time of the First World War to the early 1970s, Filipinos could join the US Navy but only as ���culinary specialists���. As a former Navy officer, Heinlein would have been known that.

(There was a short stretch in 1946���1947 when the restriction was��removed.)

Rico���s race did not go unnoticed by persons of colour who encountered the book. In Delany 1977���s The Jewel-Hinged Jaw, SRD says (p. 80 of TJHJ, Berkeley��1977):

Thus Heinlein, in Starship Troopers, by a description of a mirror reflection and the mention of an ancestor���s nationality, in the midst of a strophe on male makeup, generates the data that the first-person narrator, with whom we have been traveling now through two hundred and fifty-odd pages (of a three-hundred-and-fifty-page book) is non-caucasian.

At this time in US history, excessive integrationism was the sort of thing that earned people petrol bombs through the front door, so it���s not inconsequential that Heinlein described Rico as a��Filipino.

There are two main downsides to rereading Starship Troopers. The first is that I will never get back the time I spent reading this damn book. The second, far more serious, is that now I have only the last and worst Heinlein juvenile to look forward to. Cue��lamentations.

#weekendreading #sciencefiction

Unsalted Sinner: @unsaltedsinner: "Sulzberger has said th...

Unsalted Sinner: @unsaltedsinner: "Sulzberger has said that the New York Times doesn't need a public editor anymore, because their readers will use social media to act as a watchdog. And when that watchdog actually shows up...

#noted

May 31, 2019: No Significant Changes: Weekly Forecasting Update

The right response to almost all economic data releases is: Next to nothing has changed with respect to the forecast���your view of the economic forecast today is different from what it was last week, last month, or three months ago in only minor ways. About the only news these past three weeks is an 0.7%-point decrease in our estimate in what production will be over April-June, driven by a reduction in estimated durable goods orders and capacity utilization. This might be an impact o Trump's trade war, plus Trump's attempts to add a trad ar with Mexico to the mix:

Federal Reserve Bank of New York: Nowcasting Report: "May 31, 2019.... The New York Fed Staff Nowcast stands at 1.5% for 2019:Q2. News from this week's data releases increased the nowcast for 2019:Q2 by 0.1 percentage point...

 

Key Points:

Specifically, it is still the case that:

The Trump-McConnell-Ryan tax cut has been a complete failure at boosting the American economy through increased investment in America.

But it has been a success in making the rich richer and thus America more unequal.
And it delivered a short-term demand-side Kerynesian fiscal stimulus to growth that has now ebbed.

U.S. potential economic growth continues to be around 2%/year.
There are still no signs the U.S. has entered that phase of the recovery in which inflation is accelerating.
There are still no signs of interest rate normalization: secular stagnation continues to reign.
There are still no signs the the U.S. is at "overfull employment" in any meaningful sense.

A change from 3 months ago: The U.S. grew at 3.2%/year in the first quarter of 2019���1.6%-points higher than had been nowcast���but the growth number you want to put in your head in assessing the strength of the economy is the 1.6%/year number that had been nowcast. The falling-apart of Trump's trade negotiating strategy with China will harm Americans and may disrupt value chains, and the might be becoming visible in the data flow.

Changes from 1 month ago: Industrial production appears to be falling as new durable goods orders come in below expectations. Industrial production may have peaked last December:

 

A change from 1 week ago: Trump has now added a possible trade war with Mexico to the mix...

Over the past 20 years: United States manufacturers are ordering no more in the way of the nominal value of capital goods than they order two decades ago. Deflators here are very hazardous, but I believe that translates to a zero increase in real orders as well. This is unprecedented for the U.S. economy: nothing like it has happened before:

 

#macro #forecasting #highlighted

Duncan Black: The New York Times Defense Force: "One of t...

Duncan Black: The New York Times Defense Force: "One of the more amusing yet horrifying things is how the New York Times Defense Force springs into action on twitter every time there's some legitimate criticism of something published in that hell 'zine.... It's always that angry unhinged partisans who do NOT UNDERSTAND JOURNALISM are picking on a poor defenseless reporter.... Class privilege is a hell of a thing. No one needs a newsless misleading puff piece about your friend Hope Hicks, Maggie. Literally no one in the country cares except your future book publishers. We get it. It's a beat sweetener. PR in exchange for information for your book.... Why they only respond this way to criticism from The Left is an exercise left for you, dear readers...

#noted

Twitter Thread: Will Wilkinson: @willwilkinson: "IMO, the...

Twitter Thread: Will Wilkinson: @willwilkinson: "IMO, the issue is whether America can EVER evolve an EGALITARIAN shared sense of pluralistic identity, which it's never had. It has ALWAYS had a pluralistic imperial identity, which involves an ethno-nationalist imperial/settler ruling class dominating enslaved/occupied subjects. Imperial/settler ruling classes always propagate narratives of 'unifying' national identity, which legitimates its own cultural/political dominance and casts demands for association on the terms of pluralistic equality as 'divisive' threats to social order...

...manu saadia @trekonomics: Who or what radicalized you Will?

Will Wilkinson @willwilkinson: Honestly? (1) The literature on the epistemic benefits of viewpoint diversity -- evidence that homogeneous groups share blindspots, make systematic correlated errors, and get intra-group feedback that leads them to update in a way that entrenches those errors. (2) Reading enough real history that I could see that what I was taught growing up was extremely distorted, which validated my sense of having been caught in the dynamic in (1). (3) Having a personal identity strongly tied up in the value of objectivity and truth pushed me to (4) actively seek out the best scholars/thinkers most likely to see clearly into my blindspots, (5) assign their views more credibility than those more likely to share them, leading to (6) more good history and receptivity to political theory that accounts for the patterns I could then historical data.

I've noticed that when I come at questions straightforwardly from my more recent (I think more objective and factually grounded) perspective, I get accused (by my blindspot cohort) of seeking some sort of social approval by "signaling" wokeness. Which is funny to me, because I'm a very typical annoying "facts and logic" libertarian white guy type (though maybe atypically philosophical and sincere). Still, it gets to me, really does hurt a little. But that's okay. Because I've come to believe that discomfort over opting out of identity-based circle-jerk confirmation bias is what it feels like to be serious about facts and logic, which don't care my feelings. Thanks for coming to my sermon.

Brad DeLong @delong: SO SAY WE ALL!

manu saadia @trekonomics: I did read the libertarian-conservative vulgate (Burke, Rothbart, Hayek, Rosenbaum etc etc) I found it lacking, except perhaps for Tocqueville. But is Tocqueville part of it anyways?

Will Wilkinson @willwilkinson: No, not really. A vulgar version of "little platoons" and the importance of vital private voluntary associations is canon, but not much else.

manu saadia @trekonomics: wait so I spent all that time uh ah nvm

Brad DeLong: @delong: At least you were in the company of Raymond Aron. Raymond Aron tried to convert post-WWII really-existing-conservatism into Tocquevillism. It was a bold intellectual judo move. It did not succeed, IMHO at least...

Will Wilkinson @willwilkinson: It's ridiculous, but I get it. I mean, I still feel miffed no one ever helped me grasp that the Ivy League is anything but a bad college sports conference. But I also know it's toxically entitled to feel you deserve EVERY advantage just because you were born with most of them.

*Brad DeLong: One possible way of understanding white America from 1925-1975 is the effective-WASPization of those willing to done down the Blarney and the Yiddishkeit���a think the Ivy League was good at teaching people to do. Hence a Scotch-Irish governor's grandson like economist James Buchanan can self-regard as a discriminated-against outsider relative to "Ivy League" Illinois Irishmen like James Tobin and New York Jews like Herman Wouk

#twitterthread #noted

Michael Hiltzik: A Devastating Analysis of the Tax Cut Sh...

Michael Hiltzik: A Devastating Analysis of the Tax Cut Shows It���s Done Virtually No Economic Good: "You may remember all the glowing predictions made for the December 2017 tax cuts by congressional Republicans and the Trump administration: Wages would soar for the rank-and-file, corporate investments would surge, and the cuts would pay for themselves. The nonpartisan Congressional Research Service has just published a deep dive into the economic impact of the cuts in their first year, and emerges from the water with a different picture. The CRS finds that the cuts have had virtually no effect on wages, haven���t contributed to a surge in investment, and haven���t come close to paying for themselves. Nor have they delivered a cut to the average taxpayer...

#noted