J. Bradford DeLong's Blog, page 178

Chris Cook: Defeated by Brexit: Forgetting Our History: Weekend Reading

Weekend Reading: Chris Cook: Defeated by Brexit: Forgetting Our History: "The Brexit negotiations are not really about the UK and 27 other countries. They are about Britain���s long and troubled relationship with Ireland. And while Dublin was prepared for that, it took London completely by surprise.... During the 2016 referendum campaign, John Major and Tony Blair, the former British prime ministers, tried to alert voters to inherent tensions between leaving the EU and preserving the UK���s relationship with Ireland. Their warnings were dismissed as fear-mongering. Ireland attracted almost no attention, but it would be the central pivot on which Brexit would turn. None of this was clear on the morning after the referendum. But nothing was. The prime minister, David Cameron, was preparing to announce his resignation. The people had voted against EU membership, but not for anything to replace it. For new leadership the government would have to wait for the Conservatives to choose a new leader...

...Whitehall has a clear ethos: it works for the government of the day, whoever that is. It does work ministers want, and ministers did not want to prepare for a Leave vote. ���The instruction was clear,��� one official said. ���Don���t do any preparation.��� It was a political decision, but one that Sir Jeremy Heywood, the cabinet secretary and head of the civil service, supported. As another senior official put it: ���Our contingency for losing was not losing.��� Heywood later told a committee of MPs: ���We did, of course��� in that last 28 days, look at what was being said by people advocating Leave and try to understand what were the issues that were likely to immediately arise on 24 June in that case.��� He said some serious and valuable thinking had been done, but admitted: ���I do not call that contingency planning, because it was not a plan.��� He had set up a ���referendum unit��� but its role was to steamroller through a campaign win.

There was some internal dissent: at a 2016 away-day in Brussels, Sir Nicholas Macpherson, then permanent secretary at the Treasury, proposed officials should work on contingencies. He was supported by Sir Ivan Rogers, then the so-called Permanent Representative to the EU, Britain���s top official in Brussels. The request was rejected: one person at the meeting said Heywood batted the proposal away. He was ���obsessed with getting the Department for Transport to show that you had to vote Remain otherwise you won���t be able to fly���. When the referendum resulted in a Leave vote, the political establishment lost its bearings. Chaos was not too strong a word, and it deepened as senior Conservatives fought for the party leadership.

Michael Gove and Boris Johnson helped to turn the leadership election into a circular firing squad
Only three weeks after the referendum and a Conservative leadership contest that quickly turned into a circular firing squad, Theresa May took her place in Downing Street���with very little understanding of Europe. The Leave victory, by 52 per cent to 48, promised to change Britain���s understanding of itself.

It promised almost as big a challenge for Ireland, but unlike Britain, Ireland had prepared. Before the Brexit referendum in 2016, the Irish Department of Foreign Affairs and the Department of the Taoiseach had been working on Brexit strategies for two years. Two British officials working on European policy in 2015 and early 2016 told me similar stories of being cornered at European events by Irish officials who wanted answers about what would happen in the event of a Leave vote.

British civil servants could see that preparation for Leave���banned in London���was happening in Dublin. Their Irish counterparts could produce documents and briefings immediately after the vote Miche��l Martin, leader of Fianna F��il, Ireland���s second-largest party, said there was a clear view on the morning of the result: ���There was an overarching sense of ���This is bad news���. This fundamentally alters our relationship that has been ongoing now for 50 years. And it fundamentally undermines the economic model that we have been working under that five decades.��� More than that, Brexit might affect the peace process���the delicate negotiation between the communities of Northern Ireland in which the British and Irish states have long been immersed.

A central failure of the UK state before the 2016 referendum had been to assume that the vote would inevitably be won by Remain. Martin, a former foreign minister, said that when meeting British politicians before 2016, they seemed very unworried: ���I was struck at the naivety with which Britain entered the referendum itself������ Macpherson, now Lord Macpherson, told me: ���Britain tends to think everything will work out okay.��� Ireland, though, is ���a serious country that has just been through a [financial] crisis. They plan for the worst. They know things don���t always turn out for the best.���

For the UK, leaving the EU would raise a large number of connected problems, which joining its predecessor organisation, back in 1973, had been intended to solve. When Harold Macmillan, the patrician Tory prime minister, first applied to join the European Communities in 1961 the old Britain was dying. The Suez fiasco of 1956, when Britain failed in its attempt, with Israel and France, to wrest back control of the canal after Egypt nationalised it, confirmed its relegation from superpower to regional player. Selwyn Lloyd, the Foreign Secretary, wrote to Macmillan in late 1959: ���We ceased to be on an equal basis with the United States and USSR when we gave up the Indian Empire [in 1947]. We have been in retreat since. We have or have had a number of albatrosses about us������

In 1960, Macmillan spoke in Johannesburg: ���The wind of change is blowing through this continent, and whether we like it or not, this growth of national consciousness is a political fact. We must all accept it as a fact, and our national policies must take account of it.��� The message heard in New Zealand and Australia, as well as by the white populations of Rhodesia, South Africa and Kenya, that the UK would no longer promote the old hierarchies of imperial power. By the 1970s Britain���s place in the world was changing, and its military forces had been withdrawn from east of Aden. Its key strategic outlets were the British Army in Germany, its submarines in the Atlantic and the defence of the UK itself.

British troops withdraw from Yemen in 1967. By the 1970s, Britain's place in the world had changed
Dean Acheson, the former US secretary of state famously quipped in 1962 that ���Great Britain has lost an empire and not found a role���. It is worth noting the sentences that followed: ���The attempt to play a separate power role���that is, a role apart from Europe, a role based on a ���special relationship��� with the United States, a role based on being the head of a ���Commonwealth��� which has no political structure, or unity, or strength and enjoys a fragile and precarious economic relationship������that role is about played out.���

The truth is that Britain had become a European power, not a global one. But even on its own continent it was struggling to impose itself. Privately Macmillan mulled Britain���s options as he saw them. He was coming to believe that there was no choice but to sign up to a new body���the European Communities of six European nations, forged a few years before. This Common Market comprised Germany, France, Italy, the Netherlands, Belgium and Luxembourg. In 1960 he wrote in his diary: ���Shall we be caught between a hostile (or at least less and less friendly) America and a boastful, powerful ���Empire of Charlemagne��� ��� now under French but later bound to come under German control. Is this the real reason for ���joining the Common Market��� (if we are acceptable)������

Britain had sought to build an alternative to joining ���the Six������a rival body, the European Free Trade Association (Efta), which came into being in 1960. Efta involved less integration and Britain was more comfortable with that. But its members were mostly minnows. It was clear from the start that the new European Communities would be the dominant power on the continent. It was also clear that Britain needed access to European markets. In the 1950s, Britain was stagnating. The economic miracles of mainland Europe were not being replicated at home. Not being in the EC actually created an extra economic problem. The Treaty of Rome reduced barriers among its members, but also raised tariffs against the UK.

There were problems with joining the EC. Britain���s way of subsidising farms would need reform and if Britain adopted the EC���s pan-European trade policy, it would mean treating old Commonwealth countries such as New Zealand like anyone else in the world. But if Britain���s future lay within the European continent, it made sense to be part of the dominant geopolitical and economic structure���not Efta, the weak rival. So, after years of prevaricating, Britain applied to become the Seventh of the Six. Yes, it meant looser ties with the Commonwealth. So be it.

The decision to leave the EU echoed some of these arguments of the 1960s and 1970s. Some Brexiters wanted to reconnect Britain to the Commonwealth. For others, sovereignty was the main reason for departing. Hugh Gaitskell, the Labour leader, had argued when Britain was applying: ���It does mean, if this is the idea, the end of Britain as an independent European state. I make no apology for repeating it. It means the end of a thousand years of history.��� There were echoes of that in 2016. When Britain voted to leave a bigger issue ��� immigration ��� coursed through the debate. The EU is built around the ���four freedoms��� of its so-called single market: free movement of capital, of goods, of services and of people. Political integration, above all, means the right to live and work anywhere in the union.

When eight central European nations joined the EU in 2004, this became a political challenge in the UK: the median income of a household in Poland in 2009 was ���5,090, compared with ���16,266 in the UK. Unlike other older EU states, the UK imposed no ���transitional controls��� on inward EU migration���so it saw a significant population shift. Combined with wage restraint and austerity, an anti-immigration message did well. The Vote Leave referendum leaflets stated (wrongly) that Turkey was about to join the EU. They obliquely hinted that Iraq and Syria might follow. The anti-immigrant message was drummed home. As Dominic Cummings, Vote Leave���s campaign director put it: ���Every week is Turkey week.��� The morning after the vote in June 2016, the UK had the same strategic problems as Macmillan faced. If anything, they were more acute. The UK is surrounded by the EU. EU members lie to its west and north, and the union spreads out to Russia in the east.

The economic case was starker, too. The so-called ���gravity��� theory means countries tend to trade more with bigger economies, but also with people nearer to them. To some extent, this is obvious���you cannot easily ship, for example, live animals thousands of miles, so people buy those nearby. But even today, as the internet and containerisation of goods have made trade in non-perishables easier than ever, the world economy has a stubborn bias to buying local. That is why economists in government���notably the Treasury and Business department���have long fixated on reducing the cost of doing business in Europe, in particular.��If you are certain Europe will always be a key market, chipping away at costs of cross-border transactions in the EU is a coherent strategy.

That is why the development of the EU has been in the direction of harmonisation: in addition to getting rid of customs barriers to trade between its members, the union has adopted common regulation so that companies know goods made for the British market can be sold freely in France. This has eroded the need for regulatory checks on products moving between member states. This is how Britain has won foreign investment. Companies based in the UK could access the whole European single market in goods, while benefiting from loose British labour laws. Furthermore, since companies know that goods will face neither tariffs, regulatory hurdles nor delays at national borders, they have built enormously complex webs of suppliers spanning member states. Car-makers can build engines in one country, the bodies in another and assemble the final product yet somewhere else.

The EU���s integration and harmonisation has also been good for Britain���s real current specialism���services. Data on services exports is poor quality, but they make up much of the UK economy. The single market in services is uneven, to the point that a lot of British eurosceptics question its existence. But there are places where it clearly does���and where the UK is enormously reliant on it: banks, for example, based in London need not set up wholly separately capitalised stand-alone institutions in other EU states. They can ���passport��� their services in. According to a report produced in 2019 by Northern Irish civil servants, the value of EU membership is particularly high in a number of services sectors. Their estimate is that leaving the single market and returning to life as a non-member���a so-called third country���will be hard. With no special arrangements, the effect will be equivalent to heavy tariffs on services trade.

The truth is, though, that the EU was not just a vehicle for the UK���s strategic and economic interests. It was a convenient vehicle for continental co-operation. The EU, which has a commitment to ���ever closer union��� as its core value, cheerfully took on ever more work. The UK���s secret negotiating plan prepared for the first round of full talks on Brexit showed the sprawling manner in which the EU had become the vehicle for a range of tasks. One strand was devoted to OSIs (pronounced ���oh-zees���), other separation issues.

These included:

the fate of the British territory in Cyprus;
the future of EU agencies based in the UK;
the legal status of UK and EU goods placed in each other���s markets before Brexit that remain unsold after Brexit;
how you stop courts in the UK and EU taking on the same cases, how you deal with pending court cases, how you deal with legal privileges;
how you deal with fissile material movement;
what to do with EU assets in the UK.

There were also questions on Gibraltar, the Channel Islands, the Isle of Man and���of all things���the Caribbean island of Anguilla, which relies on Dutch and French territories as its link to the wider world.

All these questions had to be answered and Britain had yet to work out how it would manage its relationship with Ireland.

Westminster brims with people who can tell you the minutiae of American congressional special election races. But you would be lucky to find members of the British political elite who could pick ��amon de Valera out of a line-up, name the major Irish parties or know what a TD is. British politicians get the name of the country wrong as a matter of course.

This lack of interest is not symmetrical. Ronan Fanning, the late Irish historian, wrote in 1984: ���The great divide in Irish politics had always been between those who supported and those who opposed the British connection.��� The littler state has always had to pay more attention to its bigger neighbour. So it was in 2016. At a meeting of Irish party leaders in Dublin the day after the referendum, a consensus emerged quickly. Miche��l Martin said they knew this was ���about [all] the people on the island, and we can���t play politics with it���. The next week, in the D��il, he said: ���We all need to be wearing the same jersey.���

The strength of this consensus should have been spotted in London, but London wasn���t watching. In 1991 the Republic marked the 75th anniversary of the Easter Rising, a bloody revolt that��led to Irish independence. At the time there was fear about doing too much. Was it possible to mark the revolutionary acts of the founders of Ireland without seeming to support the brutal murderers of the Provisional ira? That year republican terrorists killed 50 people.

But by 2016, at the centenary, there had been a transformation. Ireland felt able to separate 1916 from the Troubles. The violence was in the past. The critical date to explain the difference is 1998, the year of the so-called Good Friday Agreement. For most Britons, this was something that happened abroad. For Ireland, it provided answers to the British Question.

The agreement created a power-sharing politics in Northern Ireland. It also acknowledged there were two Irish political traditions: broadly, the Catholic and Protestant populations on the island. The Irish amended their constitution, dropping a claim on the northern counties in favour of softer language: ���It is the firm will of the Irish nation, in harmony and friendship, to unite all the people who share the territory of the island of Ireland, in all the diversity of their identities and traditions, recognising that a united Ireland shall be brought about only by peaceful means with the consent of a majority of the people, democratically expressed, in both jurisdictions in the island.��� As per its legal requirements, this was passed in a referendum, overwhelmingly by 94 per cent to 6. Ireland acknowledged the legitimacy of Northern Ireland and, at the same time, set out a path to unity.

Europe provided the scaffolding for this moment. Irish nationalists on both sides of the border could live in a world where Ireland was divided, but felt more like a single place. This is where the EU came in. It was not ���in the room��� when peace was concluded, but it built the foundations by removing the need for a border.��Most border checks melted away because the UK and Ireland were both members of the EU. It is hard to believe that Ireland could have got to a place where a borderless island was possible without coming from a process run by Europe. Martin says: ���Europe almost silently facilitated convergence on the island around standards, regulatory frameworks, compliance��� So the UK signed up to a EU directive, so did Ireland. And that EU directive is now in the north and south of Ireland.���

By the end of the 1940s there was no question of Ireland���s sovereignty ��� the UK and Ireland had been through a trade war, Ireland had stayed out of the second world war, the British monarch no longer had a role in Ireland, there was no governor-general, there were no oaths of allegiance. But there is more to the Irish attachment to Europe than the peace. To British people, the EU has felt like an encumbrance. It joined Europe during relative decline; no sooner had the sun set on the empire than Britain was seeking entry to the European club. By contrast, the Irish experience has been one of liberation. It is not just that Ireland got new roads built out of EU funds, as is commonly joked in Britain. It is that Ireland had been stuck in economic stagnation before it joined, too close to a struggling Britain.

Its subsequent growth was astonishing. But that is not all: there is dignity for Ireland in Europe. The EU is an enormous amplifier of the voice of little countries. There are quid pro quos, of course. Ireland is expected not to throw its vetoes around too much. But a country that worried about its position on the outer edges of Europe was now embedded in its heart. Facing Brexit, the Irish state had prepared which gave it a headstart���but Ireland���s far greater advantage is that there was a solid political consensus.

There was, rapidly, a clear, single view. It boiled down to this:

Ireland has come up with solutions about how to deal with the border with and the future status of Northern Ireland. It would not let them be harmed.
Ireland is an EU member state. Membership is non-negotiable. There are no scenarios where Ireland chooses Britain over Europe.

Martin said: ���There is common ground on the Good Friday Agreement, there always had been���and in terms of the broader trading relationship and the need to have a soft Brexit and in the end of the realisation about what Brexit will do to Ireland.��� There was such a clear consensus that Irish citizens appearing on media in other countries could ring up Irish embassies for briefings. When I told one senior official at the British Foreign Office about this, they were astonished. ���But that���s cheating.��� Brexit crashed into the long arc of Irish history, and far too few in Britain saw it coming...

#weekendreDSING

The Gap asked researchers to quantify the benefits from o...

The Gap asked researchers to quantify the benefits from offering its employees more regular schedules. The benefits are substantial:

Alix Gould-Wirth: Retail workers' Unpredictable Schedules Affect Sleep Quality:: "Retail outlets of The Gap, Inc.... surprising connections between retail workers��� schedules and their sleep patterns.... Joan C. Williams... Susan Lambert... and Saravanan Kesavan.... A novel, multicomponent intervention.... Randomly assigned 19 stores to a treatment group to implement the intervention and nine stores to a control group that did not implement the intervention...

...The Gap was so committed to increasing the amount of notice workers had of its scheduled shifts that the company extended two components that were originally planned to be part of the intervention���two-weeks advance notice and the elimination of on-call shifts���to all of its workers in North America prior to the beginning of the experiment. So, this experiment tells policymakers and businesses alike how the multicomponent intervention affects workers��� lives beyond advance notice alone..... The intervention made a substantively (and statistically) significant impact on the sleep quality of workers...

#noted

Adam Tooze: Democracy and Its Discontents: Weekend Reading

Weekend Reading: Adam Tooze is correct when he writes that "across the American political spectrum, if there is agreement on anything, it is on the need for a firmer line against China". The bombs-and-bullets people, the geopolitics people, and the blame-somebody-else people are all agreed. The U.S. needs to do something to strengthen its relative position, and that means it needs to start doing something to China.

But that would be going about it the wrong way. Thinking that the right way to do something is to do something to China is a very bad way to think. The U.S. could still forge a 21st century condominium with China. But all those necessary and needed pieces of action require that the U.S. look and act inwardly, not outwardly:

Adam Tooze: Democracy and Its Discontents: Runciman: "Rather than raging against the dying of the light, Runciman['s How Democracy Ends], like Spengler and Koj��ve, invites us to adopt a stance of disillusioned realism. If we can see the decline of democratic polities all around us and can diagnose the multiple causes of their eventual demise, that does not excuse us from the responsibility to make them work until the bitter end...

...Democracy has long been the benchmark of Westernization. Talk of a crisis in democracy has relevance precisely because the rise of the Chinese economy under Communist Party leadership puts that benchmark in question.... The most pressing questio.... Assuming current trends continue, will America accept its relative decline with equanimity?...

The concern must surely be that Runciman���s vision of a passive America is in fact overly optimistic. In a perspicacious Op-Ed, Larry Summers recently asked, ���Can the US imagine a global system in 2050 in which its economy is half the size of the world���s largest? Even if we can imagine it, could a political leader acknowledge that reality in a way that permits negotiation over what such a world would look like?��� Trump has responded to that question in his characteristic belligerent and petulant manner, launching an ill-conceived trade war. But... across the American political spectrum, if there is agreement on anything, it is on the need for a firmer line against China.

Rather than the stoical acceptance of a new reality suggested by Runciman���s scenario, is not the more likely outcome a reconfiguration of American democracy like the one that occurred in the 1930s and 1940s, when the executive branch was given unprecedented power to confront external foes? The risks in a confrontation with Nazi Germany and the Soviet Union were enormous. By comparison, our troubles with Putin���s Russia are trivial. The perils of a new cold war with China will not be...

#weekendreading #fascism #orangehairedbaboons #politicaleconomy #politics

Adam Tooze: Democracy and Its Discontents: Weekend Reading

Weekend Reading: Adam Tooze: Democracy and Its Discontent: Levitsky and Ziblatt: "Levitsky and Ziblatt['s How Democracies Die has]... a sobering message: 'American democracy is not as exceptional as we sometimes believe. There���s nothing in our Constitution or our culture to immunize us against democratic breakdown'.... The restoration of democratic norms requires building a new consensus. Levitsky and Ziblatt cite the example of Chile.... Augusto Pinochet... was overcome by a new culture of bipartisan cooperation in the so-called Democratic Concertation. In the US today, the problem lies first and foremost with the GOP. It has repeatedly behaved like an anti-systemic party that does not consider itself bound by common democratic norms... Levitsky and Ziblatt point to... Konrad Adenauer���s CDU.... But what relevance does it have to American politics? Can one seriously imagine anyone in the GOP taking lessons from Angela Merkel and her counterparts?... Levitsky and Ziblatt are strikingly naive when it comes to power...

...The overthrow of Chilean democracy in 1973 was not merely a deterioration into extreme partisanship. It was a violent clash over fundamental social and economic reforms... In Germany... it took the absolute defeat of Hitler���s regime.... Their limited, case-by-case comparative approach and their focus on national political institutions and cultures leave such questions of international politics to one side and offer no basis on which to consider the connection between cold war and post���cold war geopolitics and the trajectory of modern democracy...

#weekendreading #fascism #orangehairedbaboons #politicaleconomy #politics

Fairly Recently: Must- and Should-Reads, and Writings... (May 19, 2019)

May 17, 2019: Weekly Forecasting Update

The U.S. Economic Outlook as of May 16, 2019

Hoisted From the Archives: "Attempts to Make Sense Out of Right Wing Austrian Economics Can Never Amount to Anything"���rootlesse_

For the Weekend: Caro Emerald: Tangled Up

Weekend Reading: John Maynard Keynes (1926): The End of His ""The End of Laissez-Faire":

Weekend Reading: The Downfall of Mother Bank

Comment of the Day: Howard: "I must be missing something: I don't see this as a 'reach for yield' phenomena. I see this as a reach for 10x returns, and I don't think low interest rates have much to do with the willingness of people (well, high net-worth individuals and their VC and hedge fund managers) to take a shot at a 10x return. I continue to see low interest rates as the market's way of telling us we need public investment, badly...

Comment of the Day: JEC: "I'd just add a note to lament the five decades of empirical research into the actual formation and behavioral consequences of expectations that didn't happen, thanks to the Rational Expectations Revolution in macro. We'll never get those squandered years back...

Comment of the Day: JEC: "Against my better judgment, I find that I must demand, in the strongest possible terms, that you kids withdraw forthwith from my lawn...

Yes, Some People at the Ludwig von Mises Institute Think Churchill Was a War Criminal for Not Making Peace with Hitler in May 1940. Why Do You Ask?

Ernst H. Kantorowicz: The Fundamental Issue: Documents and Marginal Notes on the University of California Loyalty Oath

Robin Harris: The Bastards Say, Welcome: "The most famous computer ad that never ran was created for Data General.... After IBM announced the Series/1.... DG marketing came up with a rough draft of a 2-page ad: 'They Say IBM���s Entry Into Minicomputers Will Legitimize The Market. The Bastards Say, Welcome'...

Muriel Dal-Pont Legrand and Harald Hagemann: Business Cycles in Juglar and Schumpeter����: "One important difference is that for Schumpeter the classical business cycle is driven by technological innovations of medium size, whereas for Juglar the cause for an overheated boom is speculation fuelled by easy credit...

Lucius Mestrius Plutarchus: Life of Tiberius Gracchus

DS100: Principles and Techniques of Data Science

Erik Wade: St. Bride's Day Massacre : "We had to kill the Vikings, because they bathed and brushed their hair and our wives couldn't resist such sophistication" is a HELL of a take by medieval English chroniclers: 'One thirteenth-century chronicle attributed a slaughter of Danes by Anglo-Saxons in 1002 to the former's irresistibility to the latter's spouses: "The Danes made themselves too acceptable to English women by their elegant manners and their care of their person. They combed their hair daily, according to the custom of their country, and took a bath every Saturday, and even changed their clothes frequently, and improved the beauty of their bodies with many such trifles, by which means they undermined the chastity of wives...

Sam Lau, Joey Gonzalez, and Deb Nolan: Principles and Techniques of Data Science

Lyall Taylor: The LT3000 Blog: Uber, Delusion, and Ride-Hailing's Structural Economic Inefficiency: "NYC and Silicon Valley based investors forget that the majority of the world doesn't live in these areas.... Every time I go back to New Zealand to spend time with my parents [I see] that private vehicle ownership isn't going to cease any time soon. Commuting with one's own car is cheap, reliable, fast, and comfortable. Why wait around for an expensive Uber when you can just whip yourself down the road to the local store or restaurant in 5 minutes, and park for free outside on the road or in designated parking areas outside?...

AlphaChat: Kimberly Clausing Makes the Case for Open Economies

Lumen Learning: The Bank War

James A.Kahn and Robert W.Rich: _Trend Productivity Growth: "Through 2019Q1... with probability 0.93 productivity remains in a low-growth (1.33% annual rate) regime.... Productivity growth in 2019Q1 in the nonfarm business sector was 3.6% (annual rate), the highest rate in more than four years...

I missed this when it came out three years ago: Melany De La Cruz-Viesca, Zhenxiang Chen, Paul M. Ong, Darrick Hamilton, and William A. Darity Jr.: The Color of Wealth in Los Angeles

The full text is online. Go read it!: Heather Boushey, Ryan Nunn, and Jay Shambaugh: Recession Ready: Fiscal Policies to Stabilize the American Economy

George A. Akerlof et al.: Exhibit A: "George A. Akerlof, Professor Susan Dynarski... and Professor Janet L. Yellen... regularly use and teach statistical analytical methods.... Amici have a wide range of views about the appropriateness of using race as a factor in college admissions. However, they share the view that Dr. Card is one of the most outstanding and respected scholars in the field of econometrics and applied economics, that his statistical analyses in this case were methodologically sound, and that the criticisms of his modeling approach in the Brief of Economists as Amici Curiae in Support of Plaintiff, Dkt. 450 ('Plaintiff���s Amici Br.'), are not based on sound statistical principles or practices...

Jacob T. Levy: "Somehow this article never asks whether... maybe our experience with a president whose qualifications were 'playing a rich person on TV' and 'shouting on twitter' has some important lessons...

Boing-Boing: Nebula Awards: "The Ray Bradbury Award for Outstanding Dramatic Presentation: Spider-Man: Into the Spider-Verse (Screenplay by Phil Lord and Rodney Rothman)...

Leah McElrath: @leahmcelrath: "//begin sarcasm font// It���s absolutely totally okay to have no idea how many children our government has stolen from their parents. Just business as usual. //end sarcasm font// This is what we���re accepting now...

Michael Bennet: Why We Need a Public Health Insurance Option: "I Got Lucky With My Cancer Treatment, But Many Americans Go Bankrupt. That's Why We Need a Public Option...

A nice instantiation of our WCEG's monthly summary of JOLTS. I would, however, quibble with the authors' claim that workers are now "confident". Yes, they are quitting at a much higher rate than they dared to do in the early years of this decade. But I remember 1998-2000: That was a confident labor market! How old were these authors in 1999, anyway? :-): Kate Bahn and Will McGrew: JOLTS Day Graphs: March 2019 Report Edition - Equitable Growth: "The quits rate held steady at 2.3% for the 10th month in a row, reflecting a steady labor market where workers are confident leaving their jobs to find new opportunities...

David H. Autor: Work of the Past, Work of the Future: "Urban non-college workers currently perform substantially less skilled work than in prior decades..... Automation and international trade... have eliminated the bulk of non-college production, administrative support, and clerical jobs, yielding a disproportionate polarization of urban labor markets... by: (1) shunting non-college workers out of specialized middle-skill occupations into low-wage occupations that require only generic skills; (2) diminishing the set of non-college workers that hold middle-skill jobs in high-wage cities; and (3) attenuating, to a startling degree, the steep urban wage premium for non-college workers that prevailed in earlier decades. Changes in the nature of work���many of which are technological in origin���have been more disruptive and less beneficial for non-college than college workers...

I second this: The modern internet offers so much free ice cream that it is hard to justify paying for it. But IMHO Tressie Mcmillan Cottom is definitely worth it. For example, lead her on Lower Ed���on the predatory for-profit college grift: Juliane Stockman: @JulianeStockman: "If you haven't subscribed to @tressiemcphd https://thefirstand15th.substack.com, you need to.... I'm gonna have to journal about this months' essay. Hell, I'm probably gonna take it into therapy to process it. It packs a wallop...

Picking winners���seeing which are the industries in which subsidizing efficient producers will produce large externalities via the creation of communities of engineering practice���has never been that difficult. It has been actually winning that is difficult: creating the institutional and political-economic discipline so that the subsidies flow where they should, rather than where the politically powerful wish them to flow. What is nice about Cherif and Hasanov is that they show where and have some good suggestions as to how to make this more general than it has been: Andrew Batson: Rediscovering the Importance of Export Discipline: "The new IMF working paper on industrial policy, by Reda Cherif and Fuad Hasanov, has gotten a lot of notice, and indeed it is very clear, comprehensive, and useful. But for anyone who has already done some reading on the history of successful Asian economies, particularly Taiwan and South Korea, it is not exactly surprising.... Brad DeLong���s 2010 book with Stephen Cohen, The End of Influence: 'Americans like to say scornfully that industrial policy is about ���governments picking winners.��� Picking winner industries is not that hard���even for governments...

I have been waiting for this for a while: it's very good. David R. Howell and Arne L. Kalleberg: Declining Job Quality in the United States: Explanations and Evidence: "We group... explanations... into three broad visions... the competitive market model, in which supply and demand for worker skills in competitive external labor markets generates a single market wage by skill group... contested market models, in which... firms typically have substantial bargaining (monopsony) power; and social-institutional models, which... place greater emphasis on the public policies, formal and informal institutions, and the dynamics of workplace cultures and conflict.... The supply-demand explanation, which has focused on evidence of occupational employment polarization (driven by skill-biased production technologies) and the rise in the college-wage premium.... We conclude by summarizing policy recommendations that follow from each of these visions...

Lemin Wu (2015): If Not Malthusian, Then Why?: A Darwinian Explanation of the Malthusian Trap: "the Malthusian mechanism alone cannot explain the pre-industrial stagnation.... Improvement in luxury technology... would have kept living standards growing...

Martin Wolf: ���Global Britain��� is an Illusion Because Distance Has Not Died: "Why has distance not died and the world not become flat?... The nature of trade has changed and, in particular, it has become more control-intensive and time-dependent.... Regional trade arrangements also matter... because procedures tend to be far more reliable and efficient.... Regulatory and procedural harmonisation... was the price of integration.... There are only two possible explanations for the immense bias towards trade with the EU: either the preferential advantages of being within the EU are very large or the vital fact is that these are neighbours. Either way, the idea that there is a global alternative... is a delusion. It is the biggest of the many Brexit delusions...

Thomas Blanchet, Lucas Chancel, and Amory Gethin: Forty Years of Inequality in Europe: "Despite the growing importance of inequalities in policy debates, it is still difficult to compare inequality levels across European countries and to tell how European growth has been shared across income groups. This column draws on new evidence combining surveys, tax data, and national accounts to document a rise in income inequality in most European countries between 1980 and 2017. It finds that income disparities on the old continent have increased less than in the US and shows that this is essentially due to ���predistribution��� policies...

Wikipedia: Alexei Kosygin: "Kosygin told his son-in-law Mikhail Gvishiani, an NKVD officer, of the accusations leveled against his co-worker Nikolai Voznesensky, then Chairman of the State Planning Committee (in office 1942-1949) and a First Deputy Premier (in office 1941-1946), because of his possession of firearms. Gvishiani and Kosygin threw all their weapons into a lake and searched both their own houses for any listening devices. They found one at Kosygin's house, but it might have been installed to spy on Marshal Georgy Zhukov, who had lived there before him. According to his memoirs, Kosygin never left his home without reminding his wife what to do if he did not return from work. After living two years in constant fear, the family reached the conclusion[when?] that Stalin would not harm them...

I concur with Duncan Black here: Duncan Black: Jeffrey Goldberg: "The post-9/11 era was... really it's impossible to explain it to people who didn't live through it. And it was about a 5 year period, not a few weeks. It also made the careers of people who are still with us now. The wronger they were the more successful they have been! Such is The Discourse. The Atlantic is a bad magazine run by a bad person who occasionally runs good things by good people in order to cover for the fact that it is a bad magazine. My "favorite" post-9/11 nonsense was in the greatest of magazines, the New Yorker, which is known for its attention to detail and truth and its fact checking and the amount of shrooms someone must have eaten to have written this...

Wikipedia: Five Suns

Wikipedia: Valley of Mexico

Wikipedia: Valle de Bravo: "6000 feet...

The Pioneer Woman: Hard Sauce

Genius Kitchen: Persimmon Pudding Recipe

Tarte Tatin with Calvados Cream

Caro Emerald

75 Top Economics Influencers

#noted #weblogs

John Maynard Keynes (1926): The End of His ""The End of Laissez-Faire": Weekend Reading

Weekend Reading: John Maynard Keynes (1926): The end of his "The End of Laissez-Faire": "These reflections have been directed towards possible improvements in the technique of modern capitalism.... There is nothing in them which is seriously incompatible with... the essential characteristic... the dependence upon an intense appeal to... money-making and money-loving instincts.... I may do well to remind you... that the fiercest contests and the most deeply felt divisions of opinion are likely to be waged in the coming years... round... questions... psychological or, perhaps, moral...

...In Europe... there is a latent reaction... against basing society to the extent that we do upon fostering, encouraging, and protecting the money-motives.... Different persons... ind the money-motive playing a large or a small part... historians can tell us about other phases of social organisation in which this motive has played a much smaller part.... Most religions and most philosophies deprecate, to say the least of it, a way of life mainly influenced by considerations of personal money profit. On the other hand, most men today reject ascetic notions and do not doubt the real advantages of wealth... [and] it seems obvious to them that one cannot do without the money-motive, and that, apart from certain admitted abuses, it does its job well....

Confusion of thought and feeling leads to confusion of speech. Many... objecting to capitalism as a way of life, argue as though they were objecting to it on the ground of its inefficiency.... Devotees of capitalism... reject reforms... which might really strengthen and preserve it, for fear that they may prove to be first steps away from capitalism itself. Nevertheless, a time may be coming when we shall get clearer than at present... [what] we are talking about....

For my part I think that capitalism, wisely managed, can probably be made more efficient for attaining economic ends than any alternative system yet in sight, but that in itself it is in many ways extremely objectionable. Our problem is to work out a social organisation which shall be as efficient as possible without offending our notions of a satisfactory way of life.

The next step forward must come... from... an effort of the mind to elucidate our own feelings.... Reformers will not be successful until they can steadily pursue a clear and definite object with their intellects and their feelings in tune.... Material poverty provides the incentive to change... where there is very little margin for experiments. Material prosperity removes the incentive just when it might be safe to take a chance. Europe lacks the means, America the will, to make a move...

#equitablegrowth #moralphilosophy #weekendreading

Weekend Reading: The Downfall of Mother Bank

The Downfall of Mother Bank

Draw'd off from Natur by Zek Downing, Neffu to Major Jack Downing

Printed & Publd by H.R. Robinson, 52 Courtlandt St., N. York

President Andrew Jackson: Major Jack Downing. I must act in this case with energy and decision. You see the downfall of the party engine and corrupt monopoly!!

Order for the Removal of the Public Money Deposited in the UNITED STATES BANK

Jack Downing: Hurrah! Feneral! If this don't beat skunkin I'm a nigger; only see that varmint Nick how spry he is. He runs along like Weatherfield Hog with an onion in his mouth.

No more fees to be obtained here! I move we adjourn, sine die!

Fees

Daniel Webster: There is a tide in the affairs of men, as Shakespeare says, and so my dear Clay, look out for yourself.

Henry Clay: Help me up! Webster! Or I shall lose my stakes!

Kentucky

Burrow under the Mammoths here, Sila!

Boston Courier, ALbany Gazette Evening Star, Columbian Sentinel, Journal of Commerce, Commercial Advertiser, New York American, Pennsylvanian, United States Gazette, National Gazette

Nichols Biddle: It is time for me to resign my presidency

Salary 6000, Preointing expenses 80000, Courier and Enquirer 52000

#history #finance #weekendreading

I concur with Duncan Black here: Duncan Black: Jeffrey Go...

I concur with Duncan Black here: Duncan Black: Jeffrey Goldberg: "The post-9/11 era was... really it's impossible to explain it to people who didn't live through it. And it was about a 5 year period, not a few weeks. It also made the careers of people who are still with us now. The wronger they were the more successful they have been! Such is The Discourse. The Atlantic is a bad magazine run by a bad person who occasionally runs good things by good people in order to cover for the fact that it is a bad magazine. My "favorite" post-9/11 nonsense was in the greatest of magazines, the New Yorker, which is known for its attention to detail and truth and its fact checking and the amount of shrooms someone must have eaten to have written this...

#noted

May 17, 2019: Weekly Forecasting Update

The right response to almost all economic data releases is: Nothing has changed���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.

Federal Reserve Bank of New York: Nowcasting Report: May 17, 2019: "The New York Fed Staff Nowcast stands at 1.8% for 2019:Q2. News from this week's data releases decreased the nowcast for 2019:Q2 by 0.4 percentage point. Negative surprises from industrial production and capacity utilization data largely offset positive surprises from housing and regional survey data...

Key Points:

Specifically, it is still the case that:

The Trump-McConnell-Ryan tax cut:

To the extent that it was supposed to boost the American economy by boosting the supply side through increased investment in America, has been a complete failure.

To the extent that it was supposed to make America more unequal, has succeeded.
Delivered a substantial short-term demand-side fiscal stimulus to growth that has now ebbed.

(A 3.2%/year rate of growth of final sales to domestic purchasers over the seven quarters starting in January 2017,
pushing the level of Gross National Income up from 2.0%/yera from this demand-side stimulus.)



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 Federal Reserve's abandonment of its focus on policies that are likely to keep PCE chain inflation at 2%/year or lower does not mean that it is preparing to do anything to avoid or moderate the next recession.

Changes from 1 month 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, but the effects are unlikely to be clearly visible in the data flow.

A change from 1 week ago: "Industrial production fell 0.5 percent in April, and the rates of change for previous months were revised down on net. Output is now reported to have declined 1.9 percent at an annual rate in the first quarter".

Over the past 20 years: United States manufacturers are ordering no more in the way of trhe 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

Comment of the Day: Howard: "I must be missing something:...

Comment of the Day: Howard: "I must be missing something: I don't see this as a 'reach for yield' phenomena. I see this as a reach for 10x returns, and I don't think low interest rates have much to do with the willingness of people (well, high net-worth individuals and their VC and hedge fund managers) to take a shot at a 10x return. I continue to see low interest rates as the market's way of telling us we need public investment, badly...

#commentoftheday