J. Bradford DeLong's Blog, page 19

Briefly Noted for 2020-09-25

Well, a decade late and many dollars short, we seem to have become the conventional wisdom! Would only that the Economist had listened to our arguments, and been on our side a decade ago! It was always more than tenable. It was always very attractive:

Economist: Governments Can Borrow More than Was Once Believed https://www.economist.com/schools-brief/2020/09/12/governments-can-borrow-more-than-was-once-believed: ���The global financial crisis pushed rates around the world to near zero.... In 2012 Larry Summers... and Brad DeLong... suggested a large Keynesian stimulus... the gains it would provide by boosting the growth rate of gdp might outstrip the cost of financing the debt���. As the years went by... the notion of borrowing for fiscal stimulus started to seem more tenable, even attractive���. Governments ideally ought to make sure that new borrowing is doing things that will provide a lasting good, greater than the final cost of the borrowing. If money is very cheap and likely to remain so, this will look like a fairly low bar���

 

Walter Womacka: Socialist "Realist" Stained Glass https://www.bradford-delong.com/2019/12/walter-womackas-socialist-realist-stained-glass.html: ���East Germany as it wished it had been, was, and would become���

Sagarmatha https://en.wikipedia.org/wiki/Mount_Everest���

Bertolt Brecht: To Those Born Afterward https://holgerszesnat.wordpress.com/2005/04/25/bertolt-brecht-to-those-born-later/���

URL to Interact https://url-to-interact.herokuapp.com/���

Daron Acemoglu: Colonial Origins Data Archive https://economics.mit.edu/faculty/acemoglu/data/ajr2001: ���The zipped data and program files necessary for reproducing the tables and figures in The Colonial Origins of Comparative Development: An Empirical Investigation...

Wikipedia: Dark Shadows https://en.wikipedia.org/wiki/Dark_Shadows_(televised_storylines): ���Storylines���

Dan Seifert: Ring���s Latest Security Camera Is a Drone that Flies Around Inside Your House https://www.theverge.com/2020/9/24/21453709/ring-always-home-cam-indoor-drone-security-camera-price-specs-features-amazon���

Chrystia Freeland: The rise of the New Global Super-Rich https://www.youtube.com/watch?v=d6NKdnZvdoo���

Walter Greason & Kari Leigh Merritt: The 2020 Election & Beyond https://www.youtube.com/watch?v=p9XvCoYh6Tk: ���Greason explains how we should not become solely focused on the upcoming election, but instead see the broader picture and honor the successes of the MOVEMENT. He discusses his experiences as a multi-cultural organizer and lays out a brilliant plan to help save higher education.... The importance of art, comics, and Afrofuturism.... The importance of friendship, camaraderie, and community���

At a 1% mortality rate, this means COVID-19 had as of three weeks ago already burned through 1/10 of the African-American community���as opposed to 1/20 of the white American community. But there is large differential mortality comparing African-Americans and white Americans as well, which I cannot now put my hands on good estimates of: Trevon Logan: ���1 in 1020 Black Americans https://twitter.com/TrevonDLogan/status/1309475741231460352 have died of COVID-19.

This is a very useful near real-time take on what is going on right now, out there in the economy: Raksha Kopparam & al.: Equitable Growth���s Household Pulse Graphs: September 2���14 Edition https://equitablegrowth.org/equitable-growths-household-pulse-graphs-september-2-14-edition/: ���Over 50 percent of respondents in households making less than $50K reported having experienced loss of employment income since March 13���

I do not think we understand who the median effective investors in financial markets are, and why they think what they do: John Auther: It's a Weird World Where FANGs Are a Haven Asset https://delong.typepad.com/files/column-authers-2020-09-21-fangs.pdf: ���FANG popularity... rests on the perception that they are defensive... eentrenched competitive position[s]... thought to offer safety. Meanwhile, the banks are the polar opposite���. [Since] March��� the 10-year Treasury yield��� has oscillated��� around... 0.666% level... strange because the Federal Reserve isn���t��yet formally attempting to control 10-year yields, despite widespread speculation that it will start to do so before long. And views on inflation... have gone through huge changes during the .666 era���

Shapiro and Varian have long had great success by saying that the information-age economy raises little in the way of questions about antitrust that the First Gilded Age did not. But that is not quite true: Michael Kades & Fiona Scott Morton: Interoperability as a Competition Remedy for Digital Networks https://equitablegrowth.org/working-papers/interoperability-as-a-competition-remedy-for-digital-networks/: ���Addressing entry barriers created by network effects is critical to remedying... monopolization... (e.g. Facebook).... Interoperability... a necessary, but not necessarily a sufficient, condition.... How to make an interoperability requirement effective... how rulemaking could ameliorate these challenges���

Not even Johnson in Britain or Bolsonaro in Brazil has as limited and faulty a grasp of what's what as American president. And nobody in the administration appears to be doing anything constructive: Jonathan Bernstein: ���Some 200,000 people in the U.S. have died.... https://delong.typepad.com/files/column-bernstein-2020-09-22-trump-denial.pdf The fight against the pandemic... has... severely disrupted the lives of almost everyone. For a��dissenting view, however, we have��the president��� ���Below the age of 18, like���nobody�����It affects virtually nobody....��� Emphasis added. Look: I don���t like to dwell on this stuff. But... this is monstrous behavior from any elected official���

Reporting from an Ohio county that went for Trump over HRC by 3-to-1 in 2016, John Scalzi finds the Trumpists will be dead and damned before they will mask up themselves: John Scalzi: The State of Masking in Trump Country: An Anecdotal Report https://whatever.scalzi.com/2020/09/22/the-state-of-masking-in-trump-country-an-anecdotal-report/: ���Trump... has made wearing them both political and a referendum on masculinity, so it���s not entirely surprising if his supporters have followed suit. Does this mean that I am getting terrible looks from dudes because I���m wearing a mask? Not at all; mostly everyone in Kroger and elsewhere is working on minding their own business���. My anecdotal experience is anecdotal���. I���m not thrilled���. What I���m going to do is a) stay home most of the time, b) mask myself up when I do go out, and c) keep out of the way of the maskless when I can, and I mostly can���

 

Plus:

This is by far the worst news I have seen in six months, because Aaron Carroll is a very credible observer and guide, and he is now profoundly depressed. Given American political dysfunction and given the current prevalence of the virus, we need to get testing up to 10 million a day���and then act on what those tests tell us���to have a chance of pushing our current well below one so that anything like normal life can resume. Yet there are no signs we are on a path to anything like that outcome:

Aaron Carroll: Stop Expecting Life to Go Back to Normal Next Year https://www.nytimes.com/2020/09/15/opinion/coronavirus-precautions.html?smid=tw-share: ���We still need to figure out how to live in this new world, now, and that means embracing, finally, all the strategies for fighting the virus that many of us have resisted. It���s not too late to invest in testing both symptomatic and asymptomatic people. Back in the spring, I estimated that we might need a million tests a week to manage the virus. That estimate assumed that America would drive the prevalence rate of the disease into the ground, much as other countries did. We failed.... We need much more than a million tests a week... ubiquitous, cheap, fast tests... distributed widely... isolate... quarantine.... We need to normalize mask-wearing.... Finally, we need a functioning scientific infrastructure to provide detailed and specific plans.... This is a marathon, not a sprint. Both, though, require running���

 

Start with the propositions the role of the university system is to maximize societal value-added well also enabling upward social mobility. With those goals in mind, we could then have discussions about (a) how much to invest in higher-education institutions (b) of which types, and (c) how to allocate places in those institutions, plus (d) what is the best way to finance that societal investment. Very, very, very few discussions of admissions policies have this framing. One result is that we know astonishingly little about the effects of different setups. Here the very wise Zach Bleemer closes some of our knowledge gap:

Zachary Bleemer: Top Percent Policies & the Return to Postsecondary Selectivity http://zacharybleemer.com/wp-content/uploads/2020/03/ELC_Paper.pdf: ���University policies that boost the chances of admission for targeted groups with relatively low standardized test scores are highly controversial. I provide new evidence on the impact of a ���top percent��� admissions policy implemented by the University of California (UC) system between 2001 and 2011. Eligibility in the Local Context (ELC) guaranteed admission to participating UC campuses for the top 4 percent of graduates from most California high schools. Using a novel longitudinal database covering the ELC era���s 1.7 million UC applicants���including each student���s enrollments, degree attainment, and early-career earnings���and a regression discontinuity research design, I begin by showing that ELC eligibility increased the likelihood that barely-eligible applicants from bottom-SAT-quartile high schools enrolled at four selective UC campuses by 16 percentage points, all of whom would have otherwise enrolled at a less-selective public college or university in California. Those barely-eligible ELC participants had higher five-year graduation rates than barely-ineligible students by 31 percentage points and higher annual mid-20s California earnings by $15,000. ELC participants who would have other- wise enrolled at community colleges or California���s least-selective public universities benefited the most from UC enrollment under ELC; indeed, universities��� graduation rates are shown to effectively proxy ELC participants��� causal effect of enrollment. These results suggest that ELC participants substantially gained from increased overall university quality despite having lower average SAT scores than their UC peers by almost 300 points, dispelling concerns about mismatched university ���fit��� for the targeted high-GPA low-SAT applicants...

 

.#brieflynoted #noted #date

Briefly Noted for 2020-09-23

William Cohan: Jay Powell Adds Voice to Small Business Cry for Help https://www.ft.com/content/60d8bd2b-0bb5-4e8a-99bc-93653277ec42: ���US recovery will never come until the companies that account for most jobs get back on their feet���

Teresa Nielsen Hayden: Stupid Plot Tricks https://web.archive.org/web/20070930165557/http://sff.net/paradise/plottricks.htm: ���The Evil Overlord Devises a Plot���

John Davis: The Mystery of Fort Zinderneuf in Beau Geste https://mysteriouswritings.com/the-mystery-of-fort-zinderneuf-in-beau-geste-by-john-davis/���

Simple Minds: Don't You Forget About Me https://www.youtube.com/watch?v=Zfcwq44q-vA���

Keri Leigh Merritt: 'Am absolutely THRILLED to announce my new fall #Merrittocracy series (in both @youtube & #podcast formats!) ������������ https://twitter.com/KeriLeighMerrit/status/1303317030133805056. In the 6 weeks leading up to 2020 Election, I will interview 6 top scholars on: The 2020 Election & Beyond: The Possibilities & Pitfalls of a Post-Trump America���

Wikipedia: Lusitania https://en.wikipedia.org/wiki/Lusitania: ���an ancient Iberian Roman province located where modern Portugal (south of the Douro river) and part of western Spain (the present autonomous community of Extremadura and a part of the province of Salamanca) lie���

Bertholt Brecht: To Those Born After http://languagehat.com/page/4/: ���Men���s strength was little. The goal/Lay far in the distance,/Easy to see if for me/Scarcely attainable./So the time passed away/Which on earth was given me���

Elizabeth Bear: What to Do When You Feel Awful & Nothing Seems to Make Sense: Identifying & Navigating Gaslighting https://medium.com/@matociquala_57740/what-to-do-when-you-feel-awful-nothing-seems-to-make-sense-identifying-navigating-gaslighting-62918f7946c: ���One mistake we often make is to assume that gaslighting is intentional and calculated. It���s not: like most abuse, it���s reactive and triggered. This status is precisely why the behaviors can seem so random and incomprehensible that they make us, the targets or observers of the behavior, feel out of control ourselves, or as if our own perceptions must be skewed���

Branko seems here to be saying something that is both true and not true: John Woodbridge: 'An old debate https://twitter.com/JVWoodster/status/1306101839205720064 https://youtube.com/watch?v=nsT6gQmesdQ between DeLong and Tim Kane. I feel like these right wing talking points of 1) things are much better than they were in 1910 (or pick a date) and 2) and the impact of technology and it's raising of living standards isn't captured by official statistics seem, honestly, pretty hollow. Branko Milanovic wrote about this comparison in a far more intelligent way than I can: "Had anyone tried grand-parental comparison in Eastern Europe in 1989, he would have been laughed out. And yet, there was not a single indicator (income, life expectancy, education level, housing space) that in 1989 was not better than in 1949...

How to be publicly effective in the dysfunctional public sphere created by the age of Trump���and after: Jonathan Crowe: Opposition in the Age of Gish Gallops https://www.jonathancrowe.net/2016/12/opposition-in-the-age-of-gish-gallops/: ���The Gish Gallop, named after creationist Duane Gish, is a rhetorical strategy of ���drowning your opponent in a flood of individually weak arguments in order to prevent rebuttal of the whole argument collection without great effort���

How to be privately effective in the dysfunctional world created by the age of Trump���and after: Masha Gessen (2016): Autocracy: Rules for Survival https://www.nybooks.com/daily/2016/11/10/trump-election-autocracy-rules-for-survival/: ���The electoral college... two elections in which Republicans won with the minority of the popular vote. That should not be normal. But resistance���stubborn, uncompromising, outraged���should be���

Norm-breaking as the road to catastrophe: historical analogy: Plutarch: Life of Tiberius Gracchus http://penelope.uchicago.edu/Thayer/E/Roman/Texts/Plutarch/Lives/Tiberius_Gracchus*.html: ���This is said to have been the first sedition at Rome, since the abolition of royal power, to end in bloodshed and the death of citizens; the rest though neither trifling nor raised for trifling objects, were settled by mutual concessions, the nobles yielding from fear of the multitude, and the people out of respect for the senate���

 

J. Bradford DeLong: Imperialism & Underdevelopment, 1870-1914: Intro https://share.mmhmm.app/71d9afc8ded940af83fcfdb582f0f658���

J. Bradford DeLong & A. Michael Froomkin (1999): Speculative Microeconomics for Tomorrow's Economy http://osaka.law.miami.edu/~froomkin/articles/spec.htm: ���Adam Smith's case for the invisible hand... will be familiar to almost all.... The revolutions in data processing and data communications may shake these foundations���

 

Plus:

Teresa Nielsen Hayden (2003): As you know, Bob... http://nielsenhayden.com/makinglight/archives/004046.html: ���I have to quote this one. LanguageHat posted it in the Egoscanning comment thread, in the wake of Arthur Hlavaty���s remark that ���I cast no first stones; I was egoscanning when the Web was a scientifictional dream���...

Ralph 4CR looked around in astonishment. ���You mean��� there are invisible beams all around us, carrying information to all parts of the globe, even as we speak?��� The Master of Communications turned towards him solemnly. ���Yes,��� he asseverated, ���and the information is not carried whole, but is broken up into a myriad of infinitesimal packets, to be reassembled without fail when they reach their destination.��� ���You astonish me,��� breathed Ralph. ���And this information is accessible to all?��� ���It is,��� nodded the Master. ���The issues of the day are debated by all citizens, no matter where they may be located, and communication no longer waits on tides or weather.���

���And what are the great issues so decided?��� The Master cast a glance at the poll on his screen: Which Jedi Knight Are You? He looked severe. ���I fear our issues would mean nothing to you across the great gulf of time you have traversed. You should go now and refresh yourself. We will speak later. You have much to learn. Vanna, show our young guest to his room.��� A lissome blonde appeared from behind a curtain and beckoned���

 

Joseph A. Schumpeter (1946): John Maynard Keynes 1883-1946 https://github.com/braddelong/public-files/blob/master/readings/article-schumpeter-keynes-obituary.pdf: 'He was not the sort of man who would bend the full force of his mind to the individual problems of coal, textiles, steel, shipbuilding.... He was the English intellectual, a little deracine... childless and his philosophy of life was essentially a short-run philosophy...

...So he turned resolutely to the only "parameter of action" that seemed left... monetary management.... It might heal.... It would sooth.... Return to a gold system at pre-war parity was more than his England could stand.... Keynesianism is a seedling which cannot be transplanted into foreign soil: it dies there and becomes poisonous....

The social vision first revealed in the Economic Consequences of the Peace... in which investment opportunity flags and saving habits nevertheless persist, is... implemented in the General Theory of Employment, Interest, and Money... consumption function... efficiency-of-capital... liquidity-preference... the given wage-unit and the... quantity of money "determine" income and ipso facto employment... the great dependent variables to be "explained."... With Marx, capitalist evolution issues into breakdown.... With Keynes, it issues into a stationary state that constantly threatens to break down.... In both theories, the breakdown is motivated by causes inherent to the working of the economic engine.... This feature naturally qualifies Keynes's theory for the role of "rationalizer" of anti-capitalist volition....

[In] the General Theory, we find... overstatements, moreover, which cannot be reduced to the defensible level, because results depend precisely upon the excess.... One word in the book that cannot be defended... the word "general."... Keynesians may hold that these special cases are the actual ones of our age. They cannot hold more than that.... Keynes wished to secure his major results without appeal to the element of rigidity, just as he spurned the aid he might have derived from imperfections of competition. There were points, however, at which he was unable to do so.... And at other points, rigidities stand in reserve....

It is, of course, always possible to show that the economic system will cease to work if a sufficient number of its adaptive organs are paralyzed. Keynesians like this fire escape no more than do other theorists. Nevertheless, it is not without importance. The classical example is equilibrium under-employment....

Most orthodox Keynesians are "radicals" in one sense or another.... Disciples... see one thing only-an indictment of private thrift and the implications... with respect to the managed economy and inequality of incomes.... Saving had come to be regarded as the last pillar of the bourgeois argument.... Adam Smith['s]... system... amounts to all-around vituperation directed against "slothful" landlords and grasping merchants or "masters".... Marshall and Pigou were in this boat... took it for granted that inequality... was "undesirable."... Many... who entered the field... in the twenties and thirties had renounced allegiance to the bourgeois scheme... sneered at the profit motive and at the element of personal performance in the capitalist process. But... they still had to pay respect to saving-under penalty of losing caste.... Keynes broke their fetters: here, at last, was theoretical doctrine that not only obliterated the personal element and was... at least mechanizable, but also smashed the pillar into dust.... Via saving, "the unequal distribution of income is the ultimate cause of unemployment." This is what the Keynesian Revolution amounts to...

.#brieflynoted #noted #2020-09-23

Meyer: Is America in Decline?���Comment

William Meyer: Is America in Decline? https://www.bradford-delong.com/2020/09/is-america-in-decline-pairagraph.html?cid=6a00e551f080038834026bde921572200c#comment-6a00e551f080038834026bde921572200c: ���I have told many younger people that they don't know what prosperous times actually feel like. They've never felt the economy "roar." So, yeah, we're in decline and that's too bad. The truth is, however, that in the USA all the trends that have led us to such a decline are fairly ancient. White racism���based on massive economic exploitation of Native Americans, blacks and immigrants only gradually allowed into the "white" tent���has been a significant defect of America from long before our grandparents were born. The malign influence of great wealth has been a problem at least since the New Deal���if you look at the historical record, every aspect of conservativism has always been carefully watered and fertilized, if not virtually summoned up out of thin air, by ultra-conservative businessmen of great wealth. Our high-veto point Constitution has always been successfully manipulated to block human progress in our practical politics, and has always been far too susceptible and far too friendly to minority rule���a problem since Ratification. Our professional classes, since they got control of their own destinies in the early 20th century, have been ignoring the common good while entrenching their own profit in the law and in medicine. Yes, for a half century we were making progress in at least specific areas. But the malign aspects of the country somehow got the upper hand in the late 1970s and have never relinquished it since. It would be nice if in my adult life the underlying trends turned positive once more. Well, I can hope anyway���

.#commentoftheday #2020-09-22

Briefly Noted for 2020-09-22

FOLD https://readfold.com/

William Baumol (1990):��Entrepreneurship: Productive, Unproductive, & Destructive https://delong.typepad.com/baumol-1990-entrepreneurship.pdf

Wikipedia: French Conquest of Algeria https://en.wikipedia.org/wiki/French_conquest_of_Algeria���

Gillian Tett, Paul Collier, & Martin Wolf: ��e New Social Contract Agenda https://newsocialcontract.live.ft.com/agenda?login=ML: ���Why Democracy's Future Depends on Citizenship���

Gideon Rachman: Germany Has More Pressing Concerns than Brexit https://www.ft.com/content/e9b7b193-47d4-4887-abe1-2c12f344922a: ���Chatting to a diplomat in Berlin last week, I suggested that Brexit probably ranked about number four on the list of German foreign-policy concerns. He looked thoughtful and then replied: ���I think lower than that���...

Mary Burfisher, Sherman Robinson, & Karen Thierfelder: Agricultural & Food Policies in a United States-Mexico FTA https://www.sciencedirect.com/science/article/abs/pii/106294089290004B: ���This paper analyzes the effects of a U.S.-Mexico free trade agreement (FTA) on agriculture. We use a 28-sector, three-country computable general equilibrium (CGE) model in which we explicitly model agricultural and food policies in both countries, and differentiate land types���

W. Arthur Lewis (1977): ��e Evolution of ��e International Economic Order https://github.com/braddelong/public-files/blob/master/readings/book-lewis-evolution-selections.pdf...

Claudia Rei, Bitsy Perlman, & Felipe Valencia Caicedo: Virtual Economic History Seminar https://warwick.ac.uk/fac/soc/economics/staff/crei/virhist/...

Joshua Gans: Reproduction Numbers Tend to 1 & ��e Reason Could Be Behavioural https://voxeu.org/article/reproduction-numbers-tend-1-and-reason-could-be-behavioural: ���Epidemiological models that incorporate rational economic agents tend to predict that pandemics may move towards a steady state for a significant period of time...

 

I confess that I had greatly underestimated the damaging effects of Jim Crow on even the ���talented 10th��� of the African-American population:

Eric S. Yellin: How ��e Black Middle Class Was Attacked by Woodrow Wilson���s Administration https://theconversation.com/how-the-black-middle-class-was-attacked-by-woodrow-wilsons-administration-52200: ���When Woodrow Wilson arrived in the nation���s capital in March 1913, he brought with him an administration loaded with white supremacists.... Wilson���s personal racism tends to distract us from a bigger story about the changing place of race in American life and politics. Wilson���s administration['s]... impact was not merely the result of one man���s prejudice...

 

The Economist now fears not that the Chinese model will fail and leave China much poorer than it has to be, but that it will succeed:

Economist: ��e Chinese Economic Model: Xi Jinping Is Reinventing State Capitalism. Don���t Underestimate It https://www.economist.com/leaders/2020/08/13/xi-jinping-is-reinventing-state-capitalism-dont-underestimate-it: ���The Trump administration... [thought] China���s steroidal state capitalism is weaker than it looks.... Simple, but wrong.... Xi���s... ruthless mix of autocracy, technology and dynamism could propel growth for years. Underestimating China���s economy is hardly a new phenomenon...

 

Another thing that I would not have predicted: that TSMC would become such a key node, asset, and resource in the global economy���something not just producing great economic surplus for the world, but becoming a strategic key in the ���weaponized interdependence��� sense:

Paul Mozur: TSMC https://stratechery.com/2020/an-interview-with-paul-mozur-on-technology-in-china: ���TSMC has basically been pulled into the American camp.... It does feel like in that kind of geopolitical chess match, Taiwan and TSMC are now with the United States, and that leaves China in a very difficult position���

 

I am a sucker for ���China pessimism��� pieces. But then, while I have been optimistic about the short-run future of state capitalism with Chinese characteristics, egalitarian aspirations, and Stalinist instincts for 40 years, I have also spent those same 40 years being pessimistic about the long-run future. 40 years is a long time, long enough for it to be clear that I was wrong. So I am not someone you should ask to peer into the crystal ball with respect to China:

Jamil Anderlini: Behind ��e Recovery, China���s Economy Is Wobbling https://www.ft.com/content/ef2ac2d3-6389-4ac6-8608-90dbc3e68465?shareType=nongift: ���The solid rebound was only achieved with Herculean effort from an interventionist state falling back on the same tools it has relied on since the financial crisis of 2008.... A bicycle laden with enormous boxes of debt, ridden by a drunk and with strategic competitors such as the US trying to knock it over...

 

Here the editorial board of the Financial Times grasps at the straw hope that modern neofascism will prove incompetent at governing, even according to the standards of its core supporters. They have not read their 1984. Orwell saw very clearly that what the fascist and Stalinist base want is not for the government to raise the chocolate ration, but only that they be told on the TV that the chocolate ration has been raised. The editorial board knows and they should reflect on how Boris Johnson has managed to move his goalposts so that after the fact he will proclaim Brexit to be a success no matter what happens���for at least England will have ���stood up��� against the eurocrats and the deracinated rootless cosmopolites:

Financial Times: Competence Is ��e Test for Populists https://www.ft.com/content/8e375a56-fddb-4de4-965f-a8edab644a97: ���Johnson���s campaign poetry has now caught up with him. Far from ���getting Brexit done���, his own deal is���in his telling���getting in the way.... It is the political version of a Ponzi scheme: always move on to the next promise before you are asked to deliver on the last one���

 

Plus

Willem Jongman (2006): Gibbon Was Right: ��e Decline & Fall of ��e Roman Economy https://github.com/braddelong/public-files/blob/master/readings/article-jongman-gibbon.pdf: ���Imagine a pre-industrial and largely agricultural economy in a fairly stable equilibrium. Next that equilibrium is disturbed by catastrophic mortality: what do we expect to happen when the proportion between people and assets changes?��� Prices and wages rose quite dramatically in the wake of the Antonine Plague��� [and] the coinage itself began its slide into substantial debasement. Theoretically, there was no need for that. The money stock was large, and by now even too large���

...The reason must have been the needs of the state. It had become difficult to collect taxes in the turmoil of the day, precisely when the state also had to finance huge military efforts���. The biggest economic and social change, however, was to the land-labour ratio���. Production per man hour must have gone up���. Conversely, rents [should] have gone down���. The Roman Empire should have turned into a world of happy and prosperous peasants, and much greater social equality���. Theory is impeccable���.

Reality was, of course, different���. What we witness from the late second century is the emergence of a new social, political and legal regime, where oppression replaces the entitlements of citizenship���honestiores and humiliores���. Demand for slaves declined because citizens could now be exploited more fully���. Rome debased the value of citizenship and followed the same route that Prussian Junkers were to follow during the so-called second serfdom���. The coloni of the Saltus Burunitanus of 180 were not alone to complain to the emperor about increased oppression and growing abuse. When pushed hard enough, they could have moved, but that was precisely what was to become illegal. Tied to the land, they lost their powers in the market���. The declining legal status of citizens was��� an instrument imposed in the face of what would have been an improved economic position for the peasantry if the market would have had its way.

This change in social relations is also reflected culturally. The late second century was a period of important cultural changes��� Mithraism��� Christianity��� new forms of belonging and a sociability that no longer depended on civic life or patronal benevolence���.

For me, the interesting thing is the resilience of the Roman state. For more than half a century, the Severan regime maintained the integrity and continuit ���. The surprise is not that it finally collapsed, but that it survived��� for so long that the crisis later became known as the crisis of the third century, rather than��� of the second century���. Just as remarkable as the temporary Severan recovery is the recovery from Diocletian��� [which] also generated a measure of economic recovery��� substantial enough for late antique economic decline to be dramatic.

The real beginnings of that decline and fall, however, may have been in the beginning of a period of much colder and dryer weather, and in the scourge of the Antonine Plague. With the growth of its Empire, with the growth of its cities, and with the growth of a system of government and transportation based on those cities, Rome had created the perhaps most prosperous and successful pre-industrial economy in history. The age of Antoninus Pius was indeed probably the best age to live in pre-industrial history.

 

Is it the staying at home with lots of time to think, the economic distress and uncertainty, or the heightened fear and consciousness of mortality, or just chance that turn the coronavirus spring into Black Lives Matter spring? Barry Eichengreen believes that it is the second:

Barry Eichengreen: Rage Against ��e Pandemic https://www.project-syndicate.org/commentary/covid19-racial-disparities-fuel-usa-protests-by-barry-eichengreen-2020-06: ���The connection running in the other direction���from the pandemic to the demonstrations���has received far less attention. Without diminishing for a moment the horror of Floyd���s death, the question is: why now? After all, before Floyd, there was the police killing of Michael Brown... Eric Garner... nearly 100 African-Americans who died in police custody over the past six years...

...One explanation for why Floyd���s killing triggered a national uprising is that an especially horrific recording quickly dominated social media and traditional news outlets alike. But this answer will satisfy only those who have forgotten the equally horrific recording of Garner���s killing. A more convincing explanation must include the pandemic....

The COVID-19 mortality rate is 2.4 times as high among black Americans as white Americans. Even without more images of police brutality, the situation facing many African-Americans, disproportionately affected by the pandemic, was already approaching the unbearable. That is because of America���s threadbare social safety net. Unemployment insurance benefits are typically limited to 26 weeks in the US. Certain states in the South provide fewer. Indeed, some, such as Florida, have intentionally designed their bureaucracies to make applying for unemployment benefits as difficult as possible...

.#brieflynoted #noted #2020-09-22

Robbins: Sleepwalking into Depression: The Economic Response to COVID-19���Noted

Things have not gone as badly in the past two months as Jacob Robbins feared back in mid-July. But we still stand on the knife���s edge of an even deeper depression then we are currently in, with governments about to apply a large deflationary demand shock this fall:

Jacob Robbins: Sleepwalking into Depression: The Economic Response to COVID-19 in the United States https://equitablegrowth.org/research-paper/wage-discrimination-and-the-exploitation-of-workers-in-the-u-s-labor-market/: ���The few green shoots of improved economic data belie the fact that the health and economic crises are far from over. In fact, we are in danger of sleepwalking into economic depression���. Thanks in large part to pandemic-related income support, spending recovered somewhat in May, rising 8.2 percent��� I use real-time payment data from Earnest Research, a company that analyzes spending data from credit and debit cards, to study the latest on how consumer spending is responding to the pandemic���

.#noted #2020-09-18

Islam: England Has Lost Control Again���Noted

England has now lost control of the coronavirus plague again:

Faisal Islam: 'The PHE surveillance report chart that I followed very closely in early March https://twitter.com/faisalislam/status/1306963521373175811... a leading indicator in showing the pandemic hitting care homes... Acute Respiratory Infections now back up to April levels, but this time fair chunk is in schools���

.#noted #2020-09-18

Sahm: GET MORE MONEY OUT���Noted

I understood why professional Republican economists were opposed to expansionary fiscal policy from 2009 to 2013: they thought that multipliers were small, government debt was expensive, and that even extended spells of unemployment were salutory worker-discipline devices that boosted productivity (and made the income distribution more unequal and more just).

And I understood why Republican politicians went along: Democratic President Obama owned the economy, it was not the job of the opposition to be constructive, and, anyway, all Democratic policy initiatives are probably bad ideas.

But now it is a decade later, even the laggards among reality-based economists have learned a lot, and it is Republican President Trump who owns the economy. Thus it is the Republicans who have the incentive to try things. Yet those economists who are professional Republicans first and analysts second are being with absolutely no help. And Claudia Sahm is extremely alarmed:

Claudia Sahm: GET MORE MONEY OUT: IT IS AN AND / BOTH MOMENT!!! https://twitter.com/Claudia_Sahm/status/1306943139526119424: ���Not holding my breath disappointed many times already... don���t think we are closing in. most important: $3 trillion is bare minimum we need, other smaller proposals are an insult to our crisis!! I am a broken record. NO REGRETS. DC is same train wreck as in Great Recession... we must not again.... We are dealing with the mother of all demand shocks. on top of a pandemic. get money out, and put politics aside!! IT IS AN AND / BOTH MOMENT!!! unemployed, communities small businesses, families ALL NEED MONEY from DC!!!���

.#noted #2020-09-18

Ruffini: Worker Earnings, Service Quality, & Firm Profitability���Noted

The spring and summer of 2020 were exactly the wrong time to have an economy that places a very low weight on the quality of eldercare:

Krista Ruffini: Worker Earnings, Service Quality, & Firm Profitability: Evidence from Nursing Homes & Minimum Wage Reform https://equitablegrowth.org/working-papers/worker-earnings-service-quality-and-firm-profitability-evidence-from-nursing-homes-and-minimum-wage-reforms/: ���A ten percent increase in the minimum wage raises low-skilled nursing home workers��� earnings one to two percent, reduces separations, and increases stable hires. These earnings gains and increases in firm-specific human capital translate into marked improvements in patient health and safety. A ten percent increase in the minimum wage would prevent at least 15,000 deaths, lower the number of inspection violations by one to two percent, and reduce the cost of preventable care���

.#noted #2020-09-18

Gans: Reproduction Numbers Tend to 1 & ��e Reason Could Be Behavioural���Noted

I confess that back in March I grossly misjudged the situation. I thought back then that one of two things would happen: (1) We would fail to knock the virus���s R[current] below 1, and the virus would rip through the population in a spring or spring and summer of horror, but it would be largely over by the fall. (2) We would knock the virus���s R[current] below one, and the virus would become a minor annoyance. I completely did not expect what we have now: a seriously depressed economy, with substantial but inadequate social-distancing, mask-wearing, and other measures, keeping the virus���s R[current] around one, but with every prospect of this plague raging for years until policy somehow changes. Here the very sharp Joshua Gans says: We are economists. We are trained to look for equilibrium positions. So we should have expected this. Yes, I take his point. But I would never have imagined that the equilibrium caseload would be this high, and cause this big an ongoing depression:

Joshua Gans: Reproduction Numbers Tend to 1 & ��e Reason Could Be Behavioural https://voxeu.org/article/reproduction-numbers-tend-1-and-reason-could-be-behavioural: ���Standard epidemiological models that show how infection rates in the population rise and then fall assume that people do not understand what���s going on. When people react to infection rates by changing behaviour, the model���s predictions are no longer valid. This column explains why that can mean that pandemics don���t rage out of control but becoming something more endemic. In particular, epidemiological models that incorporate rational economic agents tend to predict that pandemics may move towards a steady state for a significant period of time...

.#noted #2020-09-18

Bahn, Stelzner, & Openchowski: Wage Discrimination & ��e Exploitation of Workers���Noted

It was decades ago that my ex-roommate Andrei Shleifer asked me: why are there Keynesians and monetarists and Hayekians and institutionalists in economics, but no Galbraithians? I did not have a good answer for him then. But I believe that now I do. It is: we are all Galbraithians now:

Kate Bahn, Mark Stelzner, & Emilie Openchowski: Wage Discrimination & ��e Exploitation of Workers in ��e U.S. Labor Market https://equitablegrowth.org/research-paper/wage-discrimination-and-the-exploitation-of-workers-in-the-u-s-labor-market/: ���Characteristics specific to race and gender, such as the lower levels of wealth... increased household responsibilities... make workers of color and women more susceptible to exploitation.... Government support for workers to act collectively boosts worker power, reducing employers��� monopsony power���their ability to set and lower wages���and thus decreasing worker exploitation and wage differences that replicate discriminatory biases against these groups of workers���

.#noted #2020-09-18