J. Bradford DeLong's Blog, page 2072

Mark Thoma Is Up Late Tonight

And he sends us to:

Americans have higher rates of most chronic diseases than same-age counterparts in England...

Lane Kenworthy: Inequality and mobility at the top « Consider the Evidence: The large increase in income inequality has not been offset by a rise in mobility at the top...

Vince Reinhart: A Year of Living Dangerously: The Management of the Financial Crisis in 2008...

Fatih Birol and Nicholas Stern: Urgent steps to stop the climate door closing...

Benjamin Barber Doubles Down and Defends Saif Al-Gaddafi Against the Charge of Plagiarism

Bluffing does not work when all the cards are on the table. But Benjamin Barber appears to think that it does. He doubles down in defense of Saif Al-Gaddafi:

Understanding Libya's Michael Corleone - An Interview with Benjamin Barber | Foreign Policy:

BB: People act like [Saif] snapped his fingers and bought a dissertation. He labored for years to get a MA and a Ph.D. and write two books and to create a foundation in conflict with all that the Qaddafi name denotes. Yet now they're trying to say that he has plagiarized the thesis.... Of course they are wrong! I mean, Lord Desai who sat on his dissertation committee and examined him said, "There are enough things wrong with Saif that you don't have to make him a plagiarist as well!" He's not; that charge is just garbage. He has a great many things to answer for in the last few weeks, but plagiarism is not among them.... There are about 600 books quoted at length or paraphrased -- it's a doctoral dissertation; you're supposed to cite people! You're not allowed to have your own views, but despite that, Saif has his own views. He quotes John Rawls, John Locke; he quotes Robert Putnam and Giddens; he quotes me, all kinds of people. He quotes me on my book Strong Democracy, and later on he talks about participatory democracy in his own words -- is he stealing from me? I directed 60 dissertations; if he is a plagiarist forget everything else -- then so is everyone else who has written a dissertation. Saif is an original thinker, and his original thought takes the form of trying to adapt liberalism to the living culture and developing world in North Africa and the Middle East...

Plagiarism - Saif Al-Islam Gaddafi Thesis Wiki: 16. Thesis, pp. 396-402:

“The WTO is ‘member-driven’: it is run by its member governments and all major decisions are made by the membership as a whole, either by ministers (who meet at least once every two years) or by their ambassadors or delegates (who meet regularly in Geneva). . . .” (Gaddafi, p. 396) “The WTO is run by its member governments. All major decisions are made by the membership as a whole, either by ministers (who meet at least once every two years) or by their ambassadors or delegates (who meet regularly in Geneva).” (WTO)

“Topmost is the Ministerial Conference, which is the supreme body of the WTO, composed of representatives of all members, with the authority to carry out the functions of the WTO, take the actions necessary to this effect, and take decisions on matters under any of the Multilateral Trade Agreements . . . .” (Gaddafi, p. 396) “Topmost is the ministerial conference which has to meet at least once every two years. The Ministerial Conference can take decisions on all matters under any of the multilateral trade agreements.” (WTO)

“Six other bodies report to the General Council. Their scope is smaller, so they are merely ‘committees’, but they still consist of all WTO members. They cover issues such as trade and development, the environment, regional trading arrangements, and administrative issues.” (Gaddafi, p. 398) “Six other bodies report to the General Council. The scope of their coverage is smaller, so they are “committees”. But they still consist of all WTO members. They cover issues such as trade and development, the environment, regional trading arrangements, and administrative issues.” (WTO)

“The Singapore Ministerial Conference in December 1996 decided to create new working groups to look at investment and competition policy, transparency in government procurement, and trade facilitation.” (Gaddafi, p. 399) “The Singapore Ministerial Conference in December 1996 decided to create new working groups to look at investment and competition policy, transparency in government procurement, and trade facilitation.” (WTO)

“Two more subsidiary bodies dealing with the plurilateral agreements (which are not signed by all WTO members) keep the General Council informed of their activities regularly.” (Gaddafi, p. 399) “Two more subsidiary bodies dealing with the plurilateral agreements (which are not signed by all WTO members) keep the General Council informed of their activities regularly.” (WTO)

“Each of the higher level councils has subsidiary bodies. The Goods Council has eleven committees dealing with specific subjects (market access, agriculture, sanitary and phytosanitary measures, technical barriers to trade, subsidies and countervailing measures, anti-dumping measures, customs valuation, rules of origin, import licensing, trade-related investment measures, and safeguards). Again, these consist of all member countries. Also reporting to the Goods Council is the Textiles Monitoring Body, which consists of a chairman and ten members acting in their personal capacities, and groups dealing with notifications (governments informing the WTO about current and new policies or measures) and state trading enterprises.” (Gaddafi, p. 399) “Each of the higher level councils has subsidiary bodies. The Goods Council has 11 committees dealing with specific subjects (such as agriculture, market access, subsidies, anti-dumping measures and so on). Again, these consist of all member countries. Also reporting to the Goods Council is the Textiles Monitoring Body, which consists of a chairman and 10 members acting in their personal capacities, and groups dealing with notifications (governments informing the WTO about current and new policies or measures) and state trading enterprises.” (WTO)

“The Services Council’s subsidiary bodies deal with financial services, domestic regulations, GATS rules and specific commitments.” (Gaddafi, p. 399) “The Services Council’s subsidiary bodies deal with financial services, domestic regulations, GATS rules and specific commitments.” (WTO)

“At the General Council level, the Dispute Settlement Body also has two subsidiaries: the dispute settlement ‘panels’ of experts appointed to adjudicate on unresolved disputes, and the Appellate Body that deals with appeals.” (Gaddafi, p. 399) “At the General Council level, the Dispute Settlement Body also has two subsidiaries: the dispute settlement “panels” of experts appointed to adjudicate on unresolved disputes, and the Appellate Body that deals with appeals.” (WTO)

“Important breakthroughs are rarely made in formal meetings of these bodies, least of all in the higher-level councils. Since decisions are made by consensus, without voting, informal consultations within the WTO play a vital role in bringing a vastly diverse membership to an agreement.” (Gaddafi, p. 400) “Important breakthroughs are rarely made in formal meetings of these bodies, least of all in the higher level councils. Since decisions are made by consensus, without voting, informal consultations within the WTO play a vital role in bringing a vastly diverse membership round to an agreement.” (WTO)

“One step away from the formal meetings are informal meetings that still include the full membership, such as those of the Heads of Delegations (HOD). More difficult issues have to be thrashed out in smaller groups. A common recent practice is for the chairperson of a negotiating group to attempt to forge a compromise by holding consultations with delegations individually, in twos or threes, or in groups of 20-30 of the most interested delegations.” (Gaddafi, p. 400) “One step away from the formal meetings are informal meetings that still include the full membership, such as those of the Heads of Delegations (HOD). More difficult issues have to be thrashed out in smaller groups. A common recent practice is for the chairperson of a negotiating group to attempt to forge a compromise by holding consultations with delegations individually, in twos or threes, or in groups of 20-30 of the most interested delegations.” (WTO)

“These smaller meetings have to be handled sensitively. It is necessary to ensure that everyone is kept informed about what is going on (the process must be ‘transparent’) even if they are not in a particular consultation or meeting, and that they have an opportunity to participate or provide input (the process must be ‘inclusive’).” (Gaddafi, p. 400) “These smaller meetings have to be handled sensitively. The key is to ensure that everyone is kept informed about what is going on (the process must be “transparent”) even if they are not in a particular consultation or meeting, and that they have an opportunity to participate or provide input (it must be “inclusive”).” (WTO)

“One term has become controversial, but more among some outside observers than among delegations. The ‘Green Room’ is a phrase taken from the informal name of the director-general’s conference room. It is used to refer to meetings of 20–40 delegations, usually at the level of heads of delegations. These meetings can take place elsewhere, such as at Ministerial Conferences, and can be called by the minister chairing the conference as well as the director-general. Similar smaller-group consultations can be organised by the chairs of committees negotiating individual subjects, although the term Green Room is not usually used for these.” (Gaddafi, p. 400) “One term has become controversial, but more among some outside observers than among delegations. The “Green Room” is a phrase taken from the informal name of the director-general’s conference room. It is used to refer to meetings of 20–40 delegations, usually at the level of heads of delegations. These meetings can take place elsewhere, such as at Ministerial Conferences, and can be called by the minister chairing the conference as well as the director-general. Similar smaller group consultations can be organized by the chairs of committees negotiating individual subjects, although the term Green Room is not usually used for these.” (WTO)

“In the past delegations have sometimes felt that Green Room meetings could lead to compromises being struck behind their backs, so extra efforts are made to ensure that the process is handled correctly, with regular reports back to the full membership.” (Gaddafi, p. 401) “In the past delegations have sometimes felt that Green Room meetings could lead to compromises being struck behind their backs. So, extra efforts are made to ensure that the process is handled correctly, with regular reports back to the full membership.” (WTO)

“The way countries now negotiate has helped somewhat. In order to increase their bargaining power, countries have formed coalitions. In some subjects such as agriculture virtually all countries are members of at least one coalition—and in many cases, several coalitions. This means that all countries can be represented in the process if the coordinators and other key players are present. The coordinators also take responsibility for both ‘transparency’ and ‘inclusiveness’ by keeping their coalitions informed and by taking the positions negotiated within their alliances.” (Gaddafi, p. 401) “The way countries now negotiate has helped somewhat. In order to increase their bargaining power, countries have formed coalitions. In some subjects such as agriculture virtually all countries are members of at least one coalition — and in many cases, several coalitions. This means that all countries can be represented in the process if the coordinators and other key players are present. The coordinators also take responsibility for both “transparency” and “inclusiveness” by keeping their coalitions informed and by taking the positions negotiated within their alliances.” (WTO)

“In the end, decisions have to be taken by all members and by consensus. The membership as a whole would resist attempts to impose the will of a small group. No one has been able to find an alternative way of achieving consensus on difficult issues, because it is virtually impossible for members to change their positions voluntarily in meetings of the full membership.” (Gaddafi, p. 401) “In the end, decisions have to be taken by all members and by consensus. The membership as a whole would resist attempts to impose the will of a small group. No one has been able to find an alternative way of achieving consensus on difficult issues, because it is virtually impossible for members to change their positions voluntarily in meetings of the full membership.” (WTO)

“Market access negotiations also involve small groups, but for a completely different reason. The final outcome is a multilateral package of individual countries’ commitments, but those commitments are the result of numerous bilateral, informal bargaining sessions, which depend on individual countries’ interests. (Examples include the traditional tariff negotiations, and market access talks in services.)” (Gaddafi, p. 401) “Market access negotiations also involve small groups, but for a completely different reason. The final outcome is a multilateral package of individual countries’ commitments, but those commitments are the result of numerous bilateral, informal bargaining sessions, which depend on individual countries’ interests. (Examples include the traditional tariff negotiations, and market access talks in services.)” (WTO)

“Thus, informal consultations in various forms play a vital role in allowing consensus to be reached, but they do not appear in organisation charts, precisely because they are informal.” (Gaddafi, p. 401) “So, informal consultations in various forms play a vital role in allowing consensus to be reached, but they do not appear in organization charts, precisely because they are informal.” (WTO)

“They are not separate from the formal meetings, however. They are necessary for making formal decisions in the councils and committees. Nor are the formal meetings unimportant. They are the forums for exchanging views, putting countries’ positions on the record, and ultimately for confirming decisions. The art of achieving agreement among all WTO members is to strike an appropriate balance, so that a breakthrough achieved among only a few countries can be acceptable to the rest of the membership.” (Gaddafi, p. 402) “They are not separate from the formal meetings, however. They are necessary for making formal decisions in the councils and committees. Nor are the formal meetings unimportant. They are the forums for exchanging views, putting countries’ positions on the record, and ultimately for confirming decisions. The art of achieving agreement among all WTO members is to strike an appropriate balance, so that a breakthrough achieved among only a few countries can be acceptable to the rest of the membership.” (WTO)

Signs of Inflation Watch

Courtesy of Tim Duy and Mark Thoma: there are no signs of inflation.

A "Great Stagnation"?--NOT!!

I think Hal Varian is right:

Hal Varian: I RECEIVED an email from The Economist's editor in London referring to Tyler Cowen's book yesterday afternoon. I went to Amazon, downloaded the book to my iPad, and read it...all in the space of an hour and a half. I then composed this note and sent it to London—19 hours after receiving the first email. I have every reason to believe that this note will appear on economist.com a few hours after it is received. None of this would have been possible 30 years ago. It is therefore particularly ironic that a major theme of the book is about how technological progress has stalled in the last 30 years.

To be fair, Mr Cowen singles out the internet as “one sector where we've had more innovation than anyone had expected”. The problem with the internet, according to Mr Cowen, is that it doesn't contribute much to jobs or revenue. But these facts just show that the internet is hugely efficient in producing consumer surplus: a relatively small amount of labour (plus a substantial dose of capital and know how) produces a huge amount of benefits.... osts of communication and computation have tumbled.  William Nordhaus at Yale University claims that computing performance has increased by a factor of 1 to 5 trillion since 1900, which represents a compound growth rate of 30-35% for a century. Since 1940, the growth rate has accelerated to 50% a year.

It's not that the growth in benefits from technology has stagnated. Quite the contrary, it's the growth in costs that have stagnated. And that's a good thing!

I think Annie Lowrey is wrong (and Tyler Cowen is wrong):

Annie Lowrey: Has the Internet, the most revolutionary communications technology advance since Gutenberg rolled out the printing press, done nothing for GDP growth? The answer, economists broadly agree, is: Sorry, but no—at least, not nearly as much as you would expect.... [A] theory... espoused by Cowen himself... [is that] the Internet is just not as revolutionary as we think it is. Sure, people might derive endless pleasure from it—its tendency to improve people's quality of life is undeniable. And sure, it might have revolutionized how we find, buy, and sell goods and services. But that still does not necessarily mean it is as transformative of an economy as, say, railroads were.

That is in part because the Internet and computers tend to push costs toward zero, and have the capacity to reduce the need for labor. You are, of course, currently reading this article for free on a Web site supported not by subscriptions, but by advertising....

That the Internet has not produced an economic boom might be hard to believe, Cowen admits. "We have a collective historical memory that technological progress brings a big and predictable stream of revenue growth across most of the economy," he writes. "When it comes to the web, those assumptions are turning out to be wrong or misleading. The revenue-intensive sectors of our economy have been slowing down and the big technological gains are coming in revenue-deficient sectors."... [I]f our most radical and life-altering technologies are not improving incomes or productivity or growth, then we still have problems. Quality-of-life improvements do not put dinner on the table or pay for Social Security benefits...

But we already put dinner on the table perfectly well.

We--especially me--really do not need more calories, thank you.

What we need is the ability to quickly search and decide exactly what kind of dinner we want brought to us if we are lazy.

What we need is the ability to figure out quickly what the tastiest and most nutritional recipe we can make with what is in the fridge if we are feeling industrious.

Those are the things that the internet is best at.

That the internet is not "producing revenue" is completely beside the point. What the internet is doing is, as Paul Seabright has already written, saving attention--and that is much more valuable.

Given a choice between doubling the amount of calories consumed by the typical middle-class American family--or doubling the amount of furniture purchased, or doubling the amount of automobiles owned, or doubling the number of clothes in our closets--and halving the time we must spend searching for what we want to buy, to read, to watch, to listen to, can anyone think that this is a difficult choice?

And to the extent that our price indexes do not take into account the improvements in quality of life from the internet, we don't have to spend as much on Social Security benefits as the CPI suggests in order to provide our seniors with a generous standard of living.

Not One But Many Kinds of "Social Media"

Tom Slee on "Social Media":

Blogs and Bullets: Breaking Down Social Media - Whimsley: Once we give up on the "tendency" and "on average" arguments around digital technologies, the Internet takes its place as one part of the real world, not a separate entity.... In the early 1990's there was much talk of a "new economics" of the Internet, but in the end it turned out that - with a sharpened focus on increasing returns - traditional economics did explain much of the industrial organization of the digital realm. At the same time there was much talk of how the Internet would break down legal barriers, but such barriers have proven surprisingly resilient.... What smaller-scale structures would we talk about, if we give up the grand themes of "social media"? Here is a rough sketch of one division.

Internet-based social network platforms: Centralized, commercial, privately-owned and advertising-driven, the YouTwitFace world is obviously one of the big stories of the moment. The cost structure of such businesses make them natural, if maybe short-lived, monopolies. To be repetitious, the story is not just one about "networks"; it's also about the terms of service, privacy policies, and advertising policies of the major platform owners. A focus on the Internet has given a tendency to discuss Facebook (the platform)'s role in the current ferment independent of Facebook (the company), but that's unsupportable (much more here). What accommodations have the owners made with the countries in which they operate?

Mobile Devices: Messaging on a phone in the street is different from looking at a browser while sitting inside, especially in times of political turmoil. It is quite possible that the phone could supplement political activity while the desktop browser could displace it. Mobility makes a difference, and lumping SMS messaging together with blogs just confuses things. On the other hand, the proprietary nature of the phone network means that device manufacturers and network operators can be leaned on to comply with state-driven security demands (ask RIM).

Blogs: Despite Turkey blocking all of blogspot.com, blogging (and especially independent blogging) is architecturally different from social networking platforms. The network of sites is looser, the content more dispersed, the ownership more individual. Blogging plays a different role in political debate and activity to Facebook and other forms of expression.

Multi-channel outlets: Al Jazeera, The Guardian, The New York Times: major media operations that have adapted to the web now operate as multi-channel outlets. Does it make sense to situate The Guardian as traditional media and put the Huffington Post in the new media category? I don't see why, but these outlets that can operate in multiple media surely demand different treatment.

Displaced forms of media: The winner-take-all structure of digital markets means that in any one niche there are relatively few players compared to the number in the diminishing-returns-based physical world. There's no need for separate special-topic reference publications when Wikipedia can be expanded indefinitely, and there are fewer bookshops online than there are offline. The major cultural outlets for many countries are increasingly based on the west coast of the USA as Hollywood is joined by Apple, Amazon, and Netflix. We are losing a diversity of institutions in the move to a digital terrain, and it is worth investigating what impact that loss has.

Circumvention tools: Tools used specifically by activists while carrying out illegal or politically sensitive acts fall into a separate category. Do tools like Tor and the failed Haystack tell us much about social networking and Facebook? I don't think so.

Obviously there are many other divisions possible. My main point is: if there is one shift that forswearing "social media" would produce, it would be to talk less about networks and self-organization and to talk more about institutions (commercial, state, and global), and this seems to me a realistic shift given how the digital world has changed over the last few years.

Liveblogging World War II: March 8, 1941

Convoy SL-67 escapes attack from the Scharnhorst and Gneisenau because the battleship Malaya is present, and the battlecruisers are under orders to avoid action with capital ships.

Tyler Cowen on Free Exchange

TC:

Free Exchange - The 25 Best Financial Blogs - TIME: Free Exchange brings the reader a few of The Economist's leading economics reporters, but in a more freely flowing form, in shorter bits and in debate with the leading economists of the blogosphere. The "link exchange" feature points the reader each day to the best economics of the Web on that day.... The blog is strong on reasoned argument, links to evidence and avoids the nasty and fruitless polemics that bog down so many other parts of the Web. Most posts have a sharp and thoughtful point about a public-policy issue. The coverage is opportunistic rather than comprehensive, playing to the strengths of the writers. And if that weren't enough, the comments section attracts educated, intelligent remarks.

What's the only drawback of the site? The annoying pop-ups. Most people reading the blog already subscribe to the magazine. But it's not annoying enough to get me to stop reading. The Economist has 24 blogs and this is one of the best.

Obama Made a Substantial Unforced Error in Choosing Deficit Arsonist Alan Simpson to Co-Chair His Deficit Commission

MJ Lee:

Obama's debt expert yells at kids: The co-chairman of President Obama’s deficit commission tried to scold the elderly on Monday for complaining about their Social Security funds being targeted, but instead he found himself making a reference to “Snoopy Snoopy Poop Dogg.” “This is a fakery,” Simpson said on Fox News. “If they care at all about their children or grandchildren, and sometimes I doubt that – I think, you know, grandchildren now don’t write a thank-you for the Christmas presents, they’re walking on their pants with the cap on backwards listening to the enema man and Snoopy Snoopy Poop Dogg, and they don’t like them!”

U.C. Berkeley Revised Breadth Requirements

I say return to our roots: Grammar, logic, rhetoric, astronomy, music, arithmetic, and geometry.

Calculated Risk Muses on Labor Force Participation and the Unemployment Rate

CR:

Calculated Risk: More on Labor Force Participation Rate: Sudeep Reddy and Sara Murray at the WSJ wrote: Jobless Rate Falls Further

A growing number of workers with health problems are applying for Social Security Disability Insurance benefits. The disability rolls, where many beneficiaries remain for life, have surged more than 14% since the recession began, to nearly 10.2 million in December 2010. "We already know from the number of people who have entered the disability rolls that there's going to be a permanent hit to the labor force participation rate," said Lawrence Katz, a Harvard University economist. "That's both costly to them—they're going to be less happy—and costly to us to lose someone who could be a productive worker."

I still expect some bounce back in the participation rate, and how many people return to the labor force is key in estimating how many jobs are needed to reduce the unemployment rate.

As I noted yesterday, if the Civilian noninstitutional population (over 16 years old) grows by about 2 million per year - and the participation rate stays flat - the economy will need to add about 100 thousand jobs per month to keep the unemployment rate steady at 8.9%.

If the population grows faster (say 2.5 million per year), and/or the participation rate rises, it could take significantly more jobs per month to hold the unemployment rate steady. As an example, if the working age population grows 2.5 million per year and the participation rate rises to 65% (from 64.2%) over the next two years, the economy will need to add 200 thousand jobs per month to hold the unemployment rate steady.