J. Bradford DeLong's Blog, page 2120

Paul Krugman: Two Speeches and an Editorial

Two Speeches and an Editorial:

President Obama, yesterday:

Rather than pointing fingers or assigning blame, let us use this occasion to expand our moral imaginations, to listen to each other more carefully, to sharpen our instincts for empathy, and remind ourselves of all the ways our hopes and dreams are bound together.

President Obama, May 1, 2009:

I view that quality of empathy, of understanding and identifying with people’s hopes and struggles as an essential ingredient for arriving as just decisions and outcomes.

National Review, May 4, 2009:

Empathy is simply a codeword for an inclination toward liberal activism.

And let me add Grover Norquist, May 26, 2003:

We are trying to change the tones in the state capitals—and turn them toward bitter nastiness and partisanship. Bipartisanship is another name for date rape.

Yet Another Reason Why Friends Really Don't Let Friends Support the Republican Party

Paul Krugman

The War on Logic: My wife and I were thinking of going out for an inexpensive dinner tonight. But John Boehner, the speaker of the House, says that no matter how cheap the meal may seem, it will cost thousands of dollars once you take our monthly mortgage payments into account. Wait a minute, you may say. How can our mortgage payments be a cost of going out to eat, when we’ll have to make the same payments even if we stay home? But Mr. Boehner is adamant: our mortgage is part of the cost of our meal, and to say otherwise is just a budget gimmick.

O.K., the speaker hasn’t actually weighed in on our plans for the evening. But he and his G.O.P. colleagues have lately been making exactly the nonsensical argument I’ve just described — not about tonight’s dinner, but about health care reform. And the nonsense wasn’t a slip of the tongue; it’s the official party position, laid out in charts and figures.

We are, I believe, witnessing something new in American politics. Last year, looking at claims that we can cut taxes, avoid cuts to any popular program and still balance the budget, I observed that Republicans seemed to have lost interest in the war on terror and shifted focus to the war on arithmetic. But now the G.O.P. has moved on to an even bigger project: the war on logic....

Republicans have a small problem: they claim to care about budget deficits, yet the Congressional Budget Office says that repealing last year’s health reform would increase the deficit. So what, other than dismissing the nonpartisan budget office’s verdict as “their opinion” — as Mr. Boehner has — can the G.O.P. do?... First of all, says the analysis, the true cost of reform includes the cost of the “doc fix.”... Well, in 1997 Congress enacted a formula to determine Medicare payments to physicians. The formula was, however, flawed; it would lead to payments so low that doctors would stop accepting Medicare patients. Instead of changing the formula, however, Congress has consistently enacted one-year fixes. And Republicans claim that the estimated cost of future fixes, $208 billion over the next 10 years, should be considered a cost of health care reform. But the same spending would still be necessary if we were to undo reform. So the G.O.P. argument here is exactly like claiming that my mortgage payments, which I’ll have to make no matter what we do tonight, are a cost of going out for dinner.

There’s more like that: the G.O.P. also claims that $115 billion of other health care spending should be charged to health reform....

To be sure, the Republican analysis doesn’t rely entirely on spurious attributions of cost — it also relies on using three-card monte tricks to make money disappear. Health reform, says the budget office, will increase Social Security revenues and reduce Medicare costs. But the G.O.P. analysis says that these sums don’t count....

The key to understanding the G.O.P. analysis of health reform is that the party’s leaders are not, in fact, opposed to reform because they believe it will increase the deficit. Nor are they opposed because they seriously believe that it will be “job-killing” (which it won’t be). They’re against reform because it would cover the uninsured.... [T]he modern G.O.P. has been taken over by an ideology in which the suffering of the unfortunate isn’t a proper concern of government, and alleviating that suffering at taxpayer expense is immoral...

I think he is wrong. I think some people believe that it is immoral for poor people to receive government-funded health care. (For example, consider the line that distributive justice is that people deserve to keep whatever they earn without cheating. That would imply that (a) if you don't earn enough to pay for your health care, and (b) if market failures prevent you from buying insurance ex ante at a reasonable price, and (c) if you cannot convince anyone rich to voluntarily cover your charity care--then (d) tough: it's moral for you to die untreated.)

But rather more, I think, are opposed to implementing the Affordable Care Act--the nationwide RomneyCare plan originally proposed by the Republican Heritage Foundation--because if it is implemented the press will write about it as a victory for Obama and the Democrats.

If only the press had written about the Affordable Care Act as a victory for moderate Republicanism, there would be no more enthusiastic cheerleader for its implementation that John Boehner,

Yet Another Reason Why Friends Really Don't Friends Support the Republican Party

Paul Krugman

The War on Logic: My wife and I were thinking of going out for an inexpensive dinner tonight. But John Boehner, the speaker of the House, says that no matter how cheap the meal may seem, it will cost thousands of dollars once you take our monthly mortgage payments into account. Wait a minute, you may say. How can our mortgage payments be a cost of going out to eat, when we’ll have to make the same payments even if we stay home? But Mr. Boehner is adamant: our mortgage is part of the cost of our meal, and to say otherwise is just a budget gimmick.

O.K., the speaker hasn’t actually weighed in on our plans for the evening. But he and his G.O.P. colleagues have lately been making exactly the nonsensical argument I’ve just described — not about tonight’s dinner, but about health care reform. And the nonsense wasn’t a slip of the tongue; it’s the official party position, laid out in charts and figures.

We are, I believe, witnessing something new in American politics. Last year, looking at claims that we can cut taxes, avoid cuts to any popular program and still balance the budget, I observed that Republicans seemed to have lost interest in the war on terror and shifted focus to the war on arithmetic. But now the G.O.P. has moved on to an even bigger project: the war on logic....

Republicans have a small problem: they claim to care about budget deficits, yet the Congressional Budget Office says that repealing last year’s health reform would increase the deficit. So what, other than dismissing the nonpartisan budget office’s verdict as “their opinion” — as Mr. Boehner has — can the G.O.P. do?... First of all, says the analysis, the true cost of reform includes the cost of the “doc fix.”... Well, in 1997 Congress enacted a formula to determine Medicare payments to physicians. The formula was, however, flawed; it would lead to payments so low that doctors would stop accepting Medicare patients. Instead of changing the formula, however, Congress has consistently enacted one-year fixes. And Republicans claim that the estimated cost of future fixes, $208 billion over the next 10 years, should be considered a cost of health care reform. But the same spending would still be necessary if we were to undo reform. So the G.O.P. argument here is exactly like claiming that my mortgage payments, which I’ll have to make no matter what we do tonight, are a cost of going out for dinner.

There’s more like that: the G.O.P. also claims that $115 billion of other health care spending should be charged to health reform....

To be sure, the Republican analysis doesn’t rely entirely on spurious attributions of cost — it also relies on using three-card monte tricks to make money disappear. Health reform, says the budget office, will increase Social Security revenues and reduce Medicare costs. But the G.O.P. analysis says that these sums don’t count....

The key to understanding the G.O.P. analysis of health reform is that the party’s leaders are not, in fact, opposed to reform because they believe it will increase the deficit. Nor are they opposed because they seriously believe that it will be “job-killing” (which it won’t be). They’re against reform because it would cover the uninsured.... [T]he modern G.O.P. has been taken over by an ideology in which the suffering of the unfortunate isn’t a proper concern of government, and alleviating that suffering at taxpayer expense is immoral...

I think he is wrong. I think some people believe that it is immoral for poor people to receive government-funded health care. (For example, consider the line that distributive justice is that people deserve to keep whatever they earn without cheating. That would imply that (a) if you don't earn enough to pay for your health care, and (b) if market failures prevent you from buying insurance ex ante at a reasonable price, and (c) if you cannot convince anyone rich to voluntarily cover your charity care--then (d) tough: it's moral for you to die untreated.)

But rather more, I think, are opposed to implementing the Affordable Care Act--the nationwide RomneyCare plan originally proposed by the Republican Heritage Foundation--because if it is implemented the press will write about it as a victory for Obama and the Democrats.

If only the press had written about the Affordable Care Act as a victory for moderate Republicanism, there would be no more enthusiastic cheerleader for its implementation that John Boehner,

Alex Tabarrok and Paul Krugman vs. Tyler Cowen

Well this is unusual to see. Alex Tabarrok:

Marginal Revolution: ZMP v. Sticky Wages: I find myself in the unusual position of being closer to Paul Krugman (and Scott Sumner, less surprising) than Tyler on the question of Zero Marginal Product workers.... The term ZMP also suggests that the problem is the productivity of the unemployed when the actual problem is with the economy more generally (a version of the fundamental attribution error)....

Even within the categories of workers with the highest unemployment rates (say males without a high school degree) usually a large majority of these workers are employed. Within the same category are the unemployed so different from the employed? I don't think so. One reason employed workers are still fearful is that they see the unemployed and think, "there but for the grace of God, go I." The employed are right to be fearful, being unemployed today has less to do with personal characteristics than a bad economy and bad luck.... Imagine randomly switching an unemployed worker for a measurably similar employed worker but at say a 15% lower wage. Holding morale and other such factors constant, do you think that employers would refuse such a switch? Tyler says yes. I say no. If wages were less sticky the unemployed would be find employment

By the way, the problem of sticky wages is often misunderstood. The big problem is not that the wages of unemployed workers are sticky, the big problem is that the wages of employed workers are sticky. This is why stories of the unemployed being reemployed at far lower wages are entirely compatible with the macroeconomics of sticky wages.

Although I don't like the term ZMP workers, I do think Tyler is pointing to a very important issue: firms used to engage in labor hoarding during a recession and now firms are labor disgorging. As a result, labor productivity has changed from being mildly pro-cyclical to counter-cyclical. Why? I can think of four reasons:

The recession is structural, as Tyler has argued. If firms don't expect to ever hire workers back then they will fire them now.
Firms expect the recession to be long - this is consistent with a Scott Sumner AD view among others
In a balance-sheet recession firms are desperate to reduce debt and they can't borrow to labor hoard.
Labor markets have become more competitive. Firms used to be monopsonists and so they would hold on to workers longer since W

It would be interesting to know why Paul Krugman thinks productivity has become counter-cyclical, but I believe he has yet to address this important topic.

Well, it is a very hard issue. It is hard to understand why. That it is a fact is pretty clear:

It used to be that the times when unemployment was rising were times when economy-wide productivity growth was undershooting expectations. Now the times when unemployment is rising are times in economy-wide productivity is overshooting expectations.

If the stake had not been driven through the heart of real business cyle theory long ago, that would definitely do it...

Martin Luther King, Jr.: April 3, 1968

Thank you very kindly, my friends. As I listened to Ralph Abernathy and his eloquent and generous introduction and then thought about myself, I wondered who he was talking about. It's always good to have your closest friend and associate to say something good about you. And Ralph Abernathy is the best friend that I have in the world. I'm delighted to see each of you here tonight in spite of a storm warning. You reveal that you are determined to go on anyhow.

Something is happening in Memphis; something is happening in our world. And you know, if I were standing at the beginning of time, with the possibility of taking a kind of general and panoramic view of the whole of human history up to now, and the Almighty said to me, "Martin Luther King, which age would you like to live in?" I would take my mental flight by Egypt and I would watch God's children in their magnificent trek from the dark dungeons of Egypt through, or rather across the Red Sea, through the wilderness on toward the promised land. And in spite of its magnificence, I wouldn't stop there.

I would move on by Greece and take my mind to Mount Olympus. And I would see Plato, Aristotle, Socrates, Euripides and Aristophanes assembled around the Parthenon. And I would watch them around the Parthenon as they discussed the great and eternal issues of reality. But I wouldn't stop there.

I would go on, even to the great heyday of the Roman Empire. And I would see developments around there, through various emperors and leaders. But I wouldn't stop there.

I would even come up to the day of the Renaissance, and get a quick picture of all that the Renaissance did for the cultural and aesthetic life of man. But I wouldn't stop there.

I would even go by the way that the man for whom I am named had his habitat. And I would watch Martin Luther as he tacked his ninety-five theses on the door at the church of Wittenberg. But I wouldn't stop there.

I would come on up even to 1863, and watch a vacillating President by the name of Abraham Lincoln finally come to the conclusion that he had to sign the Emancipation Proclamation. But I wouldn't stop there.

I would even come up to the early thirties, and see a man grappling with the problems of the bankruptcy of his nation. And come with an eloquent cry that we have nothing to fear but "fear itself." But I wouldn't stop there.

Strangely enough, I would turn to the Almighty, and say, "If you allow me to live just a few years in the second half of the 20th century, I will be happy."

Now that's a strange statement to make, because the world is all messed up. The nation is sick. Trouble is in the land; confusion all around. That's a strange statement. But I know, somehow, that only when it is dark enough can you see the stars. And I see God working in this period of the twentieth century in a way that men, in some strange way, are responding.

Something is happening in our world. The masses of people are rising up. And wherever they are assembled today, whether they are in Johannesburg, South Africa; Nairobi, Kenya; Accra, Ghana; New York City; Atlanta, Georgia; Jackson, Mississippi; or Memphis, Tennessee -- the cry is always the same: "We want to be free."

And another reason that I'm happy to live in this period is that we have been forced to a point where we are going to have to grapple with the problems that men have been trying to grapple with through history, but the demands didn't force them to do it. Survival demands that we grapple with them. Men, for years now, have been talking about war and peace. But now, no longer can they just talk about it. It is no longer a choice between violence and nonviolence in this world; it's nonviolence or nonexistence. That is where we are today.

And also in the human rights revolution, if something isn't done, and done in a hurry, to bring the colored peoples of the world out of their long years of poverty, their long years of hurt and neglect, the whole world is doomed. Now, I'm just happy that God has allowed me to live in this period to see what is unfolding. And I'm happy that He's allowed me to be in Memphis.

I can remember -- I can remember when Negroes were just going around as Ralph has said, so often, scratching where they didn't itch, and laughing when they were not tickled. But that day is all over. We mean business now, and we are determined to gain our rightful place in God's world.

And that's all this whole thing is about. We aren't engaged in any negative protest and in any negative arguments with anybody. We are saying that we are determined to be men. We are determined to be people. We are saying -- We are saying that we are God's children. And that we are God's children, we don't have to live like we are forced to live.

Now, what does all of this mean in this great period of history? It means that we've got to stay together. We've got to stay together and maintain unity. You know, whenever Pharaoh wanted to prolong the period of slavery in Egypt, he had a favorite, favorite formula for doing it. What was that? He kept the slaves fighting among themselves. But whenever the slaves get together, something happens in Pharaoh's court, and he cannot hold the slaves in slavery. When the slaves get together, that's the beginning of getting out of slavery. Now let us maintain unity.

Secondly, let us keep the issues where they are. The issue is injustice. The issue is the refusal of Memphis to be fair and honest in its dealings with its public servants, who happen to be sanitation workers. Now, we've got to keep attention on that. That's always the problem with a little violence. You know what happened the other day, and the press dealt only with the window-breaking. I read the articles. They very seldom got around to mentioning the fact that one thousand, three hundred sanitation workers are on strike, and that Memphis is not being fair to them, and that Mayor Loeb is in dire need of a doctor. They didn't get around to that.

Now we're going to march again, and we've got to march again, in order to put the issue where it is supposed to be -- and force everybody to see that there are thirteen hundred of God's children here suffering, sometimes going hungry, going through dark and dreary nights wondering how this thing is going to come out. That's the issue. And we've got to say to the nation: We know how it's coming out. For when people get caught up with that which is right and they are willing to sacrifice for it, there is no stopping point short of victory.

We aren't going to let any mace stop us. We are masters in our nonviolent movement in disarming police forces; they don't know what to do. I've seen them so often. I remember in Birmingham, Alabama, when we were in that majestic struggle there, we would move out of the 16th Street Baptist Church day after day; by the hundreds we would move out. And Bull Connor would tell them to send the dogs forth, and they did come; but we just went before the dogs singing, "Ain't gonna let nobody turn me around."

Bull Connor next would say, "Turn the fire hoses on." And as I said to you the other night, Bull Connor didn't know history. He knew a kind of physics that somehow didn't relate to the transphysics that we knew about. And that was the fact that there was a certain kind of fire that no water could put out. And we went before the fire hoses; we had known water. If we were Baptist or some other denominations, we had been immersed. If we were Methodist, and some others, we had been sprinkled, but we knew water. That couldn't stop us.

And we just went on before the dogs and we would look at them; and we'd go on before the water hoses and we would look at it, and we'd just go on singing "Over my head I see freedom in the air." And then we would be thrown in the paddy wagons, and sometimes we were stacked in there like sardines in a can. And they would throw us in, and old Bull would say, "Take 'em off," and they did; and we would just go in the paddy wagon singing, "We Shall Overcome." And every now and then we'd get in jail, and we'd see the jailers looking through the windows being moved by our prayers, and being moved by our words and our songs. And there was a power there which Bull Connor couldn't adjust to; and so we ended up transforming Bull into a steer, and we won our struggle in Birmingham. Now we've got to go on in Memphis just like that. I call upon you to be with us when we go out Monday.

Now about injunctions: We have an injunction and we're going into court tomorrow morning to fight this illegal, unconstitutional injunction. All we say to America is, "Be true to what you said on paper." If I lived in China or even Russia, or any totalitarian country, maybe I could understand some of these illegal injunctions. Maybe I could understand the denial of certain basic First Amendment privileges, because they hadn't committed themselves to that over there. But somewhere I read of the freedom of assembly. Somewhere I read of the freedom of speech. Somewhere I read of the freedom of press. Somewhere I read that the greatness of America is the right to protest for right. And so just as I say, we aren't going to let dogs or water hoses turn us around, we aren't going to let any injunction turn us around. We are going on.

We need all of you. And you know what's beautiful to me is to see all of these ministers of the Gospel. It's a marvelous picture. Who is it that is supposed to articulate the longings and aspirations of the people more than the preacher? Somehow the preacher must have a kind of fire shut up in his bones. And whenever injustice is around he tell it. Somehow the preacher must be an Amos, and saith, "When God speaks who can but prophesy?" Again with Amos, "Let justice roll down like waters and righteousness like a mighty stream." Somehow the preacher must say with Jesus, "The Spirit of the Lord is upon me, because he hath anointed me," and he's anointed me to deal with the problems of the poor."

And I want to commend the preachers, under the leadership of these noble men: James Lawson, one who has been in this struggle for many years; he's been to jail for struggling; he's been kicked out of Vanderbilt University for this struggle, but he's still going on, fighting for the rights of his people. Reverend Ralph Jackson, Billy Kiles; I could just go right on down the list, but time will not permit. But I want to thank all of them. And I want you to thank them, because so often, preachers aren't concerned about anything but themselves. And I'm always happy to see a relevant ministry.

It's all right to talk about "long white robes over yonder," in all of its symbolism. But ultimately people want some suits and dresses and shoes to wear down here! It's all right to talk about "streets flowing with milk and honey," but God has commanded us to be concerned about the slums down here, and his children who can't eat three square meals a day. It's all right to talk about the new Jerusalem, but one day, God's preacher must talk about the new New York, the new Atlanta, the new Philadelphia, the new Los Angeles, the new Memphis, Tennessee. This is what we have to do.

Now the other thing we'll have to do is this: Always anchor our external direct action with the power of economic withdrawal. Now, we are poor people. Individually, we are poor when you compare us with white society in America. We are poor. Never stop and forget that collectively -- that means all of us together -- collectively we are richer than all the nations in the world, with the exception of nine. Did you ever think about that? After you leave the United States, Soviet Russia, Great Britain, West Germany, France, and I could name the others, the American Negro collectively is richer than most nations of the world. We have an annual income of more than thirty billion dollars a year, which is more than all of the exports of the United States, and more than the national budget of Canada. Did you know that? That's power right there, if we know how to pool it.

We don't have to argue with anybody. We don't have to curse and go around acting bad with our words. We don't need any bricks and bottles. We don't need any Molotov cocktails. We just need to go around to these stores, and to these massive industries in our country, and say, "God sent us by here, to say to you that you're not treating his children right. And we've come by here to ask you to make the first item on your agenda fair treatment, where God's children are concerned. Now, if you are not prepared to do that, we do have an agenda that we must follow. And our agenda calls for withdrawing economic support from you."

And so, as a result of this, we are asking you tonight, to go out and tell your neighbors not to buy Coca-Cola in Memphis. Go by and tell them not to buy Sealtest milk. Tell them not to buy -- what is the other bread? -- Wonder Bread. And what is the other bread company, Jesse? Tell them not to buy Hart's bread. As Jesse Jackson has said, up to now, only the garbage men have been feeling pain; now we must kind of redistribute the pain. We are choosing these companies because they haven't been fair in their hiring policies; and we are choosing them because they can begin the process of saying they are going to support the needs and the rights of these men who are on strike. And then they can move on town -- downtown and tell Mayor Loeb to do what is right.

But not only that, we've got to strengthen black institutions. I call upon you to take your money out of the banks downtown and deposit your money in Tri-State Bank. We want a "bank-in" movement in Memphis. Go by the savings and loan association. I'm not asking you something that we don't do ourselves at SCLC. Judge Hooks and others will tell you that we have an account here in the savings and loan association from the Southern Christian Leadership Conference. We are telling you to follow what we are doing. Put your money there. You have six or seven black insurance companies here in the city of Memphis. Take out your insurance there. We want to have an "insurance-in."

Now these are some practical things that we can do. We begin the process of building a greater economic base. And at the same time, we are putting pressure where it really hurts. I ask you to follow through here.

Now, let me say as I move to my conclusion that we've got to give ourselves to this struggle until the end. Nothing would be more tragic than to stop at this point in Memphis. We've got to see it through. And when we have our march, you need to be there. If it means leaving work, if it means leaving school -- be there. Be concerned about your brother. You may not be on strike. But either we go up together, or we go down together.

Let us develop a kind of dangerous unselfishness. One day a man came to Jesus, and he wanted to raise some questions about some vital matters of life. At points he wanted to trick Jesus, and show him that he knew a little more than Jesus knew and throw him off base....

Now that question could have easily ended up in a philosophical and theological debate. But Jesus immediately pulled that question from mid-air, and placed it on a dangerous curve between Jerusalem and Jericho. And he talked about a certain man, who fell among thieves. You remember that a Levite and a priest passed by on the other side. They didn't stop to help him. And finally a man of another race came by. He got down from his beast, decided not to be compassionate by proxy. But he got down with him, administered first aid, and helped the man in need. Jesus ended up saying, this was the good man, this was the great man, because he had the capacity to project the "I" into the "thou," and to be concerned about his brother.

Now you know, we use our imagination a great deal to try to determine why the priest and the Levite didn't stop. At times we say they were busy going to a church meeting, an ecclesiastical gathering, and they had to get on down to Jerusalem so they wouldn't be late for their meeting. At other times we would speculate that there was a religious law that "One who was engaged in religious ceremonials was not to touch a human body twenty-four hours before the ceremony." And every now and then we begin to wonder whether maybe they were not going down to Jerusalem -- or down to Jericho, rather to organize a "Jericho Road Improvement Association." That's a possibility. Maybe they felt that it was better to deal with the problem from the causal root, rather than to get bogged down with an individual effect.

But I'm going to tell you what my imagination tells me. It's possible that those men were afraid. You see, the Jericho road is a dangerous road. I remember when Mrs. King and I were first in Jerusalem. We rented a car and drove from Jerusalem down to Jericho. And as soon as we got on that road, I said to my wife, "I can see why Jesus used this as the setting for his parable." It's a winding, meandering road. It's really conducive for ambushing. You start out in Jerusalem, which is about 1200 miles -- or rather 1200 feet above sea level. And by the time you get down to Jericho, fifteen or twenty minutes later, you're about 2200 feet below sea level. That's a dangerous road. In the days of Jesus it came to be known as the "Bloody Pass." And you know, it's possible that the priest and the Levite looked over that man on the ground and wondered if the robbers were still around. Or it's possible that they felt that the man on the ground was merely faking. And he was acting like he had been robbed and hurt, in order to seize them over there, lure them there for quick and easy seizure. And so the first question that the priest asked -- the first question that the Levite asked was, "If I stop to help this man, what will happen to me?" But then the Good Samaritan came by. And he reversed the question: "If I do not stop to help this man, what will happen to him?"

That's the question before you tonight. Not, "If I stop to help the sanitation workers, what will happen to my job. Not, "If I stop to help the sanitation workers what will happen to all of the hours that I usually spend in my office every day and every week as a pastor?" The question is not, "If I stop to help this man in need, what will happen to me?" The question is, "If I do not stop to help the sanitation workers, what will happen to them?" That's the question.

Let us rise up tonight with a greater readiness. Let us stand with a greater determination. And let us move on in these powerful days, these days of challenge to make America what it ought to be. We have an opportunity to make America a better nation. And I want to thank God, once more, for allowing me to be here with you.

You know, several years ago, I was in New York City autographing the first book that I had written. And while sitting there autographing books, a demented black woman came up. The only question I heard from her was, "Are you Martin Luther King?" And I was looking down writing, and I said, "Yes." And the next minute I felt something beating on my chest. Before I knew it I had been stabbed by this demented woman. I was rushed to Harlem Hospital. It was a dark Saturday afternoon. And that blade had gone through, and the X-rays revealed that the tip of the blade was on the edge of my aorta, the main artery. And once that's punctured, your drowned in your own blood -- that's the end of you.

It came out in the New York Times the next morning, that if I had merely sneezed, I would have died. Well, about four days later, they allowed me, after the operation, after my chest had been opened, and the blade had been taken out, to move around in the wheel chair in the hospital. They allowed me to read some of the mail that came in, and from all over the states and the world, kind letters came in. I read a few, but one of them I will never forget. I had received one from the President and the Vice-President. I've forgotten what those telegrams said. I'd received a visit and a letter from the Governor of New York, but I've forgotten what that letter said. But there was another letter that came from a little girl, a young girl who was a student at the White Plains High School. And I looked at that letter, and I'll never forget it. It said simply,

Dear Dr. King,

I am a ninth-grade student at the White Plains High School."

And she said,

While it should not matter, I would like to mention that I'm a white girl. I read in the paper of your misfortune, and of your suffering. And I read that if you had sneezed, you would have died. And I'm simply writing you to say that I'm so happy that you didn't sneeze.

And I want to say tonight -- I want to say tonight that I too am happy that I didn't sneeze. Because if I had sneezed, I wouldn't have been around here in 1960, when students all over the South started sitting-in at lunch counters. And I knew that as they were sitting in, they were really standing up for the best in the American dream, and taking the whole nation back to those great wells of democracy which were dug deep by the Founding Fathers in the Declaration of Independence and the Constitution.

If I had sneezed, I wouldn't have been around here in 1961, when we decided to take a ride for freedom and ended segregation in inter-state travel.

If I had sneezed, I wouldn't have been around here in 1962, when Negroes in Albany, Georgia, decided to straighten their backs up. And whenever men and women straighten their backs up, they are going somewhere, because a man can't ride your back unless it is bent.

If I had sneezed -- If I had sneezed I wouldn't have been here in 1963, when the black people of Birmingham, Alabama, aroused the conscience of this nation, and brought into being the Civil Rights Bill.

If I had sneezed, I wouldn't have had a chance later that year, in August, to try to tell America about a dream that I had had.

If I had sneezed, I wouldn't have been down in Selma, Alabama, to see the great Movement there.

If I had sneezed, I wouldn't have been in Memphis to see a community rally around those brothers and sisters who are suffering.

I'm so happy that I didn't sneeze.

And they were telling me --. Now, it doesn't matter, now. It really doesn't matter what happens now. I left Atlanta this morning, and as we got started on the plane, there were six of us. The pilot said over the public address system, "We are sorry for the delay, but we have Dr. Martin Luther King on the plane. And to be sure that all of the bags were checked, and to be sure that nothing would be wrong with on the plane, we had to check out everything carefully. And we've had the plane protected and guarded all night."

And then I got into Memphis. And some began to say the threats, or talk about the threats that were out. What would happen to me from some of our sick white brothers?

Well, I don't know what will happen now. We've got some difficult days ahead. But it really doesn't matter with me now, because I've been to the mountaintop.

And I don't mind.

Like anybody, I would like to live a long life. Longevity has its place. But I'm not concerned about that now. I just want to do God's will. And He's allowed me to go up to the mountain. And I've looked over. And I've seen the Promised Land. I may not get there with you. But I want you to know tonight, that we, as a people, will get to the promised land!

And so I'm happy, tonight.

I'm not worried about anything.

I'm not fearing any man!

Mine eyes have seen the glory of the coming of the Lord!!

Parson Malthus Preacheth the Lesson!

T.R. Malthus

http://tinyurl.com/dl20090120d: It is, undoubtedly, a most disheartening reflection that the great obstacle in the way to any extraordinary improvement in society is of a nature that we can never hope to overcome. The perpetual tendency in the race of man to increase beyond the means of subsistence is one of the general laws of animated nature which we can have no reason to expect will change. Yet, discouraging as the contemplation of this difficulty must be to those whose exertions are laudably directed to the improvement of the human species, it is evident that no possible good can arise from any endeavours to slur it over or keep it in the background. On the contrary, the most baleful mischiefs may be expected from the unmanly conduct of not daring to face truth because it is unpleasing. Independently of what relates to this great obstacle, sufficient yet remains to be done for mankind to animate us to the most unremitted exertion. But if we proceed without a thorough knowledge and accurate comprehension of the nature, extent, and magnitude of the difficulties we have to encounter, or if we unwisely direct our efforts towards an object in which we cannot hope for success, we shall not only exhaust our strength in fruitless exertions and remain at as great a distance as ever from the summit of our wishes, but we shall be perpetually crushed by the recoil of this rock of Sisyphus...

[...]

It is a perfectly just observation of Mr. Godwin, that, 'There is a principle in human society, by which population is perpetually kept down to the level of the means of subsistence.' The sole question is, what is this principle? is it some obscure and occult cause? Is it some mysterious interference of heaven.... Or is it a cause, open to our researches, within our view, a cause, which has constantly been observed to operate, though with varied force, in every state in which man has been placed? Is it not a degree of misery, the necessary and inevitable result of the laws of nature, which human institutions, so far from aggravating, have tended considerably to mitigate, though they never can remove?.... It seems highly probable, therefore, that an administration of property, not very different from that which prevails in civilized states at present, would be established, as the best, though inadequate, remedy for the evils which were pressing on the society...

Hoisted from the Archives: Thinking About Aristotle of Stagira and Moses Finley

Thinking About Aristotle of Stagira and Moses Finley: Archive Entry From Brad DeLong's Webjournal: I'm never sure whether I should begin my economic history survey courses with Aristotle or not.

As Moses Finley powerfully argues, Aristotle does not care about the economy. The fragments in his Ethics and Politics that economists like Joseph Schumpeter point to are, mostly, concerned with other things than economic analysis. Karl Polanyi thought that Aristotle's naivete was the result of the fact that a mercantile, market, commercial economy was something very new. He was surely wrong: it was not something new, but rather something that Aristotle as a Hellenic aristocrat would have been embarrassed to be caught thinking seriously about.

Aristotle's perspective is so different from ours that it provides a useful mental shock when you consider that Aristotle of Stagira was not an idiot. For two thousand years people--pagan Hellenes, Christian Europeans, and Islamic Arabs, Egyptians, Mesopotamians,and Iranians--called Aristotle of Stagira "the philosopher", as if there could be only one. Think of the way seventeenth, eighteenth, and nineteenth century Britons regarded Newton (or the way we regard Einstein). So we need to take Aristotle seriously.

Think about how a very good mind, thinking very hard, in pre-industrial-revolution economic circumstances, could wind up thinking the thoughts on the economy that Aristotle does. Specifically, why does he...

...believe so strongly that gross inequality--domination and slavery--is natural and inevitable?

...believe that the 'natural art of acquisition'--the getting of the resources necessary to properly run one's household--has a limit: 'a boundary fixed, just as there is in the other arts; for the instruments of any art are never unlimited, either in number or size, and riches may be defined as a number of instruments to be used in a household or in a state...'? (Never mind that Aristotle's "limit" is probably the full-time year-round labor of at least fifty people, at today's OECD wage levels some $3,000,000 a year: in one sense very, very few of us will ever come near to Aristotle's point of satiation; in another sense every single one of us has already gone far beyond Aristotle's limit.)

...believe that shepherds are '...the laziest [of men]... lead an idle life... get their subsistence without trouble from tame animals...'?

...believe that '[t]here are two sorts of wealth-getting... one is a part of household management, the other is retail trade: the former necessary and honorable, while that which consists in exchange is justly censured; for it is unnatural, and a mode by which men gain from one another...'?

...believe that of '...the practical part [of wealth-getting] the discussion of such matters is not unworthy of philosophy, but to be engaged in them practically is illiberal and irksome'?

And if you do read it, don't miss Aristotle's story of Thales of Miletos and his corner of the olive-press-rental market on Khios..."

The Shift from Procyclical to Countercyclical Productivity in the American Business Cycle

Between the end of World War II and the late 1980s, times when unemployment rose were times when productivity growth was relatively low--and as the economy came out of the depths of the recession productivity growth would accelerate.

Since 1990, times when unemployment rates have risen have been times when productivity growth is relatively high--and as the economy comes out of the depths of the recession productivity growth tends to drop:

This shift does, I think, pose a big problem for Austrian and other real supply as opposed to demand side theories of the business cycle. In the depths of recent recessions unemployment is not high because labor productivity is low relative to trend. In the depths of recent recessions unemployment is high in spite of the fact that labor productivity is high relative to trend. Were it not for the shortage of demand, firms would want to employ not fewer but rather more workers at the trough than they had employed at the peak.

But because of the shortage of demand the new firms that could employ the unemployed profitably if only demand were normal do not exist. And because of the shortage of demand the firms that will expand and profitably employ the unemployed when demand returns to normal do not yet know who they are.

20110116 8QD unemp and prod.xls

Why Oh Why Can't We Have a Better Press Corps?

Yes. It's the Washington Post again, attacking the eight-hour day. Dean Baker:

Utopian Thinking on Jobs and Unemployment at the Washington Post: [R]idiculing the suggestion by James Galbraith to temporarily lower the age at which workers can receive full Social Security benefits to 62. The plan, which also was put forward in a bill by Representative Dennis Kucinich, would pull some number of older workers out of the labor force and thereby create more jobs for unemployed younger workers. The Post disses the plan. In addition to telling readers that it baffled financial journlalists (are financial journalists really so thick that they had problems understanding this one?) it goes on:

The proposals echo a familiar, and questionable, notion on the left: that we should find ways to better parcel out existing jobs. It's the same logic that leads some countries to consider cutting the number of hours or days someone can work each week, so that more people can share the work pool. In reality, the true challenge is to figure out how to create new jobs.

This one really is too delicious to believe that it actually appeared in print. Let's go in order. The first part describes the idea that we might want to redistribute work by cutting the number of hours each person works as a "notion on the left." Wow, according to the Washington Post, Germany's Christian Democratic government is now on the left.... Okay, now for part II: "In reality, the true challenge is to figure out how to create new jobs." Oh yeah! And, let's see what are the ideas that the Washington Post has for putting 15 million people back to work. Hmmmm, I looked through the rest of the Outlook section, I didn't see any. I looked through the rest of the paper, and yesterday's too, didn't see any there either. In fact, I did a search of the paper over the last two months and I can't say that I saw anything that resembled a proposal to put 15 million people back to work. A naive reader might think that the Washington Post, and the group of policy wonks it considers respectable, just don't have ideas for creating "new jobs"' and putting 15 million people back to work.

It sure would be wonderful if these respectable people did rise to the "true challenge" and come up with a way to put millions of people back to work, but they seem to be spending most of their time thinking of ways to reduce the deficit. It appears that our choices at the moment might be sharing the available work or having near double-digit unemployment...

Capacity Utilization and Unemployment

Mark Thoma:

Economist's View: Capacity Utilization and Unemployment: Why will the recovery of employment take even longer than the recovery of output?... First, firms do not want to make a commitment to hiring new workers until they are sure the recovery is solid, and uncertainty about the strength of the recovery near turning points leads firms to delay in hiring new workers. Second, during a downturn it's natural to reorganize production... install labor saving equipment in an attempt to cut costs.... The third reason for a delay is that firms... will not hire new workers until this excess capacity is used up.... Fourth, when there is a considerable amount of structural change – leading to large numbers of workers who must be retrained and/or relocated as they move out of industries such as housing and finance – labor markets will have difficulty recovering.

I hope I am wrong, but I believe these factors will interact to produce an extended period of unemployment. Historically, financial meltdowns of the type we experienced are difficult to recover from and this creates considerable uncertainty. Thus, the first factor listed above is particularly strong....

What about the longer run? Will the troubles for labor end when the recession is over? Unfortunately, the answer is no.  Labor markets have experienced tumultuous change in recent decades due to globalization and technological change, and these forces will still be there after the recession ends.