J. Bradford DeLong's Blog, page 215

The Fed Needs to Be Buying Recession Insurance���But Is Not: DeLong's Morning Coffee

Morning Coffee Podcast: The Fed Needs to Be Buying Recession Insurance���But Is Not: Should the U.S. fall into recession soon, the Federal Reserve will have very little room to loosen policy to cushion the downturn. This is a large asymmetric risk. The right way to manage an asymmetric risk is to buy insurance: the Federal Reserve should be buying recession insurance. It is not. This is a substantial problem...

7:15: https://delong.micro.blog/uploads/2019/9ae742f670.mp3 | https://delong.micro.blog/2019/03/16/the-fed-needs.html

Link to Project Syndicate

#morningcoffee #podcast #monetarypolicy

The Fed Should Buy Recession Insurance: Fresh at Project Syndicate

Fresh at Project Syndicate: The Fed Should Buy Recession Insurance: If the United States falls into recession in the next year or two, the US Federal Reserve may have very little room to loosen policy, yet it is not taking any steps to cover that risk. Unless the Fed rectifies this soon, the US���and the world���may well face much bigger problems later. The next global downturn may still be a little way off. The chances that the North Atlantic as a whole will be in recession a year from now have fallen to about one in four. German growth may well be positive this quarter, while China could rebound, too. And although US growth is definitely slowing���to 1% or so this quarter���this may yet turn out to be a blip. Let���s hope so. Because if the next downturn is looming, North Atlantic central banks do not have the policy room to fight it effectively... Read MOAR at Project Syndicate

#highlighted #projectsyndicate #monetarypolicy

REMIND YOURSELF: We Are with Her!

Looking Forward to Years During Which Most if Not All of America's Potential for Human Progress Is Likely to Be Wasted:

With each passing day Donald Trump looks more and more like Silvio Berlusconi
Bunga-bunga governance
With a number of unlikely and unforeseen disasters
And a major drag on the country

Except in states where his policies are neutralized.

Nevertheless, remember: WE ARE WITH HER!

#workingmemory #socialjustice #politics #moralresponsibility

Chris Grey: This Is What a Politics Based on Lies Looks L...

Chris Grey: This Is What a Politics Based on Lies Looks Like: "Underlying all the chaos and confusion... what is being tested to destruction is a set of propositions made in the Vote Leave campaign about how Brexit would be quick, simple, easy, would cause no damage (either economically or politically) and indeed would be beneficial in every respect...

...For almost three years now Theresa May has sought to put those propositions into practice: accepting the hard Brexiters��� interpretation on the single market, customs union, and ECJ whilst trying to fashion something which, although certainly highly damaging, at least tries to contain the very worst of the damage. Insofar as there is a workable version of hard Brexit, her deal delivers it.... Because what the Brexiters want is a fantasy, no deliverable version of it will ever satisfy them, and they will always seek a pretext to oppose it.... Hence the bizarre spectacle of her this week stridently proclaiming (so far as her voice would allow) the full, uncompromising hard Brexit mantra���the 'voice of the country' has 'instructed' us to end freedom of movement, take control of our trade policy, and have our laws made and judged in our own country���even as the hard Brexiters gave her yet another kicking. She has only herself to blame: she pretended their lies were true and vilified those who said otherwise....

The constant, sanctimonious, self-righteous invocation of the ���17.4 million��� who are claimed to have given unanimous support to things that they were never asked about and mysteriously endorse things they were never told about.... The fantasies and lies of that campaign because Brexiters continue to peddle fantasies and lies even now.... Whilst much of what is happening grows out of the false claims of Brexiters, somehow this hapless government manages to make things even worse than they need be....

There will be an application for extension of Article 50....

So what of MV3? Like PV campaigners, the ERG... may already have made the wrong call by not backing May in MV2.... If it squeaks through, despite being something that nobody really wants, it will set up years of acrimony, slow-burn economic decline and rumbling political crisis. If it is defeated again, all bets are off.... Very likely that will bring a long extension and if so then at that point the loss of the 29 March ���independence day��� will become a huge development...

#noted

Edward Luce: Why America Cannot Fly Alone: "Trump���s Boe...

Edward Luce: Why America Cannot Fly Alone: "Trump���s Boeing reversal is a teachable moment for the America First president.... No black box is needed to discover why. The biggest factor is falling global trust in US institutional probity. Mr Trump���s budget this week proposed a cut to the FAA in spite of the fact that its air traffic control system remains years behind many of its counterparts. Moreover, the FAA lacks a chief. Mr Trump nominated his own pilot, John Dunkin���the man who flew Trump planes, not Air Force One���to head it. When the Senate laughed him off as unqualified to lead an 18bn agency, Mr Trump failed to come up with a new name. The FAA has been flying without a pilot, so to speak, for more than a year. Little surprise America���s partners have lost trust in its direction. Much the same could be said of US diplomacy...

#noted

Ed Luce: Dublin���s Irish-American Trump Card: "Richie Ne...

Ed Luce: Dublin���s Irish-American Trump Card: "Richie Neal... Massachusetts��� congressman... ally of Sinn F��in... could block any trade deal Trump plans to negotiate with Britain. Indeed, he has vowed to do so if Britain jeopardises the open border between the republic and Northern Ireland.... A hard deal Brexit would trigger an equally hard Irish-American roadblock. Why jeopardise peace in Ireland (and therefore Britain) in quest of a US trade deal that���ll hit instant roadblocks in DC?... From what I can tell, the Brexiters have done precious little homework on any aspect of a no-deal Brexit. Let me save them some time on the American end: no US-UK trade deal can emerge from the ashes of the Good Friday Agreement. There. I���ve got it off my chest...

...The gratuitous vandalism of British politics. As this week���s Lexington column in the Economist puts it, Ireland���s Taoiseach is the only world leader who has a guaranteed annual meeting with the president. For the most part, it���s a cheerful excuse to get tipsy before lunch on Irish coffee. With Trump, it���s a bit of a farce, because he insists on talking about his golf course in Doonbeg and how much he likes Brexit (and on how he foresaw it and celebrated the result with the Scots, etc). But it���s an ironcast date in the White House calendar. If the Brexit wrecking ball reaches a nihilistic denouement, Britain may come to see the grandness of the irony. They used to say Britain punched above its weight. But London has nothing on Dublin. Rana, what odds would you give a US-UK trade deal? What would it include if there were one?...

#noted

For the Weekend: Stadium Love

Metric: Stadium Love:

#fortheweekend #music

Framing the Industrial Revolution

https://www.icloud.com/keynote/0-3JUJaZHlPgS6_6W91jmkw8Q

#berkeley #teachingeconomics #teachinggrowth #teachinghistory #highlighted


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Frances Coppola: Tether's U.S. Dollar Peg Is No Longer Cr...

Frances Coppola: Tether's U.S. Dollar Peg Is No Longer Credible: "Tether does not have 100% traditional currency backing for its reserves. It has 'cash equivalents'... has become an unregulated fractional reserve bank. It���s a very risky fractional reserve bank, too. Loans that you can���t sell, can���t pledge for cash, and may or may not be able to call are not by any stretch of the imagination 'reserves'.... Tether may regard one USDT as the same as one U.S. dollar, but without either the reserves or the central bank backing to guarantee this, its words are empty. The Fed isn���t going to step in and bail it out. Remarkably, though, crypto markets still believe Tether���s guarantee...

#noted

I must confess that my knee-jerk reaction given my social...

I must confess that my knee-jerk reaction given my socialization into the neoliberal cult when young to paid leave programs is to worry that loading responsibility for providing social insurance onto employers is a hazardous activity���it is not the 1920s, and we are not the tarry-eyed Edward Filene certain that paternalistic companies engaged in welfare capitalism can do more to enhance societal well-being than the ardent socialists and social democrats. But evidence is piling up from the laboratories of social insurance that are the states that my knee-jerk reaction is wrong: Heather Boushey: Increasing Evidence of the Benefits of Paid Leave Means Congress Needs to Consider a Federal Program like the FAMILY Act: "The existing state programs���the oldest, in California, dates back to 2004���have provided a laboratory for researchers to study labor and health outcomes for individuals, performance and productivity outcomes for firms, and broader macroeconomic outcomes of paid family and medical leave. This work builds on a considerable body of research from long-established programs in some European countries. The answers to many questions are already coming into focus...

...In states with paid leave insurance programs, mothers who use paid leave are more likely to remain in the workforce in the year following a birth. The women experiencing the benefits of these new programs are more likely to be less educated, which makes sense given that they are less likely to have had access to paid leave in the absence of a state program.... In instances where paid leave is provided there is less reliance on public assistance to contend with family medical emergencies. Moreover, there has been no evidence of higher employee turnover or rising wage costs for businesses. Research on parental leave programs abroad also suggests that paid leave of the length contemplated by the FAMILY Act, up to 12 weeks, has a positive effect on women���s income and likelihood of remaining in the workforce...

#noted