J. Bradford DeLong's Blog, page 217

Donaldson: Railways of the Raj

https://www.icloud.com/keynote/0qBZ2I5FNs-WmpuCh_lZHOurw

#teachingeconomics #teachinggrowth #teachinghistory #moderneconomicgrowth #berkeley


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Tim Ross, Robert Hutton, and Ian Wishart: This Is the New...

Tim Ross, Robert Hutton, and Ian Wishart: This Is the New Brexit Deal Theresa May Got From the EU: "Juncker says it���s this deal or U.K. might never leave EU. May, Juncker agree new legal texts on Irish border backstop.... Three new documents... includ[ing] a 'unilateral declaration' setting out how the U.K. believes it can escape the backstop....Wording in a legally binding joint statement goes as far as the EU says is possible in reiterating that the backstop���an insurance policy that effectively keeps the U.K. in a customs union with the EU���is only meant to be temporary. And it gives the U.K. some authority to walk away if the EU doesn���t do enough to replace it with a full trade deal.... The independent arbitration panel (comprising senior judges) could rule that the EU is acting in such a way as to make the backstop last indefinitely.... 'Persistent failure' to comply with a ruling 'may result in temporary remedies'. This doesn���t go as far as meeting the demands of Attorney General Geoffrey Cox....But the joint document does go on to say that the U.K. (or EU, for that matter) would 'ultimately' have the right 'to enact a unilateral, proportionate suspension of its obligations under the Withdrawal Agreement' including the backstop.... The U.K. also published a separate document, 'interpreting' the joint statement in its own wording but with the tacit consent of the EU...

#noted

Andr��s Velasco: The Challenge of Monetary Independence: ...

Andr��s Velasco: The Challenge of Monetary Independence: "By shadowing the US Federal Reserve so closely, Latin American countries are foregoing the policy flexibility that their floating exchange-rate regimes are intended to allow. They also risk relying too heavily on possible US interest-rate cuts to boost their economies, and not enough on deeper, long-term reforms...

#noted

Comment of the Day: Phil Koop: Larry Kudlow (December 7, ...

Comment of the Day: Phil Koop: Larry Kudlow (December 7, 2007): Bush Boom Continues: "Don't sell Kudlow short! He's also a terrible now- and back-caster...

#commentoftheday

Fairly Recently: Must- and Should-Reads, and Writings... (March 11, 2019)

Carville-Hunt "Two Old White Guys" Podcast

Weekend Reading: What I think of James Carville: Substituted in "James Carville" for "Sadie Burke"

Weekend Reading: Raphael Hogarth: 'No Deal' Actually Means Total Supplication...

Comment of the Day: JEC: "This sentence: 'This high-stakes approach was much criticised by liberals, who feared nuclear Armageddon more than they feared the consequences of appeasing the Soviet Union...' It tells you everything you need to know about Niall Ferguson. Well, that and the fact that Ferguson imagines this to be a sick burn on the 'liberals', rather than an acknowledgment of their obviously superior wisdom, prudence, and foresight...

KJV: John 5: "Now there is at Jerusalem by the sheep market a pool, which is called in the Hebrew tongue Bethesda, having five porches. In these lay a great multitude of impotent folk, of blind, halt, withered, waiting for the moving of the water. For an angel went down at a certain season into the pool, and troubled the water: whosoever then first after the troubling of the water stepped in was made whole of whatsoever disease he had...

Edward Luce: Ivanka Trump and the Rise of the Stepford Daughter: "The first daughter���s drive to improve the skills of American workers mainly involves photo-ops. Washington���s most surreal event this week���an absurdly high bar���was Ivanka Trump���s roll-out of her workforce development council. It opened with her father calling the chief executive of America���s largest smartphone company 'Tim Apple'. Tim Cook barely flinched...

Madeline Peltz: Tucker Carlson's interviews on 'Bubba The Love Sponge'...

Benjamin Dreyer: Jeanine Pirro was permanently banned from Leonard���s of Great Neck after she tried to walk out with a table floral arrangement from a bat mitzvah she wasn���t even attending. So grain of salt on the constitutional scholarship...

The Vela: A Leisurely Extinction

Paul N. Van de Water: [More Evidence of Post-ACA Slowdown in Health Care Spending(https://www.cbpp.org/blog/more-eviden...): "In early 2010 we projected that federal debt would reach 289 percent of gross domestic product (GDP) by 2048; we now project 113 percent of GDP. Over half of that improvement stems from lower health care costs; the rest largely reflects lower interest rates. Although health care costs remain a major driver of future increases in federal spending, that shouldn���t obscure how much their projected costs have fallen in recent years...

Nyum Bai: Our Menu ���

August (1) Five: Menu

Marica Restaurant: Current Food & Drink Offerings

Pete Buttigieg: On Pence's support of Trump: "How could he allow himself to become the cheerleader of the porn star presidency. Is it that he stopped believing in scripture when he started believing in Donald Trump?...

Tobias S. Buckell: What Tools Does a Professional Fiction Writer Use?

Microeconomic Insights: About: "Microeconomic Insights is a home��for accessible summaries of high quality microeconomic research which informs��the public about microeconomic issues that are, or should be, in the public���s��eye...

Emma Hyman

KJV: Song of Moses and Miriam

Wikipedia: Al Hunt

Alfred, Lord Tennyson: Ulysses: "Tho' much is taken, much abides; and tho'/We are not now that strength which in old days/Moved earth and heaven, that which we are, we are...

Nick Rowe: Reverse-Engineering the MMT Model: "The MMT AD curve is vertical.... Fiscal policy can be used, and must be used, because this model, with its vertical AD curve, has no inherent tendency towards 'full employment' output...

Financial Times: The ECB Is Attempting to Get Ahead of Events: "The European Central Bank���s U-turn this week���reviving part of its stimulus programme after two years of weaning the eurozone off easy money���took markets by surprise. It should not have done. Signs of eurozone weakening, especially in Germany, and in key partners such as China, had been evident for months. Once the US Federal Reserve signalled a pause before lifting rates again, the ECB became likely to follow suit. In his final months in the role, ECB president Mario Draghi is clearly trying to get ahead of events. Less clear is whether the bank has done enough, or has the means to do so, if the weakening continues...

Melissa Dell: The Persistent Effects of Peru���s Mining Mita: "This study utilizes regression discontinuity to examine the long-run impacts of the mita, an extensive forced mining labor system in effect in Peru and Bolivia between 1573 and 1812. Results indicate that a mita effect lowers household consumption by around 25% and increases the prevalence of stunted growth in children by around 6 percentage points in subjected districts today. Using data from the Spanish Empire and Peruvian Republic to trace channels of institutional persistence, I show that the mita���s influence has persisted through its impacts on land tenure and public goods provision. Mita districts historically had fewer large landowners and lower educational attainment. Today, they are less integrated into road networks and their residents are substantially more likely to be subsistence farmers...

Marcy Wheeler: Art of the Get-Screwed-in-Your-Russian-Quid-Pro-Quo Deal | emptywheel: "Putin���s election year operation exacerbated the polarization between Democrats and Republicans such that most Republicans and a goodly number of Democrats have been unable to step back and say, holy shit, this country got attacked and we need to come together to do something about it. Trump���s win got Republicans to fear Trump���s base so much that they care more about those fevered hordes than doing what is right for this country. And Democrats rightly want to punish Trump for cheating, but haven���t thought about what a least-damaging off-ramp for that cheater might look like. Putin doesn���t care if Trump benefits... though he is happy to keep toying with Trump like a cat plays before he eviscerates his mouse.... There are multiple ways for him to get a win out of this, whether or not Trump manages to eke out any kind of real payoff... Putin isn���t the only one playing this game. Certainly, Mohammed bin Salman feels the same way, even if his record of ruthless dealmaking is shorter and sloppier than Putin���s.... Donald Trump and Jared Kushner are easy marks for a whole range of skilled operators willing to stroke their egos and dangle loot... to the detriment of the interests of the United States. That they are so bad at deal making in no way disproves their culpability. There is no Trump Tower in Moscow. But there never had to be. All that was needed was the promise of a ridiculously lucrative narcissism-stroking deal for the Trump family to agree to shit that would hurt this country. And all the evidence suggests that they did, and continue to do so...

Let me hoist this from last year: Kate Bahn summarizing the evidence that imposing work requirements simply does not work: it has none of the benefits that people wish that it would have, and all of the drawbacks you can think of: Kate Bahn: Work Requirements for U.S. Public Assistance Programs Don���t Work: "Analysis from the Center on Budget and Policy Priorities finds that imposing work requirements simply doesn���t work. One reason is because increased red tape may lead to eligible recipients losing their benefits even though they are eligible for them. People with volatile work hours or who hold multiple jobs may have a hard time collecting and submitting sufficient documentation to demonstrate they are working regularly. As CBPP points out, completing work-requirement red tape is even harder for self-employed workers, which should be cause for concern as gig-based employment becomes more prevalent...

Even though the first quarter of 2019 is only two-thirds over, practically all of the private-sector decisions that will determine the level of economic growth from the first quarter of 2018 to the first quarter of 2019 have already been made. Moreover, because of a statistical quirk 8/9 of the components of the growth rate have already occurred, and we have reasonable data on 2/3 of the components. So the Federal Reserve Bank of New York's forecast that the first-quarter growth rate will be only 1.4% is now a semi-solid thing: you cannot take it to the bank, but you can borrow on it (the last three month-out misses were 0, +0.2, and -0.4 respectively). It's not a recession. Not quite. But it is clear that even if 2.4% were the right target for the short safe nominal interest rate two months ago, it is not the right target for the short safe nominal interest rate now. The Fed should cut. It is far from clear to me that the risk of a U.S. recession this year is low. The risk that a recession will be called is low. The risk that a recession will start is 30%: Gavyn Davies: Alarm Bells Ring for the��Goldilocks World Economy: "Markets seem willing to overlook the continuing slowdown in the advanced economies, which has taken the latest growth rate to only 0.8 per cent.... This is perversely seen as good news because it will reduce the likelihood of further interest rate increases.... The dovish turn in US monetary policy has been confirmed by an unusual��volte-face in policy guidance by the Fed leadership in the space of a few weeks.... This phase of the cycle is often described as the��Goldilocks zone, in which growth ��� like the heroine���s porridge in��The��Story of the Three Bears���is neither too hot nor too cold.... Meanwhile, growth is still high enough to indicate that the risk of outright recession in the next 12 months remains close to zero.... While the US is still clinging to the middle of the��Goldilocks zone, the eurozone is flirting with the bottom boundary of its zone. Any further decline in the nowcast would see a large increase in the probability of a European recession this year. With the Japanese nowcast already in negative territory and Asian trade flows headed sharply downwards, the markets may not be able to ignore much further weakness in the world economy...

Larry Kudlow (December 7, 2007): Bush Boom Continues: "There���s no recession coming. The pessimistas were wrong. It���s not going to happen. At a bare minimum, we are looking at Goldilocks 2.0. (And that���s a minimum). Goldilocks is alive and well. The Bush boom is alive and well. It���s finishing up its sixth consecutive year with more to come. Yes, it���s still the greatest story never told...

Larry Kudlow (February 5, 2008): ���I���m going to bet that the economy will be rebounding sometime this summer, if not sooner. We are in a slow patch. That���s all. It���s nothing to get up in arms about...

Miranda Aldersley: The Girl Who Executed Nazis after Seducing Them in Bars Dies Aged 92: "Freddie Oversteegen... with her older sister Truus and their friend Hannie Schaft... blew up bridges and railway tracks with dynamite, smuggled Jewish children out of concentration camps and executed as many Nazis as she could, using a firearm hidden in the basket of her bike.... First approach the Nazi men in bars, and, having successfully seduced them, ask if they wanted to 'go for a stroll' in the forest, where, as Freddie herself put it, they would be 'liquidated'.... 'It was a necessary evil, killing those who betrayed the good people'. When asked how many people she had killed or helped kill, she demurred: 'One should not ask a soldier any of that'.... She was the last surviving member of the Netherlands' most famous female resistance cell...

From any sensible risk-management perspective, the Fed ought to have been cutting interest rates for the past month. Yet it has not been. They seem to me to bet playing a game not of "risk management" but rather "let's pretend we have not wedged ourselves into a corner and should be working much harder to get out of it": Jon Hilsenrath and Nick Timiraos: Central Banks Play a Game of Risk Management: "The world���s central banks are engaged in a major policy reversal to prevent the world economy from sinking into unexpected recession... calling off interest-rate increases.... In many cases, the central bankers are boxed in, with few policy tools available to cushion their economies.... Six months ago, Fed officials thought they would raise short-term interest rates three times in 2019 on the way toward a policy rate near 3.5% in 2020. Fed officials recently signaled they have paused for now, with short-term rates just below 2.5%. Their actions and words strongly suggest they could be done altogether.... They have unlimited space to fight accelerating inflation with higher interest rates and little-to-no space to fight slowing inflation with lower rates.... The risk may be diminished after the latest reversal by central banks, but it���s hardly gone...

#noted #weblogs

Carville-Hunt "Two Old White Guys" Podcast

Carville-Hunt "Two Old White Guys" Podcast:

Edited for Coherence and Clarity

https://www.pscp.tv/w/1OwxWOzBQgkxQ?q=alhuntdc

Al Hunt: Brad Delong, a Rubin Democrat, a mainstream, a Clinton-Obama Democrat, if you will, has said in the [intra-]democratic wars: My side has lost. We can't form any coalitions with [even] a handful of moderate Republicans. Cap-and-trade was a Republican idea. Every single Republican basically turned their back.

Uh, Brad, are you there?...

As soon as you're with us, let us know.

Brad, you hit the smiley face.

We are going to ask Brad what this means for the Democratic Party���s [position] on major economic issues.

I think we have Brad, right?

Brad DeLong: [The Machine] says I am here.

Al Hunt: Terrific. I'm talking about your vox[.com] interview. I also note that you are one of the 750 most influential economists. James and I hope to be one of the 70,000 most influential podcasters at some point. We once again have been elevated by our guests.

James [Carville], let me turn it over to you to ask the first couple of questions to Brad about his new thesis.

Brad DeLong: May I first compliment the two of you?

You both have [long] been heroes of mine. I came to Washington as an adult at the start of 1993 to work for the [Clinton-Bentsen-Rubin] Treasury. I remember[���I think it was���] the first day I went in to the Treasury. Jack de Vore, who was Bentsen���s [press secretary] and left hand said: ���Be very careful what you say to Al Hunt���s people. They're very honest. And they're very, very, very good. I don't understand how he runs that bureau in such a way that it's so head-and-shoulders above all the others.���

He had the office next to me during my first year in the Clinton administration. Boy, was it an education!

Al Hunt: He was press secretary for Lloyd Bentsen for years. We were having drinks. I said: ���Jack, you've got a great reputation. You know, what do you do?��� He says: ���I never lie. Never, never lie. That sounds so basic and so fundamental. A lot of people in Washington need [to have] learned that lesson, particularly today.

Brad DeLong: And [back in 2000, I was one] of us who thought that George H.W. Bush was in there for eight years, and that the ���Reagan Revolution��� would [then] be totally solidified. Then, in 1992, Bill Clinton showed up with James Carville by his side. And:

it wasn't an election. It was hell among the yearlings and the charge of the light brigade and Saturday night in the backroom of Casey's saloon rolled into one and when the dust cleared away there was just Bill Clinton with his hair in his eyes and his shirt sticking to his stomach with sweat and he had a meat ax in his hand and was screaming for blood and in the background under a purplish tumbled sky flecked with sinister white like driven foam was James Carville...

James Carville: Okay.

We tried to appeal to a broad section of people. We knew we were not going to get a single Republican [lwegislator], and as evidence for that the [1993] Budget Act and then came 2009. What state's [senator] provided the deciding vote in both the Clinton Budget and Obama Health Care?

Brad DeLong: No, I do not know...

James Carville: It was Nebraska: [First Bob] Kerrey [and then Ben] Nelson. Right now. I don't think we got them because [the policies needed to be] more Democratic. We got what accomplishments we've had in this country over the last 25 years [only] when [we have] built the Democratic coalition sufficiently broadly to get Democrats [from Nebraska] on board. You seem to be saying what we need to do is: "to hell with that! Let's just solidify all of the, the, the Berneie-bots..."

Brad DeLong: I wouldn't go that far.

This started out with me on Twitter.

And on Twitter you should never do nuance.

Nuance just doesn't work.

Nuance is death on Twitter.

But I would say we've learned three things over the past 25 years:

First, we've learned that the, call them the [standard] centrist-Democratic policies, don't work as well as we thought they would work back up the start of 1993. [Back then] Bob Reich was saying: we need to worry more about income inequality, and we need to worry a lot more about cutting off financial [wealth plutocratic] power over the economy and the polity. That looks wise now, much wiser now than it appeared to me back in 1993. So we need to shift the policies we advocate for.

Second, we now see a big problem of implementation...

James Carville: Oh no! The 93 Budget Deal worked great...

Brad DeLong: [Yes.] The 93 Budget Deal was, among other things, the largest���at the time���expansion of the social insurance state to make the lives of relatively poor Americans easier. That came through this massive expansion of the Earned Income Tax Credit that Gene Sperling [and Bob Reich and company] kept plugging and plugging and plugging away at until the Treasury and OMB said "uncle" left it in the 1993 Reconciliation Bill. It [was seriously pro-growth.] It actually did trigger a 4% of national-product dumb���in today's terms an 800 billion dollar a year���boost to investment in America. That made us a much richer country.

The Republicans were claiming their tax bill in 2017 would do it. [It didn't.] We did it...

James Carville: And that thing, ObamaCare. Oh it was rushed through, [but it is] great. We had a hell of a lot more people insured. Now we're supposed to apologize for that too?

Brad DeLong: But, second, we now [see we have a big problem of implementation ]. Neither of them worked nearly as well as they could have, or in some sense ought to have. It would have been so very nice to have gotten the BTU tax in 1993 rather than getting whippedsawed���making the conservative Democrats in the House vote for it, and then gotten our knees cut out from under us by trading it away to that idiot [senator] from Oklahoma, Boren.

James Carville: Yeah.

Brad DeLong: And Obamacare would have worked much, much better if we hadn't given so much implementation authority to states to mess up the exchanges when they wanted a mess them up. And of course, if we hadn't had a lawless chief justice of the Supreme Court [making up fake legal doctrines to give] states politicians to nullify it...

James Carville: I don't know what Bob is saying. You don't do it without the votes. You talked about what you should do. You don't have the votes, you can't do it. That's what is the reality of politics.

Brad DeLong: Well, Obama and���was it daschle?���were not especially clever. I showed up at the Treasury in 1993 with Jack de Vore in the office next to me on one side and Lloyd Bentsen's [right hand and] legislative tactician, Michael Levy, on the other. Michael Levy said: the only things [that are the President's priorities] that will pass are things that are also Republican prioirities, and things that pass either via Reconciliation or under the [imminent] threat of reconciliation. [Nobody in the Obama administration with power recognized that.]

You know what the Democrats on January 21st, 2009 ought to have done? Pass a carbon tax, Medicare-for-all, and three rounds of fiscal stimulus through Reconciliation on day one. Then bargain back to [better-working[ regulatory policies. Make the Republican's very anxious to bargain���as opposed to very anxious to block.

Al Hunt: Brad. Brad, let me ask you two questions. One, suppose I'm a Democratic nominee in 2020 and I run on a something that is more liberal than Rubin Democrats. Take health care. I'm going to do something about drug pricing���[let] Medicare [bargain on] drug prices, and cost controls on healthcare. Uh, I'm going to expand the exchanges. [I'm going to add more [to the] subsidy [pools]. I'm going to adopt Elizabeth Warren's proposal that tells insurance companies that if you want to participate in the Medicare supplement programs, which they do, then you got to be on the, on the exchanges. And after four or five years were will then see if we want to go for Medicare-for-all. And we guarantee that preexisting conditions are covered.

That strikes me as something some Republicans will support. [It will be hard for them] to oppose that.

And on taxes. What I think is the alternative: we're going to increase your top but not right to 70%. We're going to really tighten up the estate tax. We've going to treat capital gains like ordinary income.

That is legislatively possible���as opposed to going for Medicare-for-all, free college tuition, and a wealth tax.

Brad DeLong: Right. I think that the first round of healthcare things should also include the ability of anyone who wants to to buy into Medicare. Medicare-for-all, at least as I understand it, doesn't mean you have to take Medicare. It means you can [get Medicare] if you want. Medicare is the backstop. If private health insurance companies want to play they need to produce something that's better for consumers than Medicare...

James Carville: We political people say: you know these policies people, they sit there and they say, 'well, we should have done this, yeah, this would have been better there and the GDP would have been way up and stuff that", but we're down to the last God Damned vote...

Brad DeLong: If we're down to the last God Damned vote...

James Carville: We couldn't get the public option. I think it would have been better. Yes, but so what? You can't do anything if you don't have the votes. We come up with guests���they think we need to have Medicare for everybody. We need to have job guarantee for everybody. Great. Let's go do it. As long as you can do that [with the votes].

And 18% of the country elects 50% of the Senate. That is the political reality on the ground. You can't change it.

Brad DeLong: This is going to be a difficult problem for America for the next 30, 40, 50 years. We have a Senate that is, by the Constitution, gerrymandered in a way as bad as British legislative districts were back in the early 19th century, before the First Reform Bill...

Al Hunt: The Great John Dingell, who passed away a couple of months ago, right? Last time I interviewed him, Brad, I said: What's the one thing, based on your 55 years, that you would do, you really think would make a difference. He said: "It's simple���abolish the Senate".

That's not going to happen.

I think James [Carville] makes a good point. Look, these things were tough to get through. Medicare-for-all [is], some say, do[ing] away with private insurance. That's what Kamala Harris proposed in her initial speech, Free college tuition for most everybody in public universities. How are you going to get any Republicans on that? How are you going to get any of those red state Democrats, which you need to have a maturity in the senate?

Brad DeLong: [Governor] Earl Warren had free college education for everyone in California [in the 1940s and 1950s]. Earl. Warren. A Republican Albeit a very different kind of Republican than we have now.

Earl Warren was a Republican for Republicans who believed that they were the party of enterprise, upward mobility, and America's future���[Republicans who wanted to] go out and get stuff done. [They are] opposed to [today's] party of people who think they have a little bit, but stand to lose from [any] change.

Free college [for those who wanted to go] was something that we had [here in America], at least for those of us who were lucky enough to be white and male and native born, in the 1950s.

The 70% top tax rate. You are talking about a 70% top tax rate, [and calling that the Rubin Democrat position]. That indicates that I am right���because back in the 1990s we [in the Rubin Treasury] were arguing that we really did not want to let the top income tax rate, federal, state and local combined, get above 50%. I was there carrying spears for the Rubin Treasury on that position. And Medicare-for-all was [Harry S Truman's]...

James Carville: Yes, yes. Well we passed that [1993 Reconciliation Bill] by one vote.

Al Hunt: [I remember] being there with [???] in the Oval Office. Yeah. Phone calls. The whole administration was an active TV...

Brad DeLong: I know...

James Carville: It's a picture people should have [to remember how we passed] the big one...

Brad DeLong: Yes, I remember that well.

I remember being���I think it was in Marjorie Margolies-Mezvinsky's office���when we had to tell her [based on numbers I had calculated] that she was one of seven Congress members who had more constituents who would pay higher income tax rates than would get an expanded EITC. There were only seven districts in which the tax bill was a clear and immediate apparent loser for their constituents. And her constituents were one of those seven.

And yet she walked the walk. [She voted for the 1993 Clinton Budget.]

Admittedly, in return Bill and Hillary offered up to her their first-born child, whom they lovest...

Al Hunt: But still we got to run [senate races in] North Carolina and Georgia, Alabama, Texas, Colorado, Arizona. Do you think that these candidates are going to want to run [with] the most progressive liberal [presidential-candidate] person that we can find? [Not[ in [those] states...

Brad DeLong: No. No, no, no. But.

It was, I think. the very smart Norman Ornstein [who] puts it [thus]: Someone like Susan Collins. In the end, her first allegiance is to the Republican Party. Her second allegiance is to good policy [for the country]. And her third allegiance is to their constituents in Maine. She is a Republican first, and everything else later.

[By contrast,] you remember 1993 and 1994. How very many of the Democratic congressional barons were interested in themselves first and policy second and the success of the Democratic Party third. [Plus] how very many people wanted to take that Hick from Arkansas [Bill Clinton] and his [cornpone-talking] friends [like James Carville] down a peg or two.

I remember you, [James,] begging them, [the Democratic congressional barons], not to do so [and to back President Clinton] on the grounds that their seats were at risk if the president of their party was not a but [reather merely] perceived to be a failure. Then they might well lose their jobs. And indeed a great many of them did lose their jobs in 1994, because the Republicans were quite good at painting Bill Clinton as a failure. And a great many of them did lose their jobs in 2010 because at the time recovery was so slow that Obama did [indeed] look like a failure.

Al Hunt: Brad, your critique is brilliant. I don't think almost anyone could really quarrel with [your] critique of what happened and the problems and the difficulties. I have and James ha enormous respect for you. You are, you know, not [jut] one of the great economist, but I mean you talk in English, which gives you an advantage over a lot of your [peers]...

Brad DeLong: Thank Jack de Vore and Michael Levy for that...

Al Hunt: Your solution that worries me. Turn it over to the left, and then try to make their proposals slightly more palatable. I don't see how that becomes in any fashion a winning coalition, legislatively or politically.

Brad DeLong: I said: pass the baton, right? I said: pass the baton.

And yet as the thing spreads out into the Internet, it gets turned into "surrender", "abandon my beliefs", "bend at the knee", all kinds of other things. [It was pass the baton.]

You pass the baton for a lap in the race. [It is a long race.]

What will be possible legislatively in 2021 depends on a lot of things. We cannot now forecast them. I've given up forecasting what the American political system will do. I gave that up in December, 2000.

[The American political system is] simply not rational at all. It will do whatever it does, in whatever crazy way. And we don't really know what the state of things we'll be at the start of 2021. [We cannot yet knw] what we should not do, what we should not do, [for that lap]...

Al Hunt: Yeah, you're right. I guess what you're saying is that despite all the Republicans being what they are���like with Norman's analysis of Susan Collins���I think Olympia Snowe is different by the way���That's not going to change.

I guess I would say that incrementalism, whether it's the Clinton Budget Act, which as you say, played a huge role not only in ushering in the prosperity of the 1990s but also in social programs like expansion of he EITC. Or the Affordable Healthcare Act, which for all of its imperfections and it was enacted in a really sloppy way because they had to enact it in a sloppy way. They lost their supermajority. We're a lot better off on health care in 2019 then we were in 2009. [We are] not as well off as we'd like. You can build on it.

But the argument to kill Obamacare and come up with a whole new system���I traveled to a lot of suburban districts last fall, and I want to tell you [that] if you tell those suburban voters who voted Democratic and we'e terribly important in that new house majority, that you're going to lose your health insurance and we are going to give you a government program instead... That is what some of our [candidates]���Bernie's argued for that, [and] Harris walked it back but that's what she started off. Right���they are going to suddenly not become as enthusiastic for the Democratic Party,Brad DeLong: But if you offer them the ability to join Medicare as an option if they prefer it to what the private insurance companies are offering, [they will be enthusiastic]. The ability to join Medicare as a backstop...

Al Hunt: The public option [as] a Medicare Supplemental or Medicare Advantage...

Bfrad DeLong: Let's drag on the Obama administration.

When it became clear there weren't 60 votes for the public option in ObamaCare, then the right thing to do was [not to drop the pubic option and proceed].

[The right thing to do was] to back up, pass Medicare-for-all through Reconciliation, and then say to the Republicans: now that [our Reconciliation Bill means we give] people a choice between their current insurance and Medicare, are you sure you wouldn't rather vote for this exchange system that is [called] RomneyCare? We were pushing [it] because we thought it would get a bunch of Republican votes, [and it was better to do this on a bipartisan basis].

With respect to getting the recovery [going], was it not incredibly "premature" in December and January of 2010 for Obama to say [that the government has] spent too much money on recovery and now we need a big spending freeze?

Was it not a mistake [not] to say: if you won't come on board with cap and trade, we'll pass a carbon tax through Reconciliation and then bargain back to a better regulatory system?

James Carville: I don't disagree with much of what you said. You go back to February and March of 2009. This country was [in] the worst economic [condition] since the Great Depression. That's not an exaggeration, as you know better than that. Right. And the stimulus package should have been bigger.

But it couldn't get there. You couldn't have the votes. I got to tell y'all something���hat world that you live in with the 50 votes for Reconciliation with the economic plan. Hauling politics is hard, man. It's hard to put this stuff together. You can always come to [a better] idea in the after action report.

I get the BTU tax. We should have done that. It would have been night. It wasn't going to happen.

I mean, look at the Senate in 1993. I mean Sam Nunn.

I'm just, I love you guys. Smart Democrats. You are great teachers. Yet inspiration isn't the point in a world where the rubber [has t ] hit the road.

Brad DeLong: That from [James was] an excellent rant. Truly an excellent rent. It's the kind of rant he can do. It's very effective and very powerful.

But I'd like to draw a distinction between three things:

what legislative sausage you actually make come 2021 and thereafter.

what you run on in the 2020 campaign as what the Democratic Party will try to accomplish.

what our vision of a good society is going to be as we listen and talk to our base and try to educate the world as a whole.

For Barack Obama, a lot of the time, a good society was one in which the Democratic Party would give up kind of 3 dollars of entitlement spending in 2040 in return for each extra dollar of tax revenue ecause the first priority was to get the budget balanced. Well, [that did not cut it then and won't now...]

James Carville: I just want to say something. I want to come out to Berkeley...

Brad DeLong: Please do. We'll a discussion. We'll have you for dinner...

Al Hunt: I want to get a tape of that. James Carville at Berkeley. I think Netflix might pick that up. James, do you have to run?

James Carville: Yeah, I gotta run. I'm sorry, Brad, thank you so much.

Brad DeLong: Thank you very, very much for having me on. It's greatly appreciated. James Carville is a Great American, who has done an immense amount to make the country a better place. People should strew flowers before him wherever he walks...

Al Hunt: Oh my gosh. I don't know if Mary Matalin will go along to that...

Brad DeLong: No one thinks their husband is a Great American...

Al Hunt: Which of those Democratic candidates that you're watching much more closely than most academics at Berkeley���your blog, it's fascinating, some of the stuff did you put at, even when I disagree with it���which of those Democratic candidate do you think fits the bill you're talking about right now best?

Brad DeLong: I think it's too early to say. If you want to know someone who has impressed me, it's Mayor Pete from South Bend, Indiana...

Al Hunt: A Rhodes scholar, a successful mayor, openly gay. Full of new ideas. He wants to be the first millennial president. I'm not quite sure he's talking about all the things you're talking about, however...

Brad DeLong: But he's from Indiana. If you think that the ideal Democratic candidate is an unknown southern governor, [he's close]. Indiana joined the Confederacy in the 1920s with the revival of the Klan, with my great-great uncles from Indiana [who] belonged to the Klan in the 1920s, and the only excuse they ever had to say was there weren't any Black people, we were just anti-Catholic.

Pete as a mayor from Indiana will speak to the center and to the cultural right of America the way Bill Clinton did, which is a big plus. Yet Pete's policy proposals look to me to be if not solidly in at least close to the Alexandria Ocasio-Cortez line.

Al Hunt: I don't think he's talking about a 70% top rate. He's not talking about free college. A number of states and cities are doing about about community college tuition for anybody. I think that is a great starting point. But I think AOC and Bernie and others go far beyond what most voters are willing to accept it.

Brad DeLong: But [the free college] they go back to [and present to] voters [ we had in] the 1950s and 1960s.

Al Hunt: On a healthcare plan in 1947, you probably would have adopted something along the lies, of the Canadian or the German or even the British plans. But that was 70 years ago. And it's harder to do that now with a huge country like this.

Al Hunt: Yeah, you're right. I guess what you're saying is that despite all the Republicans being what they are���like with Norman's analysis of Susan Collins���I think Olympia Snowe is different by the way���That's not going to change.

I guess I would say that incrementalism, whether it's the Clinton Budget Act, which as you say, played a huge role not only in ushering in the prosperity of the 1990s but also in social programs like expansion of he EITC. Or the Affordable Healthcare Act, which for all of its imperfections and it was enacted in a really sloppy way because they had to enact it in a sloppy way. They lost their supermajority. We're a lot better off on health care in 2019 then we were in 2009. [We are] not as well off as we'd like. You can build on it.

But the argument to kill Obamacare and come up with a whole new system���I traveled to a lot of suburban districts last fall, and I want to tell you [that] if you tell those suburban voters who voted Democratic and we'e terribly important in that new house majority, that you're going to lose your health insurance and we are going to give you a government program instead. That is what some of our [candidates]���Bernie's argued for that, [and] Harris walked it back but that's what she started off [with]. [The suburban voters] are going to suddenly not become as enthusiastic for the Democratic Party...

Brad DeLong: Why is it harder to do sensible things? I was talking to my podiatrist last Friday. He tries to deal with the infected [corn] on my second toe and demands that I tell him about economics. We talk about how pharmaceutical companies [don't] want to make new antibiotics���because you'll take seven antibiotic pills and then you'll be cured and for seven pills you can't charge that much. They want a chronic disease that is not cured but alleviated by something expensive and that rich people care about a lot. Male impotence, male pattern baldness���these are the things that are [private] pharmaceutical system is set up to focus its effort on. There's a very large place for a government to take over a much broader role in drug research and discovery, given that the incentives the market produces [are] all wrong...

Al Hunt: When you're on a show called "Two Old White Guys", [recognize that] we are very skittish about talking about impotence and things like that.

Uh, look, you have been terrific. This is really been interesting even when we have disagreed with you, as we have.

I think you've laid out some, some interesting ideas. I would, anyone who's listening you ought to go to

Go to Brad's blog site because there's always extra stuff.

And I want you to promise me that if Carville comes to Berkeley that I get to see the Carville-DeLong...

Brad DeLong: Oh, definitely, definitely. I [will start by asking] Carville: wouldn't it have been much, much better to design an Affordable Care Act that did not assume that Republican governors would be enthusiastic about it and wouldtry hard to make the system work in their states? Wouldn't it have been much, much better to pass something narrower through Reconciliatio���something that did not give Governor Sam Brownback of Kansas [and his ilk] the opportunity to nullify it? And [something that] was not complicated enough for an illegitimate supreme court decision by John Roberts to come close to nullifying it as well.

Al Hunt: We will leave it at that, but I would say maybe that's a good, very arguable point. If you could have gotten 51 votes, which of course is the key to everything...

Brad DeLong: We had 53 back in the spring of 2009, but that's for another time...

Al Hunt: Yeah, that's for another day. Thanks a lot. Welcome [for coming]. Enjoy this day, and thank you for listening. and we'll be back next week.

Brad DeLong: Okay. Here's looking at you. Thank you. Goodbye.

#highlighted #politicaleconomy #politics #publicsphere

Weekend Reading: What I think of James Carville: Substituted in "James Carville" for "Sadie Burke"

Weekend Reading: What I think of James Carville, but substitute in "Bill Clinton" for "Willie", and substitute in "James Carville" for "Sadie Burke": Robert Penn Warren: All the King's Men: "He announced in the Democratic primary.... It was hell among the yearlings and the Charge of the Light Brigade and Saturday night in the back room of Casey's saloon rolled into one, and when the dust cleared away not a picture still hung on the walls.... There was just [Bill Clinton], with his hair in his eyes and his shirt sticking to his stomach with sweat. And he had a meat ax in his hand and was screaming for blood. In the background of the picture, under a purplish tumbled sky flecked with sinister white like driven foam, flanking [Bill Clinton]... [James Carville]...

#weekendreading

From any sensible risk-management perspective, the Fed ou...

From any sensible risk-management perspective, the Fed ought to have been cutting interest rates for the past month. Yet it has not been. They seem to me to bet playing a game not of "risk management" but rather "let's pretend we have not wedged ourselves into a corner and should be working much harder to get out of it":

Jon Hilsenrath and Nick Timiraos: Central Banks Play a Game of Risk Management: "The world���s central banks are engaged in a major policy reversal to prevent the world economy from sinking into unexpected recession... calling off interest-rate increases.... In many cases, the central bankers are boxed in, with few policy tools available to cushion their economies.... Six months ago, Fed officials thought they would raise short-term interest rates three times in 2019 on the way toward a policy rate near 3.5% in 2020. Fed officials recently signaled they have paused for now, with short-term rates just below 2.5%. Their actions and words strongly suggest they could be done altogether.... They have unlimited space to fight accelerating inflation with higher interest rates and little-to-no space to fight slowing inflation with lower rates.... The risk may be diminished after the latest reversal by central banks, but it���s hardly gone...

#noted

Weekend Reading: Raphael Hogarth: 'No Deal' Actually Means Total Supplication...

Weekend Reading: Raphael Hogarth: "Some MPs Talk about 'No Deal' as a Great Liberation. 'No Deal' Actually Means Total Supplication, Handing Huge Control over the UK to the European Commission.Read the government���s technical notices on no deal, and you will find that an awful lot of sectors will need a decision from Brussels to keep trading...

...Agriculture: the UK is ���confident��� that its products of animal origin meet the EU���s import requirements for third countries, but the EU has not formally listed the UK products as such. If it doesn���t, no exports of animal products to Europe. Likewise plant variety rights and marketing of seed. ���The UK would apply to the EU to recognise its certification processes as equivalent, but we cannot guarantee this recognition would be in place at the point the UK leaves the EU.���

Data (vital for UK services): Commission would have to issue an ���adequacy decision��� to allow data flows to continue. The Commission ���has not yet indicated a timetable for this and have stated that the decision on adequacy cannot be taken until we are a third country.���

Operating bus services: the UK ���intends to rejoin��� Interbus, an intl agreement including the EU, which would allow UK bus and coach operators to carry out journeys. Not mentioned in the notice, but Interbus members (incl EU) take decisions by unanimity, so EU has a veto.

Horizon 2020 (research co-operation): HMG ���seeking discussions w the Commission to agree ... continued���participation as 3rd country���. And Erasmus (student exchange): UK to "engage" w the Commission w aim of securing "UK���s continued full participation���. Will they engage back?

Trading electricity: it is ���strongly in the interests of all parties" to agree a means to avoid the split of the single electricity market, and so HMG will ���work with the Irish government and the European Commission��� to ���seek agreement that the status quo will continue���.

Pet travel! Unless UK is formally ���listed���, you must get your pet microchipped and vaccinated before it can travel. ���We are seeking discussions with the Commission to allow the UK to become a listed third country��� and ���will continue to press the Commission to discuss���.

And all of that is ignoring the massive power of member state customs authorities, and their Commission supervisor @EU_Taxud, to decide what proportion of trucks and boats to stop, what proportion of customs declarations to check, how lenient to be when paperwork is faulty. The Commission clearly intends to use its leverage. Listen to Barnier adviser @StefaanDeRynck words at recent @UKandEU event, and read between the lines. ���If you have a no deal scenario, the first weeks and months will be crucial for the UK government. Choices will be made.... Will the UK honour its financial obligations to the EU?��� And crucially: ���the UK has said it wants to be respectful of Ireland���s place in the single market. All these commitments, hopefully, will stand in a no deal scenario.���

EU has already promised some mitigation: 1y equivalence for clearing, 2y for depositing, and subject to fair competition conditions/UK reciprocation, planes fly for 1y, aviation licences valid for 9 months, road haulage rights stay for 9 months.

NB ���subject to fair competition conditions��� is v interesting. The backstop provisions on ���fair competition��� involve UK alignment with EU rules on environment, labour and state aid. Sub-text is: if UK goes for Singapore-on-Thames in a no-deal scenario, planes may not fly.

In my view, those who worry about "no deal" should be focusing much more on this loss of control. The "economic apocalypse" message is not landing with the public, and particularly Leave voters, who remain quite relaxed about no deal. Plus, in the eyes of no-dealers, every mitigating measure that either side adopts will "prove the doom-mongers got it wrong" when they said that planes would not fly, supermarket shelves would be empty, etc.

In summary:

No deal is not the ultimate in ���taking back control���, but in handing control the EU.

Even in a no-deal scenario, the Commission will try to get the UK to sign up to the backstop and pay the bill, and has plenty of leverage with which to do so.

#weekendreading #orangehairedbaboons #globalization #brexit

Miranda Aldersley: The Girl Who Executed Nazis after Sedu...

Miranda Aldersley: The Girl Who Executed Nazis after Seducing Them in Bars Dies Aged 92: "Freddie Oversteegen... with her older sister Truus and their friend Hannie Schaft... blew up bridges and railway tracks with dynamite, smuggled Jewish children out of concentration camps and executed as many Nazis as she could, using a firearm hidden in the basket of her bike.... First approach the Nazi men in bars, and, having successfully seduced them, ask if they wanted to 'go for a stroll' in the forest, where, as Freddie herself put it, they would be 'liquidated'.... 'It was a necessary evil, killing those who betrayed the good people'. When asked how many people she had killed or helped kill, she demurred: 'One should not ask a soldier any of that'.... She was the last surviving member of the Netherlands' most famous female resistance cell...

#noted