J. Bradford DeLong's Blog, page 2242
July 30, 2010
Deepwater Horizon Alarm Intentionally Disabled...
Brett Michael Dykes:
Deepwater Horizon worker: Fire alarm was intentionally disabled before explosion: Testifying before a federal panel investigating the Deepwater Horizon explosion, Transocean employee Michael Williams said that an alarm designed to warn the crew if combustible gases were in danger of igniting was deliberately disabled.
"The general alarm was inhibited," Williams testified. He went on to say that when he alerted his superiors about the extreme safety hazard...
Economic Inequality in the Anglosphere
I am not convinced. The U.S. economy is so large, and barriers to upper-class labor mobility across the Anglosphere so small, that I think the U.S. drags inequality trends in other English-speaking nations along after it.
Via Henry Farrell, Andrea Brandolini:
Why Is Economic Inequality Higher in English Speaking Industrialized Democracies?: What I really find conspicuous in the comparison of top income shares across rich nations is the similarity of the patterns observed in...
DeLong Smackdown Watch: vtcodger on Chemists
Hoisted from Comments:
vtcodger said...: Re: "Chemists begin with what the Heisenberg and Pauli principles, plus the three-dimensionality of space, tell us about stable electron configurations."
No, I'm pretty sure they don't. Moreover, they developed the Periodic Table of Elements around 1870 -- roughly 30 years before Pauli and Heisenberg were even born. Understanding of why the Periodic Table works took another 80-100 years. They did not even mention Pauli and Heisenberg in...
Is America Facing an Increase in Structural Unemployment?
Economics: Is America facing an increase in structural unemployment?
I think the answer is "yes"...
David Altig of the Federal Reserve Bank of Atlanta http://macroblog.typepad.com/macroblog/2010/07/a-curious-unemployment-picture-gets-more-curious.html has just convinced me that the answer to this question is "yes": given the large recent increase in vacancies in the past two quarters, the U.S. unemployment rate ought to have started to fall. It did not.
That means that the chances...
It Always Looked Like Alan Simpson Was a Mistake to Co-Chair a Deficit-Reduction Commission. Now It Looks Like Erskine Bowles Was an Even Bigger Mistake
Numerology is not a science. And there is no reason to think that 21% is a particularly auspicious number.
Matt Miller--like me, part of the sensible, technocratic bipartisan center--looks at what is coming out of the Obama deficit-reduction commission, and is as horrified as I am:
A spending goal too small for aging America: I don't want to overreact. I'd hate to prematurely diss President Obama's National Commission on Fiscal Responsibility and Reform, which held its fourth...
John Stuart Mill vs. the European Central Bank
We are live at Project Syndicate: John Stuart Mill vs. the European Central Bank:
One of the dirty secrets of economics is that there is no such thing as “economic theory.” There is simply no set of bedrock principles on which one can base calculations that illuminate real-world economic outcomes. We should bear in mind this constraint on economic knowledge as the global drive for fiscal austerity shifts into top gear.
Unlike economists, biologists, for example, know that every cell...
July 29, 2010
Liquidationism Further Refuted
Paul Krugman directs us to Heather Boushey:
his Has Been An Equal Opportunity Recession When It Comes To Job Losses Across Industries: Economist Paul Krugman highlights Raghuram Rajan arguing in today’s Financial Times that the Federal Reserve should begin raising interest rates because “the US had far too much productive capacity devoted to houses and cars, because consumers could obtain financing for them easily.” Essentially, Rajan is arguing that monetary tightening is necessary to...
"Houses Have Increased Their Preference for Being Vacant"
Ryan Avent reads Alex Tabarrok:
Aggregate demand: Think of the unemployed houses: THIS is an interesting thought experiment, courtesy of Alex Tabarrok, who notes that America's housing vacancy rate is at record highs and writes:
House prices may be sticky but they have fallen a lot--maybe not enough--but they have fallen a lot more than have wages. On the other hand, house prices rose a lot more than wages. Maybe house prices are sticky relative to the required variation in...
Paul Krugman Wonders What Raghuram Rajan Is Talking About
Paul Krugman:
The Work Of Depressions: OK, I actually haven’t taken cars into account; someone with more time can do that. But let’s look at the role of job losses in construction versus other sectors.... If high unemployment were largely about shifting workers out of an overblown construction sector, wouldn’t you expect job losses to be concentrated in that sector? Wouldn’t you expect employment elsewhere to be, if anything, rising? In fact, however, the vast majority of job losses...
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