J. Bradford DeLong's Blog, page 237
February 8, 2019
This Is Nuts. When's the Crash?
The highly-estimable FT Alphaville has long had a series: This is nuts. When's the crash?. That is my reaction to learning that Hoover Institution senior fellows are now crypto...
It is not at all clear to me whether they are grifters or griftees here...
I had known about John Taylor, but had thought that was a strange one-off. And now Niall Ferguson. Is anybody even pretending to have a business model other than pup-and-dump? I think the only appropriate response is here:
Background:
Brad DeLong @delong What is going on? Help us, @ncweaver! You are our only hope! What is this... fresh hell... new devilry? https://twitter.com/BenDWalsh/status/1093932167921631232
Ben Walsh: @BenDWalsh: The blockchain company Niall Fergusson is joining really does not like inflation https://www.ampleforth.org
Nicholas Weaver: @ncweaver: "Yet another recapitulation of Basis: an algorithmic dumb currency peg. Which means it only works up to the instant when someone figures out how to make money breaking the peg. The only part new appears to be a better story for 'Moon Lambo' at the start before stability, which was always the problem with Basis and its 100M of VC money: if it works, it���s stable, so there is no investment nor way to make money off of it. And if it doesn���t work, why dump 100M of VC money in it. This adds 'it will be stable after the Moon Lambo phase'. Bet is they will raise at least $50M from dumb VC like a16z since they have 'We���re Basis but with Moon Lambo first, and we aren���t in the US so we will just ignore the SEC' as the story, and it will implode on the launch pad if it ever gets implemented in the first place...
Jemima Kelly: The John Taylor-Backed ���Stablecoin��� that's Backed by, um, Stability: "Stanford economist John Taylor... once a favourite to succeed Janet Yellen as chair of the Federal Reserve... has got into crypto.... Mr Taylor told us...
...This [Basis] is a great improvement.... The stability is so important-that���s what���s so, just, beautiful, and intriguing about this currency. It will get that stability, and it���s really what we���ve been searching for forever���to have a stable, reliable medium of exchange...
It all sounds quite, well, beautiful, right? And what is it backed by, again? Mr Taylor, again:
It���s not backed by anything other than the fact this is stable.
Wow, OK. But let's look at how it actually intends to work. Because it is not backed by dollars, the way Basis plans to maintain its stability is by executing open market operations... an algorithm buys and sells what it calls 'Basis bonds'���on the blockchain of course���in response to changes in demand....
And what about making some money for Basis's investors, we ask? Mr al-Naji....
It's very important to us that we comply with regulatory requirements so I'd avoid focusing on the commercial aspects of Basis. But as a general answer, our design goal is to have participants in the system share in expansions of Basis supply when the Blockchain decides an expansion of supply is needed. You can check out the��White Paper��on our website for more information on this design as well...
Ah, sorry, OK, let's not focus on the commercial aspects of a currency that's received 133m in investment before it's even launched. We'll check out the white paper...
Jemima Kelly: Niall Ferguson Joins Blockchain Project Ampleforth: "Ampleforth: not just an ideal school to send your kids if you're Catholic and can afford it, but also, 'an ideal money'. More specifically (and perplexingly): 'A decentralised store of value protocol that is volatile in price and supply at launch, but is strictly better than Bitcoin at steady state because it converges on a stable unit of account.' And Niall Ferguson, the rightwing British historian and who once called himself a 'fully paid-up member of the neo-imperialist gang', has joined its advisory board.... Here's Ferguson...
...The idea of reinventing money excites me. Bitcoin, currently, is incapable of being ���money��� that can be a means of payment. But at the same time, I am doubtful of fiat-pegged stablecoins. As someone who is deeply interested in financial innovation, I���m attracted by Ampleforth's mission to reinvent money in a way that protects individual freedom and to create a payments system that treats everyone equally...
John McAfee: @officialmcafee: "When I predicted Bitcoin at $500,000 by the end of 2020, it used a model that predicted $5,000 at the end of 2017. BTC has accelerated much faster than my model assumptions. I now predict Bircoin at $1 million by the end of 2020. I will still eat my dick if wrong...
#finance #orangehairedbaboons
Fairly Recently: Must- and Should-Reads, and Writings... (February 8, 2019)
Debt Derangement Syndrome: Fresh at Project Syndicate: Standard policy economics dictates that the public sector needs to fill the gap in aggregate demand when the private sector is not spending enough. After a decade of denial, the Global North may finally be returning to economic basics...
A Rant on Trump, Trade, and China...: Then, lo and behold, suddenly someone convinces trump that the TPP is the second-worst trade deal in American history���"it's almost as bad as NAFTA!"���and you switch sides: all of a sudden you are there on Trish Regan's show claiming the TPP is a horrible deal for America...
Weekend Reading: : Trust and the Benefit of the Doubt: Dietz Vollrath sends us to a classic story from the late Douglas Adams.... 'This actually did happen to a real person, and the real person was me...
Comment of the Day: Kansas Jack: A Very Nice Twitter Rant from Tom Nichols: "It isn't about anything of substance, it is about being pissed off. Period. About what? Doesn't matter.... It wasn't that it fell on deaf ears because they couldn't understand, they simply didn't care. And the more it mattered to you, the happier they were...
A very nice Twitter rant from Tom Nichols. In fact, I think it is worse���if they could be bought off, it would be fine. But they can't be bought off since they have no idea what they want. The people of the hill country of Kentucky needed the end of pre-existing condition exclusions for the upper half of and access to Medicaid for the lower half of the working class. They buy-off was accomplished. And yet...: Tom Nichols: "If Trump wanted to add 15 more countries to NATO and fund the World Bank from Social Security taxes, Lindsey Graham would propose the legislation and guys in diners in Ohio would be explaining why it was the right thing to do���as long as some intellectual objected first. I'm not sure how long we have to go on pretending Trump's policies reflect a 'view', any more than any other group of populist idiots. What does the current Italian govt want to do? Heard about them lately? They're bogged down in dumb stuff. Because populism isn't a program. It's stupefying to watch intelligent men and women wishcasting 'idea'" onto Trumpism or Leavers or Europopulists. There's no 'there' there. It's the Seinfeld of political movements: about nothing, but passionately about nothing. Yes, yes, I know. Immigration. Income inequality. Gas prices. Mostly, it's about change, and why people hate it, and why they want to be bought off rather than accept it. More transfers for me, and also, please magically create an idealized version of 1970 that never existed. The tell is that people are aggrieved over things that aren't true. Ask Americans-or even the French-how many Muslims live in their country. How much they think gas should be. What they think was better in 1970 or 1980 or 1990. They can't tell you in any real way. In fact, ask them what they want. As a thought exercise, say: 'You win. What do you want?' They can't really answer that, either, because they know the answer is impossible (or racist, or self-serving). Mostly, they want to piss off other people. That's the key. That's why you can never find a compromise with the hard-core 35 percent in the U.S., or the rioters in Europe. (Short of just sending cash to them as a buy-off.) Imputing 'policy' preferences to them is a mug's game, and it's long past time to stop playing it...
Emil Verner and Gyozo Gyongyosi: Household Debt Revaluation and the Real Economy: Evidence from a Foreign Currency Debt Crisis: "The large (over 30%) and unexpected depreciation of the Hungarian forint in late 2008... a shock to local household debt... a rise in default rates and a persistent decline in local durable and non-durable consumption...
?????? it certainly seems to me as though Donald Trump wants there to be a Sino-American trade war���after all they are, as he says, easy to win. If the U.S. wants a tussle with China over intellectual property, the right strategy is for the U.S to back off now, go to the TPP members, apologize for its actions in rejecting the TPP in early 2017, join the TPP, and then negotiate as part of a United front with other TPP members. The U.S. by itself has no leverage ���the IP China can grab is worth more than the cost of losing access to the U.S. market. So I have no idea what Marty thinks he is saying here: Martin Feldstein: There Is No Sino-American Trade War: "Chinese negotiators recently offered to buy enough American products to reduce the bilateral trade deficit to zero by 2024. Why, then, have US negotiators rejected that as a way to end the dispute?...
Anatole Kaletsky: How EU Leaders Can Prevent a No-Deal Brexit: "Once May���s negotiating strategy is properly understood, the EU���s rational response becomes obvious: total inflexibility on the Brexit deal���s substance, but removal of the Brexit deadline..... No concessions of any kind on the withdrawal agreement... the commitment to Ireland... no hints about future trade deals. But they should also state publicly that they no longer consider March 29 a hard deadline and would be happy to extend the Brexit negotiating period for as long as is necessary not only to agree on a new UK-EU relationship, but also to demonstrate that what is agreed satisfies both sides...
Donald Tusk: "I've been wondering what that special place in hell looks like, for those who promoted #Brexit, without even a sketch of a plan how to carry it out safely...
Vincent Gabrielsen: Financing the Athenian Fleet
Wikipedia: Sergei Guriev
Barry Eichengreen: The European Economy since 1945: Coordinated Capitalism and Beyond: https://books.google.com/books?isbn=0691138486
Trolly McTrollface: The #XRPArmy, Explained: "Together, the members of the XRP Army identified by my clustering algorithm, had produced 32 tweets, 1998 retweets, 2264 likes, and 1986 replies, from a dataset of 100,000 data points. Yes, you���ve read that right: less than 1.5% of the content the XRP Army produces are original tweets. They are very rarely initiators of a thread, electing instead to jump in on existing discussions...
Austin Carr: Inside Wisconsin���s Disastrous 4.5 Billion Deal With Foxconn - Bloomberg: "A huge tax break was supposed to create a manufacturing paradise, but interviews with 49 people familiar with the project depict a chaotic operation unlikely to ever employ 13,000 workers.... 'This is the Eighth Wonder of the World.' So declared President Donald Trump.... For some Foxconn workers watching, the president���s rhetoric didn���t match reality. The LCD components weren���t made in the USA, according to sources familiar with the operation. They were shipped from a Foxconn factory in Tijuana...
2018 was only the fourth hottest year in our records! Time for some more contrarianism from Steve Dubner and Steve Levitt about how since 2016 "over the past several years the average global temperature has in fact decreased"?: Oliver Millman: 2018 Was World's Fourth Hottest Year on Record, Scientists Confirm: "World 1.5F hotter than average set between 1951 and 1980. Current five-year stretch the warmest since records began...
Rick Perlstein: How Doris Kearns Goodwin Came to Resemble Lyndon Johnson: "Doris Kearns Goodwin... in 1993 she made a wounded remark that Joe McGinnis, the author of a new Kennedy book, had plagiarized her. McGinnis contends that he cited Goodwin appropriately in his book. Whatever the case, for Goodwin to call out McGinnis was a debased act, an alienated act, in itself. For when she did it, Goodwin acted as if she had not already privately acknowledged a few years earlier stealing from an author's work herself���Lynne McTaggart's Kathleen Kennedy (1993)���then bribing her to keep quiet about it. We don't call such things bribes, of course; they are 'settlements'. Either way they are one of the more corrupt prerogatives of power in our time...
There is no merit-based case for David Malpass to run the World Bank. Ivanka would be a massively superior candidate: Dylan Matthews: David Malpass���s World Bank Nomination, Explained: "Malpass is... an infamously bad... forecaster.... Chief economist to Bear Stearns in 2007 and 2008 as the firm collapsed due to the subprime crisis. In August 2007... wrote a Wall Street Journal op-ed titled, 'Don���t Panic About the Credit Market'.... Undeterred, Malpass spent the Obama years calling for the Fed to adopt higher interest rates, and in 2012 even argued that maintaining low rates would lead to a recession. The Fed kept rates low, a recession didn���t ensue, and most economists credit the steady recovery to the Fed���s willingness to maintain rates near zero. If anything, it erred in not trying hard enough to push long-term interest rates down...
Ken Houghton: The Bank is the Colour of Malpasspractice, not Dead Televisions
Bruce Bartlett (October 9, 2012): Partisan Bias and Economic Forecasts: "On Sept. 27... James Pethokoukis, now employed by the conservative American Enterprise Institute, said that the United States economy was 'running out of steam' and that there was now a 50 percent chance of a recession within a year. 'It may be several years before we see unemployment below 8 percent'.... On Friday, the Bureau of Labor Statistics announced that the unemployment rate in September was 7.8 percent. On Sept. 29... David Malpass... took a similarly bearish view.... Current economic data, he said, ���point to a recession in 2013.��� On Oct. 1, Brian Wesbury... raised the risk of a recession to 25 percent in his weekly client letter.... In July, Mr. Malpass was predicting 2 percent real gross domestic product growth in 2012 and 3 percent in both 2013 and 2014.... [In] September survey, Mr. Wesbury was predicting 2.3 percent real growth in 2012.... The average forecast for all economists surveyed by The Journal in September was 1.9 percent real G.D.P. growth in 2012, 2.4 percent in 2013 and 2.9 percent in 2014.... None of the economists surveyed has predicted even a single quarter of negative real growth within the forecast window. Typically, a recession requires two back-to-back quarters of negative real growth...
Tsinghua University: Qian Yingyi: "Born in Beijing... graduated from Tsinghua University in Mathematics... Ph.D. in Economics from Harvard University after earning an M.Phil. in Management Science/Operations Research from Yale University and an M.A. in Statistics from Columbia University.��He was on the economics faculties at Stanford University, the University of Maryland, and the University of California, Berkeley.�� He was the Dean of the School of Economics and Management at Tsinghua University in 2006-2018.... He is the author of the book How Reform Worked in China: The Transition from Plan to Market (The MIT Press, 2017)...
Wikipedia: Andrew Jalil
An argument that all of behavioral economics is just a set of footnotes to Pierre Laplace: Joshua B. Miller and Andrew Gelman: Laplace���s Theories of Cognitive Illusions, Heuristics, and Biases: "Essai Philosophique sur les Probabilities anticipated many ideas developed within the past 50 years in cognitive psychology and behavioral economics, explaining human tendencies to deviate from norms of rationality in the presence of probability and uncertainty.... Laplace���s theories and reasoning... how modern they seem, how much progress he made without the benefit of systematic experimentation, and the novelty of a few of his unexplored conjectures. We argue that this work points to these theories being more fundamental and less contingent on recent experimental findings than we might have thought... #behavioral
Dominique Barth��lemy (2009): The Serf, the Knight, and the Historian
Michael Mitterauer: Why Europe?: The Medieval Origins of Its Special Path: "While most historians have located the beginning of Europe���s special path in the rise of state power in the modern era, Mitterauer establishes its origins in rye and oats. These new crops played a decisive role in remaking the European family, he contends, spurring the rise of individualism and softening the constraints of patriarchy. Mitterauer reaches these conclusions by comparing Europe with other cultures, especially China and the Islamic world, while surveying the most important characteristics of European society as they took shape from the decline of the Roman empire to the invention of the printing press. Along the way, Why Europe? offers up a dazzling series of novel hypotheses to explain the unique evolution of European culture...
Information Technology and Innovation Foundation
Dietz Vollrath (2017): Who Are You Calling "Malthusian"?: "I���m not sure how to reply. I���m not a Malthusian 'believer', because that isn���t a thing. But I do think that several of Malthus��� assumptions about how economies function, in particular prior to the onset of sustained growth during the 1800���s, are well founded. And those assumptions have implications that help make sense of the world in that period of time...
This is, I think, wrong: The Reagan-Thatcher era was solidified not by renewed economic growth but rather by the conquest of inflation and upward redistribution of wealth to the already-wealthy: Gideon Rachman: The Trump era could last 30 years | Financial Times: "The rapid spread of this new political style could be just the beginning of a new era that lasts decades. But there is one major qualification to this idea, that distressed liberals should hang on to. If the period of emulation and intensification is to last, the populist movement needs more than electoral success. It also needs to point to results in the real world. The trente glorieuses were deemed glorious because living standards were visibly rising across the west. In the same way, the Reagan-Thatcher era was solidified by renewed economic growth and victory in the cold war. By contrast, Brexit is in deep trouble and the Trump administration is floundering. Unless populists can deliver tangible results, their new era could yet die in its infancy...
Back in the depths of the Great Recession, employers said that they wanted, needed, and required college graduates and the highly experienced. But what they meant was that they thought high unemployment meant that they could get overqualified workers when they went to the labor market. Now that unemployment has fallen, these needs and requirements have vanished. Employers still want over-qualified workers. But they are no longer asking for them becuase they no longer expect to be able to get them: Matthew Yglesias: The ���Skills Gap��� Was a Lie: "Alicia Sasser Modestino, Daniel Shoag, and Joshua Ballance... the skeptics were right... employers responded to high unemployment by making their job descriptions more stringent. When unemployment went down thanks to the demand-side recovery, suddenly employers got more relaxed again.... The skills gap was the consequence of high unemployment rather than its cause. With workers plentiful, employers got choosier. Rather than investing in training workers, they demanded lots of experience and educational credentials. And while job skills are obviously important, when the labor market is healthy employers have incentives to try to impart skills to workers rather than posting advertorial content about how the government should fix this problem for them...
David Weil: In Conversation: "Franchising started to spread... a form of business organization that allows you to shed and yet control.... Information technology facilitated this because you have lower-cost mechanisms to monitor subsidiary organizations.... The end result is you have broken apart the employment relationships.... If you think this is just about employers trying to weasel out of their responsibilities, you miss this more fundamental change... [are] underestimating the difficulty of unwinding that behavior or changing that behavior in some way to deal with the consequences in the labor market...
Barry Ritholtz: Art of the Deal, Scott Walker Style: "As we discussed, the Foxconn-Wisconsin tax giveaway is unfolding as per expectations. Via Businessweek, here is 'The Art of the Deal', Scott Walker style: 'Interviews with 49 people familiar with Foxconn���s Wisconsin project, including more than a dozen current and former employees close to its efforts there, show how hollow the boosters��� assurances have been all along.... Insiders describe a chaotic environment with ever-changing goals far different from what Trump and others promised. Walker and the White House declined to comment for this story, although a Trump administration official says the White House would be ���disappointed��� by any reduced investment. The only consistency, many of these people say, lay in how obvious it was that Wisconsin struck a weak deal. Under the terms Walker negotiated, each job at the Mount Pleasant factory is projected to cost the state at least 219,000 in tax breaks and other incentives. The good or extra-bad news, depending on your perspective, is that there probably won���t be 13,000 of them.' Shocking, but not surprising...
A Rant on Trump, Trade, and China...
I'm still trying to come to terms with my Commonwealth Club event with Steve Moore last month. As therapy, I took some of my less-than-coherent ravings and tried to turn then into proper rant:
Steve, what you are saying is simply delusional.
You keep saying that Xi needs to deal because Trump is deadly serious on China and will not back down. Do remember that Trump declared victory on reforming NAFTA, "the worst trade deal in the history of the world", with small adjustments on autoparts rules-of-origin. Small adjustment on auto parts were enough to transform NAFTA, in Trump's mind, from the worst trade deal in the history of the world into something he is now very proud of. Xi has to to be thinking that he should deal with Trump the same way that Mexico did���hang tough, provide a few symbolic concessions only, and Trump will cave and go back to business-as-usual. What is there in the situation that would keep that from being the obvious strategy for Xi?
The United States in the nineteenth century did not pay a cent to Britain for its intellectual property in textiles and steel. Japan industrialized without paying a lot of attention to claims about who owned intellectual property. Now China is doing the same thing���this is what rising powers always do. We did not pay a cent in royalties to Charles Dickens for all of his novels in the nineteenth century. In fact, as late as the 1950s we used a loophole to steal J.R.R. Tolkien's copyright to The Lord of the Rings. We did it to Britain. Japan did it to us. Now China is doing it to us and Japan. This is a source of annoyance. This is a thing to negotiate about. We push, we pull. But that does not change the fact that international trade relationships���whether between Britain and the United States in the 19th century or Japan and America in the mid-20th century or the U.S. and China today���are all enormously valuable win-wins. We are arguing about the division of an enormous surplus from the global division of labor. Letting that argument turn into a trade war that wrecks the joint is hte definition of stupidity.
The Obama administration sought leverage over China with respect to intellectual property issues. It wished take a harder line with China on intellectual property. The Obama administration sought to get as many as possible of China's other trading partners on our side. It formed this organization called the Trans-Pacific Partnership to set up a common negotiating position on what the international trade r��gime in the Pacific should be. The plan was for the TPP countries to then confront and negotiate with China. And back then you thought this was good���you and Art Laffer wrote a number of pieces about how great the TPP was, and how much leverage it would have���and, indeed, when the bulk of countries from which China might seek to buy from or sell to are on board, you have a lot of leverage. You wrote about how Marco rubio was to be praised because he had been willing to become a decisive Senate vote to grant Obama the power to negotiate the TPP.
Then, lo and behold, suddenly someone convinces trump that the TPP is the second-worst trade deal in American history���"it's almost as bad as NAFTA!"���and you switch sides: all of a sudden you are there on Trish Regan's show claiming the TPP is a horrible deal for America.
Donald Trump... is not a terribly wise person. Jared Kushner finds a guy Peter Navarro who seems to be simply delusional and brings hin into the White House, Robert Lighthizer���who was an effective pro-free trade technocrat back in the Reagan and Bush 41 administrations���as now adopting positions that I can only understand as driven by corruption. Trump, Navarro, and Lighthizer appear to be running this China trade war. And I cannot find a single person in the White House who approves of what they are doing.
Trump was���it appears Trump still is���insisting on bilateral balance with China. That is not going to happen. Balanced trade inevitably requires bilateral surpluses and deficits because for no country in the world is the set of countries it wants to export to identical to the set of countries it needs to import from. Balance is always triangular and more complicate patterns of balance, not bilateral balance. Moreover, low-savings countries run trade deficits. The United States is a low-savings country. And the United States is a country that wants to import from China but sees other countries as more attractive export targets.
Consider how things look from Xi's perspective, sitting there in Beijing. Xi has got to conclude that somebody who truly cared about and was genuinely serious about the intellectual property issues would not have blown up his leverage on day 1 by nuking the TPP. Someone who cared about trade issues at all would not be damanding something���bilateral trade balance���that is never going to happen both because the U.S. is a low-savings country and low-savings countries run trade deficits, and because the way trade would balance would have China running bilateral deficits with its materials suppliers, its materials suppliers running bilateral deficits with us, and our running a bilateral deficit with China.
Xi has got to conclude 's going on, um, that either this is all a big bluff because someone who was genuinely serious about intellectual property would not have thrown away his leverage to start with and would not be demanding something that simply ain't going to happen no matter what balanced bilateral trade, either it's a bluff or this is simply someone who cannot be reasoned with. Um, and so we're going up kind of have to do what other people do. What the mexican government, the mexican government was faced with trump who thought that naft claimed to think proud. Nafta was not the second worst, but the worst trade deal in american history. And lo and behold, change the name of nafta to what is it canadian us mexican free trade agreement or something and have some very minor adjustments. In what counts as domestic auto parts, production adjustments that us auto manufacturers didn't really want them don't really care about, and all of a sudden, instead of being the worst trade deal in american history, naf does something perfectly fine that trump is way competent to happy to sign and is extraordinarily proud of those ge thinks is betting that trump will fold here again as he folded with nafta and ge thinks if trump doesn't fold well, this isn't really a rational agent we're dealing with.
From Xi's perspective, it has to look like he is negotiating with somebody who is (a) bluffing or (b) flunking his Turing Test.
So Xi and his advisors have to conclude that (a) Trump is probably bluffing���as he bluffed on the shutdown, as the bluffed on NAFTA���and that (b) even if Trump is not bluffing, there is no point in offering concessions because the people running policy���Trump, Navarro, Lighthizer���are not wise, are delusional, appear corrupt���and they have no support either inside or outside the White House. So we had better hope this is another Trump bluff.
#publicsphere #orangehairedbaboons #highlighted #globalization
Barry Ritholtz: Art of the Deal, Scott Walker Style: "As ...
Barry Ritholtz: Art of the Deal, Scott Walker Style: "As we discussed, the Foxconn-Wisconsin tax giveaway is unfolding as per expectations. Via Businessweek, here is 'The Art of the Deal', Scott Walker style: 'Interviews with 49 people familiar with Foxconn���s Wisconsin project, including more than a dozen current and former employees close to its efforts there, show how hollow the boosters��� assurances have been all along.... Insiders describe a chaotic environment with ever-changing goals far different from what Trump and others promised. Walker and the White House declined to comment for this story, although a Trump administration official says the White House would be ���disappointed��� by any reduced investment. The only consistency, many of these people say, lay in how obvious it was that Wisconsin struck a weak deal. Under the terms Walker negotiated, each job at the Mount Pleasant factory is projected to cost the state at least 219,000 in tax breaks and other incentives. The good or extra-bad news, depending on your perspective, is that there probably won���t be 13,000 of them.' Shocking, but not surprising...
#noted
February 7, 2019
David Weil: In Conversation: "Franchising started to spre...
David Weil: In Conversation: "Franchising started to spread... a form of business organization that allows you to shed and yet control.... Information technology facilitated this because you have lower-cost mechanisms to monitor subsidiary organizations.... The end result is you have broken apart the employment relationships.... If you think this is just about employers trying to weasel out of their responsibilities, you miss this more fundamental change... [are] underestimating the difficulty of unwinding that behavior or changing that behavior in some way to deal with the consequences in the labor market...
#noted
Back in the depths of the Great Recession, employers said...
Back in the depths of the Great Recession, employers said that they wanted, needed, and required college graduates and the highly experienced. But what they meant was that they thought high unemployment meant that they could get overqualified workers when they went to the labor market. Now that unemployment has fallen, these needs and requirements have vanished.
Employers still want over-qualified workers. But they are no longer asking for them becuase they no longer expect to be able to get them:
Matthew Yglesias: The ���Skills Gap��� Was a Lie: "Alicia Sasser Modestino, Daniel Shoag, and Joshua Ballance... the skeptics were right... employers responded to high unemployment by making their job descriptions more stringent. When unemployment went down thanks to the demand-side recovery, suddenly employers got more relaxed again.... The skills gap was the consequence of high unemployment rather than its cause. With workers plentiful, employers got choosier. Rather than investing in training workers, they demanded lots of experience and educational credentials. And while job skills are obviously important, when the labor market is healthy employers have incentives to try to impart skills to workers rather than posting advertorial content about how the government should fix this problem for them...
#noted
This is, I think, wrong: The Reagan-Thatcher era was soli...
This is, I think, wrong: The Reagan-Thatcher era was solidified not by renewed economic growth but rather by the conquest of inflation and upward redistribution of wealth to the already-wealthy: Gideon Rachman: The Trump era could last 30 years | Financial Times: "The rapid spread of this new political style could be just the beginning of a new era that lasts decades. But there is one major qualification to this idea, that distressed liberals should hang on to. If the period of emulation and intensification is to last, the populist movement needs more than electoral success. It also needs to point to results in the real world. The trente glorieuses were deemed glorious because living standards were visibly rising across the west. In the same way, the Reagan-Thatcher era was solidified by renewed economic growth and victory in the cold war. By contrast, Brexit is in deep trouble and the Trump administration is floundering. Unless populists can deliver tangible results, their new era could yet die in its infancy...
#noted
Dietz Vollrath (2017): Who Are You Calling "Malthusian"?:...
Dietz Vollrath (2017): Who Are You Calling "Malthusian"?: "I���m not sure how to reply. I���m not a Malthusian 'believer', because that isn���t a thing. But I do think that several of Malthus��� assumptions about how economies function, in particular prior to the onset of sustained growth during the 1800���s, are well founded. And those assumptions have implications that help make sense of the world in that period of time:
#noted
Who are you calling Malthusian?
Dietz Vollrath (2017): Who Are You Calling "Malthusian"?: "I���m not sure how to reply. I���m not a Malthusian 'believer', because that isn���t a thing. But I do think that several of Malthus��� assumptions about how economies function, in particular prior to the onset of sustained growth during the 1800���s, are well founded. And those assumptions have implications that help make sense of the world in that period of time:
#noted
Michael Mitterauer: Why Europe?: The Medieval Origins of ...
Michael Mitterauer: Why Europe?: The Medieval Origins of Its Special Path: "While most historians have located the beginning of Europe���s special path in the rise of state power in the modern era, Mitterauer establishes its origins in rye and oats. These new crops played a decisive role in remaking the European family, he contends, spurring the rise of individualism and softening the constraints of patriarchy. Mitterauer reaches these conclusions by comparing Europe with other cultures, especially China and the Islamic world, while surveying the most important characteristics of European society as they took shape from the decline of the Roman empire to the invention of the printing press. Along the way, Why Europe? offers up a dazzling series of novel hypotheses to explain the unique evolution of European culture...
#noted
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