J. Bradford DeLong's Blog, page 242

Marcy Wheeler: Lawfare's Theory of L'Affaire Russe Misses...

Marcy Wheeler: Lawfare's Theory of L'Affaire Russe Misses the Kompromat for the Pee Glee_: "Trump and the Russians were engaged in a call-and-response... that appears in the Papadopoulos plea and (as Lawfare notes) the GRU indictment.... At each stage... Russia got a Trump flunkie (first, Papadopoulos) or Trump himself to publicly engage in the call-and-response.... Putin obtained receipts at each stage of this romance of Trump���s willing engagement in a conspiracy with Russians for help getting elected. Putin knows what each of those receipts mean. Mueller has provided hints, most obviously in that GRU indictment, that he knows what some of them are.... Trump knows that if Mueller can present those receipts, he���s sunk, unless he so discredits the Mueller investigation before that time as to convince voters not to give Democrats a majority in Congress, and convince Congress not to oust him as the sell-out to the country those receipts show him to be. He also knows that, on the off-chance Mueller hasn���t figured this all out yet, Putin can at any time make those receipts plain.... Trump knows he���s screwed. He���s just not sure whether Putin or Mueller presents the bigger threat...

#noted

Note to Self: _A Comment on Development Engineering: With...

Note to Self: _A Comment on Development Engineering: With respect to "doing good versus doing well"...

From an economist's point of view, the economy is a decentralized societal calculating machine. It looks at everybody, and tries, in a utilitarian way, to increase social welfare���which it roughly defines as summing everybody's well-being, with each person's well-being weighted by their lifetime wealth. This produces a system in which incentives are, and "doing well" achieved by, increasing resources that produce things for which rich people have a serious Jones.

Serving the global poor is not going to do that. Som making a living serving the poor requires focusing on one of two things:

Finding an organization���a government or an NGO���that is willing to some degree to commit resources to bend this market logic of "to those who have, more shall be given"

Find some people who have skills and resources and industry that are somehow blocked from the sight of the world market, and figure out a narrow strategic intervention that will makes those resources visible���and hence valuable.

#notetoself #berkeley #equitablegrowth

Fairly Recently: Must- and Should-Reads, and Writings... (January 31, 2019)

Yes, There Are Individual Economists Worth Paying Respect to. But Is Economics Worth Paying Respect to?: Blush. To be one of fifteen good economists name-checked by Larry Summers genuinely makes my day���nay, makes my week. But.... Yes, there are very many good economists worth listening to. But does economics as a whole have any claim to authority, or is it better for outsiders' first reaction to be to dismiss its claims as some combination of ideology on the one hand and obsequious toadying to political masters on the other?...

Comment of the Day: Cervantes: Yes, There Are Individual Economists Worth Paying Respect to. But Is Economics Worth Paying Respect to?: "The introductory economics course... 1) Propound a list of assumptions which are not true; 2) Develop an elaborate theory of how the world would be were the assumptions true; 3) Forget that the assumptions are false and carry on...

Commonwealth Club: Annual Economic Forecast Event (January 25, 2019): Relevant Files

Some Great Past First-Year Berkeley Economic History Course Papers

Note to Self: In response to EconSpark: Ben Bernanke: "How important was the financial panic as a cause of the Great Recession?": From 2005 through the end of 2007 the housing bubble breaks���and real housing investment relative to potential real GDP falls by 3.3%-points of real potential GDP. Yet there is no recession. Expenditure is smoothly switched from residential investment to exports and non-residential investment. Consumption is not noticeably weak in spite of the impact of diminished housing wealth on households. Thus my belief that if the financial crisis had been managed���if the Bagehot Rule had been followed, and if there had been authorities to lend freely at a penalty rate on collateral that was good in normal times���and if 2008 had passed without a crash, then our proves would have been over. It was not the case that the economy in November 2008 "needed a recession" as John Cochrane liked to claim, "because people pounding nails in Nevada needed to find something else to do"...

Adrian Wooldridge Is... the Vicar of Bray!: Hoisted from the Archives: "The Illustrious House of Hannover,/And Protestant succession,/To these I lustily will swear,/Whilst they can keep possession:/For in my Faith, and Loyalty,/I never once will faulter,/But George, my lawful king shall be,/Except the Times shou'd alter"...

Larry Summers: Has economics failed us? Hardly: "My friend Fareed Zakaria... writing... ���The End of Economics?,��� doubting the relevance and utility of economics and economists. Because Fareed is so thoughtful and echoes arguments that are frequently made, he deserves a considered response. Fareed ignores large bodies of economic thought, fails to recognize that economists have been the sources of most critiques of previous economic thinking, tilts at straw men and offers little alternative to economic approaches to public policy...

Fareed Zakaria: The End of Economics?: "In the three decades since the end of the Cold War, economics has enjoyed a kind of intellectual hegemony.��In the three decades since the end of the Cold War, economics has enjoyed a kind of intellectual hegemony... first among equals in the social sciences... dominated most��policy agendas as well.... That hegemony is now over.... In October 2008, Greenspan, a lifelong libertarian, admitted that 'the whole intellectual edifice��� collapsed in the summer of last year'...

Jennifer Taube: Thread by @jentaub: "Don���t expect a public report, some say. Ignore them. Pay attention to documents already filed. Through them, we/ve seen much of the Mueller Report. And it is spectacular...

Wikipedia: Scholomance

Eric Lonergan: There is no shortage of safe assets-a short proof

Charlie Warzel: "A Honeypot For Assholes": Inside Twitter���s 10-Year Failure To Stop Harassment: "For nearly its entire existence, Twitter has not just tolerated abuse and hate speech���it���s virtually been optimized to accommodate it. With public backlash at an all-time high and growth stagnating, what is the platform that declared itself 'the free speech wing of the free speech party' to do? BuzzFeed News talks to the people who���ve been trying to figure this out for a decade...

Matt Redman: 10,000 Reasons

Alice Dreger: Why I Escaped the ���Intellectual Dark Web���: "Pissing off progressives isn���t intellectual progress. Conventional wisdom says that if a staff writer for The New York Times wants to feature you in a story about brave intellectuals, you reply, 'Yes, please!'... But every time that Times writer, Bari Weiss, called to talk with me about the 'Intellectual Dark Web' and my supposed membership in it, I just started laughing.... Why was I laughing? The idea that I was part of a cool group made me think there was at least some kind of major attribution error going on.... I���m all for bringing intellectualism to the masses, but like a lot of academics, I value ambivalence itself, along with intellectual humility. Yet these values seem in direct opposition to the kind of cocksure strutting that is the favored dance move of the IDW.... Professors, listen to me: You don���t want to be in this dark-web thing, even if it comes with an awesome trading-card photo. You are in the right place. Carry on...

Dora L. Costa, Noelle Yetter, and Heather DeSomer: Intergenerational Transmission of Paternal Trauma among US Civil War Ex-POWs

Siqi Zheng and Matthew E. Kahn: China���s Bullet Trains Facilitate Market Integration and Mitigate the Cost of Megacity Growth

Otto English: Brexit has become a Doomsday Cult: "But May���s ardour is as nothing next to Mystic Mogg and his followers, who seem ever more bent on a 'Branch Davidian' path, unsullied by the compromises of reality. Redemption is attainable���if only everyone could see things their way. The true path has been corrupted by concession���only a mythical ���No Deal��� Brexit will fulfil the destiny of the great flight from Dunkirk. Planet Brexit can be reached, the spaceship is coming, we simply have to extract the metal bits from our bras and check that we have set our watches correctly. Beyond parliament rank and file converts remain... in thrall.... They stand on the pavements outside Westminster, shouting meaningless platitudes 'WTO rules' or 'Leave Means Leave'���and waiting for the Brexit Clarions to appear...

Matthew Waxman: Remembering Eisenhower���s Formosa AUMF

Adam Gurri: The Minefield of Prejudice: "One common approach for discrediting an opponent���s ideas without engaging with them on their merits is to attempt to place them in an unsavory history.... Recent projects in this spirit include Thomas Leonard���s Illiberal Reformers, about the ideological allegiance of the early progressive economists to the principles of eugenics, and Nancy MacLean���s Democracy in Chains.... History of this kind is important, but to think that it is in itself discrediting is mistaken.... Investigating the histories of frameworks is important precisely because we aren���t in a position to align ourselves with something entirely pure. It is therefore imperative that we wrestle with the potential dangers in how our ideas and other alignments prejudice us, and 'genealogy' of Nietzsche���s sort can be an invaluable tool.... We are not the third-person omniscient narrators of our lives.... Scrutinizing the sources of our orientation is an important way we can learn more about our prejudices...

Adam Tooze attributes to me the idea that many of the problems fo the past decade stem from the fact that we had "the wrong crisis"���and that we then in large part reacted to the crisis we had expected but did not in fact have. But I think this point is more Matt's than mine: Matthew Yglesias (2012): The Crisis We Should Have Had: "The US economy from 2002-2006... someday soon, the capital flows would come to an end... the value of the dollar would crash, restraining inflation would require high interest rates, and the US economy would feature a period of painful restructuring.... Sections of Tyler Cowen���s The Great Stagnation are about the crisis we should have had... Spence���s The Next Convergence... Stiglitz��� recent Vanity Fair article... Mandel���s piece on the myth of American productivity.... I can name others.... An awful lot of the Obama agenda has been about efforts to address the crisis we should have had. That���s why long-term fiscal austerity is important and why there was no ���holy crap the economy���s falling apart, let���s forget about comprehensive reform of the health, energy, and education sectors��� moment back in 2009...

Ryan Avent: The Really Wild Thing About the Post Is the Suggestion That Arguments Like That Made by Saez And Zucman Are Un-Economic. What an Indictment of Economics: "I think Mankiw's argument here is mistaken, but... I'm not sure what good economics is if it can't evaluate arguments like S&Z's. 'We understand how best to do tax, though we can't say anything about the effects of tax regimes on long-run political stability', is one hell of a position...

Bijan Parsia: Blocked on Twitter: "Noted author and literary journalist Ron Rosenbaum... made a mistake: https://twitter.com/RonRosenbaum1/status/1079006088522067969. The thread is hilarious: https://twitter.com/maxkennerly/status/1078777955562729472?s=21.... Ron did not handle this well.... I decided to jump in but to do so without mockery and with some attempt at sympathy: https://twitter.com/bparsia/status/1079073455725862913?s=21 In particular: https://twitter.com/bparsia/status/1079080278155579392?s=21 Welp, Ron did not like this and went down the insult trail until he blocked me.... Note that one move I made that definitely didn���t help was not giving him any way of being right. Of course, there is in fact no way for him to be right but it���s even harder for people to get out of those situations without a way of feeling that they were right about something...

Jared Bernstein: No correlation between top tax rates and growth rates | Jared Bernstein | On the Economy: "In a piece in WaPo today, I note in passing that there���s no persistent correlation between top tax rates and growth rates across the US time series, nor in oft-cited international data from Saez et al...

Shachar Kariv: The Best Talk On Behavioral Economics: "Fundamental trade-offs... risk vs. return; today vs. tomorrow; personal well-being vs. the well-being of others; what kind of investor should go to a financial advisor; why people should list their goals, constraints, and preferences to arrive at sensible solutions to their problems; the difference between risk aversion and loss aversion; what is 'ambiguity aversion' and why risk profiling in the financial advisory industry is 'completely broken'; what is home bias and why emerging market investing frightens people beyond objective considerations of risk; why your financial advisor may be more important than your personal physician (and which financial advisors you should run away from)...

WTF?????. How? Working through the investment channel, boosting growth by 0.5%/year requires boosting the growth rate of the 60 trillion dollar capital stock by 1.5%/year, which requires a permanent one-time upward jump in investment of 4.5% of national income���of 900 billion a year. We are not getting that. Are there other channels Manki regars as "reaonable"? What are they?: Greg Mankiw: The Bad Economics Behind Trump's Policies: "One might reasonably argue that Trump���s tax cuts will increase growth over the next decade by as much as half a percentage point per year...

Back in the mid-1990s I thought that George H.W. Bush was below replacement as a Republican President. Three things, especially, disappointed me. "Read my lips: no new taxes" was destructive. The attacks on Clinton for "demonstrating against his country on foreign soil" were classless. And his ostentatious pre-firing of advisors who had served him well and to the best of their ability���that was simply graceless and classless: R.W. Apple (October 12, 1992): The 1992 Campaign: The Debate; Bush Stresses His Experience But 2 Rivals Cite Economic Lag: "White House officials said later that if he was re-elected Mr. Bush planned to dismiss his three top economic advisers, as demanded for months by Republican conservatives outraged over tax increases. They are Nicholas F. Brady, the Treasury Secretary; Richard G. Darman, the budget director, and Michael J. Boskin, the top White House economist...

Larry Kudlow (January 16, 2008): ���Banks are taking significant steps to repair their balance sheets. Even though some people might not be happy with the speed, the reality is things are improving...

The Federal Reserve turns on a dime. I wish that rates were lower as they pursue a hifher inflation target than 2%/year, but they appear to have decided that they, after all, really o not wish to invert the yield curve. That makes this a brighter day then I had expected. Tim Duy: Setting The Doves Free: "The statement was more dovish than I anticipated; I did not think they would want to take rate hikes off the table to this degree. I forgot that the Fed often turns their story later than I think they should, but when they turn, they turn quickly.... The Fed believes they will maintain a larger than expected balance sheet.... The bar for raising rates seems high now and apparently hinges on the inflation boogeyman to finally show his face.... This sounds like the rate hike cycle is over���or largely over���as long as the economy eases as expected...

Holly Quan: Red Tape Stands In Way Of Constructing In-Law Units | KCBS 740AM | 106.9 FM: "Changes in state law have opened the door to a flood of construction projects in people���s backyards. They're ADUs, ���accessory dwelling units,..��� or what we used to call granny flats. They're one possible way to ease the housing crisis.��KCBS Radio's Holly Quan reports that a San Francisco assemblyman is trying to cut through the red tape that slows down construction of this specialty type of housing...

Philip Stephens: The EU Cannot Rescue Britain from Brexit Chaos: "I had intended to address a slightly sheepish plea to Britain���s European partners. Even at this late hour, the EU27 should show forbearance with the Brexit shenanigans.... My shaky resolve collapsed after Theresa May���s latest swerve. The EU could now be forgiven for simply throwing Britain overboard. The prime minister���s embrace of her party���s hardline Brexiters was breathtaking in its cynicism. Only weeks ago she was immovable about the arrangements in the EU withdrawal agreement for the border between Northern Ireland and the Irish Republic. Now she promises to try to rewrite them to suit the prejudices of her party. What of the Belfast Agreement, the treaty underpinning peace on the island of Ireland? It ranks second, it seems, to appeasement of Brexiters such as Boris Johnson and Jacob Rees-Mogg...

Bloomberg View: Theresa May Gives the EU a Brexit Ultimatum: "Perhaps May is hoping that the ticking clock... will... get a majority... on board with her original bargain, maybe with some cosmetic embellishments.... The prime minister would be asking Parliament to affirm an agreement that it first rejected by a historic margin, that she herself had then ripped up in an effort to run out the clock, and that has no redeeming qualities or benefits of its own. And this, by the way, is her best-case scenario. Eventually, reality will intrude.... May should concede that no prime minister could willingly accept a no-deal exit, and that the Brexit countdown must be stopped. Parliament should debate alternatives that the EU could realistically accept. And the government should start planning to give the public another say...

Arkady Martine: The Mysterious Discipline of Narratologists: Why We Need Stories to Make Sense | Tor.com: "Cognitive narratology.... All of those little functional devices���how do they get processed? How do different humans react differently to them? Why did medieval Byzantine historians put obviously fake trope events���like emperors riding bravely into battles they weren���t even present for���into histories the writers swore were true and reported fact? How come readers say they feel ���cheated��� when an author doesn���t write the ending they expected? Why, for that matter, is it so hard for human beings right now in 2019 to recognize and understand information that contradicts a narrative they believe in very strongly? In short, I started thinking about why we want stories to make sense. At the heart of cognitive narratology���really, at the heart of the whole mysterious discipline of narratologists���is a concept called the ���storyworld���. It was named by the cognitive narratologist David Herman, and it is both intuitively simple and has deep consequences for thinking about how people engage with narratives...

Arkady Martine: The Mysterious Discipline of Narratologis...

Arkady Martine: The Mysterious Discipline of Narratologists: Why We Need Stories to Make Sense | Tor.com: "Cognitive narratology.... All of those little functional devices���how do they get processed? How do different humans react differently to them? Why did medieval Byzantine historians put obviously fake trope events���like emperors riding bravely into battles they weren���t even present for���into histories the writers swore were true and reported fact? How come readers say they feel ���cheated��� when an author doesn���t write the ending they expected? Why, for that matter, is it so hard for human beings right now in 2019 to recognize and understand information that contradicts a narrative they believe in very strongly? In short, I started thinking about why we want stories to make sense. At the heart of cognitive narratology���really, at the heart of the whole mysterious discipline of narratologists���is a concept called the ���storyworld���. It was named by the cognitive narratologist David Herman, and it is both intuitively simple and has deep consequences for thinking about how people engage with narratives...

...A ���storyworld��� can be defined as a possible world constructed by, not only the narrative on the page, but the cognitive results of the process of comprehending the story, cued by the author and experienced and completed by the reader. It is bigger than any one narrative. It is a sort of ���mental model��� of a universe, containing all of the events, persons, places, and interactions that make up the narrative, plus all of the possible events, persons, places, and interactions which might exist in a world where the narrative-as-perceived also exists. A storyworld is thus a co-created world between author and audience, bound by mutually held-in-common rules of causality and verisimilitude���an assembly of referents that tell us what kind of stories are true and what sequences of events are believable, given the evidence of the world presented in the narrative.... Storyworlds are..., not confined to genres that we traditionally consider ���fiction���. A storyworld can also be ideological: ���stories construed as strategies for building mental models of the world��� applies just as well to conceptions of ���how a state functions��� as it does to ���what is a plausible event in a novel���.... If no readers blink when your handwavium whisks your protagonist away through a wormhole into a distant part of the galaxy, you���ve built the storyworld of your narrative convincingly enough that wormholes are a true and plausible thing. If you can convince Great-Uncle Malcolm that climate change is real, even though it is snowing outside, by asking him if it snowed more often when he was a child, then you���ve fit your information into his narrative of how the universe works: into the storyworld that governs his everyday interpretations. And that is the power of the mysterious discipline of narratologists: it tells us why stories make sense, and why we want them to so very desperately...

#noted

Bloomberg View: Theresa May Gives the EU a Brexit Ultimat...

Bloomberg View: Theresa May Gives the EU a Brexit Ultimatum: "Perhaps May is hoping that the ticking clock... will... get a majority... on board with her original bargain, maybe with some cosmetic embellishments.... The prime minister would be asking Parliament to affirm an agreement that it first rejected by a historic margin, that she herself had then ripped up in an effort to run out the clock, and that has no redeeming qualities or benefits of its own. And this, by the way, is her best-case scenario. Eventually, reality will intrude.... May should concede that no prime minister could willingly accept a no-deal exit, and that the Brexit countdown must be stopped. Parliament should debate alternatives that the EU could realistically accept. And the government should start planning to give the public another say...

#noted

Philip Stephens: The EU Cannot Rescue Britain from Brexit...

Philip Stephens: The EU Cannot Rescue Britain from Brexit Chaos: "I had intended to address a slightly sheepish plea to Britain���s European partners. Even at this late hour, the EU27 should show forbearance with the Brexit shenanigans.... My shaky resolve collapsed after Theresa May���s latest swerve. The EU could now be forgiven for simply throwing Britain overboard. The prime minister���s embrace of her party���s hardline Brexiters was breathtaking in its cynicism. Only weeks ago she was immovable about the arrangements in the EU withdrawal agreement for the border between Northern Ireland and the Irish Republic. Now she promises to try to rewrite them to suit the prejudices of her party. What of the Belfast Agreement, the treaty underpinning peace on the island of Ireland? It ranks second, it seems, to appeasement of Brexiters such as Boris Johnson and Jacob Rees-Mogg...

#noted

The Federal Reserve turns on a dime. I wish that rates we...

The Federal Reserve turns on a dime. I wish that rates were lower as they pursue a hifher inflation target than 2%/year, but they appear to have decided that they, after all, really o not wish to invert the yield curve. That makes this a brighter day then I had expected. Tim Duy: Setting The Doves Free: "The statement was more dovish than I anticipated; I did not think they would want to take rate hikes off the table to this degree. I forgot that the Fed often turns their story later than I think they should, but when they turn, they turn quickly.... The Fed believes they will maintain a larger than expected balance sheet.... The bar for raising rates seems high now and apparently hinges on the inflation boogeyman to finally show his face.... This sounds like the rate hike cycle is over���or largely over���as long as the economy eases as expected...

#noted

Ryan Avent: The Really Wild Thing About the Post Is the S...

Ryan Avent: The Really Wild Thing About the Post Is the Suggestion That Arguments Like That Made by Saez And Zucman Are Un-Economic. What an Indictment of Economics: "I think Mankiw's argument here is mistaken, but... I'm not sure what good economics is if it can't evaluate arguments like S&Z's. 'We understand how best to do tax, though we can't say anything about the effects of tax regimes on long-run political stability', is one hell of a position...

#noted

Adrian Wooldridge Is... the Vicar of Bray!: Hoisted from the Archives

Hoisted from the Archives: Adrian Wooldridge Is... the Vicar of Bray!:

"The Illustrious House of Hannover,

And Protestant succession,

To these I lustily will swear,

Whilst they can keep possession:

For in my Faith, and Loyalty,

I never once will faulter,

But George, my lawful king shall be,

Except the Times shou'd alter."

Adrian Wooldridge, October 27, 2004: "[Bush's] presidency has been momentous--two terms rolled into one, by any decent reckoning... transformed American policy... transformed American conservatism.... No Republican president has devoted so much attention to this 'right nation' within America.... The past four years have arguably brought more dramatic changes to conservative America than to America as a whole.... The most surprising change has been the rise of 'big government conservatism.'.... The massive growth in the state during this presidency... is a deliberate strategy.... Before Mr. Bush, conservatives had assumed that the only way to win the battle against what Michael Barone has dubbed 'soft America' was to shrink government. Mr. Bush has pioneered a different strategy���to 'harden' government itself. Mr. Bush... has shifted power dramatically in favor of social conservatives.... A quarter of voters are born-again Christians--and Karl Rove blames his boss's failure to win a resounding victory in 2000 on the failure of four million of these voters to turn up at the polls.... Mr. Bush's boldest contribution to reinventing conservatism���foreign policy... the radicalism of America's post-Sept. 11 foreign policy.... Mr. Bush has applied his doctrine of spreading democracy to an area of the world where the Reaganites feared to tread.... Yet there is one area where Mr. Bush has exceeded the expectations of everybody on the right���party building. He is arguably the greatest Republican party builder since William McKinley..."

Adrian Wooldridge, January 15, 2009: "[Bush] leaves the White House as one of the least popular and most divisive presidents in American history... approval rating... stuck in the 20s... the most catastrophic collapse in America���s reputation... deep recession.... Bush family name... now so tainted that Jeb, George���s younger brother, recently decided not to run for the Senate.... Bush���s presidency was also poisoned by his own ambition. Mr Bruni���s 'timeless fraternity boy' wanted to be a great president... hated anything that was 'small ball'.... Facets of Mr Bush���s personality mixed with his vaulting ambition to undermine his presidency. Mr Bush is what the British call an inverted snob. A scion of one of America���s most powerful families, he is a devotee of sunbelt populism; a product of Yale and Harvard Business School, he is a scourge of eggheads.... He also styled himself, much like Reagan, as a decider rather than a details man; many people who met him were astonished by what they described as his 'lack of inquisitiveness' and his general 'passivity'.... The fruit of all this can be seen in... partisanship, politicisation and incompetence. Mr Bush was the most partisan president in living memory.... Alberto Gonzales... only the most visible of an army of over-promoted, ideologically vetted homunculi.... The Iraq war was a case study of what happens when politicisation is mixed with incompetence.... A president who laboured to produce Republican hegemony ended up dramatically weakening the Republican Party.... A president who believed that America���s global supremacy was guaranteed by America���s unrivalled military power ended up demonstrating the limits of both.... Economic legacy is littered with wasted opportunity, bad judgments and politicised policy.... Good policy repeatedly took a back seat to Mr Bush���s overweening political ambition. Both the country and, ultimately, the Republican Party are left the worse for it..."

#journamalism #hoistedfromteharchives #smackdown

Larry Kudlow (January 16, 2008): ���Banks are taking sign...

Larry Kudlow (January 16, 2008): ���Banks are taking significant steps to repair their balance sheets. Even though some people might not be happy with the speed, the reality is things are improving...

#noted