J. Bradford DeLong's Blog, page 25

Quiggin: Intangibles = Monopoly���Noted

We kinda-sorta understood the economies of the past: the agrarian-age economy based on agriculture in handicrafts, the succeeding commercial-age economy to which was added commerce, the industrial-revolution economy based more on manufacturing and non-animal power sources, and then modern economic growth based on mass production and engineering communities. But now we have a problem. Our problem now is that, increasingly, our computer age information and attention economy works differently. And we do not understand it terribly well:

John Quiggin: Intangibles = Monopoly https://crookedtimber.org/2020/08/11/intangibles-monopoly/: ���The fact that the most profitable companies, particularly tech companies, don���t have all that much in the way of capital assets compared to their market value. What they have is monopoly power, which has been increasing steadily over time...

...���intangibles���.... The crucial point about intangibles isn���t that they aren���t physical, it���s that they can���t be reproduced by anyone else.... There���s a complicated relationship here between the rise of monopoly and the development of the information economy in which the top tech firms operate. Information is the ultimate ���non-rival��� good. Once generated by one person it can be shared with anyone else without diminishing in value. As the cost of communication has fallen, it���s become possible for everyone in the world to gain access to new information at essentially zero cost. What this means is that there is very little relationship between the value of information and the ability of corporations to capture value from it....

Traditional ideas about capital and investment are largely irrelevant in the information economy...

.#economics #informationeconomy #monopoly #noted #2020-08-14

Stone: Russia, America, and the American Press���Noted

I.F. Stone (1954): On Russia, America, and the American Press https://www.bradford-delong.com/2006/09/if_stone_on_rus.html: ���If there is indeed a monstrous and diabolic conspiracy against world peace and stability, then isn't McCarthy right? If "subversives" are at work like termites... are they not likely to be found in the most unlikely places and under the most unlikely disguises?... To doubt the power of the devil... is... to incur suspicion of being oneself in league with the powers of evil. So all the fighters against McCarthyism are impelled to adopt its premises.... Nowhere in American politics is there evidence of any important figure (even Stevenson) prepared to talk in sober, mature, and realistic terms of the real problems which arise in a real world where national rivalries, mass aspirations, and ideas clash as naturally as waves of the sea. The premises of free society and of liberalism find no one to voice them, yet McCarthyisms will not be ended until someone has the nerve to make this kind of fundamental attack on it��� .#noted #1954-01-01

Farrell: Charles Rowley Was Never All There...���Noted

Henry Farrell (2009): Death to the Keynesian Insect That Preys on the Life of the People! https://crookedtimber.org/2009/12/06/death-to-the-keynesian-insect-that-preys-on-the-life-of-the-people/: ���It���s super-duper awesome! Charles Rowley, familiar to long time CT readers for his ruminations on the corruption of the profession of political science... and his bizarre attack on Avner Greif... now has his own blog. It���s everything that one might possibly hope for. My favorite so far is the bit telling us that: "the massive fist of free market ideas once again will smash through the false consciousness of Keynesian dreams, and voters will rush to elect leaders such as Margaret Thatcher and Ronald Reagan..." ���cos it���s a level of rhetorical styling that I haven���t seen since I used to pick up the newsletter of the Maoist International Movement.... But the Obama=Sykes, Larry Summers=Fagin ���post��� runs a very close second... #noted 2020-08-12

Meyer: ��e Right-Wing-o-Sphere Will Fight a Cold Civil War���Comment of ��e Day

William Meyer: All Hands on Deck Time https://www.bradford-delong.com/2020/08/all-hands-on-deck-timenote-to-self.html?cid=6a00e551f080038834026bde897408200c#comment-6a00e551f080038834026bde897408200c: ���What to say about these people? Even if there is a major political win in November for the Democrats, the entire right-wing-o-sphere, now all-in on despicable behavior, will still be out there, raring for revenge and almost certainly trying to make the pandemic and the economic damage worse with an eye on the 2022 midterms. Of course they hope to repeat their successful strategy of 2010. (That certainly looks to be what McConnell is aiming for, at a minimum���he is the smartest guy they've got.) I guess there is no alternative, but what we have ahead of us is���literally���a Cold Civil War. We better be prepared to fight it��� .#commentoftheday #2020-08-14

Sabelhaus: Restoring ��e Federal Estate Tax Is a Proven Way to Raise Revenue & Address Wealth Inequality���Noted from Equitable Growth

An excellent and brand-new working paper by John Sabelhaus: John Sabelhaus: Restoring ��e Federal Estate Tax Is a Proven Way to Raise Revenue & Address Wealth Inequality https://equitablegrowth.org/restoring-the-federal-estate-tax-is-a-proven-way-to-raise-revenue-and-address-wealth-inequality/: ���There are four principal reasons why expanding the estate tax could well be the most effective and efficient way.... First, policymakers have repeatedly cut the estate tax over the past 20 years, without regard for the true economic and distributional consequences.... Second... the estate tax, in practice, is better described as an effective backstop to the federal income tax.... Third, the very failure to collect taxes on the true incomes of the very wealthy increases wealth inequality within generations and amplifies the inequality due to intergenerational wealth transfers.... Fourth... reviv[ing] the estate tax���doing so would greatly improve the overall fiscal outlook of the federal government, and in a highly progressive way��� .#equitablegrowth #noted #2020-08-14

Hardy & Logan: Race & ��e Lack of Intergenerational Economic Mobility in ��e United States���Noted from Equitable Growth

I have talked about this before. But now it is back on the agenda in a much more salient way for a large number of reasons, of which perhaps the largest is the police murder of George Floyd:

Bradley Hardy & Trevon Logan: Race & ��e Lack of Intergenerational Economic Mobility in ��e United States https://equitablegrowth.org/race-and-the-lack-of-intergenerational-economic-mobility-in-the-united-states/: ���Geographic and racial differences in economic mobility are particularly important from a policy perspective for three reasons. First, racial differences in mobility can exacerbate racial differences in other areas.... Second, inequalities in opportunity are antithetical to our nation���s creed.... Third, structural differences in mobility limit the potential for overall U.S. economic growth.... The historic links between intergenerational economic mobility and race and income inequality.... The known policy remedies for persistently low intergenerational economic mobility among African Americans.... A mix of policies to promote more equitable housing and educational opportunities alongside moves to boost income security and wealth accumulation��� .#equitablegrowth #noted #2020-08-14

Equitable Growth: Unemployment Insurance Claims���Noted from Equitable Growth

Better news from the labor market than I was expecting: while the coronavirus plague is still on the increase nationwide, that has not spilled over to further depress the economy���at least not yet. However, to the extent that we could suppress the virus cheaply and easily by accepting a deepening of the recession, we would be fools to be pleased that we are not doing so:

Equitable Growth: 'Regular continued claims, or the number of workers who are now insured, fell to 15.2 million the week ending August 1... 10.4 percent https://twitter.com/equitablegrowth/status/1293889469851095041.... For the week ending August 8, 831,856 workers filed for regular unemployment benefits.... States reported that another 488,622 workers filed for initial PUA, the program that extended eligibility to some workers, such as caretakers, the self-employed, and those without enough earnings history, who are not eligible for regular jobless benefits.... Experts warn that President Trump���s presidential memorandum on UI is regressive (it excludes those receiving less than $100 in unemployment benefits) and extremely difficult to implement (states might have to set up entirely new delivery systems)��� .#noted #2020-08-14

Husak: Uber���s CEO Says Uber Is a Value-Subtracting Firm���Noted from Equitable Growth

If Uber cannot be profitable if the government requires it to pay its workers enough that they make at least minimum wage, than Uber is not a value-adding firm. It is, rather, a value-destroying firm���like the state-owned enterprises of behind the Iron Curtain. Capital should flow to something that can be profitable when it pays workers minimum wage. Workers should take up better-paying options. If Uber needs a playing field especially tilted towards it to survive, it is a net negative for the economy. That's just Econ 1:

Corey Husak: 'Uber���s CEO... [is] asking for a complete re-shaping of labor law https://twitter.com/CoreyHusak/status/1293630881349992449 just to fit their profit scheme.... Their real innovation was finding tricks to pay drivers less than their competitors... [by] making workers contractors instead of employees.... Larry Mishel at EPI found that after deducting expenses, Uber fees, taxes, and the benefits they���d make as employees, Uber drivers take home only $9.21/hr, of the $22/hr they generate in fares.... A lack of benefits makes them among the most exposed to the effects of the #coronavirus recession. A normal person looks at this and thinks ���Drivers need support. Uber should follow minimum wage laws.���... However, paying workers more would hurt profits, so Uber claims they couldn���t possibly provide their drivers the same rights and benefits as most other employers���

.#equitablegrowth #noted #2020-08-14

538: Minnesota as ��e Most Likely Battleground���Noted

Minnesota as the most likely tipping-point state. Democratic edge (in order): Pennsylvania, Wisconsin, Nevada, New Hampshire, Michigan. Republican edge (in order): Florida, Arizona, Nebraska (2), North Carolina, Ohio: 538: 2020 Election Forecast https://projects.fivethirtyeight.com/2020-election-forecast/��� .#highlighted #noted #politics #2020-08-13

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��e Ghouls Who Ran Herman Cain's Twitter Feed While He Fought for His Life & ��en Drowned in His Hospital Bed Continue ��e Grift���Noted

The ghouls who ran Herman Cain's twitter feed while he fought for his life & then drowned in his hospital bed continue the grift: Rob Beschizza: Herman Cain Tweets From Beyond ��e Grave https://boingboing.net/2020/08/13/herman-cain-tweets-from-beyond.html: ���Herman Cain... banal pro-Trump propaganda... a grim month-long spectacle seemingly pumped out by political handlers willing to speak with Cain's voice even as that voice ceased to exist. I speculated that the tweets would continue after his death, a melding of Trumpian incompetence, obscenity and indifference. I was asked to stop posting on grounds of "Rob, He Just Died", but sadly that exortation was not made to whoever is wearing Cain's corpse today on Twitter��� .#noted #orangehairedbaboons #2020-08-13