J. Bradford DeLong's Blog, page 253

Why Economic History?

We economists have gotten too good at making theories. In fact, the set of plausible and admissible economic theories is now dense in the space of possible conclusions: For every desired conclusion X, for every ��, there is a degree of theoretical complexity n�� and a chain of theories of increasing complexity T such that:

for all n > n�� -> | T(n) - X | < ��

We have also gotten not too good at but too proficient at econometrics: RCT, regression discontinuity, diff-in-diff, IV, aggressively and preemptively seizing the high ground of the null hypothesis, unconscious and conscious, deliberate and accidental specification searches, plus file-drawer problems. My first econometrics teacher Zvi Griliches said that the CLT was the second most important thing he had to teach. The most important?:

If someone tortures the data enough, they will confess...

Is a theoretical result an interesting constraint on reality or a demonstration of the ingenuity of the researcher? Is an econometric-empirical result a robust finding about the world out there or a demonstration that research assistants desperate to please jet-setting tenured bosses can do amazing things?

This is not to say that things were not worse in the old days. The pasts of many sub-literatures in economics are better understood as careerists on the make taking the line of theoretical least resistance rather than trying to understand the world. The lack of computer power that made it next to impossible to robustly summarize the data meant that arresting anecdotes could not be checked for representativeness and typicality.

But good theory is in the end nothing but distilled and crystallized economic history. It could, after all, be nothing else. And piling more and more computer power on to the analysis of nonhistorical data could only be an intellectual optimum if the world was created ex nihilo the instant of the first date of your panel.

So this is why we are here. Welcome to economic history.

#teachingeconomics #economichistory #highlighted


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The remarkable thing about Robert Barro���and all the oth...

The remarkable thing about Robert Barro���and all the other Lucases and Famas and Boldrins and Cochranes who, back in 2008-2012, said it was logically impossible for expansionary fiscal policy to work���and his question "Where was the market failure that allowed the government to improve things just by borrowing money and giving it to people?" is that the answer had been well-known and on the table since at least 1829. The answer was given by John Stuart Mill The market failure is that the economy is out-of-equiilibrium, in a "general glut", with an excess demand for money and an excess supply of pretty much every currently-produced good and services.

Normally the existence of excess supplies and excess demands in an economy is a good thing: The entrepreneurial profits imbalances create set in motion the migration of resources to higher-value uses. But private-sector entities cannot migrate labor and capital into the business of creating money, for money is liquid trust and can only be created by institutions that are trusted to be, well, good for the money. So the solution is not to move resources out of creating currently-produced goods and services but to move demand into buying currently-produced goods and services. And���as long as it is good for the money���the government's borrowing-and-spending or printing-and-dropping works just fine:

Comment of the Day: JEC: Keynesian Economics vs. Regular Economics: "'Unlike the trade-off in regular economics, that extra $1 billion is the ultimate free lunch. How can it be right? Where was the market failure that allowed the government to improve things just by borrowing money and giving it to people?' The funny thing here is that Barro imagines this to be a killer rhetorical question, when it is in fact a crucial and open research question (and one that Keynesian macroeconomists have done far too little to answer, in my opinion). What makes it a research question rather than a damning rhetorical one is the empirical fact that, under certain circumstances, multipliers greater than one are well-documented. (In fairness, better documented today than in 2011)...

...Arguments like Barro's (and this one is typical of the New Classicals) remind me of the folks who insist that jet propulsion can't work in outer space because there is "nothing to push against." Rockets can't possibly work; that's just common sense! Their plaintive cries of "How can this be?" should be read literally���as confessions of ignorance. The trouble starts when they infer from their ignorance that the phenomenon they fail to understand cannot, perforce, exist at all. Which is, more or less literally, the position of the New Classicals and RBC theorists on the Great Depression: can't happen; didn't happen...

#commentoftheday #economicsgonewrong

What Will Cause the Next US Recession?: Live at Project Syndicate

Live at Project Syndicate: U.S. Recession No Longer Improbable: The next recession most likely will not be due to a sudden shift by the Fed from a growth-nurturing to an inflation-fighting policy. Given that visible inflationary pressures probably will not build up by much over the next half-decade, it is more likely that something else will trigger the next downturn.... The culprit will probably be a sudden, sharp ���flight to safety��� following the revelation of a fundamental weakness in financial markets. That... is the pattern that has been generating downturns since at least 1825, when England���s canal-stock boom collapsed.

Needless to say, the particular nature and form of the next financial shock will be unanticipated. Investors, speculators, and financial institutions are generally hedged against the foreseeable shocks.... The death blow to the global economy in 2008-2009 came not from global imbalances or from the collapse of the mid-2000s housing bubble, but from the concentration of ownership of mortgage-backed securities... Read MOAR at Project Syndicat

#projectsyndicate #monetarypolicy #recessionwarning #macro #highlighted

Ben Alper: Fun With Primary Sources: The Free Congress Fo...

Ben Alper: Fun With Primary Sources: The Free Congress Foundation's "History of Political Correctness": "The notion that the Frankfurt School was responsible for creating 'Political Correctness', 'Cultural Marxism', and a related plot against Western civilization itself emerged from the circle around Lyndon LaRouche from the 1970s (when LaRouche���s attacks on the Frankfurt Institute apparently began) through the early 1990s...

... Michael Minnicino���s 1992 article on the Frankfurt School and Political Correctness, published in Fidelio, the journal of LaRouche���s Schiller Institute, was particularly important. Minnicino has since renounced this article and other work he produced for LaRouche.... The supposed connections between the Frankfurt School, 'Political Correctness', 'Cultural Marxism', and a plot against Western civilization were popularized by William S. Lind through his work at Paul Weyrich���s Free Congress Foundation.... Intellectual historian���and actual Frankfurt School expert���Martin Jay puts in an appearance here. ��Lind���s surprise interview of him made him aware of this particular conspiracy theory for the first time. He has since written an article about this issue: 'Dialectic of Counter-Enlightenment: The Frankfurt School as Scapegoat of the Lunatic Fringe', Salmagundi, 169, (Fall 2010-Winter 2011). Even more influential than this video was the short book 'Political Correctness': A Short History of an Ideology, which��Lind edited for the Free Congress Foundation. ��It was apparently originally posted, free of charge, in late 2004 on the FCF���s website...

#noted

Comment of the Day: Cervantes: British Produce: "I didn't...

Comment of the Day: Cervantes: British Produce: "I didn't know that British produce comes into season at the end of March, actually. You learn something every day...

Phil Koop: Also, according to this tweet by Sam Coates, 63% of Tory party members say they would be "delighted/pleased/relieved by no deal", whereas 18% of the electorate says the same. Seems like a collision course with destiny, then.

Matt: ���It���s not like we won���t be able to eat���. Ferinstance, there are all these useless Tories that happen to be made of meat.

JEC: I actually expected this. In the future, look for rhetoric linking Brexit with the Blitz and U-boat warfare: lots of "Britons have always been willing to endure privation if that's the price of sovereignty!"

howard: what a bleedin' cockup, and what a fantastic misreading of reality.

Graydon: It doesn't. March through May are colloquially "the hungry months" if you ask an allotment gardener or similar; stored winter produce consumed, nothing new available yet. Somebody elsenet had list of where the UK's supermarket carrots come from; in March and April, it's Spain. (then it switches to France)...

#commentoftheday #orangehairedbaboons

Betting That Nobody Will Check the References as an Intellectual Style: Monday Smackdown

Monday Smackdown: Apropos of David Brooks's ill-sourced imaginings that "cultural Marxism... is now the lingua franca in the elite academy..." and his use of Alexander Zubatov and Russell Blackford to back him up...

I am not sure whether Brooks is simply confident that people will not check Zubatov's references or did not check them himself���he does have to write a full 1200 words a week in his job. But I have long thought that betting nobody will check the references is an intellectual style much more common on the right than on the center or the left. For example:

On Niall Ferguson: Why Did Keynes Write "In the Long Run We Are All Dead"?: In [Keynes's] extended discussion of how to use the quantity theory of money, the sentence 'In the long run we are all dead' performs an important rhetorical role. It wakes up the reader. It gets him or her to reset an attention that may well be flagging.

But it has nothing to do with attitudes toward the future, or with rates of time discount, or with a heedless pursuit of present pleasure.

So why do people think it does? Note that we are speaking not just of Ferguson here, but of Mankiw and Hayek and Schumpeter and Himmelfarb and Peter Drucker and McCraw and even Heilbroner���along with many others.

I blame it on Hayek and Schumpeter. They appear to be the wellsprings.

Hayek is simply a bad actor���knowingly dishonest. In what Nicholas Wapshott delicately calls "misappropriation", Hayek does not just quote "In the long run we are all dead" out of context but gives it a false context he makes up:

Are we not even told that, since 'in the long run we are all dead', policy should be guided entirely by short run considerations? I fear that these believers in the principle of apres nous le d��luge may get what they have bargained for sooner than they wish.

And Hayek's bad-faith writing yielded a lot of fruit: cf. Himmelfarb:

Something of the "soul" of Bloomsbury penetrated even into Keynes's economic theories. There is a discernible affinity between the Bloomsbury ethos, which put a premium on immediate and present satisfactions, and Keynesian economics, which is based entirely on the short run and precludes any long-term judgments. (Keynes's famous remark. "In the long run we are all dead," also has an obvious connection with his homosexuality-what Schumpeter delicately referred to as his "childless vision.") The same ethos is reflected in the Keynesian doctrine that consumption rather than saving is the source of economic growth-indeed, that thrift is economically and socially harmful. In The Economic Consequences of the Peace, written long before The General Theory, Keynes ridiculed the "virtue" of saving. The capitalists, he said, deluded the working classes into thinking that their interests were best served by saving rather than consuming. This delusion was part of the age-old Puritan fallacy:

The duty of "saving" became nine-tenths of virtue and the growth of the cake the object of true religion. There grew round the non-consumption of the cake all those instincts of puritanism which in other ages has withdrawn itself from the world and has neglected the arts of production as well as those of enjoyment. And so the cake increased; but to what end was not clearly contemplated. Individuals would be exhorted not so much to abstain as to defer, and to cultivate the pleasures of security and anticipation. Saving was for old age or for your children; but this was only in theory - the virtue of the cake was that it was never to be consumed, neither by you nor by your children after you.

Never mind that Himmelfarb cuts off her quote from Keynes just before Keynes writes that he approves of this Puritan fallacy���that he is not, as Himmelfarb claims, ridiculing it, but rather praising it:

In the unconscious recesses of its being Society knew what it was about. The cake was really very small in proportion to the appetites of consumption, and no one, if it were shared all round, would be much the better off by the cutting of it. Society was working not for the small pleasures of today but for the future security and improvement of the race,���in fact for "progress." If only the cake were not cut but was allowed to grow in the geometrical proportion predicted by Malthus of population, but not less true of compound interest, perhaps a day might come when there would at last be enough to go round, and when posterity could enter into the enjoyment of our labors...

������

#noted #economicsgonewrong #moralresponsibility #publicsphere #smackdown #highlighted

Fairly Recently: Must- and Should-Reads, and Writings... (January 6, 2019)

Dinner in California���Sparing a Thought for the Victims of Boris Johnson and Company...: The consensus of the eaters is that the parsnips are only edible if the ratio of parsnip-to-butter is less than 2-to-1...

Comment of the Day: I had always thought that the "male variability" hypothesis was really a "male skewed lower tail" hypothesis, and has nothing to say about the upper tail of males. It's the small Y-chromosome���the missing genes that make males overwhelmingly susceptible to color-blindness, hemophilia, the autism spectrum, may play a role in reduced life expectancy, and other things. But that male variability is greater because males are genetically weak says little or nothing about a possible genetic upper tail: Paul Reber: Patriarchy & Gender

Comment of the Day: Pinkybum:: What Is Going on This Morning Over at "National Review"? Is It Worth Reading? No.: "He even has to attribute and invent reprehensible behavior towards them to make them unsympathetic (pushing fat kids in the way of the bullets) this is why the joke is a stretch...

Debating Societies, Talking Points, and Choosing Our Governors: With Bill Clinton, or Bill Bradley, or Al Gore, or Barack Obama, or Lloyd Bentsen, or Hillary Rodham Clinton���you listen to them, or you talk to them, and you know there is a mind back there deeply knowledgeable about and wrestling with substantive issues of societal welfare and technocratic policy...

We May Well Not Be at Full Employment Yet...: Taking 2007 as a benchmark for the prime-age labor-force participation rate suggests that there is an extra 1.3% of workers ought there who could be relatively easily pulled back into the labor force���if the labor share of income were high enough...

For the Weekend: "Rocky" Training Montage

Rand Paul: Protecting Property Holders��� Rights to Discriminate on the Basis of Race: "Is the Hard Part About Believing in Freedom...": Dismantling the New Deal and rolling back the social insurance state were not ideas that had much potential political-economy juice.... But if... one of the key liberties that libertarians were fighting to defend was the liberty to discriminate against and oppress the Negroes���than all of a sudden you could have a political movement that might get somewhere...

What more would it take to get Pence to Invoke #Amendment25?: Daniel Dale: These Are Headlines About One Trump Cabinet Meeting #orangehairedbaboons

Nick Rowe: Worthwhile Canadian Initiative: "Are We at Full Employment Yet?": "Set aside the other benefits of switching from an inflation target to an NGDP level path target. If switching targets meant we wouldn't need to ask "Are we at full employment yet?" in order to figure out whether monetary policy is too tight or too loose, that would be a major advantage. Because it's a question we can't answer until it's too late. Instead we would simply hope that we are not at full employment yet: we would hope that target NGDP growth would in future be composed more of real GDP growth and less of inflation. And we would be forced to concentrate instead on microeconomic policies that might improve that composition... #monetarypolicy

Yes, the "LEAVE!" faction of the British Conservative and Unionist Party is bats--- insane. Any questions?: Arj Singh: 'Increasing Number' Of Tory MPs Are Considering No-Deal Brexit As A 'Viable' Plan B: "A Leave-backing former cabinet minister said... 'People aren���t going round and saying "No Deal" is going to be a cakewalk. But... people are... asking "how much will this actually impact people���s lives?" We won���t be able to get certain foods like bananas or tomatoes but it���s not like we won���t be able to eat. And we���ll be leaving at a time when British produce is beginning to come into season, so it���s the best possible time to leave with no deal'... #globalization #orangehairedbaboons

M.G. Siegler: Apple���s Precarious and Pivotal 2019: The battery replacement issue suggests that many people are no longer upgrading iPhones because they���re now 'good enough' and everyone is more than happy to just pay a bit more for a better battery.... The part about 'US dollar strength-related price increases'���yes, this is Apple... acknowledging there may be a price ceiling for the iPhone.... The '$1,500 iPhone' (the most expensive variety of the iPhone XS Max) [was]���to test such upper boundaries, like velociraptors testing electric fences. Consider it tested! And they���ll remember!... #economicgrowth

AOC Dances To Every Song

Barry Eichengreen: [The Euro at 20: An Enduring Success but a Fundamental Failure(https://theconversation.com/the-euro-...): "The belief of... Francois Mitterrand and... Helmut Kohl that a single European currency would apply irresistible pressure for political integration. It would lead eventually to their ultimate goal.... To function smoothly, monetary union requires banking union... an integrated fiscal system.... Banking union and fiscal union will only be regarded as legitimate if those responsible for their operation can be held accountable for their decisions by citizens.... Monetary integration creates a logic and therefore irresistible pressure for political integration. Or so the euro���s architects believed... #globalization #politicaleconomy

Ray [REDACTED]: Gather Round, Kids, While I Tell You About What I Call.. "The Greatest S---show in Crypto": "Many of you will be surprised to learn that there is a thriving industry of paid advice on buying and selling cryptos assets, including newsletters, telegram groups, and subscriber-only emails. Until very recently, one of the most popular paid services was something called Standpoint research, seen here on CNBC with Mr. Wonderful from SharkTank. In February of 2018, Standpoint Research recommended that its subscribers buy an unknown asset known as $DIG, because the owner of Standpoint thought there was insider trading going on. You read that right. He suspected fraud, so he issued a 'buy' recommendation. The coin then subsequently grew from a fraction of a penny to 16 cents per token, as buyers rushed in to acquire this asset. For the craziest reasons you can imagine. The coin itself claims to be backed by $15 billion (not a typo) in Gold Bullion. Their website, if you are curious, is http://arbitrade.io ... #finance #behavioral

This is the word on how the government ought to analyze proposed tax regulations: Greg Leiserson and Adam Looney: A Framework for Economic Analysis of Tax Regulations: "Treasury and the IRS should conduct a formal economic analysis of regulations in two cases. First, for regulations that implement recent tax legislation, the agencies should conduct an analysis if they have substantial discretion in designing the regulation and if different ways of doing so would vary substantially in their economic effects. Second, for regulations unrelated to recent legislation, the agencies should conduct an analysis if the regulation would have large economic effects relative to current practice... #fiscalpolicy

Cora Wandel: Daniel Webster In The Webster-Hayne Debate

Wikipedia: aDaniel Webster Memorial: "1603 Massachusetts Avenue Northwest, beside Scott Circle at the intersection of Massachusetts Avenue and Rhode Island Avenue...

Laboratories of democracy! It seems pretty clear that Brownback was in on the grift, but expected���hoped?���that his tax cuts would pull enough activity and people from Kansas City, MO to Kansas City, KS that that plus a normal rapid recovery would allow him to claim a "Kansas boom". But his henchmen still control the Kansas Republican Party: Heather Boushey: Failed Tax-Cut Experiment in Kansas Should Guide National Leaders: "Sam Brownback���s failed ���red state experiment��� has truly come to an end.... In 2012 and 2013, Republican Gov.��Sam Brownback signed into law the largest tax cuts in Kansas history. The top state income tax rate fell by nearly one-third and passthrough taxes that affected mainly relatively wealthy individuals were eliminated. With the decline in revenues came significant spending cuts... #fiscalpolicy #orangehairedbaboons

Karam Sethi: Gymkhana's Dorset Brown Crab with Butter, Garlic and Black Pepper: "A seafood special from Gymkhana, the Anglo-Indian restaurant recently voted the best in Britain, this recipe was a Trishna original.... 6 tbsp melted butter, 1 tsp vegetable oil, 2 tbsp garlic paste (crush with a little water to a paste), 1 tbsp brown crab meat, 200g white crab meat, 1 tbsp coarse black pepper, 3 tbsp finely sliced wild garlic, plus extra to serve...

Lisa Cook: On invention gaps, hate-related violence, discrimination, and more: "One of the first things I do is to buy a Bic pen.... Each one was 10 dollars! Ten dollars! This completely stunned me. I knew how poor most people were. I knew students had to have these pens to write in their blue books. It just started this whole train of thought...

Where did David Brooks learn to use the term "cultural Marxism"? From Alexander Zubatov and his attempt to rehabilitate it from its anti-Semitic not just connotation but denotation. How does Zubatov do this? By taking Russell Blackford out of context: Zubatov claims that Blackford's bottom line is "in other words, [cultural Marxism] has perfectly respectable uses outside the dark, dank silos of the far right". Blackford's actual bottom line is that the modern "conception of cultural Marxism is too blunt an intellectual instrument to be useful for analysing current trends. At its worst, it mixes wild conspiracy theorizing with self-righteous moralism.... Right-wing culture warriors will go on employing the expression 'cultural Marxism'... attaching it to dubious, sometimes paranoid, theories of cultural history.... Outside of historical scholarship, and discussions of the history and current state of Western Marxism, we need to be careful.... Those of us who do not accept the narrative of a grand, semi-conspiratorial movement aimed at producing moral degeneracy should probably avoid using the term 'cultural Marxism'..." Why does Zubatov misuse Blackford? In the hope that he will pick up readers like Brooks, who will take his representations of what Blackford says to be accurate. Why does Brooks take Zubatov's representations of what Blackford says as accurate? Because Brooks is too lazy to do his homework: Ben Alpers: A Far-Right Anti-Semitic Conspiracy Theory Becomes a Mainstream Irritable Gesture: "At the heart of this largely rote piece of Brooksian pablum is a claim that deserves a closer look.�� 'The younger militants', writes Brooks, 'tend to have been influenced by the cultural Marxism that is now the lingua franca in the elite academy'.��This is interesting both for what Brooks appears to be trying to say and, more immediately, how he has decided to say it.... Norwegian far-right terrorist Anders Behring Breivik... murdered sixty-nine people... William Lind... associated with both the Free Congress Foundation and Lyndon LaRouche... Lind���s conception of Cultural Marxism was explicitly anti-Semitic.... Over the course of these years, the idea of Cultural Marxism spread across the American far right... [with] a big boost from Andrew Breitbart.... Why would a columnist like David Brooks, who is himself Jewish in background (if, perhaps, no longer in faith) and who has tried to build his brand identity by peddling in respectability and civility, adopt the term?... #publicsphere #orangehairedbaboons

The Death of Stalin (2017): Quotes: Vasily Stalin: "I know the drill: Smile, shake hands and try not to call them c---s...

Brian Barrett: The Silver Lining in Apple���s Very Bad iPhone News: "As recently as 2015, smartphone users on average upgraded their phone roughly every 24 months.... As of the fourth quarter of last year, that had jumped to at least 35 months.... The shift from buying phones on a two-year contract���heavily subsidized by the carriers���to installment plans in which the customer pays full freight... a sharp drop-off in carrier incentives. They turn out not to be worth it.... 'It actually costs them to get you into a new phone, to do those promotions, to run the transaction and put it on their books and finance it'. Bottom line: If your service is reliable and your iPhone still works fine, why go through the hassle?...

Natasha Geiling: The Science Behind Honey���s Eternal Shelf Life: "A slew of factors���its acidity, its lack of water and the presence of hydrogen peroxide���work in perfect harmony, allowing the sticky treat to last forever...

As I have said: It is a long time since NEC Chair Larry Kudlow was an economist���now he is just a guy who plays an economist on TV: Fred Imbert: White House Advisor Kudlow Says Apple Technology May Have Been 'Picked Off' by China: "'Apple technology may have been picked off by China and now China is becoming very competitive with Apple',��� says Kudlow. 'There are some indications from China that they���re looking at that, but we don���t know that yet. There���s no enforcement; there���s nothing concrete', Kudlow adds... John Gruber: "What he���s saying here is that the Chinese stole Apple technology, copied it, and are now flooding the Chinese market with phones based on that stolen tech. I���m 99.8 percent certain that hasn���t happened���if there were Chinese phones built with stolen Apple technology we���d know it because we���d see it. I was going to say 'You can���t just make shit like this up', but as with most of the Trump Kakistocracy, things that you think are can���t���s are really just shouldn���t���s... #orangehairedbaboons #publicsphere

Kieran Healy: Conversational Disciplines: "Being able to broadly agree on how to evaluate contributions is what allows disciplines to tolerate (and enjoy) substantial, persistent disagreement about this or that 'big question' or 'core problem'. Thus, you are unlikely to convince your fellow Psychologists of something important (something that���s important to them, I mean) without some fake data good experimental evidence. Similarly, Economists may not pay attention to you if you do not proceed according to some (to them) widely-shared rules of ritualized mathematics model-building supplemented by some nonsense about incentives empirical evidence. Professional Historians will be less likely to take you seriously if your claims are not built on an elegant prose style a demonstrated mastery of a relevant archive. Sociologists may remain unconvinced of your claims if you do not blame neoliberalism blame neoliberalism...

The most remarkable thing about this piece from 2011 is that Robert Barro does not seem to feel under any pressure at all to provide an account of why it was that real GDP per capita was 52,049 dollars in the fourth quarter of 2007 and yet only 49,318 dollars in the second quarter of 2009���and did not surpass its 2007Q4 level again until 2013Q3. Other adherents than Barro to what Barro calls "normal economics" have put forward three theories: that there was a huge sudden change in American workers' utility functions that made them much less eager to work, that there was a huge sudden forgetting of a great deal of knowledge about how to manipulate nature and organize production, and that there was a great and well-founded fear that Obama was about to impose taxes to turn America into a Venezuela or that Bernanke was about to follow a monetary policy that would turn the U.S. into a Zimbabwe. They were laughed at. So Barro prefers to have no explanationa at all for why production per capita was lower than it had been in 2007Q4, and yet maintain unshaken confidence that he has a deep and correct understanding of what determines the level of production. You can't do that���hold that you have the correct theory, and yet not explain how it applies to the world in which you live: Robert Barro (2011): Keynesian Economics vs. Regular Economics - WSJ: "The overall prediction from regular economics is that an expansion of transfers, such as food stamps, decreases employment and, hence, gross domestic product (GDP). In regular economics, the central ideas involve incentives as the drivers of economic activity. Additional transfers to people with earnings below designated levels motivate less work effort by reducing the reward from working. In addition, the financing of a transfer program requires more taxes���today or in the future in the case of deficit financing. These added levies likely further reduce work effort���in this instance by taxpayers expected to finance the transfer���and also lower investment because the return after taxes is diminished... #economicsgonewrong #publicsphere #moralresponsibility

Cosma Shalizi (2007): ...In Different Voices: "Q: How would you react to the idea that a psychological trait, one intimately linked to the higher mental functions, is highly heritable? A: With suspicion and unease, naturally. Q: It's strongly correlated with educational achievement, class and race. A: Worse and worse. Q: Basically nothing that happens after early adolescence makes an impact on it; before that it's also correlated with diet. A: Do you work at the Heritage Foundation? Such things cannot be. Q: What if I told you the trait was accent? A: I'm sorry? Q (in a transparently fake California accent): When you, like, say words differently than other people? who speak, like, the same language? because that's how you, you know, learned to say them from people around you?... #reasoning

Josh Bivens: The Bad Economics of PAYGO Swamp Any Strategic Gain from Adopting It: "A PAYGO rule means that any tax cut or spending increase passed into law needs to be offset in the same spending cycle with tax increases or spending cuts elsewhere in the budget.... Many Washington insiders assert forcefully that committing to PAYGO rules in the House for the next Congress is good politics.... The strength of evidence supporting this political claim is debatable. What���s less debatable is that PAYGO really has hindered progressive policymaking in the not-so-recent past. For example, it was commitments to adhere to PAYGO that led to the Affordable Care Act (ACA) having underpowered subsidies for purchasing insurance and, even more importantly, having a long lag in implementation...

Matthew Yglesias: "It really feels like Pelosi should cut out the middle-man and open direct negotiations with the cast of Fox & Friends to find out what kind of face-saving 'border security' fudge they���d go for...

Sara Benincasa: Chrissy Teigen���s Headbands Helped Me Get Sober: "And other notes from an unexpected year...

David Roberts: "70% income taxes on high-earners are both familiar (we had them not that long ago) and supported by the bulk of expert research. It is the DC establishment that's dumb on this, not AOC...

Ezra Klein: "Anyway, I wouldn't predict too much off one op-ed. But I wouldn't dismiss it either. Romney knew he'd be opening himself to a lot of backlash by writing this. That suggests commitment from a prominent senator who, unlike Flake or Corker, hasn't wrecked his leverage by retiring...

Josh Bivens: The Bad Economics of PAYGO Swamp Any Strateg...

Josh Bivens: The Bad Economics of PAYGO Swamp Any Strategic Gain from Adopting It: "A PAYGO rule means that any tax cut or spending increase passed into law needs to be offset in the same spending cycle with tax increases or spending cuts elsewhere in the budget.... Many Washington insiders assert forcefully that committing to PAYGO rules in the House for the next Congress is good politics.... The strength of evidence supporting this political claim is debatable. What���s less debatable is that PAYGO really has hindered progressive policymaking in the not-so-recent past. For example, it was commitments to adhere to PAYGO that led to the Affordable Care Act (ACA) having underpowered subsidies for purchasing insurance and, even more importantly, having a long lag in implementation...

#noted

Cosma Shalizi (2007): ...In Different Voices: "Q: How wou...

Cosma Shalizi (2007): ...In Different Voices: "Q: How would you react to the idea that a psychological trait, one intimately linked to the higher mental functions, is highly heritable? A: With suspicion and unease, naturally. Q: It's strongly correlated with educational achievement, class and race. A: Worse and worse. Q: Basically nothing that happens after early adolescence makes an impact on it; before that it's also correlated with diet. A: Do you work at the Heritage Foundation? Such things cannot be. Q: What if I told you the trait was accent? A: I'm sorry? Q (in a transparently fake California accent): When you, like, say words differently than other people? who speak, like, the same language? because that's how you, you know, learned to say them from people around you?...

...Accent, which transparently is not innate and is plastic, has all these features; therefore those features do not, reliably, point to innateness, or point away from plasticity. Therefore, even if IQ scores have these features, it does not, by that token, mean that they reflect some kind of unalterable trait of the organism.

Q: Would you care to push the analogy further? A: By all means.... Q: So the analogy suggests that IQ scores are...? A: A proxy for the skills and habits encouraged by a bureaucratic society; skills and habits which can be at once highly heritable (because of strong transmission through family and neighbors) and highly learned (within the scope of what it is biologically possible for humans to learn and internalize). Innate ability needn't enter into it at all. The implications for democracy would be nearly nil. Q: And the famous g? A: Is a statistical artifact, or better yet a myth; but that is another story for another time. ...

#noted #reasoning

The most remarkable thing about this piece from 2011 is t...

The most remarkable thing about this piece from 2011 is that Robert Barro does not seem to feel under any pressure at all to provide an account of why it was that real GDP per capita was 52,049 dollars in the fourth quarter of 2007 and yet only 49,318 dollars in the second quarter of 2009���and did not surpass its 2007Q4 level again until 2013Q3. Other adherents than Barro to what Barro calls "normal economics" have put forward three theories: that there was a huge sudden change in American workers' utility functions that made them much less eager to work, that there was a huge sudden forgetting of a great deal of knowledge about how to manipulate nature and organize production, and that there was a great and well-founded fear that Obama was about to impose taxes to turn America into a Venezuela or that Bernanke was about to follow a monetary policy that would turn the U.S. into a Zimbabwe. They were laughed at. So Barro prefers to have no explanationa at all for why production per capita was lower than it had been in 2007Q4, and yet maintain unshaken confidence that he has a deep and correct understanding of what determines the level of production. You can't do that���hold that you have the correct theory, and yet not explain how it applies to the world in which you live: Robert Barro (2011): Keynesian Economics vs. Regular Economics - WSJ: "The overall prediction from regular economics is that an expansion of transfers, such as food stamps, decreases employment and, hence, gross domestic product (GDP). In regular economics, the central ideas involve incentives as the drivers of economic activity. Additional transfers to people with earnings below designated levels motivate less work effort by reducing the reward from working. In addition, the financing of a transfer program requires more taxes���today or in the future in the case of deficit financing. These added levies likely further reduce work effort���in this instance by taxpayers expected to finance the transfer���and also lower investment because the return after taxes is diminished...

...This result does not mean that food stamps and other transfers are necessarily bad ideas in the world of regular economics. But there is an acknowledged trade-off: Greater provision of social insurance and redistribution of income reduces the overall GDP pie. Yet Keynesian economics argues that incentives and other forces in regular economics are overwhelmed, at least in recessions, by effects involving "aggregate demand." Recipients of food stamps use their transfers to consume more. Compared to this urge, the negative effects on consumption and investment by taxpayers are viewed as weaker in magnitude, particularly when the transfers are deficit-financed.... If valid, this result would be truly miraculous. The recipients of food stamps get, say, $1 billion but they are not the only ones who benefit. Another $1 billion appears that can make the rest of society better off. Unlike the trade-off in regular economics, that extra $1 billion is the ultimate free lunch. How can it be right? Where was the market failure that allowed the government to improve things just by borrowing money and giving it to people?...

#noted #economicsgonewrong #publicsphere #moralresponsibility