J. Bradford DeLong's Blog, page 299

Paul Krugman: The Careerism and De Facto Soft Corruption ...

Paul Krugman: The Careerism and De Facto Soft Corruption of the Center_: "given Kavanaugh's record (sexual assault aside) and the Whelan stunt it's now clear that the right-wing judicial establishment is full of charlatans and cranks.... What's different is how respectfully the judicial crazies have been treated by the non-right-wing legal establishment...

...Economists generally call cranks cranks, with some unfortunate exceptions; lawyers apparently don't. The unfortunate exception I have in mind, btw, is the letter too many colleagues signed supporting Kevin Hassett���who repaid their gesture by being every bit as dishonest and craven as you might have expected. But there's been nothing like the way law professors rushed to endorse Kavanaugh���who got his career start pursuing conspiracy theories���or the high reputation of Whelan, who seems to have been a crank all along.

What seems to explain the difference is incentives. Judges are political appointees; so a lawyer may find himself or herself facing a Federalist Society judge, creating an incentive to treat these people respectfully. Nothing comparable in econ. The point here is that in this area, as in so many others, we got to this nightmare point in US history in part because of the craziness of the right, but also in part because of the careerism and de facto soft corruption of much of the center...

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Duncan Black: Who Talks Like This: "I have some opinions ...

Duncan Black: Who Talks Like This: "I have some opinions about elite law-and The Law as a "scholarly" endeavor-which I might share sometime after a few lines of coke (joke), but something which drives me nuts is how they all talk about each other in terms of 'giant intellects' and 'intellectual prowess' and 'my friend, the jurist, has always impressed me with his deep intellect'...

...I have some really smart friends (I mean you, my friend, if you are reading this). I say things like "wow my friend is really smart" sometimes. Smart is good! Smart is impressive! But when people in that world wax idiotic about the deep intellect of their pals... and their pals are frat boy rapey types... I realize that no, actually you don't know any smart people...

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Rob Johnson and George Soros: A Better Bailout Was Possib...

Rob Johnson and George Soros: A Better Bailout Was Possible: "A critical opportunity was missed when the burden of post-crisis adjustment was tilted heavily in favor of creditors relative to debtors.... When President Barack Obama���s administration arrived, one of us (Soros) repeatedly appealed to Summers... [for] equity injection into fragile financial institutions and... writ[ing] down mortgages to a realistic market value.... Summers objected that ... such a policy reeked of socialism and America is not a socialist country...

...We found his argument unconvincing���both then and now. By relieving financial institutions of their overvalued assets, the Bush and Obama administrations had already chosen to socialize the downside. Only the upside of sharing in the possible stock gains in the event of a recovery was still at issue! Had our policy recommendation been adopted, stockholders and debt holders (who have a higher propensity to save) would have experienced greater losses than they did, whereas lower- and middle-income households (which have a higher propensity to consume) would have experienced relief from their mortgage debt. This shift in the burden of adjustment would have imposed losses on the people who were responsible for the calamity, stimulated aggregate demand, and diminished the rising inequality that was demoralizing the vast majority of people.

We did recognize a problem with our proposal: providing relief to over-indebted mortgage holders would have encountered resistance from the many homeowners who had not taken out a mortgage. We were exploring ways to overcome this problem until it became moot: the Obama administration refused to accept our advice/ The approach of the Bush and Obama administrations stands in stark contrast both to the policy followed by the British government, and to earlier examples of successful financial bailouts in the United States. In Great Britain, led by then-Prime Minister Gordon Brown, undercapitalized banks were told to raise additional capital. They were given the opportunity to go to the market themselves, but they were warned that the UK Treasury would inject funds into them if they failed to do so. The Royal Bank of Scotland and Lloyds TSB did require government support. The equity injections were accompanied by restrictions on executive pay and dividends. In contrast to Paulson���s method of injecting funds, banks were not stigmatized if they could borrow from the markets. Similarly, during the Great Depression of the 1930s, the US took ownership and recapitalized banks via the Reconstruction Finance Corporation (RFC) and managed mortgage restructuring through the Home Owners��� Loan Corporation (HOLC)...

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Yale Students To Prof Who Denies Coaching Kavanaugh Clerks: You're Lying | HuffPost

Sara Boboltz and Emily Peck: Yale Students To Prof Who Denies Coaching Kavanaugh Clerks: You're Lying: "Yale Law School professor Amy Chua strongly denied that she told students that Brett Kavanaugh, now a nominee for the U.S. Supreme Court,��liked his female law clerks to have a certain feminine appearance, in a statement emailed to the Yale Law community on Saturday...

...Yet a woman who recently graduated from Yale Law School and received advice from Chua on interviewing for a coveted clerkship position with Kavanaugh, who sits on the U.S. Court of Appeals for the D.C. Circuit, disputed the professor���s statement.�����She���s lying,��� the woman told HuffPost. The professor specifically told her not to wear a suit when she met Kavanaugh, the woman said, requesting anonymity for fear of career reprisals....

���I personally heard her state that it���s not an accident that all his clerks look like models,��� a current Yale Law student told HuffPost on Saturday. ���So I personally know that for her to say the allegations are 100 percent false is a lie, because at least that one is definitely true���...

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Why Would Anybody Sane Ever, Ever Choose Brett Kavanaugh Over Amy Barrett?

Why would anybody sane ever, ever choose Brett Kavanaugh over Amy Barrett as the swing vote to eviscerate Roe versus Wade? People have advanced three reasons:

They just do not think girls are serious���other things being equal (or, indeed, not equal), choose the man.
Amy Barrett has faith and principals: they do not know what the key issues will be 20 years from now, and they are scared to appoint somebody who may turn out to be like Justices Kennedy and Souter, actually have principals and faith, and so go off the reservation.
Amy Barrett does not believe that the president is above the law���princeps legibus solutus est is not one of her judicial principles.

Things are definitely not equal. There are lots of reasons to fear Brett Kavanaugh does not have a judicial temperament in addition to the fact that he is now lying about sexual assault of a 15-year-old 35 years ago: Stephanie Mencimer: The Many Mysteries of Brett Kavanaugh���s Finances: "Who made the down payment on his house? How did he come up with $92,000 in country club fees?...

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Pedro Nicolaci da Costa: Wage Growth Should Be Much Stron...

Pedro Nicolaci da Costa: Wage Growth Should Be Much Stronger by Now Given Low Jobless Rates: "There's a simple way to tell the US job market is not as strong as it appears.... 'The definition of full employment is low- and moderate-wage workers actually get raises," said Josh Bivens, director of research at the Economic Policy Institute. 'We are not at full employment yet'...

...Who was it that said doing the same thing and expecting a different result was the definition of insanity? That seems to be the curious path of Federal Reserve policymakers who continue to argue they must keep pushing interest rates higher in earnest because the unemployment rate is so low that it risks generating runaway inflation as workers ask for big pay raises. There's just one missing ingredient: actual wage growth of any substance and duration. The unemployment rate is at 3.9% and average hourly earnings rose 2.9% last month, the strongest since the Great Recession. But that pace of income gains is still paltry compared to past recoveries when a much more robust 4% rate of growth was common. Wages are certainly rising all-too-slowly in relation to the low headline jobless rate, which masks negative factors like depressed labor force participation and widespread underemployment. Plus, that was a single month's reading that was high compared to the recent record...

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Binyamin Applebaum: Economics as a Professional Vocation:...

Binyamin Applebaum: Economics as a Professional Vocation: "I am not sure there is a defensible case for the discipline of macroeconomics if they can���t at least agree on the ground rules for evaluating tax policy...

...What does it mean to produce the signatures of 100 economists in favor of a given proposition when another 100 will sign their names to the opposite statement? How does Harvard, for example, justify granting tenure to people who purport to work in the same discipline and publicly condemn each other as charlatans? How are ordinary people, let alone members of Congress, supposed to figure out which tenured professors are the serious economists?...

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GDP has its place in our national public-sphere conversat...

GDP has its place in our national public-sphere conversation because a new number is released roughly once a month���each quarter of the year has its own GDP number, and the Commerce Department's Bureau of Economic Analysis releases "advance", "second", and "third" estimates for each quarter, and then there are benchmarking revisions. To attain an equal place in public-sphere consciousness, the distributional national accounts component would have to appear also once a month. And it is not clear to me how to do that: Equitable Growth: Measuring U.S. economic growth: "The measurement of GDP has fostered a national fixation on 'growing the pie' that ignores how growth is distributed...

... That conventional wisdom has become antiquated.... Policymakers interested in combatting rising income inequality cannot evaluate the effectiveness of their policies without a consistent, high-quality measure of how economic growth is distributed. Existing statistics on inequality and the distribution of economic gains produced by the federal government do not account for all income, vastly underestimate the income of top earners, or are not given the level of attention received by other major economic statistical products. A distributional component could be added to the National Income and Product Accounts, at least in part...

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Michael R. Strain: The Economics and Emotions Behind Slow...

Michael R. Strain: The Economics and Emotions Behind Slow Wage Growth: "why does wage growth continue to be so tepid? As unemployment falls and the number of open jobs increases, businesses should have to increase pay in order to attract increasingly scarce available workers as well as retain the employees they have...

...To some extent, reality is conforming to this story. But many who look at the numbers aren���t satisfied. So let���s discuss some possible explanations. One theory has been that there is more ���slack��� in the labor market than the unemployment rate would lead you to believe, since people who leave the workforce altogether are not counted as unemployed in the official statistics. If the severity of the Great Recession drove people out of the labor force (rather than simply into the ranks of the unemployed looking for work) but who might readily rejoin, then the jobless rate could be very low at the same time that there is enough slack to restrain wage growth.... More than 5 million people are not in the labor force but report wanting a job. We also saw some evidence consistent with hidden slack in Friday���s labor market report. The unemployment rate increased in June because around 600,000 people entered the labor force, but some were still searching for work at the time of the survey, and so were counted as unemployed. To some degree, the unemployment rate is overstating the health of the admittedly healthy labor market. Another possibility is that the composition of the work force is changing in ways that affect pay. There is evidence that higher-wage older workers have been retiring.... It���s also possible that businesses are competing for workers using levers other than wages.... Mary C. Daly and Bart Hobijn suggest another possible reason for restrained wage growth: Employers��� reluctance to reduce the wages of existing workers during the Great Recession may have created a backlog of wage cuts that must be worked through. They find that industries least able to cut their workers��� pay during the recession have also experienced slower wage growth during the recovery. I wonder how much of what we are seeing in wage statistics is driven by psychology and norms....

We should also admit the possibility that there is no problem to solve, no mystery to explain���that wages are growing in line with the economy���s overall performance. Moody���s Analytics economist Adam Ozimek finds that when you measure slack using the employment rate rather than the unemployment rate, wages are growing at a pace you would expect....

Wage growth is slower than we���d expect, and the reason is something of a mystery. Some combination of all the factors we���ve discussed is probably the culprit. This is good news, because it means that a healthy rate of wage growth is likely in the future. But let���s hope the future arrives sooner rather than later...

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Josh Marshall: Whelan Nutbar Twitter Thread Preserved for...

Josh Marshall: Whelan Nutbar Twitter Thread Preserved for Posterity: "We still have more questions than answers about Ed Whelan���s bizarre twitter thread that accused another Kavanaugh classmate of attacking Prof. Blasey Ford and roiled the already embattled nomination. So for those who didn���t see or would like to read through it again for clues to what happened, here���s the whole thing:

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