J. Bradford DeLong's Blog, page 332

Weekend Reading: Claire Berlinski: Post-WWII Western Europe

IMHO, the threat of Stalin had at least as much to do with the end of war in western and central Europe as did the projection of American power. And that kind of threat remains���one of Putin-enabled destabilizing kleptocracy���to keep Europe, at least Europe west of the German-Polish border, peaceful and civilized. But, yes, I do not think anybody wants a larger German or Japanese military, even now. I think that is a feature, not a bug: Claire Berlinski: "Modern Europe���liberal, democratic Europe���is the United States��� creation.: This story was once known to every American, but as the generation responsible for this achievement dies, so too has the knowledge ceased to be passed down casually, within families...

...The United States built this modern order upon an architecture of specific institutions: the United Nations, the International Monetary Fund, the International Court of Justice, the World Economic Forum, and above all NATO and the US. The global order we built is in effect an empire, but one far more humane than European imperialism. It rests upon two beliefs, one idealistic and the other realistic: The first is the idea that certain moral values are universal and that liberal democracies best reflect and cultivate those values. The second is that in international affairs; anarchy reigns: Power is the only currency that matters.

Europe was designed���by the United States���to be the other half of the West. Europe���s success is a global advertisement for liberal democracy. The collapse of liberal democracy in Europe would represent the failure of these ideals���upon which the United States also rests. Neither Europe nor the US are wealthy or powerful enough, alone, to sustain and expand liberal democracy in a world growingly dominated by China, Russia, and anarchy. No European country alone, nor any of the American states alone, can now sustain the global liberal order.

A United Europe���and the United States���are together strong enough to sustain the liberal democratic tradition and Western values. This is precisely why the enemies of liberal democracy are trying to drive a stake through our seventy-year alliance. The demilitarization and pacification of Germany was the greatest of American achievements. It made European peace and integration possible. Germany���s demilitarization ended the Franco-German rivalry that set the Continent alight and reduced it to ashes, again and again.

The wars that broke out in 1939 and 1914 were iterations of the wars fought by Bismarck, Napoleon and Louis XIV���Sedan, 1870; Leipzig, 1813; Jena, 1806; Valmy, 1792; Turckheim, 1675. The 20th centuries��� were bloodier for only one reason: a massive improvement in killing capability. Europe's history was defined, for centuries, by unmitigated slaughter and butchery among the European peoples, a traditional only occasionally interrupted since the sack of Rome. For centuries, as we discovered, Europe was the globe's leading exporter of violence, and that is precisely why our postwar foreign policy was designed to ensure our permanent military hegemony over the Continent.

American power put an end to centuries of the same European war, and only American power, as we exercised it, could have ended this conflict. We ended it by credibly guaranteeing Germany���s security under the American nuclear umbrella. Postwar Europe ceased to be the world���s leading exporter of violence because it was occupied, stripped of full sovereignty, and subordinated to outside hegemons���first the US and the USSR, then the US alone. The long peace is the direct consequence of our hegemony. The benefits of this���to the US, Europe, and the world���are not just economic, though those are immense. The benefit is in the suppression of Europe's inherent security conflicts: wars were not fought, lives were not squandered. European free-riding isn���t a bug, as many Americans now seem to feel���it is the central feature of our postwar security strategy.

How is it, then, that suddenly, we���re consumed with rage that Europe is ���taking advantage��� of us? How have we forgotten that this is the point of the system? We designed it this way, and did so for overwhelmingly obvious historic reasons, learnt at incalculable cost. Since World War II, we have been deployed in Eurasia to ensure it cannot be dominated by a single power capable of monopolizing, and turning against us, the resources of Europe or East Asia. We do this by suppressing security competition in those regions. We build our own overwhelmingly massive military assets and locate them, strategically, as a warning: You cannot win. Don't even try. By this means, we prevent local arms races before they begin. Simultaneously, we say, "But there is no need to try. Your safety is guaranteed. You need not worry about this." And we regularly show, often at terrible risk to ourselves, that we mean this." This has largely kept the peace in Europe for 74 years. The US underwrites European security through forward engagement and security guarantees based on deterrence. In return, its Allies accept the leading role of the US in the international system and contribute towards meeting common challenges.

The polite fiction that allows Europeans to save face, is that this is a partnership, rather than subordination to US hegemony is a partnership, with each party contributing according to ability. The truth is that the US does, of course, pay more than its fair share, and in exchange receives more than its fair of power. The arrangement liberates Europeans and Americans alike from the most dangerous force confronting them: the Europe's ancient impulse to fratricide. Americans died, suffered, and labored assiduously, for generations, to create of Europe what it had never been before: a zone of peaceful, prosperous, liberal, democracies���and the other half of the West. The rescue and reconstruction of Europe was our greatest moral and political accomplishment, towering above any other in our country���s short history. Our grandparents destroyed the most monstrous and tyrannical regimes humanity has known. and then proved that our system of governance, or something much like it, could be built and made to work on that very soil. This is the story of the world we know, and the story of our country, too. This is the accomplishment now under threat.

The world we built is the only world any American alive now knows. We take it for granted. The United States seems so mammoth, so solid, so marmoreal that it requires immense imagination to realize that nothing about our system of governance is intuitive, natural, or typical; or to recall that before we built this world, liberal democracy was a fragile and relatively untested experiment. It was our victory in the Second World War and our reconstruction of Europe and Japan that made us a global, norm-setting power���capable of defining the rules of international order, and this is what made liberal democracy a global aspiration���and in many places a reality. We take for granted, too, the security that comes with being a global hegemon. We cannot imagine what we're putting at risk.

#weekendreading

Ryan Avent: Bond yields reliably predict recessions. Why?...

Ryan Avent: Bond yields reliably predict recessions. Why?: "An inverted yield curve may mean a few things, none of them cheering...

...Just before each of America���s most recent three recessions the yield curve for government bonds ���inverted���, meaning that yields on long-term bonds fell below those on short-term bonds.... Markets may expect future short-term rates to be lower than present ones, presumably because the central bank has chosen to cut rates in response to economic weakness. Or markets may think they need less compensation for holding long-term bonds in the future. That might reflect expectations that inflation will fall, or that appetite will grow for the safety provided in financial storms by long-run government debt. More generally, the yield curve often inverts when a central bank is expected to switch from a bout of monetary tightening to one of monetary easing. Such transitions often happen around the time a boom comes to an end and a recession begins....

There is also something strange about the enduring power of the yield-curve indicator. A reliable signal that a recession looms should prod central banks into preventive action. That should help avert recession, thereby destroying the predictive power of the indicator.... Or perhaps not. In 2006 Ben Bernanke, then the chairman of the Federal Reserve, expressed scepticism about the danger indicated by the yield curve, noting that he ���would not interpret the currently very flat yield curve as indicating a significant economic slowdown to come���. (It did.) When asked about the flattening yield curve in March of this year, Jerome Powell, the current chairman, echoed Mr Bernanke���s sentiment, saying: ���I don���t think that recession probabilities are particularly high at the moment, any higher than they normally are.��� Awkwardly, whether Mr Powell is right or not depends on how his Fed plans to react to the yield-curve signal...

#shouldread

Early industrial Japan did marvelous things. It accomplis...

Early industrial Japan did marvelous things. It accomplished something unique: transferring enough industrial technology outside of the charmed circles of the North Atlantic and the temperate-climate European settler economies. Ever since, politicians, economists, and pretty much everybody else have been trying to determine just what it was Japan was ale to do, and why. But it was a low-wage semi-industrial civilization, economizing on land, materials, and capital and sweating labor: Pietra Rivoli (2005): The Travels of a T-Shirt in the Global Economy: An Economist Examines the Markets, Power, and Politics of World Trade (New York: John Riley: 0470456426) https://books.google.com/books?isbn=0470456426: "Female cotton workers in prewar Japan were referred to as 'birds in a cage'...

...given their grueling schedules���12-hour days and two days off per month���and captive lives in the company boardinghouses. In most cases, the operatives were bound to the mills for a three- to five-year period, in a contractual arrangement not unlike indentured servitude. In these boardinghouses the young women shared not only beds, but even pajamas, and they were confined to the premises by fences topped with bamboo spears and barbed wire. Food was scant, sanitation was poor, and disease was widespread...

#shouldread

Note to Self: Obama essentially turned monetary, fiscal, ...

Note to Self: Obama essentially turned monetary, fiscal, and housing policy over to two guys who were ���calm down and hope for the best��� rather than ���prepare for the worst��� guys: Ben Bernanke and Tim Geithner. Those were, in retrospect, disastrous choices���not because of what they did but because of their opposition to thinking well outside the box and preparing to deal with the worst case scenario���s. So when the ���green shoots��� of a strong recovery that both saw were not there at all���when they claimed the strong recovery glass was mostly full but in fact there was no glass���their position kept others who would have been preparing for the worst, and who might have been able to do better at dealing with the situation, from being able to take any effective action...

The Meiji Restoration: A Probable In-Take for "Slouching Towards Utopia?: An Economic History of the Long 20th Century"

The problem with this is that I do not think that I have the story of Japan's successfully pre-WWI development path nailed, the way I have the Chinese story of failure nailed. Oh well:

The opposite of China in the pre-World War I years was Japan.

In the early seventeenth century the Tokugawa clan of samurai decisively defeated its opponents at the battle of Sekigahara, and won effective control. Tokugawa Ieyasu petitioned the���secluded Priest-Emperor to grant him the title of Shogun, the Priest-Emperor's viceroy in all civil and military matters. His son Hidetaka and grandson Iemitsu consolidated the new r��gime. From its capital, Edo���renamed and now Tokyo���the Tokugawa Shogunate ruled Japan for two and a half centuries.

At its very start, early in the seventeenth century, the Tokugawa Shogunate took a look to the south, at the Philippines. Only a century before, the Philippines had been independent kingdoms. Then the Europeans landed. Merchants had been followed by missionaries. Converts had proved an effective base of popular support for European influence. Missionaries had been followed by soldiers. And by 1600 Spain ruled the Philippines.

The Tokugawa Shogunate was confident that it could control its potential rivals and subjects in Japan. It was not confident that it could resist the technology, military, and religious power of the Europeans.

The country was closed: trade restricted to a very small number of ships allowed access to the port of Nagasaki only, Japanese subjects returning from abroad were executed, foreigners discovered outside of their restricted zone were executed, and Christianity was suppressed. The Tokugawa Shoguns did adopt one more foreign practice: crucifixion���which they saw as a fitting punishment for those who refused to abjure the foreign religion of Christianity.

For two and a half centuries the Tokugawa ruled a largely peaceful Japan. Population grew. Rice-growing productivity increased. The arts and crafts flourished. Trade flourished. The military skills of the samurai warrior class atrophied, Japan's technology fell further and further behind that of Europe. And the country did not become a European colony.

Peace, relatively widespread literacy, caste boundaries that focused the attention of artisans and merchants on economic rather than political or landlord roads to advance, and a central Tokugawa government that wanted to keep the subjected former opponent daimyo class from getting too rich and too strong led to semi-Malthusian prosperity. Taxes were high, supporting very large non-agricultural classes���perhaps 40% of the population, huge for a pre-industrial agrarian-age civilization���on the backs of peasants who appear to have been quite poor and malnourished: working-class and peasant adult men appear to have averaged 5'2" and adult women 4'9". And since wages were low, the direction of technological development was to economize on materials like woods and metals, on capital, and on land. Irrigation systems to allow for a second crop���oilseeds wheat, cotton, sugar. Robert Allen claims that daimyos began a race to the top to attract industries into their dominions, and that progress in silk, for example, came not from building better machines but building better silkworms.

There was, however, a lot of economic and society built on top of the peasant economy. When the Tokugawa era came to an end with the Meiji Restoration in 1868 Kyoto, Osaka, and Tokyo together had 2 million people: one in six of the population was truly urban. Half of adult men were literate: there were more than 600 bookshops in Tokyo.

Literacy and urbanization laid the groundwork for technological competence. Robert Allen tells the story of the Lord of Nagasaki, Nabeshima Naomasa, and his cannon foundry. His workers acquired and then translated a Dutch description of a foundry in Leyden, and set out to copy it: "In 1850, they succeeded in building a reverberatory furnace, and three years later were casting cannon. In 1854, the Nagasaki group imported state-of-the-art, breech-loading Armstrong guns from Britain and manufactured copies. By 1868, Japan had eleven furnaces casting iron..."

In 1851 the President of the United States commissioned Commodore Perry to open relations with Japan. The American warships entered Tokyo Bay in 1853. There argument for why the Tokugawa Shogunate should change its policy and open up trade was simple: if they did not, the U.S. fleet would burn Tokyo. The Tokugawa Shogunate submitted, and began trying to grasp how to deal with a world in which European powers would no longer permit isolation as an option. It failed, and in 1868 the Tokugawa Shogunate was overthrown by the coup termed the "Meiji restoration."

Theoretically the Priest-Emperor resumed the direct rule that his ancestors had turned over to the first Shoguns more than a thousand years before���hence "restoration":

The Emperor of Japan announces... that permission has been granted to the Sh��gun Tokugawa Yoshinobu to return the governing power in accordance with his own request. We shall henceforward exercise supreme authority in all the internal and external affairs of the country. Consequently, the title of Emperor must be substituted for that of Taikun, in which the treaties have been made. Officers are being appointed by us to the conduct of foreign affairs. It is desirable that the representatives of the treaty powers recognize this announcement...

Thus by 1872 all the feudal domains were surrendered to the emperor, and the 2 million members of the samurai class compensated with government bonds���and within a generation inflation had expropriated them. However, well educated as they were, they and their sons became army officers, bureaucrats, teachers, administrators, and entrepreneurs. Rule was grasped by a shifting coalition of notables���most prominently at first the "Meiji Six": Mori Arinori, ��kubo Toshimichi, Saig�� Takamori, It�� Hirobumi, Yamagata Aritomo, and Kido Takayoshi���interested in absorbing European technology while maintaining Japanese civilization and independence: "western learning with Japanese spirit" in the interest of creating a "rich country with a strong army."

There followed the rapid adoption of western organization: prefects, bureaucratic jobs, newspapers, language standardization on Tokyo samurai dialect, an education ministry, compulsory school attendance, military conscription, railways built by the government, the abolition of internal customs barriers to a national market, fixed-length hours of the day, and the Gregorian calendar were all in place by 1873. Representative local government was in place by 1879. A bicameral parliament (with a newly-created peerage) and a constitutional monarchy were in place by 1889. By 1890 80% of school-age children were at least enrolled.

Li Hongzhang in China had been one of the few able to swim against the institutional and cultural tide to push modernization and industrialization forward. In Japan there were many who successfully did swim with the tide. One of the ���Meiji Six��� was the man originally named Hayashi Risuke (���������, October 16, 1841���October 26, 1909), from the then-dissident Choshu Domain, became It�� Hirobumi (������ ������) as his line���he and his father���were adopted by Mizui Buhei who was in turn adopted by It�� Yaemon. This was a social leap upward in status���but it still left the now It�� Hirobumi as a low-ranking samurai, one who was expected to support himself rather than drawing on the feudal dues the Choshu clan collected from peasants, and to do the work rather than supervise. As a teenager he attended the Shoka Sonjuku school of Torajir�� (���������), where he was taught military arts, politics, and sonno joi���to "revere the emperor and expel the barbarians" (������������). In 1863 the Choshu elders decided that they desperately needed to learn more about European organization and technology, and so���illegally���smuggled five or their promising young potential students out of Japan to travel to and study in Europe.

It�� Hirobumi worked 130 days as a deckhand on the sailing ship Pegasus before arriving in England, where he then studied at University College in London. He cut short his studies after only six months however, and returned to Choshu to argue stridently against a policy of confrontation: Japan was too weak, and the organizational and technological gap too large. That he would, at the age of 22, deviate from the plan imposed on him by Choshu and return to argue against Choshu Domain policy tells us something: about how important he thought the issue was, about how confident he was of his place, and about how well-regarded he was by the Choshu clan and its elders.

The Meiji Restoration came in 1868 when he was 26. 1870 found him in the United States studying money and banking. Early 1871 found him back in Japan writing the regulations for the commutation of feudal dues and their replacement by a general system of national taxation. Late 1871 finds him embarking on the two-year round the world Iwakura Mission. 1873 found him Minister of Industry, tasked with reverse engineering as much European technology as possible and with building telegraph lines, street lights, textile mills, railroads, shipyards, lighthouses, mines, steel foundries, glassworks, the Imperial College of Engineering, and more.

1878 found him Home Minister after the assassination of his patron ��kubo Toshimichi. 1881 found him muscling his contemporary ��kuma Shigenobu out of the government and becoming the informal prime minister of Japan. 1882-3 found him spending 18 months away studying the constitutions of the U.S., Spain, Britain, and Germany, and then returning home to chair the committee writing Japan's constitution. He chooses the 1850 Prussian model. And 1885 saw him become he first formal prime minister of Japan.

Also in 1885, It�� Hirobumi negotiated the Convention of Tianjin with Li Hongzhang, neutralizing Korea. 1895, however, saw him as prime minister the First Sino-Japanese War. With 11 European-built and two Japanese-build major warships, and with an army trained by Prussian Major Jakob Meckel, the war was short. The major Chinese base and fort of Dalian (���������) in Shandong���Port Arthur���fell to a frontal Japanese assault in one day. Capture was followed by a three-day massacre in which 2000 Chinese were killed, a massacre justified by the Japanese Army's legal officers as "reciprocity" for Chinese "provocation". Japan took Korea and Taiwan as protectorates.

The successful war with China in 1895 made Korea and Taiwan Japanese protectorates. In 1899 the Japanese government abolished extra-territoriality���the immunity of Europeans from Japanese justice and law. Japan allied with Britain, seeking the role of Britain's viceroy in the North Pacific, in 1902. Disputes with Russia over spheres of influence in Manchuria led to the Russo-Japanese War in 1905. The Japanese were eager to escalate to test their armed forces; the Russians were eager to escalate as well, Czarist ministers believing that a "short victorious war" would solidify support for the Czar. The Japanese won decisively, bringing Manchuria into their sphere of influence.

In 1905 It�� became the first Japanese Resident-General in Korea. 1907 saw him seize authority to control Korea's internal affairs. And in 1909 he was assassinated by Korean nationalist An Jung-geun.

Formal annexation of Korea followed in 1910. And Japan's declaration of war against Germany in World War I brought it rule over all Pacific islands that had been German colonies.

Robert Allen believes that those economies that successfully developed industrial societies before 1900 focused government power on creating four and only four institutional prerequisites: a national market served by railways, universal literacy via compulsory education, savings mobilization for capital via investment banks, and a tariff to shield nascent domestic industry and its communities of engineering practice from the gales of competition from British industrial exports.

Meiji Japan was prohibited by unequal treaty from imposing tariffs on imports greater than 5%. But, again, the government was willing to step in. As far as private firms were concerned, the government did not so much "pick winners" as recognize winners���and subsidize them. As the Ministry of Industry established Japan���s railway and telegraph systems, it also established its school to train Japanese engineers as fast as it could, and it relied as much as possible on domestic suppliers as it possibly could.

Meiji Japan did not have banks. It did have a government willing to fulfill a Gerschenkronian role as capital-mobilizer. And it also had some very wealthy and open merchant clans willing to move into industry: Mitsui, Mitsubishi, Sumitomo, Yasuda.

In both of these efforts to substitute for the missing investment banking and tariff wall prerequisites for Allen's "Standard Model" of early industrialization, the "strong army" part of the slogan was more important than the "rich country" part. It is unlikely that the Meiji Restoration's military politicians imagined how useful for the civilian economy the communities of engineering practice they were trying to midwife into being would be. Their focus was on preparing the logistical tail to defend Japan and conquer an empire in the age of steel and steam. As Kozo Yamamura writes, the military:

arsenals and other publicly-financed shipyards and modern factories which acted as highly effective centers for the absorption and dissemination of Western technologies and skills���. [Plus] the "strong army" policy and the wars provided��� the demand��� for assuring the survival and��� growth of often financially and technologically struggling private firms in��� shipbuilding, machinery, and machine-tool[s]���.

Within a dozen years of the Meiji Restoration, four major arsenals with satellite plants and three government shipyards were fully engaged in supplying the needs of a modern military���. In 1877 the Tokyo arsenal was equipped to repair small arms and cannons, and to produce explosives and simpler hand-operated machinery for its own use. Only seven years later, in 1884, the arsenal had Belgian, French, and German engineers and foremen, imported machinery, 2,094 workers, and was capable of producing small arms and shells and of repairing larger cannon���. The navy's arsenals in Yokosuka and Tsukiji were no less ambitious���.

In the early 1880s, when the cotton textile industry had yet to make its presence felt in the Meiji economy, these arsenals, shipyards, and their satellite plants together employed about 10,000 workers compared to fewer than 3,000 in the small private shipyards producing wooden ships and in the factories "still primarily using or making machinery of a 'pre-machine age.���������

The establishment, using imported machinery, of state-owned mines and factories could have been a disaster, as it had and has been in so many other times and places. But the Japanese government quickly swerved away, privatizing industrial establishments to businesses that had demonstrated managerial competence in the 1880s. Allen praises the creative response of Japanese sector private entrepreneurs confronted with machinery from abroad designed to economize on labor���which was, in Japan, still extremely chap: "the Japanese... redesigned Western technology to make it cost-effective in their low-wage economy. Silk-reeling... the Ono merchant family in Tsukiji established a mill that... used European-inspired machinery... [with] the machines were made of wood rather than metal and the power came from men turning cranks rather than a steam engine. The modification of Western technology along these lines became common in Japan as the ���Suwa method������"

But in the Meiji Restoration period, structural change was low. Manufacturing was still only one-fifth of GDP in 1910. The leading industries were textiles, plus tea growing and manufacture. Japan in the decade of the 1900s was only a semi-industrial civilization.

It had, however, accomplished something unique: transferring enough industrial technology outside of the charmed circles of the North Atlantic and the temperate-climate European settler economies.

Ever since, politicians, economists, and pretty much everybody else have been trying to determine just what it was Japan was ale to do, and why...

https://www.icloud.com/pages/03AN5kh1KCQYxy1J3mvRtI6qQ

Monthly for Project Syndicate #projectsyndicate

2018:

Four Lessons the Federal Reserve Ought to Have Learned https://www.icloud.com/pages/0FLGQ41ca426KPcCNwwYVyN9g
America the Loser
America's Founders vs. Trump: The Federalist's Views on Democratic Representation and the Threat of Rapid Factionalim... https://www.icloud.com/keynote/0v_JijLOHVPj6VXoe2VCBKCvQ
The Destruction of the Republican Party: Donald Trump Might Make His Adopted Party Unelectable for Years to Come...
Crisis, Rinse, Repeat: Obvious Failures in the Response to the Great Recession Still Have Not Been Acknowledged...
Trump's Tax on America: Forthcoming Tariffs on Steel and Aluminum Imports Will Raise Costs Throughout the Economy...
Donald Trump Is Playing to Lose: Marvel at the U.S. President's Bizarre and Self-Defeating Approach to Politics and Policymaking...
Why Low Inflation Is No Surprise: Challenge Economists Who Abidingly Assume that Another Price Spiral Is Always Just Around the Corner...

 

2017:

America's Broken Political System: The Country's Problems Run far Deeper than the Republicans' Bad Tax Bill...
Keeping U.S. Policymaking Honest: Fearing that the Trump Administration Is Starting to Politicize Independent Policy Assessment...
Politics in the Way of Progress: Political Confidence Men and Craven Profiteers Blocking the Sustainable Development Goals...
Supply-Side Amnesia: The Congressional Republicans' Tax Plan to Increase the Deficit and Benefit the Rich...
The New Socialism of Fools: Four Root Causes of Resistance to Globalization since the Great Recession...
Public Spheres for the Age of Trump: Some of the Last Surviving Venues for Civil Democratic Discourse Are Not Carrying Their Weight...
The Truth Behind Today's U.S. Inflation Numbers: The Fed Needs to Adjust Its Economic Forecast and Pursue New Stimulus Policies...
Where U.S. Manufacturing Jobs Really Went: The Real Post-WWII Economic History Rebuts Today's Lazy and Misleading Conventional Wisdom...
Artificial Intelligence and Artificial Problems: Time to Challenge the Assumption that Technological Progress Necessarily Impoverishes Unskilled Workers...
Rethinking Productivity Growth: Have We Been Massively Underestimating the Extent of Economic Progress?...
Trading in Trump's Lies: NAFTA Is Not to Blame for Any Visible Decline in U.S. Manufacturing Employment...

 

2016:

The Age of Incompetence: Donald Trump May Be the Star of His Presidency, But He Is Unfit to Be the Boss...
Missing the Economic Big Picture: What Needs to Be Better Managed Is Not Globalization But Market Capitalism Itself...
Would Higher Interest Rates Boost U.S. Growth: The Fed Should Not Act Until Businesses Start Creating New Savings Vehicles and Investing the Proceeds...
Beating America's Health Care Monopolists: Industry Consolidation Is a Major Threat to Consumers' Wallets, and to ObamaCare...
The Economic Trend Is Our Friend: The Engine of Long-Run Growth Is Still Running, Despite Poor Recent Performance...
A Brief History of Inequality: The Complex Factors Underpinning 250 Years of Global Wealth Distribution...
Which Thinkers Will Define Our Future?: Give the Nod to John Maynard Keynes, Karl Polanyi, and Alexis de Tocqueville...
Uncertainty at the Fed: The World's Most Important Central Bank Is at Risk of Losing Its Credibility...
Rescue Helicopters for Stranded Economies: Central Banks Should Take Action When and Where Fiscal Authorities Will Not...
Debunking America's Populist Narrative: I Refuse to Blame Income Stagnation on Globalization and Trade...
Pragmatism or Perdition: America's Economic Problems Are Overwhelmingly Due to Four Decades of Government-by-Ideologue...
Economics in the Age of Abundance: The End of Scarcity Does Not Men the End of Economic Problems...
Piketty vs. Piketty: One of the Strongest Objections to Piketty's Words Is Made by Piketty's Deeds...

 

2015:

The Trouble with Interest Rates: Borrowing Costs Are too High, Not too Low...
The Tragedy of Ben Bernanke: Macroeconomic Lessons from the Former Fed Chair's New Memoir...
Sunlight on Tax Havens: Praise Gabriel Zucman's New Book on the High Cost of Hidden Wealth...
A Cautionary History of U.S. Monetary Tightening: The Last Four Tightening Episodes Reduced Employment and Output Far More than Anticipated...
Depression's Advocates: European Policymakers Appear Determined to Ignore the Lessons of the 1930s...
How Some Small Booms Can Cause Big Busts: Some Asset-Price Bubbles Are Much More Damaging than Others...
Putting economic Models in Their Place: We Need to Take Economists to Task for Making Bigger Claims for Their Theories than Their Theories Can Support...
An Even More Dismal Science: A Quarter-Century of Debate About the Business Cycle Has Left Us with Little Room for Optimism...
The Monetarist Mistake: The Power of Misguided Ideas Led to a Tepid Response to the Great Recession...
Making Do with More: Why Living Standards Stagnate in Societies Blessed with Unprecedented Abundance...
What Failed in 2008?: Why Policymakers Have Not Responded Appropriately to Their Economies' Post-Crisis Malaise...

 

2014:

Try Everything: A Simple Yet Radical Strategy for Global Economic Recovery...
Inequality and the Internet: Broadband Accessibility Might Help Offset Some of the Growing Gap in Income and Wealth...
American Wellbeing since 1979: Perhaps Much of Even the Relatively Small Gains for Poor U.S. Households since 1979 Should Be Discounted...
The Rise of the Robots: No, Peter Thiel, Robots Are Unlikely to Save Us from Any Threatening Low-Wage Future...
The Greater Depression: It Is Time to Start Calling What Is Happening in Europe and the U.S. by Its True Name...
The Internet's Next Act: We Need to Assess the ICT Revolution's Ongoing Impact on the Middle Class...
The World's Central Banker: The U.S. Will Face a Dangerous World Unless the Federal Reserve Fulfills Its Global Role...
Unjust Deserts: The "Meritocratic" Ideology Underlying the Rise in Inequality Ought to Have Run Its Course...
The Right's Piketty Problem: I Continue to Be Gobsmacked by the Poverty of Conservative Criticism of Capital in the Twenty-First Century...
Marx and the Mechanical Turk: Can We Determine Whether Capital Complements or Substitutes for Labor Now and in the Future?
Revisiting the Fed's Crisis: Reading the Fed's Meeting Transcripts from 2008 Tells Us About Appalling and Blinkered Official Mindsets...
Is America Turning Japanese?: Trend Economic Growth Can No Longer Be Neatly Disentangled from Cyclical Dynamics...

 

2013:

The Strange Case of American Inequality: Why Americans Fail to Clamor for Policies that Would Leave 90% of Them Better Off?...
The Long Short Run: The Intellectual History of the Coming Lost Growth Decades...
Greenspan Has Left the Building: On Alan Greenspan's The Map and the Territory...
The Taper and Its Shadow: QE, Interest Rates, and Systemic Risk...
Whose Central Bank?: The Fed Should Be the Steward of the Economy, Not the Servant of Large Commercial Banks...
America's Health Care Divide: Partisanship and the Health Care Debate in the United States...
Starving the Squid
Inequality on the Horizon of Need: The Staying Power of Economic Malaise...
Deploying Germany's Debt Capacity for European Recovery...
When Is Government Debt Risky?
Risks of Debt: The Real Flaw in Reinhart-Rogoff
Let It Bleed?

 

2012:

American Conservatism's Crisis of Ideas
Grand Mal Economics
Over the Fiscal Cliff We Go
America's Political Recession
Our Debt to Stalingrad
Stage Three for the Euro Crisis?
Democracy in Tea Party America
Hopeless Unemployment
The Perils of Prophecy
The Economic Costs of Fear
Re-Capturing the Friedmans: Milton and Rose Director Friedman's Factual Claims About the World Have Largely Crumbled...
The Shadow of Depression
The Usual Suspect
Neville Chamberlain Was Right

 

2011:

America's Financial Leviathan
The 70% Solution
The ECB's War Against Central Banking
A Free Lunch for America
Ben Bernanke's Dream World
America's Locust Years
Built to Bust
Economics in Crisis
The Anatomy of Slow Recovery
Pain without Purpose
Intelligent economic Design

 

2010:

A Time to Spend
The Retreat of Macroeconomic Policy
The Humiliation of Britain
Economics for Parrots
The Varieties of Unemployment
J.S. Mill vs. the ECB
Listening to Economic Arsonists
The Flight to Quality
Obama the Centrist
Taking Hope in the Long View
Is Fiscal Stimulus Pointless?
America's Employment Dilemma

 

2009:

The Fairness of Financial Rescue
Why Are Good Policies Bad Politics?
Slouching Towards Sanity
The Anti-History Boys
Bernanke's the One
Conservative Interventionism
Sympathy for Greenspan
The Hidden Purposes of High Finance
The Price of Inaction
Kick-Starting Employment
The Stimulus Ostriches
Four Ways Out

 

2008:

Depression Economics
The Road to Depression
Stocks and the Long Run
From Central Bank to Central Planner?
Is Inflation the Right Battle?
The Knife-Edge Economy
The Democrats Line in the Sand
Gambler's Ruin
John McCain and the Decline of America
The Keynesian Cure
The End of the Age of Friedman
In Marx's Shadow Again

 

2007:

Three Cures for Three Crises
Dollars and Depression
Uncertainty Shifts to China
Alan Greenspan on Trial
Is Liquidity Enough?
Fear of Finance
The Great Moderation
China's Blackstone Coup
America's Sleeping Watch Dog
The Secret Language of Central Bankers
Fearless Financial Markets
Inequality on the March

 

2006:

Saved by Taxes
Friedman Completed Keynes
Has Neoliberalism Failed Mexico?
Man's Fate, Man's Hope
The Box that Changed the World
The Tabloid Syndrome
The Myth of the "Ownership Society"
Bottom Dollar
Fiscal Apocalypse Now
Europe's Free Riders
The False Promise of Private Pensions

 

2005:

Semi-Rational Exuberance
Eyes Wide Shut on Global Warming
For Whom America's Bell Tools
America's Opposing Futures
Houses in the Air
Inviting the Avoidable
Europe's Neo-Liberal Challenge
Economists' New World Order
America's Interest Rate Puzzle
In Search of Global Demand
Fiscal Follies in America and Beyond
Bush's Crash-Tea Economics

 

2004:

America's Coming Social Democracy
Taming Voodoo Economics
Can High Oil Prices Be Good?
Doomsday for the Dollar?
The End of Want?
Welcome to the Era of Incompetence
The European Economic Model Lives
The Great Illusion
The Coming Age of Interest
America's Schizophrenic Economy
Protectionism Rides Again
The Richest Get Richer

 

2003:

The American Mirror
Robert Rubin Revisited
Bush's Pseudo-Conservative Revolution
The Weak Dollar's Impossible Strength
The Fragile Roots of Productivity Growth
Herbert Hoover and the Stability Pact
The New New Thing in Economics
The Roots of the Islamic World's Backwardness
Is the U.S. Economy Still in Recession?
The Final Defeat of Thomas Malthus?
Lula in the Shadow of Chavez
Atlas Slumps

 

2002:

The Ghosts of Economics Past
America's Second Gilded Age
Neoliberalism's Argentine Failure
The New German Problem
A Double-Dip Recession for the U.S.?
Down and Out in the United States?
Anatomy of a Crash
Is the "New Economy" a Fad?
New Rules for a New Economy




#projectsyndicate

Starting to be the right way to do this kind of work. But...

Starting to be the right way to do this kind of work. But be careful! Active genes that code for melanin are strongly correlated with low educational attainment. Yet I do not believe that even the Charles Murrays and the Andrew Sullivans of the world believe that active melanin production in any way affects "brain-development... and neuron-to-neuron communication": James J. Lee, Robbee Wedow, about 105 others, and David Cesarini: Gene discovery and polygenic prediction from a genome-wide association study of educational attainment in 1.1 million individuals: "A large-scale genetic association analysis of educational attainment... 1.1���million individuals... 1,271���independent genome-wide-significant [Single nucleotide polymorphisms]...

...For the SNPs taken together, we found evidence of heterogeneous effects across environments. The SNPs implicate genes involved in brain-development processes and neuron-to-neuron communication. In a separate analysis of the X chromosome, we identify 10���independent genome-wide-significant SNPs and estimate a SNP heritability of around 0.3% in both men and women, consistent with partial dosage compensation. A joint (multi-phenotype) analysis of educational attainment and three related cognitive phenotypes generates polygenic scores that explain 11���13% of the variance in educational attainment and 7���10% of the variance in cognitive performance. This prediction accuracy substantially increases the utility of polygenic scores as tools in research...

#shouldread

Wealth inequality measures have been grossly understating...

Wealth inequality measures have been grossly understating concentration because of tax evasion and tax avoidance in tax havens: Annette Alstads��ter, Niels Johannesen, and GabrielZucman: Who owns the wealth in tax havens? Macro evidence and implications for global inequality: "This paper estimates the amount of household wealth owned by each country in offshore tax havens...

...The equivalent of 10% of world GDP is held in tax havens globally, but this average masks a great deal of heterogeneity���from a few percent of GDP in Scandinavia, to about 15% in Continental Europe, and 60% in Gulf countries and some Latin American economies. We use these estimates to construct revised series of top wealth shares in ten countries, which account for close to half of world GDP. Because offshore wealth is very concentrated at the top, accounting for it increases the top 0.01% wealth share substantially in Europe, even in countries that do not use tax havens extensively. It has considerable effects in Russia, where the vast majority of wealth at the top is held offshore. These results highlight the importance of looking beyond tax and survey data to study wealth accumulation among the very rich in a globalized world...

#shouldread

Ann Marie Marciarille: David Slusky on The Impact of the ...

Ann Marie Marciarille: David Slusky on The Impact of the Flint Water Crisis on Fertility: "K.U.'s David Slusky gave an interesting talk on "The Impact of the Flint Water Crisis on Fertility".�� A 4.9% decrease in birth weight is hard to ignore...

...What made me really sad was the undeserved optimism expressed by some in the audience about the potential for a litigation strategy for the fix.�� Yes, there has been criminal-side activity.��But, on the civil side, people should know that while the Safe Drinking Water Act does allow for private citizen suits, it does not allow for private plaintiff damages. Any funds recovered are payable to the government alone.�� That may be part of why the case has been filed under federal civil rights law, which allows both private plaintiff damages and has a fee shifting provision. This theory of the case has had its own challenges, of course, with the Supreme Court only recently reviving two consolidated putative class actions against government authorities from the rocky shoals of dismissal on the grounds of preemption...

#shouldread

Edith Laget, Alberto Osnago, Nadia Rocha, and Michele Rut...

Edith Laget, Alberto Osnago, Nadia Rocha, and Michele Ruta: Trade agreements and global production: "Deeper agreements have boosted countries��� participation in global value chains and helped them integrate in industries with higher levels of value added. Investment and competition now drive global value chain participation in North-South relationships, while removing traditional barriers remains important for South-South relationships..."

#shouldread