J. Bradford DeLong's Blog, page 347

June 25, 2008: Ten Years Ago on Grasping Reality

New York Times Death Spiral Watch (Maureen Dowd Edition): Is there any way for somebody writing in good faith to write both these columns in three months?...

Oil and Speculation: Since we don't see either large inventories of tanker cars filled with oil on the sidings or futures prices for oil above spot prices to make storing marginally profitable, he concludes that speculation is not driving oil prices today...

Barbara Ehrenreich Pile-On: My brother reports that Flathead Lake, Montana is both highly beautiful and affordable...

Bill Gates Reviews Windows...: "So after more than an hour of craziness and making my programs list garbage and being scared and seeing that Microsoft.com is a terrible website I haven't run Moviemaker and I haven't got the plus package. The lack of attention to usability represented by these experiences blows my mind. I thought we had reached a low with Windows Network places or the messages I get when I try to use 802.11. (don't you just love that root certificate message?)..."

Joe Klein Is Shrill!!: I really don't think it works that way. It's not that loyalties are in any sense "divided." Instead, it's an inability to even think of the idea that (interest of Likud) ��� (interest of Israel) ��� (interest of United States) or the idea that (interest of Texas oil barons) ��� (interest of United States of America)... And Andrew Sullivan is shrill too...

If you are a white citizen, things are still normal. But ...

If you are a white citizen, things are still normal. But will they be normal in five more years? Back in 2000 I would not have believed that the Republican Party would nominate and then fall into lockstep behind a President who tortured people. Time to ask the Rubin question: Look at all the future scenarios for five years out, and ask yourself: What might we wish in five years that we had done today?: Tor Ekeland: "My dad was tortured by the Gestapo: for 4 days and thrown in a concentration camp for being in the Norwegian Resistance...

...Growing up, he would tell me things he learned in the Resistance. I thought, I'm never going to need this stuff. Here's some things of those things #Thread"

You're never going to win a head on battle with an adversary that's got you outgunned. That's not the point of the Resistance. The point is to create friction, make it hard for your adversary to operate, to increase transaction costs.

Resistance doesn't have to be a dramatic act. It can be a small act, like losing a sheet of paper, taking your time processing something, not serving someone in a restaurant. Small acts taken by thousands have big effects.

Use your privilege and access if you've got it. He and his buddies stole weapons from the Nazis by driving up with a truck to the weapons depot, speaking German, acting like it was a routine pick up, and driving away.

And this is part of the third point really, sometimes the best way to do things is right out in the open. Because no one will believe something like what you're doing would be happening so blatantly. All good Social Engineers know this.

Bide your time. But be ready for opportunity when it strikes. Again, your action need not be dramatic. Just a little sand in the gears helps.

And this is a no brainer, operate in cells to limit damage to the resistance should they take you out. Limit the circulation of info to your cell, avoid writing things down and...

Be very careful with whom you trust. Snitches and compromised individuals are everywhere. My Dad was arrested because of a snitch. His friends weren't so lucky, the Gestapo machine gunned the cabin they were in without bothering to try and arrest them.

Use the skills you have to contribute. Dad was an electrical engineer. When the Nazis imposed the death penalty for owning a radio (the British sent coded messages to the Resistance after BBC shows) he said he became the most popular guy in town.

But everything's cool and we're not going to need to engage in any of this. We don't have a President who openly admires and coddles dictators while trashing our democratic allies. Our President has read the Constitution he's taken an oath to uphold, and so have his followers...

#shouldread

2008-2012 was, apparently, not enough for the Great and G...

2008-2012 was, apparently, not enough for the Great and Good of Germany to decide to repair the Eurozone and European Union's structural economic flaws: Wolfgang M��nchau: Eurozone Downturn and Lack of Reform Presage Existential Crisis: "A slowdown mixed with a monetary union unwilling to repair itself would be a risk to the global economy...

...Germany has closed the doors on serious reform. Angela Merkel and Emmanuel Macron���s meeting in Berlin exposed deep differences about the German and French leaders��� visions of the future.... [And] there has been a sudden decline in the eurozone���s economic activity.... Add these two pieces of news together. We know for certain that Germany will not agree to a central eurozone budget to weather macroeconomic shocks. There will be no single safe asset. There will be no common deposit insurance. The big project of a European banking union will remain forever uncompleted. Then add something really dangerous���a recession���into the mix. I have no idea whether the next crisis will originate in sovereign bond markets, in the banking sector, or somewhere else. But the combination of a slowing and possibly retracting economy and a monetary union unwilling to repair itself constitutes one of the biggest risks to the global economy right now....

After years of following the eurozone debate, I have come to the conclusion that Germany will not agree to reforms unless it is confronted with a take-it-or-leave-it choice. A eurozone break-up would be a disaster for Germany. It would destroy the country���s export-led business model, and shrink its massive stock of external assets. But it is the prevailing assumption behind the refusal to accept institutional reforms that such a challenge would never happen. This assumption is correct. For now...

#shouldread
#macroeconomics
#exchangerates
#eurozone

June 24, 2008: Ten Years Ago on Grasping Reality

*If you think the Washington Post is an embarrassment in the Age of Trump, it was no better a decade ago: *: Washington Post Death Spiral Watch (Lori Montgomery Edition): Lori Montgomery is giving her bosses up through Len Downie and Katherine Weymouth and Donald Graham what they want, clearly���and what they want is not to inform their readers about the budget.... If Len Downie and company truly want to entertain rather than inform, why not have Lori Montgomery write about Hollywood or professional sports? The people in Hollywood are much more aesthetic than politicians or budget experts. Professional sports not only has prettier and much more athletic people but also superbly structured narrative story lines without the awkward ambiguities and loose ends of government and policy. It is a mystery...

Bear Stearns Hedge Fund Blogging: 47 up months in a row for any fund indicates either (a) they have a hell of a lot of alpha which they are not leveraging sufficiently to make the most money for themselves and their investors, or (b) they are being paid to take on a lot of large and correlated risks for which the bill has just not come due yet...

Curses, Foiled Again!: My time is being absorbed by a large number of very smart and interesting people I haven't heard from in a while: people like Derek Bok, Richard Layard, Louis Gerstner, Michael Lind, Ray Kurzweil, George Soros, Gordon Brown, Frances Cairncross, John Seely Brown, Bill Emmott, and Amartya Sen. They are all across the room clamoring for my attention, encased as they are in rows and rows of these small virtual-reality boxes. You see, when Professor Tyson moved her base of operations back to her Business School office, she left too many of her books behind. So I am now distracted not just by my books, but by hers as well...

Dawn Patrol...: "..."

#shouldread
#tenyearsagoongraspingreality

Ten Years Ago at Grasping Reality: June 22, 2008

Higher-Level Languages and Genetic Programming: The Quintessence writes....

Wait...did you say "eldritch?": Comparison of the various chordate genomes reveals that there are very few chordate-specific genes. Specifically, the authors described 239 "chordate gene novelties" out of 22,000 genes in the lancelet. The nature and function of these genes is intensely interesting, and indeed the authors devote a separate report to issues related to this. But think about it: only 1% of the genes in chordates (vertebrates and all their relatives) are "novel" among genes from all other organisms. So if the toolbox isn't all that different between lancelets and lions, despite divergence at least 550 million years ago, then what is different?... The likelihood that changes in regulation of a (mostly) common genetic toolkit is a major factor in evolution of form....

Now that is scary. The DNA genome is best conceptualized not just as machine language for the cell and the organism, not just machine plus assembly language, not just machine plus assembly language plus Fortran, but all of those and overlaid over the whole, controlling everything, the highest-level genetic code for our humanity written in the molecular equivalent of Java.

Paul Krugman Critiques Guillermo Calvo on Commodity Prices: The fact that somebody has bought an oil futures contract means that somebody else has sold one--hence no effect on demand without real storage. Paul Krugman critiques Guillermo Calvo and others...

Atlantic Monthly Death Spiral Watch (Ambinder on McCain on Offshore Drilling Edition): The number of mulligans that America's press corps gives John McCain is truly remarkable. I'm becoming increasingly convinced that it's because he doesn't threaten them--just as George W. Bush doesn't threaten them. By contrast, Bill Clinton and Al Gore and John Kerry and John Edwards and Hillary Rodham Clinton and Barack Obama are scary-smart, in the way that my ex-boss Alicia Munnell once spoke of Lloyd Bentsen: "It only takes fifteen minutes before it is very clear why he is the Secretary of the Treasury and I am the Assistant Secretary." That seems to provoke an adverse reaction from many journalists--I am not sure why. Outsourced to Mark Kleiman: "The Reality-Based Community: Ambinder on McCain on offshore drilling: Does not compute..."

Then--I won't call her "Ombudsman"--[unprintable] Deborah Howell tries to hide the fact that the Washington Post had rules for outside income in an attempt to constrain conflicts-of-interest and worse that were only binding on the little people: Washington Post Death Spiral Watch (Robert Woodward and Deborah Howell Edition): "I find this a very interesting journalistic tick: you draw the dots, but you do not connect them, and the person you are writing about--in this case, Robert Woodward--breathes a big sigh of relief because there is no bottom-line quote that can be pulled out of the story that makes him look bad.

And I must point out that Sidwell Friends is not a "charity" in any proper sense of the world. Don't get me wrong--it is a wonderful school, from which I received a truly excellent education from many teachers who were paid far less than they were truly worth. Five stick out in my memory right now: Peter Cohen, Joe Wildermuth, George Lang, Florence Fassinelli, Richard Brady.

But it is not moral or just to classify gifts to Sidwell as worthy of the charitable deduction on your income tax form...

Washington Post Death Spiral Watch (David Broder and Deborah Howell Edition): Ken Silverstein.... "When Broder was first confronted he lied about the speeches.When he was faced with clear evidence he then admitted that he broke the rules but then tried to blame it on others by saying that he had told them.They, of course, didn���t remember him saying a word (remind you of Judy Miller at the NYT?). Mr. Broder is obviously a serial liar who thought he could BS his way out of a mess of his own making. So the only question left to ask is--what is the Post going to do about his repeated unethical conduct?" The answer, of course, is "nothing"...

Note to Self: On Bloomberg Surveillanceon Bloomberg Radio...

Note to Self: On Bloomberg Surveillanceon Bloomberg Radio this morning...

#audio
#media

Ten Years Ago at Grasping Reality: June 21, 2008

Desolation Wilderness: We once again prove the first law of American vacations: gain 300 feet in elevation above the nearest paved two lane road, and you are effectively alone. Oh, there are exceptions: the tops of gondolas and the Vernal Falls trail in Yosemite Valley come to mind immediately. But can you think of any others?...

TICKLER: More on the Discourse of Blaming "Luxus" on the Transformation of the Roman Empire from the Optimate to the Principate...

Roman "Republic" seems to me to be not quite right--it does not fit what we think of when we think of a republic. Perhaps "Optimate"--that is, rule by the Optimates, in the same way that we call the regime established by Augustus the Princeps the Principate?

The idea that the collapse of the aristocratic Roman Free State into the Roman Empire was due to wild dissipative partying���luxus, a vice caught from the Greeks and "Asiatics", giving rise to avaritia, which then leads to ambitio and cupido imperii���was originally a meme put forward by those I regard as the true villains���plutocrats and political norm breakers���to avoid responsibility. A.W. Lintott here seems wise to me: A.W. Lintott (1972): Imperial Expansion and Moral Decline in the Roman Republic: "Imperial expansion in general did of course have divisive economic and political effects...

...This discord should not necessarily be interpreted as moral decline. In particular, radical politicians, who wished to be patrons of the plebs tried to use the profits of empire to satisfy plebeian grievances. By ancient standards there was nothing either new or wrong in this distribution of praeda, though the actual measures clashed with senatorial tradition. What was new was the determination with which politicians pursued their aims, which in turn reflected the strength of socio-economic pressures and greater competition in the Roman governing class. Affluence, new social customs and intenser political strife in the second century were all changes brought about at least in part by empire, but are not sufficient explanations of each other. They should not be wrapped up together and labelled 'moral decline'.

In my view the tradition which ascribed the political failure of the Republic to moral corruption derived from wealth and foreign conquest, developed from the propaganda of the Gracchan period. Faced with the catstrophe of 133, some people claimed that Scipio Nasica Corculum was vindicated, the elimination of Carthage had brought ambitious demagogues and would-be tyrants. The destroyer of Carthage, Aemilianus, had to find another scapegoat. Disliking Greek luxury and effeminacy, he put the blame on Gracchus' association with Pergamum and Manlius Vulso's triumph. This view was reproduced by his contemporary Piso in his annales, while Nasica's view was eventually incorporated in Poseidonius' work. The views have become intermingled and confused in Sallust and later historians. They should not distract us now when we try to understand what changes, if any, in political mores were involved in the Republic's collapse...

Here we have Macrobius Ambrosius Theodosius (Praetorian Prefect of Italy, 430??) trying to make sense of the tradition as it was handed down to him:

That the nobility had caught the disease of shameful decadent luxury late in the first century BC...
But maybe it was earlier--Cato the Elder, at least, was condemning bawdy idlers who declaimed Greek poetry, told jokes, and struck poses at least a generation earlier...
But nobody seems to have objected to the fact that L. Cornelius Sulla had a very good singing voice, and liked to use it...

Of course, if one did object to anything L. Cornelius Sulla--whom we mention with great respect--did, his bully-boys might well have cut your throat in the dark one day...

Macrobius: Saturnalia: However, we certainly know the the sons and--although it is a dreadful thing to say--the virgin daughters of noble families regarded dancing as one of their accomplishments...

...Our witness here is Scipio Africanus Aemilianus, who states in his speech against the judiciary law proposed by Tiberius Gracchus:

Men are taught dishonorable tricks: with catamites and accompanied by the zither and the lute they go to drama schools. They learn to sing songs which our ancestors considered disgraceful for the free-born to sing--free-born boys, and girls too, go, I say, to dancing schools and mix with male dancers.

When someone told me this I could not bring myself to believe that men of noble birth would have their children taught such things in a school. Among them--and this more than anything else made me pity the Republic--was a boy wearing the amulet of the free-born, the son of a candidate for office, a boy not less than twelve. He was dancing with castanets, and dancing a dance indecent for even a shameless little slave...

You see how it grieved Africanus to have seen the son of an office-seeker dancing with castanets���a candidate for election, that is, whose hopes and plans for winning a magistracy could not restrain him from doing something that evidently was not considered disgraceful, even at a time when he was obliged to keep himself and his family clear of reproach.

There are complaints still earlier that most of the nobility were behaving in these shameful ways. Thus Marcus Cato calls the noble senator Caelius an ���idler��� and ���bawdy���. Cato says Caelius is a poseur: ���He dismounts from his nag, strikes poses, spouts jokes...��� He elsewhere attacks the same man in these terms: ���Furthermore, he sings when it strikes his fancy, now and then declaims Greek poetry, tells jokes, talks in different voices, strikes poses...���

So says Cato, who (as you see) thought even singing was not the mark of a serious person. Others, however, were far from judging it disgraceful. For example, Lucius Sulla, a man of very great reputation, is said to have been an excellent singer...

On Twitter:

Tom Holland: "I enjoyed this article by @nfergus on Trump���s America as late Republican Rome very, very, very much indeed."

@de1ong: ???? Do you see the origins of Trump in the luxury of Los Angeles, or the fall of Roman republican liberty in the orgies of Baiae? If so, why, and how? ????

@holland_tom: I think that the Roman republic provides a mirror into which the American republic cannot help but look.

@de1ong: & apropos Polybius XXXI.25.: "Cato... said once in a public speech that 'it was the surest sign of deterioration in the republic when pretty boys fetch more than fields, and jars of caviar more than ploughmen'." "Caviar" cannot be right, can it? Is Paton translating "garum" as "caviar" here, or is it something else?

@holland_tom: The Greek word means 'salted fish', and it's specified as coming from Pontus, ie the Black Sea region. Caviar perhaps a bit of a leap!

@de1ong: ah! Thanks very much... A jar of salted fish from the north coast of the Black Sea costing more than an agricultural slave? Perhaps Cato the Elder had a point...

#shouldread
#liberty
#falloftheromanrepublic

Paul Krugman attempts to summarize the state-of-play on t...

Paul Krugman attempts to summarize the state-of-play on the slack-and-wages puzzle: Paul Krugman: Opinion | Monopsony, Rigidity, and the Wage Puzzle: "The unemployment rate... suggest[s] an economy pretty much at full employment...

...But sluggish wage growth could indicate that there���s still substantial slack in the labor market. Which is it?... A number of economists have argued that the official unemployment rate, which only counts people actively looking for work, has become an increasingly inaccurate guide to the real state of labor markets.... EPOP is indeed still significantly below its pre-crisis level. But it has been a decade since the crisis���and that���s enough time to worry about secular trends in labor force participation. In particular, there���s been a long-run trend toward fewer prime-age men working, and it���s not at all clear that we���re currently below that trend.... Quits are back up to pre-crisis levels.... Another piece of evidence is what employers say about the ease of finding workers.... All in all, I think I come down on Jason Furman���s side here���not with 100% certainty, to be sure, but this really shows most of the signatures of a full-employment economy.

But in that case, why aren���t wages surging?... There have already been some analyses suggesting that an extended period of wages constrained by downward rigidity has created a sort of backlog of pent-up wage cuts that is currently holding down wage increases.... There���s now a lot of evidence that many employers have considerable monopsony power in the labor market.... A firm that has monopsony power over labor... would normally be happy to get more workers if it could do so without paying higher wages. That is, complaints about labor and/or skill shortages are normal for many employers....

During the years of high unemployment, firms faced... workers desperate for jobs. This ���should��� have allowed them to cut wages ��� but for the most part they couldn���t, because wage cuts have lots of adverse side effects.... I���d argue that the combination of downward nominal wage rigidity and monopsony power helps explain both why wages didn���t fall during the period of high unemployment and why employers aren���t doing much to raise wages despite tight labor markets now....

The bottom line here is that I reluctantly find myself on the no slack side of this debate. I think the U.S. really is more or less at full employment. But do I think the Fed is right to be raising rates, and that we should start being worried about fiscal deficits? Actually, no.... First, I might be wrong. And the costs of tightening when the economy still has room to grow are much bigger than those of waiting and discovering that we���ve overshot a bit. Second, everything we���ve learned since a 2% inflation target became orthodoxy suggests that the target was too low.... So while I am not convinced that we have a lot of labor market slack, I actually favor policies that act as if we did...

#shouldread

Some MOAR Links

Dan Davies: "Just to be clear-paid internships are bad too..."

J.R.R. Tolkien: The Lay of Leithien

J.R.R. Tolkien: Light as Leaf on Linden Tree

Michael McFaul: "Russia was kicked out of G7 because Putin invaded Ukraine & annexed Crimea. Letting Russia back in without any change in Russian behavior would Make America Look Weak Again..."

Douglas A. Irwin (2008): Trade Liberalization: Cordell Hull and the Case for Optimism

Kim Clausing: How will the #TCJA Impact American Workers?: "(1) Overall, the benefits of the #taxcuts are skewed toward the wealthy. (2) When the tax cuts are eventually paid for, the vast majority of American households will be worse off..." https://t.co/1HaOwddUai https://pbs.twimg.com/media/Dec5gBJWAAAghdc.jpg

This was a private cabinet meeting. Yes, there are always lots of leaks and lots of complaisant reporters who work for sources generating a cloud of misinformation in an attempt to seek personal advantage in the court that is the White House. But "our principal is an idiot" is a message that people in the White House rarely wish to send: Dan Froomkin: "THIS IS NOT NORMAL: In private FEMA remarks, Trump���s focus strays from hurricanes..."

The New York Times has done an appallingly bad job in this age of Trump. What they see here about the bad job done by Republican politicians is all true. But I wish they would turn their scrutiny inward a bit: New York Times: The Cult of Trump: "Every now and again, someone sticks a neck out...

Well, since capitalism delivers higher real wages than any other system we know about, how can you oppose it root-and-branch except by somehow claiming it is fruit from a poisoned tree?: Matthew Yglesias: I would like to read an intellectual history of how exactly ���slavery was a boon to economic development��� became the leftist position, and ���actually, slavery is a retrograde anti-growth system as well as an immoral one��� (Marx���s view!) became the neoliberal sellout view..."

One would not think that it would be difficult for the rich to understand that enabling kleptocrats with little respect for the rule of law in an attempt to fend off democratic waves of social democracy is very unwise. Princeton's Harold James looks at interwar Germany: Harold James: Ten Weimar Lessons: "The collapse of the Weimar Republic and the emergence of the Nazis' Third Reich in the early 1930s still stands as one of modern history's most powerful cautionary tales...