J. Bradford DeLong's Blog, page 39

Rutherford: "Just Wear Your Mask"���Noted

George Rutherford (UCSF): 'Just wear your mask. Stop thinking of excuses not to wear your mask. Universal mask wearing would get us through this to vaccine... #coronavirus #noted #publichealth #2020-06-26

Was the Great Recession More Damaging Than the Great Depression?: No Longer Fresh at the Milken Review

EG: Brad DeLong: Was the Great Recession More Damaging Than the Great Depression?: Your parents������more likely your grandparents������Great Depression opened with the then-biggest-ever stock market crash, continued with the largest-ever sustained decline in GDP, and ended with a near-decade of subnormal production and employment. Yet 11 years after the 1929 crash, national income per worker was 10 percent above its 1929 level. The next year, 12 years after, it was 28 percent above its 1929 level. The economy had fully recovered. And then came the boom of World War II, followed by the ���thirty glorious years��� of post-World War II prosperity. The Great Depression was a nightmare. But the economy then woke up���and it was not haunted thereafter. Our ���Great Recession��� opened in 2007 with what appeared to be a containable financial crisis. The economy subsequently danced on a knife-edge of instability for a year. Then came the crash ��� in stock market values, employment and GDP. The experience of the Great Depression, however, gave policymakers the knowledge and running room to keep our depression-in-the-making an order of magnitude less severe than the Great Depression. That���s all true. But it���s not the whole story. The Great Recession has cast a very large shadow on America���s future prosperity. We are still haunted by it... Read MOAR at Project Syndicate

#shouldread #greatrecession #greatdepression #macroeconomics #economichistory

MOAR on Kissinger & Pinochet���Noted

And news on the relationship between Pinochet and Kissinger: Boston.com: Cable Ties Kissinger to Chile Controversy http://archive.boston.com/news/nation/washington/articles/2010/04/10/cable_ties_kissinger_to_chile_controversy/: 'the U.S. State Department became concerned that Condor included plans for political assassination around the world. The State Department drafted a plan to deliver a stern message to the three governments not to engage in such murders. In the Sept. 16, 1976 cable, the topic of one paragraph is listed as "Operation Condor," preceded by the words "(KISSINGER, HENRY A.) SUBJECT: ACTIONS TAKEN." The cable states that "secretary declined to approve message to Montevideo" Uruguay "and has instructed that no further action be taken on this matter." "The Sept. 16 cable is the missing piece of the historical puzzle on Kissinger's role in the action, and inaction, of the U.S. government after learning of Condor assassination plots," Peter Kornbluh, the National Security Archive's senior analyst on Chile, said Saturday. Kornbluh is the author of "The Pinochet File: A Declassified Dossier on Atrocity and Accountability." Jessica LePorin, a spokeswoman for Kissinger, says that the former secretary of state dealt many years ago with questions concerning the cancellation of the warnings to the South American governments and had no further comment on the matter.... William D. Rogers, Kissinger's former assistant secretary of state, said Kissinger "had nothing to do with" a Sept. 20, 1976 cable instructing that the warnings to Chile, Argentina and Uruguay be canceled. Rogers died in 2007... .#noted #2020-06-25

Simon Wren-Lewis: "Social Consumption" & COVID-19���Noted

The bottom line appears to be that ending ���lockdowns��� will not produce rapid economic recovery. People have increased their savings substantially���are planning to do next year, after the plague has passed, things that they can reasonably postpone to next year. Such an increase in savings requires an increase in planned investment spending (or in government public consumption spending) to maintain macroeconomic balance. But that maintenance of macroeconomic balance is not being greased by government action to make sure that that investment spending appears. And government consumption spending is not growing but shrinking as a new wave of austerity kicks in. But what about ending the lockdowns? Doesn���t that help? Probably not. Ending the lockdowns gets more people sick���which further raises savings. And the lockdowns themselves did not so much decrease spending as shift spending from nonessential (restaurants) to essential (grocery stores and take-out) spending categories:

Simon Wren-Lewis: Locking Down Too Late but Ending Lockdown Too Early https://mainlymacro.blogspot.com/2020/06/locking-down-too-late-but-ending.html: ���All this is important... because it means that the number of new infections is declining very slowly, which in turn means that most people will not return to previous patterns of ���social consumption���. That in turn means that there cannot be a complete recovery. We do not know at what level of daily infections people will be happy to resume social consumption, but it is bound to be well below 17,000. The difference between R=0.8 and R=0.9 in getting to that much lower number of infections is measured in months, as is the difference between R=0.9 and R=0.95. We are relaxing lockdown at much higher levels for daily new infections compared to Italy, France and Germany. Relaxing the lockdown might (I stress might) be justified if there was a tried and tested alternative mechanism to suppress R. That mechanism does exist: a well functioning and comprehensive track, trace and isolate (TTI) infrastructure.... It seems clear that many/most of the scientists advising the government also think lockdown is ending too quickly. The alert level remains at 4, despite Johnson/Cummings��� wishes. As Rafael Behr��put it, ���Johnson's relationship with science has gone the way of most of his relationships.��� Yet this divergence does not seem to worry him and those around him at all, which is a bit odd for a government that kept claiming they were following the science. I should resist the temptation to suggest that all this is obvious. When I modeled the economic impact of a pandemic I was surprised at how much of aggregate consumption was social. It isn���t just pubs, restaurants and tourism, but large parts of recreation, culture and transport. These sectors make up over a third of consumption. Even the demand for clothing may decline if there are no parties to go to. The pandemic creates a huge demand shock even without any lockdown measures like school closures. That is why many better-off households have been saving much more during the pandemic.... There is no trade-off between public health and the economy: better public health (less COVID-19 infections) is the sure way to a substantial recovery. The idea that we have to lift the lockdown for the sake of the economy is the new austerity.... Could we get a similar recovery by some other means, such as a large fiscal stimulus? The short answer is no. Because social consumption is such a large proportion of the total, you would need a ridiculously large increase in spending in other sectors even to come close to substituting for that loss. The only reason why you would contemplate not doing the first best option, getting infections down, is because your ideology is screwing your common sense. Which is a pretty good description of how this government has dealt with this pandemic so far��� .#noted #2020-06-25

Andy Matuschak: Narrated Explorables: Three Mental Models...

Andy Matuschak: Narrated Explorables: Three Mental Models https://medium.com/khan-academy-early-product-development/narrated-explorables-three-mental-models-e16e0d80e4c1: 'Today our former colleagues Ben Eater and Grant Sanderson published Visualizing quaternions, an exciting addition to a hazy new medium. It combines video-like narrative explanation, interactive representations, and game-like challenge prompts. At first, it feels like watching a YouTube video that uses great visualizations to explain something��� but then you realize that you can interrupt the speaker to manipulate with the representation, and they intermittently prompt you to do so with some challenge. How should we design such systems? What are their prospects? I���ll explore a few ideas here. I know of no common name for this medium, so I���ll call these narrated explorables... .#noted #2020-06-25

Newitz: A Better Internet Is Waiting for Us���Noted

Let me not think about our current problems and dysfunctions for a moment and instead cast our eyes forward to the task of how to build something closer to Utopia over the next decade, after this mess wins its way to its likely very sorry end. The thoughtful Annalee Newitz is worth listening to as we face the task of constructing a better functioning public sphere. We can certainly do it. But it almost surely cannot be built on the backs of advertising supported social media. Facebook, Twitter, Instagram, and Company will probably have to die and be replaced by subscription and by public services:

Annalee Newitz: A Better Internet Is Waiting for Us https://www.nytimes.com/interactive/2019/11/30/opinion/social-media-future.html: 'My quest to imagine a different reality: Social media is broken. It has poisoned the way we communicate with each other and undermined the democratic process. Many of us just want to get away from it, but we can���t imagine a world without it. Though we talk about reforming and regulating it, ���fixing��� it, those of us who grew up on the internet know there���s no such thing as a social network that lasts forever. Facebook and Twitter are slowly imploding. And before they���re finally dead, we need to think about what the future will be like after social media so we can prepare for what comes next.... What will replace social media the way the internet replaced television, transforming our entire culture?... Erika Hall���s design firm Mule.... ���I absolutely believe that you can design interfaces that create more safe spaces to interact, in the same way we know how to design streets that are safer,��� she said. But today, she told me, the issue isn���t technical. It has to do with the way business is being done in Silicon Valley.... [John] Scalzi... imagines a new wave of digital media companies that will serve the generations of people who have grown up online (soon, that will be most people) and already know that digital information can���t be trusted. They will care about who is giving them the news, where it comes from, and why it���s believable. ���They will not be internet optimists in the way that the current generation of tech billionaires wants,��� he said with a laugh.... There isn���t a decent real-world analogue for social media, and that makes it difficult for users to understand where public information is coming from, and where their personal information is going. It doesn���t have to be that way.... Public life has been irrevocably changed by social media; now it���s time for something else. We need to stop handing off responsibility for maintaining public space to corporations and algorithms���and give it back to human beings. We may need to slow down, but we���ve created democracies out of chaos before. We can do it again... #cognition #democracy #noted #politicaleconomy #publicsphere #2020-06-25

Worthy Reads for June 20, 2019

Worthy Reads from Equitable Growth:

Relationships between user and supplier firms were never arms-length. But while the assumption that they were may have been a minor error three generations ago, it is a major error today. We need more people like Susan Helper thinking about the consequences of the information and technology flows generated in today's value-chain economy. Such flows are a very important piece of our community of engineering practice: Susan Helper: Building High-Road Supply Networks in the United States: "A different kind of outsourcing is possible���'high-road' supply networks that benefit firms, workers, and consumers... collaboration between management and workers and along the length of the supply chain, sharing of skills and ideas, new and innovative processes, and, ultimately, better products that can deliver higher profits to firms and higher wages to workers. Firms could take a key step by themselves, since it could improve profits. Collaboration among firms along a supply chain can lead to greater productivity and innovation. Lead firms can raise the capabilities of supplier firms and their workers such that even routine operations can benefit from collaboration for continuous improvement...

This is exactly the kind of work we at Equitable Growth want to see carried out by exactly the kind of young people we ought to be financing. Very well done: Ellora Derenoncourt and Claire Montialoux: Minimum Wages and Racial Inequality: "The earnings difference between black and white workers fell dramatically in the United States in the late 1960s and early 1970s. This paper shows that the extension of the minimum wage played a critical role in this decline. The 1966 Fair Labor Standards Act extended federal minimum wage coverage to agriculture, restaurants, nursing homes, and other services which were previously uncovered and where nearly a third of black workers were employed...

Inequality leads to leverage. Leverage leads to instability. Instability leads to depression: Heather Boushey: A New Economic Paradigm: "We should let go of the workhorse macroeconomic models.... [that] have all but ignored inequality in their thinking... [making the] 'implicit, if not explicit, assumption... that inequality doesn���t matter much when gauging the macroeconomic outlook'.... [In] the long-term picture or consider[ing] the potential for the system to spin out of control... higher inequality increases the likelihood of instability...

I am trying to think through what the issues we should be talking about when we talk about "manufacturing jobs" really are. I am not having a great deal of success: Resonse to Noah Smith: Yes, Susan [Houseman] is right; yes, the index-number problem rears its ugly head; yes, there are absolute numbers and there are employment shares; yes, there is manufacturing; yes, there is non-computer manufacturing; yes, there are traditional blue-collar occupations. One reading of Susan is "traditional blue-collar occupations are of special concern, and manufacturing excluding computers is important because computer manufacturing is not really a blue-collar semi-skilled easy-to-unionize source of employment". That characterization of computer manufacturing is increasingly true over time���but it also applies increasingly over time to sunbelt manufacturing as well...

 

Worthy Reads from Elsewhere:

The Fed now seems to be saying: "We misjudged the situation late last year. We are going to reverse our policy. But not quite yet." And I do not understand the frame of mind in which that is a coherent system of thought. I wish they would explain: Tim Duy: Rate Cut On The Way: "The Fed turned... dovish... basically announcing a July rate cut.... The proximity to the lower bound coupled with low inflation was always going to lead the Fed to err on the side of a rate cut. It just took them some time to find their way there.... It would be exceedingly difficult to pull back on a rate cut now. Nor is there any reason to...

The evidence for the position that minimum wage increase can often be an effective policy for equitable growth continues to pile up: P��ter Harasztosi and Attila Lindner: Who Pays for the Minimum Wage?: "A large and persistent minimum wage increase in Hungary.... Employment elasticities are negative but small even four years after the reform... 75 percent of the minimum wage increase was paid by consumers and 25 percent by firm owners; that firms responded to the minimum wage by substituting labor with capital; and that dis-employment effects were greater in industries where passing the wage costs to consumers is more difficult...

I am with David Autor here: individual tasks that are components of jobs will be automated, but human thought and judgment will continue to be able to add value throughout the economy. There is, however, nothing to require that a world of abundant capital and sophisticated computers will be a world in which the income distribution will be relatively equal: David Autor: Polanyi���s Paradox: Will It Be Overcome?: "Jobs are made up of many tasks.... Understanding the interaction between technology and employment requires thinking about... how human labor can often complement new technology.... The tasks that have proved most vexing to automate are those demanding flexibility, judgment, and common sense���skills that we understand only tacitly. I referred to this constraint above as Polanyi���s paradox.... Is Polanyi���s Paradox soon to be at least mostly overcome, in the sense that the vast majority of tasks will soon be automated? My reading of the evidence suggests otherwise...

In very important dimensions, Europe is handling the coming of the Second Gilded Age significantly better than we are handling it here in America: Thomas Blanchet, Lucas Chancel, and Amory Gethin: Forty Years of Inequality in Europe: "Despite the growing importance of inequalities in policy debates, it is still difficult to compare inequality levels across European countries and to tell how European growth has been shared across income groups. This column draws on new evidence combining surveys, tax data, and national accounts to document a rise in income inequality in most European countries between 1980 and 2017. It finds that income disparities on the old continent have increased less than in the US and shows that this is essentially due to ���predistribution��� policies...

One very peculiar thing about America is majorities that believe that government doesn't have our back and indeed, shouldn't have our back. This is a very puzzling attitude to see in a democracy: Gillian Tett: Why Japan Isn���t Afraid of Robots: "The social safety net.... 63 per cent of people in Japan think that it is up to the government... to help the population adapt to automation.... In the US, however, only about 30 per cent of the public expect the government to help.... A recipe for anxiety: some of America���s current problems can be traced to the sense of abandonment felt by many workers in deindustrialised regions...

Anybody who has spent any time looking at the data knows that it is in the boom, not in the depression, that the work of sectoral readjustment is done. Indeed, that work cannot be done in the depression. In the depression nothing is profitable. So how could entrepreneurs possibly judge then what will be profitable when the depression is past? They must wait for the boom to see: Robert Heilbroner (1996): The Embarrassment of Economics: "Schumpeter arrived in his famous riding habit and great cloak, of which he divested himself in a grand gesture. He greeted us in a typically Schumpeterian way: 'Gentlemen, a depression is for capitalism like a good, cold douche'. The remark shocked us...

Judea Pearl and Dana Mackenzie: Simpson's Paradox: "Any claim to resolve a paradox... should explain why people find the paradox surprising or unbelievable.... When the paradox does occur, and we have to make a choice between two plausible yet contradictory statements, it should tell us which statement is correct.... A paradox... should entail a conflict between two deeply held convictions...

When "Prince of Whales: suddenly shows up in my timeline, only one thing can possibly be gong on: Darth: "���� u know it wasn���t even a typo: he really thinks it is prince of whales: https://delong.typepad.com/.a/6a00e551f0800388340240a4b31ac9200b-pi

.#noted #weblogs #2019-06-20

Note to Self: Pre-Kameron Hurley Uses of the Phrase "Women, Cattle, & Slaves"

Note to Self: Pre-Kameron Hurley uses of the phrase "women, cattle, & slaves":

Alexina Mackay Harrison: The Story of the Life of Mackay of Uganda: Pioneer Missionary https://books.google.com/books?id=Xe0-AAAAIAAJ...

Dwayne Woods: Bringing Geography Back In: Civilizations, Wealth, and Poverty https://www-jstor-org.libproxy.berkeley.edu/stable/pdf/3186574.pdf...

David Robinson: Sources of the African Past https://books.google.com/books?id=coGJBAAAQBAJ...

Jeffrey Herbst: States and Power in Africa: Comparative Lessons in Authority and Control https://books.google.com/books?id=4Ed-BAAAQBAJ...

Alison Jolly: Lords and Lemurs: Mad Scientists, Kings with Spears, and the Survival of Diversity in Madagascar https://books.google.com/books?id=PtE3C_mUzCUC...

& Kameron Hurley (2013): 'We Have Always Fought': Challenging the 'Women, Cattle and Slaves' Narrative http://aidanmoher.com/blog/featured-article/2013/05/we-have-always-fought-challenging-the-women-cattle-and-slaves-narrative-by-kameron-hurley/

.#books #economichistory #inequality #notetoself #2020-06-25

Roser: Is the World Making Progress Against the Pandemic?���Noted

I confess that I really wish that Max Roser & company would do more than just color-code the confirmed case data by frequency of testing. What we really want are estimates of true ���rona plague cases, inferred from testing frequencies and confirmed cases. My own guess���but I am not an epidemiologist https://www.bradford-delong.com/2020/05/worst-coronavirus-response-in-the-world-by-the-most-incompetent-ignorant-and-undisciplined-president-imaginable-donald-tru.html���is that the United States is still missing two out of three new ���rona cases, and that our true nationwide case replication rate R here in the United States, after shrinking to 0.85 per week in mid-May, is now back up at 1.00 and is about to start growing again, as Georgia, Florida, Arizona, Texas, and southern California shift from being hot spots to being inferno spots.

It is, I must say, one hell of a time to have a big revival-style campaign event in Arizona.

But other people could do a better job at guessing at the answers to these questions than I can, and I wish they would:

Max Roser & al.: Is the World Making Progress Against the Pandemic? We Built the Chart to Answer This Question https://ourworldindata.org/epi-curve-covid-19: ���Data on the number of confirmed cases only becomes meaningful when it can be interpreted in light of how much a country tests. This is what the chart shows.... Trajectories show the daily number of cases. The goal is for every line to bend towards zero. And line color gives an indication of the quality of a country���s data at each point in time. If a country finds a case for every few tests they perform the line is shown in shades of red. Here it is likely that the unknown number of cases is high.... The darker shades of blue mean that a country does many tests for each case it finds.... The goal is that a country tests widely in relation to its outbreak, shown by the line color turning into dark shades of blue.... Two very different groups of countries.... Slovakia, Thailand, New Zealand, South Korea, and Germany... monitored the outbreak well... were able to bend the curve and bring down the number of confirmed cases.... These are not the only countries, that achieved this; you can add for example Austria, Iceland, Slovenia, Tunisia... Latvia... similar trajectories.... Brazil, Mexico, the United States, UK, Sweden, India, Pakistan, South Africa, and Nigeria... test little... report unfortunately still very high daily case counts��� #coronavirus #noted #publichealth #2020-06-25

Kottke: Vietnam, Population 95 Million, Has Recorded 0 Deaths from Covid-19���Noted

I am sure that they missed some deaths, or that the ruling party regards reporting zero deaths as a boasting point to be maintained. But it looks as though as long as they can maintain their 14-day quarantine requirement on those entering the country, the Vietnamese have this plague licked, and life can return to normal. They, and New Zealand, and Mauritius and company, may well get out of this thing with the least economic damage:

Jason Kottke: Vietnam, Population 95 Million, Has Recorded 0 Deaths from Covid-19 https://kottke.org/20/06/vietnam-population-95-million-has-recorded-0-deaths-from-covid-19: ���Vietnam, a nation of 95 million people that borders China, has recorded only 334 total infections and 0 deaths... currently on a 61-day streak without a single community transmission.... They acted early and aggressively.... From the BBC: "Vietnam enacted measures other countries would take months to move on, bringing in travel restrictions, closely monitoring and eventually closing the border with China and increasing health checks at borders and other vulnerable places. Schools were closed for the Lunar New Year holiday at the end of January and remained closed until mid-May. A vast and labour intensive contact tracing operation got under way. 'This is a country that has dealt with a lot of outbreaks in the past', says Prof Thwaites.... By mid-March, Vietnam was sending everyone who entered the country-and anyone within the country who���d had contact with a confirmed case���to quarantine centres for 14 days. Costs were mostly covered by the government, though accommodation was not necessarily luxurious...." Forced bussing to quarantine centers in the US, could you even imagine? Better that hundreds of thousands of people die, I guess. The Vietnamese health system also implemented aggressive contact tracing��� .#coronavirus #noted #publichealth #2020-06-25