J. Bradford DeLong's Blog, page 438

Links and Such/Procrastination for November 5, 2017

Must-Reads:

Sustainable Development Goals: No Longer Fresh at Project Syndicate
Keeping US Policymaking Honest: Fresh at Project Syndicate
"Stockmanism" or "Magic Asteriskism" Is Bad Economics. Period
When Globalization is Public Enemy Number One: At the Milken Review
Ryan Avent (2011): Best Budget Ever: "PAUL RYAN has officially revealed the House Republicans' budget proposal...
David Kamin: How a Tax Cut Turns Into a Tax Increase: "In rolling out their plan, House Republicans focused on an example family...
Martin Wolf: The challenge of Xi Jinping���s Leninist autocracy: "Xi Jinping['s]... claims... are bold: 'Socialism with Chinese characteristics has crossed the threshold into a new era,'...
Jason Furman and Greg Leiserson: The real cost of the Republican tax cuts: "The House Republican plan will itself be incomplete...
Jason Furman: @jasonfurman on Twitter: "THREAD. New results from Penn-Wharton Budget Model show wage effects of corporate tax changes...
Tim Alberta: John Boehner Unchained: "After railing against the defund strategy, however, Boehner surveyed his conference and realized...

Should-Reads:

Equitable Growth: Jobs Day Graphs: October 2017 Report Edition | Equitable Growth: "After an increase in September, the prime employment rate fell slightly to 78.8 percent in October...
Nick Bunker: Weekend reading: ���Winners, losers, and tax plans��� edition: "Next month will mark 10 years since the beginning of the Great Recession...
Sam Bell: Why Yellen Was Not Reappointed: "Trump deserves blame for not reappointing Yellen but more a story about the GOP...
Mark Thoma: Federal Reserve Independence: "After the FOMC cut interest rates to almost nil during the Great Recession, the committee took advantage of its independence to boldly go where no Fed had gone before...
Elhanan Helpman, Oleg Itskhoki, Marc-Andreas Muendler, and Stephen J. Redding: From Theory to Estimation: "Trade and Inequality: While neoclassical theory emphasizes the impact of trade on wage inequality between occupations and sectors...
Robert Post: There is no 1st Amendment right to speak on a college campus: "Members of the university... enjoy special freedoms... academic freedom, not First Amendment freedom of speech...
Paul De Grauwe and Yuemei Ji: Behavioural economics is also useful in macroeconomics: "Concepts from behavioural economics... [help] develop macroeconomic models with endogenous business cycle fluctuations...
Paul Krugman: Paul Ryan Is Choking On His Own Mystery Meat: "A cynic might have expected Republicans to go for full-on cynicism...
Dani Rodrik: The Trouble With Globalization: "The United States, too, could have moved aggressively to compensate dislocated workers in the 1990s, when it opened its economy to imports from Mexico, China...
Wladimir Woytinsky (1952): Lerner's Economics of Employment: A Review: "The first and most obvious objection-conforming with the idea of Functional Finance as a supplement to the ordinary budget-is...
Steven Rosenthal: Foreigners Would Win Big from A Corporate Tax Cut: "The Trump Administration and congressional Republican leaders (the Big Six) have proposed a $70 billion-a-year tax cut for foreign investors...
Heather Boushey: Equitable Growth in Conversation: Kimberly A. Clausing: "Boushey: One of the arguments that you hear time and time again for why Congress needs to reduce the corporate tax rate is that doing so will boost investment in overall economic growth...
John Quiggin: The end of fossil fuels: "The International Energy Agency recently released data showing that world coal production fell sharply in 2016, mainly because of big cuts in China...
David Glasner: Larry Summers v. John Taylor: No Contest: "'If a Fed Funds rate higher than the rate set for the past three years would have led, as the Taylor rule implies, to lower inflation...
Bridget Ansel: The gender gap in economics has ramifications far beyond the ivory tower: "The lack of women in economics���and their segregation into certain subfields���boast ramifications beyond individual women���s careers...
Iris Marechal: Weekend reading: the ���fiscal highlights��� edition: "Rex Nutting argues that the Trump-Ryan plan will actually encourage more corporate offshore tax avoidance...
Austin Clemens: Here���s why you should interpret GDP growth estimates skeptically: "No single number can really tell us much of anything about our immensely complicated $19 trillion economy...

Links:

Pedro Nicolaci da Costa: Puerto Rico devastation hits already tattered island economy - Business Insider
Josh Barro: GOP tax plan's biggest problem is 'small business' provision: "What we are seeing now is that a lot of people and a lot of interest groups like the idea of tax reform in theory����� but that if you add up all their theories, you'll find the tax benefits they expect to get add up to more than the $1.5 trillion Republicans have available to hand out. Once it becomes clear who's not getting what they want, it will be a lot harder to hold the tax reform coalition together..."
Juan Carlos Su��rez Serrato and Owen Zidar: Who benefits from corporate tax cuts? Evidence from local US labour markets: "The largest beneficiaries from a tax cut would be the owners of firms (40%), with landowners and workers splitting the remaining 60% of the economic gains..."
Stephen Cecchetti and Kim Schoenholtz: Black Monday: Thirty years after: "A key lingering vulnerability ��� the lack of a mechanism for managing the insolvency of critical payment, clearing, and settlement institutions..."
Ned Phelps: Nothing Natural About the Natural Rate of Unemployment: "A compelling hypothesis is that workers, shaken by the 2008 financial crisis and the deep recession that resulted, have grown afraid to demand promotions or to search for better-paying employers ��� despite the ease of finding work in the recently tight labor market..."
Susan Dynarski: Online Schooling: Who Is Harmed and Who Is Helped?: "Online coursework should be focused on expanding course options or providing acceleration for students who are academically prepared, rather than shoring up the performance of those who are lagging..."
Nancy LeTourneau: Establishment Republicans Will Lose Their Civil War With the Insurgents: "a fascinating piece written by Oliver Darcy over a year ago about how GOP leaders had been ejected from the epistemic bubble created by right wing media..."
Christa Blackmon: Acknowledging Mistakes: I Don't Want To Be Lisa Bloom - Lawyers, Guns & Money
Adriana Kugler, Catherine Tinsley, and Olga Ukhaneva: Why there aren't more women in STEM fields: "Women are just as resilient to negative feedback as men when deciding whether to continue in a field of study, but when faced with additional signals such as an association of the field with masculinity, they appear to become more prone to opt out in response to low grades..."
Harold James: Europe���s Hard-Core Problem: "France and Germany urgently need to develop a shared vision that transcends their own national politics and embraces genuine EU-level reform..."
Nicholas Davis: Learning from Martin Luther About Technological Disruption: "Perhaps the most enduring lesson of Luther���s call for a scholarly debate���and his use of technology to deliver his views���is that it failed. Instead of a series of public discussions about the Church���s evolving authority, the Protestant Reformation became a bitter battle played out via mass communication, splitting not just a religious institution but also an entire region. Worse, it became a means to justify centuries of atrocities..."
Michael Kinsley (2011): Gingrich is right on Palestinians���to a point: "In the 1980s and 1990s I worked at the [Old] New Republic, a fervently pro-Zionist publication. Many's the night I worked late editing articles I wasn't sure I agreed with offering yet one more reason why a Palestinian state was unthinkable..."
Josh Marshall: Compromise and the Civil War
Eric Alterman (2000): ound and Fury: The Making of the Punditocracy
Davide Cantoni, Jeremiah Dittmar, and Noam Yuchtman: The Protestant Reformation and the allocation of resources in Europe: "Five hundred years ago today, Martin Luther.... The Reformation not only transformed Western Europe's religious landscape, but also led to an immediate and large secularisation of��Europe���s political economy..."
Steve Kolowich: What Is Seth Abramson Trying to Tell Us?: "A professor of English has won himself a big audience by building a case against President Trump on Twitter. But the real meaning of his online crusade is in the subtext..."
Michael Winship: GOP Tax Cuts Won���t Pass This Year ��� Or Maybe Even Next: "In Part 1 of a two-part interview, former Reagan economic adviser Bruce Bartlett says Trump is lying about tax reform that will benefit the super rich and hurt everyone else..."
Josh Barro: How tax reform is likely to pan out: "When the legislation is released on Wednesday, it will likely become more unpopular than it already is as a framework. Republicans have a math problem that will make passing the legislation extremely difficult..."
Amanda Bayer and David Wilcox: The Unequal Distribution of Economic Education: A Report on the Race, Ethnicity, and Gender of Economics Majors at US
Colleges and Universities
Jonathan Chapman et al.: Willingness to Pay and Willingness to Accept are Probably Less Correlated Than You Think
Pete Klenow and Huiyu Li: Federal Reserve Bank of San Francisco |
Oliver Butterworth
Nicholas Bagley: Trump and the Essential Health Benefits
**Noah Smith: Japan Goes With Another Round of Abenomics - Bloomberg: "And why not? The economy hasn't been this good since the 1980s..."
Matthew Yglesias (2010): Wieseltier vs��Sullivan

On Grasping Reality:

Sustainable Development Goals: No Longer Fresh at Project Syndicate
Keeping US Policymaking Honest: Fresh at Project Syndicate
"Stockmanism" or "Magic Asteriskism" Is Bad Economics. Period
When Globalization is Public Enemy Number One: At the Milken Review
Monday Smackdown Tickler: I Am Begging...
How 100% Truth Becomes, in Republicans' Eyes, an Unfair Attack on Them...
Abraham Lincoln vs. John Kelly: From the Cooper Union Speech: Hoisted from the Archives
Hoisted from the Archives: "95": "Out of love for the truth and from desire to elucidate it, the Reverend Father Martin Luther..."
Live from the Orange-Haired Baboon Cage: Do I want to know what has happened this evening?: "See 1750 new tweets..."
Live from the MCP Bunker: The Epicurean Dealmaker writes: "If it can happen at NPR, it can happen anywhere, folks..."
Live from the Orange-Haired Baboon Cage: Karl Marx really loathed social classes that deviated from their proper societal role: Karl Marx on Napoleon III and his lumpenproletariat, from the 18th Brumaire: Napoleon III was his own Breitbart...
Live from the Kinsley, Hertzberg, Sullivan Self-Made Gehenna: Apropos of Leon Wieseltier, their role thereof, and their silence regarding their role...
For the Weekend: Stephen Vincent Benet: The Devil and Daniel Webster X

Should-Read: Nick Bunker: Weekend reading: ���Winners, lo...

Should-Read: Nick Bunker: Weekend reading: ���Winners, losers, and tax plans��� edition: "Next month will mark 10 years since the beginning of the Great Recession...

...Annie Lowrey takes a look at the potential policy response to the next recession and isn���t reassured.... Matt Ygelsias writes about a new letter Senator Cory Booker (D-NY) sent to antitrust officials about monopsony power.... Izabella Kaminska sits down with Adair Turner.... Who benefits from a cut in the U.S. corporate income tax? Economists Juan Carlos Su��rez Serrato and Owen Zidar summarize their research.... Millennials are constantly hopping between jobs, right? No. They are not...

Should-Read: Asad Abbasi: After Piketty: The Agenda for E...

Should-Read: Asad Abbasi: After Piketty: The Agenda for Economics and Inequality: "In the final chapter, Piketty explains, defends and elaborates...

Capital, Piketty notes, embodies multidimensional history, rooted as much in politics as in economics. Capital serves as an ���introduction��� to this history (548-53). ���Had I believed���, Piketty quips, ���in the one dimensional neoclassical model of capital accumulation [���] then my book would have been 30 pages long rather than 800 pages���. Piketty argues that capitalism contains an inherent capacity to produce unequal societies... hopes that his work provokes discussion on wealth and inequality. After Piketty��not only generates such debate, but also deepens it by highlighting the gaps missed by Piketty. For this reason, After Piketty ticks the box as being as much an ���homage��� to, as a critique of, Piketty���s Capital. After Piketty is not your typical holiday read. It is work of serious scholarship. The academic language of some chapters pinpoints its intended audience: scholars, students, policymakers and politicians. Yet, the topics discussed in the book affect all citizens. High inequality should concern everyone because it is a moral, social and political issue...

Monday Smackdown Tickler: I Am Begging...

I am begging for links to high quality smackdowns of arguments that I have made...

If I never change my mind because of evidence, I never get any smarter. So, please, send 'em along. I want to get smarter. And I do very much want to get smarter.

I could always use Monday's "Smackdown" feature to highlight Paul Romer and Robert Lucas's different "interpretations" of the Volcker disinflation. But the feature is supposed to be at least 50% smackdowns of me...

Sustainable Development Goals: No Longer Fresh at Project Syndicate

Politics in the Way of Progress: The seventeen���seventeen!���sustainable development goals are: No Poverty, Zero Hunger, Good Health and Well-being, Quality Education, Gender Equality, Clean Water and Sanitation, Affordable and Clean Energy, Decent Work and Economic Growth, Industry, Innovation and Infrastructure, Reduced Inequalities, Sustainable Cities and Communities, Responsible Consumption and Production, Climate Action, Life Below Water, Life on Land, Peace, Justice and Strong Institutions, and "Partnerships for the Goals https://en.wikipedia.org/wiki/Sustainable_Development_Goals.

It is clear to me that seventeen is too many. Napoleon is supposed to have said: "he who defends everything defends nothing". Similarly, those who prioritize everything prioritize nothing.

The point to having goals and forging a consensus about what those goals are is to find goals working toward which carries you onto and then rapidly along the turnpike: you make faster progress in key areas, and then, when you later get off the turnpike and head to your various final destinations, you find you have gotten there faster and easier than if you had not taken the turnpike. Consensus goals should not be a wish list of everything that will be when the New Jerusalem descends. Consensus goals should be directions to the turnpike.

Can we make progress by taking a look at what people are warning against? Against what people fear will be wrong turns taken as we try to get to the turnpike are people giving warnings? Perhaps we can. For example:

Andrew Sheng and Xiao Geng https://www.project-syndicate.org/commentary/sdgs-global-cooperation-trump-un-speech-by-andrew-sheng-and-xiao-geng-2017-09 fear "technological disruption, geopolitical rivalry, and widening social inequality", but above all they fear "populist calls for nationalist policies, including trade protectionism". They see us as in a world in which "the sovereign state still reigns supreme, with national interests overshadowing shared objectives... [and so] paying for global public goods has become all the more unappealing... [while] both democratic and authoritarian governance have failed to promote equitable development..." And they conclude that with "no global tax mechanism to ensure the provision of global public goods... no global monetary or welfare policies to maintain price stability and social peace... [and with] the antiquated Westphalian model of nation-states, achieving the SDGs will probably be impossible."

Mark Suzman https://www.project-syndicate.org/commentary/better-data-for-gender-equality-by-mark-suzman-2017-09 fears that we do not have enough information to even figure out how the world as a whole is misusing its female more-than-half. The world as a whole has over the past two centuries shifted away from the high infant mortality world that saw the typical woman spend roughly five years pregnant and ten years nursing to our low infant mortality world. Yet patriarchy continues to block women, so that they do much less than they could do. But how can development progress if we cannot even see where, exactly, the most important patriarchal blockages are?

Michael Spence https://www.project-syndicate.org/commentary/tackling-non-inclusive-growth-by-michael-spence-2017-09 warns that "non-inclusive growth patterns... fail.... They underutilize and misuse valuable human resources... give rise to political or social turmoil... polarization... wide policy swings... policy paralysis.... Sustained growth requires a coherent, adaptable strategy that is based on shared values and goals, trust, and some degree of consensus... requires a discontinuous leap in expectations and policies..."

And Kaushik Basu https://www.project-syndicate.org/commentary/reversing-india-growth-slowdown-by-kaushik-basu-2017-09, focusing on India, calls for "identif[ying] specific economic sectors to boost.... with health and education... particularly promising... India���s medical tourism industry... a hub for higher education. For the government, the imperative is to create more regulatory space and provide a facilitating ethos for the private sector..."

The message comes through clearly, to me at least: politics and people���and a politics of people. We have a world today that is richer, astonishingly richer, per capita than in any previous generation. It should be easy for us, collectively, to get people the nutrition and the health care they need to enable all to live full lives. It should be straightforward for us, collectively, to get people the education and connection so that they can easily learn both how to utilize our gigantic technological and other resources and where they can make useful contributions. And it should be obvious to us all���even the richest���that their old ages will be much more comfortable and their grandchildren's and great-grandchildren's lives much more secure and richer in a world in which today's rich pay the taxes to enable truly equitable growth.

But there seems, underneath, by all of those writing the most intelligent contributions to the SDG debate, the same great fear: the fear that those with an eye for plausible political confidence jobs will rally the world's rich who have benefited most from inequitable growth with those non-rich who feel that something they deserved has been taken from them. We see this in America, where every hour on Fox News you can see blame attached to Mexican auto-parts workers in Hermosillo, immigrants from El Salvador, Muslims in general, native-born non-whites who are insufficiently grateful, and "globalists" who in an earlier age would have been called "rootless cosmopolites". But we see this all around the globe.

And I think that we���at least the "we" who read these commentaries, who are overwhelmingly from the top 50% of the Global North and the top 20% of the Global South���need to recognize and say that every opportunity that we are all lucky: some of us have more than others, but we all have much more than we deserve. And than I think we should stop thinking in terms of "deserve" at all. And I remember a character in a long-ago science fiction novel by Ursula K. LeGuin http://amzn.to/2xIuDCc, Odo, who said:

For we each of us deserve everything, every luxury that was ever piled in the tombs of the dead kings, and we each of us deserve nothing, not a mouthful of bread in hunger. Have we not eaten while another starved? Will you punish us for that? Will you reward us for the virtue of starving while others ate? No man earns punishment, no man earns reward. Free your mind of the idea of deserving, the idea of earning, and you will begin to be able to think...

Should-Read: Sam Bell: Why Yellen Was Not Reappointed: "T...

Should-Read: Sam Bell: Why Yellen Was Not Reappointed: "Trump deserves blame for not reappointing Yellen but more a story about the GOP...

...Hensarling, Mulvaney, Shelby, Pence, WSJ ed board, etc: a trend that started during @benbernanke tenure. includes (at times) "moderates" like Bob Corker plus intellectuals like John Taylor. I would (generously) characterize it as a belief that the Federal Reserve's cure was worse than the disease (bad recession). That is why you hear a lot-most recently from Plosser-that it is premature to evaluate Yellen's record.

Whenever the next bad thing happens in the economy they are going to blame it on Bernanke/Yellen and their "excesses" during the recovery. There is just too much ink spilled on that argument... and in too apocalyptic of tones to let it go, even at this late date.

So she won't be Fed Chair, but you will continue to hear about Janet Yellen (and Ben Bernanke) for years to come. The GOP won't let its 'response worse than crisis' analysis go, and that is why Yellen is gone...

Must-Read: Alice Rivlin described how she, in the first O...

Must-Read: Alice Rivlin described how she, in the first Obama administration, successfully negotiated with Paul Ryan, a serious person interested in honest estimates of how policies would work. I remember it very differently. Worth flagging for everybody thinking of taking Ryan's policy competence or Ryan-endorsed estimates seriously:

Ryan Avent (2011): Best Budget Ever: "PAUL RYAN has officially revealed the House Republicans' budget proposal...

...Whatever your take on the policy proposals, it's worth approaching the rosy claims made on its behalf with extreme caution.... Heritage analysis... [is] simply outlandish.... Ryan's plan will bring the unemployment rate down to... 2.8% in 2021.... That's unrealistic enough to be considered somewhat bizarre. Everyone puts a positive spin on their policy proposals. But fundamentally worthy policies shouldn't need to promise laughably overoptimistic outcomes to win support...

Live from the Orange-Haired Baboon Cage: Do I want to kno...

Live from the Orange-Haired Baboon Cage: Do I want to know what has happened this evening?

Keeping US Policymaking Honest: Fresh at Project Syndicate

Project Syndicate: Keeping US Policymaking Honest: This week here at Berkeley I heard great optimism from the illustrious Alice Rivlin. What ���technocracy��� in the good sense the United States has--what respect is paid to sound analysis and empirical evidence in the making of policy--is due more to Alice Rivlin than to any other living human.... Her founding of the Congressional Budget Office is only one, albeit the most important one, of the times that Alice Rivlin has indeed eaten from and forced the rest of us to eat from the tree of knowledge. And we are all massively better for it... Read MOAR at Project Syndicate

Must-Read: The Republican House caucus led by mainstream ...

Must-Read: The Republican House caucus led by mainstream media-acclaimed "policy wonk" Paul Ryan are best thought of as a bunch of 19 year old college frat boys who didn't do the reading winging it in a Model Budget Simulation course:

David Kamin: How a Tax Cut Turns Into a Tax Increase: "In rolling out their plan, House Republicans focused on an example family...

...a married couple making 59,000 dollars per year and with two kids... a tax cut of over 1,182 dollars in 2018.... [But] that... family making 59,000 dollars would face a tax increase by 2024 relative... potentially rising to 500 dollars by 2027.. even as tax cuts for those at the top are maintained...."