J. Bradford DeLong's Blog, page 53

Coronavirus Daily Read List

Comment of the Day: Ronald Brakels https://www.bradford-delong.com/2020/03/coronavirus-daily-read-list.html: 'It's 11:00 pm in Washington DC on the 10th of April. Australia's COVID-19 death toll is 54. The United State's is 18,747. The US has 13 times Australia's population, so the per capita death toll in the US is 27 times higher. Both countries had similar time to prepare. At current rates, the US death toll will end up hundreds of times higher on a per capita basis...

#commentoftheday #2020-04-17

Comment of the Day: Moving into life in an Isaac Asimov n...

Comment of the Day: Moving into life in an Isaac Asimov novel of the 1950s: Dilbert Dogbert https://www.bradford-delong.com/2020/04/comment-of-the-day-_meno-new-zealand-has-a-plan_-new-zealand-has-an-articulate-plan-for-the-next-year-and-we-see-th.html?cid=6a00e551f0800388340240a52150de200b#comment-6a00e551f0800388340240a52150de200b: 'Nice that NZ has a plan. I have a plan. For the rest of my life I will be in isolation, partial. Wear a mask and gloves when going anywhere there are people not family. I am not sure I will change behavior even if a vaccine and/or a drug becomes available. We, the wife and I, are lucky as we have lived in partial isolation for 11 years after moving from Palo Alto to the outer fringes of the Gamma Quadrant. Our risks will be medical appointments, grocery shopping and obtaining needed hardware supplies. Most of our other shopping is via the internet. I am a semi-isolate naturally even though I like people. The wife does her group clubs over the internet. I have a shop and she has a garden. Lucky to have the resources to keep horses that allow us to get out and about in isolation. Damn Lucky!...

#commentoftheday #2020-04-17

What is the Real Prevalence of Coronavirus Across States?

Tests per million times cases per test gives you confirmed cases per million. But we want true cases per million.

Tests per million are different across states because (a) the states are undertaking testing with different levels of effort and (b) the prevalence of the virus is different in different states.

Confirmed cases per million are different across states because (c) states are testing at different rates and (b) the prevalence of the virus is different in different states.

Cases per test are different across states because (d) some states are not testing much and hence are still picking (relatively, for their state) low hanging fruit and (b) the prevalence of the virus is different in different states.

We have data on confirmed cases and tests across states. How do we use that to get real as opposed to fake estimates of where the virus is in the different states?

And then there is the lag: how do we do the nowcast, taking proper account of acceleration and deceleration in the progress of the disease?

Georgia, for example, is fifth in cases per test, at 0.24. Georgia is also fortysixth in tests per million, at 6598. And so Georgia is thirteenth in cases per million, at 1590.

If Georgia were testing at the same rate as New York���30000 per million���how many cases would it be reporting, and what would its confirmed caseload be? Its cases per test is presumably elevated because it is not testing very many people, so simply multiplying by 4.5 is not right. What is right?

#coronavirus #notetoself #2020-04-17

Comment of the Day: Meno: New Zealand has a plan https://...

Comment of the Day: Meno: New Zealand has a plan https://www.bradford-delong.com/2020/04/we-could-be-new-zealand-we-should-be-new-zealand.html#comment-6a00e551f0800388340240a51ff0b5200b: 'New Zealand has an articulate plan for the next year. And we see this as a marathon, not a sprint. We started a month ago with 4 defined levels of social distancing response. We are now up at level 4 (everyone stays home). As the virus is eradicated we will step down to 3, 2, 1. Or back up if needed. Regions could end up on different levels, but probably not as roadblocks and checkpoints are difficult. Our testing rates will not go down as social distancing ends. The aim is zero cases a day, with border quarantine and strong testing levels finding zero cases, with contact tracing set up as a backstop. ���Have your staff work from home if practical��� comes in early at level 2: my partners and I own a NZ IT firm so we expect our staff will wrk from home for another 2 or 3 months, while schools and etc will open earlier and so will construction work, factories, shops. The govt will not guarantee timing, there are many unknowns, and our tourism industry is totally screwed: but the govt are doing their best to help businesses plan for the upcoming year. You could still do that. Stop just reacting, start planning...

#commentoftheday #2020-04-13

Note to Self: We could be New Zealand. We should be New Z...

Note to Self: We could be New Zealand. We should be New Zealand: New Zealand has tested 1 in a 100 people, has a 2% positive rate, and has suffered only 0.8 deaths per million so far...

#coronavirus #notetoself #2020-04-12

Weekend Reading: Plutarch: Life of Cleomenes

Plutarch: Life of Cleomenes http://penelope.uchicago.edu/Thayer/E/Roman/Texts/Plutarch/Lives/Cleomenes*.html: 'As long, then, he said, as the ephors kept within bounds, it had been better to bear with them; but when with their assumed power they subverted the ancient form of government to such an extent as to drive away some kings, put others to death without a trial, and threaten such as desired to behold again in Sparta her fairest and most divinely appointed constitution, it was not to be endured...

...If, then, it had been possible without bloodshed to rid Sparta of her imported curses, namely luxury and extravagance, and debts and usury, and those elder evils than these, namely, poverty and wealth, he would have thought himself the most fortunate king in the world to have cured the disease of his country like a wise physician, without pain; but as it was, he said, in support of the necessity that had been laid upon him, he could cite Lycurgus, who, though he was neither king nor magistrate, but a private person attempting to act as king, proceeded with an armed retinue into the market-place, so that Charillus the king took fright and fled for refuge to an altar.

That king, however, Cleomenes said, since he was an excellent man and a lover of his country, speedily concurred in the measures of Lycurgus and accepted the change of constitution; still, as a matter of fact Lycurgus by his own acts bore witness to the difficulty of changing a constitution without violence and fear. To these, Cleomenes said, he had himself resorted with the greatest moderation, for he had but put out of the way the men who were opposed to the salvation of Sparta. For all the rest, he said, the whole land should be common property, debtors should be set free from their debts, and foreigners should be examined and rated, in order that the strongest of them might be made Spartan citizens and help to preserve the state by their arms. "In this way," he said, "we shall cease to behold Sparta the booty of Aetolians and Illyrians through lack of men to defend her."

After this, to begin with, Cleomenes himself placed his property in the common stock, as did Megistono��s his step-father and every one of his friends besides; next, all the rest of the citizens did the same, and the land was parcelled out. Cleomenes also assigned a portion of land to each man who had been exiled by him, and promised to bring them all home after matters had become quiet. Then he filled up the body of citizens with the most promising of the free provincials, and thus raised a body of four thousand men-at���arms, whom he taught to use a long pike, held in both hands, instead of a short spear, and to carry their shields by a strap instead of by a fixed handle.

Next he devoted himself to the training of the young men and to the "agoge," or ancient discipline, most of the details of which Sphaerus, who was then in Sparta, helped him in arranging. And quickly was the proper system of bodily training and public messes resumed, a��few out of necessity, but most with a willing spirit, subjecting themselves to the old Spartan regime with all its simplicity. And yet, desiring to give the name of absolute power a less offensive sound, he associated with himself in royal power his brother Eucleidas. And this was the only time when the Spartans had two kings from the same house...

#weekendreading

Worthy Reads for April 11, 2019

Worthy Reads from Equitable Growth:

Best thing of the week���a must-see: an incredibly engaging interview with Columbia's Alexander Hertel-Fernandez: Worker and Management Preferences for Specific Aspects of Labor Organization...

The Quarterly Journal of Economics puts its stamp of approval on Cengiz, Dube, Linder, and Zipperer. This makes me even more surprised that the minimum-wage effects wars are till going on. At least for minimum wages near current U.S. levels, there literally is no downside to raising the minimum wage: Arindrajit Dube: On Twitter: "Pleased to announce that our paper quantifying the overall effect of US minimum wages on low-wage jobs is now forthcoming at the Quarterly Journal of Economics...

I confess I do not understand why Jeff Miron and Dean Baker disagree with our Fearless Leader Heather Boushey's tame observation that more informaiton relevant to societal well-being is better than less: Emily Stewart: GDP: Democrats Want to Know Who���s Benefiting from the Economy���s Growth: "Democrats are pushing for is for the BEA to produce a new metric, the 'income growth indicator', to be reported quarterly and annually with GDP numbers starting in 2020 that would show who is and isn���t benefiting from economic growth...

Methinks this oldie-but-very-goodie from Jesse Rothstein does go a little bit too far in its enthusiasm for the fact that the EITC is in the tax code. In fact, there are pluses and minuses. And the EITC is in the tax code not because of rational reasons but because Senator Russell Long chaired the Senate Finance committee back in the day: Jesse Rothstein (2015): The Earned Income Tax Credit: "The Earned Income Tax Credit is a federal refundable tax credit designed to encourage work, offset federal payroll and income taxes, and raise living standards.... The EITC has grown to be one of the largest and least controversial elements of the U.S. welfare state, with 26.7 million recipients sharing $63 billion in total federal EITC expenditures in 2013. The placement of the EITC within the tax code has three important effects...

Equitable Growth alumnus Nick Bunker sends us to the always-valuable Brookings Hamilton Project on how the post-2000 prime-age female labor-force participation define was not due to anything other than a weak economy in which it was hard to get well-paying jobs: Trends in Women���s Labor Force Participation: "much like 2000 is now recognized as a pivotal year for the U.S. labor market, 2015 is beginning to look like another turning point. In part due to the ongoing strengthening of the labor market, both prime-age women���s labor force participation and prime-age men���s participation have increased sharply from 2015 through the beginning of 2019. Figure 1 shows that prime-age women now participate at higher levels than prior to the Great Recession and have now made up 70 percent of their January 2000���September 2015 decline...

 

Worthy Reads Elsewhere:

Adam Kotsko's mode of discourse is well outside our wheelhouse here at Equitable Growth, but I do think that this is important. It is generally a mistake in America to think that religious arguments will persuade anyone of anything political or moral. In America, at least, religion tends to act as a righteousness multiplier rather than a set of principles and ideas that can be used for persuasion and to get peoplle to think reflectively: Adam Kotsko: The Political Theology of Trump: "This brings us to a scriptural parallel that evangelicals themselves have drawn with Trump: Cyrus the Great, the Persian Emperor who allowed Israelite priestly elites to settle back in the Promised Land.... The Prophet Isaiah sings this pagan ruler���s praises, even calling him God���s 'anointed'... 'Messiah' in Hebrew or 'Christ' in Greek���and promising divine assistance in his ongoing conquest.... IT���S THE BIBLICAL VERSION of 'only Nixon can go to China'. Only a pagan ruler who knows nothing of the God of Israel... can restore the righteous remnant to the Promised Land...

And, speaking of totalizing revealed ideologies, the Chinese Communist Party is finding little difficulty in proof-texting its current doctrines out of the scripture that is the collected writings of Marx and Engels. Their point that Donald Trump and Brexit suggest that unequal slow-growth political democracies do not have it right is powerful. And it is hopeful that Xi Jinping and company view gross inequality as a problem to be solved���"the result of an 'early stage of development'"���rather than a reality to be suffered: Tom Hancock: China���s Selective Version of Marxist Theory Is a Puzzle: "A TV show, Marx Got it Right, and an illustrated edition of his masterpiece Das Kapital aimed at 8- to 14-year-olds.... The Communist party is stepping-up promotion of Marxist thought.... Beijing pushes a selective version of Marxism... likes the theory of historical change that helps portray Communist party rule as inevitable.... Marxism means one-party rule... means fixing inequality, the result of an 'early stage of development'... gives US president Donald Trump and Brexit as examples of 'serious problems of capitalist development'...

The question of whether it is just income or wealth that is the source of political-economic maldistribution is an interesting and complex one. But I think Auerbach and Hassett are wrong here in neglecting r > g and pure luck as powerful sources generating inequality that work in addition to inequality of labor income, and that need to be controlled just as inequality in labor income needs to be congtrolled in order to attain a good society: Alan J. Auerbach and Kevin Hassett (2015): Capital Taxation in the Twenty-First Century: "To the extent that labor income inequality is the underlying source of overall inequality, it is hard to see why the appropriate policy response is a wealth tax, rather than, for example, an increase in the progressivity of labor income taxes, as indeed Piketty and his collaborators have proposed (Piketty, Saez, and Stantcheva 2014). It may well be true that the growing inequality of labor income is leading to a growing concentration of capital ownership. Even so, the underlying factor driving inequality would be the dispersion of labor income...

Moreover, who says that workers are paid anything like their marginal products? Luck and market power seem to me to be much more important than anything that could be called net social value of the work. As I often say, a skilled worker is an unskilled worker with a good union: Paul Campos: Talent Is Not Scarce: "Existing social hierarchies, and especially the compensation structures that undergird them, require the constant denial of the fact that almost everyone is easily replaceable at any time.�� After all, if there are 500 people standing at the ready who could do just as good or better a job than Chairman Smith or President Jones or Senior Executive Vice President for West Coast Promotion Johnson or Distinguished Professor of the Newly Endowed Chair for the Worship of Capitalism Cowan, then why do these people get treated and most of all paid as if they were as unique as unicorns, as precious as Vermeer portraits, as irreplaceable as Billy Shakespeare or Willie Mays? Because if we didn���t treat them (us) in that way, that would mean the entire structure of our society is radically unjust, root and branch.�� And that can���t be true, obviously...

Rather than saying, with Stigler, that industrial policy is too dangerous because it is too vulnerable to rent-seeking, more economists should be writing papers like this: Reda Cherif and Fuad Hasanov: : "Industrial policy is tainted with bad reputation among policymakers and academics and is often viewed as the road to perdition.... Yet the success of the Asian Miracles... stands as an uncomfortable story.... We argue that one can learn more from miracles than failures. We suggest three key principles... (i) the support of domestic producers in sophisticated industries, beyond the initial comparative advantage; (ii) export orientation; and (iii) the pursuit of fierce competition with strict accountability...

And Noah Smith believes that if we found enough research universities in small cities, we will have a booming economy elsewhere than the coasts for both indust8rrial-policy and private-entrepreneurship reasons: Noah Smith: Universities and Colleges Can Revive Declining Rural America: "Big cities aren���t the only places to benefit from knowledge industries���college towns also thrive in the new economy.... College Station, Texas.... Even small towns like Pikeville, Kentucky, home to the modest University of Pikeville, are doing well.... Government money that gets routed to college towns via state subsidies and federal research grants, then spent locally... tuition fees... university research... attracting smart people to the region and drawing in private investment, research universities harness the forces of knowledge-industry clustering to increase the wealth of an entire region. There���s a good chance that these forces can be harnessed to revive parts of the rural U.S.... It���s worth a shot...

If you believe���as so many do���that one important source of the disaster of 2008-10 was that economies had too much potentailly-insecure debt, you should be petrified today: John Authers and Lauren Leatherby: Financial Crisis: Decade of Deleveraging Debt Didn���t Quite Work Out: "This was the decade of de-leveraging that wasn���t. A decade ago... there was agreement... too much debt had caused the crisis, and so there must be a huge de-leveraging. It has not worked out like that.... Companies, particularly in the U.S., took advantage of the rock-bottom interest rates meant to bail out banks to go on their own borrowing spree. And the world found a new borrower of last resort. Ten years ago, China had been enjoying phenomenal economic growth for two decades, and largely avoided debt to fund it. No more. China���s debt has ballooned, transforming the geography of global debt in the process. It���s now bipolar, revolving around the U.S. and China...

ALAS! Parents appear to value not schools that teach their children but rather schools in which their children can rub elbows with the right kind of people. This could help make school choice into a recipe for disaster: Atila Abdulkadiroglu, Parag A. Pathak, Jonathan Schellenberg, and Christopher R. Walters: Do Parents Value School Effectiveness?: "School choice may lead to improvements in school productivity if parents' choices reward effective schools and punish ineffective ones. This mechanism requires parents to choose schools based on causal effectiveness rather than peer characteristics.... [But] arents prefer schools that enroll high-achieving peers.... We find no relationship between preferences and school effectiveness after controlling for peer quality...

U.C. Davis economic historian Eric Rauchway continues his long twilight struggle against the Obama administration's claims that it did better with its crises than FDR did with his in the Great Depression-ridden 1930s. I'm with Eric here: Roosevelt knew less about how the economy worked and what to do, yet in retrospect did much better given the state of things when he took office: Eric Rauchway: The New Deal Was on the Ballot in 1932: "During the 1932 campaign, Franklin Roosevelt explicitly committed himself to nearly all of what would become the important programs of the New Deal. In the months before his March 4, 1933, inauguration, he made his proposed policies even clearer. Yet many Americans have forgotten this clarity of purpose.... One historian [Roger Daniels] recently declared, 'The notion that when Franklin Roosevelt became president he had a plan in his head called the New Deal is a myth that no serious scholar has ever believed'. Outgoing president Herbert Hoover (and voters and politicians and diplomats at the time) knew better...

The China shock was not the only shock American manufacturing has experienced. Yet New England politics did not turn nativist in the 1960s. What was the difference? No Fox News?: John F. Kennedy: New England Industry and the South: "The southward migration of industry from New England has too frequently taken place for causes other than normal competition and natural advantages...

#noted #weblogs #2019-04-11

Lecture Notes: East Asian Miracles

4149 words: https://github.com/braddelong/public-files/blob/master/lecture-east-asia-text.pdf

East Asia was on the downside of the Malthusian cycle when western Europe erupted into the eastern Pacific in the 1800s: populous, with many ingenious and efficient non-machine technologies for squeezing output out of very limited resources, but desperately poor. ���The West��� brought machine technologies and the global market. It also brought a measure of contempt for east Asia. Nearly all western observers thought the idea that the Mysterious East might catch up to the north Atlantic in any reasonable historical timeframe was absolutely ludicrous.

Malthusian poverty meant no domestic middle-class to demand domestic manufactures, and productivity levels in Asia were hopeless as far as manufactured exports were concerned. The military and political power gradient vis-��-vis the north Atlantic meant no ability to impose tariffs, even had a domestic middle class on whose demand one might be able to build a community of engineering practice and progress existed. The lack of a powerful domestic bourgeoisie meant rule by princes for whom broad-based economic growth was simply not a priority. And in general a ���Confucian��� religious orientation meant that right moral attitude was more important than the rationalization of techniques and methods.

As Melissa Dale says: If we were sitting here in the 1950s, we would not have predicted anything like east Asia���s miracles.

Yet we have had four: first the early industrialization of Japan, then the extraordinary drive of Japan to global north status from 1950 to 1975, then the four east Asian tigers, and now coastal China.

All that surprises...

Slides: https://github.com/braddelong/public-files/blob/master/econ-135-lecture-20.pptx

Text: https://github.com/braddelong/public-files/blob/master/lecture-east-asia-text.pdf
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4149 words

#economichistory #economics #economicgrowth #equitablegrowth #globalization #highlighted #lecturenotes #politicaleconomy #2020-04-11

Raw Coronavirus Extrapolations

https://delong.typepad.com/files/coronavirus-extrapolations.pdf

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#corona #notetoself #2020-04-06

Ludwig Wittgenstein: Wittgenstein's Ladder https://en.wik...

Ludwig Wittgenstein: Wittgenstein's Ladder https://en.wikipedia.org/wiki/Wittgenstein%27s_ladder: 'My propositions serve as elucidations in the following way: anyone who understands me eventually recognizes them as nonsensical, when he has used them���as steps���to climb beyond them. (He must, so to speak, throw away the ladder after he has climbed up it.) He must transcend these propositions, and then he will see the world aright...

#noted #2020-04-05