- Morning Must-Read: Chris Dillow: How I Would Defend Inequality | Washington Center for Equitable Growth
- The Federal Reserve Needs to Fulfill Its Global Role: Tuesday Focus for July 1, 2014 | Washington Center for Equitable Growth
- Afternoon Must-Read: Yifan Cao and Adam Shapiro: Will Inflation Remain Low? | Washington Center for Equitable Growth
- Afternoon Must-Read: Unlearning Economics: Capital in Pikettys Capital | Washington Center for Equitable Growth
- Afternoon Must-Read: Ryan Avent: Monetary Policy: Dead Economies Blow No Bubbles | Washington Center for Equitable Growth
- Morning Must-Read; Ralph Nader: October 20, 2000 | Washington Center for Equitable Growth
- Monday DeLong Smackdown Watch: Cosma Shalizi Has Serious Doubts About How Well We in Berkeley Economics Are Doing at Our Broad Educational Mission... | Washington Center for Equitable Growth
- Liveblogging World War I: July 1, 1914 (Brad DeLong's Grasping Reality...)
- Recess Appointments, Congressional Sessions, and the Constitution: Live from La Farine CCVIII: July 1, 2014 (Brad DeLong's Grasping Reality...)
- Tuesday Archives: A Question About What I Do Not Get About Michael Oakeshott... (Brad DeLong's Grasping Reality...)
- The Federal Reserve Needs to Fulfill Its Proper Global Role: Tuesday Focus for July 1, 2014 (Brad DeLong's Grasping Reality...)
- Monday DeLong Smackdown Watch: Cosma Shalizi Has Serious Doubts About My Claim That We at Berkeley "Broadly, Manage to Accomplish This" (Brad DeLong's Grasping Reality...)
- (1/4) Let's ask a theologian on Twitter! What could possibly go wrong? Hey! .@ebreunig! Can you clue me in to what those who #hobbylobby
- (2/4) .@ebreunig: believe that ensoulment occurs at fertilization and thus preventing implantation is an abortion really #hobbylobby
- (3/4) .@ebreunig: think? Do they really believe that half of all created souls never get to experience any form of life at #hobbylobby
- (4/4) .@ebreunig: all and thus never have any opportunity to learn about God or exercise moral agency other than as a blastocyte? #hobbylobby
Political and Moral Responsibility:
- (1/6) Ralph Nader (2000): "The only difference between Al Gore and George W. Bush is the velocity with which #politicalresponsibility
- (2/6) Ralph Nader (2000): their knees hit the floor when corporations knock.... George W. Bush we can dismiss with #politicalresponsibility
- (3/6) Ralph Nader (2000): a summary comment: nothing more than a corporation disguised as a human being. #politicalresponsibility
- (4/6) Ralph Nader (2000): There's no end to [Gore's] betrayal.... All I can see is this Pinocchio nose coming.... #politicalresponsibility
- (5/6) Ralph Nader (2000): He exudes a lack of credibility.... If it were a choice between a provocateur and #politicalresponsibility
- (6/6) Ralph Nader (2000): an 'anesthetizer', I'd rather have a provocateur. It would mobilize us..." #politicalresponsibility
- (1/5) I find myself frustrated with usually-reliable Gerald Seib. Our political disruption problems today are http://equitablegrowth.org/2014/06/30/whats-really-going-american-politics-governance-monday-focus-june-30-2014/
- (2/5) driven by 3 factors: the Reagan-Thatcher bet on inequality in 1990, the Gingrich bet on obstructionism in 1993
- (3/5) (and doubling-down on it in 2009), and the Obama bet in late 2009 that the macroeconomic dog would sleep
- (4/5) and should be let to lie as a strong recovery took hold. Our political disruption problems not driven by
- (5/5) "globalization, alienation, populism". That framing doesn't tell us what needs to be and can be done. http://equitablegrowth.org/2014/06/30/whats-really-going-american-politics-governance-monday-focus-june-30-2014/
- @noahpinion: I've said it before and I'll say it again: If Japan doesn't deserve to have a real military, neither do France, Mongolia, Turkey, or Spain.
- .@Noahpinion If horse-archers or janissaries & tercios were still key military tech, I would agree about Mongolia, Turkey, & Spain
- .@Noahpinion I think France & Japan have no business having armies until, say, at least 3000…
- @noahpinion: ??? But propeller planes and WW2 battle rifles are obsolete too...
- .@Noahpinion the levee en masse and air-sea battle are still going strong, however…
Global Monetary Policy:
- (1/8) It is likely that the Federal Reserve's policies are insufficiently expansionary to properly carry out its http://www.project-syndicate.org/commentary/j--bradford-delong-argues-that-the-us-will-face-a-dangerous-world-unless-the-federal-reserve-fulfills-its-global-role
- (2/8) domestic stabilization policy task. But that argument has been lost. However, the Federal Reserve
- (3/8) also has a global role: desires to avoid disruption of the tradables sector means that no country wants to
- (4/8) vary too much from U.S. monetary policy. In a good world, the Federal Reserve would
- (5/8) use this leadership power to offset the deflationary bias built into the Eurozone. Such a policy
- (6/8) is in the U.S.'s long-run political-economic interest: a world in which grinding Eurozone deflation
- (7/8) and emerging market crises driven by disruptions of the carry trade summon fascist spectres
- (8/8) is not a comfortable world for the U.S. to live in. http://www.project-syndicate.org/commentary/j--bradford-delong-argues-that-the-us-will-face-a-dangerous-world-unless-the-federal-reserve-fulfills-its-global-role
- .@jbarro don’t U mean “unless the law impinges on an item of dogma of a sect that five justices belong to”?
- @scalzi: This has been another episode of I Need Better Enemies, Because the Ones I Have Are Asinine Tools. Thank you for your attention.
Adrianna Macintyre: The Hobby Lobby decision is only about birth control: "The Supreme Court decided in a 5-4 split that 'closely-held' corporations cannot be compelled to cover birth control in their insurance benefits.... The opinion is written narrowly enough that it doesn't allow companies to touch benefits that aren't contraceptives.... Justice Alito addresses the issue specifically in the majority opinion: 'This decision concerns only the contraceptive mandate and should not be understood to hold that all insurance-coverage mandates, e.g., for vaccinations or blood transfusions, must necessarily fall if they conflict with an employer’s religious beliefs.' That means that corporations--no matter how closely held--cannot use this decision to start denying coverage for other services based on religious beliefs..."
Scott Lemieux: Hobby Lobby and the War on Women: "Shorter Sam Alito: 'When Congress said that the executive cannot impose a “substantial burden” on the religious beliefs of “persons,” it meant that it cannot impose “any burden, no matter how trivial and no matter what the burden to third parties” on “closely held corporations.” However, our consideration is limited to the present circumstances, for the problem of women and their strange parts generally presents many complexities...'"
Nick Bunker: The Decline of Unions in America Abetted More by Supreme Court: "Justice Samuel Alito, writing for a five-justice majority, found that some public-sector workers cannot be compelled to pay certain fees to unions.... After an earlier Supreme Court decision, Communication Workers of America v. Beck, workers covered by collective bargaining agreements can’t be compelled to pay membership fees. But they must pay agency fees to cover the union’s collective bargaining efforts. What was at stake in today’s Harris v. Quinn decision was the ability of public-sector unions to compel workers to pay the agency fee.... Private-sector unionization rates have dropped significantly from 24.2 percent in 1973 to 6.7 percent in 2013 while public sector rates have actually increased from 23 percent to 35.3 percent over the same period. The decline of private-sector union membership is a major contributor to the rise in income inequality over the past 30 plus years. This decline is responsible for between 15 percent to 20 percent of the rise in wage inequality for male workers between 1973 and 1993, according to... David Card..."
Should Be Aware of:
- Rebecca Vallas and Shawn Fremstad: Nine Facts That Prove Disability Insurance Isn’t A Giant Boondoggle
- John Paget: The New "Examen": or, An Inquiry Into the Evidence Relating to Certain Passages in Lord Macaulay's History
- Koichi Hamada: The "Third Arrow" of Shinzo Abe's Japanese Growth Strategy
- David Hume: Of the Balance of Trade
Jessica Valenti: The Hobby Lobby ruling proves men of the law still can't get over 'immoral' women having sex: "Thirty-five years ago... Ellen Willis wrote, 'it is depressing to have to insist that sex is not an unnecessary, morally dubious self-indulgence but a basic human need, no less for women than for men'. If it was depressing in 1979, it looks downright miserable today.... The underlying values that drove this company to sue... is the belief that women having pre-marital or non-procreative sex is wrong. There is a reason that the first large-scale cultural reaction to the issue of insurance coverage for birth control was a female law student being called a 'slut'. Sandra Fluke's testimony to a congressional committee in favor of contraceptive coverage for a friend's serious medical condition set off an apoplectic frenzy of sexually-based attacks on her.... Legal decisions about contraception have always been based, at least in part, on concerns about women's potential promiscuity. The supreme court decision in Eisenstadt v Baird... was sparked by the arrest of William Baird after he handed a condom to an unmarried woman... his action violated Massachusetts law on "crimes against chastity". Decades later, we've seen the conservative obsession with women's sexual purity restrict access to Plan B and the HPV vaccine.... The message about women and sex remains the same..."
Winston Churchill (1940): "The fierce and bitter controversies which hung around [Neville Chamberlain] in recent times were hushed by the news of his illness and are silenced by his death. In paying a tribute of respect and of regard to an eminent man who has been taken from us, no one is obliged to alter the opinions which he has formed or expressed upon issues which have become a part of history; but at the Lychgate we may all pass our own conduct and our own judgments under a searching review. It is not given to human beings, happily for them, for otherwise life would be intolerable, to foresee or to predict to any large extent the unfolding course of events. In one phase men seem to have been right, in another they seem to have been wrong. Then again, a few years later, when the perspective of time has lengthened, all stands in a different setting. There is a new proportion. There is another scale of values. History with its flickering lamp stumbles along the trail of the past, trying to reconstruct its scenes, to revive its echoes, and kindle with pale gleams the passion of former days. What is the worth of all this? The only guide to a man is his conscience; the only shield to his memory is the rectitude and sincerity of his actions. It is very imprudent to walk through life without this shield, because we are so often mocked by the failure of our hopes and the upsetting of our calculations; but with this shield, however the fates may play, we march always in the ranks of honour. It fell to Neville Chamberlain in one of the supreme crises of the world to be contradicted by events, to be disappointed in his hopes, and to be deceived and cheated by a wicked man. But what were these hopes in which he was disappointed? What were these wishes in which he was frustrated? What was that faith that was abused? They were surely among the most noble and benevolent instincts of the human heart-the love of peace, the toil for peace, the strife for peace, the pursuit of peace, even at great peril, and certainly to the utter disdain of popularity or clamour. Whatever else history may or may not say about these terrible, tremendous years, we can be sure that Neville Chamberlain acted with perfect sincerity according to his lights and strove to the utmost of his capacity and authority, which were powerful, to save the world from the awful, devastating struggle in which we are now engaged. This alone will stand him in good stead as far as what is called the verdict of history is concerned..."
Ruth Bader Ginsburg: Dissent on the Hobby Lobby Contraception Decision: "Religious organizations exist to foster the interests of persons subscribing to the same religious faith. Not so of for-profit corporations...." "Any decision to use contraceptives made by a woman covered under Hobby Lobby's or Conestoga's plan will not be propelled by the Government, it will be the woman's autonomous choice, informed by the physician she consults...." "It bears note in this regard that the cost of an IUD is nearly equivalent to a month's full-time pay for workers earning the minimum wage...." "Would the exemption…extend to employers with religiously grounded objections to blood transfusions (Jehovah's Witnesses); antidepressants (Scientologists); medications derived from pigs, including anesthesia, intravenous fluids, and pills coated with gelatin (certain Muslims, Jews, and Hindus); and vaccinations[?]... Not much help there for the lower courts bound by today's decision...." "Approving some religious claims while deeming others unworthy of accommodation could be 'perceived as favoring one religion over another,' the very risk the Establishment Clause was designed to preclude."
Lawrence Summers: U.S. Economic Prospects: Secular Stagnation, Hysteresis, and the Zero Lower Bound: "The nature of macroeconomics has changed dramatically in the last seven years. Now, instead of being concerned with minor adjustments to stabilize about a given trend, concern is focused on avoiding secular stagnation. Much of this concern arises from the long- run effects of short-run developments and the inability of monetary policy to accomplish much more when interest rates have already reached their lower bound. This address analyzes contemporary macroeconomic problems and proposes solutions to put the U.S. economy back on a path toward healthy growth."
Ryan Avent: Monetary policy: Dead economies blow no bubbles: "The stopped clock that is the Bank for International Settlements is showing the same face.... In 2011... the BIS argued that global growth needed to slow in order to reduce inflationary pressure. In 2012 it warned that central banks shouldn't do any more to boost growth lest they create financial instability and discourage structural reform.... In its latest annual report, it argues that what the world needs now is higher interest rates. One of these days the BIS may just turn out to be right. Not this year.... Low rates are not doing much to help the real economy, BIS says, but are contributing to another worrying credit boom.... Because it knows the result it wants (higher interest rates) it misreads the particular risks of the moment.... It was until very recently taken for granted that loose money meant policy that allows for excessively fast demand growth.... Rich economies currently suffer from none of those ailments. One could conclude then that policy is not too loose. Instead, the BIS, which is pretty sure that it is, finds a different measure of policy looseness with which to justify its call for higher rates: the financial cycle.... Raising rates now would almost certainly be counterproductive.... As markets priced in a perpetual slump (and lower inflation or deflation) long-term interest rates would edge even lower. Weak demand would also reduce the growth boost to structural forms, making them a harder sell, and would lead to still more deterioration in public balance sheets..."
Ralph Nader: October 20, 2000: "The only difference between Al Gore and George W. Bush is the velocity with which their knees hit the floor when corporations knock.... George W. Bush we can dismiss with a summary comment: nothing more than a corporation disguised as a human being. There's no end to [Gore's] betrayal.... All I can see is this Pinocchio nose coming.... He exudes a lack of credibility.... If it were a choice between a provocateur and an 'anesthetizer', I'd rather have a provocateur. It would mobilize us..."
Unlearning Economics: Capital in Pikettys Capital: "Although Piketty relates his framework back to the neoclassical production function, it plays only a supporting role (he refers to Cobb-Douglas somewhat disparagingly as a 'simple story'), and his conception of 'capital', as defined above, is far more general than a literal interpretation of the production function might suggest.... Rognlie's argument takes the estimates of the elasticity as central.... Piketty only references elasticity estimates for support, and actually stakes most of his claim that diminishing returns will not become a problem on historical observation: 'On the basis of historical data, one can estimate an elasticity between 1.3 and 1.6. But not only is this estimate uncertain and imprecise. More than that, there is no reason why the technologies of the future should exhibit the same elasticity as those of the past. The only thing that appears to be relatively well established is that the tendency for the capital/income ratio β to rise.... To be sure, it is likely that the return on capital, r, will decrease as β increases. But on the basis of historical experience, the most likely outcome is that the volume effect will outweigh the price effect, which means that the accumulation effect will outweigh the decrease in the return on capital.' This is not to say that Rognlie's arguments are not worth considering, and he makes some good points... that the returns to new, IT-based technologies are not especially high... that, absent housing housing bubbles, capital's share of income has declined in many countries over the past few decades..."
Yifan Cao and Adam Shapiro:Will Inflation Remain Low?: "The well-known Phillips curve suggests that future inflation depends on current and past inflation and a measure of economic slack or resource utilization. Using the unemployment gap to measure slack, a simple Phillips curve currently predicts that inflation will remain quite low through 2015. Two variations of the model, which impose a higher anchor for inflation expectations or focus only on a short-term unemployment gap, still predict that inflation will remain low, albeit higher than implied by the basic model..."
Chris Dillow: How I would defend inequality: "Defenders of inequality are doing a desperately poor job. Tim Worstall's claim that the tax and benefit system already does a lot of redistribution fails to engage with the argument that pre-tax inequality might be a bad thing. And Greg Mankiw's claim that the rich deserve their fortune barely counts as an effort. Even if we concede--heroically--that high salaries are due to high marginal productivity, questions remain such as: what about Rawls' claim that talents are arbitrary from a moral point of view? Do people really deserve to have been born at a time when their marginal productivity is high[?]... And even if people do deserve credit for cultivating their own ability, they hardly deserve credit for the fact that others' inability to do so renders their ability scarce.... More intelligent rightists, such as Hayek or Nozick, have acknowledged that the link between merit and income is weak. So, is it possible to defend inequality better? The issue here is not one of free markets: it's perfectly possible for a free marketeer to worry about inequality precisely because so much of it arises from market imperfections or state interventions such as bank subsidies, QE, crony capitalism or copyright laws.
"Subject to that caveat, here's how I would try to defend inequality: 1. [If] bosses and bankers... were paid less, they would seek other ways of satisfying their self-regard.... There's a reason why the word 'efficiency' appears in the phrase 'efficiency wage models'. It's because it might be efficient to bribe workers not to exploit their power.... Some policies to curb high salaries would merely shift incomes between the rich.... One of the best ways to increase equality would be to create countervailing power.... But there is no demand for such policies.... It's our neighbour's new car or our colleague's pay rise that upsets us from day to day, not footballers' million-pound salaries.... One big fact... warns us not to expect a growth bonanza from egalitarian policies.... [because] long-term economic growth doesn't vary much across countries or time.... I'm not sure about these arguments.... But I suspect they are better than wibble about desert."