The Poverty of Microfoundationalist Fantasies: "The microfoundationalist’s fantasy has a powerful hold on macroeconomists...:
Kevin Hoover: The Poverty of Microfoundationalist Fantasies: "The microfoundationalist’s fantasy has a powerful hold on macroeconomists...
From the Good Germany--the one that has more to offer the world than austerity and general depression. Bonus: the most expensive special effects for a music video ever:
Alfred Marshall and Mary Marshall (1885), Economics of Industry, Book III: Market Value: Chapter 1: Changes in the Purchasing Power of Money http://tinyurl.com/dl20110818j:
(4) After every crisis, in every period of commercial depression, it is said that supply is in excess of demand. Of course there may easily be an excessive supply of some particular commodities.... But something more than this is meant.... The warehouses are overstocked... in almost every important trade; scarcely any trade can continue undiminished production so as to afford a good rate of proﬁts....
Daniel Davies: What would the German export sector look like?: "German Economic Thought and the European Crisis...
...What would the German export sector look like?
Just consider what the state of Germany’s export sector would be right now if Germany were not part of the euro, and had the real exchange rate of Switzerland.’
I’ve considered it, and I think the answer is actually ‘more or less the same’.
Patricia Crone (2008): What Do We Actually Know About Mohammed?:
It is notoriously difficult to know anything for sure about the founder of a world religion. Just as one shrine after the other obliterates the contours of the localities in which he was active, so one doctrine after another reshapes him as a figure for veneration and imitation for a vast number of people in times and places that he never knew.
Lant Pritchett (2014): Can Rich Countries be Reliable Partners for National Development?:
"Time and time again I have seen NGOs and politicians in rich countries advocate that the poor follow a path that they, the rich, never have followed, nor are willing to follow." -John Briscoe (1948-2014), in memoriam.
FORTY-three years ago, the then-President of the World Bank, Robert McNamara, went to Somalia. As a partner in that country’s attempts at development in 1972, the World Bank pledged a loan of $32 million to build a port in the capital Mogadishu. The port was built and, while development went off track into conflict, the port still exists, still operates, and generates what few resources the struggling Somali state controls. Building a port was welcomed and seen by all as core to the mission of the International Bank for Reconstruction and Development, one of the five institutions that make up the World Bank Group.
"With this sentence, [Michael] Cannon is spitting out his own snake oil..."
Scott Lemieux: On Jonathan Adler and Michael Cannon: "The ACA was, in fact, passed with somewhat less haste than a turtle crawling through a tar pit...
Over at Equitable Growth: most interesting thing about this, looking back, is my failure to fully believe--in spite of Japan since 1990, in spite of the global savings glut, in spite of so many things that make it seem obvious in retrospect--that the naive Hicksian short run--which had already lasted for three years--could last for, potentially, more than ten years:
The Interest Rate That Did Not Bark in the Night: The Surge in U.S. Treasury Debt and the Non-Reaction of Rates (Summer 2011): At the very start of the 2000s in the years of the Clinton budget surpluses--remember those?--the U.S. government was repaying its debt at the rate of $60 billion a quarter: each quarter saw $60 billion less of U.S. Treasury debt out there in the private market for savers to hold.
Must-Read: Dean Baker: The 2001 Recession Actually Was Really Bad News: "I see that I have to disagree with Brad DeLong again...
...Brad wants to see the 2008 downturn as a uniquely bad event due to the overextension of credit and the ensuing financial collapse. I see it as overwhelmingly a story of a burst housing bubble and the resulting fallout in the real sector....
Norm Ornstein: The Birth of Obamacare: "It is worth going back and recounting what actually happened leading up to the enactment of Obamacare...
...and reflect a little bit on what might, and what should, happen going forward.
Did Obama Leap Rashly to Consider Healthcare Instead of Focusing on Jobs or the Economy?
There is no doubt that the president made healthcare reform a top early priority. There was good reason for doing so; past experience, including that of the Clinton health-reform plan, showed that waiting to pass a major social-policy change, in the absence of a great crisis, is a fool’s errand. A president’s momentum, his public support, and the backing of his party peak early, and major social-policy change by definition shakes up the status quo, creating losers along with potential winners and an even larger number of those unsettled by change. The longer presidents wait, the greater the likelihood that their opposition will mobilize and exploit uneasy voters. And the closer midterm elections loom, the more nervousness builds among lawmakers from the president’s party. [READ MOAR]
Doug Henwood (1998): Europe's Fateful Union: "In just a bit over nine months, the euro will be born...
...and the next stage in the process of European economic and monetary union (EMU) will begin. Of the fifteen countries that make up the European Union (EU), eleven (Austria, Belgium, Finland, France, Germany, Ireland, Italy, Luxembourg, the Netherlands, Portugal, and Spain) will begin a three-year process of dissolving their national currencies into a single continental one. Three (Denmark, Sweden, and the UK) are holding off on this step, and one (Greece) just wasn't tough enough to make the cut this time around.
Over at Equitable Growth: It is a commonplace among Anglo-Saxon economists that Saxon-Saxon "ordoliberalism" was a post-World War II success only because somebody else--the United States--was both looking after the level of demand in the system as a whole, and also willing to act as an importer of last resort to allow other countries that had insufficient domestic demand to use the United States consumer to rebalance their individual economies at full employment even when domestic demand was grossly insufficient. READ MOAR
Hoisted from Others' Archives from Two Years Ago:
Jamelle Bouie: The Trayvon Martin Killing and the Myth of Black-on-Black Crime: "Last week, in Chicago, 16-year-old Darryl Green was found dead in the yard of an abandoned home...
This weekly feature really is supposed to be part of my own autocritique--my attempt to keep myself from getting too swelled a head, and to help me mark my beliefs to market.
But everytime I try to get out, they drag me back in...
I've said it before. I will say it again: There is something morally wrong with anybody who pays money to or receives money from The Washington Post. There has to be a limit. And the Post is well beyond it:
Debra Kessler: Washington Post Writer Who Accused Amy Schumer Of Racism Never Saw Her Standup or TV Show: ""'A white woman standing on a stage and insinuating that Mexicans or other men of color are rapists...
...given our history, given that historically when white women made claims, most of the times they were false about black men raping them, somebody ended up hanging from a tree. — Dr. Stacey Patton, author of The Washington Post, Op-Ed.
Jonathan Chait: The Obamacare Resistance Regroups: "The 16th Amendment to the Constitution, authorizing the federal income tax...
...was ratified in 1913. Still, every once in a while, the news will report the arrest of some right-wing kook who has failed to pay his income tax on the grounds that it’s illegal. Also in 1913, the 17th Amendment, requiring the popular election of senators (who before then were often appointed by state legislatures) took effect. And yet many conservatives still want to repeal it--and not just kooks, or at least influential kooks and not just completely marginal and obscure kooks [but Antonin Scalia, Rick Perry, now-Sens. Mike Lee (R-Utah), Jeff Flake (R-Ariz.), and Ted Cruz (R-Texas). And those things happened more than a century ago. So how long will the Obamacare resistance live on? A long, long time....
Simon Maloy: “Moops” now, “Moops” forever: The sad, final yawp of the defeated King v. Burwell mastermind: "Michael Cannon argues that by losing at the Supreme Court...
...he actually won, because blah blah something whatever: If you read the Supreme Court’s 6-3 decision in King v. Burwell, you probably came away thinking that the plaintiffs and the conservative activists who dreamed up the legal challenge lost. That’s because they did. The plaintiffs argued that the Affordable Care Act was written in such a way that the government could not provide insurance subsidies to people in the majority of states. The Court disagreed and the law emerged unscathed. But according to the Cato Institute’s Michael Cannon, one the legal minds behind the King challenge, losing the case doesn’t actually mean that they ‘lost the case.’
Hoisted from Other People's Archives from Five Years Ago: Paul Krugman** (2010): The Conventional Superstition: "Calculated Risk points us to a speech by Kevin Warsh...
that strikes me as almost the perfect illustration of the predicament we’re in, in which policy is paralyzed by fear of invisible bond vigilantes. Warsh isn’t an especially bad example — but that’s the point: this is what Serious People sound like these days. The bottom line of Warsh’s speech — although expressed indirectly — is that it’s time for fiscal austerity, even though the economy remains deeply depressed; and no, the Fed can’t offset the effects of fiscal contraction with more quantitative easing. In short, the responsible thing is just to accept 10 percent unemployment. And why is this the responsible thing? On fiscal policy:
Must-Read: Hoyt Bleakley and Jeffrey Lin: History and the Sizes of Cities: "We contrast evidence of urban path dependence with efforts to analyze calibrated models of city sizes...
Via John the Lutheran: Alex Butterworth: The World That Never Was: "Childhood, individual liberty, the rights of man...
nothing was respected. It was a mighty letting loose of every sort of clerical fury — a St Bartholomew to the sixth power,
Rochefort would later record of the Semaine Sanglante, recalling the terrible massacre of Huguenots by Catholics 300 years earlier.
Richard Mayhew: On Twitter:
Richard Mayhew @bjdickmayhew 4h4 hours ago @xpostfactoid1 http://www.balloon-juice.com/2015/07/06/cash-flow-of-rejecting-free-money/ … Medicaid Rejection has lower net GDP component than @Delong argued in 10/14 due to APTC and CSR $$$
Richard Mayhew @bjdickmayhew 4h4 hours ago @xpostfactoid1 @delong so for Florida, net cash missed is Medicaid Expansion for 100k... Rounding error
Richard Mayhew @bjdickmayhew 4h4 hours ago @xpostfactoid1 @delong what % 100-138℅ are of 0 to 138℅ expansion eligible... Need an intern for this
xpostfactoid @xpostfactoid1 2h2 hours ago Alabama update: perhaps 22% of those who should have been Medicaid-eligible now in QHPs. @bjdickmayhew http://bit.ly/1TaGCei
Richard Mayhew @bjdickmayhew 2h2 hours ago @xpostfactoid1 OK, that is still a big multiplier cost
xpostfactoid @xpostfactoid1 2h2 hours ago @bjdickmayhew Can be calculated state-by-state. I'll work up for FL & MS too shortly.
xpostfactoid @xpostfactoid1 2h2 hours ago @charles_gaba @bjdickmayhew I had 1.9m originally - figuring now 1.6m, w/ attrition, v. 4m in Medicaid gap, per Kaiser. That's 28.5%.
Richard Mayhew @bjdickmayhew @xpostfactoid1 @charles_gaba so net loss of about .5% GDP, not @delong initial .7% rejection state GDP...
Arthur Goldhammer: The Old Continent Creaks: Austerity and the failures of the technocratic elite have created the current populist backlash. France’s experience is instructive—and, possibly, ominous:
What’s the matter with Europe? Wherever one looks these days, there are signs of deep trouble. Economic growth has stagnated. Deflation threatens. Unemployment is rampant in many member states of the European Union. Support for the former mainstream parties of the center-right and center-left is waning. Populist parties of the far right and far left are on the rise. Anti-Islamic movements such as PEGIDA in Germany have attracted worrisome support, while in France the xenophobic National Front has topped all other parties in recent polls. Terrorist attacks by native-born citizens in Paris and Copenhagen have raised fears that the social fabric has irreparably deteriorated—fears compounded by the flight of several thousand young Europeans to join the Islamic State in Syria. And to top it all off, Ukraine has been racked by civil war and threatened with disintegration since Russian-backed separatists rejected the rule of the government in Kiev.
Steve Randy Waldman: Greece: "I’ll end this ramble with...
...a discussion of a fashionable view that in fact, the Greece crisis is not about the money at all, it is merely about creditors wresting political control from the concededly fucked up Greek state in order to make reforms in the long term interest of the Greek public. Anyone familiar with corporate finance ought to be immediately skeptical of this claim. A state cannot be liquidated. In bankruptcy terms, it must be reorganized. Corporate bankruptcy laws wisely limit the control rights of unconverted creditors during reorganizations, because creditors have no interest in maximizing the value of firm assets. Their claim to any upside is capped, their downside is large, they seek the fastest possible exit that makes them mostly whole. The incentives of impaired creditors are simply not well aligned with maximizing the long-term value of an enterprise.
...and things like this show up in my email inbox in rapid order:
Why Is FEMA Hoarding Survival Food?
You're not going to believe what FEMA just tried to pull.
You won't believe what the government is doing now...
>> Click here to watch the banned video now.
It's true, Friend. They are coming. Like it or not.
And they won't leave empty-handed.
Don't wait. You snooze, you lose.
Get the truth about what the government is trying to get away with, before they yank it offline.
>> Secret video exposes what you need to know.
PS...It's going to be every man, woman and child for themselves... food mobs will strip store shelves bare... get prepared by watching this ground-breaking video before it's taken down by government hackers...
Over at Equitable Growth: By coincidence, two people this past weekend have soberly informed me of what they call a "hard truth": that nationwide employment simply had to go down in 2008 and 2009.
You see, they said, we had to move people out of me industry of building houses and the occupations connected to that industry, and it was impossible to do that without lowering employment. READ MOAR
Walter Jon Williams: Waterloo: "Here we view the climactic scene from the 1970 film Waterloo...
...directed by the Russian director Sergei Bondarchuk, who I’ve always thought of as “Sergei Ponderous,” from his heavy-handed directorial style. (It was Bondarchuk who directed the 6 1/2 hour version of War and Peace, which I once viewed on a midnight-till-dawn showing in a London theater. If you survived the French invasion, you got champagne.) Bondarchuk was lucky enough to be able to borrow what seems to be the entire Yugoslav Army.... The sheer scale of the battle, with nearly 200,000 men (and a few women) clawing at each other on a very compact, muddy battlefield, so constricted that it’s hard to believe that any of those bullets missed... the sheer slaughter that produced 40-50,000 dead— the precise number is impossible to determine, because the French were so broken they never managed a head count afterwards:
bottlerocketscience: Startup Geometry Podcast EP 004: Brad DeLong:
J. Bradford DeLong on June 17, 2015 at 12:49 PM in Economics: Finance, Economics: Growth, Economics: History, Economics: Inequality, Economics: Information, Economics: Macro, Philosophy: Moral, Political Economy, Politics, Streams: Cycle, Streams: DeLong FAQ, Streams: Economics, Streams: Equitable Growth, Streams: Highlighted | Permalink | Comments (1)
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M.S.: Inequality: The 1 percent needs better defenders: "Perhaps [it was] John Kenneth Galbraith... [who] said that the way to debate...
Miriam Burstein: Cited by: "Dad the Emeritus Historian of Graeco-Roman Egypt...
...sent me to Donald Kagan's Jefferson Lecture. Despite Kagan's warnings against the dangers of over-generalization, his critique of contemporary historiography was so non-specific--apparently, we're still stuck in 80s crusades against DWM--that I had a hard time finding the 'there' there. I've already had an earful about this lecture from a classicist's perspective, and I'll leave his call for history as a 'sound base for moral judgments' to other historians.
I don't think any words are necessary. I think this passage from the Wall Street Journal's attack on the College Board's AP U.S. History curriculum speaks for itself:
Daniel Henninger: Bye, Bye, American History: "From Key Concept 1.3: ‘Many Europeans developed a belief in white superiority...
...to justify their subjugation of Africans and American Indians, using several different rationales.
Pity the high-school or college student who puts up a hand to contest that anymore. They don’t. They know the Orwellian option now is to stay down.... Weak school administrators and academics empowered tireless activists who [have] forced all of American history and life through the four prisms of class, gender, ethnicity and identity. What emerged at the other end was one idea—guilt. I exist, therefore I must be guilty. Of something. The College Board promises that what it produces next month will be ‘balanced.’ We await the event.
Which part of that Key Concept do Daniel Henninger and the Wall Street Journal editorial board believe should be contested, and wish to contest? The subjugation of Africans? The continued subjugation of African-Americans? The subjugation of American Indians? The belief in white supremacy? The link between subjugation on the one hand and belief in white supremacy on the other? The claim that there were different rationales for white supremacy in different times and places?
Inquiring minds really want to know. The Wall Street Journal--and Daniel Henninger--owe us a long-form follow-up.
It is very nice to see the Financial Times correction of Niall Ferguson--although it does not, in my opinion, go far enough.
A word, however, to Lionel Barber, Gillian Tett, and company: The Financial Times's only current assets are an incredibly skilled and hard-working journalistic team and a reputation as a trusted information intermediary. You are not going to be able to out-pander the Spectator, the Wall Street Journal, the Torygraph, and Fox News as a place where the rich feel comforted rather than afflicted by the news. That means you cannot risk your reputation as a trusted information intermediary by routinely publishing pieces that undermine it.
Jonathan Chait: Niall Ferguson Claims Smeared by Facts, Fights Back: "[Ferguson's] most recent example of ‘correct politicalness’ is the humiliation Ferguson suffered when...
Hoisted from the Archives from Spring 2009: This Is Getting Damned Annoying: Will I Ever Be Allowed to Disagree with Paul Krugman Again About Anything? (Niall Ferguson Edition):
There have been two annoying things about the past decade. The first is that I feel like I have been living in a Ken Macleod novel--and one of the more dystopic ones too, at least up until January 21, 2009 (I am glad he has stopped: Ken: please don't get cranky again).
The second is that the best way to understand the world is through these two rules:
Over on the Twitter Device the very sharp Tim Noah trolls me by writing 33 tweets about how "things went sour" for The Old New Republic when Richard Just got fired:
And following up with:
Hoisted from the Archives: I understand that the Old New Republic was at times (save for firing him) very good to the very sharp Timothy Noah. But he says some things he shouldn't in and ancillary to a very nice tweetstorm:
It was not a good magazine.
Jon Schwarz: Legendary Journalist in Private: "It Is All Fraudulent, All of It, Everywhere": "Politico recently ran a fantastic historical profile...
...of journalist Theodore H. White by the writer Scott Porch. White invented the genre of modern presidential campaign books with The Making of the President, 1960 (and then 1964, 1968 and 1972). The 1960 version, which won a Pulitzer Prize and sold four million copies, describes John F. Kennedy as a ‘forlorn and lonesome young man … lithe as an athlete … handsome and tired, with just a fleck of gray now in his glossy brown hair’ who ‘baffled’ the ‘old-line politicians of Tammany.’ Then after Kennedy was assassinated, White helped Jackie Kennedy create the ‘Camelot’ myth of his presidency.
Hoisted from the Archives from Two Years Ago:: Moby Ben, or, The Washington Super-Whale: Hedge Fundies, the Federal Reserve, and Bernanke-Hatred
In February 2012, a number of hedge fund traders noted one particular index--CDX IG 9--that seemed to be underpriced. It seemed to be cheaper to buy credit default protection on the 125 companies that made the index by buying the index than by buying protection on the 125 companies one by one. This was an obvious short-term moneymaking opportunity: Buy the index, sell its component short, in short order either the index will rise or the components will fall in value, and then you will be able to quickly close out your position with a large profit.
Live from Evans Hall: When I arrived at 506 Evans Hall for this morning's workshop, this book was on the seminar table looking at me.
I think the ghost of John Hicks is weighing in on the inadequacy of Hicks (1937) as the thing you need to know to do policy-relevant macro with success...
David Eckstein: The Precession of the Perihelion of Mercury: "The difference... in the case of Mercury...
...was so big that it demanded an explanation.... Einstein was overjoyed when he calculated near the end of 1915 that his new theory predicted an addition of just 43 arc-seconds per century to the precession of the perihelion of Mercury! He derived the following formula:
where Δφ is the extra rotation per orbit in radians; RS is the Schwarzschild radius of the sun; a is the length of the semi-major axis of the orbit; and ε is the eccentricity of the ellipse.
Now can somebody who is up-to-speed on all of this please tell me what this means in practice?
Dan Roberts, Ben Jacobs, and Spencer Ackerman: Patriot Act to Lapse at Midnight as Senate Fails to Agree on NSA Reform: "Maverick Republican senator Rand Paul forced at least a temporary shutdown of sweeping US surveillance powers...
...on Sunday night after refusing to allow an accelerated vote on compromise legislation designed to more narrowly restrain the National Security Agency. In a double blow for Washington security hawks, represented by embattled Senate majority leader Mitch McConnell, it now looks likely that Congress will have to wait several days before passing that bill, the USA Freedom Act. The reform legislation, which bans the NSA from collecting bulk telephone records, was initially opposed by McConnell. But with the clock ticking down toward the midnight expiration of broader powers initially granted after 9/11 under the Patriot Act, Republican leaders had few options but to get behind the bill as the best way of preserving other surveillance authority. ‘This is now the only realistic way forward,’ said McConnell.... McConnell’s concession was a tacit acknowledgement that the bulk collection of US phone records exposed in June 2013 by the Guardian, thanks to leaks from whistleblower Edward Snowden, will end....
The Right Nation: Why America is Different, by Adrian Wooldridge, John Micklethwait:
Dennis Hastert, the Republican Speaker... a hulking former wrestling coach, is a fairly straightforward conservative: antiabortion, anti-gay marriage, anti-Kyoto, pro-invading Iraq, pro-death penalty.... Hastert got a 100 percent rating from the American Conservative Union in the days when he voted regularly....
Compared with other “red” districts, Hastert’s (Illinois’s fourteenth) is deep scarlet. It begins in the suburbs thirty miles west of the Chicago Loop and then stretches out through miles of cornfields to a point just forty miles short of the Iowa border. To drive across it takes a good three hours. Hastert’s district can claim to be the most Republican in the country, at least if you factor in length of loyalty to the party Unlike nouveaux droites such as Texas, Illinois has been full of Republicans since the party’s founding in 1854.... Hastert’s district is resolutely “normal.” The local citizens think of themselves as typical Americans, and their geographical vision is often bounded by the Great Plains that surround them.