Marijana: MARCH 30, 2011: Yesterday at the Web 2.0 conference in San Francisco, Google’s Chief Economist Hal Varian dedicated his keynote speech to explaining the economic value of Google advertising and search... more than $119 billion[/year]...
Marijana: MARCH 30, 2011: Yesterday at the Web 2.0 conference in San Francisco, Google’s Chief Economist Hal Varian dedicated his keynote speech to explaining the economic value of Google advertising and search... more than $119 billion[/year]...
Pat Kline and Enrico Moretti: People, Places and Public Policy: Some Simple Welfare Economics of Local Economic Development Programs:
Subsidizing poor or unproductive places is an imperfect way of transferring resources to poor people.... Mobility responses may lead the local cost of living to change, which in turn can lead landlords, some of whom may not live in the community, to capture some of the benefits associated with a policy. This is more likely when the housing market is already tight or when there are sharp restrictions on building. For this reason, it may be advisable to target areas with depressed housing markets and high vacancy rates that have enough slack to absorb a demand increase without a large increase in the cost of living.... A potentially compelling case for place based policies can be made based upon the remediation of localized market imperfections. When private and social returns diverge, local governments may be able to raise the welfare of their residents by re-aligning private incentives through taxes or subsidies or the provision of local public goods.... The presence of agglomeration economies does not imply that every state or country should attempt to generate a Silicon Valley equivalent from scratch...
Dave Reifschneider, William Wascher, and David Wilcox: Aggregate Supply in the United States: Recent Developments and Implications for the Conduct of Monetary Policy:
The recent financial crisis and ensuing recession appear to have put the productive capacity of the economy on a lower and shallower trajectory than the one that seemed to be in place prior to 2007. Using a version of an unobserved components model introduced by Fleischman and Roberts (2011), we estimate that potential GDP is currently about 7 percent below the trajectory it appeared to be on prior to 2007.
We also examine the recent performance of the labor market. While the available indicators are still inconclusive, some indicators suggest that hysteresis should be a more present concern now than it has been during previous periods of economic recovery in the United States. We go on to argue that a significant portion of the recent damage to the supply side of the economy plausibly was endogenous to the weakness in aggregate demand—contrary to the conventional view that policymakers must simply accommodate themselves to aggregate supply conditions.
Endogeneity of supply with respect to demand provides a strong motivation for a vigorous policy response to a weakening in aggregate demand, and we present optimal-control simulations showing how monetary policy might respond to such endogeneity in the absence of other considerations. We then discuss how other considerations— such as increased risks of financial instability or inflation instability—could cause policymakers to exercise restraint in their response to cyclical weakness.
Carmen M. Reinhart and Takeshi Tashiro: Crowding Out Redefined: The Role of Reserve Accumulation
It is well understood that investment serves as a shock absorber at the time of crisis. The duration of the drag on investment, however, is perplexing. For the nine Asian economies we focus on in this study, average investment/GDP is about 6 percentage points lower during 1998-2012 than its average level in the decade before the crisis; if China and India are excluded, the estimated decline exceeds 9 percent. We document how in the wake of crisis home bias in finance usually increases markedly as public and private sectors look inward when external financing becomes prohibitively costly, altogether impossible, or just plain undesirable from a financial stability perspective. Also, previous studies have not made a connection between the sustained reserve accumulation and the persistent and significantly lower levels of investment in the region. Put differently, reserve accumulation involves an official institution (i.e., the central bank) funneling domestic saving abroad and thus competing with domestic borrowers in the market for loanable funds. We suggest a broader definition of crowding out, driven importantly by increased home bias in finance and by official capital outflows. We present evidence from Asia to support this interpretation.
Lance Knobel: So, Brad, one of your areas is economic history. I am curious: as we face this increasing automation, robotization, is this something that’s likely to be something we have seen before in economic history or is this time going to be different?
Brad DeLong: Well, it is always going to be different, because history does not repeat itself--although it does rhyme. The question is: how is it going to be different?
Looking back at all the major transformations in history before--as we have seen entire categories of things we do to add value to our society vanish--we always found new valued things for people to do. Technological unemployment has been a yearly thing, a decade thing, a generational thing perhaps--but never before more than a generational thing.
Matthew Yglesias: BART strike: Here's how to think about it.:
The recent strike of Bay Area Rapid Transit workers looking for a raise has prompted a fascinating window in the (often-dark) souls of privileged Bay Area high-tech workers. That, in turn, has prompted an outpouring of self-righteousness from east coast writer types about the evils of the privileged Bay Area high-tech workers. But at the end of the day, a strike at BART or any other mass transit agency isn't about privileged high-tech workers it's about the mass transit system.
Joshua Bloom: Wealth and Labor in the Cognitive Automation Era:
Disruptive technologies have always been greeted with a concern—and many times a back reaction—by the institutions that they are, or are meant to, disrupt. In the startup world, we think about disruption as replacing established technologies and ways of doing things with compelling (and better) alternatives, challenging incumbent market dominants. But disruption also means changing how people work, and therefore also means upheaval in labor markets. [October 25], in the Uncharted Forum here in Berkeley, I discussed artificial intelligence on stage with former Deputy Assistant Secretary of the Treasury Brad DeLong (also a professor with me at Berkeley). Uncharted is a new ideas-exchange event modeled in part after SXSW, Ted and Davos.
Brad DeLong : James Scott and Friedrich Hayek: October 24, 2007:
JAMES SCOTT AND FRIEDRICH HAYEK
My review of James Scott (1998), Seeing Like a State: How Certain Schemes to Improve the Human Condition Have Failed (New Haven: Yale University Press: 0300070160):
There is a lot that is excellent in James Scott's Seeing Like a State:
On one level, it is an extraordinary well-written and well-argued tour through the various forms of damage that have been done in the twentieth century by centrally-planned social-engineering projects--by what James Scott calls "high modernism" and the attempt to use high modernist principles and practices to build utopia. As such, every economist who reads it will see it as marking the final stage in the intellectual struggle that the Austrian tradition has long waged against apostles of central planning. Heaven knows that I am no Austrian--I am a monetarist-Keynesian, a liberal, and a social democrat--but within economics even monetarist-Keynesian liberal social democrats acknowledge that the Austrians won total and decisive victory in their intellectual war with the central planners long, long ago. This book marks the final stage because it shows the spread of what every economist would see as "Austrian ideas" into political science, sociology, and anthropology as well. No one can finish reading Scott without believing--as Austrians have argued for three-quarters of a century--that centrally-planned social-engineering is not an appropriate mechanism for building a better society.
John Podesta and Neera Tanden: Proponents of austerity are out of ideas. We have the alternative:
We can have strong economic growth without shredding the social safety net... by investing in the true engine of economic growth: the middle class. These are the policies real people believe in.... Conservative politicians are out of ideas. We've tried their solutions. Their trickle-down ideology of austerity for the poor and tax cuts for the rich has dominated policymaking for the better part of three decades. And what has it gotten us? Increasing inequality. Stagnating wages. One in four American children living in poverty.... The worst economic crisis since the Great Depression. And yet today's conservatives call for more of the same....
At present, 24 States (and DC) have decided to move ahead with the Medicaid expansion provided for in Obamacare... 21 have rejected expansion... 6 are still considering their options. If the current decisions hold, it will result in a self-imposed redistribution of money from poorer (and typically Red states), to richer (and typically Blue ones). According to an analysis I [and Callie Gable] have done... in 2016... the 24 expanding states will receive $30.3 Billion... those not expanding will forego... $35.0 Billion... the fence sitters have... $15.2 Billion at stake....
The rejectors have 1/3 of the wealth of the nation--call it $5 trillion/year. They are throwing 0.7% of that away to make a political point. If this federal money was, say, to host an Air Force wing they would be begging for it. But since it is simply to help their poor afford to go to the doctor and make the lives of their medical professionals easier by not forcing them to play a shell game to raise the resources to treat the uninsured...
I am increasingly convinced that the Republicans of the Prairies and the South just do not understand how to play the game of economic growth or, indeed, of capitalism in the 21st century. Betting your economic growth strategy on low wages, a lack of infrastructure, low taxes, union-busting, natural resources, and the direction of farm subsidies, defense spending, and NASA to your districts carries you only so far, after all.
In the short-run of our currently-depressed economy we want to apply the within-monetary-union Keynesian multiplier to these flows: Medicaid-rejcting red states are thus making themselves 2% poorer in the short-run. For medical-care hubs like Dallas, Omaha, Atlanta, and Kansas City, the effects are likely to be larger: 3% less in terms of economic activity relative to the baseline, while the Bostons, the Denvers, and the Albuquerques will be on baseline. In the long-run--should they continue this insane and self-destructive policy--we want to apply Enrico Moretti's long-run regional economic distribution multipliers--which means that we are talking a fall relative to baseline growth of 6% of regional GDP as far as medical-hub cities are concerned.
Doctors of Overland Park, Kansas, and businessmen and -women of Kansas City, Dallas, Omaha, and Atlanta to the red courtesy phone, please...
Ashok Rao: Feed the Beast:
Since 1988 education (purple) has increased almost seven fold. Healthcare (red) five fold. Food and beverage prices have only doubled, apparel costs have flatlined, while technology and entertainment prices have plummeted. Basically prices for everything the government is good for have a positive slope and everything it’s bad for have a negative slope. I don’t think any other graph could more clearly explode hopes for a smaller, or even flatlined, government.
Stolen from FT Alphaville, in turn stolen from John McDermott, in turn stolen from Branco Milanovic:
Note that these are not the changes in income of individuals in the world economy. Rather, they are the changes in the incomes associated with particular percentile slots in the world economy. Your average citizen of China is in a much higher percentile of the income distribution today than twenty years ago.
Also note that Milanovic's numbers on the prosperity of the pre-1991 Communist Bloc have always looked to me to be considerably higher than reality--they have never seemed to me to make adequate allowances for quality, variety, and the hassle factor involved in obtaining goods and services in a centrally-planned really existing-socialist economy.
Plus I am a techno-optimist: I see the coming of internet access as contributing an enormous amount to human well-being via consumer surplus that is simply not captured by standard GDP accounts.
Neverthless, the (relative) failure of development for the 75-90 percentile of the world income distribution over 1988-2008 is a fact, a fascinating one, and a somewhat terrifying one.
Morning session I: Robots, architecture
October 25 @ 11:40 am - 12:40 pm
I, for one, welcome our new robot overlords. Brad DeLong in conversation with Joshua Bloom
What will increasing automation mean for our economy and our society? Will it exacerbate unemployment, or will it spur new industries? Are there some aspects of automation that we’re unlikely to accept?
The bridge to somewhere. Donald MacDonald in conversation with Felix Salmon
The architect of the new East Span of the Bay Bridge discusses the importance of bridges and what they can bring to an urban environment.
Start: October 25, 2013 11:40 am
End: October 25, 2013 12:40 pm
Event Category: Conversation
Four things create value:
And let me know that, as far back as we can tell, your status and standard of living depends on (a) the value you directly add and (b) what you are able to grab (and persuade others that you are right to grab) from our joint-product common store.
The greatest hesitation I have about the market economy is the wedge between demand and the willingness to pay that is the ability to pay. This is, after all, why full employment is so important. This is why opportunity and equality are so important.... This wedge... presents] insurmountable problems... [to]any kind of welfare claims about the market economy.... We can't say anything about the quality of the system as a whole that isn't contingent on implausible assumption about the quality of the distribution of the ability to pay. The trouble is the ability to pay is tied up with productivity, and this doesn't seem to be a justifiable basis for distributing well-being. At the same time allocating productivity efficiently is the only chance of getting a surplus in the first place to distribute.
If we have robots, robot socialism is probably an answer. Until then I just don't know.
Enrico Moretti: Where the Good Jobs Are—and Why:
It is a tipping-point.... Once a city spawns some innovative companies, its ecosystem changes in ways that make it even more attractive to others.... Salesforce, Twitter and Yelp in downtown San Francisco increases the city's appeal to other high-tech entrepreneurs.... Scientists and software engineers are not the only ones who thrive as a result... for each new innovation-job in a city, five additional jobs are created... professional occupations (lawyers, teachers, nurses) but also nonprofessional occupations (waiters, hairdressers, carpenters). For each new software designer hired at Twitter in San Francisco, there are five new job openings for baristas, personal trainers, therapists and taxi drivers. The most important effect of high-tech companies on the local economy is outside high-tech.
This matters for wages, too. In 1980, salaries for workers with a high-school diploma in Austin and Raleigh were significantly lower than the national average. Then those cities became important hubs for IT and life science, respectively. Salaries are 45% higher, and the gap keeps expanding. High-school graduates in Austin and Raleigh don't work harder or have higher IQs. The ecosystem around them is different. Most industries have a multiplier effect. But none has a bigger one than the innovation sector: about three times as large as that of extractive industries or traditional manufacturing. Clearly, the best way for a city or state to generate jobs for everyone is to attract innovative companies that hire highly educated workers.
The physiocrats saw France as having four kinds of jobs:
Farmers, they thought, produced the net value in the economy--the net product. Their labor combined with water, soil, and sun grew the food they and others ate. Artisans, the physiocrats thought, were best seen not as creators but as transformers of wealth--transformers of wealth in the form of food into wealth in the form of manufactures. Aristocrats collected this net product--agricultural production in excess of farmers' subsistence needs--and spent it buying manufactured goods and, when they got sated with manufactured goods, employing flunkies.
Economists--my own tribe--hink that people are better off if they have more money--which is fine as far as it goes. So if a few people get a lot more money and most people get little or nothing, but do not lose out, economists will usually argue that the world is a better place. And indeed there is enormous appeal to the idea that, as long as no one gets hurt, better off is better; it is called the Pareto criterion. Yet this idea is completely undermined if wellbeing is defined too narrowly; people have to be better off, or no worse off, in wellbeing, not just in material living standards. If those who get rich get favorable political treatment, or undermine the public health or education systems, so that those who do less well lose out in politics, health, or education, then those who have done less well may have gained money but they are not better off. One cannot assess society, or justice, using living standards alone. Yet economists routinely and incorrectly apply the Pareto argument to income, ignoring other aspects of wellbeing...
Andrew Gelman: Ivy Jew update:
Nurit Baytch posted a document, A Critique of Ron Unz’s Article “The Myth of American Meritocracy”, that is relevant to an ongoing discussion we had on this blog. Baytch’s article....
I shall demonstrate that Unz’s conclusion that Jews are over-admitted to Harvard... relied on faulty assumptions and spurious data: Unz substantially overestimated the percentage of Jews at Harvard while grossly underestimating the percentage of Jews among high academic achievers, when, in fact, there is no discrepancy.... Unz’s analysis of Jewish academic achievement is predicated on his ability to identify Jews on the basis of their names, which proved spectacularly wrong for the one data set on which there exists confirmed, peer-reviewed data....
"Hello. My name is Brad DeLong. I'm the parent of two kids at Burton Valley. I'm volunteering tonight to call people to ask for their support for Measure E, the parcel tax measure for local Lafayette schools."
Note the words parent, volunteer, local. I'm not Washington calling: I'm your neighbor. This isn't big government: this is volunteerism. This isn't for some federal construction boondoggle: this is for the school in your neighborhood.
Oregon Economic Forum: After the Recession: Opportunities and Challenges
The 10th Annual Oregon Economic Forum
Thursday, October 24, 2013
Portland Art Museum
Doors open at 0700am. Breakfast Served.
Come join us for our 10th Anniversary.
This summer will mark the fourth year of the recovery. Four years of slow economic growth that defied early-expectations of a rapid rebound. But while fiscal contraction is dragging down overall growth, momentum in the private sector is building. The long-awaited return to a more normal recovery may finally be at hand.
Paul Krugman: Agglomerating A Revolution:
Nicks, Crafts and Wolf... argue that the cutting edge of Britain’s Industrial Revolution, the cotton textile industry, benefited hugely from agglomeration.... Crafts and Wolf suggest, in effect, that at least some of England’s comparative advantage in cloth came from external economies, not underlying national characteristics.... It’s interesting to at least contemplate the possibility that but for the accidents of history, cotton cloth might have been made by the banks of the Tagus rather than in the region of the Mersey.
Only if you give Portugal (i) Britain's super-cheap coal, and (ii) have it gain Britain's early-nineteenth century seaborne empire and thus have Britain's real wage levels--only then is even the agglomerated early-nineteenth technology profitable when deployed, and only if you deploy early-nineteenth century technology can you develop mid-nineteenth century technology.
And the problem was that it didn't have the coal, and the fact that it had to defend its border (not terribly successfully) against Spain meant that it couldn't focus on gaining and keeping the empire.
Truth to tell, as Bob Allen points out, only Britain, the Ruhr, and Silesia had the geography to give them cheap-enough coal; and only Britain (and, I suppose, Ireland) had both the ports and the islandishness to allow them to focus on dominating the world of the commercial revolution.
And if we had somehow had an 1805 in which the Portuguese navy won the Battle of Trafalgar while the coals were still in Newcastle, what would the world of today look like?
And yet Greenspan forgets Bill Clinton's (and Al Gore's!) insistence that budget enforcement mechanisms be strengthened in order to "lock box" the budget surpluses--precisely in order to boost national savings and secure an economy strong enough to fund the entitlement programs.
The dot-com boom, for example, produced the budget surpluses of 1998 to 2001 for the federal government and many states. No elected officials in modern times seem to resist being enticed by unexpected surplus cash sitting around, uncommitted…
It wasn't enough for you to support the Bush tax cut of 2001, Mr. Greenspan?
I remember what policies Barack Obama has in fact pursued:
I find myself disappointed that this has not yet jelled into something coherent--especially because there are now only 99 hours until I have to take the stage on Friday…
Let us start out with the view from 30,000 feet: What do we people do to add value? Eight things:
The Hamilton Project: Improving College Outcomes: A Modern Approach:
On October 21st The Hamilton Project will host a forum focusing on the evolving role of higher education in American society and release three new policy proposals… ways to strengthen the Pell Grant program… reform the federal student loan repayment system… expand the availability of information on the “net” vs. “sticker” price of attending college…
Binyamin Applebaum: ‘The Map and the Territory’ by Alan Greenspan:
Alan Greenspan… writes… that he has been thinking about bubbles since the financial crisis of 2008…. What economists like to call “the animal spirits” can be incorporated into economic models…. This is promising stuff. It might even make an interesting book. But the subject barely holds Mr. Greenspan’s attention for a single chapter.
Richard Florida: What the Shutdown Revealed About the Economic Divides in U.S. Politics:
The geography of Tea Party conservatives is largely what you’d expect. Half are in the South, and a quarter are in the Midwest. Not a single one is in the Northeast or the along the Pacific coast. All voted for Romney over Obama…. Charlotta Mellander… looking at the share of a state’s congressional delegation that had signed the August letter to Boehner (and thereby made it into Lizza’s "suicide caucus") and key economic and demographic characteristics…. The percentage of suicide caucus districts was negatively correlated with wages (-.30), incomes (-.33) and college graduates (-.36)… less diverse--both in terms of immigrant and gay and lesbian shares of the populations… less urban… [more] uninsured…. The last map gets at the deep economic fissures underlying Tea Party politics. It’s a map of America’s centers of innovation…. The Tea Party gets it stronghold in places that have been left behind by the knowledge economy… "committed to a past that never quite existed and hopes for a future that seems rather unlikely."
From his An Inquiry into the Nature and Causes of the Wealth of Nations:
The difference of natural talents in different men is, in reality, much less than we are aware of; and the very different genius which appears to distinguish men of different professions, when grown up to maturity, is not upon many occasions so much the cause as the effect of the division of labour.
That is one of Kansas Governor Sam Brownback's constant applause lines--that he wants Kansas to be a lot less like California and a lot more like Texas.
And so I was reading Bryan Burrough on Erica Grieder: ‘Big, Hot, Cheap and Right’: What America Can Learn from the Strange Genius of Texas, and ran across Burrough's claim:
AS a Texas-raised journalist, I can tell you two things with confidence about my native state. One, its economy has been humming nicely for years…
And I think: which years are those? The Texas unemployment rate jumped 4.5% points to above 8% in the depths of the Lesser Depression, and is still 6.5%. That's not "humming"--at least not unless you view the experience of the unemployed and of those who fear they might lose their jobs as of no account.
Has he forgotten that the last successful bipartisan budget negotiation was in… 1990? That calling on President Obama to use his Green Lantern-like powers to create a large budget-balance deal is a strategy that has not produced any results in 23 years?
And, given that Alice Rivlin is saying that she thinks that discretionary spending at current levels is too low for the government to function effectively, isn't it time for Leon Panetta to shut up and sit down and stop talking about the need for "tough choices" to further reduce spending?
There are times when I wonder if I lived through the same history as the Green Lanternists…
UCB Public Affairs: Festival of ‘uncharted’ ideas coming to downtown Berkeley:
Robots, technology, race, food justice and climate change are just some of the diverse and pressing topics up for discussion at “Uncharted: The Berkeley Festival of Ideas” Oct. 25 and 26. The downtown-Berkeley happening will feature a who’s who of speakers and lots of opportunity for participating “infovores” to interact, converse and imagine new futures.
Felix Salmon: The default has already begun:
There’s a spectrum of default severities. At one end, you have the outright repudiation of sovereign debt, a la Ecuador in 2008; at the other end, you have the sequester, which involves telling a large number… that the resources which were promised them will not, in fact, arrive. Both of them involve the government going back on its promises, but some promises are far more binding, and far more important…. Right now, with the shutdown, we’ve already reached the point at which the government is breaking very important promises indeed: we promised to pay hundreds of thousands of government employees a certain amount on certain dates, in return for their honest work. We have broken that promise. Indeed, by Treasury’s own definition, it’s reasonable to say that we have already defaulted: surely, by any sensible conception, the salaries of government employees constitute “legal obligations of the US“.
Lawrence Summers: The battle over the US budget is the wrong fight:
There is a chance future historians will see today’s crisis as the turning point when American democracy was to shown to be dysfunctional…. The substance being debated in the current crisis is only tangentially relevant to the main challenges and opportunities…. More fundamental is this: budget deficits are now a second-order problem…. Policies that indirectly address deficit issues by focusing on growth are sounder economically and more plausible politically than the long-term budget deals with which much of the policy community is obsessed…. In most areas policy makers avoid taking strong actions unless there is statistically compelling evidence to support them. Few would favor action to curb greenhouse gas emissions without evidence establishing that substantial climate change is overwhelmingly likely. Yet it is conventional wisdom that urgent action must be taken to cut the deficit, even as prevailing short-run deficit forecasts suggest no problems and long-run forecasts are within margins of error…. If even half the energy that has been devoted over the past five years to “budget deals” were devoted instead to “growth strategies” we could enjoy sounder government finances and a restoration of the power of the American example. At a time when the majority of the US thinks that it is moving in the wrong direction, and family incomes have been stagnant, a reduction in political fighting is not enough--we have to start focusing on the issues that are actually most important.
Ashok Rao: The Great Degeneration by Niall Ferguson:
Rarely is a book’s title… so well-suited for its own description…. I agree with Niall Ferguson’s principal charge; that is institutions more than geography and culture explain global economic disparity, and their decay – especially in the West – should be of concern. At least more than it is right now. Also, despite the fact that he seems to know almost nothing about monetary policy, I found The Ascent of Money to be invaluable. Never, however, have I read a book… so blatant in its fraudulent claim, only vindicated by a lawyerly interpretation of grammar….
Dani Rodrik: The Perils of Premature Deindustrialization:
Most of today’s advanced economies became what they are by traveling the well-worn path of industrialization…. Peasants became factory workers, a process that underpinned not only an unprecedented rise in economic productivity, but also a wholesale revolution in social and political organization. The labor movement led to mass politics, and ultimately to political democracy. Over time, manufacturing ceded its place to services…. Only a few developing countries, typically in East Asia, have been able to emulate this pattern…. Consider Brazil and India…. In Brazil, manufacturing’s share of employment barely budged from 1950 to 1980, rising from 12% to 15%. Since the late 1980’s, Brazil has begun to deindustrialize…. India presents an even more striking case: Manufacturing employment there peaked at a meager 13% in 2002, and has since trended down….
So what do economists have to say when they speak as public intellectuals in the public square? As I see it, economists have five things to teach at the "micro" level--of how individuals act, and of their well-being as they try to make their way in the world. These are: the deep roots of markets in human psychology and society, the extroardinary power of markets as decentralized mechanisms for getting large groups of humans to work broadly together rather than at cross-purposes, the ways in which markets can powerfully reinforce and amplify the harm done by domination and oppression, the manifold other ways in which the market can go wrong because it is somewhat paradoxically so effective, and how the market needs the state to underpin and manage it on the “micro” level.
Andrew Watt is an unhappy camper:
What is surprising and worrying in this case is that Brad Delong… has missed out the thirty important years of economic history, and very much downplays Keynesian economics in that period…
The Hamilton Project--now led by Melissa Kearney--doesn't get nearly as much love as it should. I am not sure why not. There is a lot of very good stuff there. like:
As we hear more and more that the Federal Open Market Committee has man on it who have no enthusiasm for additional Quantitative Easing, it is time to reiterate my conclusion that the Federal Reserve's announcement last December that it was switching from a time- to a state-based policy rule has not REPEAT NOT shifted expectations of the distribution of possible levels of prices and inflation over the next five, ten, or thirty years.
Perhaps this is because Federal Reserve communicators have spent a lot of time telling people that the shift to state-based policy does not mean that the Federal Reserve will tolerate higher inflation. Perhaps it is because people do not believe that the Federal Reserve's policy rule is truly state-based--or state-based in the way the Evans Rule is supposed to be state-based. Perhaps it is for other reasons. In any event, this is a powerful piece of evidence that it is much harder to summon the Inflation Expectations Imp than economists like Greg Mankiw had thought. It is a point for the expansionary fiscalists in their debate with the expansionary monetarists.
"Kansas needs to be less like California"--that is one of Kansas Governor Sam Brownback's favorite applause lines.
I have been hearing things like this for 30 years. Sometime around 1984 the spinmasters of the Republican Party decided that California was no longer the Future, no longer the home of Ronald Reagan and even of Richard Nixon and Herbert Hoover, but was instead someplace sinister, alien, weird--unAmerican. I remember first noting this in 1984 at the Republican National Convention. It was still-registered Democrat UN Ambassador Jeanne Kirkpatrick whom the spinmasters assigned the undignified task of saying:
They always blame America first: those San Francisco Democrats!
According to Robin Greenwood and David Scharfstein in their article, The Growth of Modern Finance:
The U.S. financial services industry grew from 4.9% of GDP in 1980 to 7.9% of GDP in 2007. A sizeable portion of the growth can be explained by rising asset management fees…. Another important factor was growth in fees associated with an expansion in household credit, particularly fees associated with residential mortgages. This expansion was itself fueled by the development of non-bank credit intermediation (or “shadow banking”)…
Several times here in Daily Kos and in some of my other blog posts I argued that the modern financial system that first developed in the US and the North-Atlantic countries and has now spread throughout the world since 1980 has in fact limited the growth of world wealth rather than grown it as some of its supporters, such as that dangerous man Milton Friedman, predicted.
Andrew Delbanco: The Two Faces of American Education:
Diane Ravitch not only sides with Rhee’s critics; she surpasses them in her condemnation, which borders on contempt. Here is her summary of Rhee’s legacy to the Washington schools: “cheating, teaching to bad tests, institutionalized fraud, dumbing down of tests, and a narrowed curriculum.”… During Rhee’s regime, teachers’ pay, their jobs, even the survival of their schools, could depend on a couple of years of test scores. In this respect, her intervention was representative of an approach to education that has been gathering force…. Ravitch describes that approach, aptly, as “testing mania.” Tests, she thinks, can be useful diagnostic instruments, but as a high-stakes method for evaluating teachers and schools, they create more problems than they solve.
It has been a busy week for the Machine-Human Alliance. Sorry! The Human-Machine Alliance…. First there was the deployment of South Korea's autonomous jellyfish-killing aquatic robot swarm. Now… the engineers at Boston Dynamics… have released video of the WildCat, an untethered version of their quadrupedal Cheetah robot, capable of standing and running freely under its own power. There is absolutely no connection between the unveiling of this free-running terrestrial robot and the deployment of the aquatic jellyfish-killing robot swarm. This robot has legs. At present, this robot does not operate in collaborative hunting groups. Is there even any precedent for quadrupeds to operate in collaborative hunting groups?
Federal Medicaid spending was $250 billion in 2012, covering roughly 50 million people…
3 million people in St. Louis, 2 million people in Kansas City, 1 million people in Wichita, 3 million people elsewhere in Kansas and Missouri…
The Medicaid expansion--which the Missouri legislature and which the Kansas governor and legislature are currently rejecting--would have brought Medicaid coverage to 600,000 of these 9 million people, with the federal government paying roughly $5,000 per year per recipient--a total of $3 billion per year, the overwhelming bulk of it flowing into greater St. Louis, Kansas City, and Wichita…
Say $1.2 billion a year to St. Louis, $800 million a year to Kansas City, and $400 million a year to Wichita--those are added money flows that Denver, Minneapolis, Albuquerque, Chicago, Cincinnati, even Louisville and Little Rock will get, and that St. Louis, Kansas City, and Wichita will not. That is a money flow of about 1% of gross regional product that will be coming into the first group of cities and not the second.
Local multipliers are pretty ferocious in the medium-term…
We invite submissions for “We Robot 2014: Risks & Opportunities”--a conference at the intersection of the law, policy, and technology of robotics, to be held in Coral Gables, Florida on April 4-5, 2014. We Robot is now in its third year, returning to the University of Miami School of Law after being hosted by Stanford Law School last April. The conference web site is at http://robots.law.miami.edu/2014. We Robot 2014 seeks contributions by academics, practitioners, and developers in the form of scholarly papers or presentations of relevant projects…. We are encouraging conversations between the people designing, building, and deploying robots, and the people who design or influence the legal and social structures in which robots will operate.
At 5 million current page views for her two-minute "I Quit!" video, the world's most famous #Mizzou graduate Marina Shifrin has absorbed 170,000 hours of the world's attention. Valueing attention at $10/hour, that is $1.7 million--two entire decade's worth of value at $85,000/year, generated by spending two hours making one two-minute video and then distributing it over Youtube. That's $850,000/hour--that's a lot of productivity.
Alex Tabarrok: BS Jobs and BS Economics:
David Graeber’s peculiar article on bullshit jobs (noted earlier by Tyler) does have one redeeming feature, a great example of poor economic reasoning: