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...
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...
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
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.’
It’s always the books I like the most that I feel I haven’t done justice to when I write about them.
Gaudy Night was published in 1936. It’s still in print, and more than that, it’s still relevant. It’s not science fiction or fantasy by any stretch, its genre is cosy detective story. It’s about a series of incidents in a women’s college in Oxford in which someone is trying to provoke a scandal. But what it’s really about is the difficult balance between love and work and whether it is possible for a woman to lead a life of the mind wholeheartedly, and whether it’s possible for her to do this and have love and a family. Sayers examines this seriously and with examples. You might think that the issues might be dated. Some of the attitudes are, but on the whole the fulcrum point of ‘having it all’, marrying as an equal and not as a helpmeet, is still an interesting question.
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.
The parallels with the antinomies of the thought of the Ludwig von Mises of today--John Taylor--are, I think, rather striking:
In looking up some sources for my previous post on the gold-exchange standard, I checked, as I like to do from time to time, my old copy of The Theory of Money and Credit by Ludwig von Mises. Mises published The Theory of Money and Credit in 1912 (in German of course) when he was about 31 years old, a significant achievement. In 1924 he published a second enlarged edition addressing many issues that became relevant in the aftermath the World War and the attempts then underway to restore the gold standard. So one finds in the 1934 English translation of the 1924 German edition a whole section of Part III, chapter 6 devoted to the Gold-Exchange Standard.
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.
Daniel P. Tompkins: What the Ancient Greeks Can Teach Us About Human Capital: "Unsupervised, cooperative Athenians developed an economy powerful enough to escape the Malthus trap...
The Rise and Fall of Classical Greece by Josiah Ober, Princeton University Press, 464pp. "Must it not then be acknowledged by an attentive examiner of the histories of mankind, that in every age and in every State in which man has existed, or does now exist, That the increase of population is necessarily limited by the means of subsistence? That population does invariably increase when the means of subsistence increase? And, That the superior power of population it repressed, and the actual population kept equal to the means of subsistence, by misery and vice?"
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.
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.
...But the new skeptics of reform are not hacks, and they raise valuable critiques that deserve a hearing, even if they are sometimes vulnerable to romanticism, naïveté, and nostalgia of their own. Besides La Raja and Pildes... Bruce Cain... Jonathan Rauch... and Jason Grumet.... These books and articles vary greatly in tone and depth, ranging from Cain’s cool-eyed analysis of paradoxes in dozens of aspects of political reform at the state and federal level, to Grumet’s nostalgia for the era when handshake agreements were made in adjoining chairs in the Senate barbershop.
A POLICY AGENDA FOR THE KNOWLEDGE ECONOMY
- Policy debate dominated by discussions of ‘reform’
- Policy agenda set in 1980s >* Irrelevant or counterproductive today
- We need a 21st century policy agenda
- Previous reform era provides a way to think about this.
Mario Draghi: ECB: The ECB’s Recent Monetary Policy Measures: Effectiveness and Challenges: "Over the past year the ECB has taken a series of major monetary policy measures...
...culminating in our decision in January this year to expand our asset purchases towards public sector securities. While the aim of these measures is the same as it has always been – maintaining price stability over the medium-term – their form is unprecedented for our central bank. And as such our policy decisions have become more complex in two key ways.
...In a month of Brooks, you’d get the call to begin or continue a war with Iraq or Iran, the grasping attempt to paint some cretinous Senator or presidential hopeful as the intellectual heir to Edmund Burke, and then, at last, the decline-and-fall column. You’d see a headline like ‘The Slow Virtues’ or ‘The Hollow Century’ or ‘Why the Teens Are Despicable,’ and you’d know ol’ Dave’s coffee shop was out of plain croissants a week ago and the barista had a nose-ring.... I got too comfortable automatically deploying this familiar way of understanding.... I think that is why I missed a change in Brooks’s work....
An excellent piece by the very sharp and thoughtful Jonathan Chait.
The remarkable thing is that Republican ideologues could, right now, be taking a huge victory lap with the apparent success of ObamaCare. All they had to say was: "this is really RomneyCare." But they didn't.
How much of what he says these days does Michael Tanner believe? My feeling is: relatively little.
...The trouble is that anti-Obamacare dogma sits so deeply at the GOP’s core that any discussion of health care must pay fealty to their belief that the law has failed utterly. The Republican Party in the Obamacare era is a doomsday cult after the world failed to end. Its entire analysis of the issue is built upon a foundation of falsehoods.
...on Japan's ongoing "Great Recession," although I have to keep pinching myself to ask if its main thesis can really be true. Is the equilibrium (full-employment) medium-term real interest rate for Japan actually negative, so that unless the Bank of Japan (BOJ) resigns itself to sustained inflation, the zero bound on nominal interest rates will present serious problems? Has the BOJ so thoroughly convinced the public of its anti-inflation credibility that it has lost the power to rekindle inflation now that Japan needs it?
Francis Fukuyama (2006): After Neoconservatism: "How did the neoconservatives end up overreaching to such an extent that they risk undermining their own goals?...
...Four common... threads ran through... [Neoconservative] thought... a concern with democracy, human rights and, more generally, the internal politics of states; a belief that American power can be used for moral purposes; a skepticism about the ability of international law and institutions to solve serious security problems; and finally, a view that ambitious social engineering often leads to unexpected consequences and thereby undermines its own ends.... The skeptical stance toward ambitious social engineering... [was] applied... to domestic policies like affirmative action, busing and welfare.... The belief in the potential moral uses of American power... [called for] American activism... [to] reshape the structure of global politics....
Fascism, the more it considers and observes the future and the development of humanity quite apart from political considerations of the moment, believes neither in the possibility nor the utility of perpetual peace. It thus repudiates the doctrine of Pacifism -- born of a renunciation of the struggle and an act of cowardice in the face of sacrifice. War alone brings up to its highest tension all human energy and puts the stamp of nobility upon the peoples who have courage to meet it. All other trials are substitutes, which never really put men into the position where they have to make the great decision -- the alternative of life or death....
...in which the frothing distrust of people who aren’t just like you is couched in language designed to give the appearance of being reasonable until you squint at it closely, then you’re not going to want to miss this piece by Baen publisher Toni Weisskopf. It’s a really fine example of the form. I recommend you check it out for the full effect, but for those of you who won’t, here’s an encapsulation of the piece:
“Once upon a time all the fractious lands of science fiction fandom were joined together, and worshiped at the altar of Heinlein. But in these fallen times, lo do many refuse to worship Heinlein, preferring instead their false idols and evil ways. What shall we, who continue to attend the Orthodox Church of Heinlein, do with these dirty, dirty people? Perhaps we shall wall ourselves away in His sepulcher, for we are the One True Church, and should not have to sully ourselves with the likes of them. P.S.: Also, their awards don’t mean anything because we don’t get nominated for them very much and maybe we don’t want to be nominated anyway.”
...This policy framework is backed by substantial explanation and analysis, via the chairman's press conferences, FOMC meeting minutes, FOMC economic projections (including projections of the federal funds rate), testimony, and speeches.... In [this] targets-based framework, the central bank forecasts its goal variables—inflation and employment, in the case of the Fed—and describes its policy strategy for bringing the forecasts in line with its stated objectives. Although targeting rules are not mechanical, they do provide a transparent framework....
According to the news media, 2014 was the year that the GOP “Establishment” finally pulled Republicans back from the right-wing brink. Pragmatism, it seemed, had finally triumphed over extremism in primary and general election contests that The New York Times called “proxy wars for the overall direction of the Republican Party.” There’s just one problem with this dominant narrative. It’s wrong. The GOP isn’t moving back to the center. The “proxy wars” of 2014 were mainly about tactics and packaging, not moderation.
...Rosa Luxemburg, Emma Goldman and Eleanor Marx. The first two survived these debilitating attachments, the third did not. At the age of 43, upon learning that her common law husband of 14 years had secretly married a 22-year-old actress, Eleanor took poison and died. Had her father, Karl Marx, been alive he would have been not only distressed by her death but, I think, dismayed that a daughter of his could not surmount this level of betrayal, for the sake of international socialism if nothing else.
I think Tony Yates gets it 100% correct. It is not just that I do not think that John Taylor's current positions are incorrect, it is that I cannot imagine a possible world in which they would be consistent:
...He contends the following: That the Great Moderation was due to adherence to the Taylor Rule [and to ‘rules-based’ fiscal policy]. That during the early 2000s, monetary policy was set looser than that prescribed by the Taylor Rule. This caused the build up of debt and risk-taking, which ultimately led to the bust, and the end of the Great Moderation. Weak activity following the crisis has been due to departures from rules based monetary policy, in the form of unconventional monetary policy. And departure from rules based fiscal policy, in the form of the fiscal stimulus enacted by Obama in 2009. These departures have created uncertainty that has weighed against activity. Tighter policy on both counts would have led to more buoyant activity during the recovery on account of being more certain.
I think he’s wrong on every point.
The Heinlein Foundation appears to have taken down its Virginia Edition Sample.
Here's the letter to F.M. Busby from it:
EDITOR’S NOTE: This letter may never have been sent, possibly due (in part) to its racial contents, still incandescently incendiary forty-five years later. Heinlein moved the letter bodily to his “Story Notes” desk file, possibly because of its relevance to the underlying background of Farnham’s Freehold. The first page of the letter is missing, so we pick it up in mid- sentence and undated, though Virginia Heinlein noted on an index card stored with the letter that it must, by internal evidence, have been written sometime in 1964 or 1965 and in any event before October 1965 (when the Heinleins moved from Colorado Springs). The letter is printed otherwise complete and as Heinlein wrote it.
It should be known that at the beginning of the dynasty, taxation yields a large revenue from small assessments. At the end of the dynasty, taxation yields a small revenue from large assessments.
...by their conduct and example, to decide the important question, whether societies of men are really capable or not of establishing good government from reflection and choice, or whether they are forever destined to depend for their political constitutions on accident and force....
...came to a parley with the suppliants and their friends, in order to save the town; and prevailed upon some of them to go on board the ships, of which they still manned thirty, against the expected attack. But the Peloponnesians after ravaging the country until midday sailed away, and towards nightfall were informed by beacon signals of the approach of sixty Athenian vessels from Leucas, under the command of Eurymedon, son of Thucles; which had been sent off by the Athenians upon the news of the revolution and of the fleet with Alcidas being about to sail for Corcyra.
...I’ll take questions as long as anybody can endure listening, until they drag me away to wherever else I’m supposed to go.
I would like to thank President Williams for his kind introduction and the Federal Reserve Bank of San Francisco for inviting me to what promises to be a very stimulating and important conference.
As you know, last week the Federal Open Market Committee (FOMC) changed its forward guidance pertaining to the federal funds rate. With continued improvement in economic conditions, an increase in the target range for that rate may well be warranted later this year. Of course, the timing of the first increase in the federal funds rate and its subsequent path will be determined by the Committee in light of incoming data on labor market conditions, inflation, and other aspects of the current expansion.
...It's weird, almost as if writers purposely avoided the topic. There is a rich record of coins, civic and private monuments, and inscriptions.... Most of the scholarship on Trajan is done by archaeologists and others with a strong, non-textual orientation.... Neither Suetonius nor Tacitus treated Trajan's rule explicitly. Book 10 of Pliny's Letters has a complicated textual history, and it's unclear exactly how we are to understand its relationship to Books 1-9 (or, even, when it became attached to Books 1-9). Trajan is surprisingly absent from Pliny's letters otherwise....
...The bearing of the foregoing theory on the first of these is obvious. But there are also two important respects in which it is relevant to the second.... The removal of very great disparities of wealth and income... through... direct taxation... [is] deterred by... the fear of making skilful evasions too much worth while... of diminishing unduly the motive towards risk-taking, but mainly, I think, by the belief that the growth of capital depends upon the strength of the motive towards individual saving, and that for a large proportion of this growth we are dependent on the savings of the rich out of their superfluity.
...The first thing you see of Richard Burton in Martin Ritt’s The Spy Who Came in from the Cold, the 1965 adaptation of the novel by John le Carré, is his overcoat. He’s filmed from behind, in black and white, looking out of a window of a checkpoint into the Berlin night, and all you see is the coat, and all you hear is the voice as he gives weary commands.
...though, about the initial reaction to Israel’s decision to try Adolf Eichmann. The response to that decision, as historians like Peter Novick and Deborah Lipstadt have shown, was rife with anti-Semitism. The Wall Street Journal warned darkly of ‘an atmosphere of Old Testament retribution.’ A Unitarian minister, according to Novick, claimed ‘he could see little ethical difference between ‘the Jew-pursuing Nazi and the Nazi-pursuing Jew.’ Those unitarian universalists.
The worst offender, though, was National Review. Combining all the elements of anticommunism, Christian homiletics, and ancient Jew-hatred, William F. Buckley’s magazine castigated the Israelis--really, the Jews, those Shylocks of vengeance and memory--for their inability to let bygones be bygones. In one editorial, the magazine wrote:
As ex-senator and current lobbyist Evan Bayh beats the drum for the U.S. to launch an attack on Iran, Duncan Black reminds me of what may be the best thing Ezra Klein has ever written:
...but got his revenge as well as he could. Now it's more war all the time. It's the greatest grift of all, really. War breaks out, and 'everyone' gets rich.
...'There are better ways to serve my fellow citizens,' Bayh said. 'I love working for the people of Indiana. I love helping our citizens make the most of their lives, but I do not love Congress.
We analyze time series of investor expectations of future stock market returns from six data sources between 1963 and 2011. The six measures of expectations are highly positively correlated with each other, as well as with past stock returns and with the level of the stock market. However, investor expectations are strongly negatively correlated with model-based expected returns. The evidence is not consistent with rational expectations representative investor models of returns.
In their essay last fall on the state of economics, Seth Ackerman and Mike Beggs charged that today’s mainstream is irredeemably captured by conservative ideology. The good news is they’re wrong — Piketty’s work testiﬁes to that.
J. Bradford DeLong on March 07, 2015 at 04:13 AM in Economics: Growth, Economics: History, Economics: Inequality, Economics: Macro, Philosophy: Moral, Political Economy, Politics, Streams: (Weekend) Reading, Streams: Cycle, Streams: Economics, Streams: Equitable Growth | Permalink | Comments (15)
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Josh Barro: Why Does Josh Barro Hate the Merely Affluent?: "I called out the ‘merely affluent’...
...people with family incomes of, say, $175,000--for pleading poverty and putting themselves off limits for tax increases. Comments on the article drew a lot of poverty pleas from merely affluent readers. Liz from Utah... Robert from New York... A reader from Queens....
...between income inequality and r − g and argue that r − g does not seem to have much impact on inequality. However, I do not find these regressions very convincing, for two main reasons.
...is forced to concern himself with the anticipation of impending changes, in the news or in the atmosphere, of the kind by which experience shows that the mass psychology of the market is most influenced. This is the inevitable result of investment markets organised with a view to so-called ‘liquidity’.
Nils: Breaking the Web: "The Deane Barker column was touching...
...in its sincerity and simplicity. Of course mobile apps break the web, are isolated from each other, and do not link to anything. You are supposed to PAY for them, not GET them for FREE. Welcome to the Market Based Universe.
...hysteria surrounding the idea is that a huge wave of automation, technology and skills have lead to a huge structural change in the economy since 2010. The implicit argument here is that robots and machines have both made traditional demand-side policies irrelevant or naïve, and been a major driver of wage stagnation and inequality. Though not the most pernicious story that gained prominence as the recovery remained sluggish in 2010 to 2011, it gained important foothold among elite discussion.
ABSTRACT: There are two views of the British Industrial Revolution in the literature today. The more traditional description sees the Industrial Revolution as a broad change in the British economy and society. This broad view of the Industrial Revolution has been challenged by Crafts and Harley who see the Industrial Revolution as the result of technical change in only a few industries. This article presents a test of these views using the Ricardian model of international trade with many goods. British trade data are used to implement the test and discriminate between the two views of the Industrial Revolution.
Robert Allen: Farm to Factory: A Summary