Grasping Reality on TypePad, by Brad DeLong

American Cotton and American Slavery: A Deleted Scene from My "Slouching Towards Utopia?: The Economic History of the Twentieth Century" Ms.

The first half of the nineteenth century prefigured what was going to come over the 1870-1914 period with the creation of the first true global economy.

The first half of the nineteenth century saw the creation of a much more limited form of trans-oceanic economic integration--the growth to maturity of the trans-Atlantic trade in the first industrial staple: cotton. The ménage a trois between the United States’s African-American slaves, the rich river valley cotton-growing soils of the American south, and Eli Whitney’s cotton gin together produced a cheap material input to an important manufacturing industry. This time the industry was dynamic enough and the raw material important and cheap enough that the presence of the Americas did change the shape of the leading European economy, that of Britain.

Stagnation and Poverty Outside the North Atlantic, 10000 BC-1870: A Deleted Scene from My "Slouching Towards Utopia?: The Economic History of the Twentieth Century" Ms.

John Ball (1381):

When Adam delved and Eve span/Who was then the gentleman?

From the beginning all men by nature were created alike, and our bondage or servitude came in by the unjust oppression of naughty men. For if God would have had any bondmen from the beginning, he would have appointed who should be bond, and who free. And therefore I exhort you to consider that now the time is come, appointed to us by God, in which ye may (if ye will) cast off the yoke of bondage, and recover liberty…

5.1: Children

You need to understand three things to grasp the state of the world economy outside the North Atlantic in 1870:

• that the drive to make love is one of the very strongest of all human drives,

• that living standards were what we would regard as very low for the bulk of humanity in the long trek between the invention of agriculture in 1870, and

• that the rate of global and even leading-nation technological progress up to 1870—even in the heat of the Industrial Revolution itself—was, by our standards, glacial.

A comment on Laura Tyson on India's current policy dilemma…

Laura Tyson has a nice piece in Project Syndicate this morning about typhoon season for emerging market economies.

With increasing signs the North Atlantic central banks will tighten over the next several years, forward-looking financial markets are incorporating that tightening into their pricing of emerging-market assets today.

This means emerging-market central banks have three options:

Where Was China?: Why the Twentieth-Century Was Not a Chinese Century: A Deleted Scene from My "Slouching Towards Utopia?: The Economic History of the Twentieth Century" Ms.

Kong Shangren, as quoted by Jonathan Spence:

White glass from across the Western Seas
Is imported through Macao:
Fashioned into lenses big as coins,
They encompass the eyes in a double frame.
I put them on—-it suddenly becomes clear;
I can see the very tips of things!
And read fine print by the dim-lit window
Just like in my youth!

In 1870 a part of the world was starting to become not-poor, yet not the obvious part. The technological and organizational edge of human civilization in 1870 was the North Atlantic. That was, in historical perspective, distinctly odd.

Central Banking: Banking Camp vs. Macroeconomics Camp

And we are live at Project Syndicate once more:

Broadly speaking, for possibly longer and for at least 115 years--since the publication of Swedish economist Knut Wicksell's Geldzins and Guterpreis--economists have divided into two camps with respect to what a central bank like the Federal Reserve system really is. One camp, call it the Banking Camp, sees a central bank as a bank for bankers: its clients are the banks; it is a place where banks can go to borrow money when they really need to; and its functions are to support the banking sector so that banks can make their proper profits as they go about their proper business and, especially, to ensure that there is enough credit and liquidity in the economy that mere illiquidity rather than insolvency does not force banks into bankruptcy and liquidation. Another camp, call it the Macroeconomic Camp, sees a central bank as an institution to make it so that Say's Law--the principle that production is balanced by demand, with their neither being too little demand to purchase the goods and services produced and so cause unemployment nor too much and so cause unexpected inflation--holds in practice, because it is surely true that Say's Law does not hold in theory. It sees the central bank as the steward of the economy as a whole, with its primary responsibility not to preserve the health of the businesses that make up the banking sector but rather to maintain the health of the economy as a whole.

Liveblogging World War II: August 31, 1943

The Death of Tsar Boris III of Bulgaria:

In early 1943, Nazi officials requested that Bulgaria deport its Jewish population to German occupied Poland. The request caused a public outcry, and a campaign whose most prominent leaders were Parliament Vice-Chairman Dimitar Peshev and the head of the Bulgarian Orthodox Church, Archbishop Stefan, was organized…. Boris refused to permit the extradition of Bulgaria's 50,000 Jews…. The Bulgarian government utilized Swiss diplomatic channels to inquire whether possible deportations of the Jews can happen to British-controlled Palestine by ships rather than to concentration camps in Poland by trains…. However, this attempt was blocked by the British Foreign Minister, Anthony Eden. Eventually, Boris did succumb to the German demand for the extradition of 11,343 Jews from those territories re-occupied by Bulgaria, but the extradition of the Jews from pre-war Bulgaria was stopped.

Paul Krugman: Too Little, Gone Too Soon: Noted for August 31, 2013

Paul Krugman: Too Little, Gone Too Soon:

One of the things you always heard, back when we were actually talking about stimulus rather than fighting a rearguard action against destructive austerity, was the claim that stimulus spending would inevitably end up becoming a permanent fixture of the economy. This was always said with an air of worldly wisdom--of course that’s how these things work!--even though history said very much the opposite. But anyway, the invaluable FRED now has a series on exactly that subject…. So next time someone goes on about how we had this huge stimulus that failed, you can tell him that the “huge” stimulus--in response to the worst financial crisis in three generations--peaked at a whopping 1.6 percent of GDP, and was effectively gone in a bit over two years.

Cf. to the CE's start-of-2009 judgment that the economy needed a 4% of GDP stimulus for three years…

Weekend Non-Music

Whiskey Tango Foxtrot Kansas City Bang Query: 102F @ 5:30 PM

A Comment on a Talk by Warren Mosler...

In the Tinbergen setup, we have two instruments--fiscal policy and monetary policy--and three targets: full employment, price stability, and a stable debt trajectory.

Abba Lerner's intuition back during World War II--which he developed right here in Kansas City--was that there was some sort of "divine coincidence" by which there was at least one combination of fiscal and monetary policy that achieved full employment and price stability and yet also had a stable debt trajectory.

Lerner's argument was essentially an argument by construction. Pick fiscal and monetary policies that produce full employment and price stability. Look at the debt trajectory. If the debt trajectory is unsustainable, then ease monetary policy by some amount {delta}M and tighten fiscal policy by some amount {delta}G in order to keep output at potential, and thus produce no additional upward pressure on inflation. The easing of monetary policy reduces interest rates on the outstanding debt; the tightening of fiscal policy reduces the flow deficit; the net effect is to reduce the slope of the debt trajectory. Look at the debt trajectory again. Is it sustainable? If not, tighten fiscal policy and ease monetary policy some more. Continue this process until the debt trajectory is no longer explosive.

A disproof of Lerner thus seems to require that you reach a point where there is (a) full employment, (b) price stability, (c ) an explosive deficit path--but that (d) you cannot then tighten fiscal policy because the political system won't let you. Thus the debt continues on an explosive nominal path, and that explosive nominal path sweeps price stability away with it.

On this interpretation, at least as long as we stay within the Lernerian universe, it is possible to make arguments that we have to settle for a sub-full employment economy now because of the burden of outstanding debt. But such arguments seem to require (i) a belief that the political system will not allow a sufficiently countercyclical and tight-enough fiscal policy when we reach full employment, (ii) so we cannot run a sufficiently countercyclical and loose-enough fiscal policy now, and (iii) our monetary policy options are very limited once we hit the ZLB.

Is there another way to break Lerner's argument as long as we believe in the accelerationist Phillips curve--as long as we believe that full employment also produces inflation outcomes equal to inflation expectations?

Noted for August 30, 2013

Short:

John Sides and Lynn Vavreck: Scholarship in Public: We have a new book on the 2012 presidential election… designed to be an accessible academic account… written in real time and published within a year of the election itself | Brad DeLong: The Curse of Richard Nixon: Republican Primary Electorate Edition | Larry Meyer: Market Converges to Our View on Seven-to-Ten-Year Treasuries | Robert Reich: Detroit and the bankruptcy of America’s social contract | Wonkette: Congresscritter Gary Miller Knows Immigrants’ Pain, Because He Moved From Arkansas To California | Sarah Kliff: You’re spending way more on your health benefits than you think |

Long:

Tom Mann and Norm Ornstein (May 2012): U.S. Republican Party: "It's Even Worse than It Looks" | Aristotle: Politics |

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• Paul Krugman: The Baht and the Bubble Excuse
• Kevin O'Rourke: The Irish Economy: Thailand without the baht
• Tim F: From the dumb idea files
• Emi Nakamura and Jon Steinsson: Fiscal Stimulus & the Open Economy Relative Multiplier
• David Barrett: David Miranda was carrying password for secret files on piece of paper

The Catering Serving Carts of Hephaestus...

Homer, Iliad, 18:398, Lombardo translation:

Thetis' silver feet took her to Hephaestus' house,
A mansion the lame god had built himself…
She found him at his bellows, glazed with sweat
As he hurried to complete his latest project,
Twenty cauldrons on tripods to line his hall
With golden wheels at the base of each tripod.
…He was getting these ready,
Forging the rivets with inspired artistry…

David Barrett: David Miranda was carrying password for secret files on piece of paper: Noted for August 30, 2013

David Barrett: David Miranda was carrying password for secret files on piece of paper:

The government’s statement claims possession of the documents by Mr Miranda, Mr Greenwald and the Guardian posed a threat to national security, particularly because Mr Miranda was carrying a password alongside a range of electronic devices on which classified documents were stored…. Oliver Robbins… said….

The information that has been accessed consists entirely of misappropriated material in the form of approximately 58,000 highly classified UK intelligence documents… the disclosure of this information would cause harm to UK national security… among the unencrypted documents… was a piece of paper that included the password for decrypting one of the encypted files on the external hard drive recovered from the claimant… a sign of very poor information security practice…. Even if the claimant were to undertake not to publish or disclose the information that has been detained, the claimant and his associates have demonstrated very poor judgement in their security arrangements with respect to the material rendering the appropriation of the material, or at least access to it by other, non-State actors, a real possibility.

Emi Nakamura and Jon Steinsson: Fiscal Stimulus & the Open Economy Relative Multiplier: Noted for August 30, 2013

Emi Nakamura and Jon Steinsson: Fiscal Stimulus & the Open Economy Relative Multiplier:

When the U.S. embarks upon a military buildup, there is a systematic tendency for spending to increase more in some states than others…. We find that when relative spending in a state increases by 1 percent of GDP, relative state GDP rises by 1.5 percent… the “open economy relative multiplier”…. The closed economy aggregate multiplier is highly sensitive to how aggressively monetary and tax policy “lean against the wind” in response to a government spending shock…. Since the open economy relative multiplier focuses on relative changes in government spending and output, these aggregate factors are “differenced out”…. We show that our estimates are much more consistent with New Keynesian models in which “aggregate demand” shocks—-such as government spending shocks—-have potentially large effects on output than they are with the plain-vanilla Neoclassical model. In particular, our results suggest that government spending should have large output multipliers when the economy is in a liquidity trap

Tim F: From the dumb idea files: Noted for August 30, 2013

Tim F.: From the dumb idea files:

Question: Why should you stick to sabotaging the Affordable Care Act at the national level?

Answer: You can only blame Obama if everyone suffers. On the other hand, if Missouri cannot or will not provide decent care while people have no problem across the border in Illinois, Iowa, Arkansas or even Kentucky, it will be pretty easy to figure out who screwed up.

I wish that real people did not have to suffer in order for these idiots to find out why you do not cut off your nose to spite your face.

Federal Reserve Succession Watch: The London Economist Narrowly Prefers Janet Yellen...

…and in so doing adopts a plan: Janet Yellen at the Fed, Lawrence Summers at the Treasury, Jack Lew at the NEC:

Economist: Federal Reserve: Choosing the chairman:

For all the political circus that has surrounded the decision, Mr Obama is choosing from excellent candidates. The two leading contenders—-Larry Summers, a former treasury secretary and presidential adviser, and Janet Yellen, the Fed’s current vice-chairman—-are both top-notch economists with years of relevant experience…. This newspaper would (narrowly) plump for Ms Yellen….

Paul Krugman: The Baht and the Bubble Excuse: Noted for August 30, 2013

Paul Krugman: The Baht and the Bubble Excuse:

One of the ways defenders of European austerity policies move the goalposts [is] by claiming that the pre-crisis peak isn’t relevant for comparison purposes, because it was inflated by a bubble…. Often, although not always, it reflects a confusion between demand and supply--saying that there was excess spending on, say, housing doesn’t mean that the economy couldn’t have been producing something else instead…. Asia from 1997 on provides a useful comparison. Southeast Asia in the mid-90s was a bubble--oh, boy, was it a bubble…. Nonetheless, by contrast with Europe’s crisis economies, the Asians fairly quickly returned to and then passed the pre-crisis peak. I will say, 15 years ago it would never have occurred to me that we would be looking back at Asia’s crisis as a success story.

Kevin O'Rourke: The Irish Economy: Thailand without the baht: Noted for August 30, 2013

Kevin O'Rourke: The Irish Economy: Thailand without the baht:

“Thailand without the baht” is a useful way of thinking about the Irish economy’s boom, bust, and subsequent flat-lining…. The subsequent [post 1997-1998 crisis] rebound showed that these [East Asian] economies were still capable of delivering long run growth once their short-run macro problems had been resolved. Seen from the inside the Irish growth model seems pretty rickety, but respectable if unexciting growth rates of the sort you see in countries close to the technological frontier should be attainable in the future once our own short-run macro problems, and those of the Eurozone as a whole, have been resolved. Unfortunately this doesn’t seem to be on the horizon right now, which is why the “default and devalue” scenario has to be an option…. The problem with the “short run” is that it can continue for an awfully long time unless corrective action is taken.

Hoisted from the Archives from Fifteen Months Ago: Tom Mann and Norm Ornstein at U.C. Berkeley on May 18, 2012: U.S. Republican Party: "It's Even Worse than It Looks"

###Cleaned-Up Transcript###

Eric Schickler: Welcome everybody to the Institute of Governmental Studies. I will say, as my first point, that a couple of weeks ago when we were scheduling this for several days after graduation, some people commented:

Do you think a lot of people will come? You know it might be a little problem.

Well, this is clearly the biggest crowd I have ever seen at IGS. We have had some great events in the past, but this one promises to be really special. I want to note there are some extra seats in the side room where you will be able to hear, for Tom and Norman will have microphones. You should be able to hear them in there. You might be more comfortable in there than standing in the back.

Brad DeLong: But no closed-circuit TV.

Eric Schickler: We did not arrange CCTV unfortunately.

Unfortunately, we can’t bring any more chairs into the room. There are fire code concerns that we have been warned about.

Liveblogging World War II: August 30, 1943

Grumman F6F Hellcat:

The Grumman F6F Hellcat was a carrier-based fighter aircraft conceived to replace the earlier F4F Wildcat in United States Navy (USN) service. Although the F6F resembled the Wildcat, it was a completely new design,[4] powered by a 2,000 hp Pratt & Whitney R-2800, the same powerplant used for both the Navy's earlier Chance Vought F4U Corsair and the United States Army Air Force's (USAAF) Republic P-47 Thunderbolt fighters. Some military observers tagged the Hellcat as the "Wildcat's big brother". The F6F was best known for its role as a rugged, well designed carrier fighter which was able, after its combat debut in early 1943, to counter the Mitsubishi A6M and help secure air superiority over the Pacific Theater. Such was the quality of the basic simple, straightforward design, that the Hellcat was the least modified fighter of the war, with a total of 12,200 being built in just over two years.

Fear of a Black President, Part CXXIV: Political Gridlock Weblogging

A few thoughts provoked by reading Mann and Ornstein this morning…

Barack Obama has, after all, been pursuing Bill Clinton's gun-control policy, Ronald Reagan's foreign policy, John McCain's climate policy, Mitt Romney's health-care policy, George W. Bush's immigration policy, the bipartisan Squam Lake Group’s financial-regulatory policy, Bill Clinton's tax policy, George H.W. Bush's spending policy, South Carolina Republican Ben Bernanke's monetary policy, and Wyoming Republican Alan Simpson's fiscal policy. Many of these are much too far to the ideological right for technocratic justification. None of them are much too far to the left…

Simon Wren-Lewis Thinks Academic Macroeconomics Lives in a New-Keynesian World...

I think he's largely wrong--half of academic macroeconomics lives in a New Keynesian world. The other half does not. Cf. the discussion in Christina Romer's session at the 2013 NBER Macro Annual Conference.

Simon Wren Lewis: Macro workers and macro wars:

Nearly fifteen years ago I began working with DSGE models looking at monetary and fiscal interactions. Doing this work taught me a lot about how fiscal policy worked in New Keynesian models. I understood more clearly why monetary policy was the stabilisation tool of choice in those models, but also why fiscal policy--appropriately designed--was also quite effective in that role if monetary policy was absent (individual countries in the Eurozone) or impaired (the ZLB)…. So when we hit the ZLB, the reaction of policymakers in using fiscal stimulus seemed logical, entirely appropriate and fully in line with current theory….

Yet Another AEI Fellow Behaving Badly: T.P. Carney Says Republicans Like Mitt Romney Are the Real Victims Here Weblogging

Why oh why can't we have a better press corps?

Back at the start of July, 2009, Republican Presidential candidate Mitt Romney decided: Hey! Why don't I make a speech to the NAACP, not to try to get African-American votes, but rather to get some video of me being booed by Blacks so that Fox News can show it and fire up my base!

Michael Tomasky in "Mitt Romney the Race Baiter at the NAACP" called Romney out on this:

With his incendiary speech to the NAACP, Mitt crossed an ugly line. No longer simply spineless and disingenuous, he’s now become a race-mongering pyromaniac…. He wasn’t a race-baiter until yesterday. That speech wasn’t to the NAACP. It was to Rush Limbaugh. It was to Tea Party Nation. It was to Fox News…. You don’t go into the NAACP and use the word “Obamacare” and think that you’re not going to hear some boos…. He and his team had to know those boos were coming, and Romney acknowledged as much a few hours later in an interview with… guess which channel (hint: it’s the one whose web site often has to close articles about race to commenters because of the blatant racism). Romney and team obviously concluded that a little shower of boos was perfectly fine because the story “Romney Booed at NAACP” would jazz up their (very white) base.

Blame the media for making such a big deal of it? Come on. When a candidate’s staffers are preparing a speech, they know very well exactly what line the press is going to lead with. Speeches are written with precisely that intent (or if they’re not, someone is sleeping on the job)…

Now comes T.P Carney of the American Enterprise Institute in "Finding racism where it’s not as blatant, and inventing it where it’s not present" to say that people like Michael Tomasky is the real malefactor, and people like Mitt Romney are the real victims:

Matthew Yglesias: Obama on equality of opportunity: Noted for August 29, 2013

Matthew Yglesias: Obama on equality of opportunity:

In the midst of yesterday's peroration on race in America, Barack Obama took an aside to reassure white people that he's not one of those black politicians…. Obviously if anyone out there is deliberately refusing to participate in the raising of their child and using poverty as an excuse for doing so they ought to stop (but does this happen? I'm skeptical.) And a bold stance against violent rioting is, I guess, something we can all get on board for (though see Ta-Nehisi Coates' important points). But this business on equality of opportunity versus a "mere desire for government support" is pernicious nonsense. Unless equality of opportunity is going to be nothing more than a hollow formalism, you need a lot of government support.

Liveblogging World War II: August 29, 1943

The Big Scuttle:  

When German troops invaded the Naval Dockyard in the morning of August 29, 1943 orders were issued to scuttle the Danish Navy. The Royal Danish Navy succeeded in the scuttling of 32 vessels, while 1 Patrol Boat, 3 Minesweepers an 9 cutters managed to escape to neutral Swedish waters….

When at 0400 hrs. on the morning of August 29, 1943 the Germans attacked the Danish Naval Base at the Royal Dockyard (Holmen) in Copenhagen, it proved impossible for the Danish ships to leave the harbor. German guns placed around the harbor controlled the only exit, and the signal to scuttle the fleet was given. At 0408 the signal K N U was dispatch to all units, authorizing the planned scuttling of the Navy. This signal also reached some of the few vessels stationed outside Copenhagen.

Ta-Nehisi Coates: On the Death of Dreams: Noted for August 29, 2013

Ta-Nehisi Coates: On the Death of Dreams:

If we are honest with ourselves we will see a president who believes in particular black morality, but eschews particular black policy.

Watching Barack Obama's speech yesterday, I thought of a young W.E.B. Du Bois who in 1897 authored the original Poundcake Speech:

We believe that the first and greatest step toward the settlement of the present friction between the races-commonly called the Negro Problem-lies in the correction of the immorality, crime and laziness among the Negroes themselves, which still remains as a heritage from slavery. We believe that only earnest and long continued efforts on our own part can cure these social ills.

Jared Bernstein: Team Can't We All Just Get Along?: Noted for August 29, 2013

Jared Bernstein: Summers and the Banks:

I’ve remained neutral in the debate over Yellen vs. Summers for Fed chair.  I continue to think they’re both fine choices… the differences… are far more narrow than you’d think from the frenzy…. Washington really loves a horse race and that the White House has misplayed this…. If I’ve put any bit of my thumb on the scale, it’s as follows, as quoted in the Times the other day: "All else equal, I would not lightly dismiss the opportunity to break a glass ceiling"…. But in the interest of fairness, I also wanted to weigh in briefly on ways in which Larry Summers views on financial market oversight… have been misrepresented…. I am well aware of mistakes he made in the Clinton years in this regard, but he learned from those mistakes, and frequently quoted Keynes’ line: “When the facts change, I change my mind.”…. Well in advance of the collapse of Bear and Lehman, Summers… wrote in late 2006 that “…innovations that contribute to risk spreading in normal times can become sources of instability following shocks to the system as large-scale liquidations take place.”

Liveblogging World War II: August 29, 1943

HowStuffWorks "World War II Timeline: August 15, 1943-August 29, 1943": August 29:

Washington puts Berlin on notice, saying it has become aware of German atrocities against Poles and that the perpetrators will pay for any war crimes when the day of reckoning arrives.

Following Nazi suppression of Danish civil rights and the arrest of King Christian X, the Danes sink most of their naval fleet to prevent it from falling into Nazi hands.

And Once Again I Am Defeated: Failing to Excerpt John Holbo Weblogging

Once again I find myself reading John Holbo, and immediately thinking: "Hey! This is really good. It will be easy to just excerpt two sentences, and point people to this excellent thing!"

5000 words later…

Read the whole thing:

John Holbo: How Moral Revolutions Happen (They Had A Nightmare):

Exception to the moral complacency point: these [pro-slavery] writers stand very firm when they seize the Biblical high ground… even a George F. Will-type needs moments of rhetorical firmness. (You can’t be effectively complacent, without sometimes seeming the very opposite of that.) But this produces very strange turns. Slavery is a horror, yes, but God says it’s ok… so if you say slavery needs to be abolished… you are holding yourself to a higher moral standard than God, which is surely some kind of Satanic pride on top of all the utopian dangers:

And when men, professing to be holy men, and who are by numbers so regarded, declare those things to be sinful which our Creator has expressly authorized and instituted, they do more to destroy his authority among mankind than the most wicked can effect, by proclaiming that to be innocent which he has forbidden.

(I’m using this one next time I teach "Euthyphro". Divine Command Theory buffs, this is one for the record books!)…

Hold It!? The New Campbell Hall Is Going to Be No Bigger than the Old Campbell Hall?: Whisky-Tango-Foxtrot-Bang-Query-Bang-Query Weblogging

Noted for August 29, 2013

Short:

Mark Kleiman: Note to conservatives about Martin Luther King « The Reality-Based Community | Top 200 Influential Economics Blogs | Austin Frakt and Aaron Carroll: Singapore’s health system: commentary from the literature | Dylan Scott: This Is What Obamacare Outreach Looks Like | Jonathan Chait: The Obama College-Socialism Backlash Is Here |

Long:

Michael D. Bauer and Glenn D. Rudebusch: Federal Reserve Bank San Francisco | What Caused the Decline in Long-term Yields? | Scott E. Carrell, Bruce I. Sacerdote, and James E. West: From Natural Variation to Optimal Policy? The Importance of Endogenous Peer Group Formation |

---

• Matthew Yglesias: Obama on equality of opportunity
• Ta-Nehisi Coates: On the Death of Dreams
• Jared Bernstein: Team Can't We All Just Get Along?

Noted for August 28, 2013

Short:

David Nye: America's Assembly Line | Louise Radnofsky and Ben Kesling: Michigan Senate Votes to Expand Medicaid | Daniel Gross: Why Rebublicans Are Starting to Love Health Reform | Gene Lyons: Move Over, Obamacare: Impeachment Is The Right’s New Lost Cause | Kathleen Gray: Medicaid expansion passes after heated politicking; 470,000 more Michiganders to get coverage | Speaking After MLK Jr. |

Long:

'Meet The Press' Airs Historic Martin Luther King, Jr. Interview (VIDEO) | Mark Carney: Crossing the Threshold to Recovery |

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• Kevin Drum: Conservatives Are Finally Admitting What Voter Suppression Laws Are All About
• Mark Blyth: End Austerity Now
• Ryan Avent: Business cycles: Demand more inflation
• Robert Waldmann: Contra Robert Hall
• Ballon Juice: Lexicon: Cavuto Mark
• Paul Krugman: The Real Trouble with Economics

Paul Krugman: The Real Trouble with Economics: Noted for August 28, 2013

Paul Krugman: The Real Trouble with Economics:

I’m a bit behind the curve in commenting on the Rosenberg-Curtain piece…. They’ve gotten it almost all wrong…. They apparently imagine that QE was an intuitive reaction by Bernanke, one that academic macroeconomics would never have suggested. Nothing could be further from the truth…. Krugman 1998 (pdf), Eggertsson and Woodford (2003), and, yes, Bernanke-Reinhart-Sack 2004 (pdf). Indeed, the Fed’s QE policies initially followed the latter paper closely…. Far from acting as a free-spirited improviser, Bernanke has been largely implementing recipes developed in the academic literature years before. So Rosenberg and Curtain completely misunderstand what’s been going on

They also misunderstand the nature of economists’ predictive failures…. [While] few economists predicted the onset… once crisis struck… basic macroeconomic models did a very good job…. The intuitionists--remember, Alan Greenspan was supposed to be famously able to sense the economy’s pulse--insisted that budget deficits would send interest rates soaring, that the expansion of the Fed’s balance sheet would be inflationary, that fiscal austerity would strengthen economies through “confidence”. Meanwhile, wonks who relied on suitably interpreted IS-LM confidently declared that all this intuition… would prove wrong--and they were right… these past 5 years have been a triumph for and vindication of economic modeling…. It would be a real tragedy if the takeaway from recent events becomes that you should listen to impressive-looking guys with good tailors who stroke their chins and sound wise, and ignore the nerds; the nerds have been mostly right….

Ballon Juice: Lexicon: Cavuto Mark: Noted for August 28, 2013

Balloon Juice: Lexicon (A-H): Cavuto Mark:

A question mark used to speculate on a false claim, thus allowing Fox News to run incendiary chyrons without needing any facts to support the claim. The use of punctuation to cover for what would otherwise be a baseless (and libellous) accusation: “Dick Cheney hunts black men” would be wrong. “Dick Cheney hunts black men?” is okay. Perhaps rhetorical, perhaps slanderous--we examine the controversy; you decide! Coined by Jon Stewart after Fox’s Neil Cavuto:

…Cavuto’s not saying these things. He’s just asking, like, ‘Is your mother a whore?’ What? I’m not saying she’s a whore. I’m just wondering out loud if she is a whore. All I’m saying is that reasonable people who have banged your mother for money can disagree.

See also, "Some people say…"

Liveblogging World War II: August 28, 1943

von Manstein:

Robert Waldmann: Contra Robert Hall: Noted for August 28, 2013

Robert Waldmann: Contra Hall:

[Is Hall's] phrase “job-value”… the value of a new hire to the employer or to the new employee. DeLong and Krugman consider the value of a new hire to the employer…. Hall says that hiring is like investing…. An increase in risk premia implies more discounting of the flow of expected future profits and can reduce both investment and hiring. Thus Hall has explained--nothing much. Yes private sector investment is low, but that is because investment in housing is low. Real private-sector non-housing fixed investment has recovered. and hiring hasn’t. So far, Hall’s argument must be that hiring is like building houses and not just like buying equipment…

How about… assuming that the “job-value” refers to the value of the job to the newly hired worker? In that case… the idea is that unemployed workers aren’t looking hard, because a job isn’t worth much because of "uncertainty"…. This doesn’t work either. It’s still investment… it shouldn’t be low if investment is normal… a… low value of an employment relationship should cause a high rate of separations as well…. [But] of course separation rates [right now] are very low, just as they always are when unemployment is high.

There would have to be something… special… occurring now… [a] strange thing which [also] occurred world wide in the 30s and in Europe in the late 70s 80s and 90s (and which was mysteriously cured by loose monetary policy after October 1987 in the UK). I say it is slack demand, and the mysterious failure of nominal wages to decline is due to the mysterious nominal rigidity… which is right there in the original Phillips scatter which included two periods of extremely high unemployment only one of which was associated with declining nominal wages. The key subtle insight is that the Phillips curve is a curve and not a straight line. Macroeconomists in general have not considered this strange mysterious possibility.

Ryan Avent: Business cycles: Demand more inflation: Noted for August 28, 2013

Ryan Avent: Business cycles: Demand more inflation:

There is a parsimonious explanation for the economy's behaviour sitting right in front of us: that inflation has been relatively stable because the Fed has targeted stable inflation, and the Fed's choice not to raise inflation higher—-and thereby reduce the real interest rate further—-accounts for continued high unemployment. That should be the null hypothesis, and I'm not sure on what grounds Mr Hall rejects it…. As Mr Hall acknowledges, the prevailing view of what to do in the face of a liquidity trap—-commit to making up lost nominal ground or, as some would have it, "promise to be irresponsible" and allow inflation above target for a time even after unemployment returns to "normal" levels—-seems pretty compelling. Perhaps if a central bank actually gave it a try we'd have a better sense of just how many of the questions addressed by Mr Hall actually need to be answered.

Mark Blyth: End Austerity Now: Noted for August 28, 2013

Mark Blyth: End Austerity Now:

Cynics recall that a European recovery was supposed to take hold as early as the fourth quarter of 2010, and that every International Monetary Fund projection since then has predicted recovery “by the end of the year.” Instead, GDP has collapsed, with the Spanish and Italian economies expected to contract by close to 2% this year. Portugal’s economy is set to shrink by more than 2%, and Greece’s output will fall by more than 4%. Moreover, unemployment in the eurozone has skyrocketed to an average rate of roughly 12%…. More significant, over the last year, the public debt/GDP ratio rose by seven percentage points in Italy, 11 in Ireland, and 15 in Portugal and Spain. If the sine qua non of recovery via austerity is the stabilization and reduction of debt, the cynics’ case appears to have been made…. The problem with austerity in the eurozone is… policymakers are attempting to address a sovereign-debt crisis, though the real problem is a banking crisis…. Eurozone leaders must recognize that spending cuts will do nothing to stabilize the balance sheets of core-country banks that are over-exposed to peripheral countries’ sovereign debt. Until Europe rejects austerity in favor of a growth-oriented approach, all signs of recovery will prove illusory.

Kevin Drum: Conservatives Are Finally Admitting What Voter Suppression Laws Are All About: Noted for August 28, 2013

Kevin Drum: Conservatives Are Finally Admitting What Voter Suppression Laws Are All About:

Conservatives have gotten tired of keeping up the pretense about the purpose of their voter suppression laws. Why bother, after all? It might make sense if they needed to convince a few Democrats to join their cause, but that's obviously hopeless. Alternatively, it might be necessary if they needed to maintain a legal fig leaf for future court cases, but the Supreme Court has ruled that purely partisan motivations for voting laws are A-OK. Finally, they might care about public opinion. And they probably do. But not much. At this point, the jig is up. Everyone knows what these laws are about, and there's hardly any use in pretending anymore. In fact, the only real goal of the voter suppression crowd now is to provide a plausible legal argument that what they're doing isn't intentionally racist. That's really the only thing that can derail them at this point, and the best way to fight back is to shrug their shoulders and just admit that they're being brazenly partisan. That's what Texas attorney general Greg Abbott did in his brief supporting his state's voter suppression laws, and he did it with gusto. But if that's the official argument that you have to make in your legal briefs, there's not much point in denying it in other forums. You might as well just go with it.

Steampunk!: Hoisted from the Archives from 2009 Wednesday Weblogging

Steampunk!: Via Making Light: Sydney Padua: 2D Goggles » Lovelace: The Origin: Augusta Ada King, Countess of Lovelace:

Life in Japan

Noted for August 27, 2013

Short:

Dean Baker: Abenomics | Kieran Healy: Social Theory from Marx to Parsons | Brad DeLong (2010): More on Clinton-Era Regulation of Derivatives | Ian Millhiser: Justice Ginsburg's Terrifying Assessment Of Her Own Court | Kevin Drum: Conservatives Are Finally Admitting What Voter Suppression Laws Are All About | Timothy B. Lee: Here’s how phone metadata can reveal your affairs, abortions, and other secrets | Peter Aldhous: Yosemite Rim Fire is taste of things to come | Mark Thoma (2009): Lucas roundtable: Ask the right questions | Reinventing Michigan: Facts About Medicaid Expansion | Happy Nice Time People |

Long:

Wendy Brown (2003): Neoliberalism and the End of Liberal Democracy | Perry Mehrling: INET Course on the Economics of Money and Banking | Ben S. Bernanke, Vincent R. Reinhart, and Brian P. Sack (2004): Monetary Policy Alternatives at the Zero Bound: An Empirical Assessment |

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• Erik Wemple: Pari Bradlee and the brilliance of Fox News’s Howard Kurtz: Noted for August 27, 2013:
• Richard Landes: David Landes Obituary: Noted for August 27, 2013:
• Mark Thoma: The Great Lesson from the Great Recession: Noted for August 27, 2013:
• Peter Gleick: Peak Water in the American West: Noted for August 27, 2013:
• Jason Cherkis: These three paragraphs say everything about Obamacare: Noted for August 27, 2013:
• Felix Salmon: Is Marissa Mayer the right CEO for Yahoo?

Erik Wemple: Pari Bradlee and the brilliance of Fox News’s Howard Kurtz: Noted for August 27, 2013

Erik Wemple: Pari Bradlee and the brilliance of Fox News’s Howard Kurtz:

Kurtz is doing the job he was hired to do. By writing a post on an issue that doesn’t exist; whose only connection to significance is Georgetown establishment; whose motivation is transparently communal prurience; whose execution is so nakedly lacking in meaningful editorial supervision; whose publication is being thoroughly giggled about on Twitter; and whose facts are unimpeachable, Kurtz is elevating the editorial standards of Fox News.

Richard Landes: David Landes Obituary: Noted for August 27, 2013

Richard Landes: David S. Landes, May his memory be a blessing:

This last Saturday afternoon, August 17, 2013, my father, David Landes died in Haverford PA. The following is a brief obit to which I will add when I have more time. He was the beloved husband of Sonia T. Landes, who died on April 12, 2013, after 69 years of marriage. He was the father of Jane Landes Foster, Richard Allen Landes and Alison Landes Fiekowsky, grandfather of eight and great-grandfather of nine.

Mark Thoma: The Great Lesson from the Great Recession: Noted for August 27, 2013

Mark Thoma: The Great Lesson from the Great Recession:

Is there a similarly important policy lesson to be drawn from the Great Recession we’ve just experienced?… The Fed did avoid the big error of allowing massive bank failures and declines in banking reserves that were so problematic during the Great Depression, and many people give the Fed credit for avoiding a Great Depression type collapse…. I would not have wanted to experience a repeat of the Fed’s failures during the Great Depression…. When the recession hit this time around, we had a much, much higher level of societal wealth, and hence a much larger cushion to absorb the shocks than we had during the Great Recession. Second, and importantly, the presence of automatic stabilizers, particularly those that come in the form of social insurance programs, made a big difference…. Third, it’s not as though the Fed created a miracle recovery…. The improved response of monetary authorities and the existence of automatic stabilizers certainly made the downturn far less severe than it might have been, but a big lesson from our recent experience is that these policies alone are not enough to turn the economy around. Help from fiscal policy is needed…. Congress failed to implement a fiscal stabilization package that was large enough to address the big problems the economy was facing, and due to Republican opposition it refused to implement additional measures when it became clear the initial package was too small in both size and duration…. That failure was bad enough. But even worse is that fiscal policymakers actually began moving in the wrong direction--toward austerity--at a time when just the opposite policy was needed. The result has been a much slower recovery than we might have seen otherwise. After the Great Depression, the Fed learned from its mistakes…. But what about fiscal policy? Will fiscal policymakers in the US and Europe learn from the big mistakes they made recently--mistakes that have prolonged the recession and imposed permanent harm on some members of society? As much as I’d like to hope that somehow economists will speak with a strong, unified voice on the usefulness of fiscal policy in deep recessions, a position I believe is firmly supported by the empirical evidence, and that politicians--Republican politicians in particular--would follow their advice, it’s hard to imagine either of those things happening. That means, discouragingly, that the next time a severe recession hits fiscal policymakers will likely fail us once again and leave us with yet another unnecessarily slow, agonizing recovery.

Today in Total Derp: Howard Kurtz and Fox's Idea of NEWS

Anybody who has spent the last generation quoting or citing Howard "WOW! Yoga Instructor Looks Fit!!!!" Kurtz on anything owes us all a big apology.

Why oh why can't we have a better press corps?

Howard Kurtz:

Ben Bradlee’s daughter-in-law reveals (almost) all on Facebook | Fox News: Ben Bradlee, one of the great men of American journalism, celebrated his 92nd birthday yesterday, and his daughter-in-law paid tribute by posting a photo of them and saying "it is a dream to be part of his family."  That, however, is only one of the photos that Pari Bradlee has been putting on Facebook.  Her new profile picture, in a Swiss-cheese bra that leaves little to the imagination and long black leather sleeves and briefs, is so revealing that it drew a torrent of breathless comments. In another just-posted photo she is nude, shot from the back, twisting one arm behind her. 

Liveblogging World War II: August 27, 1943

Free French Pilot Pierre Clostermann:

Suddenly I found myself in a relatively clear bit of sky. Spitfires and Focke-Wulfs swirled all round. Four vertical trails of heavy black smoke that hung in the air without dissipating marked the fatal trajectory of four aircraft, whose debris blazed on the ground, scattered in the meadows 27,000 feet below.

Parachutes began to blossom on every side. Why no reinforcements? What was the controller waiting for? Twenty-four against 200 didn’t give us much chance.

Brad DeLong (1996): Review of John Maynard Keynes, "A Tract on Monetary Reform": Tuesday Book Review Weblogging

February 21, 1996: Review of John Maynard Keynes, "A Tract on Monetary Reform":

John Maynard Keynes, A Tract on Monetary Reform (London: Macmillan, 1924)

This may well be Keynes's best book. It is certainly the best monetarist economics book ever written.

What do I mean by monetarist? Consider the book's preface, where Keynes writes:

[The economy] cannot work properly if the money... assume[d] as a stable measuring rod, is undependable. Unemployment, the precarious life of the worker, the disappointment of expectation, the sudden loss of savings, the excessive windfalls to individuals, the speculator, the profiteer--all proceed, in large measure, from the instability of the standard of value.

It is often supposed that the costs of production are threefold... labor, enterprise, and accumulation. But there is a fourth cost, namely, risk; and the reward of risk-bearing is one of the heaviest, and perhaps the most avoidable, burden on production....[T]he adoption by this country and the world at large of sound monetary principles, would diminish the wastes of Risk, which consume at present too much of our estate.

Peter Gleick: Peak Water in the American West: Noted for August 27, 2013

Peter Gleick: Peak Water in the American West:

It is no surprise, of course, that the western United States is dry. The entire history of the West can be told… in large part through the story of the hydrology…. But the story of water in the West is also being told, every day, in the growing crisis facing communities, watersheds, ecosystems, and economies…. Las Vegas is so desperate for new supplies they have proposed a series of massive and controversial ideas, including: a $15+ billion pipeline to tap into groundwater aquifers in other parts of the state, diverting the Missouri River to the west, and building desalination plants in Southern California or Mexico so they can take a bigger share of the Colorado…. Praying for rain has become an official water strategy for some politicians in Texas, Georgia, Florida, Oklahoma, and elsewhere. Another popular water strategy seems to be to sue your neighboring state. Here are some examples: Texas v. Oklahoma and Kansas v. Nebraska and Colorado, and outside of the west, Florida v. Georgia (and Alabama too)….

We must acknowledge that we’ve reached peak water in the American west. We have promised more water to users than nature provides…. This means figuring out how to use water more efficiently and productively, and thinking about moving some water-intensive activities and products to more water-abundant regions… rice, alfalfa, cotton, and pasture with flood irrigation…. Finally we have to stop assuming that the water available for future use is the same as in the past. Climate change ensures that it won’t be.

Jason Cherkis: These three paragraphs say everything about Obamacare: Noted for August 27, 2013

Jason Cherkis: These three paragraphs say everything about Obamacare:

A middle-aged man in a red golf shirt shuffles up to a small folding table with gold trim, in a booth adorned with a flotilla of helium balloons, where government workers at the Kentucky State Fair are hawking the virtues of Kynect, the state’s health benefit exchange established by Obamacare.

The man is impressed. “This beats Obamacare I hope,” he mutters to one of the workers.

“Do I burst his bubble?” wonders Reina Diaz-Dempsey, overseeing the operation. She doesn’t. If he signs up, it’s a win-win, whether he knows he’s been ensnared by Obamacare or not.