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Neoliberalism and Its Discontents: Podcast

Brad DeLong, Reed Hundt, and Joshua Cohen: Neoliberalism and Its Discontents: "At the end of the Carter administration and throughout the Reagan Revolution, belief in the power of markets became America's preferred economic policy doctrine. President Bill Clinton all but announced the triumph of free markets when he declared that 'the era of big government is over'. President Barack Obama faced the worst economic crisis since the Great Depression and pushed a recovery plan that was more limited than many had hoped, seeming to protect the very sectors that had created it.... In his new book, A Crisis Wasted, Reed Hundt... makes the argument that Obama missed an opportunity to push for a new progressive era of governance, a miscalculation that ultimately hobbled his administration.... A very special conversation between Hundt and DeLong about the limits of, and challenges to, free-market economics... in conversation with Joshua Cohen, co-editor of Boston Review...

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Grand Narrative: An Intake from Slouching Towards Utopia?: An Economic History of the Twentieth Century, 1870-2016

Il Quarto Stato

Slouching Towards Utopia?: An Economic History of the Twentieth Century, 1870-2016

I. Grand Narrative

J. Bradford DeLong :: U.C. Berkeley, NBER, WCEG https://www.icloud.com/pages/0TzensY9YyNvqcY8elYagLUnQ https://www.icloud.com/keynote/0_nA1dc3XLgFa_2rEVsk3nuWQ

1.1: The Long 20th Century in Human History

The Long 20th Century began around 1870 and ended in 2016.

Before 1870 humanity was poor, and life was typically nasty, brutish, and short. Before 1870, over and over again, technology lost its race with human fecundity, and greater numbers coupled with resource scarcity to produce a humanity where most people most of the time could not be confident that they and their families would have their 2000 calories, plus essential nutrients, plus a roof over their head in a year. Before 1870 those on the make overwhelmingly focused on how to take from others or keep what they had while maintaining order, rather on how to make more for everyone. It is true that between 1800 and 1870 technology and organization gained a step or two in their race with fecundity. But only a step. Any post-1870 slackening of the pace of technological or organizational progress, or any major redivision of society’s dividends devoting less to the sinews or peace and more to the sinews of war, and “nasty, brutish, and short” would reassert itself.

But starting in 1870 all that changed. Science reached critical mass and gave birth to engineering. A liberal political order gave birth to a market economy. Engineering and the market produced an explosion of economic growth: these days one single year sees as much proportional technological and organizational advance and change in the human economy as a typical fifty years did back before 1800.

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DevEng 215: Pre-Class Note: Welcome!

Il Quarto Stato

Let us set the scene with an introductory note:

Back in 1800, nearly the entire world lived in dire poverty—what we today see as the dire poverty line of $1.90 a day, a level at which you are spending more than half your income on bare calories and essential nutrients, the minimum of heat and shelter, and the minimum of clothing. Below that line, certainly your health and perhaps your life is impacted: women become too skinny to reliably ovulate, and children become too malnourished to have healthy and effective immune systems. Back in 1800, there were only a few economies where the median household had a standard of living of more than $3 a day: Germany, France, Austria, Denmark, Belgium, Holland, Switzerland, the U.K., the U.S., and that was it.

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American Twentieth-Century Exceptionalism: An Outtake from "Slouching Towards Utopia: An Economic History of the Long Twentieth Century 1870-2016"

Il Quarto Stato

Sources of American Exceptionalism

In 1870 the focus of economic growth crossed the Atlantic to America, where continent-wide scale, a flood of immigration, vast resources, and an open society that made inventors and entrepreneurs culture heroes welcomed economic growth. In the United States the Belle Époque, the Gilded Age, the period of the explosion of prosperity set in motion around 1870 lasted without interruption longer than elsewhere in the world. China collapsed into revolution in 1911. Europe descended into the hell of World War I in 1914. In America the period of progress and industrial development lasted longer—perhaps from when the guns fell silent at the end of America’s Civil War at Appomattox in 1865 until the start of the Great Depression in the summer of 1929.

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John Cochrane Prostitutes Himself to Republican Politicians Department: Monday Smackdown/Hoisted from 2015

Clowns (ICP)

Noah Smith: John Cochrane Smackdown: "John writes: 'My surprise in reading Noah is that he provided no alternative numbers. If you don't think Free Market Nirvana will have 4% growth, at least for a decade as we remove all the level inefficiencies, how much do you think it will produce, and how solid is that evidence?...' I don't really feel I need to produce an alternative to a number that was made up as a political talking point. Why 4 percent? Why not 5? Why not 8? Why not 782 percent? Where do we get the number for how good we can expect Free Market Nirvana to be? Is it from the sum of point estimates from a bunch of different meta-analyses of research on various free-market policies? No. It was something Jeb Bush tossed out in a conference call because it was 'a nice round number', after James Glassman had suggested '3 or 3.5'. You want me to give you an alternative number, using the same rigorous methodology? Sure, how about 3.1. Wait, no. 3.3. There we go. 3.3 sounds good. Rolls off the tongue..."

I must say, Cochrane here reminds me of one of my most favorite quotes from tank economist Paul M. Sweezy:

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Who Are the Tankies, and Why Do They Fight for Dystopia?

Il Quarto Stato

Note to Self: And, of course, the curious thing is that when the chips are down it is the authoritarianism rather than the aolition of private property that is the key: Urban Dictionary: Tankie: "The term derives from the fact that the divisions within the communist movement first arose when the Soviet Union sent tanks into communist Hungary in 1956, to crush an attempt to establish an alternative version of communism which was not embraced by the Russians. Most communists outside the eastern bloc opposed this action and criticised the Soviet Union. The 'tankies' were those who said 'send the tanks in'. The epithet has stuck because tankies also supported 'sending the tanks in' in cases such as Czechoslovakia 1968, Afghanistan 1979, Bosnia and Kosovo/a (in the case of the Serbian state)...


German classical liberal Max Weber... saw that [really existing] socialism could become nothing but a synonym for bureaucratic despotism. For:  

History shows that wherever bureaucracy gained the upper hand, as in China, Egypt, it did not disappear. A progressive elimination of private capitalism is theoretically conceivable. What would be the practical result? The destruction of the [dehumanizing] steel frame of modern industrial work? No! Simply that also the top management of the socialized enterprises would become bureaucratic. There is even less freedom, since every power struggle with a state bureaucracy is hopeless.

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Migration 1870-1925 and International Economic InequalityOuttake from "Slouching Towards Utopia: An Economic History of the Long Twentieth Century 1870-2016

Il Quarto Stato

What did matter for inequality and upward mobility in the pre-World War I era was not trade but migration. The descendants of those who lived in Ireland at the start of the nineteenth century are, today, one of the richest groups in the world: less than half of the descendants of the Irish of 1800 live in Ireland today; instead, they are spread throughout America, Britain, and Australia, and they have prospered.

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Introducing Partha Dasgupta: Economics: A Very Short Introduction

479 Social Capital and Natural Resources Sir Partha Dasgupta YouTube

Introducing Partha Dasgupta: Economics: A Very Short Introduction

http://amzn.to/2gR2jH3

Back in 1800, nearly the entire world lived in dire poverty—what we today see as the dire poverty line of $1.90 a day, a level at which you are spending more than half your income on bare calories and essential nutrients, the minimum of heat and shelter, and the minimum of clothing. Below that line, certainly your health and perhaps your life is impacted: women become too skinny to reliably ovulate, and children become too malnourished to have healthy and effective immune systems. Back in 1800, there were only a few economies where the median household had a standard of living of more than $3 a day: Germany, France, Austria, Denmark, Belgium, Holland, Switzerland, the U.K., the U.S., and that was it.

Continue reading "Introducing Partha Dasgupta: Economics: A Very Short Introduction" »


Ancient Economies: A Malthusian Model: Markdown Notebook

DRAFT: Ancient Economies: A Malthusian Model : The math for complicating the standard Solow Growth Model with (a) a rate of population growth that depends positively on the excess of spending on necessities above "subsistence" and (b) a level of the efficiency-of-labor that depends inversely on population, as a higher population induces resource scarcity that makes labor less productive. For understanding both the long-term apparent stagnation of living standards between the Neolithic and the Industrial Revolutions, and for understanding the rise and fall of ancient civilizations. Question: How should we add on to the Python class for the Solow Growth Model to turn this into a tool for doing problem sets for Econ 101b (and perhaps 135):

https://nbviewer.jupyter.org/github/braddelong/LS2019/blob/master/2019-08-17-Ancient_Economies.ipynb

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A Competitive Market: Python Class/Notebook

DRAFT: A Competitive Market: A Python class for a competitive market equilibrium with linear supply and demand curves—equilibrium price, equilibrium quantity, producer surplus, consumer surplus, total surplus. Looks for input parameters giving the slopes of the demand and supply curves, plus the maximum willingness-to-pay of the most eager demander and the minimum opportunity cost of the most efficient supplier. Now ready to hand over to others for editing, tightening, and additions.

https://nbviewer.jupyter.org/github/braddelong/LS2019/blob/master/2019-08-10_market.ipynb

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Solow Growth Model: Python Class/Notebook

CANDIDATE: Solow Growth Model Derived and modified from Stachurski-Sargent http://quantecon.org. A Python class for simulations using the Solow Growth Model, with additional code for performing simulations with baseline- and alternative-scenario parameter values. Focuses on the capital-output ratio κ as the key state variable, as it is (a) observable, and (b) with constant growth-model parameter values converges exactly (in continuous time at least) as an exponential. Now ready to hand over to others for tightening and additions:

https://nbviewer.jupyter.org/github/braddelong/LS2019/blob/master/2019-08-08-Sargent-Stachurski.ipynb

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August 16, 2019: Weekly Forecasting Update

Industrial Production Manufacturing NAICS IPMAN FRED St Louis Fed

The market has now delivered 100 basis points of easing in the ten-year Treasury window since the end of last October. On the 30-year bond, you would have made a 20% profit if you both it last October and sold it today, compared to a 3.5% profit on the S&P Composite over the same period. That is a major, major sentiment shift. That means that a number of people short debt with riskier operations than the S&P Composite are about to face margin calls and rollover difficulties. We will shortly see how solvent the market judges them.

Meanwhile, There was essentially no news about real GDP last week: The Federal Reserve Bank of New York nowcast stands at 1.8% for 2019:Q3.

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Looking Backwards from This Week at 24, 16, 8, 4, 2, 1, 1/2, and 1/4 Years Ago (August 7-August 13, 2019)

stacks and stacks of books

MUST OF THE MUSTS: J. Bradford De Long and Lawrence H. Summers: Equipment Investment and Economic Growth: "We use disaggregated data from the United Nations International Comparison Project and the Penn World Table to examine the association between different components of investment and economic growth over 1960–85. We find that producers’ machinery and equipment has a very strong association with growth: in our cross section of nations each percent of GDP invested in equipment raises GDP growth rate by 1/3 of a percentage point per year. This is a much stronger association than can be found between any of the other components. We interpret this association as revealing that the marginal product of equipment is about 30 percent per year. The cross nation pattern of equipment prices, quantities, and growth is consistent with the belief that countries with rapid growth have favorable supply conditions for machinery and equipment. The pattern is not consistent with the belief that some third factor both pushes up the rate of growth and increases the demand for machinery and equipment...

 

Continue reading "Looking Backwards from This Week at 24, 16, 8, 4, 2, 1, 1/2, and 1/4 Years Ago (August 7-August 13, 2019)" »


Fairly Recently: Must- and Should-Reads, and Writings... (August 15, 2019)

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  1. Wikipedia: Charlie Dent

  2. Duncan Black: Healthy Country: "I really don't see a way forward which isn't 'no deal Brexit' though no deal Brexit isn't a real thing. It just means 'we didn't bother to solve all the problems we have to start solving piece by piece now'...

  3. Appian: The Macedonian Wars: "Flamininus came into conference with Philip a second time at the Malian gulf.... The Greeks asked the Roman Senate to require Philip to remove from their country the three garrisons which he called 'the fetters of Greece': the one at Chalcis, which threatened the Boeotians, the Euboeans, and the Locrians; the one at Corinth, which closed the door of the Peloponnese; and the third at Demetrias, which lay, as it were, in ambush for the Aetolians and the Magnesians. The Senate asked Philip's ambassadors what the king's views were respecting the garrisons. When they answered that they did not know, the Senate said that Flamininus should decide the question and do what he considered just. So the ambassadors took their departure from Rome. Flamininus and Philip, being unable to come to any agreement, resumed hostilities...

  4. Simon Wren-Lewis: There Is No Mandate for No Deal

  5. Wikipedia: Ferghana horse

  6. Visit Faroe Islands

  7. Wikipedia: War of the Heavenly Horses: "The War of the Heavenly Horses or the Han–Dayuan war was a military conflict fought in 104 BC and 102 BC between the Chinese Han dynasty and Dayuan (in Central Asia, around Uzbekistan, east of Persia). The result was Han victory...

  8. Paul Krugman (1987): Adjustment in the World Economy

  9. Fred Hoyle: Ossian's Ride

  10. Wikipedia: Li Bai: "Li Bai, Li Po, Li Bo, Ri Haku have been all used in the West, but are all written with the same characters. His given name, (白), is romanized by variants such as Po, Bo, Bai, Pai. In Hanyu Pinyin, reflecting modern Mandarin Chinese, the main, colloquial equivalent for this character is Bái; Bó is the literary variant and is commonly used...

  11. Squawk Box: Business, Politics, Investors and Traders: "'Squawk Box' is the ultimate 'pre-market' morning news and talk program, where the biggest names in business and politics tell their most important stories. Anchored by Joe Kernen, Becky Quick and Andrew Ross Sorkin, the show brings Wall Street to Main Street. It's a 'must see' for everyone from the professional trader to the casual investor...

  12. Sidewalk Street Food

  13. The Art of the Lingnan School, 嶺南畫派的繪畫藝術

  14. Steve Jobs *(2007): Introducing The iPhone At MacWorld 2007

  15. Michael Pettis: Real Growth in China is Less than Half of Reported Growth

Continue reading "Fairly Recently: Must- and Should-Reads, and Writings... (August 15, 2019)" »


America’s Superpower Panic: Project Syndicate

America s Superpower Panic by J Bradford DeLong Project Syndicate and America s Superpower Panic Project Syndicate

Project Syndicate: America’s Superpower Panic: History suggests that a global superpower in relative decline should aim for a soft landing, so that it still has a comfortable place in the world once its dominance fades. By contrast, US President Donald Trump's incoherent, confrontational approach toward China could seriously damage America’s long-term interests.

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Is Plutocracy Really the Biggest Problem?: No Longer Fresh at Project Syndicate

Is Plutocracy Really the Problem by J Bradford DeLong Project Syndicate

Project Syndicate: Is Plutocracy Really the Biggest Problem?: After the 2008 financial crisis, economic policymakers in the United States did enough to avert another Great Depression, but fell far short of what was needed to ensure a strong recovery. Attributing that failure to the malign influence of the plutocracy is tempting, but it misses the root of the problem:

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Fairly Recently: Must- and Should-Reads, and Writings... (August 11, 2019)

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  • Reflections 11 Years After the Crash: As long as people were confident that the 500 billion of bad mortgage debt would ultimately land on somebody who could absorb it, the only thing that would make a bad recession was if people anticipated a bad recession. And with no Lehman panic—if Bernanke, Paulson, and Geithner had not caused everybody to say quote what the fuck is going on" by allowing Lehman's bankruptcy uncontrolled and then justifying their actions by claiming that they were forbidden by law to support a too-big-to-fail institution that was insolvent and not just illiquid... Without that, no reason to fear even as bad as the S&L crisis...

  • Weekly Forecasting Update: August 9, 2019: There was essentially no news about real GDP last week: The Federal Reserve Bank of New York nowcast continues to stand at 1.6% for 2019:Q3. We did see another fifteen basis points of market easing at the long end of the yield. Curve: the 10-Year TIPS yield is now 0.09%. And that, of course, makes equity stock market investments a deal. Patrick Chovanec is worth reading...

  • Hoisted from the Archives: A Now-Extended Non-Sokratic Dialogue on Website Design

  • DeLong Smackdown: Why I Was Wrong Over 2006-2010...: Let me say what things I was "expecting," in the sense of anticipating that it was they were both likely enough and serious enough that public policymakers should be paying significant attention to guarding the risks that it would create...

  • Note to Self: We know that big data can find correlations. We thus fear people will then use those correlations to hack our brains for their profit or advantage—and for our loss.... On the other hand... Big Ad Data is not smart enough to figure out: "although this internet identity is associated with this credit card number, the person surfing the web right now is not the person who buys the bras"...

  • Note to Self: et me say that I am 100% behind Roxane Gay here. When Jonathan Weisman was covering economics and monetary policy, he was a "Paul Krugman and Donald Luskin disagree about the shape of the earth: who can tell who is right?" guy. Those of us who talked to him took the incompetence for granted—and more than that: a willful desire to not understand the issues because then he might be unable to properly suck up to the sources he wished to suck up to...

  • Note to Self: Why was Jonathan Weisman's economic policy reporting for the Washington Post so execrable back in the mid-2000s? A person who was, as they say, very, very, very, very, very familiar with the matter: "Jonathan's big problem is that he's not that deep into the issues, and he has no backup. There's nobody that he can go to in that building to tell him 'this was how X was trying to mislead you' or 'this is Y's history' or 'be very careful here: if you get this detail Z wrong, they'll come down on you extremely hard'"...

  • Note to Self: For programming and Python Jupyter Notebook νBs, who are wondering what they are getting themselves into: Programming Dos and Don'ts: A Running List...

  • Looking Backward: From This Week at 24, 20, 16, 12, 8, 4, 2, 1, 1/2, and 1/4 Years Ago (July 31-August 6, 2019): MUST OF THE MUSTS: James M. Buchanan: The "Social" Efficiency of Education: You have to be able to hold in your mind two things at once in order to understand economist James M. Buchanan: (1) He was a total loon: a strong believer in the de Maistrean trinity of Patriarchy, Orthodoxy, Autocracy as necessary for society—essential Noble Lies; a man who in 1970 wanted to shut down America's universities as teachers of evil, and regretted the failure of nerve that made that impossible; a man who saw Martin Luther King Jr. as a teacher of evil—whose response to the Civil Rights movement and its peaceful civil disobedience campaign was not Edmund Burke's "to make us love our country, our country must be lovely", but rather: how dare MLK claim that an African American should be "openly encouraged to use his own conscience"—rather than shutting up and accepting his subservient Jim Crow position in society! (2) A man who saw things that other economists did not and would not have without him...

  • A Year Ago on Equitable Growth: Fifteen Worthy Reads On and Off Equitable Growth for August 9, 2018:

  • Comment of the Day: Graydon: "You get what you reward, and the present mechanism of reward is advertising, fundamentally aligned with increasing people's insecurity so as to increase their likelihood of making a purchase to address that insecurity...

  • Comment of the Day: Cosma Shalizi: ":I have used Google as pretty much my only search engine since it became available.... Google should thus have a very complete idea of what I'm interested in.... I can, with charity, understand 'homemaking and interior decor' (because I'd been researching new window blinds), and 'pet food and supplies' (though my cat had died more than a year before). Everything else was just flat wrong, and often mystifyingly so...

  • Comment of the Day: Doctor Jay: "I'm very much not getting what I want out of social media. I very much AM getting what I want out of internet search...

  • For the Weekend: J.R.R. Tolkien (1925): Light as Leaf on Linden Tree:

  • Liveblogging: The Anglo-Saxon Chronicle: Cynegils: "A.D. 635. This year King Cynegils was baptized by Bishop Birinus at Dorchester; and Oswald, king of the Northumbrians, was his sponsor. A.D. 636. This year King Cwichelm was baptized at Dorchester, and died the same year. Bishop Felix also preached to the East-Angles the belief of Christ...

  • Liveblogging: The Anglo-Saxon Chronicle: Erkenbert: ""A.D. 639. This year Birinus baptized King Cuthred at Dorchester, and received him as his son...


  1. Brian Chappatta: Trump Risks Losing the Fed as a Recession Scapegoat: "The Federal Reserve cut interest rates to account for a 'simmering' trade war. Then the president turned up the heat and put a downturn in play himself. The market signal for a recession is blinking fast and Trump has only himself to blame. The markets have spoken. If they are to be believed, the potential for a U.S. recession has never been greater in the post-crisis era than it is right now. That’s a problem for President Donald Trump because after the events of the past few days, it should be clear that he has effectively forfeited the ability to use the Federal Reserve as a scapegoat for any economic slowdown, an angle he was clearly prepared to play...

  2. Jeremy R. Hammond: The Lies that Led to the Iraq War and the Myth of 'Intelligence Failure'

  3. Jonathan Stein and Tim Dickinson: Lie by Lie: A Timeline of How We Got Into Iraq: "Mushroom clouds, duct tape, Judy Miller, Curveball. Recalling how Americans were sold a bogus case for invasion...

  4. Hubert Horan: Uber’s Path of Destruction: "Uber has disrupted... the idea that competitive consumer and capital markets will maximize overall economic welfare by rewarding companies with superior efficiency.... Uber’s most important innovation has been to produce staggering levels of private wealth without creating any sustainable benefits for consumers, workers, the cities they serve, or anyone else...

  5. Yereth Rosen: Record-Low Sea Ice in July Sets Up Conditions For an Ultra-Low Minimum Extent This Fall: "Sea ice extent in September of 2019 is likely to be among the five lowest minimums recorded...

  6. Patrick Chovanec: U.S. Market and Economic Review—August 2019

  7. Kieran Healy: Frank Oz Muppets and the Big Five Personality Traits

Continue reading "Fairly Recently: Must- and Should-Reads, and Writings... (August 11, 2019)" »


August 9, 2019: Weekly Forecasting Update

FRED Graph FRED St Louis Fed

There was essentially no news about real GDP last week: The Federal Reserve Bank of New York nowcast continues to stand at 1.6% for 2019:Q3. We did see another fifteen basis points of market easing at the long end of the yield. Curve: the 10-Year TIPS yield is now 0.09%. And that, of course, makes equity stock market investments a deal. Patrick Chovanec is worth reading:

Patrick Chovanec: Outlook: "Besides consumption and government spending... the rest was negative in Q2...

...Exports fell by −5.2% while imports were flat... business investment fell by −0.6%, its first quarterly decline in over three years.... Durable goods orders in Q2 were down −2.1% from a year ago.... (The slowdown in U.S. manufacturing matches similar purchasing manager surveys in Europe, Japan, and China, which are all in outright contraction).... Residential investment fell −1.5% in Q2.... New housing permits... were down −4.5% in Q2, from a year ago...

The new tariffs on China—10% on virtually all imports that aren’t already tariffed at 25%, scheduled to take effect in September—are exactly what U.S. companies across multiple sectors have worried and warned about for nearly a year now. Though their direct impact may be limited, the prospect of further escalation hangs like a cloud over business confidence....

Given these uncertainties, U.S. share prices may look daunting even at a 12-month trailing P/E ratio of 19.1x operating earnings, which is far from excessive by historical terms. But they look better compared to U.S. Treasuries at an implied P/E ratio of 60x, returning little more than inflation, or the nearly $15 trillion in bonds around the world selling at negative yields. Safe harbors are expensive, and likely to prove costly over the longer term, even if the economy could stumble in the meantime. With an equity risk premium at 5.6%—before the latest dip in share prices and bond yields—the prospective rewards to riding out the storm, as opposed to running for cover at any price, are too high for an investor who can endure a few bumps along the way to ignore...

Continue reading "August 9, 2019: Weekly Forecasting Update" »


DeLong Smackdown: Why I Was Wrong Over 2006-2010...

Smackdown/Hoisted: Why I Was Wrong...: Calculated Risk issued an invitation:

Calculated Risk: Hoocoodanode?: Earlier today, I saw Greg "Bush economist" Mankiw was a little touchy about a Krugman blog comment. My reaction was that Mankiw has some explaining to do. A key embarrassment for the economics profession in general, and Bush economists Greg Mankiw and Eddie Lazear in particular, is how they missed the biggest economic story of our times.... This was a typical response from the right (this is from a post by Professor Arnold Kling) in August 2006:

Apparently, the echo chamber of left-wing macro pundits has pronounced a recession to be imminent. For example, Nouriel Roubini writes, "Given the recent flow of dismal economic indicators, I now believe that the odds of a U.S. recession by year end have increased from 50% to 70%." For these pundits, the most dismal indicator is that we have a Republican Administration. They have been gloomy for six years now...

Sure Roubini was early (I thought so at the time), but show me someone who has been more right! And this brings me to Krugman's column:

... Why did so many observers dismiss the obvious signs of a housing bubble, even though the 1990s dot-com bubble was fresh in our memories? Why did so many people insist that our financial system was “resilient,” as Alan Greenspan put it, when in 1998 the collapse of a single hedge fund, Long-Term Capital Management, temporarily paralyzed credit markets around the world? Why did almost everyone believe in the omnipotence of the Federal Reserve when its counterpart, the Bank of Japan, spent a decade trying and failing to jump-start a stalled economy?

Continue reading "DeLong Smackdown: Why I Was Wrong Over 2006-2010..." »


Looking Backwards from This Week at 24, 20, 16, 12, 8, 4, 2, 1, 1/2, and 1/4 Years Ago (July 31-August 6, 2019)

stacks and stacks of books

MUST OF THE MUSTS: James M. Buchanan: The "Social" Efficiency of Education: You have to be able to hold in your mind two things at once in order to understand economist James M. Buchanan: (1) He was a total loon: a strong believer in the de Maistrean trinity of Patriarchy, Orthodoxy, Autocracy as necessary for society—essential Noble Lies; a man who in 1970 wanted to shut down America's universities as teachers of evil, and regretted the failure of nerve that made that impossible; a man who saw Martin Luther King Jr. as a teacher of evil—whose response to the Civil Rights movement and its peaceful civil disobedience campaign was not Edmund Burke's "to make us love our country, our country must be lovely", but rather: how dare MLK claim that an African American should be "openly encouraged to use his own conscience"—rather than shutting up and accepting his subservient Jim Crow position in society! (2) A man who saw things that other economists did not and would not have without him...

 

Continue reading "Looking Backwards from This Week at 24, 20, 16, 12, 8, 4, 2, 1, 1/2, and 1/4 Years Ago (July 31-August 6, 2019)" »


Reflections 11 Years After the Crash

Idle factories in 2010 Google Search

1) If there hadn't been any of the kind of panic we got post-Lehman, how severe you think the U.S. recession would have been? Would it have been like a slightly worse S&L crisis, or is that underselling it?

I think the smart money in June 2008 was that the recession was or was about to be over. Housing investment had already rebalanced: the construction sector was back to a sustainable share of GDP. There were only about 500 billion of mortgage losses to be distributed around the world or to be bailed out by governments—really, trivial amounts in a world economy with 80 trillion of traded financial assets. And with Bear-Stearns the U.S. government had guaranteed the debt but not the equty of too big to fail institutions. Banks were still having trouble raising equity. But as long as people were confident that the 500 billion of bad mortgage debt would ultimately land on somebody who could absorb it, the only thing that would make a bad recession was if people anticipated a bad recession. And with no Lehman panic—if Bernanke, Paulson, and Geithner had not caused everybody to say quote what the fuck is going on" by allowing Lehman's bankruptcy uncontrolled and then justifying their actions by claiming that they were forbidden by law to support a too-big-to-fail institution that was insolvent and not just illiquid... Without that, no reason to fear even as bad as the S&L crisis.

Continue reading "Reflections 11 Years After the Crash" »


A Now-Extended Non-Sokratic Dialogue on Website Design: Hoisted from the Archives

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Hoisted from the Archives: A Now-Extended Non-Sokratic Dialogue on Website Design: What I, at least, regard as an interesting discussion in the comments to my A Very Brief Sokratic Dialogue on Website Redesign: From that post:

Platon: Five requirements?

Sokrates: Yes.... The stream... so... who want to either read what is new or to treat the site as a weblog--that is, have a sustained engagement and conversation with the website considered as a Turing-class hivemind--can do so.... The front-end... to give each piece of content a visually-engaging and subhead-teaser informative welcome mat.... The syndication... to propagate the front-end cards out to Twitter and Facebook.... The stock... a pathway... by which people can pull things written in the past... relevant... to their concerns today.... The grammar: The visually-interesting and subhead-teaser front-end... needs to lead the people who would want to and enjoy engaging with the content to actually do so.... [But,] as William Goldman says, nobody knows anything.

Platon: Is there anybody whose degree of not-knowingness is even slightly less than the degree of not-knowingness of the rest of us?...

Sokrates: My guess... http://www.vox.com--Ezra Klein and Melissa Bell and company--are most likely to be slightly less not-knowing than the rest of us....

Continue reading "A Now-Extended Non-Sokratic Dialogue on Website Design: Hoisted from the Archives" »


Fairly Recently: Must- and Should-Reads, and Writings... (August 5, 2019)

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  • Weekly Forecasting Update: August 2, 2019: "These past two weeks have seen three pieces of real news that have altered the outlook: it is not true to say that little has changed: (1) A large twenty basis-point reduction in ten-year Treasury interest rates. (2) Trump's relaunching and intensification of his trade war. (3) New data pushing down out our estimate of the level of manufacturing production in the third quarter of 2019 by almost a full percentage point. Nevertheless, the United States is not in or even likely to be on the verge of a recession. Germany, however, appears to be in recession... #macro #forecasting #highlighted #2019-08-02

  • A Smart Approach to China-U.S. Relations: "Compared to Holland and Britain when they were global hyperpowers pursuing soft landings, how are we doing? The answer has to be: since January 2017, not well at all... #aspen #globalization #highlighted #oranghairedbaboons #strategy #2019-08-02

  • The Blocked Southern and Midwestern Global Warming Conversation: "Yet in the U.S Midwest the factual conversation drawing of the links between climate change—screw it: global warming—global warming and weather disasters that farmers and workers and bosses and power-brokers in Malawi and Mozambique have, farmers and workers and bosses and power-brokers in Davenport, IO, are unwilling even to begin... #aspen #globalwarming #highlighted #orangehairedbaboons #publicsphere #2019-08-01

  • Immigration and American Politics: "I want to thank XXXXXX XXXXXX. I confess I had thought that if the President started putting migrant children in cage, the immediate reaction would not be that this might well be a clever political move. I do have a sense that for a lot of people who know better on the Republican side, they think there's mileage to be gained by characterizing bedrock American values as if they were foreign and "cosmopolitan" values. And it is very nice to hear XXXXXX pushing back... #aspen #globalization #immigration #orangehairedbaboons #politics #2019-07-31

  • Note to Self: Perhaps Britain's Supersession by America Was Not Inevitable...: A Britain more interested in turning into Britons or Canadians the migrating Jews, Poles, Italians, Romanians, and even Turks who do not happen to be named Alexander Boris de Pfeffel Johnson—who bears Turkish Minister of the Interior Ali Kemal's Y and five other chromosomes, and hence is, by all the rules of conservative patriarchy, a Turk— would have been much stronger throughout the twentieth century. Perhaps it would not be in its current undignified position... #aspen #history #notetoself #strategy #2019-08-04

  • Note to Self: Enormous Possibilities in China...: Peng Dehuai... a poem he wrote in 1958 on an inspection tour of the Great Leap Forward famine: Grain scattered on the ground, potato leaves withered;/Strong young people have left to make steel;/Only children and old women reap the crops;/How can they survive the coming year?/Allow me to raise my voice for the people!... #aspen #bravery #economicgrowth #notetoself #orangehariedbaboons #politicaleconomy #2019-08-04

  • A Year Ago on Equitable Growth: Twenty Worthy Reads On and Off Equitable Growth for August 2, 2018 #noted #hoistedfromthearchives #equitablegrowth #weblogs #2019-08-01

  • Cat Handling: General Considerations: "The cat is faster and has sharper teeth and claws than you do. It has no 'code of ethics' or consideration for its own future. In a fair fight it will win: 1. DON'T FIGHT A CAT 2. USE YOUR BRAIN 3. USE DRUGS #notetoself #singularity #superintelligence #2019-08-04

  • Monday Smackdown: Fafblog: Condi Rice Complains to Customer Service!: Not even Fafblog can deal with the Bush administration at the appropriate level. However, it is trying. Here Fafnir interviews Condi Rice: RICE: "First of all, we don't send prisoners off to be tortured, Fafnir. We just transport prisoners to countries where torture happens to be legal and where they happen to end up getting tortured." FB: "Well that explains everything then! It's all just a wacky misunderstanding, like that episode a Three's Company where Jack sends Janet off to Uzbekistan to get boiled alive by the secret police." RICE: "I'd also like to point out that whenever we send a prisoner to a country that routinely tortures prisoners, that country promises us NOT to torture them." FB: "And then they get tortured anyway!" RICE: "Yes, they do! It's very strange." FB: "Over and over again, every time! That's gotta be so frustrating." RICE: "Oh it is, it is."... #hoistedfromthearchives #moralresponsibility #mondaysmackdown #neofascism #orangehairedbaboons #torture #strategy #2019-08-05

  • Comment of the Day: Erik Lund: "I especially like the argument from 1949 that Israel had to curtail immigration immediately because there wasn't enough work for the newcomers due to the... wait for it... Labour shortage... #commentoftheday #2019-08-04

  • Comment of the Day: Robert Waldmann: "By your logic the USA can be number one in 2119 if we defeat the terrible threat not from the PRC but from the GOP. You might have a point there. If you descendants of Mayflower passengers can assimilate Magyars, you can assimilate anyone... #commentoftheday #2019-08-04

  • Liveblogging: The Anglo-Saxon Chronicle: From Edwin to Osric #2019-08-01

  • Weekend Reading: Samuel Pepys: Diary: Friday 19 July 1667: "'By God,' says he, 'I think the Devil shits Dutchmen'... #history #strategy #weekendreading #2019-08-02

  • Weekend Reading: Maciej Cegloski (2005): A Rocket To Nowhere: "Meanwhile, while the Shuttle has been up on blocks, a wealth of unmanned probes has been doing exactly the kind of exploration NASA considers so important, except without the encumbrance of big hairless monkeys on board... #weekendreading #2019-08-04


  1. Scott Lemieux: When the Republican Party Was Respectable: "This is exactly right. There’s a direct line to be drawn from William Buckley’s defense of Jim Crow to Reagan’s comments to Shelby County to Trump’s comments about Baltimore. They’re all from influential Republican elites, and all reflect the view that black people are not fit for self-governance. Trump is working well within the Reaganite tradition...

  2. UC Berkeley Events Calendar: Yogendra Yadav: Politics after Modi: Hegemony and Counter-Hegemony: Lecture | August 13 | 12-2 p.m. | Stephens Hall, 10 (ISAS Conf. Room)...

  3. Evelyn Cheng and Shirley Tay: China Social Credit System Still in Testing Phase Amid Trials: "The Chinese government is running up against a self-imposed 2020 deadline to formulate a nationwide social credit plan. The proposed system tries to create a standard for tracking individual actions across Chinese society, and rewarding or punishing accordingly...

  4. Altitude Safety 101: Oxygen Levels at High Altitudes: "Altitude (feet): 0 ft.... Effective Oxygen: 20.9%.... 10,000 ft... 14.3%...

  5. Weijian Shan: Out of the Gobi: My Story of China and America

  6. Henry Farrell: "@ANewmanforward and my article_ on "weaponized interdependence" has just been published by @Journal_IS and is now available ungated-(link: https://www.mitpressjournals.org/doi/full/10.1162/isec_a_00351). We are really happy to see it officially published, citable etc...

  7. Maciej Ceglowski: Best Practices for Time Travelers

  8. Hunter Blair: It’s not trickling down: New data provides no evidence that the TCJA is working as its proponents claimed it would: "With the TCJA’s corporate rate cut exacerbating decades of rising income inequality, and little evidence to be working as promised, it’s time for its repeal...

  9. An Outtake from "Slouching Towards Utopia: An Economic History of the Long Twentieth Century": Mass Politics and "Populism":

  10. Timothy L. O'Brien: Trump's Baltimore-Elijah Cummings Racism Is Fine With Republicans: "Trump’s Racism Infests the Republican Party: As his latest foray into bigotry shows, the president is feeling empowered by the lack of opposition from within the GOP...

Continue reading "Fairly Recently: Must- and Should-Reads, and Writings... (August 5, 2019)" »


August 2, 2019: Weekly Forecasting Update

Nowcasting Report FEDERAL RESERVE BANK of NEW YORK

Federal Reserve Bank of New York: Nowcasting Report: "The New York Fed Staff Nowcast stands at 1.6% for 2019:Q3. News from this week's data releases decreased the nowcast for 2019:Q3 by 0.6 percentage point. Negative surprises from ISM manufacturing data and lower than expected trade data drove most of the decrease...

These past two weeks have seen three pieces of real news that have altered the outlook: it is not true to say that little has changed:

  1. A large twenty basis-point reduction in ten-year Treasury interest rates.
  2. Trump's relaunching and intensification of his trade war.
  3. New data pushing down out our estimate of the level of manufacturing production in the third quarter of 2019 by almost a full percentage point.

Nevertheless, the United States is not in or even likely to be on the verge of a recession. Germany, however, appears to be in recession.

Daily Treasury Yield Curve Rates

Daily Treasury Yield Curve Rates

Continue reading "August 2, 2019: Weekly Forecasting Update" »


A Smart Approach to China-U.S. Relations

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Consider a country that is the global superpower.

Its military is best-of-breed. Its reach extends from Japan to the West Indies to the Indian Ocean, and beyond. Its industries of the most productive in the world. It Is predominate in world trade. It dominates global finance.

But, when this global superpower looks to the west, across the sea, it sees a rising power—a confident nation with a larger population, hungry for wealth, hungry for preeminence, seeing itself as possessing a manifest destiny to supersede the old superpower. And, unless something goes horribly wrong with the rising power to the west, its rise is indeed all but inevitable.

Continue reading "A Smart Approach to China-U.S. Relations" »


The Blocked Southern and Midwestern Global Warming Conversation

Screenshot 8 1 19 6 24 AM

I find myself thinking about XXXXXX and her points about experiential, personal narrative hooks, and about XXXXXX today and XXXXXX yesterday on effects on the United States.

As I said yesterday, the U.S. climate is, on average, marching north by 4 miles a year. And it is becoming more variable: thermodynamics tells us that a system with more energy will over time occupy more configuration states, and in the U.S. midwest the extra configuration states are predominantly hotter, wetter configuration states: rather than hot dry air moving northeast from the deserts, hot wet air is moving northwest from the Gulf of Mexico. Witness this year's floods in the Mississippi, Missouri, and Arkansas watersheds. Yet in the U.S Midwest the factual conversation drawing of the links between climate change—screw it: global warming—global warming and weather disasters that farmers and workers and bosses and power-brokers in Malawi and Mozambique have, farmers and workers and bosses and power-brokers in Davenport, IO, are unwilling even to begin.

I made a pitch to the XXXXXX XXXXXX XXXXXX XXXXXX XXXXXX about five years ago that the highest and best use of their money was to start documenting the links between global warming and four state-area agriculture. No traction at all: collecting facts was viewed as, in some way, dangerous. I keep thinking about how in a lot of America the public sphere of factual discussion and debate is profoundly broken. I can think of nothing to do other than keep trying to roll the boulder up the hill, and keep saying to myself: "we must imagine Sisyphus happy". And I look across the table at XXXXXX XXXXXX and I ask him for help.

Continue reading "The Blocked Southern and Midwestern Global Warming Conversation" »


Fairly Recently: Must- and Should-Reads, and Writings... (July 31, 2019)

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  • What Is the Federal Reserve Thinking Right Now?: We have no warrant for believing that our models are more knowledgeable right now than the market. And there is pronounced asymmetry here: we can always deal with too-high inflation via tighter money, but it is not obvious what we could do to fix the situation if a negative demand shock were to push the prime-age employment rate down two or four percentage-points. Hence we will validate market expectations and drop our policy rates by 25 basis points at our next meeting. What will follow that... will be data-dependent...

  • Annual Celebration of the John Bell Hood-Max von Gallwitz Society!: Dedicated to celebrating the memory of two field commanders who may well have been the worst in history. Drink a toast to John Bell Hood on the 7/28 anniversary of his defeat at Ezra Church.... And drink a toast as well to Max von Gallwitz—perhaps the only Imperial German commander who could have turned the Somme into a draw!...

  • Weekly Forecasting Update: July 26, 2019: Back in late 2017 the Trump Administration, the Republicans in the Congress, and their tame economists were all claiming that passing the Ryan-McConnell-Trump upper-income tax cut would permanently boost investment in America by as much as the Clinton economic program of the 1990s had done, and would do so much more quickly—Clinton program was phased-in over five years, while Ryan-McConnell-Trump was phased-in immediately and had been affecting investment behavior even before it was passed. It is simply not happening...

  • I Want My Country Back!: We really don’t know the consequences of this degree of income inequality: the distribution of income was never this bad before, and it continues to get worse. We did have, in the thirty years before the New Deal, a whipsaw...

  • Note to Self: Playing with Sargent-Stachurski QuantEcon http://quantecon.org: I have long been annoyed with the standard presentation of the Solow Growth Model because the state variable k—capital per effective worker—is not observable in the real world, while the capital-output ratio κ is. Moreover, the steady-state capital-output ratio has an easy to remember and intuitive description: it is the savings rate divided by the economy's steady-state investment requirements. Capital per effective worker has no such intuitive description. Plus the capital-output ratio exhibits exponential convergence to the steady-state. Capital per effective worker does not...

  • Note to Self: Consider Alasdair Macintyre: In the beginning: boring.... Today: boring.... But in the middle, along the trajectory... what a thinker! what a powerful awareness of the attractiveness of different positions! what deep insights generated by position and opposition...

  • Note to Self: Homer's Odyssey Blogging: "Like Little Birds... They Writhed with Their Feet... But for No Long While...": Is there somebody I should read who has thought deeply and powerfully about these issues?... How do we educate people to read—listen—watch—properly, so that they become their better rather than their worse selves?...

  • Note to Self: A historical question I want answered: What difference did it make for medieval economies—and for the relative prosperity of the Muslim world in the middle ages—that Muhammed was a merchant?...

  • Hoisted from the Archives: Karl Marx, First Real Business Cycle Theorist: Nine years ago: Karl Marx, First Real Business Cycle Theorist: We see the affinity between Karl Marx and the Pain Caucus in his notes on crises in Theories of Surplus Value. Negative supply shocks and missed collective guesses on what the extent of the market will be in the future create overaccumulation and overproduction. Marx is very clear that the monetary crisis theorists—like John Stuart Mill—must be wrong, and that the system cannot run itself without crises. In Marx this is one of the reasons why the system is abominable and must be overthrown. For the Pain Caucus the conclusion is opposite: because the system is good crises must be suffered...

  • Monday Smackdown/Hoisted from the Archives: Four Huge Mistakes in One Short Piece by John Taylor: None of those have panned out as intellectual bets. Yet John Taylor today exhibits no visible curiosity as to why they did not. This strongly suggests to me that none of them were meant seriously in the first place—that it was always disinformation, and never an analytical judgment, and thus subject to revision as knowledge advanced...

  • Monday Smackdown: Every Time I Try to Get Out, They Pull Me Back In... Clive Crook Edition: Duncan Black has been reading the once-thoughtful Clive Crook again: Duncan Black http://www.eschatonblog.com/2017/07/national-humiliation.html: "People is weird.... [Clive Crook:]... 'Suppose a second referendum was called and the result was Remain; suppose the EU said, "Great, glad to have you back."... This cringing submission would raise instinctive euro-skepticism to new extremes and divide the U.K. even more bitterly... a national humiliation... [that] would surpass the Suez Crisis in 1956 and the country's surrender to trade-union militancy in the 1970s—crushing setbacks with far-reaching political consequences. If there were ever a case of "be careful what you wish for," this is it...' This the thinking that leads to pointless catastrophic wars. Let's shoot ourselves in the face just to prove our gun works...

  • Hoisted from the Archives: Looking Backwards from This Week at 24, 16, 8, 4, 2, 1, 1/2, and 1/4 Years Ago (July 24-30, 2019: It is very common to attribute the collapse of Roman Republican institutions and the rise of Imperial dictatorship to a loss of moral virtue on behalf of the Roman electorate—who are supposed to have fallen prey to demagogues and voted for bread-and-circuses as the underlying foundations of liberty collapsed underneath them. That story is not true. Here Sean Elling sends us to Edward Watts on the real story—recently enriched plutocracy breaking political norm after political norm in an attempt to disrupt what had been the normal grievance-redressing operation of the system: Sean Illing: Mortal Republic: Edward Watts on what America can learn from Rome’s collapse...

  • Comment of the Day: Yes, the failure modes of making jam are pretty scary: Graydon on Homer's Odyssey and David Drake's Hammer's Slammers: "I think you're missing the central thing about Drake's writing... which is a vehicle crew...

  • Comment of the Day: Robert Waldmann: "I disagreed with that analysis in 1980. So did Solow...

  • A Year Ago on Equitable Growth: Fifteen Worthy Reads On and Off Equitable Growth for July 26, 2018: TOP MUST REMEMBER: What I call 'Bob Rubin's End-of-Meeting Questions'. Ask them! They really work!: Annie Duke: Thinking in Bets: Making Smarter Decisions When You Don't Have All the Facts: "In fact, questioning what you see or hear can get you eaten. For survival-essential skills, type I errors (false positives) were less costly than type II errors (false negatives). In other words, better to be safe than sorry, especially when considering whether to believe that the rustling in the grass is a lion. We didn’t develop a high degree of skepticism when our beliefs were about things we directly experienced, especially when our lives were at stake...

  • Liveblogging: The Anglo-Saxon Chronicle: A.D. 617: Edwin the Son of Ella: "A daughter was born to Edwin, whose name was Eanfleda. Then promised the king to Paulinus, that he would devote his daughter to God, if he would procure at the hand of God, that he might destroy his enemy, who had sent the assassin to him. He then advanced against the West-Saxons with an army, felled on the spot five kings, and slew many of their men...

  • Liveblogging: The Anglo-Saxon Chronicle: Penda and Edwin: "Archbishop Justus having departed this life on the tenth of November, Honorius was consecrated at Lincoln Archbishop of Canterbury by Paulinus; and Pope Honorius sent him the pall. And he sent an injunction to the Scots, that they should return to the right celebration of Easter...


  1. Charli Carpenter: Summer Vacation in an Age of Concentration Camps, Part 6: "Protest Matters"

  2. Duncan Black: Obummer: "I don't follow Trump's polls. They don't change much. But at best he's no more popular than Obama was, and the press always treated Obama like an unpopular president, not a POLITICAL GENIUS who CONTROLLED THE NARRATIVE...

  3. Scott Lemieux: The Republican War on Rural Voters: "Always remember that ANTI-ELITIST Josh Hawley’s goal is to ensure massive rural hospital closures nationwide by getting Republican hacks in the federal courts to strike down the Affordable Care Act entirely, and marvel that there are actually professional pundits who will swallow his bullshit. The Republican Party is quite literally indifferent to the lives of the white rural voters that are critical to maintaining control of the Senate, White House and Supreme Court...

  4. Andrew Kaczynski: Mike Pence Argued In An Op-Ed That Disney's "Mulan" Was Liberal Propaganda: "'Obviously, this is Walt Disney's attempt to add childhood expectation to the cultural debate over the role of women in the military', Pence wrote. Obviously...

  5. Jay Rosen: PressThink : "What do you want the candidates to be discussing as they compete for votes? Part of a call to action for an alternative direction in election coverage, originated by the newsroom improvement company, Hearken, and the research project that I direct, Membership Puzzle Project...

  6. Brett Terpstra: nvALT

  7. Robert Armstrong: True Patriots Aren’t Afraid to Tell the Truth: "The life of French historian Marc Bloch holds sobering lessons for us today...

  8. Lobsta Truck: Serving Lobster Rolls in California

  9. NBER: Solomon M. Hsiang

  10. Abbott Payson Usher: A History of Mechanical Inventions: Revised Edition: "Updated classic explores importance of technological innovation in cultural and economic history of the West. Water wheels, clocks, printing, machine tools, more. "Without peer." — American Scientist... #books

  11. Sam Lau, Joey Gonzalez, and Deb Nolan: Principles and Techniques of Data Science #books

  12. Martina Baras: Lawyer Larry Klayman Should Get License Suspended, Panel Says: "Committee finds rule violations in client representation.... Klayman should be required to prove his fitness to practice as a condition of reinstatement, the Board on Professional Responsibility’s ad hoc hearing committee recommended July 24.... The case is In re Klayman, D.C. Ct. App., Board Docket No. 17-BD-063, Board on Professional Responsibility recommendation 7/24/19...

Continue reading "Fairly Recently: Must- and Should-Reads, and Writings... (July 31, 2019)" »


I Want My Country Back!

Mussolini rally Google Search

Council on Foreign Relations: The Future of Democracy Symposium: Session Two: Economics, Identity, and the Democratic Recession: We really don’t know the consequences of this degree of income inequality: the distribution of income was never this bad before, and it continues to get worse.

We did have, in the thirty years before the New Deal, a whipsaw.

First, we saw the rise of the progressive movement. Lots of people, even people for whom America was then doing very, very well, begin to say: "Wait a minute, this can’t go on. There’s something fundamentally wrong!"

Thus you had Teddy Roosevelt attacking the "malefactors of great wealth". You had Andrew Carnegie saying "he who dies rich, dies disgraced"—and that, in fact, if you leave anything at all to your children, you should be ashamed of yourself.

But then we had the whipsaw.

Continue reading "I Want My Country Back!" »


Annual Celebration of the John Bell Hood-Max von Gallwitz Society!

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Hoisted from the Archives: The John Bell Hood-Max von Gallwitz Society!: Dedicated to celebrating the memory of two field commanders who may well have been the worst in history. Drink a toast to John Bell Hood on the 7/28 anniversary of his defeat at Ezra Church:

Hood... moved his troops out to oppose the Union army... planned to intercept them and catch them completely by surprise.... Unfortunately for Hood... Howard had predicted such a maneuver based on his knowledge of Hood from their time together.... His troops were already waiting in their trenches when Hood reached them. The Confederate army also had not done enough reconnaisance... and made an uncoordinated attack.... In all, about 3,642 men were casualties; 3,000 on the Confederate side and 642 on the Union side...

And drink a toast as well to Max von Gallwitz—perhaps the only Imperial German commander who could have turned the Somme into a draw!...

Continue reading "Annual Celebration of the John Bell Hood-Max von Gallwitz Society!" »


Looking Backwards from This Week at 24, 16, 8, 4, 2, 1, 1/2, and 1/4 Years Ago (July 24-30, 2019)

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Three Months Ago (April 24-30, 2019):

  • SEDAC: Population Estimation Tools:
     

  • It is very common to attribute the collapse of Roman Republican institutions and the rise of Imperial dictatorship to a loss of moral virtue on behalf of the Roman electorate—who are supposed to have fallen prey to demagogues and voted for bread-and-circuses as the underlying foundations of liberty collapsed underneath them. That story is not true. Here Sean Elling sends us to Edward Watts on the real story—recently enriched plutocracy breaking political norm after political norm in an attempt to disrupt what had been the normal grievance-redressing operation of the system: Sean Illing: Mortal Republic: Edward Watts on what America can learn from Rome’s collapse...

  • Rosa Luxemburg: "Freedom only for the supporters of the government, only for the members of one party... is no freedom at all. Freedom is always and exclusively freedom for the one who thinks differently.... All that is instructive, wholesome and purifying in political freedom depends on this essential characteristic, and its effectiveness vanishes when ‘freedom’ becomes a special privilege...

  • Edmund Wilson (1940): Trotsky, History, and Providence: Weekend Reading: "These statements make no sense whatever unless one substitutes for the words history and dialectic of history the words Providence and God.... There sometimes can turn out to be valuable objects cast away in the garbage-pile of history.... From the point of view of the Stalinist Soviet Union, that is where Trotsky himself is today; and he might well discard his earlier assumption that an isolated individual must needs be 'pitiful' for the conviction of Dr. Stockman in Ibsen's Enemy of the People that 'the strongest man is he who stands most alone'...

  • The Knot of War 1870-1914: An Intake from "Slouching Towards Utopia?: An Economic History of the Long Twentieth Century 1870-2016"

  • Henry Farrell and Bruce Schneier: Information Attacks on Democracies: "Democracies, in contrast, are vulnerable to information attacks that turn common political knowledge into contested political knowledge. If people disagree on the results of an election, or whether a census process is accurate, then democracy suffers. Similarly, if people lose any sense of what the other perspectives in society are, who is real and who is not real, then the debate and argument that democracy thrives on will be degraded. This is what seems to be Russia’s aims in their information campaigns against the U.S.: to weaken our collective trust in the institutions and systems that hold our country together. This is also the situation that writers like Adrien Chen and Peter Pomerantsev describe in today’s Russia, where no one knows which parties or voices are genuine, and which are puppets of the regime, creating general paranoia and despair...

 

Continue reading "Looking Backwards from This Week at 24, 16, 8, 4, 2, 1, 1/2, and 1/4 Years Ago (July 24-30, 2019)" »


What Is the Federal Reserve Thinking Right Now?

The Federal Reserve is not an intelligence: it does not think. Individual members of the Federal Open Market Committee, however, do think. And the center of gravity of their individual thoughts now runs something like this:

1980-1985 was a disaster: 3 x 6 x 0.5 = 9%-point-years of lost jobs for Americans, jobs that would not have been lost had the Federal Reserve done its proper job and kept inflation under control in the 1970s:

Employment Rate Aged 25 54 All Persons for the United States FRED St Louis Fed

Inflation exploded in the 1970s because of demand-pull: the Federal Reserve let employment get above full employment, and outgo workers and firms rapidly concluded that this was a permanent situation in which they had to act first to boost their incomes:

Consumer Price Index for All Urban Consumers All Items Less Food and Energy FRED St Louis Fed

We cannot let this happen again: hence three times since 2010—in 2013, 2016, and 2018—we have used our policy tools of rates, quantities, and jawboning to push interest rates higher because we thought we were rapidly closing in on the full employment point at which inflation would start to move up substantially:

Real Gross Domestic Product FRED St Louis Fed

All three times we were wrong: we were not rapidly closing in on the full employment point at which inflation would start to move up substantially.

Real Gross Domestic Product FRED St Louis Fed

Now the inverted yield curve tells us that the market thinks that we have overdone interest rate increases, and will be substantially cutting rates by 100 basis points over the next two years:

FRED Graph FRED St Louis Fed

The market could be right and it could be wrong. An inverted yield curve has been a reliable warning signal in the past, but the world is different now, and perhaps that matters. However, failing to begin to validate market expectations now would shake confidence and raise uncertainty. We have no warrant for believing that our models are more knowledgeable right now than the market. And there is pronounced asymmetry here: we can always deal with too-high inflation via tighter money, but it is not obvious what we could do to fix the situation if a negative demand shock were to push the prime-age employment rate down two or four percentage-points.

Hence we will validate market expectations and drop our policy rates by 25 basis points at our next meeting. What will follow that... will be data-dependent...

Continue reading "What Is the Federal Reserve Thinking Right Now?" »


July 26, 2019: Weekly Forecasting Update

Back in late 2017 the Trump Administration, the Republicans in the Congress, and their tame economists were all claiming that passing the Ryan-McConnell-Trump upper-income tax cut would permanently boost investment in America by as much as the Clinton economic program of the 1990s had done, and would do so much more quickly—Clinton program was phased-in over five years, while Ryan-McConnell-Trump was phased-in immediately and had been affecting investment behavior even before it was passed.

It is simply not happening.

Gross Private Domestic Investment Nominal Potential Gross Domestic Product FRED St Louis Fed

Yet I have heard no explanations for why not. For example, a Tyler Cowen would write, in November 2017, that: Yes, a Corporate Tax Cut Would Increase Investment - Bloomberg: "Republicans have science on their side when it comes to this part of their tax plans.... The most likely result is that lower corporate tax rates will lead to more investment projects and thus more aggregate economic activity.... [The] worry... that companies will take their cash windfalls and simply return them to investors.... The evidence doesn’t support this fear.... When the critics allege that corporate tax rate cuts won’t boost investment, that’s going against basic economics..."

Has there been a peep from him since marking his beliefs to market? No.

The Ryan-McConnell-Trump tax cut did nothing other than make America even more unequal. Macroeconomically, we are where we were three years ago: Relatively stable growth at a trend a bit above 2% per year, with slowly rising employment, and no signs of rising inflation or a rising labor share.

The only significant difference that the Fed has now recognized that its hope of normalizing the Fed Funds rate in the foreseeable future is vain, and has now recognized that its confidence over the past six years that we were close to full employment was simply wrong.

Continue reading "July 26, 2019: Weekly Forecasting Update" »


Karl Marx, First Real Business Cycle Theorist: Hoisted from the Archives

J Bradford DeLong s Awesome Presentation On The History Of The Bank Bailout Business Insider

Hoisted from the Archives: Nine years ago: Karl Marx, First Real Business Cycle Theorist: We see the affinity between Karl Marx and the Pain Caucus in his notes on crises in Theories of Surplus Value. Negative supply shocks and missed collective guesses on what the extent of the market will be in the future create overaccumulation and overproduction. Marx is very clear that the monetary crisis theorists--like John Stuart Mill--must be wrong, and that the system cannot run itself without crises.

In Marx this is one of the reasons why the system is abominable and must be overthrown. For the Pain Caucus the conclusion is opposite: because the system is good crises must be suffered.

Karl Marx:

Theories of Surplus-Value, Chapter 17: "When speaking of the destruction of capital through crises, one must distinguish between two factors...

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Fairly Recently: Must- and Should-Reads, and Writings... (July 25, 2019)

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  • Weekly Forecasting Update: July 19, 2019: We are where we were a year ago: Stable growth at 2% per year with no signs of rising inflation or a rising labor share. The only significant difference that the Fed has recognized that its hope of normalizing the Fed Funds rate in the foreseeable future is vain, and has now recognized that its confidence over the past six years that we were close to full employment was simply wrong...

  • Monday Smackdown: Batshit Insane American Nat-Cs Department: Intellectual Leading Light Samuel P. Huntington: Apropos of our National Conservatives—our Nat-Cs—here in America today. It is worth remembering how batshit insane is right-wing "class of civilizations" urberguru Samuel Hintington. Witness his firm belief that immigrants from Cuba have ruined Miami: "Anglos had three choices... [i] accept their subordinate and outsider position... [ii] assimilate into the Hispanic community—“acculturation in reverse”... [iii] they could leave Miami, and between 1983 and 1993, about 140,000 did just that, their exodus reflected in a popular bumper sticker: 'Will the last American to leave Miami, please bring the flag'...

  • Monday Smackdown/Hoisted from the Archives: Scott Sumner Knew Better than to Do This!: "They are both basically saying: 'if we hold nominal spending constant, fiscal policy can’t fix it.'... [I]t’s really rather sad when people like Krugman and Brad DeLong keep insisting that these guys don’t understand basic macro principles.... I don’t know for sure that Fama was using the same implicit assumption... [but] I think it quite likely that Fama was also cutting corners.... Lots of brilliant people talking past each other.... Welcome to elite macroeconomics, circa 2011.... If I was going to assign blame I’d single out Krugman/DeLong for rudeness and Fama/Cochrane for poor communication skills..." Me: Economists' Views of Fiscal Policy: RetCon Department: The argument that Sumner attributes to Cochrane and Fama (and, wrongly, to Barro) is not a coherent argument: if you say "if I assume that fiscal policy does not affect nominal spending, then fiscal policy does not affect nominal spending, and so I have proved my case" you haven't made an argument at all...

  • Monday Smackdown: Let Me Smackdown Jared Bernstein on International Trade Here...: I really, really wish Jared Bernstein would not do this. It is simply not the case—as he knows well—that policymakers "quickly forgot about the need to compensate for the losses" from expanded international trade. Democratic policymakers—of whom Jared is one—well-remembered this, but after November 1994 did not have the power. Republican policymakers did not see the need as a need at all: they did not forget it: they ignored it...

  • Note to Self: My sense is that "we need to raise reserve requirements in a boom" is very good policy; but that "we need to pop this bubble" is almost always very bad policy. And we do not appear to have any (large) equity bubble. The weirdness is all in bond prices...

  • Looking Backwards from This Week at 16, 8, 4, 2, 1, 1/2, and 1/4 Years Ago: July 23, 2019: Highlights of Highlights: The 1870 Inflection Point in Transport and Trade: An In-Take from "Slouching Towards Utopia": An Economic History of the Long 20th Century: Everyplace in the world was, as long as there were docks and railroads, cheek-by-jowl to every other place. Everyone’s opportunities and constraints, not, as before, just the consumption patterns of the elite, depended on what was going on in every other piece of the world economy.... And once a comparative advantage was established it tended to stick....
     
    Reading Notes for Robert Skidelsky: "Keynes: A Very Short Introduction"...: John Maynard Keynes was brought up a classical liberal and a classical economist... believed in free trade, economic progress, cultural uplift, and political reason... found himself watching as the classical economic mechanisms he had been taught to admire all fell apart. He then picked himself up. After World War I Keynes used what power he had to—don't laugh—try to restore civilization.... And when he lost in the 1920s and the 1930s he picked himself up yet again, and tried yet again in the mid-1930s and thereafter to lay the groundwork for future victories for prosperity, rationality, and technocracy. And, in the end, he succeeded....
     
    A Teaching Note on Barro's (2005) "Rare Events and the Equity Premium" and Rietz's (1988) "The Equity Premium: A Solution": Barro's paper follows Rietz (1988).... A greater fear of future catastrophe is a source of high, not low, price-dividend and price-earnings ratios. THIS CAN ONLY WORK BECAUSE THERE ARE NO BONDS IN THE MODEL: SAFE ASSETS ARE IN ZERO SUPPLY: THE ONLY WAY TO INSURE AGAINST A BAD FUTURE IS TO BUY RISKY EQUITIES NOW IN AN ATTEMPT TO MOVE PURCHASING POWER FORWARD IN TIME!!!!....
     
    World War II at the Operational Level: The Fall of France 1940 (Prompted by the Forthcoming Release of "Dunkirk")_: Three days into the battle it was clear that a major Nazi attack was coming through the Ardennes, and the French began to respond... threw 800 tanks in four armored divisions plus between six and ten infantry divisions in front of the Nazi breakthrough in plenty of time to make a difference—yet (de Gaulle's division aside) they were completely ineffective in a running fight against seven Nazi panzer divisions, which had no more tanks and somewhat fewer soldiers than the French reserves committed to oppose them.... But before we scorn the French army of 1940 as cheese-eating surrender monkeys, remember what happened to the U.S. 106th Infantry Division when Hitler’s Third Reich was on its very last legs, and what happened to Major General Lloyd Fredendall’s U.S. II Corps at Kasserine Pass. Everybody who faced the Nazis did more-or-less equally badly, in their initial encounters at least....
     
    Obama Has Always Been for Premature Fiscal Austerity: January 7 [2009]: TAPPER: "Your team has talked about the stimulus package being 675 to 775 billion. But at the same time... you're going to distribute a memo in which economists say it should be between 800 billion and 1.3 trillion. How do you reconcile that difference...?" OBAMA: "Well, we are still in consultation with members of Congress about the final size of the package. We expect that it will be on the high end of our estimates, but [it] will not be as high as some economists have recommended because of the constraints and concerns we have about the existing deficit...

  • Comment of the Day: Graydon: "It's quite possible to look at the Chinese per-city bans on combustion-powered busses and taxis... as drifting toward the Chinese banning sales of new private combustion-powered automobiles by 2022 or so...

  • Comment of the Day: Grebmorts: ": "Seven thorns. 'Yt' is an abbreviation for 'þat' https://en.wiktionary.org/wiki/yt..." Touché... Why þ and &—not to mention æ, ð, œ—have not made more of a comeback in this Age of Twitter is a mystery to me...

  • For the Weekend: Aretha Franklin: Who's Zoomin' Who?

  • Weekend Reading: Francis Wilkinson: Gun Safety Takes a Back Seat to Gun Culture and Children Die

  • Weekend Reading: Dwight D. Eisenhower (1954): Letter to Edgar Newton Eisenhower: "Should any political party attempt to abolish social security, unemployment insurance, and eliminate labor laws and farm programs, you would not hear of that party again in our political history. There is a tiny splinter group, of course, that believes you can do these things. Among them are H. L. Hunt (you possibly know his background), a few other Texas oil millionaires, and an occasional politician or business man from other areas. Their number is negligible and they are stupid...

  • Weekend Reading: Roger Zelazny: For a Breath I Tarry...


  1. Abraham Lincoln: On the Know Nothing Party: Letter to Joshua F. Speed: "I am not a Know-Nothing. That is certain. How could I be? How can any one who abhors the oppression of negroes, be in favor of degrading classes of white people? Our progress in degeneracy appears to me to be pretty rapid. As a nation, we begin by declaring that 'all men are created equal'. We now practically read it 'all men are created equal, except negroes'. When the Know-Nothings get control, it will read 'all men are created equal, except negroes, and foreigners, and catholics'...

  2. Colin Leys: Samuel Huntington and the End of Classic Modernization Theory

  3. John Ronald Reuel Tolkien (1966): The Homecoming of Beorhtnoth Beorthelm's Son: "Beorhtwold... utters the famous... 'Hige sceal þe heardra, heorte þe cenre/mod sceal þe mare þe ure maegen lytlað' 'Will shall be the sterner, heart the bolder, spirit the greater as our strength lessens'. It is here implied, as is indeed probable, that these words were not "original," but an ancient and honoured expression of heroic will; Beorhtwold is all the more, not the less, likely for that reason actually to have used them in his last hour...

  4. Greg Sargent: "Central to Trump’s racism—and more broadly to Trumpism writ large—is... asserting the right to engage in public displays of racism without it being called out for what it is... to flaunt his racism with impunity.... Nonwhite lawmakers who were born here... are in some sense not members of the American nation.... The flat-out denial that any of this is racist is... crucial to the overall statement: The explicit idea here is that Trump is free to engage in public racism without it being called out for what it really is, that is, with no apology or capitulation to those who label it as such...

  5. Wikipedia: Višegrad Massacres

  6. Jennifer Craig: Value of Shipwreck Data in Databases

  7. Justin Leidwanger: From Time Capsules to Networks: New Light on Roman Shipwrecks in the Maritime Economy

  8. QuantEcon: QuantEcon Notebook Library

  9. A. J. Parker: Artifact Distributions and Wreck Locations: The Archaeology of Roman Commerce

  10. William Bradford: History of Plimoth Plantation

  11. Joseph R. McConnell et al.: Lead Pollution Recorded in Greenland Ice Indicates European Emissions Tracked Plagues, Wars, and Imperial Expansion During Antiquity

  12. Roger Zelazny: For a Breath I Tarry...

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Looking Backwards from This Week at 16, 8, 4, 2, 1, 1/2, and 1/4 Years Ago

stacks and stacks of books

Three Months Ago:

  • Cosma Shalizi (2011): Dives, Lazarus, and Alice: Weekend Reading: "The market clears, Alice is 11 cents better off, Dives enjoys a consumer surplus of $4999.89, and Lazarus starves to death in the street, clutching his dime.Nothing can be changed without making someone worse off, so this is Pareto optimal. And so, in yet another triumph, the market mechanism has allocated a scarce resource, viz., the turkey, to its most efficient use.... What makes this the most efficient use of the scarce resource? Why, simply that it goes to the user who will pay the highest price for it. This is all that economic efficiency amounts to. It is not about meeting demand, but meeting effective demand, demand backed by purchasing power...

  • Writing Bulls--- for the WSJ Op-Ed Page as a Career Strategy: The Nine Unprofessional Republican Economists: The extra quarter's worth of data from the new BEA NIPA release raises this, once again, to the top of the pile: Note the contrast between the path of investment, on the one hand, implicit in the growth forecast of the effects of the Trump-Ryan-McConnell tax cut that Robert J. Barro, Michael J. Boskin, John Cogan, Douglas Holtz-Eakin, Glenn Hubbard, Lawrence B. Lindsey, Harvey S. Rosen, George P. Shultz and John. B. Taylor, and, on the other hand, reality. If you are even 10% in the explain-the-world business—if you are even 1% in the explain-the-world business—such a sharp disjunction between what you had predicted and the outcome calls forth curiosity, interest, and explanations of why you think you went wrong and what your future research projects will be to figure it out.... Yet as I listen to each and very one of the Nine Unprofessional Republican Economists, all that I hear is: < crickets > ...

 

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Monday Smackdown/Hoisted from the Archives: Scott Sumner Knew Better than to Do This!

Smackdown

Hoisted from 2011: Sumner really knew better than to do this, and really ought to have restrained himself:

Scott Sumner: A Slightly Off-Center Perspective on Monetary Problems: "They are both basically saying: 'if we hold nominal spending constant, fiscal policy can’t fix it.'... [I]t’s really rather sad when people like Krugman and Brad DeLong keep insisting that these guys don’t understand basic macro principles.... I don’t know for sure that Fama was using the same implicit assumption... [but] I think it quite likely that Fama was also cutting corners.... Lots of brilliant people talking past each other.... Welcome to elite macroeconomics, circa 2011.... If I was going to assign blame I’d single out Krugman/DeLong for rudeness and Fama/Cochrane for poor communication skills...

Me:

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Let Me Smackdown Jared Bernstein on International Trade Here...

Smackdown

I really, really wish Jared Bernstein would not do this. It is simply not the case—as he knows well—that policymakers "quickly forgot about the need to compensate for the losses" from expanded international trade. Democratic policymakers—of whom Jared is one—well-remembered this, but after November 1994 did not have the power. Republican policymakers did not see the need as a need at all: they did not forget it: they ignored it.

Do you want to know what I think? I think a lot of not completely consistent things. Here are three things to read:

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July 19, 2019: Weekly Forecasting Update

Cursor and FRED Graph FRED St Louis Fed

The right response to almost all economic data releases is: Next to nothing has changed. We are where we were a year ago: Stable growth at 2% per year with no signs of rising inflation or a rising labor share.

The only significant difference that the Fed has recognized that its hope of normalizing the Fed Funds rate in the foreseeable future is vain, and has now recognized that its confidence over the past six years that we were close to full employment was simply wrong:

Federal Reserve Bank of New York: Nowcasting Report: Jul 19, 2019: "1.4% for 2019:Q2 and 1.9% for 2019:Q3.News from this week's data releases decreased the nowcast for 2019:Q2 by 0.1 percentage point and increased the nowcast for 2019:Q3 by 0.1 percentage point. Negative surprises from housing data accounted for most of the decline for 2019:Q2, while positive surprises from survey data accounted for most of the increase in 2019:Q3...

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Fairly Recently: Must- and Should-Reads, and Writings... (July 17, 2019)

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  • Weekly Forecasting Update: July 12, 2019: "the Fed has recognized that its hope of normalizing the Fed Funds rate in the foreseeable future is vain, and has now recognized that its confidence over the past six years that we were close to full employment was simply wrong...

  • For the Weekend: Paul Celan: Todesfugue: "Death is a master from German his eye it is blue/he shoots you with shot made of lead shoots you level and true/a man lives in the house your golden hair Margarete/he looses his hounds on us grants us a grave in the air /he plays with his vipers and daydreams/Death is a master from Germany/your golden hair Margarete/your ashen hair Shulamith...

  • Weekend Reading: Thomas Wyatt the Younger: "Great12-grandfather...

  • Weekend Reading: Titus Livius: The Latin War: The History of Rome: "An order was issued that the treaty should be renewed with the Laurentians; and it is renewed every year since, on the tenth day after the Latin festival. The rights of citizenship were granted to the Campanian horsemen; and that it might serve as a memorial, they hung up a brazen tablet in the temple of Castor at Rome. The Campanian state was also enjoined to pay them a yearly stipend of four hundred and fifty denarii each; their number amounted to one thousand six hundred...

  • Weekend Reading: Jo Walton: The Spearpoint Theory: The Dyer of Lorbanery: "It’s very small and sharp but because it’s backed by the length and weight of a whole spear and a whole strong person pushing it, it’s a point that goes in a long way. Spearpoints need all that behind them, or they don’t pack their punch in the same way. Examples are difficult to give because spear-points by their nature require their context, and spoilers. They tend to be moments of poignancy and realization. When Duncan picks the branches when passing through trees, he’s just getting a disguise, but we the audience suddenly understand how Birnam Wood shall come to Dunsinane...

  • A Year Ago on Equitable Growth: Twenty Worthy Reads from the Past Week or so: July 19, 2018: TOP MUST REMEMBER: Here is the website for Zucman, Wier, and Torslavon's work on missing profits from tax avoidance and tax evasion...

  • A Year Ago on Equitable Growth: Fifteen Worthy Reads from the Past Week or so: July 12, 2018: TOP MUST REMEMBER: Cory Doctorow: I Was Naive: "I've been thinking of all those 'progressive' Senators who said that... Jeff Sessions was a gentleman, honorable, decent—just someone whose ideas they disagreed with. They approved Sessions for AG on that basis, and he architected this kids-in-cages moment...

  • Liveblogging: The Anglo-Saxon Chronicle: Laurentius and St. Peter: "Then Laurentius, who was archbishop in Kent, meant to depart southward over sea, and abandon everything. But there came to him in the night the apostle Peter, and severely chastised him, because he would so desert the flock of God. And he charged him to go to the king, and teach him the right belief. And he did so; and the king returned to the right belief...

  • Liveblogging: The Anglo-Saxon Chronicle: The Prophecy of Augustine: "So was fulfilled the prophecy of Augustine, wherein he saith 'If the Welsh will not have peace with us, they shall perish at the hands of the Saxons'...


  1. Bruce Springsteen: YouTube Channel

  2. Paul Campos: ITMFA?: "Wilentz’s case for impeachment is plausible... but... Pelosi’s go-slow approach is also plausible.... Wilentz takes what seems like a somewhat cavalier attitude toward the massive differences in the political ecosystems of America in 1974 and 2019.... All the options look very fraught at best and potentially disastrous at worst, because our political system is in the midst of a long not-so-slow decline. The extraordinary difficulty of trying to figure out the best path toward removing a completely unfit proto-fascist cult leader from the office of the presidency is Exhibit A of that decline...

  3. Nora Eckert: Tennessee Governor Criticized for Honoring Nathan Bedford Forrest : NPR: "Tennessee's Republican governor, Bill Lee, is facing public backlash after he declared Saturday 'Nathan Bedford Forrest Day', continuing a decades-old tradition honoring the Confederate general, slave trader and onetime leader of the Ku Klux Klan.... Some of the outcry came from members of Lee's own party. On Friday, GOP Sen. Ted Cruz of Texas took to Twitter to condemn the governor's move, calling Forrest 'a slave trader & the 1st Grand Wizard of the KKK'...

  4. Lenny Mendonca: Business and Public Policy Perspectives on US Inequality: "Inequality in the United States–Definition and Facts.... Housing and Transportation . Place-Based Policies. Race and Inequality. Opportunity and Early Education. Higher Education. Immigration (and Effects on Other American Workers). Low-wage Workers. Tax Policy–The 1%. Work in the Future and Universal Basic Income...

  5. Suresh Naidu et al.: Political Polarization and the Dynamics of Political Language: Evidence from 130 Years of Partisan Speech

  6. Vanessa Williamson, Theda Skocpol, and John Coggin: The Tea Party and the Remaking of Republican Conservatism

  7. Types of "General Gluts": Fisher, Wicksell, Bagehot

  8. How Does the Economy Choose Which Equilibrium to Settle at?: Praying for the Confidence Fairy to Rescue Italy Edition

  9. Musings on Thomas Malthus, the Hellenistic Age, the Loyal-Spirit Great Kings of Iran 550-330 BCE, and Other Topics: The Honest Broker for the Week of August 17, 2015

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July 12, 2019: Weekly Forecasting Update

FRED Graph FRED St Louis Fed

The right response to almost all economic data releases is: Next to nothing has changed. We are where we were a year ago: Stable growth at 2% per year with no signs of rising inflation or a rising labor share.

The only significant difference that the Fed has recognized that its hope of normalizing the Fed Funds rate in the foreseeable future is vain, and has now recognized that its confidence over the past six years that we were close to full employment was simply wrong:

Federal Reserve Bank of New York: Nowcasting Report: Junly 5, 2019: "The... Nowcast stands at 1.5% for 2019:Q2 and 1.8% for 2019:Q3. News from the JOLTS, CPI, and PPI releases were small, leaving the nowcast for both quarters broadly unchanged...

Continue reading "July 12, 2019: Weekly Forecasting Update" »


Fairly Recently: Must- and Should-Reads, and Writings... (July 10, 2019)

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  • Fresh at Project Syndicate: Is Plutocracy Really the Problem?: The larger issue...is an absence of alternative voices. If the 2010s had been anything like the 1930s, the National Association of Manufacturers and the Conference Board would have been aggressively calling for more investment in America, and these arguments would have commanded the attention of the press. Labor unions would have had a prominent voice as advocates for a high-pressure economy. Both would have had very powerful voices inside the political process through their support of candidates. Did the top 0.01% put something in the water to make the media freeze out such voices after 2008?...

  • Smackdown: Failing to Do Robustness Checks Is Not a Virtue: This, from this past April of all times, greatly puzzles me: WHAT IN THE HOLY NAME OF THE ONE WHO IS IS GOING ON HERE?! Let us remember what really happened back in 2011 when the unemployment rate was 9%: "Reinhart... explained that countries rarely pass the 90 percent debt-to-GDP tipping point precisely because it is dangerous.... Reinhart and Rogoff... 'current debt trajectories are a risk to long-term growth and stability, with many advanced economies already reaching or exceeding the important marker of 90 percent of GDP'..." Yet there never was any "90 percent debt-to-GDP tipping point". Reinhart and Rogoff thought there was because they did not do any robustness checks of their data-analysis binning procedures. Perhaps an apology to the misled world should be a high priority? Perhaps it should be a higher priority than rants claiming that their critics like me—who were right—engaged in "years of mounting polemics against austerity policies, Keynesian dogma has become something close to a secular religion"?...

  • Hoisted from the Archives: Risks of Debt: The Real Flaw in Reinhart-Rogoff: A country that spends and spends and spends and spends and does not tax sufficiently will eventually run into debt-generated trouble.... But can this happen as long as interest rates remain low? As long as stock prices remain buoyant? As long as inflation remains subdued. My faction of economists—including Larry Summers, Laura Tyson, Paul Krugman, and many many others—believe that it will not...

  • Hoisted from the Archives: What Was the Point of Robert Woodward's "The Agenda"?: According to the Washington Post's headline writers (and according to pretty damn near everybody else who read The Agenda that I have talked to), Woodward's book tells the story of a president who (a) feels "blindsided" by their actions, (b) feels that the policies his administration is adopting means that he is losing his soul, (c) finds that the Republican Federal Reserve Chair's views are etching a deep impression on policy, (d) finds himself stuck with a "turkey" of an economic plan, (e) has advisors who fight fiercely in order to (f) control a wishy-washy president, and as a result (g) decision-making suffers and (h) clarity of vision is lost. Now I was there. (a) is simply wrong. (b) is sorta true, sorta false--Clinton was conflicted. (c) is true. (d) is false--it was a damned good economic plan. (e) is true. But (f) is false: wrestling intently and intelligently with hard choices does not make you the puppet of your advisors. (g) is wrong: the process produced a very good outcome. And (h) is wrong too. I want to set this out because in comments we have Bob Woodward claiming that his book was about... something else than the Washington Post headline writers who got the first excerpts from it and published them thought it was about...

  • Hoisted from July 3, 2008: Optimal Control: "Was the Federal Reserve too volatile and hair-trigger? Or was the ECB too sluggish?...

  • Note to Self: The establishment-survey payroll-employment numbers (red line) contain within them a guess as to how many newly-formed forms there are that have not yet caught up to and entered the payroll system. When a recession starts, that guess at the fudge factor can be way high. On the other hand, the household-survey employment numbers (blue line) has a lot more statistical noise in it...

  • Comment of the Day: Ronald Brakels: "If you record a bitch's new born puppy and then play that sound on a tape deck or other audio device the bitch will pick up that device and treat it like a pup. Dogs have about 2 billion plus neurons but this shows they are still very stupid. But no one seems to have a problem with this epic level of idiocy in our closest animal companions...

  • Comment of the Day: Charles Steindel: "Nothing at all wrong with Weller, really. The truly odd point appears to be how he got nominated. It seems that Trump was pleased that Jim Bullard, the president of the St. Louis Fed, voted to cut the funds rate at the last meeting, and offered Jim the slot. Bullard turned it down (no regional president would ever be included to accept a Board post other than Chair or Vice Chair; no more real power, combined with less pay and no staff) and suggested Weller. That's not the usual way these things get done...

  • For the Weekend: The Death of Stalin: Jason Isaacs as Georgy Zhukov Arrives at Stalin's Funeral: For the Weekend

  • Weekend Reading: Daniel Davies: One-Minute MBA: "The secret to every analysis I've ever done... has been, more or less, my expensive business school education.... Good ideas do not need lots of lies told about them in order to gain public acceptance. I was first made aware of this during an accounting class.... Fibbers' Forecasts Are Worthless. Case after miserable case after bloody case we went through, I tell you.... Not only that people who want a project will tend to make inaccurate projections about the possible outcomes of that project, but about the futility of attempts to "shade" downward a fundamentally dishonest set of predictions.... It's been shown time and again and again; companies which do not audit completed projects in order to see how accurate the original projections were, tend to get exactly the forecasts and projects that they deserve.... Next week, perhaps, a few reflections on why it is that people don't support the neoconservative project to bring democracy to the Middle East (a trailer for those who can't wait; the title is going to be something like 'If You Tell Lies A Lot, You Tend To Get A Reputation As A Liar'). Mind how you go...

  • Weekend Reading: Annette Gordon-Reed: Some Thoughts About Sally Hemings

  • A Year Ago on Equitable Growth: : Fifteen Worthy Reads from the Past Week or so: July 12, 2018: TOP MUST REMEMBER: Cory Doctorow: I Was Naive: "I've been thinking of all those 'progressive' Senators who said that... Jeff Sessions was a gentleman, honorable, decent—just someone whose ideas they disagreed with. They approved Sessions for AG on that basis, and he architected this kids-in-cages moment...

  • Liveblogging: The Anglo-Saxon Chronicle: Gregory, Augustine, and Ceolwulf: "A.D. 596. This year Pope Gregory sent Augustine to Britain with very many monks, to preach the word of God to the English people...

  • Liveblogging: The Anglo-Saxon Chronicle: Ceawlin and Friends: "A.D. 568. This year Ceawlin, and Cutha the brother of Ceawlin, fought with Ethelbert, and pursued him into Kent. And they slew two aldermen at Wimbledon, Oslake and Cnebba...

  • Liveblogging: The Anglo-Saxon Chronicle: The Holy Pope Gregory, and Columba: "A.D. 560. This year Ceawlin undertook the government of the West-Saxons; and Ella, on the death of Ida, that of the Northumbrians; each of whom reigned thirty winters...


  1. Duncan Black: In The Old Times: "I'm not one to defend the Bush administration, but they did at least attempt to color inside the lines, if in garish bloody colors. I'm sure Yoo's torture memo was quite a marvel of legal reasoning that only someone who went to the best law school could come up with (our best laws schools are churning out sociopaths, but still). At this point, the Trump administration is just saying 'we are going to continue doing crimes and you can't stop us and hahaha you aren't even trying'...

  2. Sam Dangremond: Ken Griffin's 238 Million NYC Penthouse Is Most Expensive Home in America: "The penthouse at 220 Central Park South... $238 million.... At 953 feet, the 79-story tower stands out along the Central Park South skyline. Griffin's penthouse—a combination of two units—encompasses approximately 24,000 square feet, according to the Wall Street Journal. The $238-million price tag dwarfs the previous record of $137 million, which hedge-fund manager Barry Rosenstein reportedly paid for a home in East Hampton...

  3. MGI: Jobs Lost, Jobs Gained: Workforce Transitions in a Time of Automation

  4. Abd Ar Rahman bin Muhammed ibn Khaldun: The Muqaddimah https://delong.typepad.com/files/muquaddimah.pdf #books

  5. Jared Bernstein: More Evidence–This Time from CBO... Higher (Even Much Higher) Minimum Wages Largely Do What They’re Supposed To Do: "Raising the federal minimum wage to 15 per hour by 2025 would lift the pay of 27.3 million workers—17 percent of the workforce—according to a new report from the Congressional Budget Office. It would raise the incomes of poor families by 5 percent and thus reduce the number of people in poverty by 1.3 million. Since these low-end gains would be partially financed out of profits, the increase in the wage floor would reduce inequality. CBO also estimates that '1.3 million workers who would otherwise be employed would be jobless in an average week in 2025'.... The report warns that some will be hurt by the increase, but the best research suggests their job-loss estimate may be too high. Moreover, even if they’re right, the ratio of helped-to-hurt is 21 (27.3m/1.3m)...

  6. Tomaz Cajner, Leland D. Crane, Ryan A. Decker, Adrian Hamins-Puertolas, and Christopher Kurz: Improving the Accuracy of Economic Measurement with Multiple Data Sources: The Case of Payroll Employment Data: "The optimal predictor... puts approximately equal weight on the CES and ADP-derived series. Moreover, the estimated state contains information about future readings of payroll employment...

  7. David Byrne and Carol Corrado: Accounting for Innovations in Consumer Digital Services: IT Still mMatters: "Accounting for innovations in consumer content delivery matters: The innovations boost consumer surplus by nearly 1,800 (2017 dollars) per connected user per year for the full period of this study (1987 to 2017) and contribute more than 1/2 percentage point to US real GDP growth during the last ten...

  8. Kim Darroch: How Foreign Allies Talk About Trump Behind Closed Doors: "We don’t really believe this Administration is going to become substantially more normal; less dysfunctional; less unpredictable; less faction riven; less diplomatically clumsy and inept...

  9. Owen Zidar (2013): Debt to GDP & Future Economic Growth

Continue reading "Fairly Recently: Must- and Should-Reads, and Writings... (July 10, 2019)" »


Is Plutocracy Really the Problem?: Fresh at Project Syndicate

Is Plutocracy Really the Problem by J Bradford DeLong Project Syndicate

Fresh at Project Syndicate: Is Plutocracy Really the Problem?: After the 2008 financial crisis, economic policymakers in the United States did enough to avert another Great Depression, but fell far short of what was needed to ensure a strong recovery. Attributing that failure to the malign influence of the plutocracy is tempting, but it misses the root of the problem.... In fact, big money does not always find a way, nor does its influence necessarily increase as the top 0.01% captures a larger share of total income.... The larger issue...is an absence of alternative voices. If the 2010s had been anything like the 1930s, the National Association of Manufacturers and the Conference Board would have been aggressively calling for more investment in America, and these arguments would have commanded the attention of the press. Labor unions would have had a prominent voice as advocates for a high-pressure economy. Both would have had very powerful voices inside the political process through their support of candidates. Did the top 0.01% put something in the water to make the media freeze out such voices after 2008?... Read MOAR at Project Syndicate

Continue reading "Is Plutocracy Really the Problem?: Fresh at Project Syndicate" »


Smackdown: Failing to Do Robustness Checks Is Not a Virtue

Smackdown

This, from this past April of all times, greatly puzzles me: WHAT IN THE HOLY NAME OF THE ONE WHO IS IS GOING ON HERE?!

Let us remember what really happened back in 2011 when the unemployment rate was 9%:

"Reinhart... explained that countries rarely pass the 90 percent debt-to-GDP tipping point precisely because it is dangerous.... Reinhart and Rogoff... 'current debt trajectories are a risk to long-term growth and stability, with many advanced economies already reaching or exceeding the important marker of 90 percent of GDP'..."

Yet there never was any "90 percent debt-to-GDP tipping point".

Reinhart and Rogoff thought there was because they did not do any robustness checks of their data-analysis binning procedures.

Perhaps an apology to the misled world should be a high priority? Perhaps it should be a higher priority than rants claiming that their critics like me—who were right—engaged in "years of mounting polemics against austerity policies, Keynesian dogma has become something close to a secular religion"?

Marking your beliefs to market makes your thoughts stronger and raises your credibility. Not doing so does the reverse:

Ken Rogoff: The Austerity Chronicles: "After years of mounting polemics against austerity policies, Keynesian dogma has become something close to a secular religion in popular economic-policy debates. But a new study of 16 advanced economies shows that, as with all dogmas, righteousness is no substitute for empirical facts...

Continue reading "Smackdown: Failing to Do Robustness Checks Is Not a Virtue" »


Fairly Recently: Must- and Should-Reads, and Writings... (July 6, 2019)

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  • Weekly Forecasting Update: July 5, 2019: The Fed has recognized that its hope of normalizing the Fed Funds rate in the foreseeable future is vain. We are one year closer to full employment, yes. But we have extended our view of when we will reach full employment by nine months...

  • Weekly Forecasting Update: June 28, 2019: : Ten-year CPI inflation breakeven is now 1.6%. If investors were risk neutral with respect to bearing this particular inflation risk, this breakeven ought to be 2.5% if investors expected the Federal Reserve to meet its 2.0% PCE inflation target over the next decade...

  • On Twitter: Socialist Calculation Debate 2.0: Sparsity: : Suresh Naidu: "Right: instead of trying to get all the prices right, the regularization bet is that is that 99% of the benefits of planning can be realized with 1% of the prices planned by the state (e.g. fed rates)." Arindrajit Dube': "'The commanding heights were a great idea but need ML to find them" Brad DeLong: We already have such bets. Milton Friedman bet that fixing the growth of nominal liquidity services at a constant proportional rate got us 99% of the benefits. Alan Greenspan bet fixing the price of nominal liquidity services at his guess at Wicksellian neutral rate got us 99% of benefits...

  • It is macro: recession, weak recovery, catastrophe, and then superweak recovery...: "I confess I do not get this from Paul Krugman. Yes, the trade deficit crowds-out traditionally-male blue-collar import-substituting manufacturing jobs, but imports crowd-in traditionally-male blue-collar wholesale trade jobs, and finance traditionally-male blue-collar construction (and capital-goods manufacturing) jobs.... NAFTA is nowhere. The 2002-2007 bilateral-trade "China shock" is simply not a terribly big deal for the country as a whole: employment in traditionally-male blue-collar occupations was flat. A big deal for places that found their manufactures competing with new imports from China, yes. But not for blue-collar traditionally-male employment in the country as a whole...

  • Note to Self: Gary Foresythe: "The Ineditum Vaticanum.... The second of the four anecdotes concerns an encounter between a Roman and a Carthaginian at the Strait of Messina on the eve of the First Punic War...

  • A Year Ago on Equitable Growth: Fifteen Worthy Reads from Around the Week of July 5, 2018: Most Important: 1921—six years after the Ku Klux Klan revival sparked by "Birth of a Nation"—the early 20th Century's "Uncle Tom's Cabin" in reverse: 39 officially dead, 800 wounded, more than 35 blocks destroyed, more than 10000 people left homeless: Erik Loomis (2016): Tulsa: "The Tulsa Race Riot is one of the most shameful events in all of American history and as we know, that’s a high bar to meet...

  • Weekend Reading: "A Republic, If You Can Keep It": "A lady asked Dr. Franklin: 'Well, Doctor, what have we got—a republic or a monarchy?' 'A republic', replied the Doctor, 'if you can keep it'. (The lady here aluded to was Mrs. Powel of Philada[delphia]...

  • Weekend Reading: Polybius on the First Two Treaties Between Rome and Carthage: "The first treaty between Rome and Carthage was made... twenty-eight years before the invasion of Greece by Xerxes [509 BC].... The ancient language differs so much from that at present in use, that the best scholars among the Romans themselves have great difficulty in interpreting some points in it...

  • Comment of the Day: Graydon: "Ads exist to increase your insecurity, so you'll spend money to lower it. The entire endeavour is not in the public interest...

  • Comment of the Day: D. C. Sessions: "One of those 'small city research universities' is New Mexico Tech... in a town (Socorro) of 10,000.... Socorro is losing ground. Before trying to copy NMT across the USA, it would be wise to understand why the formula isn't working here...

  • Comment of the Day: Graydon: "Intelligence is emergent.... You can get it more than one way.... You can get it with way fewer neurons than we use (that parrot again, or corvids) but we don't know what it emerges from or how.... It's more useful to think about something like Deep Mind as an artificial reflex than as artificial intelligence; a certain narrow range of stimuli produces a quick response. The emergent stuff is just not there at all...

  • Liveblogging: The Anglo-Saxon Chronicle: Origins of Wessex: "A.D. 477: This year came Ella to Britain, with his three sons, Cymen, and Wlenking, and Cissa, in three ships; landing at a place that is called Cymenshore. There they slew many of the Welsh; and some in flight they drove into the wood that is called Andredsley...

  • Liveblogging: The Anglo-Saxon Chronicle: Descendants of Cerdic to Ethelred Son of Ethelwulf Son of Egbert: "A.D. 495. This year came two leaders into Britain, Cerdic and Cynric his son, with five ships, at a place that is called Cerdic's-ore. And they fought with the Welsh the same day...

  • Liveblogging: The Anglo-Saxon Chronicle: Alfred King of the Anglekin and His Successors: "Origins of Wessex: "Then succeeded Alfred, their brother, to the government. And then had elapsed of his age three and twenty winters, and three hundred and ninety-six winters from the time when his kindred first gained the land of Wessex from the Welsh. And he held the kingdom a year and a half less than thirty winters...

  • Liveblogging: The Anglo-Saxon Chronicle: Cerdic and Cynric: "A.D. 509. This year St. Benedict, the abbot, father of all the monks, ascended to heaven. A.D. 514. This year came the West-Saxons into Britain, with three ships, at the place that is called Cerdic's-ore. And Stuff and Wihtgar fought with the Britons, and put them to flight. A.D. 519. This year Cerdic and Cynric undertook the government of the West-Saxons; the same year they fought with the Britons at a place now called Charford. From that day have reigned the children of the West-Saxon kings...

  • Liveblogging: The Anglo-Saxon Chronicle: Astronomy, Northumbria, and Victories of Cynric: "A.D. 538. This year the sun was eclipsed, fourteen days before the calends of March, from before morning until nine...


  1. Shawn Donnan: Trade War Latest: Trump, G-20, China, Huawei, EU, Brazil: "A grim new reality for U.S. economic power. When Trump dialed up the heat with tariffs and threats, the rest of the world looked elsewhere for opportunities. The early results were not going in America’s favor...

  2. Tom Gara: The New Republic is Hiring an Inequality Editor: "This is a part-time role, requiring 29.5 hours per week, and does not include benefits...

  3. Adam Serwer: The Detention Camps at the Border Are a Crime: "The Trump administration’s commitment to deterring immigration through cruelty has made horrifying conditions in detention facilities inevitable...

  4. I agree that economists are doing a bad job of policing our discipline against intellectual grifters. But it is not because we need to shill in order to eat. Our problems are different: Wolfgang Munchau: Age of the Expert as Policymaker Is Coming to an End: "When economics blogging started to become fashionable, I sat on a podium with an academic blogger who predicted that people like him would usurp the role of the economics newspaper columnist within a period of 10 years. That was a decade ago. His argument was that trained economists were just smarter. What he did not reckon with is that it is hard to speak truth to power when you have to beg that power to fund your think-tank or institute. Even less so once you are politically attached or appointed. Independence matters...

  5. Barack Obama (2010): "Families across the country are tightening their belts and making tough decisions. The federal government should do the same. So tonight, I'm proposing specific steps to pay for the trillion dollars that it took to rescue the economy last year. Starting in 2011, we are prepared to freeze government spending for three years. Spending related to our national security, Medicare, Medicaid, and Social Security will not be affected. But all other discretionary government programs will.  Like any cash-strapped family, we will work within a budget to invest in what we need and sacrifice what we don't. And if I have to enforce this discipline by veto, I will...

  6. Azeem Azhar: Entrepreneurs, the Market, and the State: "Speaking with venture capitalist Bill Janeway...

  7. Apple (1997): Apple's World Wide Developers Conference 1997 with Steve Jobs

  8. Climateer Investing: Twitter Has an Algorithm That Creates Harassment All by Itself: "Harassment is such a harsh word, let's call it 'engagement'. From glitch girl MC Mclure's Twitter feed.... 'Social experiment: "Do NOT read the replies to this tweet before you reply to it".... What Twitter's doing is finding people with low-flow timelines & filling space in with "high engagement" tweets ("things you're likely to reply to too"). This tells us 2 things: It's not just "favs are RTs" now; REPLIES might be RTs too. TWITTER HAS AUTOMATED PILEONS...

  9. Martin Wolf: Why Democratic Government Is Showing Strains in the US and UK: "Reagan and Thatcher failed. Both countries went through radical policy changes in the 1980s, towards free markets. This did not work out as well as had been hoped. Nationalism duly became a way to mobilise support on the right.... Austerity bites. In both countries, the crisis bequeathed huge structural fiscal deficits. This encouraged politicians of the right to slash public spending. Elites decline. Democracies require respected elites. But, in both countries, the ideal of public service has corroded, while people increasingly think of their elites as incompetent, or crooks...

  10. Alan R. Rogers, Ryan J. Bohlender, and Chad D. Huff: Early History of Neanderthals and Denisovans: "Neanderthals and Denisovans were human populations that separated from the modern lineage early in the Middle Pleistocene. Many modern humans carry DNA derived from these archaic populations by interbreeding during the Late Pleistocene. We develop a statistical method to study the early history of these archaic populations. We show that the archaic lineage was very small during the 10,000y that followed its separation from the modern lineage. It then split into two regional populations, the Neanderthals and the Denisovans. The Neanderthal population grew large and separated into largely isolated local groups https://delong.typepad.com/neanderthals.pdf...

  11. Doug Jones: Hits, Slides, and Rings: "Even though we’re mostly not aware of it, we’re very good at using our hearing to keep track of what’s going on in our physical surroundings... easily recognize the difference between someone going upstairs and someone going downstairs... good at recognizing individuals by their treads. The sounds that solid objects make can be broadly categorized as hits, slides, and rings.... Changizi argues that these correspond to the major categories of phonemes: Hits = plosives... Slides = fricatives... Rings = sonorants, including sonorant consonants, like l r y w m n, and vowels.... We can [also] do barks and pops and farts and so on. But our auditory systems are especially cued into solid object physics, so when we try to come up with easy-to-distinguish phonemes, that’s what we focus on.... Even if imitating nature is not the whole story of phonemes, it may at least be where they got started. Later on when we talk about writing systems, we’ll see there’s a similar argument about how these are tuned to tickle our primate visual systems...

  12. Monday Smackdown/Hoisted: John Cochrane's Claim in Late 2008 That a Recession Would Be a Good Thing Deserves Some Kind of Award...: The fact is that by the end of 2007 the construction sector had rebalanced: there was no excess of people pounding nails in Nevada... To: @johnmlippert.... I am tracking down John Cochrane's claims that (i) in your December 23, 2008 article you were "only... on a hunt for embarrassing quotes", (ii) he had "spent about 10 hours patiently trying to explain some basics" to you, and (iii) you took him out of proper context when you wrote: "'We should have a recession', Cochrane said in November, speaking to students and said in November, speaking to students and investors in a conference room.... 'People who spend their lives pounding nails in Nevada need something else to do'."... John M. Lippert: "Hi Professor DeLong.... Cochrane’s complaint is something of which I became aware several months after we published our story in 2008.... Bloomberg did not respond to Cochrane’s comments. He never sent them to us, despite my request that he do so. When we became aware of his complaint, we saw no reason to make a correction. Cochrane made the ‘pounding nails’ comment at a Chicago Booth forum at the Gleacher Center in downtown Chicago in November 2008. It was part of an ongoing lecture series, as I recall. It was kind of a big event, with a couple hundred people. So they may have a recording that you can access. Good luck with your inquiries...

  13. David Brin: The Transparent Society: Will Technology Force Us To Choose Between Privacy and Freedom? #books

  14. Doug Jones: Speech Sounds: "The origin of modern human is one of the major transitions in evolution, comparable to the origin of eukaryotic cells, or of social insects. Language is crucial here: slime molds and ants organize high levels of cooperation, turning themselves into 'superorganisms', by secreting pheromones. Humans organize by secreting cosmologies...

  15. Maria Paula Cacault, Christian Hildebrand, Jeremy Laurent-Lucchetti, and Michele Pellizzari: Distance learning in Higher Education: "Online live streaming of lectures... student achievement and attendance... students at the University of Geneva.... Students use the live streaming technology only when events make attending class too costly, and that attending lectures via live streaming lowers achievement for low-ability students but increases it for high-ability ones...

  16. Octavia E. Butler: Speech Sounds #books

  17. George Washington's Mount Vernon: Elizabeth Willing Powel: "One description of a lavish party thrown by the Powels comes from John Adams’ diary, kept during the second session of the Continental Congress. On September 8, 1774, he wrote, 'Dined at Mr. Powells—A most sinfull Feast again! Every Thing which could delight the Eye, or allure the Taste.' Powel ran her parties in the French style of a salon, a location where leading intellectuals and other elites gathered to discuss current political and social issues...

  18. Gordon Bryant Brown: An Insider's Memoir: How Economics Changed to Work Against Us From Smith to Marx to BitCoin #books

Continue reading "Fairly Recently: Must- and Should-Reads, and Writings... (July 6, 2019)" »


July 5, 2019: Weekly Forecasting Update

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The right response to almost all economic data releases is: Next to nothing has changed. We are where we were a year ago: Stable growth at 2% per year with no signs of rising inflation or a rising labor share. The only significant difference that the Fed has recognized that its hope of normalizing the Fed Funds rate in the foreseeable future is vain. We are one year closer to full employment, yes. But we have extended our view of when we will reach full employment by nine months:

Federal Reserve Bank of New York: Nowcasting Report: Junly 5, 2019: "The... Nowcast stands at 1.5% for 2019:Q2 and 1.7% for 2019:Q3.... Higher than expected exports and imports data, the ISM manufacturing survey, and employment data...

Continue reading "July 5, 2019: Weekly Forecasting Update" »


June 28, 2019: Weekly Forecasting Update

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The right response to almost all economic data releases is: Next to nothing has changed with respect to the forecast. Worth noting is that the ten-year CPI inflation breakeven is now 1.6%. If investors were risk neutral with respect to bearing this particular inflation risk, this breakeven ought to be 2.5% if investors expected the Federal Reserve to meet its 2.0% PCE inflation target over the next decade:

Federal Reserve Bank of New York: Nowcasting Report: June 28, 2019: "The... Staff Nowcast stands at 1.3% for 2019:Q2 and 1.2% for 2019:Q3...

Continue reading "June 28, 2019: Weekly Forecasting Update" »


It is macro: recession, weak recovery, catastrophe, and then superweak recovery...

I confess I do not get this from Paul Krugman.

Yes, the trade deficit crowds-out traditionally-male blue-collar import-substituting manufacturing jobs, but imports crowd-in traditionally-male blue-collar wholesale trade jobs, and finance traditionally-male blue-collar construction (and capital-goods manufacturing) jobs. If you look at all traditionally-male blue-collar—wholesale, construction, manufacturing, and mining)–what you get is not a story of the trade deficit, but rather a story of (a) macro shocks to aggregate demand, and (b) the long-run technology-and-preferences trend—some of which is automation.

NAFTA is nowhere.

The 2002-2007 bilateral-trade "China shock" is simply not a terribly big deal for the country as a whole: employment in traditionally-male blue-collar occupations was flat. A big deal for places that found their manufactures competing with new imports from China, yes. But not for blue-collar traditionally-male employment in the country as a whole.

For the country as a whole, it is aggregate demand—2001-3 recession, weak recovery, 2007-9 catastrophe, and then superweak recovery—with a supporting role for technology-and-preferences:

Https fred stlouisfed org graph graph id 577417 rn 817

Paul Krugman: "Yang asserts that automation destroyed lots of manufacturing in the midwest, [but] you don't have to be a protectionist to realize that the acceleration of job loss after 2000 was mainly about the surging trade deficit:

18 Paul Krugman on Twitter And while Yang asserts that automation destroyed lots of manufacturing in the midwest you don t have to be a protectionist to realize that the acceleration of job loss after 2000 was mainly about the surging

Continue reading "It is macro: recession, weak recovery, catastrophe, and then superweak recovery..." »


Fairly Recently: Must- and Should-Reads, and Writings... (June 26, 2019)

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  • Weekly Forecasting Update: June 21, 2019: : "About the only news in the past week or so is that the Federal Reserve has—behind the curve—become convinced that it raised interest rates too much in 2018. To the extent they attribute their change of view to news, the news is that President Trump is a chaos monkey with respect to international trade—but that was well known back in 2015. Worth noting is that the ten-year CPI inflation breakeven is now 1.6%. If investors were risk neutral with respect to bearing this particular inflation risk, this breakeven ought to be 2.5% if investors expected the Federal Reserve to meet its 2.0% PCE inflation target over the next decade...

  • Project Syndicate: Robo-Apocalypse? Not in Your Lifetime: "Historically, the tasks that humans have performed have fallen into ten broad categories. The first, and most basic, is using one’s body to move physical objects, which is followed by using one’s eyes and fingers to create discrete material goods. The third category involves feeding materials into machine-driven production processes...

  • Project Syndicate: U.S. as Doofus Country, China, and Grand Strategy: "note that—of course—all those necessary and needed pieces of action require that the U.S. look and act inwardly, not outwardly...

  • 15000 workers in the top 0.01% of income this year receive an average of 400,000 dollars a day How could one go about spending that? Suppose you decided this morning that you wanted to rent the 2000 square-foot Ritz-Carlton suite at the Ritz-Carlton San Francisco hotel for the week of next Memorial Day, and did so. That would set you back 6000 for seven nights. You would still have to spend 394,000 more today to avoid getting richer: to avoid getting richer you would have to spend 16,667 an hour, awake and asleep, day in and day out...

  • Comment of the Day: JEC: On Economist James Buchanan: "So... what Buchanan learned from serving in the Navy at a time when blacks were allowed to serve on ships exclusively as cooks was that snobbish Yankees were mean to him. Remind me again why we're spending time on this man's 'thought?...

  • For the Weekend: Where There's a Whip, There's a Way!

  • Weekend Reading: Discussion of J. Bradford DeLong and Lawrence H. Summers: "Fiscal Policy in a Depressed Economy

  • Weekend Reading: John Maynard Keynes (1937): How to Avoid a Slump: "So long as surplus resources were widely diffused between industries and localities it was no great matter at what point in the economic structure the impulse of an increased demand was applied. But the evidence grows that—for several reasons into which there is no space to enter here—the economic structure is unfortunately rigid, and that (for example) building activity in the home counties is less effective than one might have hoped in decreasing unemployment in the distressed areas. It follows that the later stages of recovery require a different technique...

  • Liveblogging: The Anglo-Saxon Chronicle: The Conquest of Southeast Britain: "A.D. 457. This year Hengest and Esc fought with the Britons on the spot that is called Crayford, and there slew four thousand men. The Britons then forsook the land of Kent, and in great consternation fled to London.... A.D. 473. This year Hengest and Esc fought with the Welsh, and took immense Booty. And the Welsh fled from the English like fire...

  • Liveblogging: The Anglo-Saxon Chronicle: The Arrival of the Saxons: "A.D. 449. This year Marcian and Valentinian assumed the empire, and reigned seven winters. In their days Hengest and Horsa, invited by Wurtgern, king of the Britons to his assistance, landed in Britain in a place that is called Ipwinesfleet; first of all to support the Britons, but they afterwards fought against them...

  • Liveblogging: The Anglo-Saxon Chronicle: The Fall of the Western Roman Empire: "A.D. 443. This year sent the Britons over sea to Rome, and begged assistance against the Picts; but they had none, for the Romans were at war with Attila, king of the Huns. Then sent they to the Angles, and requested the same from the nobles of that nation...

  • Liveblogging: The Anglo-Saxon Chronicle: To the End of Roman Rule in Britain: "A.D. 189. This year Severus came to the empire; and went with his army into Britain, and subdued in battle a great part of the island. Then wrought he a mound of turf, with a broad wall thereupon, from sea to sea, for the defence of the Britons...

  • A Year Ago on Equitable Growth: Fifteen Worthy Reads from around June 28, 2018


  1. Caleb Melby, Laura Marcinek and Danielle Burger (2014): Inflation Hawks Unrepentant and Zombified Watch!: ": Fed Critics Say ’10 Letter Warning Inflation Still Right.... John Taylor 'inflation, [un]employment... destroy[ed] financial markets, complicate[d]... normaliz[ation]... all have happened.'... Douglas Holtz-Eakin 'the clever thing... is never give a number and a date. They are going to generate an uptick in core inflation.... I don’t know when, but they will.' Niall Ferguson 'this bull market has been accompanied by significant financial market distortions, just as we foresaw. Note that word "risk". And note the absence of a date. There is in fact still a risk of currency debasement and inflation.'... David Malpass: 'The letter was correct'.... Amity Shlaes: 'inflation could come... the nation is not prepared'.... Cliff Asness... declined to comment. Michael Boskin... didn’t immediately respond.... Charles Calomiris... was traveling and unavailable.... Jim Chanos... didn’t return a phone call or an e-mail.... John Cogan... didn’t respond.... Nicole Gelinas... didn’t respond.... Phone calls... and an e-mail... to Kevin A. Hassett... weren’t returned. Roger Hertog... declined to comment.... Gregory Hess... didn’t immediately return.... Diana DeSocio... said Klarman stands by the position.... William Kristol... didn’t immediately return a call.... Ronald McKinnon... died yesterday prior to a Bloomberg call.... Dan Senor... didn’t respond.... Stephen Spruiell... declined to comment... https://blogs.wsj.com/economics/2010/11/15/open-letter-to-ben-bernanke/

  2. Win McCormack: The Green New Deal: A Capitalist Plot: "To save the planet, be more like Ike.... According Cohen and DeLong, economists at Berkeley who are among the key sources of the economic development strategy underlying the Green New Deal, the Eisenhower years were perhaps the most economically consequential in modern American history...

  3. Emily Blanchard: Trade Wars in the Global Value Chain Era: "Early evidence suggests that even in the very short run, the current trade war is taking a toll on US firms and consumers.6 The key question in the months and years to come is how, if these tariffs continue, they will begin to feed back through global value chains at the expense of firms and workers in the US, China, and around the world...

  4. John Maynard Keynes (1937): How to Avoid a Slump: "The boom, not the slump, is the right time for austerity at the Treasury...

  5. Patience Haggin and Kara Dapena: Google’s Ad Dominance Explained in Three Charts: "Tech giant is the leading supplier of services to carry out virtually every step of purchasing and selling ads...

  6. "Barry Eichengreen (2015): Hall of Mirrors: The Great Depression, The Great Recession, and the Uses—and Misuses—of History

  7. Paul Krugman: Notes on Excessive Wealth Disorder: "How not to repeat the mistakes of 2011...

  8. Antonio Gramsci (1926): Some Aspects of the Southern Question:

  9. Thomas R. Bates (1975): Gramsci and the Theory of Hegemony: "The intellectuals succeed in creating hegemony to the extent that they extend the world view of the rulers to the world, and thereby secure the 'free' consent of the masses to the law and order of the land. To the extent that the intellectuals fail to create hegemony, the ruling class falls back on the state's coercive apparatus...

  10. Weekend Reading: Discussion of J. Bradford DeLong and Lawrence H. Summers (2012): "Fiscal Policy in a Depressed Economy"

  11. Notebook: Economics Gone Wrong

  12. J. Bradford Delong and Lawrence H. Summers (2012): Fiscal Policy in a Depressed Economy

  13. Paul Krugman: Notes on Excessive Wealth Disorder: "How not to repeat the mistakes of 2011...

  14. It makes me sad that the sweet spot for this is 50 a year. How many such things do I feel I can afford to subscribe to at 50 a year? About 1/10 of those I would feel I could afford to subscribe to at 10 a year...: Daniel Mallory Ortberg: The Shatner Chatner

  15. Martin Wolf (2014): The Shifts and the Shocks: What We've Learned—and Have Still to Learn—from the Financial Crisis

Continue reading "Fairly Recently: Must- and Should-Reads, and Writings... (June 26, 2019)" »


A Year Ago on Equitable Growth: Fifteen Worthy Reads from around June 28, 2018

stacks and stacks of books

Worthy Reads on Equitable Growth:

  1. A very nice paper concluding, among other things, that geographic mobility is the friend and not the foe of increases in the minimum wage as an equitable growth policy—it is the individuals who are able to move across state lines to opportunity who appear to benefit the most: Kevin Rinz and John Voorheis: The distributional effects of minimum wages: Evidence from linked survey and administrative data: "States and localities are increasingly experimenting with higher minimum wage...

  2. Brad DeLong: The lack of Federal Reserve maneuvering room is very worrisome

  3. Karen Dynan joins Equitable Growth Steering Committee

  4. It is worth stressing that motherhood penalties—work-gap penalties more generally—appear present throughout and beyond the Global North. Our labor market institutions and expectations are still as if designed for a male-dominated paid workforce in which women exit the paid labor force upon marriage or pregnancy and do not return: Eunjung Jee, Joya Misra, and Marta Murray-Close: Motherhood penalties in the U.S., 1986-2014: "Mothers earn less than childless women...

  5. I have long thought it unwise that feminist economics is not a much larger and more prominent subfield. The past century and a half, after all, has seen the typical woman go from eating for two for twenty years to eating for two for onlyfour. That is a huge change, with mammoth and fascinating implications and consequences within and far beyond economics—yet remarkably few (male) economists seem to care: Kate Bahn: Reporting from the International Association for Feminist Economics Conference: "Great presentation on 'Bridging Theory and Action: Digital Platforms as an Opportunity for Feminist Economics' by @leezagavronsky and @Bilguis92.... We need to move beyond the online/offline binary, since it often leads activism out in the world. Economists don't need to dumb things down, but present things in a more inclusive manner, with less jargon that obfuscates what we are actually trying to say...

Continue reading "A Year Ago on Equitable Growth: Fifteen Worthy Reads from around June 28, 2018" »


Making it real that we live in the "second gilded age"...

I am hearing from a number of people that columns like this one and its ilk by Paul Krugman and our other compadres are bloodless, and ineffective. They do not convey any sense of what is happening.

So let me make it more concrete:

The top 0.01% of American workers—now some 15000—this year have incomes, including capital gains, of about 500 times the average. Typical incomes in America today, including capital gains and benefits, are perhaps 300 a working day. The gulf between them and average income is large: average income is about 800. Thus 15000 workers in the top 0.01% of income this year receive an average of 400,000 dollars a day.

How could one go about spending that? Suppose you decided this morning that you wanted to rent the 2000 square-foot Ritz-Carlton suite at the Ritz-Carlton San Francisco hotel for the week of next Memorial Day, and did so. That would set you back 6000 for seven nights. You would still have to spend 394,000 more today to avoid getting richer: to avoid getting richer you would have to spend 16,667 an hour, awake and asleep, day in and day out.

One way to think about the spending of these 15000 superrich is that they are, collectively, through their spending employing 7,500,000 who are dedicated to making them happier and advancing their purposes, whatever they may be. And a large proportion of them are bosses, partially constrained by their obligation to advance the purposes of the organizations they work for, but free to shape and interpret those purposes as they wish. Guess average is effectively the unconstrained boss of only 3 more: that makes 20,000,000 of us who are paid to directly and indirectly and who are thus are focused on advancing the top 0.01%'s particular and idiosyncratic purposes. Is that likely to be a healthy society?

And then there are the rest of the top 0.1%—not 15,000 but 135,000 each on average one-ninth as well-off—who must spend and reinvest not 400,000 but 45,000 a day, but who are collectively of the same economic weight as the top 0.01%, and thus have another 20,000,000 of us working for them: paid to directly and indirectly and thus focused on advancing the top 0.1%'s particular and idiosyncratic purposes as well:

Paul Krugman: Notes on Excessive Wealth Disorder: "How not to repeat the mistakes of 2011.... What’s really at issue here is the role of the 0.1 percent, or maybe the 0.01 percent—the truly wealthy, not the '400,000 a year working Wall Street stiff' memorably ridiculed in the movie Wall Street. This is a really tiny group of people, but one that exerts huge influence over policy.... Raw corruption.... Soft corruption.... Campaign contributions.... Defining the agenda... [which] I want to focus on... a particular example that for me and others was a kind of radicalizing moment, a demonstration that extreme wealth really has degraded the ability of our political system to deal with real problems... the extraordinary shift in conventional wisdom and policy priorities that took place in 2010-2011, away from placing priority on reducing the huge suffering still taking place in the aftermath of the 2008 financial crisis, and toward action to avert the supposed risk of a debt crisis...

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