Briefly Noted: 2021-03-21 Su

Things that went whizzing by that I want to remember...

 

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Of all the things I understand least well, it is that we dare not aim to have production hit potential output and thus hit the inflation target because we cannot handle even a small overshoot because… of what, exactly? This kind of thinking perhaps avoids some risk of a bumpy future by creating an eternal very bumpy present:

Benjamin Wallace-WellsLarry Summers Versus the Biden Administration’s Coronavirus-Stimulus Plan: ‘The Biden rescue package will pour out enough sand to fill a hole, and then keep pouring. In Summers’s view, this is economically risky, because it means that the Federal Reserve will probably eventually need to manage inflation, a recipe for a bumpy future. “My reading is that there are roughly zero historical examples where we got inflation to the point where the Fed got nervous and had to tighten and the whole thing happened smoothly,” Summers told me last week. He also sees the stimulus as politically risky, in that there are only so many times the Biden Administration can ask Congress to spend huge amounts of money without raising taxes to offset it, and fewer still if they spend this round inefficiently…

LINK: <https://www.newyorker.com/news/annals-of-populism/larry-summers-versus-the-stimulus>


The Malthusian picture, the 1870-1914 escape, and fears that World War I had permanently deranged the economic growth process in such a way as to raise the specter of the return of the Devil of Malthus:

John Maynard Keynes (1919): The Economic Consequences of the Peace: ‘[Their] view of the world… filled with deep-seated melancholy the founders of our Political Economy. Before the eighteenth century mankind entertained no false hopes. To lay the illusions which grew popular at that age’s latter end, Malthus disclosed a Devil. For half a century all serious economical writings held that Devil in clear prospect. For the next half century he was chained up and out of sight. Now perhaps [with World War I] we have loosed him again…

LINK: <https://oll.libertyfund.org/title/keynes-the-economic-consequences-of-the-peace#preview>


Ummm… You target asset bubbles by reducing leverage, not by raising interest rates. I have a bad feeling about this:

Ruchir Sharma: By Targeting House Prices, New Zealand Shows the Way: ‘While consumer prices have been held in check by globalisation and automation, easy money pouring out of central banks has been driving up the price of assets from stocks to bonds and housing…. A global political celebrity, the liberal Ardern was elected on a promise of affordable housing. Fed up, her government has ordered the central bank to add stabilising home prices to its remit, starting March 1. It is novel and healthy for a politician to recognise the unintended consequences of easy money. If this idea catches on, it could lead to greater financial and social stability worldwide…. Ardern’s move may not slow the housing boom soon, because supply-and-demand dynamics are too strong. But ordering the central bank to make housing price stability a higher priority is a start, and could inspire others to rethink the role easy money has played in driving financial instability…

LINK: <https://www.ft.com/content/c8959502-7dae-43b1-b993-3bf85fb4325a>


I confess hope that Facebook dies rapidly. Silicon Valley needs a very obvious and pointed lesson that treating your users like cattle to be exploited and misled leads to your bankruptcy and to your permanent exclusion from all polite society. Feeding your users to the likes of Alex Jones for the Luz & the advertising dollars is despicable.

This applies to you to, Google, for the current state of Youtube:

Justin Bariso: Tim Cook May Have Just Ended Facebook: ‘Cook aptly points out, “advertising existed and thrived for decades” without using data that was collected in less than transparent ways. And as customers are offered more choice when it comes to how apps and websites track their data, experts predict that more and more people will opt out of said tracking. If you’re an advertiser, you’ll need to adapt. Or die.But there’s also a bigger lesson at stake. Now is the time to ask yourself: Which philosophy do I want to pursue? Do I want a business that serves my customers? Or one that takes advantage of customers to serve my business? Because in the end, only one of these philosophies is sustainable for the long-term. The other will lead you to crash and burn. And while the long-term solution may initially prove more challenging, remember: “The path of least resistance is rarely the path of wisdom”…

LINK: <https://www.inc.com/justin-bariso/tim-cook-may-have-just-ended-facebook.html>


But, Scott, the ARP is not “a bloated, stealth, and wholly partisan vehicle”. If it were, Republicans would be running against it rather than trumpeting its accomplishments and hoping to make voters think they voted for rather than against it, capisce?:

Scott Lincicome: While You Were Seussing: ‘While Republicans fight the culture war on TV, Democrats enact progressive priorities into law…. Republicans are only now scrambling to define the ARP and are left to hope that it doesn’t work, while Democrats are on the attack. A big reason for that is that instead of mounting an effective messaging campaign to highlight these provisions—ones almost entirely unrelated to the pandemic—and others (such as that ridiculous union pension bailout or the $60 billion in tax hikes), and to define the ARP as a bloated, stealth, and wholly partisan vehicle to achieve progressive social change under the cover of Covid, Republicans were on TV yelling about children’s books and cancel culture…

LINK: <https://capitolism.thedispatch.com/p/while-you-were-seussing>


The huge gap between the performance of the biomedical establishment and the performance of the Trump administration is truly remarkable:

Jason Kottke: How Were the Covid–19 Vaccines Developed So Quickly?: ‘1. The need was urgent…. 2. Funding & focus. Companies and governments threw billions and billions of dollars at this… 3. Availability of volunteers & high incidence of disease…. 4. International & corporate collaboration. Countries and companies shared research, data, and resources…. 5. We knew a lot about coronaviruses from previous work…. 6. Scientific and technological capability…. Humanity’s general scientific and technological abilities have never been stronger or more powerful…. Bloomberg: “Remember also that technology has evolved rapidly—for example, we’re now about able to sequence the genomes of every mutant version of the virus in less than a day. That helps in speeding up vaccine development.” Dr. Mark Toshner sums up the effort: “However we have collectively now shown that with money no object, some clever and highly motivated people, an unlimited pool of altruistic volunteers, and sensible regulators that we can do amazing things”…

LINK: <https://kottke.org/21/03/how-were-the-covid-19-vaccines-developed-so-quickly>


Why is it, anyhow, that a “measurement” is a self-adjoint operator? A measurement is entangling the quantum wave function of the experiment with that of a measuring device that has a macro-visible pointer. What does that have to do with a self-adjoint operator?

Sydney Coleman: Quantum Mechanics in Your Face: ‘The state of a physical system at a fixed time is a vector in Hilbert space… ѱ…. It evolves in time according to the Schrödinger equation i∂ѱ/dt = Hѱ, where the Hamiltonian H is some self-adjoint linear operator…. Some, maybe all, self-adjoint operators are “observables”. If the state is an eigenstate of an observable A, with eigenvalue a, then we say the value of A is a, is certain to be observed to be a.... There’s an implicit promise in here that, when you put the whole theory together and start calculating things, that the words “observes” and “observable” will correspond to entities that act in the same way as those entities do in the language of everyday speech under the circumstances in which the language of everyday speech is applicable. Now to show that is a long story. It’s not something I’m going to focus on here, involving things like the WKB approximation and von Neumann’s analysis of an ideal measuring device8, but I just wanted to point out that that’s there…

LINK: <https://arxiv.org/pdf/2011.12671.pdf>


HOISTED FROM ÞE ARCHIVES (2019): "Passing þe Baton": Þe Interview

I would say that Zack has it slightly wrong here. There is not one core reason for passing the baton. There are three reasons: a political reason, a policy-implementation reason, and a we've-learned-about-the-world reason:

 

Here's Zack Beauchamp: Zack BeauchampA Clinton-era Centrist Democrat Explains Why It’s Time to Give Democratic Socialists a Chance: “The Baton Rightly Passes To Our Colleagues On Our Left”: "DeLong believes that the time of people like him running the Democratic Party has passed.... It’s not often that someone in this policy debate — or, frankly, any policy debate — suggests that their side should lose. So I reached out to DeLong to dig into the reasons for his position: Why does he believe that neoliberals’ time in the sun has come to an end?...

...The core reason, DeLong argues, is political. The policies he supports depend on a responsible center-right partner to succeed. They’re premised on the understanding that at least a faction of the Republican Party would be willing to support market-friendly ideas like Obamacare or a cap-and-trade system for climate change. This is no longer the case, if it ever were.... The result, he argues, is the nature of the Democratic Party needs to shift. Rather than being a center-left coalition dominated by market-friendly ideas designed to attract conservative support, the energy of the coalition should come from the left and its broad, sweeping ideas. Market-friendly neoliberals, rather than pushing their own ideology, should work to improve ideas on the left. This, he believes, is the most effective and sustainable basis for Democratic politics and policy for the foreseeable future....

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Here's me: We are still here, but it is not our time to lead.... Barack Obama rolls into office with Mitt Romney’s health care policy, with John McCain’s climate policy, with Bill Clinton’s tax policy, and George H.W. Bush’s foreign policy. And did George H.W. Bush, did Mitt Romney, did John McCain say a single good word about anything Barack Obama ever did over the course of eight solid years? No, they f---ing did not.... While I would like to be part of a political coalition in the cat seat, able to call for bids from the left and the right about who wants to be part of the governing coalition to actually get things done, that’s simply not possible...

And: Our current bunch of leftists are wonderful people.... They’re social democrats, they’re very strong believers in democracy. They’re very strong believers in fair distribution of wealth. They could use a little more education about what is likely to work and what is not. But they’re people who we’re very, very lucky to have on our side. That’s especially opposed to the people on the other side, who are very, very strange indeed. You listen to [Never Trump conservatives]... about all the people they had been with in meetings, biting their tongues over the past 25 years, and your reaction can only be, “Why didn’t you run away screaming into the night long ago?”...

And: We learned more about the world. I could be confident in 2005 that [recession] stabilization should be the responsibility of the Federal Reserve. That you look at something like laser-eye surgery or rapid technological progress in hearing aids, you can kind of think that keeping a market in the most innovative parts of health care would be a good thing. So something like an insurance-plus-exchange system would be a good thing to have in America as a whole. It’s much harder to believe in those things now. That’s one part of it. The world appears to be more like what lefties thought it was than what I thought it was for the last 10 or 15 years…

LINK: <https://www.bradford-delong.com/2019/03/passing-the-baton-the-interview.html>

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A Clinton-era centrist Democrat explains why it’s time to give democratic socialists a chance

“The baton rightly passes to our colleagues on our left.” By Zack Beauchamp@zackbeauchampzack@vox.com  Mar 4, 2019, 8:30am EST

Angela Weiss/AFP/Getty Images

The rise of the Democratic left, personified by Sen. Bernie Sanders (I-VT) and Rep. Alexandria Ocasio-Cortez (D-NY), has raised a serious question: Should Democrats lean away from market-friendly stances and get comfortable with big government again? Should they embrace an ambitious 2020 candidate like Sanders and policies like the Green New Deal, or stick with incrementalists like former Vice President Joe Biden and more market-oriented ideas like Obamacare?

One of the most interesting takes I’ve seen on this debate came from Brad DeLong, an economist at the University of California-Berkeley. DeLong, who served as deputy assistant secretary of the Treasury for economic policy in the Clinton administration, who is one of the market-friendly, “neoliberal” Democrats who have dominated the party for the last 20 years. The term he uses for himself is “Rubin Democrat” — referring to followers of finance industry-friendly Clinton Treasury Secretary Robert Rubin.

Yet DeLong believes that the time of people like him running the Democratic Party has passed. “The baton rightly passes to our colleagues on our left,” DeLong wrote. “We are still here, but it is not our time to lead.”

It’s not often that someone in this policy debate — or, frankly, any policy debate — suggests that their side should lose. So I reached out to DeLong to dig into the reasons for his position: Why does he believe that neoliberals’ time in the sun has come to an end?

The core reason, DeLong argues, is political. The policies he supports depend on a responsible center-right partner to succeed. They’re premised on the understanding that at least a faction of the Republican Party would be willing to support market-friendly ideas like Obamacare or a cap-and-trade system for climate change. This is no longer the case, if it ever were. 

“Barack Obama rolls into office with Mitt Romney’s health care policy, with John McCain’s climate policy, with Bill Clinton’s tax policy, and George H.W. Bush’s foreign policy,” DeLong notes. “And did George H.W. Bush, did Mitt Romney, did John McCain say a single good word about anything Barack Obama ever did over the course of eight solid years? No, they fucking did not.”

The result, he argues, is the nature of the Democratic Party needs to shift. Rather than being a center-left coalition dominated by market-friendly ideas designed to attract conservative support, the energy of the coalition should come from the left and its broad, sweeping ideas. Market-friendly neoliberals, rather than pushing their own ideology, should work to improve ideas on the left. This, he believes, is the most effective and sustainable basis for Democratic politics and policy for the foreseeable future.

What follows is a transcript of our conversation, edited for length and clarity.

Zack Beauchamp

I want to start with your notion of “Rubin Democrats.” What does that mean, exactly? What was the movement you identify with?

Brad DeLong

I would say it’s largely neoliberal, market-oriented, and market-regulation and tuning aimed at social democratic ends. It also involves taking a step in the direction of appeasing conservative priorities. The belief is that if you have a broad coalition behind such policy, it will be much more strongly entrenched in America and much better implemented than if it were implemented by a narrow, largely partisan majority. 

And Rubin Democrats believe that you should prioritize economic growth. Once you have economic growth, electorates want to become a lot less Grinch-y and less likely to feel that redistribution to the poor is coming out of its hide, making them positively worse-off. Economic growth first, redistribution and beefing up the safety net second. 

Zack Beauchamp 

What you’re describing is a broad theory of political economy, in which a vision for what economic policies are best is intertwined with a particular view of what makes policies popular and sustainable. You say something about this is wrong — do you think it’s the political part, the economic part, or both?

Brad DeLong

We were certainly wrong, 100 percent, on the politics.

Barack Obama rolls into office with Mitt Romney’s health care policy, with John McCain’s climate policy, with Bill Clinton’s tax policy, and George H.W. Bush’s foreign policy. He’s all these things not because the technocrats in his administration think they’re the best possible policies, but because [White House adviser] David Axelrod and company say they poll well. 

And [Chief of Staff] Rahm Emanuel and company say we’ve got to build bridges to the Republicans. We’ve got to let Republicans amend cap and trade up the wazoo, we’ve got to let Republicans amend the [Affordable Care Act] up the wazoo before it comes up to a final vote, we’ve got to tread very lightly with finance on Dodd-Frank, we have to do a very premature pivot away from recession recovery to “entitlement reform.”

All of these with the idea that you would then collect a broad political coalition behind what is, indeed, Mitt Romney’s health care policy and John McCain’s climate policy and George H.W. Bush’s foreign policy. 

And did George H.W. Bush, did Mitt Romney, did John McCain say a single good word about anything Barack Obama ever did over the course of eight solid years? 

No, they f—-ing did not. No allegiance to truth on anything other than the belief that John Boehner, Paul Ryan, and Mitch McConnell are the leaders of the Republican Party, and since they’ve decided on scorched earth, we’re to back them to the hilt. So the politics were completely wrong, and we saw this starting back in the Clinton administration. 

Today, there’s literally nobody on the right between those frantically accommodating Donald Trump, on the one hand, and us on the other. Except for our brave friends in exile from the Cato Institute now trying to build something in the ruins at the [centrist] Niskanen Center. There’s simply no political place for neoliberals to lead with good policies that make a concession to right-wing concerns. 

Zack Beauchamp

Let’s talk a little bit about the intra-Democratic fight. When you say “pass the baton to the left,” does that mean give up on substantive policies where you — meaning Rubin Democrats — disagree with the left? 

Brad De Long

No. It means argue with them, to the extent that their policies are going to be wrong and destructive, but also accept that there is no political path to a coalition built from the Rubin-center out. Instead, we accommodate ourselves to those on our left. To the extent that they will not respond to our concerns, what they’re proposing is a helluva better than the poke-in-the-eye with a sharp stick. That’s either Trumpist proposals or the current status. 

Zack Beauchamp

So the position is not that neoliberals should abandon their policy beliefs. It’s that you need to reorient your understanding of who your coalition is. 

Brad DeLong

Yes, but that’s also relevant to policy beliefs, right? 

A belief in cap and trade — rather than the carbon tax plus huge, honking public research — was both a belief that the market really ought to rule here, plus a belief that stakeholders who are producing carbon energy can be bought off with cap-and-trade: that the Koch brothers would rather be selling their carbon allowances than having to actually burn coal to produce things. Plus, a belief there were Republicans who would actually think that global warming is a menace, and be willing to argue strenuously within the Republican coalition that something needs to be done about this. 

A bunch of policies that depended on there being a political-economic consensus to support them, as part of a broad agreement about America’s direction, are a lot worse as policies if that political-economic underpinning is not there. There also are a bunch of lessons about how policies that we thought are going to be very effective are rather less effective. 

Zack Beauchamp

The response you hear from conservative and Democratic centrists, those Blue Dogs that remain, is that they are the partners that you need to appease, not the Alexandria Ocasio-Cortez left. The Democratic coalition depends on winning in red states. 

Brad DeLong

The first lesson is the Gingrich lesson: If you’re in a swing state, you lose your seat if the president of your party is perceived to be a failure. The highest priority for Blue Dogs in red and purple states — in 1994 and in 2010 — ought to have been making it clear the president of their party was a great success. 

If there is a good state of the world in 2021 — the Lord willing and the creek don’t rise — everyone and all Blue Dogs in office needs to recognize that and act on that. 

That’s the political level and on the policy level. We tried to do health reform the Republicans’ way ,and what’s now clear with a Republican Supreme Court and with a lot of Republican governors, any attempt to do it the Republicans’ way is going to get shredded. We tried to do climate policy the Republicans’ way, and got nowhere.

Until something non-rubble-ish is built in the Republican center, what might be good incremental policies just cannot be successfully implemented in an America as we know it today. We need Medicare-for-all, funded by a carbon tax, with a whole bunch of UBI rebates for the poor and public investment in green technologies. 

That’s the best policy given the political-economic context. If the political-economic context were different — well, I’m fundamentally a neoliberal shill. It is very nice to use market means to social democratic ends when they are more effective, and they often are. 

If you can properly tweak market prices, you then don’t just have one smart guy trying to design a policy that advances an objective — you have 30 million people all over the country, all incentivized to design a policy. That’s a wonderful thing to have. 

Zack Beauchamp

But despite that substantive view, you think that instead of freaking out about the leftists at the gates, it’s smarter to side with them — to treat them as political coalition partners.

Brad De Long

Our current bunch of leftists are wonderful people, as far as leftists in the past are concerned. They’re social democrats, they’re very strong believers in democracy. They’re very strong believers in fair distribution of wealth. They could use a little more education about what is likely to work and what is not. But they’re people who we’re very, very lucky to have on our side. 

That’s especially opposed to the people on the other side, who are very, very strange indeed. You listen to [Never Trump conservatives] like Tom Nichols or Bruce Bartlett or Bill Kristol or David Frum talk about all the people they had been within meetings, biting their tongues over the past 25 years, and your reaction can only be, “Why didn’t you run away screaming into the night long ago?”

Zack Beauchamp

I don’t know if what you’re describing is a long-running reconfiguration of American politics, an emergency alliance with the left to stop an out-of-control right, or both. How would you describe the conditions that have pushed you toward a more-left oriented position than you had before?

Brad DeLong

I’d say we learned more about the world.

I could be confident in 2005 that [recession] stabilization should be the responsibility of the Federal Reserve. That you look at something like laser-eye surgery or rapid technological progress in hearing aids, you can kind of think that keeping a market in the most innovative parts of health care would be a good thing. So something like an insurance-plus-exchange system would be a good thing to have in America as a whole. 

It’s much harder to believe in those things now. That’s one part of it. The world appears to be more like what lefties thought it was than what I thought it was for the last 10 or 15 years. 

The other part is that while I would like to be part of a political coalition in the cat seat, able to call for bids from the left and the right about who wants to be part of the governing coalition to actually get things done, that’s simply not possible as of now. 

We shouldn’t pretend that it is, or that it’s going to be. We need to find ways to improve left-wing initiatives, rather than demand that they start from our basic position and do minor tweaks to make them more acceptable to their underlying position. 

LINK: <https://www.vox.com/policy-and-politics/2019/3/4/18246381/democrats-clinton-sanders-left-brad-delong>

 


"It Seems Plausible Þt þe Neoliberal Era Is Over..."

I now wish that I had said "possible" rather than "plausible", but alea iacta est...

 

Benjamin Wallace-WellsLarry Summers Versus the Biden Administration’s Coronavirus-Stimulus Plan: ‘“It seems plausible,” Brad DeLong, an economic historian at Berkeley and a Clinton Treasury official, said, that “the neoliberal era is over”…. [He] guessed that about half of the leftward turn within this universe [of economists] was… [because] “there is not nearly so much trust in the ability of the market to heal itself”…. The other half, he said, was the part that tended to isolate Summers. DeLong ascribed it to politics, and to the general feeling (“in my view, twenty-seven years too late”) that Republicans would never be willing partners for expansive economic intervention.

There was little disagreement among liberal economists, he emphasized, over how the Biden Administration ought to spend the money in an ideal world: “Most of us would say infrastructure rather than checks—if we had that option. Only Larry believes we have that option.” DeLong’s own view is that if the Biden Administration had pared back the stimulus in the hopes of building a bipartisan consensus for infrastructure, it would find that no such consensus existed. “In the absence of Republican negotiating partners, center-left Democrats have got to look to the left,” DeLong said. “This is an example of that actually happening”… 

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LINK: <https://www.newyorker.com/news/annals-of-populism/larry-summers-versus-the-stimulus>


HOISTED FROM ÞE ARCHIVES (2019): Passing þe Baton...

The original twitter rant. (Note that it is, mostly, advice to the (few) honorable among Republicans. "Passing the Baton" is a preliminary aside...

 

Brad DeLong (2019–02–25): Passing the Baton: David Walsh went to the Niskanen Center conference. He got hives: <https://bradford-delong.com/2019/02/david-walsh-went-to-the-niskanen-center-conference-he-got-hives.html>. I think it is fair to say that the already-broken American political public sphere has become significantly more broken since November 8, 2016. On the center and to the left, those like me in what used to proudly call itself the Rubin Wing of the Democratic Party—so-called after former Treasury Secretary Bob Rubin, and consisting of those of us hoping to use market means to social democratic ends in bipartisan coalition with Republicans seeking technocratic win-wins—have passed the baton to our left. Over the past 25 years, we failed to attract Republican coalition partners, we failed to energize our own base, and we failed to produce enough large-scale obvious policy wins to cement the center into a durable governing coalition. 

We blame cynical Republican politicians. We blame corrupt and craven media bosses and princelings. We are right to blame them. But shared responsibility is not diminished responsibility: We ourselves cannot escape all blame. And so the baton rightly passes to our colleagues on our left.

We are still here, but it is not our time to lead.

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On the right, however, things are much worse. Looking to the right of the Rubin Wing of the Democratic Party, we see rubble. Then we see more rubble. And more rubble. Beyond that, rubble. And then, at the far end of the political spectrum, what former Secretary of State Madeleine Albright can only call [the American version of a twenty-first century neo-fascism <https://books.google.com/books?isbn=006293127X>, devoted to entrenching plutocracy and stoking ethnic and religious hatreds, with which a great many people who ought to know better are making accommodation.

Two recent straws in the wind in this space: former Republican CEA Chair Martin Feldstein egging the Trump administration on to an intellectual-property trade war with China <https://project-syndicate.org/commentary/trump-china-trade-deal-capitulation-by-martin-feldstein-2019-02> without even a whisper of acknowledgement that the Trump administration cannot competently conduct this negotiation; former Republican CEA Chair Michael Boskin claiming that Trump is reaching [“for bipartisan compromise on important issues” <https://project-syndicate.org/commentary/2020-democratic-presidential-candidates-policies-by-michael-boskin-2019-02>.

Pitching their flags in the rubble and hoping to rebuild—in a stunning triumph of optimism of the will over rational pessimism of the intellect that I cannot view with anything other than awe—are The Bulwark <https://thebulwark.com> and the [Niskanen Center <https://niskanencenter.org> (on whose Advisory Board I sit).

What can those of us who sit to the left of the Niskanen Center and who do wish for a healthy public sphere—i.e., those of us who are not interested in concern trolling for the moment, as much fun as concern trolling is—do to be genuinely helpful? 

I could use some help here, people of twitter! 

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I think that the first piece of advice to give is: restrict yourself to #nevertrump. Trumpists are either morons, grifters, or deluded. Those who have made accomodation with neo-fascism to any substantial degree are not people you want around—they will, for one reason or another, stab you in the back the first moment that it seems opportune. Failing to require a #nevertrump litmus test seems wise. Admittedly, it is unlikely to lead to power and Fox News. But it is the right thing to do. And I urge you to Do the Right Thing.

Second, I at least regard your cultural-historical task as being to wean Republicans away from Trumpist neo-fascism as an orienting frame. Trumpist neo-fascism is, I think, a version of Kentucky-style American nationalism. Kentucky-style American nationalism is a species of standard blood-and-soil nationalism. People have moved to Kentucky because they want elbow room and do not like being forced by government and society to conform, and once people are in Kentucky they become the kinds of people who can build a log cabin with their bare hands in 48 hours, and bring down a squirrel for squirrel stew at 300 yards. Thus heredity and environment—blood and soil—produce a special kind of person. And those who come to the U.S. hoping to live in, say, a little Mogadishu or a little Kishinev or a little Cuzco cannot fit.

This blood-and-soil Kentucky neo-fascist Trumpist nationalism is, I believe, highly destructive, pernicious, and positively un-American. It needs to be fought against. In the center and on the left we fight it with the opposed “Massachusetts” picture of American nationalism—a community engaged in an Errand Unto the Wilderness to build a Utopia that will be a City Upon a Hill, and we are all in this together with no special authorities or leaders because of the Priesthood of All Believers. Never mind that John Winthrop would run screaming from us: we are his children. The Massachusetts-style American nationalism of election—that America really consists of those of us who have come here to build a common Utopia—is very powerful, much more correct, sociologically healthy, and something we all can be proud of in a sense that is simply not possible for the Kentucky-style neo-fascist Trumpist blood-and-soil nationalism. 

The question is whether the Niskanen Center and the Bulwark can take this Errand-Unto-the-Wildnerness narrative and make it sing for the center-right in anything like the way it sings for the center-left. So your task is to build up your own version of the Errand-Unto-the-Wilderness narrative of American nationalism. 

Third, the Niskanen Center and The Bulwark need to build up distinctive center-right policy positions on important issues—to stake out positions in the rubble that center-right #nevertrumpers can rally around. I see five issue areas as key. (a) the public sphere. (b) global warming. (c) income and wealth distribution at the top. (d) the social safety net. (e) the economic growth agenda. Far be it from me to say what those should be—I have enough on my plate figuring out what my position on these issue areas should be, let alone what the position of others should be. I will confine myself to saying that simple opposition to whatever actual policies wind up under the umbrella of GND is not sufficient—not if you want me and people like me to think you belong in the public sphere. And no, Elaine Kamarck, “shut up and adapt to global warming” is not sufficient either, and—if that is your position because you are too scared to endorse George Shultz’s carbon-tax-plus-UBI proposal—you should be ashamed of yourself. Go for the crash space program to build a giant sun umbrella and park it at Lagrange Point 1 if you wish. (And eat the costs as reduced insolation devastates agriculture.) At the very least, it will make us a figure of fun to aliens everywhere:

You know the earthlings? They couldn’t get their act together to stop burning coal before it started to cook their planet! So do you know what they did? You won’t believe it! Rather than cheaply transitioning to green energy THEY TRIED TO BUILD A GIANT SUN UMBRELLA AND PARK IT AT L1!! HA HA HA HA HA!!!!!! Spent a fortune!…

But be for something. 

And be brave. I know you find it hard. But you are camped there in the rubble, and if you won’t Do the Right Thing, then you have decided to go and become a Kentucky-nationalist blood-and-soil neo-fascist Trumpist. If you have, then go to your master the Devil, and stop wasting our time. 

LINK: <https://twitter.com/delong/status/1100166150845939712>

 


READING: David Abernethy (2000): Þe Dynamics of Global Dominance: European Overseas Empires 1415–1980

The European edge in the Imperial-Commercial Age 1500-1770: Priests, merchants, soldiers, sailors, & shipwrights all working together under a king for gold, glory, & God...

 

David Abernethy (2000): The Dynamics of Global Dominance: European Overseas Empires 1415–1980: ‘Beijing… was the capital city of a powerful state lacking both an expansionist foreign policy and an expansionist religion. Mecca was the central city of an expansionist religion but not of a state. Lisbon was the capital city of a state with an expansionist foreign policy and a strong commitment to spread an expansionist religion.

 

As Muslim merchants predicted, the Portuguese launched a triple assault on Malacca. The city was captured in 1511 by an armada of ships carrying fifteen hundred soldiers whose commander, Vicery Afonso d’Albuquerque, saw himself as an extension agent of the Portuguese state. That the invaders intended to assert permanent political control soon became clear. Albuquereue allegedly cried out to his men in the heat of battle that:

We [should] build fortress iin this city… and sustain it, and… this land [should] be brought under the dominion of the Portuguese, and the King D[om] Manuel be styled true king thereof.

Construction of a stone fortress was begun as soon as the battle was won, and it was kept well supplied with soldiers and cannon. The city was a Portuguese possession until the Dutch took it in the seventeenth century. Once secured, Malacca became a vital outpost used to establish other Portuguese enclaves in the Moluccas and on the China coast.

The conquest of Malacca, in turn, was an integral part of a grand scheme to capture gains from Indian Ocean trade. Political control of enclaves throughout the ocean basin was considered a necessary as well as desirable mans to an economic end. Albuquerque appealed to the profit motive as explicitly as one could: “If we take this trade of Malacca out of [the Moors’] hands, Cairo and Mecca are entirely ruined, and to Venice will no spiceries go except that which her merchants go and buy in Portugal.”

Portuguese actions also reveal the religious dimension of their drive for dominance. Albuquerque waited to launch his attack until the day of Saint James, the patron saint of the Iberian crusaders. That the crusading mentality was alive and well can be seen in his reference to “the great service which we shall perform to our Lord in casting the Moors out of the country, and quenching the fire of this sect of Mohamed so that it may never burst out again hereafter.” Non-Muslims were spared following the battle. But “of the Moors, [including] women and children, there died by the sword an infinite number, for no quarter was given to any of them.” A church was constructed, and in 1557 it became the Cathedral of the Bishop of Malacca. Priests working among non-Muslims in the local fishing community made many converts. The famous Jesuit missionary Francis Xavier visited the city in 1545 on his way from India to Japan.

By one estimate between half a million and a million people, from Mozambique to Japan, converted to Roman Catholicism by the end of the sixteenth century. Malacca’s history and its role as missionary way station to other parts of Asia illustrate the strong expansionist impulses of Euro-Christianity.

By examining actions, motivations, and institutions at a critical juncture of world history when representatives of the three leading candidates for global dominance were present at the same place and time, the case study of Malacca in 1511 tests—and supports—the book’s central proposition. The Portuguese were unlike the Chinese and Arabs in the number and variety of sectoral institutions at their dsposal, in the stretch of these institutions far from their home base, and in the way agents of different sectors worked together for mutually beneficial ends. The Malaccan case highlights not only the contrast between Europeans and others who might have formed equivalent empires, but also the empowering effects when cross-sectoral coalitions were assembled….

Share Grasping Reality Newsletter, by Brad DeLong

The case study also helps answer a secondary question…. why Europeans concentrated phase 1 settlement and conquest activities on the New World…. Portugal’s grand strategy in the Indian Ocean was to capture gains from a lucrative seaborne trade that had functioned for a long time. Malacca was valued as an enclave… profits literally floated past in the form of ships carrying spices, precious stones, textiles, chinaware, carvings, and so on through a narrow strait. There was no economic or strategic reason for Albuquerque to invade the Malayan interior….

In contrast, the Spaniards in the New World encountered no preexisting maritime trade. The wealth they sought would have to be captured at its source, deep in central and south American hinterlands. Vera Cruz… was seen not as an enclave facing the sea but as the staging area for an arduous march inland…. Spain could attain wealth in the New World only by conquering and settling… revolutionize the New World economies…. 

Portugal, having an essentially conservative economic agenda, felt no need to send settlers to Malacca or to set up plantations or prospect for minerals…. Spain, facing both the necessity and the opportunity in the Americas to design radically new patterns of extraction, production, and trade, exported its people… fostered large-scale, labor-intensive agricultural and mining operations…. Portuguese in Malacca… could prosper without altering indigenous political structures in the city’s immediate environs. Not so Cortes… who could not prosper unless state structures run by Europeans were in place to coerce indigenous peoples to labor long and hard for minimal reward…. A minimalist colonial strategy that worked well in phase 1 Malaya was not sufficient for New Spain.

Not until the nineteenth century did Europeans consider the Malayan interior worthy of their attention. Under British direction, exports from rich tin mines were increased and rubber plantations laid out… a plant Europeans had found in the New [World]… a mode of production perfected earlier in the Americas…. Europe’s concentration on transforming the New World in [European imperalism] phase 1 facilitated conquest and transformation of much of the Old World in [European imperalism] phase 3… LINK: <https://www.bradford-delong.com/2008/03/the-european--1.html>


DeLongTODAY: How Did þe “Global South” Become so Underdeveloped?

<http://delongtoday.com>
<https://drive.google.com/file/d/1v1pEjikOuMe31K62EHojlHXi37Hv64iu/view?usp=sharing>
<https://www.youtube.com/watch?v=ZIBa1abY6ME>
<https://github.com/braddelong/public-files/blob/master/delongtoday-2021-03-11.pptx>
<https://www.icloud.com/keynote/0Td2okG4-n-z59HeH8UYMjdHA>
<https://www.bradford-delong.com/2021/03/how-did-the-global-south-become-so-underdeveloped.html>

 


BRIEFLY NOTED: 2021-03-18 Th

Things that went whizzing by that I want to remember...

 

First:

Figuring out how to do antitrust in the age of the attention economy is really, really hard:

Ben ThompsonThe FTC’s Google Documents, the Staff Memo, the Economists Memo: ‘The fundamental premise of the Politico article, along with much of the antitrust chatter in Washington, misses the point: Google is dominant because consumers like it. That doesn’t mean the company didn’t act anticompetitively, or that we shouldn’t think seriously about acquisitions or contracts or advertising. Such thinking, though, has to start with a certain degree of humility about the fundamentally different nature of the Internet and how it is leading to these Aggregator-type outcomes. It really might be different this time.…

LINK: <https://stratechery.com/2021/the-ftcs-google-documents-the-staff-memo-the-economists-memo/>


Very Briefly Noted:


Six Paragraphs:

Martin Sandbu: US Stimulus Package Leaves Europe Standing in the Dust: ‘Europe and the US will loom less large in the global economy as emerging countries outperform their growth. That is inevitable. What we do not know is how fast that US and European dominance will be whittled away…. US president Joe Biden has delayed his country’s relative decline. EU leaders, however, look set to accelerate theirs. Biden’s $1.9tn fiscal stimulus package, passed last week, may not be literally visible from space, but it is certainly of planetary scale. In the OECD’s March update to its forecasts, the organisation estimated that the US stimulus will add one whole percentage point to projected global growth. It more than doubled its 2021 growth forecast for the US itself, from 3.3 to 6.5 per cent. Biden’s own administration foresees US output returning to its potential three to four years faster because of the stimulus…

LINK: <https://amp.ft.com/content/20096b0a-8a94-453d-8788-c3b15dc1704c>


Neil IrwinMove Over, Nerds. It’s the Politicians’ Economy Now: ‘“This legislation has everything to do with restoring the confidence of the American people in democracy and in their government, and if we can’t respond to the pain of working families today, we don’t deserve to be here,” said Senator Bernie Sanders of the Biden bill, known as the American Rescue Plan Act. Republicans unanimously opposed the Biden legislation, but it has not been quite the scorched-earth opposition to deficit-widening action seen during the Obama administration…. f the concerns described by Mr. Summers and Mr. Blanchard about the size of the new relief bill materialize, and the result is excessive inflation or some type of crisis, Democrats will pay a price for their actions… 

LINK: <https://www.nytimes.com/2021/03/09/upshot/politicians-not-central-bankers-economy-policy.html>


Duncan Black: I’m Gonna Tell You How It’s Gonna Be: ‘Yes he’ll fade away: “Ex-president Donald Trump finds himself adrift while in political exile. And Republicans, and even some allies, say he is disorganized, torn between playing the role of antagonist and party leader. ‘There is no apparatus, no structure and part of that is due to a lack of political understanding on Trump’s behalf’, said a person close to the former president, noting that Trump has struggled to learn the ropes of post-presidential politicking.” He’s lazy, stupid, and a micromanager, and at least somewhat radioactive at the moment. Also it isn’t a secret that he stiffs everybody. Not a magnet for the best people… LINK:

<https://www.eschatonblog.com/2021/03/im-gonna-tell-you-how-its-gonna-be.html?>


John Paul KoningHacksilver: ‘The first coins were invented in Lydia… in the 7th Century B.C.E…. Belief among some archaeologists that a form of proto-coinage had been invented prior to the Lydians and their electrum coins. This proto-coinage came in the form of sealed and regulated bags of hacksilver…. Morris Silver, an economist who researches ancient economies, describes Mesopotamian texts of the middle of the second half of the third millennium that show silver being used by street vendors, to pay rent, purchase dates, oil, barley, animals, slaves, and real estate…. Assyrian economic texts from the 7th C B.C. show that the majority of all types of payments were already being made in silver, including those for tribute, craftsmen obligations, and for conscription and labor commutations…. 6 minas (c. 3 kg) of silver are owed by two men to the merchant Ashur-idi. One third of the loan must be paid by the next harvest and the rest at a later date. If it is not repaid by that time it will accrue interest charged at a monthly rate….

Hacksilver… silver ingots, hacked pieces of ingot, silver scrap, and cut up bits of silver jewellery…. One reason for the hacking or cutting-up of silver may have been to make small change…. Another less obvious reason for hacking… is that it may have been a way for merchants to check for quality…. For over a thousand years, silver circulated as a medium of exchange, in hacked form. The big innovation with coins is the stamp. Because we trust the issuer’s brand, we needn’t weigh out or assay (i.e. smash/hack) silver prior to engaging in trade. So trade was much more fluid…. Proto-coiners… suggest that bagged and sealed hacksilver was already circulating in a way similar to coins. Some authority, perhaps a government administrator or a merchant, pre-weighed a certain amount of good hacksilver, bagged it, and affixed their seal…. If the proto-coiners are right, that… pushes the effective date of coinage technology back by 500 or so years….

One of the key hoards around which the debate revolves is the Tel Dor hoard… north of Haifa… excavated in the 1990s by Ephraim Stern…. The Tel Dor hoard dates to somewhere between 1000 B.C.E and 900 B.C.E. The hoard consists of a jug containing 17 bundles of hacksilver wrapped up by linen cloth (see photo of one of the bundles below)…. The silver weighs 8.5 kilograms… the equivalent of forty-six years of labour…. The bundles were closed with bullae, or clay seals. But these seals do not contain a name, just a pattern…. One of these bundles… registered at 490.5 grams…. The Babylonian shekel… each shekel weighed 8.3g, and 60 shekels was worth 1 mina. Thus a mina would have weighed 500 grams… as if the bundle was a very large denomination mina coin… 

LINK: <http://jpkoning.blogspot.com/2021/03/hacksilver.html>


Michael R. Gordon & Dustin Volz: Russian Disinformation Campaign Aims to Undermine Confidence in Pfizer, Other Covid–19 Vaccines, U.S. Officials Say: ‘Russian intelligence agencies have mounted a campaign to undermine confidence in Pfizer Inc.’s and other Western vaccines, using online publications that in recent months have questioned the vaccines’ development and safety, U.S. officials said…. Websites played up the vaccines’ risk of side effects, questioned their efficacy, and said the U.S. had rushed the Pfizer vaccine through the approval process, among other false or misleading claims…. “We can say these outlets are directly linked to Russian intelligence services,” the Global Engagement Center official said of the sites behind the disinformation campaign. “They’re all foreign-owned, based outside of the United States. They vary a lot in their reach, their tone, their audience, but they’re all part of the Russian propaganda and disinformation ecosystem.” In addition, Russian state media and Russian government Twitter accounts have made overt efforts to raise concerns about the cost and safety of the Pfizer vaccine in what experts outside the U.S. government say is an effort to promote the sale of Russia’s rival Sputnik V vaccine…

LINK: <https://www.wsj.com/articles/russian-disinformation-campaign-aims-to-undermine-confidence-in-pfizer-other-covid-19-vaccines-u-s-officials-say-11615129200>


Holman Christian Standard BibleLeviticus 16: ‘The LORD spoke to Moses…. “Aaron will present the bull for his sin offering and make atonement for himself and his household. Next he will take the two goats and place them before the LORD at the entrance to the tent of meeting. After Aaron casts lotsm for the two goats, one lot for the LORD and the other for azazel, he is to present the goat chosen by lot for the LORD and sacrifice it as a sin offering.p 10But the goat chosen by lot for azazel is to be presented alive before the LORD to make purification with it by sending it into the wilderness for azazel…. When he has finished purifying the most holy place, the tent of meeting, and the altar, he is to present the live male goat. Aaron will lay both his hands on the head of the live goat and confess over it all the Israelites’ wrongdoings and rebellious acts—all their sins. He is to put them on the goat’s head and send it away into the wildernessa by the man appointed for the task.ah The goat will carry on it all their wrongdoings into a desolate land, and he will release it there…. The man who released the goat for azazel is to wash his clothes and bathe his body with water; afterward he may reenter the camp…

LINK: <https://biblehub.com/hcsb/leviticus/16.htm>

 


Sidney Coleman Is My Interpretation-of-Quantum-Mechanics Guru; Plus BRIEFLY NOTED: for 2021-12-17 We

The talk that made me a many-worlds Everettian; plus things that went whizzing by that I want to remember...

 

First:

I have long loved Sidney Coleman’s 1994 Quantum Mechanics in Your Facelecture. Now it has been published, for real, with well-drawn versions of the slides:

Sidney ColemanQuantum Mechanics in Your Face: Transcript and slides edited by Martin Greiter: ’This is a write-up of Sidney Coleman’s classic lecture first given as a Dirac Lecture at Cambridge University and later recorded when repeated at the New England sectional meeting of the American Physical Society (April 9, 1994). My sources have been this recording and a copy of the slides Sidney send to me after he gave the lecture as a Physics Colloquium at Stanford University some time between 1995 and 1998. To preserve both the scientific content and most of the charm, I have kept the editing to a minimum, but did add a bibliography containing the references Sidney mentioned.—MG…

LINK: <https://arxiv.org/pdf/2011.12671.pdf>

And, of course, there still is the video: Sidney Coleman (1994): Quantum Mechanics in Your Face <https://www.youtube.com/watch?v=EtyNMlXN-sw>:

Plus there is the essential reading:

You know, i used to think that I would—someday—understand electron spin.

I used to think that I would—someday—understand why Stern-Gerlach magnets arranged along the x-axis would knock an electron that was in the <↑| state in the z-basis into the z-basis <↓| . And I used to think I would—someday—understand why if we rotated the magnets into the y-direction the little square-root-of-minus-one i’s would start appearing in the math…

Now I know that it is hopeless.

And, similarly, it is hopeless to ask why the triple measurement σ(1x)σ(2y)σ(3z) applied to the three electrons 1, 2, and 3 that are in Coleman’s entangled (<↑↑↑| - <↓↓↓|) state always produce the answer +1.

It is the Pauli matrices that are the underlying reality—or, at least, are our only through-a-glass-darkly shadowy and illusory simulacrum of understanding. They are not the things that can be explained in terms of more fundamental principles. They are, rather, our feeble monkey-brain grasp of what the fundamental data are.

All of which is to say that Sydney Coleman’s Quantum Mechanics in Your Facelecture—the title of which, I am told in good authority, is incomprehensible to Britishers, save that they suspect and fear that it is in some way obscene—is the best thing on the interpretation of quantum mechanics I have seen.

And if it does not convince you to be a root-and-branch Everettian many-worlder—well, then I think that, back in The Day, there would have been nothing to convince you to be a non-Ptolemaic Copernican either. The Copernican points would have whizzed by: In the Copernican model there is no unmotivated sharp division between the behavior of the inferior and the superior planets as there is in the Ptolemaic model? You would have shrugged. The peculiar coincidence in the Ptolemaic model that all of the planets have at least one epicycle that is the same as the main cycle of the sun, which lacks an epicycle? You would have stared blank-eyed.

If Coleman doesn’t convince you now. Copernicus would not have convinced you then…


Very Briefly Noted:



Six Paragraphs:

Steve M.We’re Living in a Post-Trump World, & Republicans Are Still Awful: ‘If you’ve been waiting for the moment when Republicans will start acting abashed, or begin examining their own behavior over the past several years, or acknowledge that their critics have a point about… well, anything, you’re going to have a long wait, because that moment will never come. It might come if Democrats beat Republicans mercilessly in several consecutive election cycles—but Democrats trounced Republicans in 2006 and 2008 and the GOP only got worse. Trumpism hasn’t supplanted old-school Republicanism. Trumpism has simply been added to all the other toxic strains of Republicanism. And we’re getting them all again, full strength…

LINK: <https://nomoremister.blogspot.com/2021/03/were-living-in-post-trump-world-and.html>


David Atkins: Could Democrats Finally Be Taking on the Filibuster?: ‘Most crucial at this inflection point in history, the Republican Party has set itself in fierce opposition to democracy itself. All across America, Republicans are pushing state-based legislation that would dramatically suppress voting rights and limit the ability of marginalized communities to have a voice in government. Republicans know they cannot persuade majorities with their current platform, so they plan instead to legally cheat their way into permanent minority power, reinstituting a new era of Jim Crow and apartheid at the ballot box. Given the current hyperconservative composition of the Supreme Court, The only way to stop it is by a federal act of Congress. But Congressional action will not take place as long as the filibuster remains standing in its current form. Everything, then, comes back to the filibuster…. Even Joe Manchin, the most famous holdout in favor of the filibuster in the Senate Democratic caucus, seems open to a talking filibuster reform…. My Washington Monthly colleague Bill Sher has been taking a contrary stand on this, hoping for compromise legislation between reasonable legislators in both parties and a de-escalation of partisan tensions. But it’s deeply unlikely that the authoritarian white supremacist fever on the right will be broken without destroying the possibility of their taking power through minority rule. Mitt Romney is not going to win the battle for the soul of the GOP–at least, not until the GOP is forced to acknowledge that their only path to legitimate power lies in persuading actual majorities of voters…

LINK: <https://washingtonmonthly.com/2021/03/13/could-democrats-finally-be-taking-on-the-filibuster/>


David Atkins: How Facebook Is Killing Journalism and Democracy | Washington Monthly: ‘It’s high time the federal government do something about It: At the heart of much of this bedlam are the deliberate actions of social media companies in general, which have broadly destroyed the revenue model for journalism–often through deliberate lies–and created engagement algorithms that incentivize hateful polarization and outright disinformation. And no social media has been more guilty of both than Facebook. Two big stories dropped this week highlighting Facebook’s ongoing role in sabotaging both journalism and democracy in the pursuit of profit. The first is a devastating story by Karen Hao at the MIT Technology Review on how Facebook’s artificial intelligence unit learned how to efficiently drive engagement on the platform by recommending increasingly inciteful and extremist content and groups. Then, when the teams involved in creating this monster began to realize what they had unleashed and took steps to curtail it, the company (largely at the direction of Mark Zuckerberg himself) refused to do anything significant about it–choosing instead to deflect the problem toward issues of bias rather than polarization and disinformation…. Worse, Facebook’s efforts at controlling bias were manipulated by Trump and the conservative media’s endless factory treadmill of self-pitying victimhood into specially privileging the very conservative disinformation that was the biggest offender for asymmetric polarization…. Facebook is not, of course, the only social media organization that has contributed to this. Youtube (now a subsidiary of Google’s parent company Alphabet) in particular is famous for leading users down a primrose path to radicalization, guiding the unsuspecting down a pipeline from videos on anything from Star Wars to fitness to economics, straight to Jordan Peterson, Prager University or Ben Shapiro in just minutes. But Facebook’s algorithms have been particularly aggressive, and its consequences especially devastating…. As if that were not bad enough, Facebook has also been responsible for lying to journalists about what would provide more of the paltry revenue they were still allowed to keep. Most striking was the “pivot to video” era, in which Facebook allegedly dramatically overstated the potential for revenue from video content…

LINK: <https://washingtonmonthly.com/2021/03/13/facebook-is-killing-journalism-and-democracy-we-should-do-something-about-it/>


David Atkins: Facebook’s Vaccine Disinformation Study Shows the Problem with Facebook: ‘Facebook can’t do anything about the fact that there are large pockets of angry, low-trust conspiracy theorists online. But Facebook could do something about the fact that those pockets have disproportionate impact on a larger universe, because Facebook tailors its engagement algorithms to promote the most controversial voices. It is no surprise at all that a small number of obnoxious people on Facebook are impacting the opinions of much larger groups on Facebook…

LINK: <https://washingtonmonthly.com/2021/03/14/facebooks-vaccine-misinformation-study-shows-the-problem-with-facebook/>


Financial Times Editorial Board: The Unhappy Consequences of Lula’s Return: ‘Latin America’s most famous politician has made a triumphant return to centre stage after a supreme court judge unexpectedly quashed his convictions for corruption. No matter that the ruling favouring former Brazilian president Luiz Inácio Lula da Silva was based on a mere technicality; his supporters hailed the decision as a vindication of their long-held belief that Lula was the victim of a politically motivated vendetta. The consequences of the ruling, assuming that it is upheld by the full court, are immense. At a stroke, it redraws the electoral map for next year’s presidential election by allowing Lula to run again. Hard-right President Jair Bolsonaro had been in a strong position to win re-election against a divided opposition; now he is likely to face a strong challenge from the left. Bolsonaro has a woeful record in power, which has included repeatedly praising dictatorship, allowing Amazon deforestation to surge to 12-year highs and dangerously mismanaging the pandemic, while disappointing investor hopes for big economic reforms. That might invite the conclusion that a ruling allowing Lula’s return can only be good for Brazil. Yet the judge’s decision has unhappy consequences. It strikes a heavy blow against the credibility of Latin America’s biggest and most successful corruption investigation. It raises disturbing questions about Brazil’s justice system. And it increases the chances that the country’s notoriously venal politicians can get back to business as usual…. In their zeal to bring the powerful to book, prosecutors made serious mistakes. Leaked messages between a judge trying the cases, Sergio Moro, and prosecutors discussing what evidence to use against Lula suggested corners were being cut to secure convictions. Moro’s subsequent decision to accept a cabinet post in Bolsonaro’s government only fuelled accusations of political bias…. Brazil now faces the ominous prospect of impunity for the corrupt: the “Lava Jato” investigation was quietly wound up last month after seven years. Almost as unappealing is the promise of a polarised election next year between candidates of the hard right and the old-fashioned left… LINK: <https://www.ft.com/content/90556eda-a658-4849-be51-fff7c0a99a23>


Noah Smith: Checking in on the Global South: ‘To some, the idea of a Global South means that history is destiny—that the dead hand of colonialism, or the living hand of neocolonialism, is holding down the developing world. To others, it’s an expression of the idea that poor countries just don’t have what it takes to get rich. Either way, it’s a form of implicit defeatism—a belief that historical and/or cultural forces are stronger than economic forces. Southeast Asia hasn’t yet broken these ideas on the wheel of hard data, but it might not take much longer to do so. Bangladesh’s similar performance, meanwhile, suggests that South Asia might not be far behind…

LINK: <https://noahpinion.substack.com/p/checking-in-on-the-global-south>


Kieran HealyAmerica’s Ur-Choropleths: ‘Maps of the U.S. for whatever variable in effect show population density more than anything else…. The other big variable… is Percent Black. Between the two of them, population density and percent black will do a lot to obliterate many a suggestively-patterned map of the United States… LINK: <https://kieranhealy.org/blog/archives/2015/06/12/americas-ur-choropleths/>

 


PODCAST: Hexapodia VI: The Global South Begins to Converge to the Global North!; Wiþ Noah Smith & Brad DeLong

For 200 years—from 1800 to 2000—first the Industrial Revolution Age and next the Modern Economic Growth Age rolled forward, bringing previously unimaginable wealth to the global north. And the global south fell further and further behind. Don’t get us wrong—life expectancy, nutrition standards, and material well-being in 2000 were all much higher in the global south in 2000 than in 1800. But the proportional gap vis-a-vis the global north had grown to staggering and awful proportions that were a scandal, a disgrace, and a crime. But since 2000 the worm may have turned: now it looks as though the global south—virtually the entire global south—is now “converging” and catching up to the global north.

References:

William Baumol (1986): Productivity, Convergence, & Welfare: What the Long-Run Data Show <http://piketty.pse.ens.fr/files/Baumol1986.pdf>

J. Bradford DeLong (1988): Productivity, Convergence, & Welfare: Comment <https://www.jstor.org/stable/1807174>

Paul Krugman (1991): _ Increasing Returns and Economic Geography_ <https://pr.princeton.edu/pictures/g-k/krugman/krugman-increasing_returns_1991.pdf>

Lant Pritchett (1997): Divergence, Big Time <https://www.econ.nyu.edu/user/debraj/Courses/Readings/Pritchett.pdf?seq=14>

Masahisa Fujita, Paul Krugman, & Anthony J. Venables (1999): The Spatial Economy: Cities, Regions, & International Trade<https://mitpress.mit.edu/books/spatial-economy>

Alberto Alesina, William Easterly, & Janina Matuszeski (2009): Artificial States <https://wcfia.harvard.edu/files/wcfia/files/alesina_artificialstates.pdf>

Joe Studwell (2013): How Asia Works: Success and Failure In the World's Most Dynamic Region <https://books.google.com/books?id=dNs33Q1cAX0C>

Noah Smith (2021): _All Futurism is Afrofuturism <https://noahpinion.substack.com/p/all-futurism-is-afrofuturism>

Dev Patel, Justin Sandefur, & Arvind Subramanian (2021): The New Era of Unconditional Convergence <https://www.cgdev.org/sites/default/files/new-era-unconditional-convergence.pdf>

Michael Kremer, Jack Willis, & Yang You (2021): Converging to Convergence <https://scholar.harvard.edu/yangyou/publications/converging-convergence>

Noah SmithChecking in on the Global South: ‘Developing countries are catching up, but not evenly… LINK: <https://noahpinion.substack.com/p/checking-in-on-the-global-south>


BRIEFLY NOTED: for 2021-02-16 Tu

Things that went whizzing by that I want to remember...

First:

I have a difficult time figuring out what to do with the NeverTrumpers. They are, most of the time, talking sense—now. But they were all enthusiastic boosters of all of the Littler Trumps who led up to this moment, from Sarah Palin to George W. Bush in a flightsuit proclaiming “Mission Accomplished” to the “why doesn’t anybody ever talk about Black-on-Black crime?”.

If one is going to have a conversion on the road to Damascus and then have the, as it were, scales fall from your eyes on the street called “Straight”, you kinda have an obligation to Testify to that Damascus Moment, don’t you?

Thus the problem is that for “where people are” read “where David French and all of his friends have led them": Donald Trump, after all, is not that different from Newt Gingrich in their common platform that the purpose of politics and governance is simply to own the liberals by every means possible:

David FrenchThe Spiritual Problem at the Heart of Christian Vaccine Refusal: ‘In conversations about the vaccine, I’ve heard a number of people declare, “I’m just less trusting than you.” In reality, these people still trust… a favorite internet voice, a local pastor, or a Bible study full of close friends who have shared counter-cultural health tips and advice for years. There’s a hostile and condescending way of approaching the different ways we trust. Yes, you can caricature objections and claim that Christians “believe the latest hoax video on PatriotLibertyEagle.net more than the Centers for Disease Control.” But we must instead meet people where they are…. Just as you don’t mock someone out of fundamentalism or sneer them out of conspiracies, you can’t berate them into trusting institutions they may perceive to be distant, elitist, and hostile…. [It] requires us to listen, to hear exactly why someone is concerned and to respond—again, without condescension—to their fears. In that atmosphere of trust and respect, you’ll often find that you can easily allay their concerns… 

LINK: <https://frenchpress.thedispatch.com/p/the-spiritual-problem-at-the-heart>


Very Briefly Noted:


One Video:

Jade: Lagrangian Mechanics—A Beautiful Way to Look at the World<https://www.youtube.com/watch?v=dPxhTiiq-1A>:


Four Paragraphs:

Mohamed A. El-ErianThe US Recovery’s Promising Moment: ‘Recent macroeconomic figures and the accelerating pace of COVID–19 vaccination suggest… optimism about the US economy…. [A] notable economic pickup is being driven by the release of pent-up demand… and… fiscal stimulus… both likely to intensify as vaccines continue to be administered more quickly…. But three main challenges…. First, progress toward increased vaccine availability is necessary but insufficient…. Second… the pickup in economic activity has yet to be accompanied by a sustained, strong rebound in employment…. Third… the fear is that the additional stimulus will trigger a spike in inflation and market interest rates, which could derail a sustained recovery and heighten the risk of financial-market accidents…

LINK: <https://www.project-syndicate.org/commentary/us-recovery-policies-to-head-off-the-headwinds-by-mohamed-a-el-erian-2021-03>


Barry EichengreenRagnar Nurkse & the International Financial Architecture: ‘Estonian economist… the early Nurkse… concerned with exchange rates, capital flows and what today we call the international financial architecture…. How many of Nurkse’s points about the interwar gold standard are confirmed by subsequent scholarship? How many of his points are still relevant to the international monetary problems of today?… LINK: <https://www.tandfonline.com/doi/full/10.1080/1406099X.2018.1540186>


We should not say “my newsletter, which is on SubStack”; we should say “my weblog, which is at the moment on substack”: 

Dan HonThe One Where I Don’t Want To Talk About Substack Just As Much As You Do, & Yet: ‘We should not say “I have a Substack” but instead “my newsletter, which is on Substack”, because we should not give power to brands in this way. Are we going to see a variant of yeah, I was into {band} before they were cool as a yeah, I used {tech platform} before they became synonymous with right-wing cancelled people Actually, I will go out on a limb and make a prediction: we’re going to see a lot more of the above qualification, that “Yeah, I used {platform} before it became known for being racist/sexist/misogynist/abusive etc.” And that was only the first Substack thing today… LINK: <https://danhon.substack.com/p/s09e07-the-one-where-i-dont-want>


Kaleberg2525: ‘I’m not naturally optimistic, but I think you are too pessimistic on the technology front… the golden age of materials science… glimpses of what is possible with nano-structures, bio-mimetics, non-traditional metallurgy, meta-materials… spin, as opposed to charge, based electronics is much faster and uses much less power. New classes of reflective and transmissive materials…. Much of that 2.1% technological growth has changed the commons. Rothschild couldn’t have bought a modern antibiotic, and neither can you. You can only “buy” amoxicillin because we have a medical-pharmacological-health insurance-research complex…. If you look to the future, it pays to think about what the commons can deliver, rather than individual components of it. Let me make some possibly correct predictions on this basis: In 2525, people will not get cancer…. People will be able to travel from point to point on the planet in less than fifteen minutes…. Energy use per-capita will be lower than today, but heating, cooling, transportation and manufacturing will be more productive. Manufacturing will increasingly be as-needed…. In some ways, society advances one patent expiration at a time…

LINK: <https://braddelong.substack.com/p/for-paying-subscribers-in-the-year/comments?token=eyJ1c2VyX2lkIjoxNjg3OSwicG9zdF9pZCI6MzMyODIxODQsIl8iOiJ5aURXViIsImlhdCI6MTYxNTU4MDM0MywiZXhwIjoxNjE1NTgzOTQzLCJpc3MiOiJwdWItNDc4NzQiLCJzdWIiOiJwb3N0LXJlYWN0aW9uIn0.nzG44aeaY2q8Q9PeGZ2SSXkWDN_fc8cFzl3vEC1yaVE#comment-1475899>


CONFERENCE COMMENT: How Should Latin Americans Understand the United States Today?

Not just Mexico but all of Latin America is "so close to the United States..."

The past three months in the United States have been both shocking and hopeful. 

They have sen the end of a 220 year tradition: the end of an unbroken chain in which the transfer of political power at the national (although not the state: not in the South) level is _peaceful_—a tradition that began in 1800 when president John Adams acceded to Thomas Jefferson’s electoral college victory without choosing violence. We lost that on January 6th, 2021. 

Many who wish to make excuses for Donald Trump say that it was not really an attempt by Trump (while preserving plausible deniability that the attempt was his own action and at his behest) to have his goons and fans shoot dead the Speaker of the House, hang the Vice President, and prevent the counting of electoral votes—that it had been, rather, a spontaneous popular outburst. Nevertheless, we came remarkably close to watching the Speaker of the House shot dead and the Vice President hanged. The counting of the electoral votes was delayed. Speaker Pelosi and Majority Leader McConnell made it a point to finish the counting that day, so that the delay was short. But there was a delay. 

However, we did get our transfer of power, albeit not peacefully.

Now we have a $1.9 trillion program—10% of a year's national income—devoted to rescue, relief, support and recovery. This is a remarkably large package. It is the result of a remarkable degree of agreement within the Democratic legislative caucuses. In the past, in both 1993 and 2009, senior Democratic legislators have been very, very interested in demonstrating that they are independent actors rather than loyal members of the party. They have been interested in demonstrating that they think for themselves rather than serve the party leader.. They have been interested in using their control of veto points to shape policy to their personal liking. Even more so, I think, they have been interested in demonstrating that they can require policy must be to their liking. 

That is much less the case this time.

I think this shift is produced by a common view of the mistakes of 2009, and probably of 1994. The legislators, I think now understand that, if they want to govern in the public interest, they have to demonstrate that the president of their party is a successful manager, and that he has their support, and that he deserves to have their support because his policies are good policies.

Here I must insert an asterisk: Senators Manchin and Sinema appear to still be playing the game by the old rules—demonstrating that they are independent voices, and hence can be trusted to do what their constituents and they believe is in the national interest on each and every issue, no matter how the party tries to corral them. Thus they hope to convince centrists, plus Republicans who are unhappy with the neo-fascist notes currently being sung by the soloists and chorus of the Republican party, to vote for them. But note that even Sinema and Manchin are only taking on this role and pose in a very moderate degree. They cheerfully voted for $1.9 trillion, even if not for changing the rules of the Senate to also include an increase in the minimum wage to $15/hour.

Why $1.9 trillion? Is that the right size? The U S government right now does have exorbitant privilege. Rich people and state actors with large amounts of money all around the globe believe that their assets held in dollars in the United States are safe assets. I do not have time to go into why they believe this. But they do. In this environment the near-consensus among the Democratic policy intellectuals is that it is appropriate to take advantage of this extraordinary demand for U.S. assets. When investor expectations and confidence shift, and when interest rates rise, then will be time to deal with the problems thus created: sufficient unto the day is the evil thereof. We bet that our successors will be intelligent and farsighted enough to deal with the economic problems of tomorrow when they arise. We do not let the fact that we are unsure about how to deal with the economic problems of tomorrow keep us from solving the economic problems of today.

Perhaps this is the end of the neoliberal intellectual hegemony established in the 1970s, when a critical mass of thinkers came to fear that the market had its own logic that could not be resisted but that could only be accommodated. The market giveth; the market takeeth away. And the only possible response, to those who became the neoliberals, was then to say: blessed be the name of the market. 

The view today is different. It is: the market was made for man, not man for the market. 

One indication of this is that those of us who are still thinking in a more neoliberal the-market-has-its-reasons logic—most prominently now my long-time friend, teacher, and patron Larry Summers and my longtime teacher Olivier Blanchard, both of whom I love dearly—have gotten very little traction in their attempts to issue warnings that perhaps $1.9 trillion is too large, and we should be prepared to recognize that it is—if it turns out to be so—and then rapidly act to reverse course. Those warnings have gotten almost no traction despite all their intellect and influence. That is an interesting signpost to the shifting intellectual climate. 

Thus I forecast that the United States is in a position to have a rapid recovery from the coronavirus plague depression. I forecast a high-pressure U.S. economy for at least a while. That will be a marvelous thing. That will be a good thing for Latin America and others who export to the United States. A United States that becomes once again the world’s importer of last resort may become a locomotive for the world, or at least for the Americas.

Now there are deeper issues, 

A generation ago there was a very effective right-wing political tactician, Lee Atwater. He used to argue that American conservatives were no longer committed to white supremacy—that their arguments, instead, really were economic arguments about the best economic policy, and bourgeois cultural-order arguments about the best forms of social order. How could you tell that these surface rationales were not masks for positions truly rooted in white supremacy? You knew, Atwater said, because no significant fraction of Republicans was calling for the repeal of the Voting Rights Act and the mass disenfranchisement of African Americans. You knew, Atwater said, because no significant fraction of Republicans were calling for the state to sanction open discrimination. 

Well, guess what.

John Roberts and his Supreme Court majority have constructively repealed the Voting Rights Act, and Republicans hope that they can now disenfranchise 20% of African-American voters in states they control. It’s not an attempt to disenfranchise 100%. But 20% is a thing. What do we call this open and notorious embrace of what I think is generally acknowledged to be white supremacy-light? 

And state-sponsored discrimination? As I understand it, there has been one trans-female high school athlete in all of South Dakota in the past decade. Yet banning such is the highest priority of one of the Republican Party’s stars, South Dakota Governor Noem. The Republican Party’s position is clear: where we can—wherever we can construct phony religious or phony national-security rationales for discrimination, and wherever the center of the electorate does not have a strong revulsion that would put us in electoral jeopardy—we will discriminate! Is this “we can no longer openly discriminate against African-Americans, yet here is earnest money that we hope to be able to do in the future”?

This white supremacy-light is so very much softer than the white supremacy of even two generations ago, let alone four, or six when the twenty-five million white citizens of the United States held five of the six million African-Americans in the bondage of slavery. That it is so very much softer is a mercy. And for that we give thanks.

Nevertheless, I believe that Lee Atwater’s deathbed hopes that his Republican Party was no longer anchored on white supremacy—that the real message intended for the base was not “Ni—er! Ni—er! Ni—er!”—have been proven wrong.

And once you start shrinking the electorate, you do damage to the prospects for a recovery of democracy that may be permanent.

Which brings us to the issue of countering voter suppression at this moment, when the Democratic Party has control over the all the major political veto points except for the Supreme Court. And this brings us to the so-called “filibuster” in the U.S. Senate.

First, it is called the “filibuster”. A filibuster is an extraordinary, a contrary to normal procedure, a contrary to morality, raw use of power. I think none of the U.S. reporters covering the filibuster in the United States know the origins of the term in things like William Walker's 1856-1857 expedition to make himself President of Nicaragua in the middle of that country's then-civil war—an office from which he was expelled by a coalition of Central American armies in 1857, and then—IIRC—executed by the government of Honduras in 1860. That was the original “filibuster”: to take over a country by force, and loot it.

That procedural requirements for supermajorities in the U.S. Senate for legislation are called the “filibuster” suggests that there is something wrong with them. We have been seeing such procedural requirements erode. It used to be that a state’s senators’ acquiescence, at least, was required for federal judge confirmations. Reconciliation was supposed to be immune from the filibuster because it was an unimportant, technical procedure that needed to be done and that should not be allowed to become a pressure point that groups of senators could use to get their way by threatening obstruction. But Reconciliation has now become the way that business gets done in the Senate: either by or under threat of Reconciliation.

Erosions of the power of the filibuster have, with the exception of BidenRescue now, ObamaCare in 2010, and the very successful Clinton federal financial rebalancing in 1993, been overwhelmingly used to advance Republican policy priorities: tax cuts for the rich and right-wing judges. Voting rights and perhaps minimum wage expansion are equally strong Democratic legislative priorities right now. Perhaps a procedural move to carve out some more exceptions to the general legislation-requires-60-votes will win the acquiescence of Sinema and Manchin. I think the prospects for that are good. But only the senators know what the senators are thinking. It is often to their political advantage to make their thinking opaque. After all, we still do not know whether the Republicans failed to repeal Obamacare during the Trump administration—was it simply because Senator McCain had decided he had had enough, or were there ten senators who did not want it repealed who were happy to let McCain be the hero, but who would have stepped up to fill his role had it been necessary?

This is related to the question of the missing middle in American politics. Structurally, the 20 most centrist senators have the power to drive legislation and governance according to their priorities. And there are stories of how it used to be so back in the 1980s and before—how centrists of that day like Bentsen of Texas and Danforth of Missouri were setters of national agendas whom presidents found themselves lobbying more often than the reverse. But over the past two generations that pattern has disappeared completely.

Republican centrist senators have turned out, since 1992, to have much more allegiance to whatever the current priorities of their party leaders are than to the norms of centrist governance. Now all the Democratic centrists senators—with the partial exceptions of Sinema and Manchin—appear to have reached the same conclusion: that their job is to support their party leaders to the extent they can without risking their reelection, rather than to be a centrist vote block that drives policy to what it wishes.

This is something that I would like some very smart political scientists to explain to me. I am puzzled. And let me close with that puzzlement.

2075 words

 


BRIEFLY NOTED: for 2021-02-13 Sa

Things that went whizzing by that I want to remember...

First:

James Robinson is scared at the large-scale soft treason of Republican actual and wannabee office holders, but I do not think he is scared enough.

It is not at all clear to me that Trumpian populism has failed. Trump has failed. But neofascism remains a mighty powerful force. If James Robinson would talk to Trumpists, he would recognize that Trump did “deliver the goods”—they imagine that, before the coming of the plague, they were enjoying an unparalleled economic boom; and they are not mistaken to think that Trump delivered the hate he had promised against immigrants, against uppity Blacks who did not know and stay in what Trumpists continue to think is their proper place, and against rootless cosmopolites. The only problem is that the center of the electorate is not—or is not yet—Trumpian. And, for some reason, the knives that actors from James Comey to Dean Baquet used to stab Hillary Rodham Clinton in the back failed to hit Joe Biden’s back this time, for lots of reasons:

James A. RobinsonWhy Trumpian Populism Failed: ‘US democracy remains vulnerable… owing to many Americans’ lack of commitment to democratic institutions. While Trump worked to de-institutionalize America and enrich himself while in office, the Republican Party either sat on its hands or in some cases applauded…. At the end of the day, Trump’s “America First” was mostly posturing, because he couldn’t deliver real improvements in the lives of his base. All successful autocrats—like former Venezuelan President Hugo Chávez, postwar Argentine President Juan Perón, or current Ugandan President Yoweri Museveni—somehow “deliver the goods” for their core constituencies. Trump delivered, but only to the rich, by cutting taxes and regulations. His symbolic gestures won’t endure, and his “Make America Great Again” slogan is destined for burial at the back of millions of American closets.

Republicans would be wise to consider this. Instead, much of the party, both in Congress and at the state and local level, still clings to the false narrative of election fraud and support for the insurrectionists, or advances the notion that the storming of the Capitol was staged to undermine Trump. This is deeply concerning. Perón was able to rule as he did after World War II because increased presidential meddling in Argentina’s Supreme Court and political institutions had eroded these bodies over the previous 15 years. Most Americans do not want to go down this path, even if many of their elected political leaders do… 

LINK: <https://www.project-syndicate.org/commentary/us-democratic-institutions-prevailed-over-trump-this-time-by-james-a-robinson-2021-03>

 


Very Briefly Noted:


One Video:

A very, very nice talk—the intellectual grandchild of Ragnar Nurkse, by way of Nicola Gennaioli and Andrei Shleifer:

Ivan Werning: Taming a Minsky Cycle <https://www.youtube.com/watch?v=B_pJsPXUVMs>:

 


Five Paragraphs:

Reminds me of the steel industry around 1900: an absolutely key commodity, with very few firms able to compete at world-class levels of efficiency, cost, and value, and with downstream implications for the prosperity of entire economies:

Debby Wu, Sohee Kim, Gao Yuan & Peter ElstromThe Race for Chip Supremacy Could Reshape the World: ‘Carmakers from Tokyo to Detroit are slashing production. PlayStations are getting harder to find in stores. Even aluminum producers warn of a potential downturn ahead. All have one thing in common: an abrupt and cascading global shortage of semiconductors… chips…. World leaders from Washington to Beijing are making chip supplies a top priority… to keep factories running and ensure national security. Hundreds of billions will be spent in a plethora of sectors in coming years on a global “chip race”…. Key Coverage: Jack Ma Crackdown Casts a Chill on China’s Tech Entrepreneurs. China Revs Up Grand Chip Ambitions to Counter U.S. Blacklistings. Chip Shortage Poses a Risk to the Global Economic Recovery. By The Numbers: $28 billion, the amount TSMC plans to spend on new plants and equipment this year; 81%, share of the semiconductor foundry business controlled by Taiwan and South Korea; $61 billion, estimated lost auto-industry revenue in 2021. Why It Matters…. A handful of missing parts can close auto factories…. The U.S. is willing to choke off chip supplies to its national champions, a vulnerability that Xi Jinping and the Communist Party view as intolerable. Beijing will pour more than $100 billion into efforts to build its own domestic chip industry…. Governments and companies will clash for years to come over semiconductor supremacy…

LINK: <https://www.bloomberg.com/news/storythreads/2021-03-09/the-race-for-chip-supremacy-could-reshape-the-world>


The state of my subdiscipline:

Ran AbramitzkyEconomics & the Modern Economic Historian: ‘I reflect on the role of modern economic history in economics. I document a substantial increase in the percentage of papers devoted to economic history in the top–5 economic journals over the last few decades. I discuss how the study of the past has contributed to economics by providing ground to test economic theory, improve economic policy, understand economic mechanisms, and answer big economic questions. Recent graduates in economic history appear to have roughly similar prospects to those of other economists in the economics job market. I speculate how the increase in availability of high quality micro level historical data, the decline in costs of digitizing data, and the use of computationally intensive methods to convert large-scale qualitative information into quantitative data might transform economic history in the future…

LINK: <https://www.nber.org/system/files/working_papers/w21636/w21636.pdf>


Anne E. C. McCants: Economic History & the Historians: ‘An economics that refuses to engage with the lessons of history or to engage in a dialog about justice and values, or ethics, can go in any or all of three directions: (1) It can wish itself back to a past that never existed, at least not in the way that intellectual shortsightedness remembers it. (2) It can lose sight of the multiplicity of human interactions across varied, but always interconnected, spheres of life—political, social, aesthetic, spiritual, or communal, among others—that affect our attempts to solve specific economic problems. It can become ever-more clever in its ability to build models, test hypotheses, and manipulate data while still remaining confused or, even worse, small-minded about the ends to which its analytical efforts are geared to pursue…


Nice to see all of this intellectual evolution collected in one place;

Pablo Gabriel BortzKeynes’s Theories of the Business Cycle: Evolution and Contemporary Relevance: ‘The paper identifies six different “theories” of business fluctuations. With different theoretical frameworks in a 30-year span, the driver of fluctuations—namely cyclical changes in expectations about future returns—remained substantially the same. The banking system also played a pivotal role… financing and influencing the behavior of return expectations. There are four major changes… a) the saving–investment framework… b) the capabilities of the banking system to moderate the business cycle; c) the effectiveness of monetary policy to fine-tune the business cycle… and d) the role of a comprehensive fiscal policy and investment policy…

LINK: <http://www.levyinstitute.org/publications/keyness-theories-of-the-business-cycle-evolution-and-contemporary-relevance>


Origins of the word “filibuster”: it’s not a nice word, and it never had a nice meaning:

WikipediaWilliam Walker: ‘William Walker (May 8, 1824 – September 12, 1860) was an American physician, lawyer, journalist, and mercenary who organized several private military expeditions into Mexico and Central America with the intention of establishing English-speaking colonies under his personal control, an enterprise then known as “filibustering”. Walker usurped the presidency of Nicaragua in July 1856 and ruled until May 1, 1857, when he was forced out[2] of the presidency and the country by a coalition of Central American armies. He returned in an attempt to re-establish his control of the region and was captured and executed by the government of Honduras in 1860… 

LINK: <https://en.wikipedia.org/wiki/William_Walker_(filibuster)>


Hoisted from the Archives:

2017: Ricardo's Big Idea, and Its Vicissitudes: Gains from Trade: Is Comparative Advantage the Ideology of the Comparatively Advantaged?<https://www.youtube.com/watch?v=uCgUkfhB8Uk>:

 

Slides: <https://github.com/braddelong/public-files/blob/master/2017-10-22-inet-edinburgh-ricardos-big-idea.pptx> <https://www.icloud.com/keynote/0QMFGpAUFCjqhdfLULfDbLE4g>

Notes: <https://www.bradford-delong.com/2017/12/gains-from-trade-is-comparative-advantage-the-ideology-of-the-comparatively-advantaged.html>


Ricardo's Big Idea, and Its Vicissitudes: Gains from Trade: Is Comparative Advantage the Ideology of the Comparatively Advantaged?: Hoisted from the Archives: 2017

<https://www.youtube.com/watch?v=uCgUkfhB8Uk>:


Slides: <https://github.com/braddelong/public-files/blob/master/2017-10-22-inet-edinburgh-ricardos-big-idea.pptx> <https://www.icloud.com/keynote/0QMFGpAUFCjqhdfLULfDbLE4g>


Notes: <https://www.bradford-delong.com/2017/12/gains-from-trade-is-comparative-advantage-the-ideology-of-the-comparatively-advantaged.html>

Continue reading "Ricardo's Big Idea, and Its Vicissitudes: Gains from Trade: Is Comparative Advantage the Ideology of the Comparatively Advantaged?: Hoisted from the Archives: 2017" »


How Should We Teach Political Economy?; & BRIEFLY NOTED: for 2021-03-10 We

Selections from my comments at an N2PE panel; plus things that went whizzing by that I want to be sure to try to remember...

 

First:

Brad DeLong: Network for a New Political Economy Teaching Panel: 2021-30-05:

Selections: What are we doing when we do political economy?…

Political economy is social theory in… this [Modern Economic Growth Age of the] extraordinary transformation of technology, understood as human powers to transform nature—not always in a good way—and to organize humans—not always in a good way at all. It is not that economists or political scientists have any special expertise in figuring out what the social theory for this age of extraordinary transformation of technology  is. I was having a discussion with two other economist [in which]…. I… Noah… Arin… found that… [we had all] been profoundly influenced… by the course[s we]… took from Mark Granovetter….

Continue reading "How Should We Teach Political Economy?; & BRIEFLY NOTED: for 2021-03-10 We" »


PODCAST: Hexapodia V: Freeing Us from the Market; Wiþ Mike Konczal, Noah Smith & Brad DeLong

 

Mike Konczal: Freedom From the Market: America’s FIght to Liberate Itself from the Grip of the Invisible Hand <https://books.google.com/books?id=0aDLDwAAQBAJ>

Konczal says that it is only today that “glib libertarians” purveying “fantasies” are trying to make us forget “that free programs and keeping things free from the market are as American as apple pie…” One of the best passages in the book is where he notes the connection between the Fight for $15 minimum wage campaign and human freedom: “Service sector workers demanding a $15 minimum wage and a union… have already won huge victories [with] ideas about how low-wage, precarious work is a form of unfreedom…. The Rev. William Barber noted that ‘it took 400 years from slavery to now to get from zero to $7.25 [an hour]. We can’t wait another 400 years’ to get to $15… Ultimately, if all you can say in response to the ills of society is “the market giveth,  the market taketh away, blessed be the name of the market…” you have very little to say indeed. Konczal quotes Oliver Wendell Holmes’s fear and alarm that his fellow justices on the Lochner Supreme Court were, in their “willingness to use a very specific understanding of economics to override law, writ[ing] a preferential understanding of economics into the constitution itself…” in a fundamentally illegitimate and societally-disruptive way. But a better maxim is: “The market was made for man, not man for the market”.

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Recovering (Economically) from COVID: Scenarios for After May; Plus BRIEFLY NOTED: 2021-03-09 Tu

Thinking about what the U.S. economy might look like after May; plus things that went whizzing by that I want to remember...

First:

Recovering (Economically) from COVID: Scenarios for After May

I see three scenarios with substantial probability mass associated with them for what happens after after May:

1) People conclude that we are living in a much more uncertain world than they thought before March 2020, so they sharply raise their long-term wealth-to-income ratios, and bank rather than spend—and then without 10 Republican senators for infrastructure, which we do not have, we repeat 2010-2015 in the absence of the $1.9T...

2) A giant Mardi Gras commences in June 2021, as people react to the final scotching of the virus as a large systemic worry in a way that they reacted to the ending of rationing after WWII. (Cf.: Gillian Brunet:

<https://www.vox.com/2020/4/10/21214980/coronavirus-economy-jobs-ppe>.) We get one-time sharp rises in wages in previously shutdown sectors, but it is a healthy and warranted jump in relative prices that does not feed through to inflation expectations—again, as after WWII. And we are very glad we did the $1.9T...

3) The multiplier from the $1.9% turns out to be significantly greater than Edelberg & Sheiner project, and the Fed needs to raise 10-year rates by 2-3%-points in order to keep the U.S. economy from overheating significantly. And that's fine, because that normalizes interest rates, and then monetary policy has traction, and normal stabilization-policy governance can resume.

There is also a fourth scenario that some people give a considerable probability to:

4) Either Jay Powell turns out to be Arthur Burns, and we get into a hell of a mess, or the increases in interest rates required to keep the economy from overheating trigger a major financial crisis, and we get into a hell of a mess. That seems to be underpinned by a belief that the Fed cannot push the unemployment rate up by 0.5% ever—that whenever it tries, unemployment rises by 3%—but I see that pattern as driven by the Federal Reserve's unwillingness since 1980 to tolerate anything that at all smells of a high-pressure economy.

I don't think (4) is very likely at all—it seems to me to be a significant outlier scenario. I see the issue as: who do you trust to run policy if things go south? Jay Powell or 10 Republican senators. And the answer to that question seems obvious to me...

Continue reading "Recovering (Economically) from COVID: Scenarios for After May; Plus BRIEFLY NOTED: 2021-03-09 Tu" »


BRIEFLY NOTED: for 2021-03-06 Sa

Things that went whizzing by that I want to remember...

First:

The global container fleet today has a capacity of 32.9 million TEU (Twenty foot-Equivalent Units). The container ship OOCL Hong Kong has 21,000 TEUs of capacity. Back in 1582 we had perhaps 1/12 of our current population on the globe. Back in 1582, back in the days when the English merchant fleet was 1/20 of the worldwide total, the entire English merchant fleet could carry only 1/3 as much cargo as the OOCL Hong Kong can.

Thus, for the globe as a whole, today 30 million TEUs; 1582 140 thousand TEUs—1/200 as much. That is one dimension of economic growth and globalization since the start of the Imperial-Commercial Revolution Age back in the 1500s:

Yuval Noah HarariLessons from a Year of Covid: ‘A largely automated present-day container ship can carry more tons than the merchant fleet of an entire early modern kingdom. In 1582, the English merchant fleet had a total carrying capacity of 68,000 tons and required about 16,000 sailors. The container ship OOCL Hong Kong, christened in 2017, can carry some 200,000 tons while requiring a crew of only 22… LINK: <https://www.ft.com/content/f1b30f2c-84aa-4595-84f2-7816796d6841>

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BRIEFLY NOTED: for 2021-03-04 Th

Things that went whizzing by that I want to remember...

 

First:

Yonatan ZungerTolerance Is Not a Moral Precept. The Title of This Essay Should Disturb You: ‘As with any peace treaty, we must consider toleration in the broader context of the war which is its alternative, and we must recognize that peace is not always a possibility…. Among the worst wars of tolerance were the religious wars which tore through Europe between 1524 and 1648…. Protestants and Catholics each seeing the other as existential threats…. These wars came to an end… each ruler had the right to choose the religion of their state, and that Christians living in principalities where their faith was not the established faith still had the right to practice their religion. A decision was made, in essence, to accept the risk of the monster rather than the reality of the war…. Tolerance, viewed as a moral absolute, amounts to renouncing the right to self-protection; but viewed as a peace treaty, it can be the basis of a stable society. Its protections extend only to those who would uphold it in turn. To withdraw those protections from those who would destroy it does not violate its moral principles; it is fundamental to them, because without this enforcement, the treaty would collapse. It is appropriate, even ethical, to answer force with proportional force, when that force is required to restore a just peace. We seek peace because on the whole it is far better than war; but as history has taught us, not every peace is better than the war it prevents… LINK: <https://extranewsfeed.com/tolerance-is-not-a-moral-precept-1af7007d6376>

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DeLongTODAY: In the Year 2525…

The real thing will live at: <http://delongtoday.com> :: <https://braddelong.substack.com/p/for-paying-subscribers-in-the-year>


Today is an anti-economic history briefing. 

Back 90 years ago, in another depressing time—one of depression, if not of depression and plague—John Maynard Keynes tried to cheer people up by talking about the bright “economic possibilities for our grandchildren”. And we are they. Or, rather, we are their great-grandchildren and great^2-grandchildren. 

So let me attempt a similar exercise.

How should we understand, from the most Olympian perspective, from a super-Olympian perspective, not the past but the future of the process of economic growth that the human race has undergone over the past half-millennium?

So let us look at our great- and great^2-grandchildren and what are their economic possibilities in 2100, then our great^5-grandchildren in 2200, and then all the way out to the year 2525: our great^15-grandchildren.

Continue reading "DeLongTODAY: In the Year 2525… " »


PODCAST: Hexapodia IV: Checks for (Almost) Everyone! Wiþ Noah Smith & Brad DeLong

AUDIO: <https://braddelong.substack.com/p/podcast-hexapodia-iv-checks-for-almost>

The classical British social insurance state took large chunks of human activity out of the marketplace and attempted to distribute them to each according to his or her need. The classical American social insurance state was targeted and grouchy, attempting to elicit proper behavior. Now we have a turn that we regard as very hopeful: recognizing that the problem of the poor is primarily the problem of too-little social power, that money brings social power, hence the solution is to get the money to the people...

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READING: Abraham Lincoln (1860-02-27): Cooper Union Address

Would William Seward have been able to beat Stephen Douglass for the North's electoral votes in 1860 had Lincoln not wowed Republicans with his Cooper Union speech? And, had Douglass won, how would a “Popular Sovereignty” United States have evolved thereafter?


But:

Harold Holzer: ‘Abraham Lincoln did triumph in New York. He delivered a learned, witty, and exquisitely reasoned address that electrified his elite audience and, more important, reverberated in newspapers and pamphlets alike until it reached tens of thousands of Republican voters across the North. He had arrived at Cooper Union a politician with more defeats than victories, but he departed politically reborn…’

<https://www.americanheritage.com/speech-made-man>


Abraham LincolnCooper Union Address: ‘Mr. President and fellow citizens of New York: -

The facts with which I shall deal this evening are mainly old and familiar; nor is there anything new in the general use I shall make of them. If there shall be any novelty, it will be in the mode of presenting the facts, and the inferences and observations following that presentation.

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BRIEFLY NOTED: for 2021-03-01 Mo

Things that went whizzing by that I want to remember...

First:

Michael Kremer, Jack Willis, & Yang YouConverging to Convergence: ‘Neoclassical theory predicts convergence towards steady-state income, determined by policies, institutions, and culture. Empirical tests… in the 1990s found that conditioning on institutions mattered: unconditionally, the norm was divergence…. We revisit…. First, there has been a trend towards unconditional convergence since the 1960s, leading to convergence since the early 2000s. Second, policies and institutions have converged… towards… institutions… associated… with higher levels of income. Third, the institutional changes are larger… than those predicted by the cross-sectional income-institution slope; while the slope itself has remained stable. Fourth, the growth-institution slope… has decreased substantially, resulting in a shrinking in the gap between conditional and unconditional convergence…

LINK: <https://iems.ust.hk/events/academic-seminar/2021/kremer-converging-to-convergence-distinguished-speakers-economics-nobel-laureates>

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READING: On Dietrich von der Glezze: Der Siegesgürtel

Not your standard Tannhäuser...

Continue reading "READING: On Dietrich von der Glezze: Der Siegesgürtel" »


History of Economic Growth: Intro to Jupyter Notebooks, & Resources & Global Inequality

Still Experimenting with Interactive Notebooks

Source: <https://github.com/braddelong/econ-135-s-2021-assignments/blob/main/ps-0.1.5.ipynb>
nbViewer: <https://nbviewer.jupyter.org/github/braddelong/econ-135-s-2021-assignments/blob/main/ps-0.1.5-answers.ipynb>
Interactive: <https://mybinder.org/v2/gh/braddelong/econ-135-s-2021-assignments/main?filepath=ps-0.1.5.ipynb>

 


Source: <https://github.com/braddelong/econ-135-s-2021-assignments/blob/main/ps-4.1.5.ipynb>
nbViewer: <https://nbviewer.jupyter.org/github/braddelong/econ-135-s-2021-assignments/blob/main/ps-4.1.5.ipynb>
Interactive: <https://mybinder.org/v2/gh/braddelong/econ-135-s-2021-assignments/main?filepath=ps-4.1.5.ipynb>


BRIEFLY NOTED: for 2021-02-25 Th

Things that went whizzing by, that I want to remember...

 

Very Briefly Noted:


Next: A Video Well Worth Your Watching:

Tony FreethThe Antikythera Mechanism

A marvelous device, that if we could only understood why and how and why not a flood of such instruments following, we would understand a great deal of the world?


Six Paragraphs:

This, I think, gets it very right: even two weeks after your second vaccination dose, do not get together with all of your friends in a damp, hot basement and have a singing party—wait until the virus is genuinely scotched for that:

Emily OsterVaccines & Transmission Redux Redux: ‘What you shouldn’t do—and I think this is really the key to the continued caution in messaging—is get together with all your vaccinated friends in a damp, hot basement and have a singing party. If you have close contact with 1000 people even if they are all vaccinated there is a reasonable chance someone’s carrying some virus around, and they could then carry it out to the rest of us who are waiting on vaccines. In another few months, when cases are lower, this will not be true anymore and we’ll be able to do our hot basement singing…

LINK: <https://emilyoster.substack.com/p/vaccines-and-transmission-redux-redux>


Gertjan VliegheAn Update on the Economic Outlook: ‘The effect of the pandemic on the economy has been unusually uneven. We are really not all in this together…. Should we consider… unspent income as “additional income” or “additional wealth”, or something else altogether? A comparison between UK and US income dynamics is instructive…. In the US, on the other hand, the pandemic stimulus cheques and the increase in unemployment benefits have led to a significant rise in household income relative to its pre-pandemic trajectory. That can more reasonably be interpreted as “additional income” for many. Moreover, it has, by design, been spread more evenly across the income distribution….

The degree to which health risks dissipate later this year will be a key factor in determining to what extent savings are retained or spent. The more there are lingering health risks and associated economic uncertainty, the more it is likely that a larger share of the accumulated savings stock will be retained, and that the desired on-going flow of savings will remain somewhat elevated relative to pre-pandemic flows. Given that we have never experienced an economic situation quite like the one we are now in, a wide range of outcomes are possible. I am genuinely uncertain about this, and it is something that reasonable people can disagree on…

LINK: https://www.bankofengland.co.uk/-/media/boe/files/speech/2021/february/an-update-on-the-economic-outlook-speech-by-gertjan-vlieghe.pdf?la=en&hash=4D50354F53FDA4D035082B9B1A844A6B134212D1


Charles DickensLittle Dorrit: ‘The conference was held at four or five o’clock in the afternoon, when all the region of Harley Street, Cavendish Square, was resonant of carriage-wheels and double-knocks. It had reached this point when Mr Merdle came home from his daily occupation of causing the British name to be more and more respected in all parts of the civilised globe capable of the appreciation of world-wide commercial enterprise and gigantic combinations of skill and capital. For, though nobody knew with the least precision what Mr Merdle’s business was, except that it was to coin money, these were the terms in which everybody defined it on all ceremonious occasions, and which it was the last new polite reading of the parable of the camel and the needle’s eye to accept without inquiry…

LINK: <https://www.gutenberg.org/files/963/963-h/963-h.htm>


Kirsten DevineRomance Before Bros: ‘A few months further back I wrote a 5 part Valentine’s Day series on romance novels, a feat of insanity that I am going to repeat this year, only I learned my lesson and am starting it at the beginning of January instead ⅔ of the way through. So hopefully unlike last year I’ll make it through mentally unscathed. This time I’m actually reading GOOD romances instead of trashy ones. It’s a lot of work, and do you know why I’m doing this? It’s because romance MATTERS…

LINK: <https://ordinary-times.com/2020/01/05/romance-before-bros/>


Ben ThompsonCreation, Consumption, & Clubhouse: ‘That “something” was a combination of factors: First, it’s much easier to get a group of people together for an informal conversation that requires nothing more than the tap of a button than a formal podcast recording. Convenience matters! It matters more than anything. Second, the rhythm and “feel” of a conversation is just fundamentally different than a produced podcast. Zeynep Tufecki wrote about this difference on her Substack, and it was tangible in this conversation. Third, this room wasn’t simply about those who were invited, but multiple others that raised their hands and joined in, sometimes to riff on stories that came before…

LINK: <https://stratechery.com/2021/more-from-daniel-ek-creation-consumption-and-clubhouse-facebook-and-australia-continued/>


Daniel EkOn Clubhouse: ‘My fundamental view is that Clubhouse is really two things. It’s a creative format and it’s super-engaging for creators. It’s very interesting with the interactivity, so we obviously pay a lot of attention to all social and interactive features. The second part is the listening part as well. Long term I believe the major trend on the Internet isn’t linear and live programming, but it’s still time-shifted and on-demand, and to that extent I feel very good about where we’re placed, but obviously, to the extent that creators find interesting ways to interact with their audience that’s definitely something that we’re paying a lot of attention to and looking at and experimenting with as well…

LINK: <https://stratechery.com/2021/more-from-daniel-ek-creation-consumption-and-clubhouse-facebook-and-australia-continued/>


Hoisted from the Archives

2010Is This an April Fool’s Joke?: Charles Lane of the Washington Post:

Some in the antislavery movement were as extreme, in their way, as the Southern “fire-eaters.”… In 1851, a Boston crowd broke into a federal courthouse to free “Shadrach,” a black man being held there by U.S. marshals enforcing the Fugitive Slave Law…. I am not suggesting a moral equivalency between the anti-slavery and pro-slavery forces. But I am suggesting an attitudinal equivalency…

First of all, Shadrach Minkins has a name–which does not deserve to be put into scare quotes. He was a human being. Charles—excuse me, ’Charles’—sees an ‘attitudinal equivalency’ between abolitionists who ‘arrested Minkins from his court officers, carried him off and temporarily hid him in a Beacon Hill attic… Boston black leaders Lewis Hayden, John J. Smith and others helped Minkins escape from Massachusetts, and he eventually found his way to Canada on the Underground Railroad…’ and Jefferson Davis and his ilk who raised armies that killed 400,000 Americans.

I am sorry: those who kill tens of thousands have a different ‘attitude’ than those who set people free without killing anybody. Worst Washington Post writer alive.

LINK: https://delong.typepad.com/sdj/2010/03/is-this-an-april-fools-joke----the-tea-party-and-a-history-of-going-to-extremes.html

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READING: The Beginning of: John Q. Marquand (1937): Think Fast, Mr. Moto

Imperialism & the capital-M capital-E Mysterious East...

John P. Marquand (1937): Think Fast, Mr. Moto: 'It had not taken Wilson Hitchings long to realize that the firm of Hitchings Brothers had its definite place in the commercial aristocracy of the East, and that China had retained a respect for mercantile tradition which had disappeared from the Occidental world. There were still traditions of sailing days and of the pre-treaty days in the transactions of the Shanghai branch of Hitchings Brothers. The position of its office upon the Bund was enough to show it. The brass plate of HITCHINGS BROTHERS was polished each morning by the office coolies so that it glittered golden against the gray stone façade. Near by were the venerable plates of JARDINE MATHESON and of the HONG KONG AND SHANGHAI BANK. The plate of HITCHINGS BROTHERS had the same remote dignity, the same integrity, the same imperviousness to time—which was not unnatural.

That plate had been made when a branch of Hitchings Brothers, under the control of Wilson’s great-grandfather from Salem, had moved up to Shanghai from the factories of Canton during the epoch when the place was little more than a swampy China-coast fishing town. Reluctantly, but accurately, Wilson Hitchings could feel the venerable weight of that tradition. The involuntary respect which the tradition had engendered in the narrow European world that maintained its precarious foothold in the Orient was accorded to Wilson Hitchings himself, in spite of youth and inexperience, simply because he bore the name.

Old white-suited gentlemen whom he never recalled meeting previously would suddenly slap him on the back as though he were an Old China Hand. Leather-faced matrons from British compounds would smile at him archly. Sometimes even an unknown, fat Chinese gentleman calling in the outer office would look at him and smile. “Mr. Hitchings,” the old gentleman would say, “so nice you have come here.”

“Gentlemen,” someone would say, toward evening at the bar, “this is young Hitchings, just out from America. He doesn’t know me but I know him. He looks the way old Will did when he came out.… Boy, give Mr. Hitchings a drink.… We have to stick together these days. Anything I can tell you, Mr. Hitchings, simply let me know.”

It had not taken Wilson Hitchings long to realize that he was a public character by right of birth. He grew to understand that the small shopkeeper and the lowest inhabitants of the International Settlement all knew him and that there is no such thing as privacy in the East. Sometimes late at night strange, ragged rickshaw boys would speak to him, in the limpid pidgin English of the place. “Marster Hitchings,” a strange boy would shout. “Please, I take you home. I know where Marster Hitchings lives.”

And sometimes at the street intersections where the pedestrians and the carts and the motors went by in an unending ribbon, the bearded Sikh policeman would bare his white teeth in an unexpected smile. “All right,” the man would say. “All right now, Hitchings Sahib.”

He had begun to realize that a part of Shanghai belonged to him, a part of that rich, monstrous, restive, sinful city where so many races dwelt noisily. It belonged to him because a Hitchings had been there ever since foreigners had come. A Hitchings had seen the city grow out of the East, where China, with that adaptability peculiar alone to itself, had absorbed the conveniences of the West and had made them into something genial and mystic and peculiar. The firm of Hitchings Brothers, on the spot it occupied along the Bund, had become a part of the life. The windows of the firm, never entirely clean in spite of diligent washing, looked out like the eyes of cynical old men upon one of the strangest sights in the world.

Beside the Bund flowed the yellow treacherous currents of the Whangpoo River; warships and huge liners were moored in the river, the last word of Occidental ingenuity, and past them always drifted brown-sailed junks, almost unchanged since the oldest Chinese paintings. Sampans, propelled by a single sculling oar, plied their ways across the river. Scavengers, in the sampans, fought raucously over ships’ garbage; and down on the street beneath, men stripped to the waist struggled like beasts, pulling burdens while limousines passed by. Out of the firm windows one could see all the comedy and tragedy of China struggling in a world of change, all the unbelievable inequality of wealth, ranging from the affluence of fortunate war-lords to a poverty reduced to a limit of existence which no stranger could envisage. It was all beneath the windows, restive and fascinating, something much better accepted than studied.

Wilson Hitchings reluctantly admired his uncle for his cold acceptance of the enigmas which moved about them. Uncle Will Hitchings had grown to accept street riots and homicide as easily as he accepted his whisky-and-soda at the Club, provided dinner was properly and efficiently served as soon as he shouted “Boy!” “My boy,” Uncle Will used to say, “there’s one thing for you to get in your mind—the firm of Hitchings Brothers is an honest firm. It has an excellent reputation upriver. Every Chinese merchant knows us. We seldom lose our customers; you must learn who these customers are; but don’t worry much about the rest. Treat our customers politely, but don’t mix with the natives. It’s confusing to you now. It used to be confusing to me at first, but you’ll get used to it. Don’t try to speak their language. You can’t learn it and it will only make you queer to try. I’ve seen a lot of nice young fellows who have got queer trying to learn Chinese. Just remember our family has got along on pidgin English.

"The main thing is to be seen with the right people. I don’t care how much you drink if you do it with the right people and in the right place; and don’t worry too much about wars and revolutions. Everything is always upset here. All we need is to be sure we get our money, and there’s just one thing more—about women. Be sure you don’t marry a Russian girl. And get as much exercise as you can, and remember I am broad-minded. Come to me when you’re in trouble, remember that nothing will shock me—nothing; and don’t forget you have the firm name. I’ll see you before dinner at the Club.”

It was a strange life, an easy life, and altogether pleasant. In spite of the size of the city, the city was like a country club where everyone of the right sort knew everyone else, where everyone moved in a small busy orbit, surrounded by the unknown, and where everyone was friendly. It did not take him long to realize that it was a responsibility to bear the family name. “You see,” his uncle told him, “we are one of the oldest firms in China and age and name mean a great deal here. I want you to come to dinner to-night. My new cook is very good. I want you to change your cook, he is squeezing you too much. I want you to be sure to be at the Club every afternoon, and I want you to use my tailor. His father and his grandfather have always dressed the Hitchingses.”

“Do you think there is going to be trouble up North, sir?” Wilson Hitchings asked.

His Uncle Will looked at him urbanely. His broad, red face reminded Wilson of the setting sun. “There is always trouble up North,” Uncle William said. “I want you to get yourself a new mess-jacket. The one you wore last night didn’t fit, and that’s more important than political speculation. You had better go to your desk now. I shall have to read the mail. Well, what is it?”

The man who sat in front of the door of William Hitchings’ private office—a gray-haired Chinese in a gray cotton gown—entered. “Please, sir,” he said, “a Japanese gentleman to see you—the one who came yesterday.”

Uncle William’s face grew redder. “My boy,” he said to Wilson, “these Japanese are always making trouble lately. They’re underselling us all along the line. You may as well sit and listen. How long have you been here now?”

“Six months, sir,” Wilson Hitchings said.

“Well,” his uncle said, “we have important interests in Japan. You had better begin to get used to the Japanese. Yes, sit here and listen.” He waved a heavy hand to the office attendant. “Show the man in,” he said.

Red-faced, white-haired, and growing heavy, William Hitchings sat behind his mahogany table with the propeller-like blades of the electric fan on the ceiling turning lazily above his head. Short as the time had been since he had been sent to China, Wilson could understand that much of his uncle’s attitude was a façade behind which he concealed a shrewd and accurate knowledge. He sat there looking about his room with a heavy placid stupidity which Wilson could suspect was part of his uncle’s stock in trade. Even his bland assumption of ignorance of Chinese was valuable.

His uncle had once admitted, perhaps rightly, that it all gave a sense of confidence, a sense of old-fashioned stability. It had been a long while since the firm had started dealing in cargoes of assorted merchandise; and now its business, largely banking, was varied and extensive. The firm was prepared to sell anything up-country through native merchants who had been connected with it for generations, and the firm was the private banker for many important individuals. Wilson could guess that his uncle knew a great deal about the finances and the intrigues of the Nanking Government, although his conversation was mostly of bridge and dinner.

While they waited Uncle William began opening the pile of letters before him with a green jade paper-cutter. Once he glanced at the clock then at the door and then at his nephew. It was three in the afternoon. “My boy,” said Uncle William, “I want you to listen to this conversation carefully and I want you to tell me what you think of it afterwards. I want you to consider one thing which is very important. You must learn to cultivate a cheerful poker face. That is what you are here for, and it will take you years before you can do it.”

“You have one, sir,” said Wilson.

“Yes, my boy,” said Uncle William, “I rather think I have.” He laid down his paper-cutter and raised his voice a trifle. There were footsteps outside the office door. Uncle William looked at the wall opposite him, which was adorned with an oil painting of the first Hitchings factory at Canton, beside which was a Chinese portrait of a stout gentleman in a purple robe seated with a thin hand resting on either knee. It was the portrait of old Wei Qua, the first hong merchant with whom the Hitchingses had dealt. Wei Qua’s face was enigmatic, untroubled and serene.

“Now in the races to-morrow,” Uncle William said distinctly, “I like Resolution in the third. There are going to be long odds on him to-morrow and he is always good in mud. Yes, I think I shall play Resolution.” The office door was opening and Uncle William pushed back his chair. A Japanese was entering, walking across the room in front of the corpulent Chinese clerk with swift birdlike steps.

“Mr. Moto, if you please,” the Chinese clerk was saying.

Mr. Moto was a small man, delicate, almost fragile. His patent leather shoes squeaked slightly as he walked. He was dressed formally in a morning coat and striped trousers. His black hair was carefully brushed in the Prussian style. He was smiling, showing a row of shiny gold-filled teeth, and as he smiled he drew in his breath with a polite, soft sibilant sound. “It is so kind of you to receive me,” he said. “So very, very kind, since I sent my letter such a short time ago. Thank you very, very much.”

“The pleasure is all mine,” Uncle William said. “Thank you, Mr. Moto”...


PODCAST: Hexapodia III: þe Minimum Wage, wiþ Arin Dube, Noah Smith, & Brad DeLong: Should We Be Fighting for $15?

If moderate raises in the minimum wage do not cause unemployment, who can object to them—but why do they not cause higher unemployment, if they in fact do not?


HOISTED FROM ÞE ARCHIVES: Regional & Distributional Policy in a World Where People Want to Ignore þe Value & Contribution of Knowledge- & Network-Based Increasing Returns

From December 2016. Why we seek for but will never be able to find "fair contribution" theories of & justifications for þe distribution of wealth...

 

Pascal Lamy: “When the wise man points at the moon, the fool looks at the finger…”

Perhaps, in the end, the problem is that people want to pretend that they are filling a valuable role in the societal division of labor, and are receiving no more than they earn—than they contribute. But that is not the case. The value—the societal dividend—is in the accumulated knowledge of humanity and in the painfully constructed networks that make up our value chains.

A “contribution” theory of what a proper distribution of income might be can only be made coherent if there are constant returns to scale in the scarce, priced, owned factors of production. Only then can you divide the pile of resources by giving to each the marginal societal product of their work and of the resources that they own.

That, however, is not the world we live in.

In a world—like the one we live in—of mammoth increasing returns to unowned knowledge and to networks, no individual and no community is especially valuable. Those who receive good livings are those who are lucky—as Carrier’s workers in Indiana have been lucky in living near Carrier’s initial location. It’s not that their contribution to society is large or that their luck is replicable: if it were, they would not care (much) about the departure of Carrier because there would be another productive network that they could fit into a slot in.

All of this “what you deserve” language is tied up with some vague idea that you deserve what you contribute—that what your work adds to the pool of society’s resources is what you deserve.

This illusion is punctured by any recognition that there is a large societal dividend to be distributed, and that the government can distribute it by supplementing (inadequate) market wages determined by your (low) societal marginal product, or by explicitly providing income support or services unconnected with work via social insurance. Instead, the government is supposed to, somehow, via clever redistribution, rearrange the pattern of market power in the economy so that the increasing-returns knowledge- and network-based societal dividend is predistributed in a relatively egalitarian way so that everybody can pretend that their income is just “to each according to his work”, and that they are not heirs and heiresses coupon clipping off of the societal capital of our predecessors’ accumulated knowledge and networks.

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On top of this we add: Polanyian disruption of patterns of life—local communities, income levels, industrial specialization—that you believed you had a right to obtain or maintain, and a right to believe that you deserve. But in a market capitalist society, nobody has a right to the preservation of their local communities, to their income levels, or to an occupation in their industrial specialization. In a market capitalist society, those survive only if they pass a market profitability test. And so the only rights that matter are those property rights that at the moment carry with them market power—the combination of the (almost inevitably low) marginal societal products of your skills and the resources you own, plus the (sometimes high) market power that those resources grant to you.

This wish to believe that you are not a moocher is what keeps people from seeing issues of distribution and allocation clearly—and generates hostility to social insurance and to wage supplement policies, for they rip the veil off of the idea that you deserve to be highly paid because you are worth it. You aren’t.

And this ties itself up with regional issues: regional decline can come very quickly whenever a region finds that its key industries have, for whatever reason, lost the market power that diverted its previously substantial share of the knowledge- and network-based societal dividend into the coffers of its firms. The resources cannot be simply redeployed in other industries unless those two have market power to control the direction of a share of the knowledge- and network-based societal dividend. And so communities decline and die. And the social contract—which was supposed to have given you a right to a healthy community—is broken.

As I have said before, humans are, at a very deep and basic level, gift-exchange animals. We create and reinforce our social bonds by establishing patterns of “owing” other people and by “being owed”. We want to enter into reciprocal gift-exchange relationships. We create and reinforce social bonds by giving each other presents. We like to give. We like to receive. We like neither to feel like cheaters nor to feel cheated. We like, instead, to feel embedded in networks of mutual reciprocal obligation. We don’t like being too much on the downside of the gift exchange: to have received much more than we have given in return makes us feel very small. We don’t like being too much on the upside of the gift exchange either: to give and give and give and never receive makes us feel like suckers.

We want to be neither cheaters nor saps.

It is, psychologically, very hard for most of us to feel like we are being takers: that we are consuming more than we are contributing, and are in some way dependent on and recipients of the charity of others. It is also, psychologically, very hard for most of us to feel like we are being saps: that others are laughing at us as they toil not yet consume what we have produced.

And it is on top of this evopsych propensity to be gift-exchange animals—what Adam Smith called our “natural propensity to truck, barter, and exchange”—we have built our complex economic division of labor. We construct property and market exchange—what Adam Smith called our natural propensity “to truck, barter, and exchange” to set and regulate expectations of what the fair, non-cheater non-sap terms of gift-exchange over time are.

We devise money as an institution as a substitute for the trust needed in a gift-exchange relationship, and we thus construct a largely-peaceful global 7.4B-strong highly-productive societal division of labor, built on:

assigning things to owners—who thus have both the responsibility for stewardship and the incentive to be good stewards… very large-scale webs of win-win exchange… mediated and regulated by market prices… There are enormous benefits to arranging things this way. As soon as we enter into a gift-exchange relationship with someone or something we will see again—perhaps often—it will automatically shade over into the friend zone. This is just who we are. And as soon as we think about entering into a gift-exchange relationship with someone, we think better of them. Thus a large and extended division of labor mediated by the market version of gift-exchange is a ver powerful creator of social harmony.

This is what the wise Albert Hirschman called the doux commerce thesis. People, as economists conceive them, are not “Hobbesians” focusing on their narrow personal self-interest, but rather “Lockeians”: believers in live-and-let live, respecting others and their spheres of autonomy, and eager to enter into reciprocal gift-exchange relationships—both one-offs mediated by cash alone and longer-run ones as well.

Share Grasping Reality Newsletter, by Brad DeLong

In an economist’s imagination, people do not enter a butcher’s shop only when armed cap-a-pie and only with armed guards. They do not fear that the butcher will knock him unconscious, take his money, slaughter him, smoke him, and sell him as long pig.

Rather, there is a presumed underlying order of property and ownership that is largely self-enforcing, that requires only a “night watchman” to keep it stable and secure.

Yet to keep the fiction that we are all fairly playing the reciprocal game of gift exchange in a 7.4 billion-strong social network—that we are neither cheaters nor saps—we need to ignore that we are coupon clippers living off of our societal inheritance.

And to do this, we need to do more than (a) set up a framework for the production of stuff, (b) set up a framework for the distribution of stuff, and so (c) create a very dense reciprocal network of interdependencies to create and reinforce our belief that we are all one society.

We need to do so in such a way that people do not see themselves, are not seen as saps—people who are systematically and persistently taken advantage of by others in their societal and market gift-exchange relationships. We need to do so in such a way that people do not see themselves, are not seen as, and are not moochers—people who systematically persistently take advantage of others in their societal and market gift-exchange relationships. We need to do this in the presence of a vast increasing-returns in the knowledge- and network-based societal dividend and in spite of the low societal marginal product of any one of us.

Thus we need to do this via clever redistribution rather than via explicit wage supplements or basic incomes or social insurance that robs people of the illusion that what they receive is what they have earned and what they are worth through their work.

Now I think it is an open question whether it is harder to do the job via predistribution, or to do the job via changing human perceptions to get everybody to understand that:

  • no, none of us is worth what we are paid.

  • we are all living, to various extents, off of the dividends from our societal capital

  • those of us who are doing especially well are those of us who have managed to luck into situations in which we have market power—in which the resources we control are (a) scarce, (b) hard to replicate quickly, and (c) help produce things that rich people have a serious jones for right now.

LINK: <https://www.bradford-delong.com/2016/12/is-the-problem-one-of-insufficient-market-wages-inadequate-social-insurance-polanyian-disruption-of-patterns-of-life-.html>

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BRIEFLY NOTED: for 2021-02-23 Tu

Things that went whizzing by, but that I really want to remember...

 

First:

There comes a point at which the dishonesty—perhaps "dishonesty" is not the right word—there comes a point at which the gaming of the system with a sociopathic disregard for the rights and expectations of your principal counterparties becomes so great that the only rational response is to say: this structure needs to be burned to the ground and a new structure in which the architects of the old have no place needs to be directed to fulfill the functions. I think Uber has reached that point:

John BullSchrodinger’s Cab Firm: Uber’s Existential Crisis: ‘ULL, the lawyers argued, didn’t employ any drivers. It was simply a brand umbrella… drew the judges’ attention to the careful wording within them that confirmed this…. Operators were granted access to UBV’s app. Not ULL’s app. On this they were clear. UBV’s app. Through that app, passengers could contact those operators directly, negotiate a ride and agree a fare. Neither ULL or UBV were involved in the ride itself, Uber’s lawyers were keen to stress…. If there was a contractual arrangement, then it was solely made between passenger and operator…. Uber’s lawyers argued that Aslam and Farrar (and the other 30,000 Uber drivers they indirectly represented) had misunderstood the relationship they had with Uber…. The drivers weren’t like caddies at all…. They were like pole dancers….

When it came, the tribunal’s ruling was unanimous…. “This is,” the tribunal judges explained in their ruling, “we think, an excellent illustration of the phenomenon of which Elias J warned in the Kalwak case, of ‘armies of lawyers’ contriving documents in their clients’ interests which simply misrepresent the true rights and obligations on both sides”…

LINK: <https://www.londonreconnections.com/2019/schrodingers-cab-firm-ubers-existential-crisis/>

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Very Briefly Noted:


Next: A Video Well Worth Your Watching:

Sofiane SmileFlashing Lights <https://www.youtube.com/watch?v=DnUyNhF3jLA>:


Five Paragraphs:

1) I do not understand Renaissance’s Medallion Fund. I do not know anybody who understands Renaissance’s Medallion Fund. If anybody has figured out how to come close to replicating whatever renaissance is medallion fund has done, they are not talking and are not on my radar screen. The fact that I have no clue as to what is going on here leaves me massively dissatisfied. I do not think I understand Bridgewater. But I do think I have a vague idea as to how they do what they do and why it might work as well as it does. I have no such insight into Renaissance Medallion:

Bradford CornellMedallion Fund: The Ultimate Counterexample?: ’Over the period from the start of trading in 1988 to 2018, $100 invested in Medallion would have grown to $398.7 million, representing a compound return of 63.3%. Returns of this magnitude over such an extended period far outstrip anything reported in the academic literature. Furthermore, during the entire 31-year period, Medallion never had a negative return despite the dot.com crash and the financial crisis. Despite this remarkable performance, the fund’s market beta and factor loadings were all negative, so that Medallion’s performance cannot be interpreted as a premium for risk bearing. To date, there is no adequate rational market explanation for this performance…

LINK: <https://papers.ssrn.com/sol3/papers.cfm?abstract_id=3504766>


2) At its origin, civilization as we have known it seems to have been quite a cruel and a brutal thing. Our technologies were, for a long long time, much more effective as technologies of extraction and domination then as technologies to boost productivity. Actually, perhaps that is wrong: our technologies were fine at boosting productivity but Malthus’s Devil ensure that the benefits flowed to increasing human numbers rather than raising human prosperity. That's for a long, long time domination and extraction was nearly the only road to individual prosperity:

Patrick WymanUruk & the Emergence of Civilization: ‘The “Uruk Phenomenon.” This was a multifaceted expansion outward from southern Mesopotamia… some combination of colonization movement, proto-imperial takeover, ideological ferment, and mercantile enterprise…. The most ubiquitous item of Uruk culture is actually a humble, misshapen… beveled-rim bowl… mass-produced by the thousands… but in crude molds. The most likely explanation is that they were used to dole out grain rations… molds to bake that grain into daily bread… speaks powerfully to the nature of Uruk society… a deeply unequal and centralized way of organizing the world, with superiors and inferiors…. Those at the bottom were dependent on their betters, who controlled their labor and doled out their food supply, perhaps in those ugly little bowls…. In the early written texts, the most common non-numerical sign is the symbol for “female slave of foreign origin.” “Captive male” isn’t far behind… LINK: 

<https://patrickwyman.substack.com/p/uruk-and-the-emergence-of-civilization>


3) Liars gonna lie. But there may be a way to use their desire to retain a shred of their self-respect in order to uncover somewhat of the truth. Note, however, that this does not work with the Trumps and with their ilk at all:

Zeynep TufekciCritical Thinking isn’t Just a Process: ‘Friends who had grown up in authoritarian or poor countries had a much easier time adjusting…. When Trump got sick with COVID… one detail stood out: he had been given dexamethasone…. The doctors… “Q: Was Trump’s oxygen level ever below 90?” “CONLEY: We don’t have any recordings here of that” “Q: But was it ever below 90, here or at the White House?” CONLEY: No, it was below 94 percent. It wasn’t down in the low 80s or anything…. They don’t have recording below 90s “here” so via Kremlinology, a sadly appropriate method now, we can probably infer that it was probably mid-to-high 80s Friday night which sparked giving him oxygen and transport to Walter Reed….

Metaepistemology may be a fancy term, but it’s actually a mundane skill…. Most deliberate misinformation from authorities—especially in places that are mid-range in terms of institutional trust and strict licensing—comes from omission…. I concluded that the most likely explanation was… that, indeed, the President had faced severe illness. Yesterday, we finally got actual reporting… “Trump… was found to have lung infiltrates… a sign of an acute case of the disease…. Trump’s blood oxygen level alone was cause for extreme concern, dipping into the 80s…” There is often talk of teaching people “critical thinking”… not just formulas to be taught but knowledge and experience to be acquired and tested and re-examined…. It may be a privilege to live in a society that does not always need official statements to be interrogated as such. But if the past few years have shown anything, that privilege is not something to be taken for granted…

LINK: <https://zeynep.substack.com/p/critical-thinking-isnt-just-a-process>


4) At this point, I think you have to presume that Facebook is guilty when charged by insiders:

Hannah MurphyFacebook Reported Revenue It ‘Should Have Never Made’, Manager Claimed: ‘Lawsuit cites product executive’s qualms over figures provided to advertisers. Facebook says that the ‘allegations are without merit and we will vigorously defend ourselves’. A Facebook employee warned that the company reported revenues it “should have never made” by overstating how many users advertisers could reach, according to internal emails revealed in a newly unsealed court filing. The world’s largest social media company has since 2018 been fighting a class-action lawsuit claiming that its executives knew its “potential reach metric”, used to inform advertisers of their potential audience size, was inflated but failed to correct it. According to sections of a filing in the lawsuit that were unredacted on Wednesday, a Facebook product manager in charge of potential reach proposed changing the definition of the metric in mid–2018 to render it more accurate. However, internal emails show that his suggestion was rebuffed by Facebook executives overseeing metrics on the grounds that the “revenue impact” for the company would be “significant”, the filing said. The product manager responded by saying “it’s revenue we should have never made given the fact it’s based on wrong data”, the complaint said…

LINK: https://www.ft.com/content/c144b3e0-a502-440b-8565-53a4ce5470a5


5) Only 23,000 years? That does not seem to me very long—especially when you consider that co-movement implies only a form of weak symbiosis and perhaps semi-domestication, not full domestication:

Angela R. Perri & al.Dog Domestication & the Dual Dispersal of People & Dogs into the Americas: ‘Over the last 10,000 y, the genetic signatures of ancient dog remains have been linked with known human dispersals in regions such as the Arctic and the remote Pacific. It is suspected, however, that this relationship has a much deeper antiquity…. By comparing population genetic results of humans and dogs from Siberia, Beringia, and North America, we show that there is a close correlation in the movement and divergences of their respective lineages…. It suggests that dogs were domesticated in Siberia by ∼23,000 y ago, possibly while both people and wolves were isolated during the harsh climate of the Last Glacial Maximum. Dogs then accompanied the first people into the Americas and traveled with them as humans rapidly dispersed into the continent beginning ∼15,000 y ago…

LINK: <https://www.pnas.org/content/118/6/e2010083118>

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Hoisted from the Archives

2010Is This an April Fool’s Joke?: Charles Lane of the Washington Post:

Some in the antislavery movement were as extreme, in their way, as the Southern “fire-eaters.”… In 1851, a Boston crowd broke into a federal courthouse to free “Shadrach,” a black man being held there by U.S. marshals enforcing the Fugitive Slave Law…. I am not suggesting a moral equivalency between the anti-slavery and pro-slavery forces. But I am suggesting an attitudinal equivalency…

First of all, Shadrach Minkins has a name—which does not deserve to be put into scare quotes. He was a human being. Charles—excuse me, ’Charles’—sees an ‘attitudinal equivalency’ between abolitionists who ‘arrested Minkins from his court officers, carried him off and temporarily hid him in a Beacon Hill attic… Boston black leaders Lewis Hayden, John J. Smith and others helped Minkins escape from Massachusetts, and he eventually found his way to Canada on the Underground Railroad…’ and Jefferson Davis and his ilk who raised armies that killed 400,000 Americans.

I am sorry: those who kill tens of thousands have a different ‘attitude’ than those who set people free without killing anybody.

Worst Washington Post writer alive.

LINK: https://delong.typepad.com/sdj/2010/03/is-this-an-april-fools-joke----the-tea-party-and-a-history-of-going-to-extremes.html

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BRIEFLY NOTED: for 2021-02-22 Mo

Things that went whizzing by, but that I want to remember...

 

First:

This is, I think, by far the most important thing today. It would be one thing if Facebook has not yet figured out how to create frameworks and algorithms in which people are their better selves as they decide what to engage with and what to look at next.

It is quite another thing that Facebook’s highest executives are in there actively cheering and creating space for people who deny that mass child murders ever actually happened. Zuckerberg needs to go. Or Facebook needs to go. And maybe, by this point, it needs to be not “or” but “and”:

Ryan Mac & Craig Silverman: “Mark [Zuckerberg] Changed The Rules”: How Facebook Went Easy On Alex Jones And Other Right-Wing Figures: ‘Joel Kaplan’s Policy Team Sways Big Facebook Decisions Like Alex Jones Ban: Facebook’s rules to combat misinformation and hate speech are subject to the whims and political considerations of its CEO and his policy team leader: In April 2019, Facebook was preparing to ban one of the internet’s most notorious spreaders of misinformation and hate, Infowars founder Alex Jones. Then CEO Mark Zuckerberg personally intervened. Jones had gained infamy for claiming that the 2012 Sandy Hook elementary school massacre was a “giant hoax,” and that the teenage survivors of the 2018 Parkland shooting were “crisis actors.” But Facebook had found that he was also relentlessly spreading hate against various groups, including Muslims and trans people. That behavior qualified him for expulsion from the social network under the company’s policies for “dangerous individuals and organizations,” which required Facebook to also remove any content that expressed “praise or support” for them. But Zuckerberg didn’t consider the Infowars founder to be a hate figure… LINK: <https://www.buzzfeednews.com/article/ryanmac/mark-zuckerberg-joel-kaplan-facebook-alex-jones>

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One Chart:

What was the Trumpist goal, aim, and point in not following the New Zealand or the Australia or the Taiwan or the South Korea strategy—lock down, scotch the virus, vigilantly shut down again at signs of trouble, and then reopen so we can have a somewhat-normal 2020? What was the gain? What was the win? What did they think the win would be?

Youyang Gu’The strongest single variable I’ve seen in being able to explain the severity of this most recent wave in each state. Not past infections/existing immunity, population density, racial makeup, latitude/weather/humidity, etc. But political lean… LINK: <https://twitter.com/youyanggu/status/1362109363029225480>


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New HistoriaWhat Did Ancient Rome Really Look Like? <https://www.youtube.com/watch?v=5XxA4CX_Ip8>

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Five Paragraphs:

1) Between 1425 and 1525, if you had to bet on which civilization would lead humanity’s progressive way forward over the next half-millennium, you might well have been strongly tempted to be on the Islamic ekumene. It was technologically on par with the others. When Mehmet II “the Conquerer” Osmanli—Sultan of what Europeans called the Ottoman Empire, or, more usually, “the Grand Turk”—besieged Constantinople in 1453, he did so with the most modern artillery park in the world. And Islamic civilization was much better organized. Mehmet’s military establishment—the galleys and the cannon and the janissaries and the sipahis—was unequalled anywhere in the world.

60 years later, at the other end of the Islamic ekumene, a prince, Babur, who has lost his wars to become Emir of Samarkand has to settle for becoming Emperor of India as a consolation prize. And he wins much as the British were to conquer India 300 years later: with massively inferior forces but massively superior discipline and coordination:

Kallie SzczepanskiOverview of the First Battle of Panipat: ‘Babur’s Mughal forces consisted of between 13,000 and 15,000 men, mostly horse cavalry. His secret weapon was 20 to 24 pieces of field artillery, a relatively recent innovation in warfare. Arrayed against the Mughals were Ibrahim Lodi’s 30,000 to 40,000 soldiers… war elephants… from 100 to 1,000 trained and battle-hardened pachyderms…. His army simply marched out in a disorganized block…. Babur… employed two tactics unfamiliar to Lodi… tulughma, dividing a smaller force into forward left, rear left, forward right, rear right, and center divisions. The highly mobile right and left divisions peeled out and surrounded the larger enemy force, driving them towards the center. At the center, Babur arrayed his cannons. The second tactical innovation was Babur’s use of carts, called araba. His artillery forces were shielded behind a row of carts which were tied together with leather ropes, to prevent the enemy from getting between them and attacking the artillerymen. This tactic was borrowed from the Ottoman Turks…

LINK: <https://www.thoughtco.com/the-first-battle-of-panipat-195785>


2) Would there have been a Rush Limbaugh—and the descent of the Republicans of America into neofascist idiocy—without Reagan’s repeal of the Fairness Doctrine? Perhaps yes. But perhaps not:

Erik LoomisThe Gasbag of Fascism: ‘This often drug-addled hypocrite dedicated his entire life to destroying American democracy, to promoting the power of the rich and the racist, to dividing Americans against each other, to ginning up hate and violence. Limbaugh is truly one of the worst Americans to ever pollute this nation…. What made Rush Limbaugh the era-changing blowhard he became was Ronald Reagan’s Federal Communications Commission repeal of the Fairness Doctrine in 1987…. The country has never recovered from this horrible event since, as we’ve been flooded with ever more extreme right-wing propaganda that has moved us increasingly down the road toward fascism, culminating with the election on Donald Trump. Limbaugh was perhaps the first major beneficiary of the Fairness Doctrine’s repeal and he holds more responsibility than anyone else except perhaps Rupert Murdoch in what the hellscape this nation has become…

LINK: <https://www.lawyersgunsmoneyblog.com/2021/02/the-gasbag-of-fascism>


3) It would be nice to be able to believe this. But, alas!, I cannot:

David FrumImpeachment Did Not Prevail, But Trump Still Lost: ‘The 57–43 margin wasn’t enough to convict under the Constitution. It wasn’t enough to formally disqualify Trump from ever again seeking office in the United States. But practically? It will do as a solemn and eternal public repudiation of Trump’s betrayal of his oath of office…. The 57–43 margin in the Senate flashes a green light to federal and state prosecutors…. The Senate minority leader condemned Trump’s actions as a “disgraceful, disgraceful dereliction of duty” and said he held Trump “practically and morally responsible for provoking the events of the day”…. His own damning assessment did not suffice to persuade McConnell to convict Trump of impeachable offenses. That abdication will weigh on McConnell’s conscience and historical reputation…


4) Pretending that you speak for a movement while you look for a grift. Making your living out of steel manning racism and sexism. Et cetera. God! I am cranky this morning! But Conor Friedersdorf certainly gives us all cause:

Scott LemieuxHe Just Wasn’t a True Scotsman: ‘Conor is this close to getting it: “As a proponent of conservatism in America, Limbaugh was a failure… culminating in his alignment with the vulgar style and populist anti-leftism of Donald Trump. Character no longer mattered. Budget deficits no longer mattered. Free trade no longer mattered. Nepotism no longer mattered. Lavishing praise on foreign dictators no longer mattered. All that mattered was owning the libs in the culture war, in part to avenge a deeply felt sense of aggrievement…” When oh when did conservatism become about what 99% of conservatives want rather than the priorities of 20 libertarian journalists?…

LINK: <https://www.lawyersgunsmoneyblog.com/2021/02/he-just-wasnt-a-true-scotsman>


5) SAS knows more about how macroeconomics should think about the world than any economist from the so-called “freshwater” school I have ever heard or read:

Scott Alexander SimkinsComplicated Dynamical Systems: ‘Imagine some benevolent aliens surveilling Earth from orbit. They don’t understand our languages, and their own culture is so exotic that even basic ideas like “money” or “war” are hard for them to understand. Still, they have good telescopes, and they’re able to measure things like how much light our cities have, how much traffic is on our roads and sea-lanes, and how much smoke our industries emit…. There are some years (for example late 1929 and the early 1930s) when city lighting, smoke emissions, and traffic all stagnate. In other years (like the late 1990s), all these things grow even faster than usual. After analyzing word frequency in human communications, they hypothesize that the former type of period corresponds to English “recession” and the latter period to “boom”. By performing sentiment analysis of human faces in the media during these periods, they hypothesize that we dislike recessions.

These are benevolent aliens, and they want us to be happy, so they wonder how to prevent recessions. Sometime during the 1970s, they notice that during a recession, there are fewer oil tankers leaving the Middle East, and longer lines at First World gas stations. They know enough chemistry to realize that oil is a pretty useful fuel at our stage of technological development, so they deduce that the recession is caused by an oil shortage. This seems solveable! Using their Materialization Ray, they cause one billion barrels of crude oil to appear on the White House lawn. This actually helps a lot! Light, traffic, and industrial emissions all return to normal. Sentiment analysis of human faces reveal a brief period of extreme confusion, followed by happiness. The aliens have successfully solved the recession. In 2020, they notice another profound decrease in lighting, traffic, and factory smoke; looks like another recession. The aliens, still wanting to help and now confident they know how, materialize another billion barrels of crude oil on the White House lawn. The Earthlings continue sheltering in place from the coronavirus, but now they also have to deal with a billion random barrels of oil tumbling around Washington DC. The aliens have solved nothing….

The global economy behaves like a huge dynamical system. Everything affects everything else in so many different ways that it’s hard to keep track of. If aliens tried to model the economy the same way Borsboom et al are modeling the mind, they’d fail. They could pick ten important economic indicators—maybe employment rate, the S&P 500, inflation, and a few other things—and track how they co-evolved over time. This would probably be illuminating—for all I know some economist in our world is doing it already and learning a lot. But it wouldn’t be enough. They would never be able to predict a recession caused by conflict in the Middle East causing an oil embargo causing an energy shortage. Or a recession caused by deregulation of banks causing them to offer too many subprime loans causing all of them to go belly-up at once…. At best they… could understand that recessions (and booms) are attractor states in a massively complex dynamical system, and come up with vague principles about how that system responds to certain shocks (eg “large stimulus packages can sometimes shift the system from recession to normal growth”)…

LINK: <https://astralcodexten.substack.com/p/ontology-of-psychiatric-conditions-34e>


Hoisted from the Archives

2016Regional Policy and Distributional Policy in a World Where People Want to Ignore the Value and Contribution of Knowledge—and Network-Based Increasing Returns: Pascal Lamy: “When the wise man points at the moon, the fool looks at the finger…” Perhaps in the end the problem is that people want more than anything else to pretend that they are filling a valuable role in the societal division of labor, and are receiving no more than they earn—than they contribute. But that is not the case.

The value—the societal dividend—is in the accumulated knowledge of humanity and in the painfully constructed networks that make up our value chains, not in any of our individual contributions. A “contribution” theory of what a proper distribution of income might be can only be made coherent if there are constant returns to scale in the scarce, priced, owned factors of production. Only then can you divide the pile of resources by giving to each the marginal societal product of their work and of the resources that they own.

That, however, is not the world we live in… 

LINK: <https://www.bradford-delong.com/2016/12/is-the-problem-one-of-insufficient-market-wages-inadequate-social-insurance-polanyian-disruption-of-patterns-of-life-.html>

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Briefly Noted for 2021-02-17

<https://braddelong.substack.com/p/briefly-noted-for-2021-02-17>

Things that whizzed by today, & that I want to note & remember...

First:

Mike Konczal’s Freedom from the Market<https://books.google.com/books?id=0aDLDwAAQBAJ> is a book you should get and read right now:

Henry FarrellFreedom from the Market: ‘Mike Konczal has a new book, Freedom from the Market <https://books.google.com/books?id=0aDLDwAAQBAJ>… Polanyian—the stresses of the market lead to social rupture, which may in turn create the conditions for political mobilization. But Konczal doesn’t depict this as necessary or inevitable—people’s choices have consequences. He is also more precise than Polanyi in his understanding of how change happens—through social movements and the state…. Konczal not only employs Polanyi’s ideas, but the ideas of Polanyi’s friendly critics like Quinn Slobodian, to describe how modern Hayekians have sought to “encase” the market order in institutions and practices that are hard to overturn.

Property rights aren’t the foundation of liberty, as both nineteenth century jurists and twentieth century economists would have it. They are a product of the choices of the state, and as such intensely political. This allows Konczal to turn pragmatism against the Hayekians. Hayek’s notion of spontaneous order is supposed to be evolutionary, to provide a more supple response to what people (thought of as individuals want). But if there is a need to provide collective goods for people that cannot be fulfilled through voluntarism, the Hayekian logic becomes a brutal constraint on adaptation.…

Konczal presses for… a very different notion of freedom…. In Konczal’s words, “markets are great at distributing things based on people’s willingness to pay. But there are some goods that should be distributed by need.”… Furthermore, people’s needs change over time, as societies and markets change. Konczal’s framework suggests the need for collective choice to figure out the best responses to these changes, and a vibrant democratic politics… as the best way to carry out these choices…. I want you to read the book itself, if you really to get the good stuff—the stories, the examples, and the overall narrative that Konczal weaves together…

LINK: <https://crookedtimber.org/2021/01/26/freedom-from-the-market/>

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Very Briefly Noted:

  • Eric Kleefeld’Wall Street Journal news section: Texas is in a catastrophe because gas power plants went offline from the storm, while they’re trying to get wind power back up to cover it. WSJ Editorial Board: Texas is suffering because wind power has failed, while gas “ramped up” to cover it… LINK: <https://twitter.com/i/timeline>

  • Eric Topol: ’Update of anaphylaxis from mRNA vaccines: 66 cases out of ~18 million vaccinations (=0.0003%). All but 1 within 11 minutes. No deaths <https://jamanetwork.com/journals/jama/fullarticle/2776557?guestAccessKey=b2690d5a-5e0b-4d0b-8bcb-e4ba5bc96218>. That almost all occur in women needs to be understood… LINK: <https://twitter.com/EricTopol/status/1360308061219430401>

  • Ryan Lizza’"NEW: 2024 primary poll shows Trump dominating: Donald Trump 53% Mike Pence 12% Donald Trump Jr. 6% Nikki Haley 6% Mitt Romney 4% Ted Cruz 4% Marco Rubio 2% Mike Pompeo 2% Josh Hawley 1% Tom Cotton 1% Tim Scott 1% Kristi Noem 1% Larry Hogan 1% Rick Scott 0%… LINK: <https://twitter.com/RyanLizza/status/1361677723576500233>

  • Joe StudwellHow Asia Works: Success & Failure In the World’s Most Dynamic Region LINK: <https://books.google.com/books?id=dNs33Q1cAX0C>

  • WikipediaIbn Battuta LINK: <https://en.wikipedia.org/wiki/Ibn_Battuta#Spain_and_North_Africa>

  • Chalmers JohnsonMITI & the Japanese Miracle: The Growth of Industrial Policy, 1925–1975 LINK: <https://books.google.com/books?id=bbGlwsjW-ekC>

  • Michael Porter, Mick Takeuchi, Mariko SakakibaraCan Japan Compete? LINK: <https://books.google.com/books?id=QYSwwQEACAAJ>

  • Henry FarrellIn Praise of Negativity: ‘We need negative criticisms from others, since they lead us to understand weaknesses in our arguments that we are incapable of coming at ourselves… LINK: <https://crookedtimber.org/2020/07/24/in-praise-of-negativity/>

  • Josh GansA Culture in Despair: ‘In the immediate aftermath of Zola’s “J’Accuse” in 1898, mobs took to the street throughout France. The cries of “Long Live the Army” and “Death to the Jews” intermingled…. But it was in France’s colonial possessions, specifically in Algeria, that “a veritable crisis of anti-Jewish hysteria occurred”…. The riots across of France… were the product of concerted organization and agitation. Antisemitic posters… antisemitic conferences… antisemitic press. The Catholic press, not to be outdone, was increasingly packed anti-Jewish articles… LINK: <https://johnganz.substack.com/p/a-culture-in-despair>

  • Noah SmithDon’t Give Up on Bringing Manufacturing Back to the U.S.: ‘By offering Americans a concrete… instead of leaving it up to the… market, the… Reshoring Initiative may be able to gather broad support for a cohesive growth strategy, even if it isn’t a perfect one…. Leaving industrial policy to the whims of the market has hit the point of severely diminishing returns, so it’s time to brainstorm new approaches.…LINK: <https://www.bloomberg.com/opinion/articles/2020-06-12/don-t-give-up-on-bringing-manufacturing-back-to-the-u-s?sref=R8NfLgwS>

  • WikipediaTrimalchio: ‘Trimalchio is a character in the 1st century AD Roman work of fiction Satyricon by Petronius. He plays a part only in the section titled “Cēna Trīmalchiōnis”…. Trimalchio is an arrogant former slave who has become quite wealthy by tactics that most would find distasteful. The name “Trimalchio” is formed from the Greek prefix τρις and the Semitic מלך (melech) in its occidental form… “Thrice King” or “greatest King”…. His full name is “Gaius Pompeius Trimalchio Maecenatianus”; the references to Pompey and Maecenas in his name serve to enhance his ostentatious character. His wife’s name is Fortunata, a former slave and chorus girl… LINK: <https://en.wikipedia.org/wiki/Trimalchio>

  • Equitable GrowthBoosting Wages for U.S. Workers in the New Economy: ‘The U.S. labor market is shackled by decades of wage stagnation… persistent wage disparities… sluggish economic growth…many families ill-prepared for the “stress test” of the coronavirus recession…. Boosting Wages for U.S. Workers in the New Economy, a joint effort of Equitable Growth and the Institute for Research on Labor and Employment at the University of California, Berkeley… LINK: <https://equitablegrowth.org/boosting-wages-for-u-s-workers-in-the-new-economy-book>


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Ta-Nehisi Coates: When Every Word Does Not Belong to Everyone:

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Six Paragraphs-Plus:

This I enthusiastically endorse: Figuring out that on Twitter you have a right—nay, stronger than a right: you have a duty—to not mute but block people even if all they do is just waste your time is essential to having a good life.

Either that, or drop Twitter entirely.

In an attention economy, grabbing your attention uselessly is a cognitive attack on your mind. Such cognitive attacks need to be stopped:

Zeynep Tufekci’I try not to block actual criticism but things I’ve started pretty much automatically blocking to make Twitter usable: Snitch-tagging; “Oh you’re surprised?” reply guys; People who respond to an article I wrote with a point made in the article as if I could have no idea. People who respond to an article I wrote with a point made in the article as if I could have no idea. I started blocking them! There are people who sit on their keyboards all day telling others—who never asked them—that what they just said is obvious. And then others reply to them. And then my mentions are unusable. I’ve never had a useful interaction with any of the above categories, and they are just cluttering up my mentions especially since others then respond to them, and it’s an endless, pointless series of pings that hide any signal that may hide in my mentions.

I didn’t tag someone already on Twitter myself? Yeah, I’m not an idiot, thank you. Immediate block if you tag them in my mentions. Go talk to them separately if you want. People wanting to start fights are not doing something healthy and life’s too short. You think my points are obvious? Happy to relieve you of them! Especially since “oh, you’re surprised” adds nothing whatsoever. Point out something obvious I missed? I’m grateful. Object to it substantively? Grateful. Just uselessly smug? On your own time and dime. Finally, I write a lengthy, detailed article about something. Someone comes with a “have you tried rebooting it” type comment as if I’m a novice, and an idiot, and clueless? I used to tolerate and then realized nothing good ever comes out of that because of the clutter they add…. These categories have a lot of repeat offenders so blocking just a few useless repeat offenders really improved my mentions.

Why not mute? I tried. Because people reply to them (which I see) and others see them and affects the quality of the discussion I do want to have, and also because snitch-taggers can work even when muted. I mute some non malicious people who just say the same thing a lot….

This is an attempt to be able to hear real criticism and feedback in my mentions. If I don’t do this, the roar of the people who make the most obvious points back to me or are just uselessly smug will drown others out. The smug and stupid minority are very repetitive…

LINK: <https://twitter.com/zeynep/status/1361680717416177664>


Most of you, gentle readers, do not realize what the right-wing fever swamp created by Rush Limbaugh and company is really like. Here is a sample. This is what they are hearing. But do note that even Frank Salvato is not with the program. He is supposed to say that there were more Trump voters than Biden voters—80 million plus. That he forgets this and says “75 million” is a tell of how little he himself believes what he writes, and how much it is a conscious grift:

Frank SalvatoIt’s Time for Mitch McConnell to Go: ‘I am taking square aim at one of our own, not to remove him from office—no I will not acquiesce to the “cancel culture” lunacy, but to demote him from leadership…. The words of the highest-ranking Republican in Washington, DC, currently, Sen. Mitch McConnell (R-KY). And more inaccurate and unproductive they could not be. First and foremost, I reject that there was no chicanery in the 2020 General Election. We had a cowardly US Supreme Court that refused to hear a seminal case in whether states whose executive branches formulated election law in fact violated the US Constitution, as the Constitution vests that power solely with the state legislatures. We had routine violations of election law in several key states—and within those states critical urban areas—that saw poll watchers and credentialed Republican election officials tantamount to being forcefully excluded from the ballot counting process….

McConnell should have been screaming about [these] in real time…. The man who should have been leading the charge for the Republican rank-and-file was sitting on his hands, too concerned with retaining his own seat and, in fact, riding on President Trump’s accomplishment coattails to do so…. McConnell single-handedly lost the two run-off races in Georgia with his blunder about not wanting to pass a $2,000 COVID relief package…. And how do Republicans in Washington, DC, punish McConnell for his failures, for his disloyalty, for his selfish exploitation of his elected position? They re-elect him to leadership, this time as Senate Minority Leader. How stupid are the Senate Republicans to do this? I have to say abundantly so.

McConnell wasn’t done with his caustic, unproductive screed—a screed that, mind you, offended 75 million voters (how stupid is McConnell?): “President Trump is still liable for everything he did while he’s in office…He didn’t get away with anything yet.”… A person who holds these positions and who has presided over the litany of failures, such as McConnell has, who has effectively forced the Republican Party to be subservient to a group of people who actually hate the United States, well, that person—Mitch McConnell—should not be in a position of leadership, and most definitely not the Senate Minority Leader…

LINK: <https://www.gopusa.com/?p=106550?omhide=tru>


A right wing made of of grifters and grifters has been a feature of American political life for a long long time now:

Steve PerlsteinThe Long Con: ‘Mitt Romney is a liar. Of course, in some sense, all politicians, even all human beings, are liars. Romney’s lying went so over-the-top extravagant by this summer, though, that the New York Times editorial board did something probably unprecedented in their polite gray precincts: they used the L-word….

There are lies, damned lies, statistics—like his assertion that his tax cut proposal won’t have any effect on the federal budget, which the Tax Policy Center called “not mathematically possible.” That frank dismissal vaulted the candidate into another category of lie, an attempt to bend time itself: Romney responded by calling that group “biased”; last year, he called them “objective.”… Ann Romney told the right-wing site Newsmax.com that her husband had “always personally been prolife,” though Mitt had said in his 1994 Senate race, “I believe that abortion should be safe and legal in this country.” And then Ann admitted a few sentence later, “They say he flip-flopped on abortion. Well, you know what? He did change his mind.”…

In 2007… I mainlined a right-wing id that was invisible to readers who encounter conservative opinion at face value…. Back in our great-grandparents’ day, the peddlers of such miracle cures and get-rich-quick schemes were known as snake-oil salesmen. You don’t see stuff like this much in mainstream culture any more; it hardly seems possible such déclassé effronteries could get anywhere in a society with a high school completion rate of 90 percent. But tenders of a 23-Cent Heart Miracle seem to work just fine on the readers of the magazine where Ann Coulter began her journalistic ascent in the late nineties by pimping the notion that liberals are all gullible rubes….

HumanEvents.com… featured an article headlined “Ideas Will Drive Conservatives’ Revival.” Two inches beneath that bold pronouncement, a box headed “Health News” included the headlines “Reverse Crippling Arthritis in 2 Days,” “Clear Clogged Arteries Safely & Easily—without drugs, without surgery, and without a radical diet,” and “High Blood Pressure Cured in 3 Minutes… Drop Measurement 60 Points.”…

The history of that movement echoes with the sonorous names of long-dead Austrian economists, of indefatigable door-knocking cadres, of soaring perorations on a nation finally poised to realize its rendezvous with destiny… [not] the massive intersection between the culture of “network” or “multilevel” marketing—where ordinary folks try to get rich via pyramid schemes that leave their neighbors holding the bag….

And yet this stuff is as important to understanding the conservative ascendancy as are the internecine organizational and ideological struggles that make up its official history—if not, indeed, more so. The strategic alliance of snake-oil vendors and conservative true believers points up evidence of another successful long march, of tactics designed to corral fleeceable multitudes all in one place—and the formation of a cast of mind that makes it hard for either them or us to discern where the ideological con ended and the money con began…

LINK: <https://thebaffler.com/salvos/the-long-con>


Clubhouse as Tik-Tok for podcasts? Perhaps?

Ben ThompsonClubhouse’s Inevitability: ‘The fact that audio can be consumed while you are doing something else allows the immediacy and vibrancy of live conversation to shine…. Make no mistake, most of these conversations will be terrible. That, though, is the case for all user-generated content. The key for Clubhouse will be in honing its algorithms so that every time a listener opens the app they are presented with a conversation that is interesting to them. This is the other area where podcasts miss the mark…. Sometimes—a lot of times!—users just want to scroll their Twitter feed instead of reading a long blog post, or click through Stories or swipe TikToks, and Clubhouse is poised to provide the same mindless escapism for background audio….

Why now?… Hardware… how easy AirPods make it to drop into and out of audio-listening mode…. COVID… last April… despite its very rough state it provided a place for people to socialize when there were few other options…. Any suggestion that Clubhouse is limited to Silicon Valley is very much off the mark…

LINK: <https://stratechery.com/2021/clubhouses-inevitability/>


Telling the truth and being fair appears way way down on the priorities of many—most?—NYT reporters these days. Scott Alexander Simkins has a receipt":

Scott Alexander Simkins: Response to NYT Article: “This is undoubtedly the version [Cade Metz] read, and he still chose to make this attack. I have 1,557 other posts worth of material he could have used, and the sentence he chose to go with was the one that was crossed out and included a plea for people to stop taking it out of context…

LINK: <https://astralcodexten.substack.com/p/statement-on-new-york-times-article>


More generally, in the case of Scott Alexander Simkins vs. Cade Metz before the bar of public opinion, I don’t think New York Times reporter Cade Mertz has it right, or did an honest or an honorable competent job here. If the New York Times had an ombudsman, it could defend him and try to change my mind. But it doesn’t. So I can. And I go with Noah Smith’s judgment here. Not as unprofessional as the semi-daily “Ivanka and Jared are working hard to save us all” that the New York Times printed over 2015–2019. But pretty unprofessional all the samel:

Noah SmithSilicon Valley Isn’t Full of Fascists: ‘Eight months later, that article is finally out, and it’s every bit as negative as [Scott Alexander Siskind] feared… draws conclusions… I don’t think are warranted… both draws on and feeds into the mistaken stereotype that Silicon Valley is full of right-wingers…. I don’t think sustaining this misconception is good for America…. Cade Metz… “[Slate Star Codex was] the epicenter of… the Rationalists… [which] included white supremacists and neo-fascists… a window into the Silicon Valley psyche…. The allure of the ideas within Silicon Valley is what made Mr. Alexander, who had also written under his given name, Scott Siskind, and his blog essential reading…”

I always get annoyed at the narrative that Silicon Valley is rife with fascists—a narrative that I feel that Metz’ Times story unfortunately furthers. In reality, the tech industry is almost entirely a bunch of liberals…. In 2020… the internet industry gave 92% of its donations to Democrats!…. “Online computer services”… was the third most liberal industry… more liberal than newspapers and print media!…. A safe space for fascists, this is not. Metz, being a technology correspondent, must know all this….

The narrative of a pipeline of fascist ideas from Rationalist blogs to the minds of the powerful people building the future is certainly a juicy one, but it just doesn’t have much evidence to back it up. Silicon Valley is a bastion of liberalism, tech founders are standard liberal nerds, and Rationalism is a niche subculture primarily concerned with navel-gazing about Bayes’ Rule, utilitarianism, and robots…

LINK: <https://noahpinion.substack.com/p/silicon-valley-isnt-full-of-fascists>


Hoisted from the Archives

Reasoning and Cogitation—by Individuals, by Social Groups, & by Societies: I am all but certain to never teach a course on: Reasoning—Indivdual, Social, and Societal. But if I were to teach such a course, would this be the best reading list? And if not these readings, what would be better replacements: William PoundstoneLabyrinths of Reason… Hugo Mercier and Dan SperberThe Enigma of Reason… Daniel KahnemanThinking, Fast and Slow… T. M. ScanlonBeing Realistic about Reasons… Joshua D. Angrist and Jörn-Steffen PischkeMostly Harmless Econometrics… Judea Pearl & Dana Mackenzie): The Book of Why… William FleschComeuppance… Josiah OberDemocracy & Knowledge… Henry Farrell & Cosma Shalizi: "Cognitive Democracy"… Cosma Shalizi: "In Soviet Union, Optimization Problem Solves You"… Herbert SimonThe Sciences of the Artificial… Partha DasguptaEconomics: A Very Short Introduction… Milton Friedman & Rose Director Friedman: Free to Choose… Tom SleeNo One Makes You Shop At Walmart… Paul SeabrightThe Company of Strangers… Richard Thaler (2015): Misbehaving…

LINK: <https://www.bradford-delong.com/2018/12/reasoningindividual-social-and-societal.html>

 


Breaking Out of Agrarian-Age Malthusian Near-Stagnation, & Review: History of Economic Growth: 2021-02-16 Tu 09:30 PST: Econ 135

<https://berkeley.zoom.us/j/7744601602>

<https://github.com/braddelong/public-files/blob/master/econ-135-3.3.5-zoom.pptx


 

Breaking Out of Agrarian-Age Malthusian Near-Stagnation, & Review: History of Economic Growth: 2021-02-16 Tu 09:30 PST: Econ 135
<https://www.typepad.com/site/blogs/6a00e551f08003883400e551f080068834/post/6a00e551f0800388340263e9908d0a200b/edit>
<https://www.bradford-delong.com/2021/02/breaking-out-of-agrarian-age-malthusian-near-stagnation-review-history-of-economic-growth-2021-02-16.html>
<https://github.com/braddelong/public-files/blob/master/econ-135-3.3.5-zoom.pptx> <https://www.icloud.com/keynote/0kwDC9Z9kYvID010bRNtRiWJQ#econ-135-3.3>


For President's Day: A Republic, If We Can Keep It

I do not know what today's Republicans want America to be, but it is certainly not a democratic republic. And it is certainly not any form of "populism" that I am aware of. Perhaps we should classify their goal as a minority ethnocentric demogocracy? "Neofascist" still seems the best word to me, but I am told that is much, much, much too impolite to use, even on the internet:

No, Alexander Hamilton was not a president. But he should have been:

Alexander Hamilton (1787): America as "Grand Experiment": Federalist #9: It is impossible to read the history of the petty republics of Greece and Italy without feeling sensations of horror and disgust at the distractions with which they were continually agitated, and at the rapid succession of revolutions by which they were kept in a state of perpetual vibration between the extremes of tyranny and anarchy…. From the disorders… advocates of despotism have drawn arguments… against the forms of republican government… [and] decried all free government as inconsistent with the order of society…. I trust America will be the broad and solid foundation of other edifices… which will be… permanent monuments of their errors.

But it is not to be denied that… if it had been found impracticable to have devised models of a more perfect structure [than the petty republics of Greece and Italy], the enlightened friends to liberty would have been obliged to abandon the cause of that species of government as indefensible. The science of politics, however… has received great improvement… distribution of power into distinct departments… balances and checks… judges holding their offices during good behavior… representation of the people… by deputies of their own election… are means, and powerful means, by which the excellences of republican government may be retained and its imperfections lessened or avoided…

LINK: <https://www.gutenberg.org/cache/epub/18/pg18.html>


Plus, as always:

Four score and seven years ago our fathers brought forth on this continent, a new nation, conceived in Liberty, and dedicated to the proposition that all men are created equal. Now we are engaged in a great civil war, testing whether that nation, or any nation so conceived and so dedicated, can long endure….

It is rather for us to be here dedicated to the great task remaining before us—that from these honored dead we take increased devotion to that cause for which they gave the last full measure of devotion—that we here highly resolve that these dead shall not have died in vain—that this nation, under God, shall have a new birth of freedom—and that government of the people, by the people, for the people, shall not perish from the earth.


Briefly Noted for 2021-02-11

Very Briefly Noted:


Next: A Video Well Worth Your Watching:

Alan Krueger, Richard Blundell, &Arindrajit Dube (2016): RES Plenary Session: Minimum Wages <https://www.youtube.com/watch?v=mf2LWR0bBjs>:

Share Grasping Reality Newsletter, by Brad DeLong


Seven Paragraphs:

Back in 1993, the expanded EITC for childless workers was one of the last things the Clinton Treasury threw out of the wolf-pursued troika as we dashed through the snow in the race to get the Clinton reconciliation bill across the finish line. “We will fix it next year”, we promised ourselves then. Nobody ever has:

Cynthia Miller & Lawrence F. KatzBiden Wants to Boost the EITC for Workers without Dependent Children—What Does the Research Say?: ‘Many commentators have expressed the hope that the inequalities exposed by the pandemic will lead to renewed efforts to address them by expanding the social safety net and by providing basic protections for workers. An expanded EITC can be an effective part of this effort, increasing workers’ incomes (without depressing work effort) and putting them in a better position to recover from this crisis and weather the next… LINK: https://thehill.com/opinion/finance/538298-biden-wants-to-boost-the-eitc-for-workers-without-dependent-children-what?rl=1#.YCUykA0cLq8.twitter


Really, really cool EDA by one of our graduate students here at Berkeley:

Emily Murphy EisnerDoes Telework Harm Older Workers? A First Look at Technological Change Spurred by COVID–19: ‘I categorized occupation groups by whether or not they had above median or below median take-up of teleworking technology during the pandemic…. Being able to work from home during the pandemic helped…. In high-teleworking occupations, there is a clear increase in the likelihood of facing unemployment as a worker ages. The positive relationship between age and unemployment is not seen in professions that don’t have a high take-up of teleworking technologies…. A good change (working from home to save lives during a pandemic) can find the cracks in our system and do harm (in this case, reducing job security for older workers). Studying this technological change will help us identify these issues, and bolster the gaps… LINK: https://emilymurphyeisner.substack.com/p/technological-change-during-covid


The media diet of Republican stalwarts: a sample:

Christopher G. AdamoCan a Phony Impeachment ‘Validate’ a Stolen Election?: ‘Honest Americans are aghast at the seeming obsession of leftist Democrats (with support from the usual cadre of RINO traitors) to continue pursuing a wholly unprecedented, unwarranted, and unconstitutional “impeachment” of President Trump after he is no longer in the White House. A little “Constitution 101” for those who are in doubt, the sole purpose of impeachment is to remove an unfit occupant from office. In the wake of the stolen 2020 election, President Trump is already out. So absolutely no legal premise can be claimed for this latest bout of leftist Democrat idiocy. As a result of the flagrant chicanery that occurred on Election Day and in its aftermath, Americans who believe in honesty and decency are outraged. And given the enormity of actual turnout for Trump in the 2020 election, that is a massive number of people who remain adamant that the election theft be dealt with. Allowing it to stand abominates and nullifies the Constitution and the rule of law in America.

In response, leftists are redoubling their efforts to suppress, and ultimately erase, any mention of the theft, vainly hoping that the current situation will at some point be regarded as “normal.”… But Americans aren’t buying any of it, so the left has to continually expand its efforts.Make no mistake. President Trump is not the actual target of this onslaught. The second sham impeachment is… an indictment and conviction of the eighty million (and likely more) Americans who voted for him last November. The goal of the leftist Democrats is to tell us that our President, and more importantly our votes, are “invalid.” But their success in convincing us to shut up and grant them this uncontested power is by no means guaranteed. The scheme will either succeed or fail based entirely on whether or not Americans allow themselves to be cowed into abandoning reality under threats and pressure from the left…

LINK: <https://www.gopusa.com/?p=106234?omhide=true>


I am thinking this is right—that the inflation of the 1970s was not due to “overheating”, but rather to (a) a high gearing of inflation expectations on recent past inflation taught the economy in the late Johnson and first Nixon administration, (b) the productivity shocks, (c) the oil shocks, and (d) the fact that markets coordinated on the signal provided by spot oil prices—never mind that not that much oil ever moved at the spot price. But Paul could be wrong. I could be wrong:

Paul KrugmanStagflation Revisited : In the 1970s… the economy never seemed to run hot enough to explain such a big rise in inflation…. So what happened? The natural explanation would emphasize supply shocks—oil and other commodity prices—amplified by the widespread existence of cost-of-living adjustments in wage contracts. Maybe these supply shocks led to a rise in headline inflation which caused expectations to become untethered. We don’t know… more work… is appropriate. But suppose something like this is true. In that case, the narrative that saw stagflation both as the cost of excessively ambitious macroeconomic policy and as a vindication of conservative economic ideas was mostly wrong. And that matters not just for history but for policy right now, which is still to some extent constrained by the fear of a 70s repeat…

LINK: https://paulkrugman.substack.com/p/stagflation-revisited


In an age of neofascist threat and viral dysfunctional political debate, central banks appear to be one of the few still fully-functional far-sighted institutions still around. Hence the demand that they take on more missions. I share Barry’s belief that this demand should be accommodated": those who can do, should do:

Barry EichengreenNew-Model Central Bank: ‘Monetary authorities are increasingly expected to address issues such as climate change and inequality, over the objections of those who insist that central banks’ narrow mandate is what sustains their operational independence. But ignoring these issues, or saying they’re someone else’s problem, is no longer an option…. The US Federal Reserve’s Paycheck Protection Program Liquidity Facility, under which the Fed provides liquidity to lenders who extend loans to small businesses in pandemic-related distress. This, clearly, is not your mother’s central bank. Now we hear calls to broaden this ambit still further…. Such calls horrify central-banking purists…. Central bankers cannot snooze quietly in their bunks in the face of an all-hands-on-deck emergency. Calls for central banks to address climate change and inequality reflect an awareness that these problems have risen to the level of existential crises. If central bankers ignored them, or said, “These urgent problems are best addressed by someone else,” their response would be seen as a haughty and perilous display of indifference. At that point, their independence would truly be at risk…

LINK: https://www.project-syndicate.org/commentary/central-banks-have-tools-for-climate-change-and-inequality-by-barry-eichengreen-2021-02


Oooh! This will be fun to watch:

William JanewayVenture Capital in the 21st Century: ‘In this eight-part lecture series, Bill Janeway investigates the relationship between venture capital and technological innovation, and the interdependent roles of entrepreneurial firms, the mission-driven State and financial speculation in the overall innovation system…

LINK: https://www.ineteconomics.org/perspectives/videos/venture-capital>


And for a preview of what Bill will be talking about at INET:

Nicolas ColinThe Digital Economy w/ Bill Janeway. Reinvention. Bezos. Musk. Communications: ‘a conversation with Bill Janeway, an economist, faculty member at Cambridge University, and author of the landmark book Doing Capitalism in the Innovation Economy. It’s a book that really has had a profound influence on me—basically containing everything you need to know about how venture capital came to be and why it’s so relevant today in the context of the transition to the digital economy. Bill’s long career in venture capital, primarily with Warburg Pincus, and his academic work let him comment on today’s economy from both a business and an institutional perspective….

I consider myself, and the world at large, really, to be quite lucky that he is also such an affable person and generous with his time and thinking. Our conversation spanned how he’s experienced the very strange year that was 2020, his thesis regarding the retreat from hyperglobalization, the consequences of Joe Biden’s election on America, the world at large, & the tech industry specifically, how he sees Europe’s future, and much more… LINK: 

<https://europeanstraits.substack.com/p/the-digital-economy-w-bill-janeway>


Damned-Soul Republican Staffers

<https://braddelong.substack.com/p/damned-soul-republican-staffers-and>

First, why do people do this?:

What Fresh Hell Do Republican Staffers Live in?:

Tweeting out that the COVID threat has been overhyped by Democrats while your boss lies dying in the hospital from COVID—this is a form of performance art that I never imagined would appear, even in this Fallen Sublunary Sphere. Yet first Republican presidential candidate Herman 9-9-9 Cain, and not Republican House member Ron White:

Patricia Kayden: ’Just before he died, Republican Rep [Ron White] sent out these tweets: "Democrats are choosing teachers unions and special interests over the well-being of our students. The CDC says schools can safely re-open if proper precautions are taken. What are we waiting for?…

Reporter Robinson: ’So this man was on his deathbed in a hospital and his staffers were pushing covid hoax bulls— while hiding his hospital admission. Now he’s dead. From covid. Republicans… LINK: <https://twitter.com/djfoxxtrott/status/1358810722210226177> 

MistermixHow Can People Be So Heartless?: ‘Rep Ron Wright (R-TX–6), a man who once said that women should be punished for having abortions, since they had committed murder, has died of COVID–19.  Wright was under treatment for lung cancer, apparently for quite a while, so he had an obvious, serious comorbidity…. Our family managed to keep mom from contracting COVID.  It was a hell of a lot of frustrating, difficult work. It involved great sacrifice, and, at every turn, our work was made harder by Republicans, who chose to make COVID a political issue rather than a medical one. There were a number of close calls caused by covidiots, and a huge amount of extra anxiety because of the unwillingness of Fox-addled small-town Republicans to take basic precautions.  Nevertheless, we persisted…. I’m guessing that Wright’s three children and his wife cared about him. And who knows? Maybe he was very careful, and was just unlucky.  But, given the behavior of most of the House Republican sedition caucus, of which he was a member, my guess is that he was careless. Now he’s dead, like ~450,000 other Americans, in part because his party refused to take COVID seriously…

LINK: https://www.balloon-juice.com/2021/02/08/how-can-people-be-so-heartless/

You literally could not make this up. Or, rather, you could only make this up if you were a sick, psychotic creep…


Briefly Noted: for 2021-02-10 We

<https://braddelong.substack.com/p/substack-navel-gazing-and-briefly>

In which I survey things that whizzed by...

Very Briefly Noted:


Next: A Video Well Worth Your Watching:

The intellectual and technological capability of Classical Greek civilization, as shown in the (reconstructed) design of the Antikythera Mechanism:

M. Wright & M. VicentiniVirtual Reconstruction of the Antikythera Mechanism


Seven Paragraphs:

Erik LoomisThe Bankruptcy of Right Populism: ‘Daniel Luban has a good piece in Dissent about the total bankruptcy of so-called “right populism”…. ’To no great surprise… instead of an infrastructure bill, there was a massive corporate tax cut; instead of a family leave plan, there was a failed attempt to strip healthcare from tens of millions of people…. a familiar cast of industry shills set to work dismantling labor rights and environmental protections. Trump’s most durable accomplishment was the rubber-stamping of scores of Federalist Society judges, each one a devoted steward of the interests of capital… LINK: <https://www.lawyersgunsmoneyblog.com/2021/02/the-bankruptcy-of-right-populism>


Dani RodrikPoor Countries’ Technology Dilemma: ‘Africa’s manufacturing renaissance… [but] few good jobs have been created in the more modern, formal, and productive manufacturing branches…. The bulk of the increase in manufacturing employment coming from small, informal enterprises. This experience stands in stark contrast with that of the rapid industrializers of East Asia…. Large firms in the manufacturing sectors of Tanzania and Ethiopia to be significantly more capital-intensive than these countries’ income levels or factor endowments would suggest… as capital-intensive as firms in the Czech Republic…. African economies [are] in a bind. Their manufacturing firms can either become more productive and competitive, or they can generate more jobs. Doing both at the same time seems very difficult, if not impossible…. This is yet another reason for a public debate on the direction of technological change and the tools that governments have to reorient it… LINK: <https://www.project-syndicate.org/commentary/poor-countries-technology-dilemma-by-dani-rodrik-2021-02>


Noah SmithLarry Summers’ Misplaced Stimulus Anxiety: ‘Moderates are worried for instinctive reasons—the debt just sorta seems Really Big…. Cutting Biden’s relief package in half wouldn’t… change that…. Republicans… are “worried” for political reasons… quick enough to support deficits when the President is a Republican. Then, like clockwork, they flip…. Cutting Biden’s relief package in half wouldn’t alter this…. Put lots more investment in the relief bill. There’s no reason we can’t do this—in fact, we already did it in the December COVID bill! Yes, pandemic relief comes first, but we can start scheduling investment projects for a year or two years from now…. It… seems unlikely that we can increase the chances of getting a big investment package passed later by slashing the size of COVID relief today. Instead, this seems like just another example of the kind of self-defeating preemptive concession-making that hobbled Obama’s first term.… LINK: https://noahpinion.substack.com/p/larry-summers-misplaced-stimulus


Patrick WymanMesopotamia and the Dawn of History: ‘Cities, writing, and states… didn’t actually appear in the Fertile Crescent proper, where the cultivated grasses grew under the steady and predictable rainfall and domesticated animals had plenty of forage. Instead, they showed up some way to the south of that pleasant zone… at the edges of the great marshes… the richest spot in the landscape… full of fish, waterfowl, and edible plants… reeds… for boats, houses, and a variety of other purposes…. Eridu… was soon joined by others. Uruk… had tens of thousands of inhabitants, trade routes that stretched as far as the Eurasian steppe, and enormous collections of temples and palaces. That was where writing and maybe the state were born… LINK: <https://patrickwyman.substack.com/p/mesopotamia-and-the-dawn-of-history>


Paul KrugmanFighting Covid Is Like Fighting a Wars: ‘The pandemic slump isn’t a conventional recession… more like a natural disaster… the appropriate policy… is… disaster relief…. Winning… means… a huge vaccination program… limiting the economic misery of families whose breadwinners can’t work… avoiding gratuitous cuts in public services…. And that’s what the American Rescue Plan mostly involves…. Medical spending, school aid, aid to the unemployed, and help for state and local governments dominate the plan. And there’s a good case for those checks, too; more about that later….

Emergency spending may not be intended as stimulus, but it nonetheless has a stimulative effect. And wartime surges in spending have often been accompanied by bursts of inflation.… So is that something that might happen this time? Yes, it might. But we don’t know for sure that it will. And to the extent that inflation is a risk, that’s an argument for seeking ways to limit that risk, not for skimping on Covid relief.

How big is the inflation risk?… There are… three reasons not to get too worked up about the package-gap comparison…. Nobody knows how big the output gap really is…. The Biden plan is… less stimulative than the topline number…. The Federal Reserve can tighten monetary policy…. There is a faint but disturbing echo here of the debate over austerity a decade ago, when advocates of fiscal tightening despite high unemployment kept inventing new theories on the fly to justify their position…

LINK: <https://www.nytimes.com/2021/02/07/opinion/covid-biden-economy-stimulus.html>


Alvaro Calderon, Vasiliki Fouka, & Marco TabelliniRacial Diversity, Electoral Preferences, & the Supply of Policy: ‘The 1940–1970 Great Migration of African Americans…. How resulting changes in the racial composition of local constituencies affected voters’ preferences and politicians’ behaviour…. Democrats and union members supported blacks’ struggle for racial equality, but that backlash against civil rights erupted among Republicans and among whites who more exposed to racial mixing…. Politicians largely responded to demands of their constituencies…. Under certain conditions, cross-race coalitions…. Changes in the composition of the electorate can polarise both voters and politicians… LINK: https://voxeu.org/article/racial-diversity-electoral-preferences-and-supply-policy


Peloton InfoSec Analyst (Incident Response)’The claim that the president’s words could not be reasonably seen as a call to violence is kind of refuted by the fact that, you know, it was. there was violence. he said the thing, and then they did the thing. It’s literally what happened… LINK: 


Hoisted from the Archives:

We Know Little About the Origins of High Patriarchy and the Extinction of Most Y-Chromosome Lineages ca. 5000 Years Ago, But…: ‘I do not see textiles as the problem. Yes, in the Odyssey Penelope, Kalypso, the 50 maidservants of Alkinous, Kirke, and the nymphs who are called Naiads are all spoken of as at their looms. Yes, the mother of Nausikaa, the 50 maidservants of Alkinous (again), Penelope (again), and the maidservants of Odysseus are all spoken of as at their spindles. Yes, in the Iliad Khryseis, Helen, Andromakhe, “a woman” are all spoken of as at their looms. yes, Andromakhe (again), “the fair spinster”, and Kryseis are all spoken of as at their spindles. Textile work is (or does not have to be) not drudgery—it is (or can be) a very social activity, for to an experienced seamstress or spinner of weaver the cognitive load of the task is not large enough to discourage conversation.

Instead, I blame the Yamnaya: the Aryans, the Indo-Europeans, the Masters of the sword, the wheel, and the bow, who spread fire and sword and the chariot and the steed from Gibraltar and Cape Finisterre to the Deccan and even to the upper reaches of the Yellow River…

LINK: https://www.bradford-delong.com/2018/07/we-know-little-about-the-origins-of-high-patriarchy-and-the-extinction-of-most-y-chromosome-lineages-ca-5000-years-ago-but.html


SubStack Navel-Gazing

<https://braddelong.substack.com/p/substack-navel-gazing-and-briefly>

In which I turn my gaze inward...

why the weblogging Renaissance under the guise of SubStacking?:

What Does SubStack Say That Its Mission Is?:

Hamish McKenzieWelcome, Facebook and Twitter. Seriously: [When] we started Substack… we were concerned about… the attention economy…. Our addiction to social media is having negative effects on both individual and collective thought… doomscrolling… rage-monsters… conspiracy theory-addled mob[s]… poisoned information supply…. We have set out to show that platforms that put writers and readers in charge are just better. Substack… a calm space that encourages reflection… free of advertising or any other distraction… no addiction-maximizing feeds, autoplaying videos, or retweetable quote-retweets to suck you into a psychological space you never asked to be in…. Information… put into your brain based on… writers [who] reward your trust, not… a dopamine hit… performative posturing…. Calmness… is the real killer feature…

LINK: <https://blog.substack.com/p/welcome-facebook-and-twitter-seriously>

SubStack is… classical weblogging—but. What is the “but”? The “but” is:

  1. A very aggressive push of the post to the email inbox of the recipient, rather than waiting for the recipient to come surfing by, with perhaps an rss-flag tickler to remind readers to come by. A subscription email with a website attached, rather than a website with a push RSS feed attached.

  2. A very, very aggressive focus on what used to be called the tip jar, which hath now fed upon that meat upon which Cæsar doth feed and grown great, and morphed into a paywall.

  3. A focus on longer-form—a newsletter rather than a log of readings and reactions. (That, however, may not turn out to be the stable form of whatever medium it turns into: Adrian Hon’s <http://mssv.net> used to have three columns—links with a phrase or a sentence, paragraphs, and essays.)

SubStack is—like Medium <http://medium.com> before it—at one level an explicit reaction to the consumption and destruction of what appeared to be a growing weblog-based public sphere by Facebook, Twitter, Instagram, and company—each of which consumed part of the space, and each of which succeeded in generating superior dopamine-hit random-reinforcement engagement, which turned what I at least regarded as a functional and improving intellectual ecosystem into: the Net of a Million Lies.

I guess the game is to return Facebook to its role of posting updates for family and friends; to turn Twitter into SubStack’s comment section, and to, as Hamish writes up top, provide “a calm space that encourages reflection… free of advertising or any other distraction… no addiction-maximizing feeds, autoplaying videos, or retweetable quote-retweets to suck you into a psychological space you never asked to be in…”

Will it work? Probably not. Can it be worse than Zuckerberg’s or Dorsey’s firehoses of fear-generating misinformation? Almost surely not. Thus it is, I think, worth trying.

As Noah Smith said on the inaugural edition of our Hexapodia podcast <https://braddelong.substack.com/p/hexapodia-is-the-key-insight-i-relief> <https://api.substack.com/feed/podcast/47874.rss>, we have already tried everything else, with less persistent success than Sisyphus.

 

& more on what we hope to do with our Hexapodia podcast in the future…

SF Masterworks cover of Vernor Vinge: A Fire Upon the Deep <https://www.amazon.com/dp/B00AVUMIZ> <http://www.isfdb.org/cgi-bin/titlecovers.cgi?1952>. Boris Vallejo did the first cover—I do not know who did this one.

 

 


The Harvard Administration's 35-Year Tolerance & Shielding of Sexual Harasser Jorge Dominguez; & Briefly Noted: 2021-02-08

Why am I always so effing naïve? Plus things that whizzed past. & some others as well...

 

I confess that I am so effing naïve.

Jorge Dominguez’s harassment of Terry Karl came to light in 1983: he told her "come across or your tenure case is toast.

I assumed that things thereafter would be under control. It was true that the Crimson wrote that “some professors said they were unhappy Rosovsky did not tell the department members what actions he took against Dominguez and complained that the reported punishment was too light. ‘There’s some feeling that the fact that there was supposed to be no publicity and the fact that he is still here are an inadequate deterrent for the future and an inadequate punishment for this case’, one professor said…” Nevertheless, I assumed that Dean Rosovsky or President Bok or both had told Dominguez, over a martini or two, that if any woman ever complained about him again he would be bounced out of Harvard University, and if the Harvard administration had anything to say about it, out of his profession as well.

But no: Thirty-five years. Not a single person in Massachusetts or University Halls or in the Political Science administrative offices… caring to do the overwatch. And Provost Newell’s words here do not fill me with confidence, for she does not say “top administrators intolerant of sexual harassment” but “accelerating progress toward a culture that is intolerant.”

I had thought Harvard had top administrators in 1983—and since—who were as horrified as I was—people who knew that female assistant professors were getting feedback like “your lectures are awful; they would be much better if you lectured naked”, and were working hard to change things.

Silly me:

Harvard Gazette & Deputy Provost Peggy NewellHarvard Issues Report on Sexual Harassment: ‘GAZETTE: What were the main findings of their report? NEWELL:  The committee’s report is incredibly thorough, and I would encourage community members to read it in its entirety. It clearly outlines several cultural and organizational factors that allowed [Political Science Professor Jorge] Domínguez to escape accountability [and for his academic and administrative career to flourish] for so long, and suggests concrete, actionable steps that Harvard can take to create an environment free from harassment and discrimination. These recommendations include: fostering greater “psychological safety” across our Schools and units, better communicating processes for reporting misconduct, achieving greater faculty gender balance, establishing standardized processes for vetting candidates, improving transparency around investigations and sanctions, monitoring employees with past infractions, and accelerating progress toward a culture that is intolerant of sexual and gender-based harassment, broadly. Some of these things we have been working on already. Other recommendations will be the foundation for new initiatives… 

LINK: https://news.harvard.edu/gazette/story/2021/02/harvard-issues-report-on-sexual-harassment/


Very Briefly Noted:

  • Siddharth Venkataramakrishnan‘Culture Warlords’ by Talia Lavin: ‘Far-right chatroom… members discussing whether she is too ugly to rape…. misogyny, anti-Semitism and white supremacy… undercover work in extreme-right spaces to draw out the poison…. Efforts to explain the alt-right proliferated throughout Donald Trump’s presidency, Lavin’s work… has a raw and deeply understandable anger. That is not to its detriment. All too often, analyses of white nationalism and the far-right have devolved into anodyne stories of “Nazis buy milk too”, or else created false equivalence with counter-protesters. Culture Warlords is a compelling read… LINK: <https://www.ft.com/content/fb635edc-d98b-4f4a-af81-d196e99143f8>

  • This “divisive”: what is divisive is not convicting Donald Trump. That would be very, very, very divisive indeed: Financial Times Editorial BoardThe US Senate Must Convict Donald Trump: ‘His trial for inciting insurrection is divisive but necessary… LINK: <https://www.ft.com/content/83911089-98e0-407b-9bd7-c7144de141b6>

  • Charlie SykesThe Prodigal Republicans: ‘Liz Cheney may not have been Never Trump, but she is clearly Never Again Trump, and that’s a beginning…. What do we do with the late arrivals?… Cheney… a loyal Trump lieutenant…. Sasse… voted with the president on his emergency declaration for the border wall, and against conviction…. But right now, both of them are saying the right things…. Welcome back the prodigals? Even the original parable acknowledges that this is not an easy call… LINK: <https://morningshots.thebulwark.com/p/the-prodigal-republicans>

  • John Burn-Murdoch & Mehul SrivastavaIsrael Provides First Signs of Mass Vaccination Driving Down Virus Cases: ‘Daily case[s]… 60 and above… fallen by 46%… a much smaller decline of 18 per cent among under–60s… LINK: <https://www.ft.com/content/0cdc8563-1e6d-4089-bedb-b0f675c0d683>


One Video:

Tony Freeth: The Anti-Kythera Device:


Seven Paragraphs:

Francis FukuyamaWhat Trump Showed Us About America: ‘The single most confounding thing about the Trump era is that we still do not really understand why more than 70 million Americans voted for Donald Trump, and why there remains a smaller core of fanatical supporters who will believe anything he says—most recently, that he won the election but that it is being stolen through voter fraud. Over the past several years, a legion of explanations for the Trump phenomenon have been put forward—that it is a backlash against the inequalities created by globalization, that it represents the fear of white voters fearing a loss of power and prestige, that is has been generated by social media companies, that it reflects a huge social divide between people living in big cities and those in smaller communities, that it is based on level of education, and so on. All of these factors are probably true to some extent, but none of them adequately explains the fear and loathing evident on the right in America today. There is a qualitative change in the nature of partisanship that conventional explanations fail to capture, reflected in poll data showing that a majority of Republican voters believe some version of QAnon theories about Democrats drinking children’s blood. Nor have I seen a good explanation for why so many conservatives can see such an imperfect vessel as Trump as the object of cultlike worship, or fear the Democrats as the embodiment of Satan. At the end of Trump’s term, what I’ve learned is that I really don’t understand America well at all… LINK: <https://www.politico.com/news/magazine/2020/11/19/roundup-what-trump-showed-us-about-america-435762>


Friedrich A. von Hayek (1988): The Fatal Conceit: ‘I certainly reject every anthropomorphic, personal, or animistic interpretation of the term [god].… The conception of a man-like or mind-like acting being appears to me rather the product of an arrogant overestimation of the capacities of a man-like mind…. Perhaps what many people mean in speaking of God is just a personification of that tradition of morals or values that keeps their community alive. The source of order that religion ascribes to a human-like divinity—the map or guide that will show a part successfully how to move within a whole—as we now learn to see to be not outside the physical world but one of its characteristics, one far too complex for any of its parts possibly to form an ‘image’ or ‘picture’ of it…. Perhaps most people can conceive of abstract tradition only as a personal Will. If so, will they not be inclined to find this will in ‘society’ in an age in which more overt supernaturalisms are ruled out as superstitions? On that question may rest the survival of our civilization…


Karl MarxTheories of Surplus-Value, Chapter 17The Childish Babble of a Say: ‘Incidentally, those economists are no better, who (like John Stuart Mill) want to explain the crises by these simple possibilities of crisis contained in the metamorphosis of commodities—such as the separation between purchase and sale.  These factors which explain the possibility of crises, by no means explain their actual occurrence.  They do not explain why the phases of the process come into such conflict that their inner unity can only assert itself through a crisis, through a violent process.  This separation appears in the crisis; it is the elementary form of the crisis.  To explain the crisis on the basis of this, its elementary form, is to explain the existence of the crisis by describing its most abstract form, that is to say, to explain the crisis by the crisis. “Ricardo says: “No man produces, but with a view to consume or sell, and he never sells, but with an intention to purchase some other commodity, which may be immediately useful to him, or which may contribute to future production.  By producing, then, he necessarily becomes either the consumer of his own goods, or the purchaser and consumer of the goods of some person.  It is not to be supposed that be should, for any length of time, be ill-informed of the commodities which he can most advantageously produce, to attain the object which he has in view, namely, the possession of other goods; and, therefore, it is not probable that he will continually produce a commodity for which there is no demand” [l.c., pp. 339–40].” This is the childish babble of a Say, but it is not worthy of Ricardo… LINK: <https://www.marxists.org/archive/marx/works/1863/theories-surplus-value/ch17.htm>


Noah SmithWelcome to Noahpinion: The Substack!: ‘Feels Good to be Blogging Again: ‘I started when I was a graduate student, continued during my years as an assistant professor, and then kept the blog going intermittently after I started writing professionally for Bloomberg Opinion… refine my thoughts… develop a voice… connect with other[s]…. Over the past few years, though, my blogging dwindled, as I shifted more and more of my commentary to Twitter. It’s time to go back. I’m definitely not giving up my awesome job at Bloomberg…. But there’s lots of stuff I want to write that I can’t put in those op-ed columns, and that stuff will all go here…. Twitter has become a dumpster fire of contentiousness, performativity, negativity, stupidity, and misinformation, and one solution is to go back to blogging. Blogs give readers time to digest and think about ideas, without being interrupted by random shouters with little context and lots of agenda. And they allow writers to insert nuance and elaboration… LINK: <https://noahpinion.substack.com/p/welcome-to-noahpinion-the-substack>


John GruberThe Rotting of the American Mind: ‘Kevin Dowd revealed himself to be well on his way to Kookville: “The Democrats remain mystified by the loyalty of Trump’s base. It is rock solid because half the country was tired of being patronized and lied to and worse, taken for granted…” Yes, yes, Trump’s base remains united behind him because they’re… tired of being lied to. That’s it. It’s certainly not that they’re tired of being told truths they do not want to hear: “A word of caution to Fox News: Your not-so-subtle shift leftward is a mistake. You are one of a kind. Watching the quick abdication of Bret Baier and Martha MacCallum following the election (joining an already hostile Chris Wallace) was like finding out my wife was cheating.” This treachery that Kevin Dowd equates to his wife cheating on him was acknowledging that Joe Biden soundly beat Donald Trump in the election. That’s not a leftward shift. It’s a statement of fact. A truth, inconvenient or not… LINK: <https://daringfireball.net/>


Bertrand Russell (1921): The Practice & Theory of Bolshevism: ‘The method by which Moscow aims at establishing Communism is a pioneer method…. I do not believe that by this method a stable or desirable form of Communism can be established…. I think these elements of failure are less attributable to faults of detail than to an impatient philosophy, which aims at creating a new world without sufficient preparation in the opinions and feelings of ordinary men and women…. A fundamental economic reconstruction, bringing with it very far-reaching changes in ways of thinking and feeling, in philosophy and art and private relations, seems absolutely necessary if industrialism is to become the servant of man instead of his master. In all this, I am at one with the Bolsheviks; politically, I criticize them only when their methods seem to involve a departure from their own ideals. There is, however, another aspect of Bolshevism from which I differ more fundamentally. Bolshevism is… a religion, with elaborate dogmas and inspired scriptures. When Lenin wishes to prove some proposition, he does so, if possible, by quoting texts from Marx and Engels. A full-fledged Communist is not merely a man who believes that land and… entertains… elaborate and dogmatic beliefs… militant certainty about objectively doubtful matters…. I believe the scientific outlook to be immeasurably important to the human race. If a more just economic system were only attainable by closing men’s minds against free inquiry, and plunging them back into the intellectual prison of the middle ages, I should consider the price too high… LINK: <https://github.com/braddelong/public-files/blob/master/readings/book-russell-1921-bolshevism.pdf>


WheatNOilmRNA Vaccines: ‘The mRNA vaccines… brilliant at a science level…. Scientists looked at the COVID virus and saw a protein on the outside of the virus that looked like a good candidate to launch an immune attack against… the virus… uses that protein to get into your cells… makes the virus… more of an asshole…. So scientists took the blueprint for the asshole protein on COVID and made an mRNA version of it. Literally just the instructions on how to make that protein. These instructions “are” the vaccine…. You can’t get infected with COVID from the vaccine. You just get these instructions. Your cells see these instructions and say “sure, I’ll make this”. So your cells make a bunch of the asshole protein. You immune system sees this new protein you’re producing and immediately says “what… the f—… is this?” And it starts attacking the protein…. Your memory cells ‘remember’ the asshole protein. They remember exactly how to destroy it. By the way, your body breaks down the mRNA instructions that you got with the vaccine pretty quickly too. That’s normal. You don’t need a bunch of instructions hanging around forever. Your body breaks those down and gets rid of them. So you’ve broken down the mRNA instructions. You’ve destroyed asshole proteins. Everything from the vaccine is gone. Except for those memory cells who remember that protein very well. So then, a COVID virus enters your body. Your body has never seen the virus before. BUT it’s seen that protein that’s on the outside of the virus. Your memory cells say “you’ve got to be kidding me, THIS asshole again? Get the f— out of here!” Your body’s own ‘natural immune system’ quickly and efficiently launches an all out war, using the template it has… LINK: <https://threadreaderapp.com/thread/1339624815137722368.html>


DeLongTODAY: Nudging Ourselves Toward Full Employment...

The rough transcript & slides for my latest DeLongTODAY briefing

<http://delongtoday.com>
/>

I am Brad DeLong, an economics professor at the University of California at Berkeley and a sometime Deputy Assistant Secretary of the U.S. Treasury. This is the weekly DeLongToday briefing. Here I hold forth here on the Leigh Bureau’s vimeo platform on my guesses as to what I think you most need to know about what our economy is doing to us right now.

I promised Wes Neff when he agreed to provide the infrastructure for this that I and my briefings would be: lively, interesting, curious, thoughtful, and relatively brief. 

Relatively.

I promised I would provide briefings on a mix of: forecasting, politics, macroeconomic analysis, history, and political economy.

Today is an economic analysis & policy briefing: is Biden doing the right thing? 

But first…


Wednesday the Republican House of Representatives caucus voted 145-61 to endorse Liz Cheney as one of their leaders, and thus to approve of her for her conscience vote to impeach Donald Trump. On Wednesday half the Republican caucus also gave bigoted conspiracy theorist, Marjorie Taylor Greene—she who has called for the assassination of Democratic House leaders, denied that mass school shootings really happened, and blames Jewish Space lasers for forest fires—a standing ovation. The difference? The Cheney vote was a secret ballot. The Greene applause was public.

I harken back to 1993 and then-Treasury Secretary Lloyd Bentsen from Texas describing to some of his senior staff—and to us junior spear-carriers standing in the back of the room against the wall—what his long-time friend Bob Dole, the Republican senate minority leader, from Kansas had said to him. Dole had said that the Republican senate caucus was going to go all-in against Clinton’s deficit-reducing reconciliation bill. It needed to be done for the country’s sake, Dole said, but we Democrats would do it. And he needed to position the Republicans to pick up seats, and the best way to do that was for none of the Republicans to be onboard voting for any of Clinton’s initiatives so that Democrats could be blamed for whatever went wrong, with no water-muddying possible.

It’s been this way for thirty years. And I am tired of it. I would call the Republicans cowardly quislings, except that a not-inconsiderable portion of them appear to be true fascists rather than just going along with the Trump- and Fox-addled base, and World War II-era Vidkun Quisling stood up and was counted when he decided that enthusiastically backing Hitler was best for his career and the only political strategy that promised some hope for Norway.

So whatever is to be done needs to be done by the 50 Democratic senators and Kamala Harris, by Pelosi’s narrow House majority, and by President Biden.


So what needs to be done to bring about full economic recovery?

First, scotch the virus.

The new-case counts are, as always, hopelessly flawed. We guess that Australia detects pretty much every coronavirus case, that Canada and Germany detect 3/4, that the United States detects about half of cases now and a much smaller fraction last spring and summer and even into the fall, that that the United Kingdom—well, a case count per 100,000 roughly equal to the United States since mid-December, but 50% more deaths suggests that Boris Johnson’s MBGA government is only detecting a third. An Australian result was not out of reach for the United States, except for Trump. A German or Canadian response and result was definitely something we should have been able to achieve. We didn’t. 1 in every 100,000 Americans is now dying of COVID-19 every day. That means that roughly 1 in every 500 Americans is catching COVID every day—that is 700,000 per day, and we are only vaccinating 1,000,000. So far we have vaccinated 10% of the population with at least one dose. American Samoa has vaccinated 20%. Israel has vaccinated 60%.

Until the virus is scotched, opening up the country to restore full employment is a fool’s errand: the government needs to be focused on relief—getting families the incomes they need to live, and avoiding permanent shutdowns of businesses that we will want to have when summer comes around and the virus is scotched. But after relief, when the virus is scotched, it will then be time for recovery.


Recovery is going to start from a bad place: 143 million people at work when we want to have 155 million. This 12 million job gap cannot be filled right now: it consists overwhelmingly of workers who do not want to be at work during the plague either for personal-safety or for caring-for-family reasons plus absent customers who do not want to buy during the plague for personal- and family-safety reasons. But it is not worthwhile trying to rejigger the economy to find those 12 million people other jobs in other sectors, because we are highly likely to want them back in their old sectors by late summer at the latest. So right now we stand pat. And as we approach herd immunity we reopen. At the moment we are at, perhaps, 85 million with at least temporary immunity from past infection, 35 million with at least temporary immunity from one-dose vaccination, with that today total of 120 million growing at 2 million per day. That would mean May 1 for being close enough to herd immunity.

Will the economy then pick up its mat and walk? Will people then return to the businesses that they worked for in February 2020, and will those businesses reopen? The experience of 2008 to 2010 strongly suggests that they will not. Back then there was not a biological plague, but there was a psychological and financial plague: a collapse of finance and credit that caused the absence of financing for business and of customers for products that produced an employment gap of about our current magnitude. This financial and credit plague however, was over by the start of 2010. Interest rate risk premium had normalized. And financial institutions were recapitalized.

There was by 2010 no reason why the businesses that were in operation in December 2007 and profitable could not have resumed operation. You may object: but we needed to move workers out of construction, for, as Chicago economist now hiding out at the Hoover institution John Cochrane claimed in late 2008, "workers pounding nails in Nevada need to find something else to do”. But Cochrane and company never did their arithmetic. Employment in construction was back below its long run average share of the economy by December 2007. The fundamental sectoral labor adjustment in response to the collapse of the housing boom had already been accomplished, and had been accomplished without mass unemployment.

And yet there was no rapid recovery. There were no green shoots. There was no "recovery summer". People did not return to the jobs in the businesses, or to the types of jobs and businesses, that they had been working in December 2007 overnight, or even in years. People needed to be pulled back into the labor market by stronger aggregate demand. And a Federal Reserve desperate to normalize interest rates and its asset portfolio and fearful of letting inflation even kiss 2% per year, let alone climb above it even for a short period of time did not help. And a Republican Party eager to hamstring Barack Obama by demanding massive deficit reduction immediately without tax increases did not help. And an Obama administration conflicted and divided between those who saw the situation clearly, those who really believed that deficit reduction was Job One, and those who thought they were being clever by pretending to prioritize deficit reduction—they really did not help the situation either.


But might things be different this time? They might. And there is one important way in which the situation is different which might matter.

The way in which things are different is that there are now $3 trillion of extra savings on household balance sheets. There was no analog to this back in 2010. Then the shortfall in spending was tied to a shortfall in income with no massive household asset accumulations. There were no extra piles of savings that raised people’s wealth to income ratios substantially above their previous targets. Now there are. Is this extra $3 trillion burning a hole in people’s pockets right now? If people spend 5% of it in the year after they feel safe from the plague,If people spend 5% of it in the year after they feel safe from the plague, that would boost economic growth over the year from mid-2021 to mid-2022 by 3/4%-point relative to mid-2020 to mid-2021. if they spend 10%, the boost would be 1.5%-points. If they spend 20%, the boost would be 3%-points. "We will", as my colleague Andres Rodriguez-Clare said earlier this week, “learn a lot about savings behavior in the American economy over the next year". I think that we are as likely to see 20% as 5% because I have been persuaded by Chris Carroll's theory that Americans savers are prudent but impatient: those with money are anxious to spend as long as they can convince themselves that they are unlikely to run out and find themselves even temporarily squeezed.

This time may well be different. I would not be surprised to find this time—because of the great savings accumulation, itself for the result of the wise relief and income support policies of 2020—we do get the semi-spontaneous market led recovery without extraordinary government support and action going forward that we did not get after 2010.

So does that mean that we should not enact extraordinary fiscal support for the economy right now? Does that mean that the Biden administration is barking up the wrong tree, as are Pelosi and Schumer, in moving their $1.9 trillion reconciliation relief, support, and stimulus bill right now?

No it does not. I might be very wrong about what the central tendency likely going forward is. And even if I am right, the balance of risks is extraordinarily asymmetric, and that calls for Biden $1.9 trillion reconciliation relief, support, and stimulus bill as insurance against a repeat of the anemic post-2010 recovery.


Louise Sheiner of Hutchins and Wendy Edelberg of Hamilton have just carried out a nice exercise. Let me enlarge it so that you have a chance of seeing it—I have clearly failed at the task of slide construction here. There.

Sheiner and Edelberg’s standard Keynesian counterfactual forecasting exercise is truly useful. It shows us that the Biden $1.9 trillion reconciliation bill is not well targeted as a fiscal stimulus. Indeed, it is not: it is aimed at relief and support, as well as stimulus. Doing it through reconciliation, and doing it in such a way as to hold all 50 Democratic senators in support—those impose considerable constraints on the form that it can take. As optimal policy, it fails. As politics as the art of the possible, it succeeds. And as boosting an economy that may well need boosting, it seems effective. By contrast, the Republican bill is… too small unless you accept CBO’s depressed view of what potential output is, and unless you in addition hold on to the belief that there should be no recoupment of output gaps: that potential output is a ceiling rather than an average that you should aim to fluctuate around.

But it is a mistake to conceptualize the problem of policy design here as one of producing a policy that is forecast, in the central case, either to get back to potential quickly or to overshoot potential and then return in such a way as to balance out the demand-side component of the coronavirus plague’s depression of economic activity below potential.

Instead, optimal policy design at this point in time needs to deal with uncertainties, asymmetry, and option value. It all discussion needs to start from the premise that this is quite likely going to be the only bite at the apple. It might be possible to provide a further substantial fiscal boost to the economy at sometime in the future if it is needed. But it might well not be politically possible. And it would be massively imprudent to plan on and expect that it will be politically possible to do so. 

What that means is that we need to make the chance that we will wish in the future that we had done more today very low.

How about the chance that we will wish in the future that we had done less today? Do not we need to worry about that? We do need to worry about that to the extent that we do not trust the Federal Reserve to take appropriate steps to control inflation should such steps become necessary. Let me postpone the question of whether we trust the Federal Reserve to the next slide.

In order to calculate what we should do in order to have a low probability of wishing in the future that we had done more, we need to push our judgments to the edge of significant probability in three respects:

  1. We need to act as though we are highly optimistic as to the pace of potential output growth: we do not want, after the fact, to look back and say: “gee, we really underestimated potential output growth”. 

  2. We need not to be optimistic about the multiplier in this case. We need to suppose that that portion of the reconciliation bill money that is going to those who normally have a low marginal propensity to consume will not materially boost the pile of savings that are burning a hole through their pockets and that they will spend quickly. It is thus prudent to suppose that only those income boosts that hit the truly liquidity constraint will be spent. And that is significantly less than half of the total spending bill.

    Shouldn't we then take steps to craft the bill more carefully? If we are giving money away to people who are not liquidity constraint for no good macroeconomic purpose, shouldn't be halt those expenditures and so avoid such a great increase in the national debt? If interest rates were positive, the answer to that question would be yes. But since interest rates are not positive and since we want to have this bill having its impact on the economy over the summer, it seems best to postpone issues of debt management and income distribution and so forth into the future, and right now focus on relief, support, and stimulus.

  3. We need to presume that Americans understand that the world is now a riskier place then we thought it was a year and a half ago. Thus we need to presume that increases in wealth to income ratios even among rich households reflect the changing definition of prudence rather than sums that are going to be rapidly spent-down as a result of impatience.

All of these, I think militate strongly in support of the Biden package—as long as we can trust the Federal Reserve to handle problems that emerge if the policy does what it is supposed to do, that is, boosts production and employment up above potential output and beyond full employment in the absence of monetary policy offset.


So can we trust the Federal Reserve? One thing seems certain about Federal Reserve chair Jerome Powell: he will not make his "temper tantrum" mistake again. He and his open-market committee will not prematurely withdraw monetary stimulus before he sees the whites of rising inflation's eyes.

Does that mean that he will hesitate to withdraw monetary stimulus and impose monetary austerity if we do reach a situation in which inflation control is rightly the highest priority of the Federal Reserve? Will Jay Powell, if faced with a return of the 1970s, turn into the equivalent of an Arthur Burns or a G. William Miller and, either out of a sense of loyalty to his political patrons, or out of fear of losing the Federal Reserve’s independence through policies Congress judges as excessively austere, or by misjudging the situation?

Never say “never”. 

But the odds of that seem to be extremely low. First, the more we look at how industrial economies behave, the more it looks as though the inertial inflation of the 1970s was a one off produced by a unique confluence of a central bank that did not take its price-stability mission seriously and an economic structure in which major moves in the price of a single crucial commodity—oil—both of very powerful fundamental importance and served as a signal on which market participants could condition their own inflation expectations. No key fundamental role of oil, no conditioning of market expectations of inflation on the oil price, no absence of trust in central banks, then no inflation of the 1970s.

I am highly confident that Jerome Powell will neither make the Greenspan mistake of viewing unregulated bubble finance with benign neglect, the Bernanke mistake of premature normalization come hell or high water, nor the Burns-Miller mistakes. He will make his own mistakes. But we do not know what those will be. And we should not fear him making Burns-Miller mistakes in the future and have that fear lead us into avoiding appropriate fiscal stimulus out of fear of what is in the shadows.

So, yes, I do think that the Biden reconciliation bill for relief, support, stimulus is highly appropriate at this moment and deserves to pass. And I think it will do a lot of good in easing America's recovery. At this point it is traditional to say something about sausage and legislation. But I do not think we really need to say that: this looks to me like as much of a technocratic triumph as one can have in this fallen sublunary sphere, in this sewer of Romulus in which we live and work. 

I am impressed with the policy design and with the marshaling of the political coalition.


That is, I am impressed with the policy design and the marshaling of the political coalition among the Democrats.

I am not so impressed with the Republicans. These do not seem to me to be partisan issues here. I could understand if the right wing of the Republican Party, with its ideological blinders and its deficiencies and its inability to avoid thinking of an optimal policy is very different when a Democrat than when a Republican is president were to show up with a $600 billion proposal. I am rather embarrassed for the moderate, non-fantasy-based wing of the Republican Party when that is what it brings to the pot-luck


I’m Brad DeLong. This is the DeLongTODAY Briefing.


Briefly Noted: 2021-02-05

First, read & think about:

Schuman may well be right. But he also may well be wrong here:

Michael Schuman: The Undoing of China’s Economic Miracle: ‘Regulators squelched… [Jack] Ma’s fintech giant, Ant Group, a mere two days before its November debut on the Shanghai and Hong Kong Stock Exchanges… widespread concern that Chinese authorities were punishing Ma for criticizing their oversight of the finance industry….  Jerome Cohen… “a new central campaign to curb the political and economic power of major private entrepreneurs who refuse to follow the central Party line in every respect.”… Though Xi has occasionally implemented market reforms… [but] overall… has shown a preference for the very visible hand of the state… financial aid to a wide range of high-tech industries, including microchips and electric cars….“dual circulation”… self-sufficiency…especially [in] microchips and other critical technologies…. Xi is preparing for protracted conflict between the world’s two largest economies by attempting to fireproof China from measures President-elect Joe Biden might use against him… LINK: <https://www.theatlantic.com/international/archive/2021/01/xi-jinping-china-economy-jack-ma/617552/?=>

I see Xi as seeking to protect himself and his régime against three threats:

  1. Pressure applied from “the west” via weaponized interdependence.

  2. Billionaires who become independent political actors as a bourgeoisie.

  3. The complete corruption of the party that would turn it into a parasitic class without a credible societal role—and, eventually, perhaps trigger a revolution.

Remember that Xi, at some level, believes Marxism. He does not believe in rule by the bourgeoisie. He does not believe in rule by—as so often has been the case in China’s history—a parasitic bureaucratic aristocracy. He wants to see China ruled by a Communist Party that carries the banner of utopia, whatever that turns out to be, into the future.

And he wants to be the boss. And once he is the boss, it is very hard to step down: emperors tend to turn into emperors for life, and—this will be China’s problem of Xi succeeds in his entrenchment—humans have little experience with the problems of imperials succession in an age of modern medicine extending life expectancy well past the age major cognitive decline begins.


And now:


Very Briefly Noted:

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Seven Paragraphs:

Dan FroomkinWhat the next generation of editors need to tell their political reporters: ‘I’ve written a speech for the next boss to give to their political staffs. It goes like this…. Hi! It’s so nice to be here…. It’s impossible to look out on the current state of political discourse in this country and think that we are succeeding in our core mission of creating an informed electorate. It’s impossible to look out at the looming and in some cases existential challenges… and think that it’s OK for us to just keep doing what we’ve been doing. So let me tell you a bit about what we need to do differently… LINK: https://presswatchers.org/2021/01/what-the-next-generation-of-editors-need-to-tell-their-political-reporters/

Kiona SmithThis Is How Hominins Adapted to a Changing World 2 Million Years Agohttps://arstechnica.com/science/2021/01/this-is-how-hominins-adapted-to-a-changing-world-2-million-years-ago/: ‘Jacks of all trades: And even if the earliest hunters and gatherers at Ewass Oldupa would have found later versions of the place totally alien, they would still have recognized the tools people used to survive it. For roughly 200,000 years, hominins relied on the same basic tools to tackle the bracken meadows beside the river, the patchwork of woods and grassland, the lush lakeshore, and the dry steppe. The chopping, scraping, and pounding tools of the Olduwan were relatively simple, but they were also incredibly versatile. According to Petraglia and his colleagues, Olduwan technology offered a basic, general toolkit that worked as well in a lakeside palm grove as it did on a dry steppe. Humans took over the world because we’re generalists, and generalists can adapt to nearly anything. Our early relatives clearly had the same advantage…

Jamie PowellThe EV Bubble Spreadsheet: Update Dos: ‘Just gawp at the aggregate figures in FT Alphaville’s proprietary EV bubble Google Sheet, which we launched a fortnight or so ago. Our favourite ridiculous metric at the moment? BMW’s research and development spend in 2019 is almost double what every electric vehicle stock is expected to spend in 2020. Which somewhat dampens the idea that this particular market bubble will have positive spillover effects in the real economy. So what’s new in the sheet this week? Well, in terms of stocks, we’ve added much hyped electric vehicle maker Faraday Future… LINK: https://www.ft.com/content/9d877b55-a0f9-47b9-bc8a-7d7bd36a03f8

Steve M.How Republicans Think & How Democrats Think: ‘Democrats have learned… that it’s dangerous to let a crazy, angry extremist become the face of the GOP because there’s no reason to believe that the Republican electorate… will reject crazy, angry extremism. It’s just the opposite, in fact—Republicans love Trump and Greene, and while Trump-like figures might never win majority support nationwide, Republicans don’t need majorities to seize control. During the Obama years, Republicans accused the president and members of his administration (Hillary Clinton, Susan Rice) of malfeasance, but they never seriously tried to punish them. Democrats, by contrast, have (futilely) impeached Donald Trump twice. Democrats aren’t faking outrage, the way Republicans have against Barack Obama, Hillary Clinton, and Joe Biden. Democrats genuinely believe that people like Trump and Greene are dangerous. Given the choice of making them examples or ridding the country of the threat they pose, Democrats will choose the latter… LINK: https://nomoremister.blogspot.com/2021/02/how-republicans-think-and-how-democrats.html

Sam ArbesmanReinventing Book Publishing in the Tech Worldhttps://arbesman.substack.com/p/-reinventing-publishing-in-the-tech: ‘attempts to constantly reexamine and reinvent the democratization, distribution, and furthering of knowledge should be watched closely (and please let me know of other examples you are aware of!). For ultimately, publishers are catalysts of world-changing ideas…

Gerard Baker (2020–11–16): Four Seasons Total Landscaping Isn’t Exactly the Reichstag https://www.wsj.com/articles/four-seasons-total-landscaping-isnt-exactly-the-reichstag-11605545752: ‘Trump’s shambolic vote challenges provoke cries of “coup” and the usual comparisons to Hitler…

Share Grasping Reality Newsletter, by Brad DeLong


Plus:

The Context of John Stuart Mill’s: “Hitherto It Is Questionable If All the Mechanical Inventions Yet Made Have Lightened the Day’s Toil of Any Human Being”

In the Ashley edition that has been standard since… 1909, I believe, the end of Book IV, Chapter 6, “Of the Stationary State” of John Stuart Mill’s Principles of Political Economy with Some of Their Applications to Social Philosophy reads:

Of the Stationary State: Hitherto [1848] it is questionable if all the mechanical inventions yet made have lightened the day’s toil of any human being. They have enabled a greater population to live the same life of drudgery and imprisonment, and an increased number of manufacturers and others to make fortunes. They have increased the comforts of the middle classes. But they have not yet begun to effect those great changes in human destiny, which it is in their nature and in their futurity to accomplish. Only when, in addition to just institutions, the increase of mankind shall be under the deliberate guidance of judicious foresight, can the conquests made from the powers of nature by the intellect and energy of scientific discoverers, become the common property of the species, and the means of improving and elevating the universal lot.

The “[1848]” in square brackets was added by W.J. Ashley in 1909 to indicate that that that first sentence, with its “Hitherto,” had been in the book since its first 1848 edition. Mill’s time references, Ashley explained, were:

occasionally a little bewildering: a “now” in his text may mean any time between 1848 and 1871. In every case where it seemed necessary to ascertain and to remind the reader of the time when a particular sentence was written, I have inserted the date in the text in square brackets…

Political Economy came out in seven editions: 1848, 1849, 1852, 1857, 1862, 1865, and 1871. In none of them did Mill himself think that it was worth changing “hitherto” to “formerly.”

LINK: https://www.bradford-delong.com/2008/05/hitherto-it-is.html


Briefly Noted: 2021-02-01 Mo

<https://braddelong.substack.com/p/briefly-noted-2021-02-01-mo>

What I have been reading that has arrested me, and made me think. This may be one use I make of my substack as I try to figure out what this platform is useful for. Let me start with things thatwhizzed by, and follow with some long-paragraph chunks that I think are very worth reading,

 

But first:

Subscribe now

 

And:

One Video That Is Very Much Worth Watching:

40 minutes: JaydenXShooting and Storming Of The US Capitol In Washington DC


Very Briefly Noted:


Seven Paragraphs-Plus for Dinnertime:

Matt YglesiasVaccines Are Better than You Think: ‘None of the people in the Pfizer/Moderna treatment groups died or even fell seriously ill and had to be hospitalized…. These days they vaccinate kids against chickenpox, so kids mostly don’t get chicken pox. But even more remarkable, when they do get chickenpox these days it’s a “sick for a few days” kind of thing not “miss weeks of school while suffering in agony.” This is a really big deal with regard to the lower efficacy we are expecting from the AstraZeneca and Johnson & Johnson vaccines. A vaccine that’s only 70 percent effective at blocking infection would be expected to generate a larger than that reduction in hospitalizations and an even larger reduction in deaths… LINK: <https://www.slowboring.com/p/good-vaccines>


Kyle OrlandRobinhood’s plan to “democratize finance” hit a GameStop-shaped speed bump [Updated] | Ars Technica: ‘Tenev said point blank that “there was no liquidity problem” and that Robinhood’s move was made “pre-emptively and proactively” to “protect the firm and protect customers.” But in the same interview, he said he “know[s] how Clorox and Lysol felt in the pandemic when they were running out of hand sanitizer and supplies,” which suggests that the company didn’t have enough of something (e.g. money) on hand to handle the SEC requirements for the trading influx… LINK: <https://arstechnica.com/gaming/2021/01/robinhoods-plan-to-democratize-finance-hit-a-gamestop-shaped-speed-bump/>


James H. Williams & al.Carbon‐Neutral Pathways for the United States: ‘Modeling the entire U.S. energy and industrial system… we created multiple pathways to net zero and net negative CO2 emissions by 2050. They met all forecast U.S. energy needs at a net cost of 0.2–1.2% of GDP in 2050, using only commercial or near‐commercial technologies, and requiring no early retirement of existing infrastructure. Pathways with constraints on consumer behavior, land use, biomass use, and technology choices (e.g., no nuclear) met the target but at higher cost. All pathways employed four basic strategies: energy efficiency, decarbonized electricity, electrification, and carbon capture. Least‐cost pathways were based on >80% wind and solar electricity plus thermal generation for reliability….

In the next decade, the actions required in all pathways were similar: expand renewable capacity 3.5 fold, retire coal, maintain existing gas generating capacity, and increase electric vehicle and heat pump sales to >50% of market share. This study provides a playbook for carbon neutrality policy with concrete near‐term priorities… LINK: <https://agupubs.onlinelibrary.wiley.com/doi/10.1029/2020AV000284>


Timothy B. LeeNo, WallStreetBets isn’t robbing Wall Street to help the little guy | Ars Technica: ‘The effort has been so effective in part because its architects have convinced people that it’s not just a pump and dump scheme… a seductive story in which retail investors found a loophole that allows them to make money at the expense of hedge funds…. In reality, most of the gains captured by early GameStop investors will come at the expense of later investors who will be left holding the bag when the stock falls… LINK: <https://arstechnica.com/tech-policy/2021/01/the-gamestop-bubble-is-going-to-hurt-a-lot-of-ordinary-investors/>


Noah SmithAbout that TFP stagnation…: ‘Wow! If you look only at the durables sector, there was no Great Stagnation at all…. Durables TFP has been growing more strongly post–1993 than it ever did in the post-WW2 boom! Consider this: In the 26 years from ’47 to ’73, durables TFP nearly doubled, but in the 15 years from ’94-’09, durables TFP more than doubled…. Something big did happen to technological progress… not in 1973… but a decade earlier. In the 15 years to 1963, the two sectors progressed pretty much in tandem. But sometime in the early- to mid–60s, they diverged wildly, with nondurables [and services] TFP rising anemically through the late 70s and then basically flatlining until now….

I think we should look at the “Great Stagnation” as a more subtle phenomenon than simply the exhaustion of the “low-hanging fruit” of nature. Our technologies for producing durable goods are improving faster than ever… LINK: <https://noahpinionblog.blogspot.com/2011/04/tfp-and-great-stagnation.html>


Matt ClancyMaybe There is No Technological Slowdown: ‘Vollrath’s preferred decomposition of the causes of the 1.25% annual slowdown in real GDP per capita growth is: 0.80pp - Declining growth in human capital; 0.20pp - The shift of spending from goods to services; 0.15pp - Declining reallocation of workers and firms; 0.10pp - Declining geographic mobility…. Human capital alone accounts for two-thirds of the slowdown….

This leaves about 0.45pp left over for explanations related to the capital stock and TFP. Indeed, you can see in the graph above that GDP per capita growth drops noticeably in 2007, but TFP growth only drops a bit. Thus, right off the bat, Vollrath argues a slowdown in technological progress explains at most part of one-third of the growth slowdown….

Services involve the purchase of attention from someone: childcare workers, doctors, restaurant servers, and so on. To the extent you are paying for attention from someone, it’s very hard to improve TFP. For these kind of services, TFP growth would entail finding a way to get more minutes of attention out of the same number of workers…. It’s not clear where the extra attention can come from… LINK: <https://mattsclancy.substack.com/p/maybe-there-is-no-technological-slowdown>


Nino Scalia says: The poor should die in the street: Supreme Court (2012–03–27): The Health Care Law & The Individual Mandate: ‘In the health care market, you’re going into the market without the ability to pay for what you get, getting the health care service anyway as a result of the social norms that allow—that—to which we’ve obligated ourselves so that people get health care.’ JUSTICE SCALIA: ’Well, don’t obligate yourself to that. Why—you know?… LINK: https://www.npr.org/2012/03/27/149465820/transcript-supreme-court-the-health-care-law-and-the-individual-mandate


Briefly Noted: 2021-01-31 Su

It is curious that—so far at least—this from the extremely sharp McKay Coppins has turned out to be wrong: McKay Coppins: ‘People who spent years coddling the president will recast themselves as voices of conscience, or whitewash their relationship with Trump… LINK: <https://uphill.thedispatch.com/p/biden-cabinet-inauguration-gop-future>

The Republicans are all doubling down on Trump, even though he is now out of office, and off of Twitter. He has all but disappeared from the general public sphere. Is he still ruling the fever swamps? And do the Republicans not recognize that there is anything else?

Plus Two Videos Well Worth Watching:

Roosevelt & Churchill: Christmas, 1941

Arnold SchwarzeneggerGovernor Schwarzenegger’s Message Following This Week’s Attack on the Capitol

Very Briefly Noted:


Seven Paragraphs-Plus for Dinnertime:

Anna AkhmatovaFrom ‘Requiem’ : ‘During the years of the Yezhovschina, I spent seventeen months standing outside the prison in Leningrad, waiting for news. One day someone recognized me. Then a woman with lips blue from the cold, who was standing behind me, and of course had never heard of my name, came out of the numbness which affected us all. She whispered in my ear (for we all spoke in whispers there): “Can you describe this?” I said, “I can.” Then something resembling a smile slipped over what had once been her face… LINK


Ken UntenerProphets of a Future Not Our Own : ‘It helps, now and then, to step back and take a long view. The kingdom is not only beyond our efforts, it is even beyond our vision. We accomplish in our lifetime only a tiny fraction of the magnificent enterprise that is God’s work. Nothing we do is complete, which is a way of saying that the Kingdom always lies beyond us. No statement says all that could be said. No prayer fully expresses our faith. No confession brings perfection. No pastoral visit brings wholeness. No program accomplishes the Church’s mission. No set of goals and objectives includes everything. This is what we are about.

We plant the seeds that one day will grow. We water seeds already planted, knowing that they hold future promise. We lay foundations that will need further development. We provide yeast that produces far beyond our capabilities. We cannot do everything, and there is a sense of liberation in realizing that. This enables us to do something, and to do it very well. It may be incomplete, but it is a beginning, a step along the way, an opportunity for the Lord’s grace to enter and do the rest.

We may never see the end results, but that is the difference between the master builder and the worker. We are workers, not master builders; ministers, not messiahs.

We are prophets of a future not our own. LINK


Rosa LuxemburgThe Russian Revolution: ‘The socialist system of society should only be, and can only be, an historical product, born out of the school of its own experiences, born in the course of its realization, as a result of the developments of living history…. Socialism by its very nature cannot be decreed or introduced by ukase…. The negative, the tearing down, can be decreed; the building up, the positive, cannot. New Territory. A thousand problems. Only experience is capable of correcting and opening new ways. Only unobstructed, effervescing life falls into a thousand new forms and improvisations, brings to light creative new force, itself corrects all mistaken attempts.

The public life of countries with limited freedom is so poverty-stricken, so miserable, so rigid, so unfruitful, precisely because, through the exclusion of democracy, it cuts off the living sources of all spiritual riches and progress…. Otherwise, socialism will be decreed from behind a few official desks by a dozen intellectuals…. Life dies out in every public institution, becomes a mere semblance of life, in which only the bureaucracy remains as the active element. Public life gradually falls asleep, a few dozen party leaders of inexhaustible energy and boundless experience direct and rule. Among them, in reality only a dozen outstanding heads do the leading and an elite of the working class is invited from time to time to meetings where they are to applaud the speeches of the leaders, and to approve proposed resolutions unanimously–at bottom, then, a clique affair–a dictatorship, to be sure, not the dictatorship of the proletariat but only the dictatorship of a handful of politicians, that is a dictatorship in the bourgeois sense, in the sense of the rule of the Jacobins (the postponement of the Soviet Congress from three-month periods to six-month periods!)

Yes, we can go even further: such conditions must inevitably cause a brutalization of public life: attempted assassinations, shooting of hostages, etc… LINK: <https://www.marxists.org/archive/luxemburg/1918/russian-revolution/ch06.htm>


Noah SmithShort Thoughts on the Insurrection: ‘I think Republicans who still support the insurrectionists—or who are still on the fence—are motivated not by hate but by fear. To understand the mind of American conservatives, you have to understand the constant diet of fear that they consume every day. For decades, right-wing talk shows and Fox News have understood that they could get conservatives to tune in by constantly pumping up the fear—fear of a War on Christmas, fear of gay culture, fear of terrorism, fear of Black crime, fear fear fear. During the Trump Era, the chief bugaboos have been A) wokeness, B) immigration, and C) antifa. To be a conservative in America is to exist in a constant state of having people trying to scare you.

Now, in the era of Trumpist insurrection, the chief threat that the fearmongers are hawking is that Republicans and conservatives will become a persecuted class in America….. Some Republicans will see this threatening warning and think “Ehh, that’s hysteria; let’s focus on the real threat of insurrection and then things will be back to normal.” But some will think “OMG it’s true…. I’m going to be hunted and persecuted in my own country just because I’m a conservative…. Who can protect me from this terror?” And for many, the only possible answer to the question of “Who can protect me from this terror?” will be “Trump, and the people who stormed the Capitol”. Having been told that the institutions of America are an existential threat to them, they will cling to the only force they feel might be capable of protecting them….

All the insurrectionists have to do to retain Republican support is to keep pumping up the threat, and keep presenting themselves as the only port in the storm. And some Republicans, tragically, will cling ever tighter to the very monster that is at their throats… LINK <https://noahpinion.substack.com/p/insurrection-thoughts-113>


Tom Snyder: The American Abyss: ‘When we give up on truth, we concede power to those with the wealth and charisma to create spectacle in its place. Without agreement about some basic facts, citizens cannot form the civil society that would allow them to defend themselves. If we lose the institutions that produce facts that are pertinent to us, then we tend to wallow in attractive abstractions and fictions. Truth defends itself particularly poorly when there is not very much of it around.... Social media... supercharges the mental habits by which we seek emotional stimulation and comfort, which means losing the distinction between what feels true and what actually is true… LINK: <https://www.nytimes.com/2021/01/09/magazine/trump-coup.html>


Haley Bird Wilt: The Consequences of Lying to People: ‘Republican lawmakers misled millions of people into believing the results of a legitimate election could be overturned. Many of them viewed contesting the outcome as a relatively easy way to gain political currency among Trump supporters, knowing all the while that their efforts would have no real impact on who will be sworn into office in two weeks. The deception—primarily led by Trump, yet enabled by members of Congress—set the stage for the violence that unfolded at the Capitol Wednesday. Four people died....

The normally dry procedural affair of counting of the Electoral College votes was viewed by everyday Republicans and zealots alike as the place to make a final stand to overturn the election—even though elected Republicans knew the outcome would ultimately remain unchanged. As my colleague Jonah writes this morning, “Convincing people they need to prevent a coup when no such coup exists is a recipe for violence.” This was the energy that fueled the horde on Wednesday… LINK: <https://uphill.thedispatch.com/p/the-consequences-of-lying-to-people>


Scott AlexanderStill Alive: ‘513,000 people read my blog post complaining about the New York Times’ attempt to dox me (for comparison…. So many people cancelled their subscription that the Times’ exasperated customer service agents started pre-empting callers with “Is this about that blog thing?”… I got emails from no fewer than four New York Times journalists expressing sympathy and offering to explain their paper’s standards in case that helped my cause. All four of them gave totally different explanations, disagreeing about whether the reporter I dealt with was just following the rules, was flagrantly violating the rules, was unaffected by any rules, or what. Seems like a fun place to work. I was nevertheless humbled by their support….

Someone who knows New York Times reporters says the guy on my case was their non-hit-piece guy; they have a different reporter for hatchet jobs. After I torched the blog in protest, they seem to have briefly flirted with turning it into a hit piece, and the following week they switched to interviewing everyone who hated me and asking a lot of leading questions about potentially bad things I did….

I think the New York Times wanted to write a fairly boring article about me, but some guideline said they had to reveal subjects’ real identities, if they knew them, unless the subject was in one of a few predefined sympathetic categories (eg sex workers). I did get to talk to a few sympathetic people from the Times, who were pretty confused about whether such a guideline existed, and certainly it’s honored more in the breach than in the observance (eg Virgil Texas)….

I had a phobia of being doxxed. But psychotherapy classes also teach you to not to let past traumas control your life even after they’ve stopped being relevant. Was I getting too worked up over an issue that no longer mattered? The New York Times thought so. Some people kept me abreast of their private discussions (in Soviet America, newspaper’s discussions get leaked to you!) and their reporters had spirited internal debates about whether I really needed anonymity. Sure, I’d gotten some death threats, but everyone gets death threats…. Sure, I might get SWATted, but realistically that’s a really scary fifteen seconds before the cops apologize and go away. Sure, my job was at risk, but I was a well-off person and could probably get another….

In the New York Times’ worldview, they start with the right to dox me, and I had to earn the right to remain anonymous by proving I’m the perfect sympathetic victim who satisfies all their criteria of victimhood…. I don’t think anyone at the Times bore me ill will, at least not originally. But somehow that just made it even more infuriating…


From Yesterday: DeLongTODAY: GameStonk

From 2021-01-29 Fr

From <http://.delongtoday.com>

On Tuesday, January 26, 2021, Tesla CEO Elon Musk tweeted out one word—GameStonk!!—with two exclamation points, and with a link to a board on the internet discussion site Reddit, a board that describes itself as: “WallStreetBets: Like 4chan found a Bloomberg terminal”. The word “GameStonk” is a mashup of “stonk”, a misspelling of “stock”, and “GameStop”—the Dallas-headquartered U.S. bricks-and-mortar videogame retailer with 5000 stores, $1 million of annual revenue per store, and currently $200 million a year of losses. The misspelling of “stock” means that Musk wants his readers to know that he is adopting a pose of enthusiasm and excitement: the pose is that he must communicate, and cannot be bothered to spellcheck anything before he sends his words out to the internet. “GameStonk!!” could therefore be translated thus: “excitement, enthusiasm, and approval for (or perhaps for what is currently going on with) the stock of the company GameStop.” 

The price of  GameStop (ticker $GME) immediately rose 60%.

The stock had doubled earlier in the day. The supposed trigger was early Facebook executive and current venture capitalist Chamath Palihapitiya’s tweeting that he had bought call options on GameStop, betting the stock would go still higher than it had before. The total equity value of GameStop was $5.5 billion Tuesday morning, $11 billion Tuesday afternoon, $17 billion Tuesday evening, a peak (so far) of $26 billion Wednesday, and $18 billion Thursday as I am taping this.

OK. So what is going on? And what does this mean?

Wikipedia tells us that GameStop is headquartered in suburban Dallas, TX, near to a LEGOLAND:

GameStop is an American video game, consumer electronics, and gaming merchandise retailer. The company is headquartered in Grapevine, Texas, United States, a suburb of Dallas, and operates 5,509 retail stores throughout the United States, Canada, Australia, New Zealand, and Europe as of February 1, 2020. The company's retail stores primarily operate under the GameStop, EB Games, ThinkGeek, and Micromania-Zing brands. In addition to retail stores, GameStop also owns Game Informer, a video game magazine.

GameStop last made a profit in calendar 2017: $35 million. It lost $673 million in 2018, lost 20% of its revenue in 2019 down to $6.46 billion for a loss of $471 million, looks to realize $5.26 billion in revenue and lose $200 million, and is forecast—but tracking analysts forecasts are usually optimistic—at revenues of $5.84 billion and break-even in 2022. Up until September, it was worth some $5 per share, $350 million for the 70 million shares outstanding.

The stock jumped in September and October—roughly tripled, boosting the company’s equity valuation from about $350 million to about $1 billion. Why? Because of Ryan Cohen. Ryan Cohen had founded online pet retailer MrChewy in 2011 at the age of 25. He had made a success of it, selling it to PetSmart for $3.35 billion and stepping down from the CEO position in 2019. He had bought 10% of GameStop. He hoped to turn it around: “GameStop needs to evolve into a technology company that delights gamers and delivers exceptional digital experiences—not remain a video game retailer that overprioritizes its brick-and-mortar footprint and stumbles around the online ecosystem…” he wrote. 

Before Ryan Cohen’s appearance, the consensus was that GameStop would be closed in a decade. The market’s valuation was that of the $50 billion in revenue the firm might collect before it closed, it would be generous to think that 1% of that might be ultimately paid out to shareholders. Afterwards, the market was more optimistic: maybe with Ryan Cohen involved, there was a 20% chance GameStop could, instead, become an internet property as valuable as MrChewy was when Cohen sold it to PetSmart. Maybe Ms. Market was right here; maybe Ms. Market was wrong. I tend to think that Ms. Market was being too enthusiastic about the ability of one charismatic 35er with successful experience in an adjacent market segment to make a big difference. But I would not say that I was at all sure that Ms. Market was wrong.

One other thing happened in September-October: an extra 35 million shares or so were shorted. As of August, there were 100 million shares in long positions—people who stood to gain if GameStop went up or paid dividends—and 30 million shares in short positions—people who stood to gain if GameStop went down. By the end of October there were 135 million shares in long positions in 65 million shares in short positions. And then nothing happens until January 12, 2021.

So what happens in the two weeks between the end of January 12 and dawn on January 26? The stock-market valuation of the company then went from $1 to $5.5 billion. Why and how? 

One part of it is a “technical” story. The technical story has two parts. The first part is the “short squeeze” part. Suppose that you are a short seller. And suppose that the price of a stock you have shorted goes up—goes way up. What do you do? On the one hand, the profits from your short, if it comes in, are now much bigger, so you hold on to and may well increase your short position. 

On the other hand you are now poorer—perhaps a lot poorer—and your tolerance for risk goes down. Moreover, you are in this as a business: you cannot get yourself into a situation where one bet going wrong will destroy your ability to make other bets in the future, no matter how big a winner this one bet looks. And, in addition, the fact that the stock has moved against you is evidence that your initial analysis of the situation was, to some degree at least, not accurate. Those will tend to make you shrink your position.

The net effect of these factors is that, for short sellers, their demand curve may well slope the wrong way. Markets are stable because when price goes up demand tends to go down. But if short-sellers decide to cover rather than increase their positions when the price rises, their component of the demand curve does not slope down but slopes up—unless and until much bigger short sellers with much deeper pockets and much greater risk tolerances are attracted into the market.

The second part of the technical story is the call option part. Suppose you want to bet on Ryan Cohen’s success—or bet that it might look like he might possibly be a success. You could buy the stock. Or you could amplify your potential winnings by buying a way-out-of-the-money call option on the stock. That way you can make a bet that might come in really big, and make it cheaply. If you think you have more knowledge than capital, and yet you want to limit your downside exposure by not borrowing to buy stock and hence being on the hook if the stock goes bankrupt, a call option can look attractive.

The question is: who do you buy the call option from? If you can find somebody who wants to make the opposite bet—to bet that Ryan Cohen will not succeed—well and good. But odds are you will buy the call option from somebody who does not have strong views about Ryan Cohen and GameStop. They simply want to collect some money for making a market up front, and then be out of the game. They do not want to gamble. They want to hedge their position.

How do they hedge their position? Well, they sell you a call option and then they buy a little bit of the stock at the market price. If the call option price goes up, it must be because the stock price has gone up. When the call option is way out-of-the-money, a $1 increase in the stock price produces only a very small increase in the value of the option, so you do not need to buy much stock. But as the stock price approaches the option strike price—the price at which you get to buy the stock if you “call” your option—the proper delta hedge requires more and more of the stock. And at the limit, as the option comes into the money, the delta hedge amount becomes one.

Thus as the stock price goes up, your counterparty who has sold you the option must increase his or her long position in the stock in order to stay hedged. From your perspective, you are not doing anything as the stock price rises. You have an option. You are just letting it ride as the stock bounces around. But the combination of you-and-your-counterparty-who-has-hedged-their-position as a unit is another positive-feedback trader: somebody else whose demand curve slopes the wrong way, with your collective demand for the stock not falling but rising as the stock price rises.

And, of course, as the stock price rises, it gains more mindshare. And some of those whom news about the stock touches will decide to buy.

So far we have three factors: short-sellers who can be squeezed, and thus turned into positive-feedback traders; counterparties of call option purchasers, who are positive-feedback traders as well; and the fact that news and buzz is a source of stock demand. There are also three more factors: call them YOLO (as Matt Levine does), rage-against-the-(financial)-machine (as John Authers does), and pump-and-dump.

Let me quote from Matt Levine on YOLO:

The people on the WallStreetBets subreddit sometimes all get into a stock at once. This is fun, a nice social outing in an age of social distancing, a risky but potentially lucrative collective entertainment. Recently they decided to do GameStop. Because, I don’t know, they’re gamers… it’s a little comical to pump the stock of… mall video-game stores during a pandemic, or because… professional investors are short GameStop and they thought it’d be funny to mess with them. Or, especially, because their friends on Reddit were buying…. Take one person who’s long for fundamental reasons, add 100 people who are long for personal-amusement reasons like “lol gaming” or “let’s mess with the shorts,” and then add thousands more who are long because they see everyone else long, and the stock moves: “‘It was a meme stock that really blew up’, said WallStreetBets moderator Bawse1…. GameStop seemed so utterly doomed that the current situation was actually sort of funny to the subreddit’s denizens. Banded together, WallStreetBets members bought in big enough to move the stock…. Here is a seven-hour YouTube video from Friday in which a guy called “Roaring Kitty” dips a chicken tender in champagne to celebrate his GameStop wins. “This is the thing, overbought can stay overbought, remain overbought, even get more overbought,” he says, which is as good a summary of the situation as anything else…

And let me quote from John Authers on rage-against-the-(financial)-machine:

I argued that it was misplaced to take pleasure at the pain for the short-sellers who had attacked GameStop stock, and then been subjected to a “short squeeze” for the ages by traders coordinating on Reddit. I received a bumper crop of feedback… leaving out many with unprintable expletives): “How much did [GameStop short-position hedge fund] Melvin pay you to write this garbage? shill. Literally trying to protect an industry trying to fleece jobs from low income workers. Sleep well chump…” “Watching entitled institutional shorts whine… that millennials equipped with margin accounts & zero fees are collaborating on Reddit to target them is my new favorite sport. Looks perfectly healthy… plus 1 for the little guys.” “Normal isn't putting the retail trader down for being independent while organized hedge funds force you to take their way or suffer in fear. Normal is the American dream and being able to make your own way. This isn't a casino. This is a riot…”

We coordinated our purchases on Reddit, and we got rich, and in the process we made a bunch of overrich institutional Wall Street plutocrats sad and poorer. What is not to like?—that seems to be their view.

Well, what is not to like is that ultimately all the money there is is the dividends that will be paid by GameStop and the price that will be paid by its acquirer whenever the GameStop corporate shell is dissolved and its assets are repositioned. At the moment those who have sold GameStop on its ride up have collected perhaps $14 billion—$7 billion from the shorts and $7 billion from current GameStop holders who were late into their long positions. The short-sellers have lost $7 billion. Current stockholders of GameStop have an asset 

worth $14 billion that they paid $7 billion for—and so a paper profit of $7 billion right now. But the only value to back GameStop is the money that will be flowing out of the firm as distributed profits—and that is likely to be $400 million only, or maybe $700 million, or maybe $1 billion at best.

Current GameStop shareholders are thus looking to lose at least $6 billion of the $7 billion they have paid for the stock—unless they find greater fools willing to take their shares off their hands at something like its current $14 billion paper-profit valuation.

And here we get to the pump-and-dump question: How much do those who have already received $14 billion in profits from GameStonk so far overlap with those who currently hold a $14 billion paper position in GameStonk—a position that was $28 billion at one moment Thursday afternoon? And how much have those who have profited already dumped their positions? And what role did those who have profited play in pumping up the stock in the first place?

Combine pump-and-dump, rage-against-the-(financial)-machine, YOLO, hedged call options as strong sources of positive-feedback trading, and the short squeeze with the excitement provoked by the hope that Ryan Cohen could repeat his success with MrChewy, and you have the stage set for Elon Musk and Chamath Palihapitiya to trigger the quintupling of Tuesday and Wednesday. It is hard to know why they did what they did. It seems likely to be YOLO—for if they had positions, they are likely to spend the rest of their lives enmeshed in nets of lawsuits.

The story is really reminiscent of the bad old days of Gilded Age Wall Street—the Harlem corner, the stats bearcat corner, the Northern Securities panic. (The family story is that one of my great-great grandfathers killed himself with his revolver because he could not face telling his family the scale of his losses in Northern Securities).

There is, however one big difference. In previous search episodes of short squeezes, corners, and massive immediate fast-moving bubble divergences of market prices from fundamentals, there was considerable uncertainty about what those fundamentals really were. Was the stock being pumped above its value by cynics who wanted to dump it later? Or were people who had learned that there was about to be great news about the business trying to quietly buy it up in advance? And were the rumors that there was a pump-and-dump going on false-flag diversions to keep the general public from getting in on a good thing?

Before there was always a universe to be understood and mastered, or Masters of the Universe who you could profit be emulating. Knowledge either about what fundamental values really were or about the plans of insiders. But this time there is no knowledge, there is no pattern.

Just as Donald Trump was a reality-TV simulacrum of a president, so this feels like a reality-TV version of financial Robber Barons. A going-through-the-motions for the camera, but, somehow, not the real thing. Then there was a reason to think things might work out as planned.

Now there is only: GameStonk!!  



Hayek & Einstein...

<https://braddelong.substack.com/p/hayek-and-einstein>

Chasing down an intellectual rabbit hole at Wednesday lunchtime...

 

I was browsing through Friedrich von Hayek's The Fatal Conceit—although it is not clear to me how much of this very late (1988) Hayek is Hayek, and how much is “editor” William Warren Bartley. Why? Because Hayek is playing a larger part in my history of the Long 20th Century, Slouching Towards Utopia?, as it moves toward finality, and I am concerned that I be fair to him. And I ran across his claim that the “socialists” felt:

an urgent need to construct a new, rationally revised and justified morality which… will not be a crippling burden, be alienating, oppressive, or`unjust', or be associated with trade. Moreover, this is only part of the great task that these new lawgivers—socialists such as Einstein, Monod and Russell, and self-proclaimed 'immoralists' such as Keynes—set for themselves. A new rational language and law must be constructed too, for existing language and law also fail to meet these requirements…. This awesome task may seem the more urgent to them in that they themselves no longer believe in any supernatural sanction for morality (let alone for language, law, and science) and yet remain convinced that some justification is necessary….

The aim of socialism is no less than to effect a complete redesigning of our traditional morals, law, and language, and on this basis to stamp out the old order and the supposedly inexorable, unjustifiable conditions that prevent the institution of reason, fulfilment, true freedom, and justice. The rationalist standards on which this whole argument, indeed this whole programme, rest, are however at best counsels of perfection and at worst the discredited rules of an ancient methodology which may have been incorporated into some of what is thought of as science, but which has nothing to do with real investigation…

Who are these Mephistophelean demons seeking to destroy human morality? Keynes, Russell, Monod, and… Einstein?

Let’s leave John Maynard Keynes to one side—even though the paragraph in his essay My Early Beliefs where Keynes calls himself an “immoralist” is, in context, a declaration that when he was young he was foolish, that he is not yet fully wise, and that as a result people regard him with justified suspicion as someone who is “not aware that civilization was a precarious crust erected by the personality and the will of a very few, and only maintained by rule and conventions skillfully put across and guilefully preserved…” Anybody who makes this and claims that Keynes boasted that he was—and saw himself as—an “immoralist” a la André Gide is not in the business of informing but of misleading you.

Let’s leave Bertrand Russell to one side (even though there was nobody more skeptical of idealist thinkers suffering from “the fatal conceit”, and nobody more willing to seek truth from facts.)

But let’s focus for a moment on Jacques Monod. What seems to have incited Hayek’s (or Bartley’s) ire? It is Monod’s short book Chance and Necessity. For Monod, we—indeed, all life—are completely and purely the result of chance and necessity working together, through the process of variation and evolution by natural selection. And what is a choice or a chance decision at one level—the cell can choose to admit or not admit a virus, the antibody can choose to grab onto and tag the virus or let the virus pass by—is at a lower level the result of necessity as the molecules do or do not fit together so that the key can turn the lock or not.

Science, Monod says, has taught us this, and in so teaching has “outrage[d] values… subvert[ed] every one of the mythical or philosophical ontogenies upon which the animist tradition, from the Australian aborigines to the dialectical materialists, has made all ethics rest: values, duties, rights, prohibitions…” Monod’s belief is that as the scientific pursuit of knowledge has brought us to this wisdom, we should response by wisely taking the further advance of scientific knowledge as our ethical touchstone, and accept that our purpose is—we are made—to be Francis Bacon’s Salomon’s House, for which “the end of our foundation is the knowledge of causes, and secret motions of things; and the enlarging of the bounds of human empire, to the effecting of all things possible…”

Now I would have thought that Monod’s ideas would have been attractive to the Hayek who sees the people’s god as “just a personification of that tradition of morals or values that keeps their community alive”.

So I cannot but believe that Hayek’s (or Bartley’s) real beef with Monod is that he says what are supposed to be the quiet parts too loudly—that it is good for other people to believe that their god is more than just a personification of their moral tradition.

And then we come to… Einstein.

Einstein?

Einstein’s Theory of Relativity is not opinion or doctrine, but fact: When you measure the clocks and yardsticks of others who are moving rapidly relative to yourself, you do measure that their clocks tick more slowly than yours and their yardsticks are contracted in the direction of motion and so measure smaller distances than yours. That is simply a fact. GPS satellites are so programmed that if that were not a fact, they would not work.

Why this animus against Einstein? It is true that he did say that socialism was a necessity, and did say something like: “I do not know with what weapons World War III will be fought, but World War IV will be fought with sticks and stones.” But how does that translate into Einstein being a crusader “to effect a complete redesigning of our traditional morals, law, and language”?

Am I wrong in misreading this as, at base, simply Hayek viewing a prominent Jew (pretty much any prominent Jew) as an Enemy of the People (George Soros today, anyone?)?

In the same era as The Fatal Conceit was published, you could read the right-wing American Spectator stating as fact that Einstein’s Theory of Relativity was simply an enormous conspiratorial con game played against the righteous and the conservative, and that ‘the constancy of the speed of light, irrespective of the observer's movement, has not been demonstrated experimentally”. Never mind that that constancy was what had been tested and demonstrated in the 1887 Michelson-Morley experiment that the American Spectator had just referred to on the previous page.

And you could read stated as fact that even though all professional physicists know that Relativity Theory is false, for the most part they “shrug and accept relativity theory—theirs is not to quarrel with the sainted genius of the twentieth century”, while:

among intellectuals in general, the theory has been much admired: so abstruse, so deliciously disrespectful of the eternal verities, so marvelously baffling to the bourgeoisie. It doesn't interfere with the daily routine, makes no practical difference to the Newtonian world. But it does upset its theoretical underpinnings. Wonderful!”

<https://github.com/braddelong/public-files/blob/master/readings/bethel-einstein-i.pdf>