Five Super-Musts:
Remember: the Trump-McConnell-Ryan tax cut did absolutely nothing to boost investment in America, and thus has no supply-side positive effects on economic growth. And it is another upward jump in inequality: Greg Leiserson: U.S. Inequality and Recent Tax Changes: "Slides from a presentation by Greg Leiserson for a panel 'U.S. Inequality and Recent Tax Changes' hosted by the Society of Government Economists on Tuesday, February 20, 2018. In the presentation, Leiserson argues that the recently enacted Tax Cuts and Jobs Act will likely increase disparities in economic well-being, after-tax income, and pre-tax income...
Very wise start-of-the-semester advice: Harry Brighouse: Advice for New College Students: "Bear in mind that while there’s such a thing as getting into too much debt, there’s also such a thing as working too many hours. Seek balance (Finding it is easier said than done). Choose classes on the following bases: does the subject interest you?; how big is the class? (seek out small classes even if you are shy; especially if you are shy, because that’s how you’ll learn not to be); how good is the professor? How do you know who’s a good professor?... Do they engage?... Are they open to a full range?... Do they make you write a lot? (if so, that’s a positive, not a negative) Do they seem to enjoy teaching?... Find out from your friends. Or from your enemies if that’s the best you can do!...
I would say that Martin Wolf grossly understates his point here. It is not just that the case for a sane globalism remains strong. Rather, the case for a sane globalism has never been stronger and grows stronger every day. With each passing day, the world needs more and more powerful international public goods in order to remain healthy and sane, and only globalists have a chance of providing them: Martin Wolf: The Case for Sane Globalism Remains Strong: "We are now close to eliminating extreme human destitution.... The decline in the proportion of humanity living in absolute poverty, to less than 10 per cent, is a huge achievement. I make no excuses for continuing to support policies and programmes, including trade-oriented development, that helped accomplish this. The notion that it may be necessary to thwart the economic rise of non-western countries, in order to cement western domination, is, in my view, an abomination.... The range of public goods we now need has vastly increased, with the complexity of our economies and societies. For the same reason, ever more of those public goods are global.... That is why the victors of the second world war decided to create effective international institutions. They had experienced unbridled national sovereignty. The outcome had been catastrophic. Nothing since then has rendered global co-operation less essential.... [On] the interface between the global and the national... we have gone too far in some areas and done too little in others.... The globalisation of finance has arguably gone too far.... [But] liberal trade has not been a dominant source of rising inequality within countries. Meanwhile, areas where global co-operation has not gone far enough include business taxation and the environment. The final and perhaps most important of all challenges is containing the natural human tendency to scapegoat foreigners for failures of domestic policy and cleavages among domestic interests.... Blaming ills on foreigners may be a successful diversionary tactic. It is also highly destructive. We must think and act globally. We have no alternative...
John Scalzi: 21 Years of Whatever: "Whatever exists today for the same reason it began existing 21 years ago, which is, I wanted a place to write about things. The formula hasn’t really wavered in all that time; I write about the things I want to write about, when I want to write about them, for whatever length I feel like writing about them for. Sometimes I’m ambitious and post several times a day; other times I’ll post once a day and sometimes skip a day or two (or more). When I’m writing a book, I tend to post less. When I’m not, I’ll post more. I don’t take requests, unless I do. And so on. Also, you know: I write here because I just plain like this site. This is, in more ways than one, my house and a reflection of me. I like how I’ve built it over the years and I like what it does. I like I have a place to say what I want to say. I like that I have a place where others occasionally come by to visit. I like that those people seem to like it too. So, I’ll keep at it some more. Let’s see what happens from here...
Quantum supremacy! We were all but certain that it would come. I mean, after all, leaves. A leaf is a solar panel attached to quantum computers attached to energy-storage mechanisms that does things no "classical" solar-panel-plus battery could do. But that it is coming so soon is interesting: John Timmer: Paper Leaks Showing a Quantum Computer Doing Something a Supercomputer Can’t https://arstechnica.com/science/2019/09/paper-leaks-showing-a-quantum-computer-doing-something-a-supercomputer-cant/: "This hardware is not the makings of a general-purpose quantum computer... you can trust. We needed error-corrected qubits before these results; we still need them after. And it's possible to argue that this was less 'performing a computation' than simply 'repeatedly measuring a quantum system to get a probability distribution'. But that seriously understates what's going on here.... There is simply no way to get that probability distribution using a classical computer. With this system, we can get it in under 10 minutes.... There's no obvious barrier to scaling up quantum computations. The hard part is the work needed to set a certain number of qubits in a specific state and then entangle them.... Recognizing the error rate, however, the researchers suggest that we're not seeing the dawn of quantum computing, but rather what they call 'Noisy Intermediate Scale Quantum technologies'.... This particular system's only obvious use is to produce a validated random number generator...
101 Must- and Shoulds-:
We do not really know how we would collect and enforce a net-worth tax—but we did not really know how we would collect and enforce a broad income tax either until Milton Friedman came up with payroll withholding. In some ways the administrative burdens of a net-worth tax will be a lot easier since it is designed to catch only the upper tail: Greg Leiserson, Will McGrew, and Raksha Kopparam: Net worth taxes: What they are and how they work - Equitable Growth: "The wealthiest 1 percent of households owns about 40 percent of all wealth.... Taxes on wealth are a natural policy instrument to address wealth inequality and could raise substantial revenue, while shoring up structural weaknesses in the current income tax system...
I confess I do not see how Tesla is going to survive. BYD or some others are going to dominate battery-making. And there will not be that much both valuable and scarce to an automobile besides an efficient battery in the future we are heading for: *Matthew Campbell and Ying Tian: *: BYD, World’s Biggest Electric Car Maker, Looks Nothing Like Tesla: "BYD, which built the battery in your ’90s cellphone, now produces more EVs than anyone—and it wants to sell them to you, soon: On the floor of a cavernous factory in southern China... a sledlike robot scooted into position.... The robot carried a crucial payload: a battery about the size and shape of a double mattress, wrapped in a gray plastic casing. Suddenly, an accordion lift extended upward from the sled and inserted the battery into the car’s undercarriage. Workers in blue jumpsuits and white cotton gloves moved swiftly to the battery’s edges, carrying rivet guns connected by curling red cables to a supply of compressed air. Once the battery was rattled into place, the accordion retracted, sending its robot host scurrying off in search of fresh cargo...
The labor requirements for this kind of farming were already absurdly low. And one swallow does not make a spring. Nevertheless, the age of intelligent tools draws closer: Ashley Robinson, Lydia Mulvany, and David Stringer: Robots Take the Wheel as Autonomous Farm Machines Hit Fields: "The first fully autonomous farm equipment is becoming commercially available.... Tractors will drive with no farmer in the cab, and specialized equipment will be able to spray, plant, plow and weed cropland. And it’s all happening well before many analysts had predicted thanks to small startups in Canada and Australia.... Saskatchewan’s Dot Technology Corp. has already sold some so-called power platforms for fully mechanized spring planting. In Australia, SwarmFarm Robotics is leasing weed-killing robots that can also do tasks like mow and spread. The companies say their machines are smaller and smarter than the gigantic machinery they aim to replace. Sam Bradford, a farm manager at Arcturus Downs in Australia’s Queensland.... 'The savings on chemicals is huge, but there’s also savings for the environment from using less chemicals and you’re also getting a better result in the end'...
An absolute must-read, from Leiserson, McGrew, and Kopparam. It is excellent. I would note that it does not get much into the political Economy of wealth taxes—that one goal of them is to persuade the wealthy to distribute their wealth, and thus reduce the amount of control over society that they exercise: Greg Leiserson, Will McGrew, and Raksha Kopparam: Net Worth Taxes: What They Are and How They Work: "New from @equitablegrowth: “Notably, a business does not pay tax on its assets. Instead, shareholders pay tax on the value of the business.... The revenue potential of a net worth tax in the United States is large, even if applied only to the very wealthiest families. The wealthiest 1 percent of families holds $33 trillion in wealth, and the wealthiest 5 percent holds $57 trillion. The burden of a net worth tax would be highly progressive. The wealthiest 1 percent of families holds about 40 percent of all wealth.... Taxes on wealth—including property taxes, net worth taxes, estate taxes, and capital gains taxes, among others—are ubiquitous in the developed countries that make up the... OECD.... Assets have value because of the income (implicit or explicit) they are expected to generate. As such, taxing wealth through a net worth tax and taxing income from wealth through a tax on investment income can achieve similar ends...
Paul Krugman (2015): Artificial Unintelligence: "In the early stages of the Lesser Depression, those of us who knew a bit about the macroeconomic debates of the 1930s... felt a sense of despair. Everywhere you looked, people who imagined themselves sophisticated and possessed of deep understanding were resurrecting 75-year-old fallacies and presenting them as deep insights. A lot of water has passed under the bridge since then.... I feel an even deeper sense of despair.... People are still rolling out those same fallacies, even though in the interim those of us who remembered and understood Keynes/Hicks have been right about most things, and those lecturing us have been wrong about everything. So here’s William Cohan in the Times, declaring that the Fed should “show some spine” and raise rates even though there is no sign of accelerating inflation. His reasoning: 'The case for raising rates is straightforward: Like any commodity, the price of borrowing money—interest rates—should be determined by supply and demand, not by manipulation by a market behemoth. Essentially, the clever Q.E. program caused a widespread mispricing of risk, deluding investors into underestimating the risk of various financial assets they were buying'...
Oded Galor, Omer Moav, and Dietrich Vollrath (2009): Inequality in Landownership, the Emergence of Human-Capital Promoting Institutions, and the Great Divergence https://delong.typepad.com/land-inequality.pdf: "Inequality in the distribution of landownership adversely affected the emergence of human-capital promoting institutions (e.g. public schooling), and thus the pace and the nature of the transition from an agricultural to an industrial economy, contributing to the emergence of the great divergence in income per capita across countries. The prediction of the theory regarding the adverse effect of the concentration of landownership on education expenditure is established empirically based on evidence from the beginning of the 20th century in the U.S...
Felix Salmon: 1 Big Thing: The Cost of Unstable Norms: "Adam Neumann, Kevin Burns, Boris Johnson and Donald Trump were historically rewarded for breaking the rules. Now, suddenly, the rules seem as though they might matter. Neumann... WeWork, broke more rules even than Travis Kalanick... of Uber... became billionaires by losing billions of dollars, and they both awarded themselves voting control of their boards despite holding only a minority economic position.... Burns... Juul Labs, allowed his company to market its products to children and to claim without FDA permission that they were significantly safer than cigarettes.... Johnson, the U.K. prime minister, made his name and reputation by making up lies about the European Union and getting them printed in a respectable newspaper.... Trump—well, if you don't know how Trump built his career by violating political rules and norms, Axios Edge is not the place for you to find out.... Neumann and Burns were both fired.... Johnson's activity was found to be illegal in a unanimous ruling by the U.K. Supreme Court. Impeachment proceedings are beginning against Trump... Their punishment does not restore trust to the system. Instead, it reveals the degree to which trust is now absent. A world where rule-breaking and 'disruption' continue to be celebrated in both the economic and political spheres is a world where a lot of energy ends up being wasted on trying to discern the status of formerly clear boundaries. Capitalism works best when everybody is playing by the same rules. Right now we seem to be moving away from that ideal...
That's a 2.5% reduction in suicides for a 10% rise in two dimensions of the safety net. That seems to me to be large effect: William H. Dow, Anna Godøy, Christopher A. Lowenstein, and Michael Reic: Can Economic Policies Reduce Deaths of Despair?: "Midlife mortality has risen... largely reflect [ing]increased mortality from alcohol poisoning, drug overdose and suicide.... We leverage state variation in policies over time to estimate difference-in-differences models of drug overdose deaths and suicides, using data on cause-specific mortality rates from 1999-2015.... Higher minimum wages and EITCs significantly reduce non-drug suicides.... Increasing both the minimum wage and the EITC by 10 percent would likely prevent a combined total of around 1230 suicides each year...
Federal Reserve Bank of New York: Nowcasting Report: Aug 16, 2019: : "The New York Fed Staff Nowcast stands at 1.8% for 2019:Q3. News from this week's data releases increased the nowcast for 2019:Q3 by 0.2 percentage point. Positive surprises from building permits and retail sales were only partially offset by negative surprises from industrial production and capacity utilization...
Tim Duy: Paving The Way To Rate Cuts: "The Fed will cut interest rates at least 25bp in September.... The manufacturing sector is weak.... Still... the slowdown in the sector has yet to match that of 2015-16 nor does it even approach something consistent with a recession. I have said this before, but it should be said again: As manufacturing becomes a smaller portion of the economy, we should expect more instances of manufacturing downturns or even manufacturing recessions being separate from the overall business cycle. In contrast, the much larger consumer sector of the economy continues to power forward. Retail sales sustained the rebound from turn-of-the-year weakness and core sales are again growing at a roughly 5% year-over-year rate.... The general continued strength in spending reflects the solid labor market. In my opinion, job losses need to mount before consumer spending will crumble. Low and steady initial unemployment claims indicate that those job losses are not yet on the horizon...
Guido Alfani and Cormac Ó Gráda: The Timing and Causes of Famines in Europe: "Studies of modern famines tend to consider them ‘man-made’, resulting from war or from adverse shocks to food entitlements. This view has increasingly been applied to historical famines, against the earlier Malthusian orthodoxy. We use a novel dataset and temporal scan analysis to identify periods when famines were particularly frequent in Europe, from ca. 1250 to the present. Up to 1710, the main clusters of famines occurred in periods of historically high population density. This relationship disappears after 1710. We analyse in detail the famines in England, France and Italy during 1300–1850, and find strong evidence that before 1710 high population pressure on resources was by far the most frequent remote cause of famines (while the proximate cause was almost invariably meteorological). We conclude, in contrast with the currently prevailing view, that most preindustrial famines were the result of production, not distribution issues. Only after 1710 did man-made famines become prevalent...
I missed this too when it came out three years ago: Chris Blattman: Black Lives Matter, Economic History Edition: "Trevon Logan’s Presidential address to the National Economics Association. Partly he calculates the productivity of his sharecropping ancestors relative to slave holding estates a century before (a persistent question in American economic history). But mainly he makes an argument for doing more qualitative interviews, which seems like an obvious point, except that systematic qualitative work is the exception in economic history (as it is in development economics): 'That richer, fuller picture reveals that the work behind the estimates came to define the way that the Logan children viewed racial relations, human capital, savings, investment, and nearly every aspect of their lives..... We also learn that it is impossible to divorce the work from its social environment, an era in which Jim Crow, segregation, and other elements of overt racial oppression were a fact of life...
Project Syndicate: Brad DeLong for PS Say More: "Welcome to Say More, a new weekly newsletter that brings Project Syndicate's renowned contributors closer to readers. Each issue invites a selected contributor to expand on topics covered in their commentaries, delve into new ones, and share recommendations, offering readers exclusive insights into the ideas, interests, and personalities of the world's leading thinkers. This week, Project Syndicate catches up with Brad DeLong...
Donald Trump: "That is why we need strong, sound, and steady [pause] leadership, at the United States Federal Reserve. I have nominated Jay to be our next Federal Chairman. [pause] And so important, because he will provide exactly that type of leadership. He's strong. He's committed. He's smart. And, if he is confirmed by the Senate, Jay will put his considerable talents to work, leading our nation's independent central bank. Jay has learned the respect and admiration of his colleagues for his hard work, expertise, and judgment. Based on his record, I am confident Jay has the wisdom and leadership to guide our economy through any challenges that our great economy may face...
Donald Trump: Our Economy is very strong, despite the horrendous lack of vision by Jay Powell and the Fed, but the Democrats are trying to “will” the Economy to be bad for purposes of the 2020 Election. Very Selfish! Our dollar is so strong that it is sadly hurting other parts of the world. The Fed Rate, over a fairly short period of time, should be reduced by at least 100 basis points, with perhaps some quantitative easing as well. If that happened, our Economy would be even better, and the World Economy would be greatly and quickly enhanced-good for everyone!...
Abby D. Phillip: "Melania Trump has never met North Korea's Kim Jong Un.... Trump claimed she has a good relationship with him. Here's how @PressSec explains the discrepancy https://t.co/47dp8U9dRO: 'While the First Lady hasn't met him, he feels like she's gotten to know him too...
Ben Thompson: The WeWork IPO: "The 'unsavoriness'... is hardly limited to the fact that WeWork can stiff its landlords in an emergency. The tech industry generally speaking is hardly a model for good corporate governance, but WeWork takes the absurdity an entirely different level. For example: WeWork paid its own CEO, Adam Neumann, $5.9 million for the 'We' trademark.... WeWork previously gave Neumann loans to buy properties that WeWork then rented. WeWork has hired several of Neumann’s relatives, and Neumann’s wife would be one of three members of a committee tasked to replace Neumann if he were to die or become permanently disabled over the next decade. Neumann has three different types of shares that guarantee him majority voting power.... Neumann has already reportedly cashed out 700 million of his holdings via sales and loans. Everything taken together hints at a completely unaccountable executive looting a company that is running as quickly as it can from massive losses that may very well be fatal whenever the next recession hits.... The WeWork bull case and bear case... both are the logical conclusion of effectively unlimited capital. The bull case is that WeWork has seized the opportunity presented by that capital to make a credible play to be the office of choice for companies all over the world, effectively intermediating and commoditizing traditional landlords. It is utterly audacious, and for that reason free of competition. The bear case, meanwhile, is that unlimited capital has resulted in a complete lack of accountability and a predictable litany of abuses, both in terms of corporate risk-taking and personal rent-seeking...
Kevin Drum: Donald Trump Is Not Well: "Prime Minister Mette Frederiksen of Denmark said today that talk of selling Greenland to the US was an “absurd discussion,” adding that Greenland Premier “Kim Kielsen has of course made it clear that Greenland is not for sale. That’s where the conversation ends.” Donald Trump responded by canceling his upcoming visit to Copenhagen: Donald J. Trump: 'Denmark is a very special country with incredible people, but based on Prime Minister Mette Frederiksen’s comments, that she would have no interest in discussing the purchase of Greenland, I will be postponing our meeting scheduled in two weeks for another time...' Can we finally start talking publicly about Trump’s mental state? This is the action of a child, not an adult in full control of his faculties. Everyone aside from Trump understood that his Greenland compulsion was a sign of cognitive regression in the first place, and this episode demonstrates that it was no passing fantasy. Trump took it seriously enough to treat Frederiksen’s comments as just another incitement to a feud with a political enemy. The man is not well. I don’t care what you want to call his condition, but he’s not well. I can only shiver at the thought of what the folks who work regularly with Trump really think of him these days...
John Haltiwanger: @jchaltiwanger: "In the past 24 hours Trump cancelled a trip to Denmark because it wouldn’t sell him Greenland, referred to American Jews who vote Democratic as disloyal, and tweeted Israeli Jews view him as the 'second coming of God' and the 'King of Israel'...
Duncan Black: But 100% Of Trump Supporters Who Say They Still Support Trump Still Support Trump: "The bizarre coverage of the electorate in the age of Trump-and all reporters are quite aware of this criticism and they do it anyway-is that the only voters who matter are the people who support Trump. Weirdly if you focus on them, it seems like Trump has 100% support!... Trump has never been popular.... But Obummer was always treated as a fairly unpopular president-with his critics dominating the narrative-and Trump has been treated as a popular one. Again, reporters know this.... They are not too stupid to be aware that this is what they have been doing.... 'Trump's low approval provides a unique challenge for Democrats' will be a NYT headline soon. And the sad thing is, Democrats will believe it...
John Maynard Keynes (1919): The Economic Consequences of the Peace, by : "What an extraordinary episode in the economic progress of man that age was which came to an end in August, 1914!...
Duncan Black: No Method In The Madness: "One might be tempted to see bucking trade orthodoxies and reconsidering our various relationships with China as good things. They probably are good things! But Trump has no idea what he's doing and even if he accidentally settled on smart policies he'd forget about them and do something differently the next day...
Steve M.: Neither Haley Nor Pence Will Be the Republican Nominee: "Elizabeth Bruenig... a conversation... with several evangelical Trump supporters in Texas.... 'I asked whether any of them would be willing to vote for a more traditional evangelical challenger to Trump, should one hypothetically rise to oppose him in the primaries.... Maria Ivy warned that Pence is soft compared with Trump, too decent and mannerly.... Bob Collins agreed: “The president is having to deal with a den of vipers,” he said. “I’m not sure Pence could do that.” “It’s spiritual warfare,” Dale Ivy added, emphasizing that Trump is the only man in the field who seems strong enough to confront it.' Given the choice between a brawler who doesn't talk about Jesus enough and a devout Christian who doesn't brawl enough, evangelical voters will choose the brawler every time.... Dan Crenshaw, Tom Cotton, Liz Cheney, Matt Gaetz, Donald Junior. (UPDATE: I should add Josh Hawley to this list.)... The nominee won't be a break from Trumpism or a 'healer'...
Ian Dunt: "Right well, the most historic day in parliament since the last one is about to kick off. You can follow along here https://t.co/nMVmrBf2pY...
**Erica Grieder (2015)The Politics of Jade Helm: "Greg Abbott’s announcement... that he would direct the Texas State Guard to monitor Operation Jade Helm... has been widely derided as political pandering, stoking paranoia, wasting state resources, and making Texas look silly. Way harsh, guys.... LTC Mark Lastoria did a good job of explaining the purpose of the operation and how local residents specifically might be affected. Less clear, at least to me, is whether the community as a whole was being unduly conspiratorial.... Several... had tinfoil-hat type questions.... Others may just have been wondering whether to make note of any planned amphibious landings at Lost Pines, or trying to assess the risk of cross-fire at Buc-ees. The latter type of concern is not deranged, especially coming from civilians who may have had little personal experience with the military or military personnel. And Abbott’s announcement is apparently in response to such concerns, rather than those being fueled by the right-wing fear machine.... Abbott notes that US Special Operations Command has already assured the state that there will be no risks to the safety of residents, or their rights, but he wants the Texas State Guard to keep an eye on the situation, just in case.... Activating the Texas State Guard in such a situation would entail some costs to the state (from current appropriations) and I wouldn’t call it the best use of state resources. Other than that, though, I don’t really see the harm...
In the modern world, it is not tariff reduction but regulatory harmonization that is required for grasping increased benefits from the world division of labor. We need to work to level up rather than level down or level stupid, but we need to work to level the regulatory landscape. The Brexit hope is for a free-trade zone with the United States but also with "national sovereignty" over regulatory matters. That is just not how it works: N. Piers Ludlow: Did We Ever Really Understand How the EU Works?: "Michael Gove... referred... to a free trade zone... from Iceland to Turkey of which Britain would, he was confident, still be part... irrespective of the outcome of the referendum. But this focus on tariffs was quaintly anachronistic, because ever since the 1980s the main target of European liberalisation efforts has... been... non-tariff barriers... regulatory convergence.... But–remarkably–hardly anyone took Gove to task for this misleading claim. Instead the vast majority of commentators seem to have regarded his statement as relevant and legitimate.... A second feature of the EU that we ought to have known about but have blithely failed to think through is the importance of timetables. European integration history is studded with the use of timetables and deadlines designed to compel member states to respect their obligations and to bring about simultaneously the administrative, commercial and legal changes that they have agreed to make.... Another avoidable error has been to underestimate the degree to which Brexit’s impact upon Ireland would become a central concern for the whole EU.... The EU is always prone to support an insider in a tussle with an outsider.... Finally, and perhaps most fundamentally, the British debate about what was likely to prove negotiable has failed repeatedly to take into account the political nature of the entity with which it is dealing, and the fact that it is the UK and not the EU that is asking for change. The first of these realities is best illustrated by the Boris Johnson ‘prosecco’ argument–or the idea that the strength of Britain’s bargaining position in the negotiations springs from the commercial interest of many continental exporters in keeping access to the lucrative UK market. This overlooks the extent to which all of the EU27 regard a flourishing EU as even more valuable than the British market, whether economically or politically...
Doug Jones: language Evolution: "People don’t just communicate by encoding and decoding literal meanings, but by inferring one another’s communicative intentions, always thinking 'I wonder what he meant by that'. There’s a whole branch of linguistics, linguistic pragmatics, that studies how this works. And pragmatic inference in language is just one instance of a special, powerful human aptitude for creating shared intentions. This aptitude means that there are always ways to subvert official speech, in any language, even Ascian or Newspeak. Or Korean: the news several years ago was that North Korea had banned sarcasm:׳Officials told people that sarcastic expressions such as “This is all America’s fault” would constitute unacceptable criticism of the regime׳...
Aldous Huxley: Brave New World: "Outside, in the garden, it was playtime. Naked in the warm June sunshine, six or seven hundred little boys and girls were running with shrill yells overs the lawns, or playing ball games, or squatting silently in twos or threes among the flowering shrubs […] The air was drowsy with the murmur of bees and helicopters. The Director and his students stood for a short time watching a game of Centrifugal Bumble-puppy. Twenty children were grouped in a circle round a chrome steel tower. A ball thrown up so as to land on the platform at the top of the tower rolled down into the interior, fell on a rapidly rotating disk, was hurled through one or other of the numerous apertures pierced in the cylindrical casing, and had to be caught. 'Strange', mused the Director, as they turned away, 'strange to think that even in Our Ford’s day most games were played without more apparatus than a ball or two and a few sticks and perhaps a bit of netting, imagine the folly of allowing people to play elaborate games which do nothing whatever to increase consumption. It’s madness. Nowadays the Controllers won’t approve of any new game unless it can be shown that it requires at least as much apparatus as the most complicated of existing games'...
Alexis Lothian: Alice Sheldon and the Name of the Tiptree Award: "In recent days, we’ve seen questions raised on social media about whether the name of the Tiptree Award should be reconsidered.... The questions relate to Alice Sheldon’s actions at the end of her life. On May 19, 1987, she shot first her husband, Huntington Sheldon, and then herself.... The Motherboard does not believe that a change to the name of the Tiptree Award is warranted now. But we believe that this is a very important discussion, and we do not think it is over. The community that has grown up around this award since its founding in 1991 deserves to have its voice heard in any conversation as significant as renaming.... Alice Sheldon... the story of how she and her husband, Huntington Sheldon (known as Ting), died. Friends and family—and the science fiction community at the time—viewed this tragedy as resulting from a suicide pact: the desperate and tragic result of a combination of physical and mental illness and the Sheldons’ desire to die on their own terms. He was 84 years old; she was 71. However... the story can also be seen as an act of caregiver murder.... Ting’s friends and family understood his death and Alice’s as the fulfilment of an agreement between the two of them.... Phillips writes: 'Ting didn’t leave a statement, but all Ting’s friends that I talked to plus his son Peter were unanimous that it was a pact, and that Ting’s health was failing'...
Jess Phillips: House of Commons: ""Tonight I will vote against a general election just like I will vote against pretty much anything the current PM put in front of me.... I have no faith in literally anything the prime minister says. There is no distance that I could trust him.... The PM is playing some bully boy game, of some bully boy public school that I probably won't understand. [Tory MP shouting] Sorry, would the hon gentleman like to make an intervention? Crack on.... Yesterday I watched Conservative colleagues begging him to tell them what he wanted... to give them a deal to vote for. This is some game that three men in No. 10 have come up with to try to game the system so that they win.... Personally I will not vote for any election that falls before October 31st..... "It's just a shame that quite a lot of the people who are sat in front of me who know that what happened over the last two days is wrong are too cowardly to actually say in here, in public, what they're all saying in the tea rooms. "You've all crowed and given sympathy to me about the problems that we have in the Labour Party and you have just sat by silently as your colleagues were marched out.... "We shouldn't go on conference recess. We shouldn't be proroguing parliament. We are currently in a national crisis. This is not a game. This is not some toy we can play with.... I'm meant to believe the PM is really doing this because he has a vision for the people in this country? He has a vision that comes to him every night and it is his own face...
Josiah Ober: The Greeks and the Rational: The Discovery of Practical Reasons: "September 19 Lecture 1. Gyges’ Choice: Rationality and Visibility. September 26 Lecture 2. Glaucon’s Dilemma: Origins of Social Order. Lecture 3. Deioces’ Ultimatum: How to Choose a King. Lecture 4. Cleisthenes’ Wager: Democratic Rationality. Lecture 5. Melos’ Prospects: Rational Domination. Lecture 6. Agamemnon’s Cluelessness: Reason and Eudaimonia...
Larry Meyer: In John Cassidy: The Decline of Economics: "In our firm, we always thanked Robert Lucas for giving us a virtual monopoly. Because of Lucas and others, for two decades no graduate students are trained who were capable of competing with us by building econometric models that had a hope of explaining short-run output and price dynamics. [Academic economics Ph.D. programs] educated a lot of macroeconomists who were trained to do only two things--teach macroeconomics to graduate students, and publish in the journals...
Filipe Campante and Edward L. Glaeser: Yet Another Tale of Two Cities: Buenos Aires and Chicago: "Buenos Aires and Chicago grew during the nineteenth century for remarkably similar reasons. Both cities were conduits for moving meat and grain from fertile hinterlands to eastern markets. However, despite their initial similarities, Chicago was vastly more prosperous for most of the twentieth century. Can the differences between the cities after 1930 be explained by differences in the cities before that date? We highlight four major differences between Buenos Aires and Chicago in 1914. Chicago was slightly richer, and significantly better educated. Chicago was more industrially developed, with about 2.25 times more capital per worker. Finally, Chicago’s political situation was far more stable and it was not a political capital. Human capital seems to explain the lion’s share of the divergent path of the two cities and their countries, both because of its direct effect and because of the connection between education and political instability...
It is certainly true that you have to look at both demand and supply to figure out what happens in equilibrium. But Milton Friedman's first rule is that supply curves do slope upward. Things have to be very weird indeed for equilibrium effects to do more than modestly attenuate impact effects. Sometimes things are really weird But that is not the way to bet: Raj Chetty: In Conversation: "We talked about moving-to-opportunity.... You might worry that if we help one low-income family move out of a low-opportunity area, do they simply get replaced by another low-income family who moves into that area, so we have essentially a musical chairs phenomenon?... Empirical research has recently mainly been focused on identifying individual-level effects. But trying to figure out how things play out in equilibrium is a very challenging problem, which, I think, is something we should have on our agenda to focus on going forward...
One problem here is that strongly progressive taxes, national health insurance, expanded social security, and universal basic income are the most effective remedies to inequality and insecurity, yet those who vote for modern-day neo-fascist poliicians vote for politicians who oppose such police, root and branch—maybe not in their rhetoric, but in committee and on the floor where the rubber hits the road. The dominant rhetorical mode is not "we need to help each other through our agency that is the government" but rather "we need to crush our enemies, and then everything will be okay". My view is that equitable growth policies are worth doing for their own sake, but do not expect them to have much purchase in preserving liberal democracy: Dani Rodrik: What’s Driving Populism?: "If... [fascism] is rooted in... culture and values, however, there are fewer options. Liberal democracy may be doomed by its own internal dynamics and contradictions.... Racism in some form or another has been an enduring feature of US society and cannot tell us, on its own, why Trump’s manipulation of it has proved so popular.... Will Wilkinson... urbanization... creates thriving, multicultural, high-density areas where socially liberal values predominate. And it leaves behind rural areas and smaller urban centers that are increasingly uniform in terms of social conservatism and aversion to diversity. This process, moreover, is self-reinforcing.... The cultural trends... are of a long-term nature, they do not fully account for the timing of the populist backlash.... Those who advocate for the primacy of cultural explanations do not in fact dismiss the role of economic shocks. These shocks, they maintain, aggravated and exacerbated cultural divisions, giving... [fascists] the added push they needed..... The precise parsing of the causes... may be less important than the policy lessons.... There is little debate here. Economic remedies to inequality and insecurity are paramount...
The extremely sharp center-right economist Ricardo Hausmann comes from Venezuela, and has been trying to understand the roots of the collapse of the social contract there. The great fear is that Veneezuela is, for us, the canary in the coal mine. His argument is strong, and I think that I have heard his argument before, in Plutarch's understanding of the downward spiral of the last days of the Roman Republic: Plutarch: _ Life of Tiberius Gracchus_: "This is said to have been the first sedition at Rome, since the abolition of royal power, to end in bloodshed and the death of citizens; the rest though neither trifling nor raised for trifling objects, were settled by mutual concessions, the nobles yielding from fear of the multitude, and the people out of respect for the senate...": Ricardo Hausmann: How the Failure of “Prestige Markets” Fuels Populism: "Given the requirements of today’s technology, dismissing expertise as privilege is dangerous. That's why a well-functioning prestige market is essential to reconciling technological progress and the maintenance of a healthy polity.... Henrich suggests... prestige is payment for the generosity with which the prestigious share their knowledge.... A model of human behavior proposed by George Akerlof and Rachel Kranton.... Rising wage differentials may destroy the equilibrium proposed by Henrich. If the prestigious are already very well paid, and are not perceived as being generous with their knowledge, prestige may collapse. This may be another instance of the incompatibility between homo economicus and community morality emphasized by Samuel Bowles.... The collapse in the prestige equilibrium can do enormous damage to a society, because it may break the implicit contract whereby society uses critical skills. To see why and how, look no further than what has happened in Venezuela...
Nice piece on the origins of the alt-right: John Ganz: The Year the Clock Broke: "Murray Rothbard loved The Godfather... even thought that the Godfather reflected his own worldview: 'Organized crime is essentially anarcho-capitalist, a productive industry struggling to govern itself.'... As early as the Reagan years, [Samuel] Francis called for Middle Americans to ally with a populist, 'Caesarist' presidency to accomplish their revolution, just as the French bourgeoisie aligned themselves with Napoleon.... He didn’t know it yet, but his Bonaparte was right there the whole time. On November, 9, 1992... New York magazine put Donald Trump on the cover...
Per Kurowski: We Need Worthy and Decent Unemployments: "Two decades ago, concerned about growing unemployment, half in jest, in an Op-Ed in El Universal of Caracas, I asked something like whether it was better to have one hundred thousand unemployed running each on his side as broody hens, or to seat them all in a huge human circle where everyone would scratch the backs of one of his neighbors, charging a lot for his services, while his own back was scratched by his other neighbor, at an equally high price. The tragedy is that this question seems to me now less and less hypothetical...
Jeb Bush: "When it comes to my brother, there's one thing I know for sure. He kept us safe."
The interest rate is an optimal-control variable. Almost always, in an optimal control problem—like in steering a boat—you are doing one of two things (1) as much as you can (wheel hard left or hard right), or (2) staying the course (wheel center, unsure whether your next move will be to nudge it left or right, but certainly your next move will be small. Only when something special is going on—like following a narrow channel, or passing a reef—do you tend to deviate from that rule. The Fed knows that its next move is highly likely to be a rate cut. I see no reef. I see no island. Why has the rate cut not happened already? What is the reason?: Tim Duy: Gearing Up For A Rate Cut: "One take on the numbers is fairly positive. The economy continues to generate jobs at a pace sufficient to either lower unemployment further or encourage more people to enter the labor force. The jump in wage growth might even suggest that the economy is finally bumping up against full capacity and that is the primary culprit behind slower job growth. And maybe the August jobs number is revised up. Another take is less positive.The job market has clearly slowed, and, after accounting for the Census hires, may have slowed very close to the point where unemployment at best holds steady. That significant downshift in momentum is very worrisome. The second derivative here is not our friend. Moreover, don’t take too much comfort in the stronger wage numbers as that can easily be a lagging variable; wages might not take a hit until unemployment starts rising.... GDP tracking measures from the New York and Atlanta Federal Reserve Banks are both at a below trend 1.5% for the third quarter. New York is looking at 1.1% growth for the fourth quarter. Most definitely nothing to write home about...
Let me endorse this from Larry Summers: Hailey Waller: Economy at Riskiest Point in a Decade, Lawrence Summers Says: "Former treasury secretary calls U.S. trade conflicts ‘foolish’. Economy to be ‘worse off’ based on current policies: Summers: The U.S. and world economies are at their riskiest moment since the global financial crisis a decade ago as trade tensions continue to grow, former Treasury Secretary Lawrence Summers said on Sunday. Summers spoke on CNN’s 'Fareed Zakaria GPS' about what he called a 'sadomasochistic and foolish trade conflict' the U.S. has engaged with China under President Donald Trump. 'We are losing very substantial amounts in terms of uncertainty, reduced investment, reduced job creation, for the sake of benefits that are very unlikely to be of substantial magnitude.... I don’t think there’s any question that American workers are going to be poorer, American companies are going to be less profitable, and the American economy is going to be worse off because of the course we’re on'...
Hoisted from the Archives: In the interest of keeping our eye on the ball in FinReg, let me present Alan Blinder stating that incentives in banks that are too big to fail simply must be totally and completely broken and misaligned: Alan Blinder (2005): On Raghuram Rajan: "I’d like to defend Raghu a little bit against the unremitting attack he is getting here for not being a sufficiently good Chicago economist.... The way a lot of these funds operate, you can become richer than Croesus on the upside, and on the downside you just get your salary. These are extremely convex returns. I’ve wondered for years why this is so. You don’t need to have public regulatory concerns to worry about it.... I remember a discussion I had with... one of the principals of the LTCM, while it was riding high. He agreed with me that the skewed incentives are a problem. But they weren’t solving it.... What can make it a systemic problem is herding, which Raghu mentioned, or bigness, which is related to the discussion that Fraga raised, and so on. If you are very close to the capital—for example, if the trader is the capitalist—then you have internalized the problem. So, it may be that bigness has a lot to do with whatever systemic concerns we have. Thus, I’d draw a distinction between the giant organizations and the smaller hedge funds. Whether that thinking leads to a regulatory cure, I don’t know. In other domains, we know, bigness has been dealt with in a regulatory way...
Nikita Khrushchev (1959): On Peaceful Coexistence: "The socialist states are ruled by the working people themselves.... To them war spells grief and tears, death, devastation and misery. Ordinary people have no need for war.... Peaceful coexistence does not mean merely living side by side... with the constantly remaining threat of [war] breaking out in the future. Peaceful coexistence can and should develop into peaceful competition for the purpose of satisfying man's needs in the best possible way.... Let us try out in practice whose system is better, let us compete without war. This is much better than competing in who will produce more arms and who will smash whom. We stand and always will stand for such competition as will help to raise the well-being of the people to a higher level.... We Communists believe that the idea of Communism will ultimately be victorious throughout the world, just as it has been victorious in our country, in China and in many other states.... We may argue, we may disagree with one another. The main thing is to keep to the positions of ideological struggle, without resorting to arms in order to prove that one is right.... With military techniques what they are today, there are no inaccessible places in the world. Should a world war break out, no country will be able to shut itself off from a crushing blow.... Ultimately that system will be victorious on the globe which will offer the nations greater opportunities for improving their material and spiritual life...
Being poor—and, more so, being poorer than you had expected you would be and having to retrench—stresses you out and makes you unhappy. Blanchflower and Clark decompose the children-make-you-unhappy fact in Europe into a "poverty" and an "other" component, and what they report makes a slot of sense: Children in a well-funcioning family setting are a source of profound happiness, and poverty in particular and stress in general are sources of profound unhappiness: David G. Blanchflower and Andrew E. Clark: Children, Unhappiness and Family Finances: Evidence from One Million Europeans: "The common finding of a zero or negative correlation between the presence of children and parental well-being continues to generate research interest.... One million observations on Europeans from ten years of Eurobarometer surveys.... Children are expensive, and controlling for financial difficulties turns almost all of our estimated child coefficients positive.... Marital status matters. Kids do not raise happiness for singles, the divorced, separated or widowed...
I used to push back against those who said that, with Trump administration immigration policy, the cruelty is the point. I can no longer do so. In Guatemala Maria Isabel Bueso would die quickly for lack of cutting-edge treatments: Farida Jhabvala Romero: Feds to Reconsider Case of Bay Area Woman Getting Lifesaving Treatment Who Faces Deportation: "Maria Isabel Bueso has overcome many challenges as a result of the debilitating genetic disease she was born with that eventually left her confined to a wheelchair, breathing through a device and reliant upon weekly treatments to survive. She trained to become a dance teacher and now is an instructor, and she graduated summa cum laude from California State University, East Bay—where she set up a scholarship fund for students with disabilities. She also advocates for people with her disease and other rare illnesses, traveling to Washington, D.C., to lobby for medical research. Now, Bueso is fighting for her life once more. Immigration authorities previously told her and her family to leave the U.S. by mid-September—or face deportation to her home country of Guatemala...
Let me direct your attention to one of the WCEG's young whippersnapper grantees writing smart things: Samir Sonti: The Politics of Inflation: "amir Sonti studies 20th century U.S. labor and economic history. Sonti’s dissertation focuses on the politics of inflation in the United States from the 1930s to the 1980s. He received a bachelor of arts degree in political science and a bachelor of science degree in economics from the University of Pennsylvania...
Moral fault attaches to anyone who supports the New York Times. That is all.
Frederick Douglass (1870): The Cause of Death of Robert E. Lee: "We are beginning to get at the cause of General Lee's death. Jeff. Davis says, that 'he died of a broken heart'; and one journal has declared, that he died being sadly depressed at the condition of the country, that he could stand it no longer. From which we are to infer, that the liberation of four millions of slaves and their elevation to manhood, and to the enjoyment of their civil and political rights, was more than he could stand, and so he died...
Brad DeLong, Reed Hundt, and Joshua Cohen: Neoliberalism and Its Discontents: "At the end of the Carter administration and throughout the Reagan Revolution, b
This post first appeared on Bradford-delong.com: Grasping Reality With The Invisible Hand..., please read the originial post: here
