Grasping Reality with Both Hands: bradford-delong.com:

Some Fairly-Recent Must- and Should-Reads...

1. Peter Jensen, Markus Lampe, Paul Sharp, and Christian Skovsgaard: The role of elites for development in Denmark: "How did Denmark get to Denmark?... Hundreds of butter factories could spring up in a few years in the 1880s... dominance in agricultural exports could be so rapidly consolidated... why this happened in Denmark and not elsewhere...

2. Paul Krugman: Brexit Meets Gravity: "These days I’m writing a lot about trade policy. I know there are more crucial topics, like Alan Dershowitz. Maybe a few other things? But getting and spending go on; and to be honest, in a way I’m doing trade issues as a form of therapy and/or escapism, focusing on stuff I know as a break from the grim political news...

3. Real Climate: 30 years after Hansen’s testimony: "The first transient climate projections using GCMs are 30 years old this year, and they have stood up remarkably well...

4. In the internet economy, traditional antitrust doctrines and nostrums are much less helpful than we would wish. We need new thinkin' and new legislatin' here. Not that I know what we need, exactly, but we do need it: Ben Thompson: AT&T, Time Warner, and a Framework for Neutrality: "Unfortunate[ly]... a bad case by the government has led to... a merger... never examined for its truly anti-competitive elements...

5. Marco Cipriani and Gabriele La Spada: The Premium for Money-Like Assets: "We estimate such premium using a quasi-natural experiment, the recent reform of the money market fund (MMF) industry...

No, the Trump administration is not very competent at achieving its stated goals. But that does not mean that the Trump administration is not doing enormous harm under the radar by simply being its chaos-monkey essence. The smart David Leonhart tries to advise people how to deal with this: David Leonhardt: Trump Tries to Destroy the West: "[Trump's] behavior requires a response that’s as serious as the threat...

The sharp and well-intentioned Will Wilkinson still thinks that the name "libertarianism" is worth fighting for, or perhaps that "liberaltarianism" is worth fighting for. I, however, for one, think that "libertarianism" is poisoned in the same way that "fascism", "communism", "socialism", and "neoliberalism" are poisoned. Too many bad people have waved their banners in bad faith. In libertarians' case, the bad people waving in bad faith have been those who think that the only rights that matter are the rights to discriminate, to exchange, and to hold what you have no matter how you acquired it. Maybe "positive libertarians" has a chance, maybe not: Will Wilkinson: Liberaltarianism: Back the Future: "Misean economics,... filtered through Ayn Rand and Murray Rothbard's peculiar views of rights and coercion...

Peter Jensen, Markus Lampe, Paul Sharp, and Christian Skovsgaard: The role of elites for development in Denmark: "How did Denmark get to Denmark?... Hundreds of butter factories could spring up in a few years in the 1880s... dominance in agricultural exports could be so rapidly consolidated... why this happened in Denmark and not elsewhere...

Paul Krugman: Brexit Meets Gravity: "These days I’m writing a lot about trade policy. I know there are more crucial topics, like Alan Dershowitz. Maybe a few other things? But getting and spending go on; and to be honest, in a way I’m doing trade issues as a form of therapy and/or escapism, focusing on stuff I know as a break from the grim political news...

Real Climate: 30 years after Hansen’s testimony: "The first transient climate projections using GCMs are 30 years old this year, and they have stood up remarkably well...

In the internet economy, traditional antitrust doctrines and nostrums are much less helpful than we would wish. We need new thinkin' and new legislatin' here. Not that I know what we need, exactly, but we do need it: Ben Thompson: AT&T, Time Warner, and a Framework for Neutrality: "Unfortunate[ly]... a bad case by the government has led to... a merger... never examined for its truly anti-competitive elements...

Marco Cipriani and Gabriele La Spada: The Premium for Money-Like Assets: "We estimate such premium using a quasi-natural experiment, the recent reform of the money market fund (MMF) industry...

David Brooks explicitly practicing identity politics. What's odd is that Jews are almost always first on the block to be excluded from "Western Europe" whenever someone embarks on the journey that leads to ultimately saying that the only true civilization bearers are the Anglo-Saxons (or the Saxon-Saxons, depending), with the wogs starting at either Calais or Liege, depending. Does he even know that the only sovereigns who made significant outreach to rescue the Sephardim expelled from Spain was named Bayezid II Osmanli?: Yastreblyansky: Identity politics with David Brooks: The wolves are in the henhouse: "David Brooks's hot take on the Trump-Putin summit ('The Murder-Suicide of the West') was that it was like when C.S. Lewis's mother died, not that he was there, it was in 1908, but he's read about it, and it's pretty sad...

Spencer Ackerman: U.S. Officials ‘at a Fucking Loss’ Over Latest Russia Sellout: "PERSONA NON GRATA: The White House’s refusal to rule out turning over former U.S. Ambassador Michael McFaul to the Russians has current and former State Department officials seeing red...."

The rise of neo-fascism: Martin Wolf: How we lost America to greed and envy: "Mr Trump is the logical outcome of a politics that serves the interests of the plutocracy...

Steven L. Hall: "From a counterintelligence perspective, something is going on behind the scenes. Before Helsinki I was less sure; post Helsinki, I feel sick..."

Yes. It is long past time for 25th Amendment remedies. Why do you ask?: David Frum: What Hold Does Putin Have on Trump?: "We still do not know what hold Vladimir Putin has on Donald Trump, but the whole world has now witnessed the power of its grip...

Economic Growth: Some Fairly Recent Should- and Must-Reads

Economic Growth:

• The answer is: probably in the late 1960s: Joe McMahon: When was the last time all the computing power in the world equaled one iPhone?: "When was the last time all the computing power in the world equaled one iPhone?..

• We may not believe Bob Allen's provocative economic history of Soviet Russia, however. I think that Russia is enough of a "European" country that an "Asian" or "Latin American" baseline is not appropriate. Aside from the value to the world of a heavy industrial complex in Magnitogorsk in 1939 (a big aside), the Stalinist road to industrial society was not only genocidal and long-run counterproductive but medium-run stupid. But why Mehmet Ali Pasha was unable to make Egypt a cotton-spinning and -weaving center remains a fascinating question: Tom Westland: Russia vs Egypt: "In both 19th century Egypt and 20th century Russia, the path to industrial growth was blocked by a formidable swamp: subsistence agriculture...

Kevin is, I think, wrong here. Radiologists are not (yet) in trouble. Radiologists as image-reading 'bots are in trouble: Kevin Drum: Puny Humans Crushed By Machines Yet Again: "Radiologists are already in trouble, and if a robot can pass a medical licensing exam summa cum laude then how much longer can it be before robots are making house calls? Everybody thinks of truck drivers and retail clerks as the first victims of the coming robot revolution, but that isn’t necessarily the case. Jobs that require no tricky physical proficiency but very deep analytical skills are going to be some of the first to put people permanently out of work. In a sense, though, this is a good thing, since it means the challenge ahead will finally get some serious attention...."

There are two ways this could go—extending "whiteness" or permanent Republican minority status. In the past, "whiteness" has always been expanded so that it includes a vast majority of the American population—and so now we have people named Mark Krikorian denouncing the threat of a Hispanic wave that will pollute America: Kevin Drum: White Party, Brown Party: "I don’t think that our political system will literally become the White Party vs. the Brown Party, but it’s already closer to this than any of us would like to admit. What’s worse, it’s all but impossible to imagine how Republicans can turn things around in their party. They’re keenly aware of the need to address their demographic challenges, but the short-term pain of reaching out to non-whites is simply too great for them to ever take the plunge. Democrats aren’t in quite such a tough spot, but their issues with the white working class are pretty well known, and don’t look likely to turn around anytime soon either.

A point with which I strongly agree: Webpages should be webpages, and not other things: David Copeland: Brutalist Web Design: "Brutalist Web Design is honest about what a website is and what it isn't...

This is as true now as it was half a century ago when Galbraith first began saying it: John Kenneth Galbraith (1963): Wealth and Poverty: "The modern conservative... not even especially modern... is engaged... in one of man’s oldest, best financed, most applauded, and, on the whole, least successful exercises in moral philosophy. That is the search for a superior moral justification for selfishness...

A small partial modification of Galbraith's dictum: Dan Davies: The Tribute that Vice Pays to Virtue: "The single most sensible thing said in political philosophy in the twentieth century was JK Galbraith's aphorism that the quest of conservative thought throughout the ages has been 'the search for a higher moral justification for selfishness'.... Then there are the tricky cases where the rightwingers happen to be on the right side because we haven't yet discovered a better form of social organisation than private property for solving several important classes of optimisation problem..."

History and Moral Philosophy: Some Fairly-Recent Should-Reads

• (i) Free trade, (ii) the industrial research lab, (iii) the gold standard, and (iv) high finance to lobby for peace and channel money to régimes that played by the rules of the game—those were the key stabilizing institutions of Gold Standardism. (i) Labor unions, (ii) Keynesian demand management, (iii) social insurance, and (iv) high-throughput oligopolistic assembly-line manufacturing—those were the key stabilizing institutions of Fordism. So what are the next key stabilizing institutions? There is no guarantee that there will be any. There was, after all, a 33-year gap between the breakdown of Gold Standardism in 1913 and the first clear signs of the successful construction of Fordism in 1946. If we see 2000 as the last gasp of successful Fordism... then we may have a long slog. For who in 1913 would have predicted the future and bet that labor unions, Keynesian demand management, social insurance, and high-throughput oligopolistic assembly-line manufacturing were the key institutions to be building?: Nicolas Colin: Doom, or Europe’s Polanyi Moment?: Polanyi’s... The Great Transformation... is really about the social and economic institutions that are necessary to support the market system and to make economic development more sustainable and inclusive...

The extremely sharp Tim Duy provides us with not a recession signal but rather with a signal that current Fed policy is going to provide us with a recession signal: Tim Duy: Fed Pushing Ahead Toward Inversion: "I fully expect the Fed will continue hiking rates if the yield curve inverts unless there is a clear financial meltdown at that time...

How to use and misuse the argument ad hominid: Belle Waring (2003): Just Not So Stories: "Like everyone else, I'm tired of hearing about how Darwinian pressures cause men to think that young women with a fetching hip-to-waist ratio...

The Trump administration and the Republicans that enable it do not understand that disrupting value chains does not get you the benefits in terms of shifting the terms-of-trade in your favor that (with no retaliation) tariffs can in the "optimal tariff" literature when levied on finished goods: Chad P. Bown: "BMW says it will build more of its SUVs overseas and NOT IN SOUTH CAROLINA because of China’s retaliation on US autos in response to Trump’s tariffs..."

Karl Marx (1867): The Historical Tendency of Capitalist Accumulation: "The private property of the labourer in his means of production is the foundation of petty industry, whether agricultural, manufacturing, or both...

Erik Loomis: The Amazing Early Progress of #AbolishICE: "This movement was basically started by Sean McElwee on Twitter in the early part of the year...

How much of the forthcoming announcement of an upward bump in GDP growth in the second quarter is due to people battening down the hatches for Trump's trade war, and will be reversed over the course of the next year? That is what we are all trying to estimate right now: Paul Krugman: Trump, Tariffs, Tofu and Tax Cuts: "More than half of America’s soybean exports typically go to China, but Chinese tariffs will shift much of that demand to Brazil, and countries that normally get their soybeans from Brazil have raced to replace them with U.S. beans. The perverse result is that the prospect of tariffs has temporarily led to a remarkably large surge in U.S. exports...

Blaming the Pollyannaish fecklessness of the Bank of England on the feckless indolence of Britain's reporters: Simon Wren-Lewis: How UK deficit hysteria began: "Monetary policy ran out of reliable levers to manage the economy. However, journalists wouldn’t know that from the Bank of England, who tended to talk as if Quantitative Easing was a close substitute to interest rates as a monetary policy instrument...

Meredith Haggerty: Review: We Tried Casper’s “The Dreamery” Nap Pods: "Casper opened a pay-per-nap store in New York, where you can use nice skincare products and ponder capitalism until you fall asleep.... Casper’s announcement that the mattress brand had created a space where New York’s tired could take 45 minute naps for $25 was met with a range of reactions.... In my sleepiness I saw an opportunity: to zonk out during work hours and charge it to Vox Media. No one asked, but I volunteered to take an expensive, expensed nap..."

Judea Pearl on the Meaning of the Monty Hall problem: Judea Pearl: (2018): The Book of Why: The New Science of Cause and Effect (New York: Basic Books: 046509760X): "Even today, many people seeing the puzzle for the first time find the result hard to believe. Why? What intuitive nerve is jangled?...

Judea Pearl provides the first good response I have ever heard to Cosma Shalizi's priceless anti-Bayesian rant: Cosma Shalizi (2016): On the Uncertainty of the Bayesian Estimator: "I hardly know where to begin. I will leave aside the color commentary. I will leave aside the internal issues with Dutch book arguments for conditionalization. I will not pursue the fascinating, even revealing idea that something which is supposedly a universal requirement of rationality needs such very historically-specific institutions and ideas as money and making book and betting odds for its expression..."

The answer is: probably in the late 1960s: Joe McMahon: When was the last time all the computing power in the world equaled one iPhone?: "When was the last time all the computing power in the world equaled one iPhone?...

Paul Krugman (2013): Macrofoundations: "Macro is the only reason anyone listens to all those microeconomists who think they’re being rigorous...

Stefan Gerlach and Rebecca Stuart: The Term Structure and Recessions Before the Fed: "The results... (1) A flattening of the term spread increases the risk of recession...

Gender Issues: Relatively Recent and Worth Reading...

• Increasingly it looks to me like a career-interruption and child-raising penalty, as if institutions designed to figure out which men are committed to the job and are thus worth paying to keep are misapplied to women. Alan Greenspan a generation and a half ago saw a market opportunity for his forecasting firm to get more productive workers for the salary dollar. But it looks as though he was and is a substantial exception: Sarah Jane Glynn: Gender wage inequality: What we know and how we can fix it: "Women are still severely limited by gender pay inequality.... Close to half of all currently employed workers (46.7 percent), yet... average earnings of... full time, year round is 80.5 percent of men..."

• Anecdotes trump data for what I wish were a surprisingly large proportion of male American economists: Economist: Barriers to entry: "In economics, men receive tenure at a rate 12 percentage points higher than women do, after controlling for family circumstances and publication records...

Paul Krugman: Monopsony, Rigidity, and the Wage Puzzle: "(1) The wage puzzle:F rom the mid-1990s until the 2008 financial crisis, it looked as if there was a fairly stable Phillips curve...

Ten Years Ago on Grasping Reality: July 10, 2008

Department of "Huh?" General Motors Bailout Edition: Why oh why can't we have a better press corps? Why oh why do we watch the New York Times in a death spiral? Why does it publish Roger Lowenstein telling us that: "Extravagant Pensions Are Killing General Motors.... G.M. acknowledged in its most recent annual report that from 1993 to 2007 it... has been sending far more money to its retirees than to its owners..." When GM offered the UAW more lavish benefits, it did so in order to induce the UAW to accept less generous wages. The money that GM paid in the 1990s and 2000s to fund pension and retiree health benefits was offset by wages that GM did not have to pay in the 1960s, 1970s, and 1980s. Lowenstein appears to want to live in a world in which GM (a) gets a break on its wage costs in the 1960s, 1970s, and 1980s; and can do so (b) without having to pay any money to fund pensions in the 1990s and 2000s. I don't want to live in Roger Lowenstein's world.

Washington Post Death Spiral Watch: Words fail me: "Gerson: The Immorality of Food Stamps". Why oh why can't we have a better press corps?

The Transparent Society: Distributed global surveillance: "Spotted Brad DeLong wearing a "Jedi Masters for Barack Obama" t-shirt..."

IMHO, betting that "even the Tory Party can spot a wrong 'un" seems a lot like drawing to an inside straight: Dan Davies: "The hard brexit types have been bounced into deal which has taught them that they're not as clever as they thought they were. Now they'll react to that with a leadership challenge which will teach them that they're not as popular as they thought they were. It's like education in the Montessori system-each little independence of discovery builds on the next..."

Anne Applebaum: Brexit is reaching its grim moment of truth—and the Brexiteers know it: "David Davis... and Boris Johnson.... At no point... have they or any of their Brexiteer colleagues offered what might be described as a viable alternative plan. That is because there isn’t one...

Marcy Wheeler: "For those many people asking me about Chait's piece, I still prefer my own series about what Mueller is looking at, which has the advantage of incorporating actually known facts..."

Hoisted/Smackdown: FLASH: Clive Crook and Jack Shafer Upset Because People Informing People Are Claiming to Be Journalists

I was performing one of my standard rants last week at lunch: about how—with very honorable but notably rare exceptions—you should view everything you see on a video screen or read in any medium from somebody paid to be a "journalist" through a hermeneutics of grave suspicion: Assume, unless and until demonstrated otherwise, that they are working for, in this order: (1) their sources, (2) their editors, (3) their advertisers, and (4) for you not at all—they simply are not interested in being a trustworthy information intermediary informing you about the world.

I got some pushback. So it is time to hoist this again from 2005. In one short week, pieces crossed my desk from both Jack Shafer and Clive Crook. Both made it very clear that, in their minds, informing people about the world is positively unprofessional for a journalist (that is the point of Shafer's attack on Klein and Yglesias) or simply not a relevant consideration (that is the point of Crook's relative exaltation of Cramer and dissing of Stewart):

FLASH: Monday Smackdown Clive Crook and Jack Shafer Upset Because People Informing People Are Claiming to Be Journalists: Hoisted from 2015: http://www.bradford-delong.com/2015/02/flash-clive-crook-and-jack-shafer-upset-because-john-stewart-and-ezra-klein-pretty-sure-earth-is-not-flat.html "Two things that crossed my desk last week that offend the shape of reality itself, and really do deserve to be smacked down.

Seth Godin: Marketing Sauerkraut: "The story goes that James Cook brought fermented german cabbage with him on a long voyage, an innovative way to combat scurvy...

We may not believe Bob Allen's provocative economic history of Soviet Russia, however. I think that Russia is enough of a "European" country that an "Asian" or "Latin American" baseline is not appropriate. Aside from the value to the world of a heavy industrial complex in Magnitogorsk in 1939 (a big aside), the Stalinist road to industrial society was not only genocidal and long-run counterproductive but medium-run stupid. But why Mehmet Ali Pasha was unable to make Egypt a cotton-spinning and -weaving center remains a fascinating question: Tom Westland: Russia vs Egypt: "In both 19th century Egypt and 20th century Russia, the path to industrial growth was blocked by a formidable swamp: subsistence agriculture...

IMHO, the "long run" problems Martin discusses need to be postponed: we don't know enough about the future to even begin to think intelligently about them. The "medium run" problems, by contrast, deserve a lot of attention right now: Martin Wolf: Work in the age of intelligent machines: "How do you organise a society in which few people do anything economically productive?...

It is not clear to me that this is right. It is not clear to me that this is wrong. I need to think about this more: a lot more: Narayana Kocherlakota: Practical Policy Evaluation: "How should a policymaker, who is making but one in a long sequence of choices over time, use the available data to arrive at a decision?...

I believe that this is the next-to-last letter from Washington to Jefferson, and that they never met in person thereafter: George Washington (1796): To Thomas Jefferson, 6 July 1796: "As you have mentioned the subject yourself, it would not be frank, candid, or friendly to conceal, that your conduct has been represented as derogating from that opinion I had conceived you entertained of me...

Trade around the Indian Ocean before 1500 was a largely peaceful, stable process. Empires, kingdoms, sultanates, and emirates ruled the lands around the ocean, but they did not have the naval strength or the orientation to even think of trying to control the ocean's trade. Pirates were pirates—but only attacked weak targets, and needed bases, and for the land-based kingdoms providing bases for pirates disrupted their own trade. Then came 1500, and a new entity appeared in the Indian Ocean: the Portuguese seaborne empire: [Non-Market Actors in a Market Economy: A Historical Parable): From David Abernethy (2000), The Dynamics of Global Dominance: European Overseas Empires 1415-1980 (New Haven: Yale), p. 242 ff: "Malacca... located on the Malayan side of the narrow strait... the principal center for maritime trade among Indian Ocean emporia, the Spice Islands, and China...

John Quiggin: Shibboleths: "I was reminded of... 2011, about when the baton was being passed from Palin to Trump...

IIRC, back when I first read Robert Nozick's Anarchy, State, and Utopia, I thought it was a joke: He spent all this space ranting about how nobody is allowed to make consequentialist arguments, and then makes the consequentialist argument that Lockeian appropriation of pieces of the global commons as private property is fine because it has the consequence of making the world richer? And then there was this: using the Cambridge Rent Control Board to break his contract—his self-actualization as a promise-making autonomous moral being—to extort 30,000 dollars from Eric Segal: Anarchy, State, and Rent Control.

I now think that Anarchy, State, and Utopia was a joke that turned into a grift. Cf.: Robert Bork, who after a lifetime of calling for "tort reform" files a slip-and-fall lawsuit against the Yale Club of Manhattan...

Wikipedia: FLOPS:

I missed this when it first came through: Lessons from special elections, especially PA-18: Josh Barro: Why Pennsylvania special-election result should terrify Republicans: "Should Democrats seek to build a coalition of college-educated suburbanites plus white urbanites and minorities, or should they try to win back blue-collar white voters...