The Economic Incompetence of Republican Presidents: Project Syndicate

J. Bradford DeLong: The Economic Incompetence of Republican Presidents In a United States rife with disinformation, one of the most persistent myths is that Republicans are better than Democrats for business and economic growth. In fact, Republicans have consistently under-performed on the economy for almost a century. One hears many strange things nowadays, not least because “they” (a complicated term) are flooding the zone with misinformation. Without a shared set of facts upon which to base ethical and policy debates, democracy inevitably breaks down. The system’s virtue lies in its unique ability to elevate and consider a broad range of ideas emanating from society. Ideally, through a good-faith exchange of arguments and a weighing of the alternatives, a majority of voters converges on the best course of action...

We hear many strange things today. They—and it is a complicated “they”—are flooding the zone with misinformation. Why? For lots of reasons. But democracy breaks down under a flood of misinformation. Democracies’ excellences spring from its ability to consider ideas from different places in society, and converge on the good ones. But that requires that the flow of information into the public-sphere be reality-based—or at least that there be confrontations in which the people can watch Lincoln debate Douglas and decide who is trustworthy and correct and who is not. And we have lost that.

But we keep on trying. Here Sisyphus. Here rock. Here hill. And, as Camus wrote now long ago, we must imagine Sisyphus happy, with what he meant depending on which of the many possible ways we choose to read the word “must”.

One piece of misinformation I see more and more these days is that on election day America faces a tradeoff. On the one hand, electing a Democrat means that America will no longer have a government that permanently kidnaps children just because it can. On the other hand, electing a Democrat “who will be radical and hurt the economy…”, as the Wall Street Journal columnist Peggy “No Republicans Should Ever Stab Trump in the Back” Noonan puts it, before writing that “[Biden] should not be going out for ice cream in a mask like John Dillinger on the lam…” and that “[Kamala Harris] is embarrassing. Apparently you’re not allowed to say these things because she’s a woman…. I will not sweat it, I will be myself…. If you can’t imitate gravity, could you at least try for seriousness?…”

So let me give the microphone to economists Alan Blinder and Mark Watson, who write that: “The superiority of economic performance under Democrats rather than Republicans is nearly ubiquitous: it holds almost regardless of how you define success…. The performance gap… strains credulity…. 1.8 percentage points [per year]… from Truman through Obama…” And note that if they went back two more presidents—to Hoover-Roosevelt—the gap would be even bigger: about 3%/year.

Note that in this context Trump was an unusually good president as far as economic performance in his first three years was concerned. In teh first three years of his presidency the economy matched the 2.4%/year growth it achieved in Obama’s second term. Even matching the previous Democrat is something that Trump’s and only Trump’s, of all post-WWII Republican presidencies, has seen.

Blinder and Watson are flummoxed on where this performance gap comes from: greater fixed investment, more consumer optimism and thus spending on durables, fewer unfavorable oil shocks, and perhaps stronger growth abroad. But these can explain less than half of the gap. It is not that Democrats pursue overinflationary policies that borrow growth from the future and move it into the present.

When I first read Blinder and Watson, the oil factor jumped out at me. Both President George Bushes—and also Nixon and Ford’s Secretary of State Henry Kissinger—were deeply confused about whether the U.S. wanted a high or a low price of oil as far as boosting real income growth was concerned. Other presidents grabbed for chances to make or keep oil prices lower.

When we look back at history, it seems that Republican presidents and their administrations have little sense of what economic policies are likely to work. It simply never entered George W. Bush’s mind, or the mind of anyone in his administration, that a financial crisis could be produced by underregulation and would be a bad thing. It simply never entered Ronald Reagan’s mind, or the mind of anyone in his administration, that the big budget deficits they created gave America a choice between seeing investment collapse—slowing growth—or borrowing from abroad and in the process importing lots more manufactures—thus turning the Midwest into a rust belt. And Nixon’s belief that low interest rates plus wage-and-price controls could keep both inflation and unemployment low was hard to fathom either at the time.

Here we can say of Trump that he has played true to type. NAFTA: worst trade deal in American history. TPP: second worst. Add some TPP provisions to NAFTA and call it USMCA, and all of a sudden it makes America great again. A trade war with China: “good, and easy to win”. But the result has been no change in manufacturing employment, a widened manufacturing trade deficit, U.S. consumers suffering reduced real incomes because they, not China, have paid the tariffs. Why? Because Robert Lighthizer and company had no clue how to plan or fight a trade war.

Republican presidents with their repeated failures to understand how the economy works have been hurting it since at least 1928. There is no tradeoff here.

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Briefly Noted for 2020-10-26


DeLong: COVID Dashboard

Ulrike Malmendier, Stefan Nagel, & Zhen Yan: The Making of Hawks & Doves: Inflation Experiences on the FOMC

Dan Froomkin: New York Times Nailed for Publishing Republican Propaganda—Yet Again ‘Two supposedly "average" voters in a Times story turn out to be hardcore Republicans. And it's happened before... It raises serious questions about whether Times editors and reporters, rather than actually trying to determine how voters feel, are setting out to find people to mouth the words they need for predetermined story lines that, not coincidentally, echo the Trump campaign's propaganda…

Fox and Briar: Mediterranean Lamb Bowls

Marc Flandreau: How Vulture Investors Draft Constitutions: North & Weingast 30 Years Later

George Dangerfield: The Strange Death of Liberal England, 1910-1914

Gaius Julius Caesar: The Civil War

Gaius Julius Caesar: The Gallic War

Marcus Tullius Cicero: Letters to Atticus

Marcus Aurelius Antoninus: Meditations

Sonam Sheth & Eliza Relman: Former Republican Presidential Candidate Herman Cain Has Died After Being Hospitalized for Coronavirus



George Borjas (2016): EJMR ‘Janet Currie… takes an even easier approach to dismiss EJMR: sexism. I personally find the forum refreshing. There’s still hope for mankind when many of the posts written by a bunch of over-educated young social scientists illustrate a throwing off of the shackles of political correctness and reflect mundane concerns that more normal human beings share: prestige, sex, money, landing a job, sex, professional misconduct, gossip, sex, and putting down “reg monkeys”…

Women’s Untold Stories ‘In the 1970s, Berkeley economics professor Laura D’Andrea Tyson would endure derogatory treatment for being a woman... was told not to wear "tight jeans" while teaching, because it would make the "boys crazy." "There was a way in which my failure to recognize that economics was a male-dominated discipline for a long time really helped me," Tyson said in an interview with Berkeley’s economics department. "... But when I realized that there were likely to be very few women in my program, and that there were very few well-known women in economics, I started to have my doubts”…

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8.2.0. WWII & Cold War Intro Video: Econ 115

8.2.0. WWII & Cold War Intro Video: Econ 115

10:00 :: 1100 words

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The Unequal World: Has Resource Access Had an Important Role to Play?: Econ 115: Problem Set 3

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Review: Exponential Growth & Dataframe Access: Econ 115: Problem Set 7

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Disaster Capitalism: DevEng 215 2020-10-22

This incorporates-by-reference the readings & lectures from week 9 of Joeva Rock's Fall 2020 instantiation of GPP 115...

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Briefly Noted for Tu 2020-10-20


Daniel Davies: Book Talk—Lying for Money: How Legendary Frauds Reveal the Workings of Our World

Cities with More than 10000 Population

Half the World Population

Population Density

Sidney Kaplan (1976): The "Domestic Insurrections" of the Declaration of Independence

Nisreen Alwan: What Exactly Is Mild Covid-19?

Persi Diaconis & Frederick Mosteller: Methods for Studying Coincidences

Stephen Pulvirent: Hodinkee Radio Episode 107: All About the Apple Watch ‘A comprehensive deep-dive into Apple's latest smartwatch…

Anna Mikusheva & Jim Stock (2007): Weak Instruments ‘Anderson-Rubin (1949)

Arjun Jayadev & Mike Konczal (2010); The Boom Not The Slump: The Right Time For Austerity ‘Such a conclusion is unmerited. The overwhelming majority of the episodes used by A & A did not see deficit reduction in the middle of a slump. Where they did, it o#en resulted in a decline in the subsequent growth rate or an increase in the debt-to-GDP ratio. Of the 26 episodes that they identify as ‘expansionary’, in virtually none did the country a) reduce the deficit when the economy was in a slump and b) increase growth rates while reducing the debt-to-GDP ratio…



Mary Daly: Interview 'The bridge… over the coronavirus depends considerably on fiscal agents doing the part that they need to do to…. Without that fiscal stimulus, my outlook is quite a bit more muted. And whether it’s next month or the month after probably doesn’t determine the outlook for the next couple of years, but it definitely does determine how much suffering and pain many American households face.

Wendy Edelberg & Louise Sheiner: What Could Additional Fiscal Policy Do in the Next Three Years? ‘We find that enacting all five of those illustrative policies and increasing federal spending by $2 trillion would raise the level of real (i.e, inflation adjusted) GDP by 0.2 percent in 2020, 4.0 percent in 2021 and 2022, and 1.6 percent in 2023 above the level it would otherwise be (authors’ calculations). If all five policies were enacted, economic activity would return to its projected path prior to the pandemic by the third quarter of 2021. Under current law, that return likely would not occur for perhaps as long as a decade…

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Briefly Noted for 2020-10-16


Philippe Weil (1989): The Equity Premium Puzzle & the Riskfree Rate Puzzle

Donald Harris: Introduction to Bukharin: “Theory of the Leisure Class”

Constance L. Hunter: Economic Outlook: Riding the COVID-Coaster

Joan Robinson: Rereading Marx……

Vanessa Stovall: A Tale of Two Creons: Black tragedies, White anxieties, and the Necessity of Abolition

Athol Fugard, John Kani, & Winston Ntshona: The Island (Play)

Emmanuel Saez & Gabriel Zucman: The Rise of Income & Wealth Inequality of America: Evidence from Distributional Macroeconomic Accounts
 Scott Hanselman (2014): Virtual Machines, JavaScript and Assembler



I must say, the world-historical reception of Karl Marx would have been very different had he stuck to his initial word choices, and not substituted "bourgeoisie" and "bourgeois" for what he had originally called "Juden" and "Judentum" as labels for his concepts: Shlomo Avinieri (2019): Karl Marx: Philosophy & Revolution ‘In German parlance of the time, Judentum also stood for commerce, trade, huckstering in general, just as the English verb “to jew” (now excised from the Oxford English Dictionary) used to mean “to cheat.” So when Marx says that American society is the apotheosis of the power of “Judaism” or that society should be emancipated from the thrall of “Judaism,” there is a subtext here: contemporary readers would recognize that he was not writing just about Jews. Fear of censorship might also have convinced Marx to use the colloquial Judentum rather than “capitalism.” Second, and ironically, Marx’s identification of Judaism with capitalism has a paradoxical literary origin. It appears for the first time in Germany in an article by Marx’s socialist colleague Moses Hess called “On Money” [Über das Geldwesen]…

Really, really not my favorite person. Someone who knows nothing at all about how market economies work, and yet thinks his political allegiance to something he calls "Marxism" makes him an expert. The U.S. in 2008-9 was—as anyone looking at interest rates would know—very far indeed from exhausting its debt capacity: David Harvey (2009): Why the U.S. Stimulus Package Is Bound to Fail ‘Any attempt to find an adequate Keynesian solution has been doomed at the start.... A Keynesian solution would require massive and prolonged deficit financing.... The problem for the United States in 2008-9 is that it starts from a position of chronic indebtedness to the rest of the world (it has been borrowing at the rate of more than $2 billion a day over the last ten years or more) and this poses an economic limitation upon the size of the extra deficit that can now be incurred. (This was not a serious problem for Roosevelt who began with a roughly balanced budget). There is also a geo-political limitation since the funding of any extra deficit is contingent upon the willingness of other powers (principally from East Asia and the Gulf States) to lend…

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Briefly Noted for 2020-10-14


Excellent to watch to see Michael Kades present his point-of-view on video: Michael Kades: Proposals to Strengthen the Antitrust Laws & Restore Competition Online

Ta-Nehisi Coates: Leak: The Atlantic Had A Meeting About Kevin Williamson ‘Black writers... would be brought in... [to] give a view of black life that I felt like very few black people actually would recognize themselves in their own private spaces.... I got incredibly used to learning from people... who... were fucking racist.... I didn’t... have the luxury of having teachers who... saw me completely as a human being.... I couldn’t speak to Andrew on the blog the way I would speak to my wife about what Andrew said on the blog in the morning when it was just us…

Neel Kashkari: Why I Dissented ‘We misread the labor market.... We heard repeatedly from businesses who complained that... we had a “historic worker shortage.”... [My] proposed language guards against the risk of underestimating slack.... We would only lift off... [after] core inflation... had... actually hit or exceed[ed] 2 percent...

God! He's long-winded: Joseph Schumpeter: Fiat Money & Social Product

Forbes: Schumpeter & Keynes ‘THE TWO MEN WERE NOT ANTAGONISTS.... While Schumpeter considered all of Keynes' answers wrong, or at least misleading, he was a sympathetic critic…

Forbes: Schumpeter & Keynes ‘Keynes, in turn, considered Schumpeter one of the few contemporary economists worthy of his respect. In his lectures he again and again referred to the works Schumpeter had published during World War I, and especially to Schumpeter's essay on the Rechenpfennige (i.e., money of account) as the initial stimulus for his own thoughts on money…

Bapu Jena & al.: Acute Myocardial Infarction Mortality During Dates of National Interventional Cardiology Meetings

Tim Miller: Actually, Virtue Signaling Is Good

Kate Bahn: 'Unemployment Benefits Initial Claims [are] not good... have plateaued around 800,000 [per week] for the last 8 weeks... at the level and about the length (from my eyeballing) of the peak during the Great Recession.... It's just so bad…

Franklin Delano Roosevelt: 1933 Inaugural Address

Tim Duy: Trump Kills Fiscal Stimulus Negotiations ‘From a campaign perspective, it seems ludicrous.... Ultimately, I think McConnell just isn’t willing to get a deal done.... Interestingly, Trump’s abandonment of fiscal stimulus comes soon after the latest plea from Federal Reserve Chair Jerome Powell for additional support for what he sees as a still struggling economy...

Vladimir Lenin (1917): State & Revolution

Leon Smolinski: Lenin & Economic Planning

Carl Shapiro & Hal Varian (1998): Information Rules: A Strategic Guide to the Network Economy

Ryan McMorrow, Nian Liu, & Sherry Fei Ju: The Transformation of Ant Financial

Josef Schumpeter (1917): Fiat Money & the Social Product

Mall History: Ku Klux Klan Rally ‘In 1925 the Ku Klux Klan (KKK) marched down Pennsylvania Avenue in Washington, DC. The organized event brought 25,000 members in full regalia to the city…

EPI: The Productivity–Pay Gap

Eric Lemieux: This Day in Labor History: July 28, 1932 ‘On July 28, 1932, the U.S. Army 12th Infantry regiment commanded by Douglas MacArthur and the 3rd Calvary Regiment, supported by six battle tanks commanded by Major George Patton violently evicted the Bonus Army from their Washington, D.C. encampment. This violent action and horrible treatment of impoverished veterans shocked the American public and demonstrated the utter indifference of Herbert Hoover to the desperate poverty the nation faced…




John Bellamy Foster: On the Laws of Capitalism ‘The Socialist Party of Boston wrote to the Harvard economics department, proposing a debate on capitalism and socialism.... The debate was held... with Sweezy and Schumpeter as the two protagonists, before a packed audience in Harvard’s Littauer Auditorium…. Leontief, as chair, summarized.... "The patient is capitalism. What is to be his fate? Our speakers are in fact agreed that the patient is inevitably dying. But the bases of their diagnoses could not be more different. On the one hand there is Sweezy, who utilizes the analysis of Marx and of Lenin to deduce that the patient is dying of a malignant cancer. Absolutely no operation can help. The end is foreordained. On the other hand, there is Schumpeter. He, too, and rather cheerfully, admits that the patient is dying. (His sweetheart already died in 1914 and his bank of tears has long since run dry.) But to Schumpeter, the patient is dying of a psychosomatic ailment. Not cancer but neurosis is his complaint. Filled with self-hate, he has lost the will to live. In this view capitalism is an unlovable system, and what is unlovable will not be loved. Paul Sweezy himself is a talisman and omen of that alienation which will seal the system’s doom...


Om Malik: Apple Watch’s Sensory Overload ‘Longtime readers are familiar with my theory around hyper-personalization, and Apple has brought that to a mass-produced product. Oh, and it also tells time!" || This Mirror with Sensors Points to a New Connected Future. Here Is Why ‘By offering a uniquely/hyper personal experience, simplehuman can go from being an invisible brand to one that is center stage in our minds. Think of it this way—connectivity and sensors allow us  to turn any large-scale platform into a personal one. Call me crazy, by when we add a dash of connectivity to those omnipresent sensors then interesting and/or magical things can happen...

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Tolley: Growth, Globalization, & Political Economy—Comment

Comment of the Day: Alex Tolley: Growth, Globalization, & Political Economy in the North Atlantic, 1870-1914—Lecture ‘The claim that we could have a steampunk world of 7+ billion people with low economic growth seems unlikely to me. We needed a number of technologies to ensure that we could feed and distribute feed to this population. With low economic growth, more people would be on the land farming, farms would be smaller, and productivity lower. There would be far fewer jobs based on the growing economy, a need for huge cities to concentrate the labor for manufacturing and later services…

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Briefly Noted for 2020-10-12


Wikipedia: Martha Gellhorn

Martha Gellhorn: The Face of War

Yun Sheng: Little Emperors: Memoir of an Only Child

Evan Cheng & Sandi Khine: Over 100 Faculty Sign Open Letter Calling for Faculty Senate to Reconsider Hoover Institution’s Relationship with Stanford

Matthew Yglesias: One Billion Americans: The Case for Thinking Bigger

PAA DEI Committee: Demographics of Racial Violence

Ursula K. LeGuin (1973): The Ones Who Walk Away from Omelas

Wikipedia: The Ones Who Walk Away from Omelas

Gabrielle Bellot (2017): Ursula Le Guin’s “The Ones Who Walk Away from Omelas” Defies Genre

Our World in Data: Coronavirus Pandemic

Wikipedia: Sophie, Duchess of Hohenberg,_Duchess_of_Hohenberg

Wikipedia: Vaso Čubrilović

KJV: Revelation 6 ‘And I saw when the Lamb opened one of the seals, and I heard, as it were the noise of thunder, one of the four beasts saying: "Come and see!"…

Manton Reece: 2.0 Makes It Easier to Customize Your Blog

Nic Newman: The Resurgence & Importance of Email Newsletters ‘Email newsletters... are proving increasingly valuable to publishers looking to build strong direct relationships with audiences…

Noah Smith: The Late '10s Were Better for Incomes than the '90s

Claudia Foroni, Massimiliano Marcellino, & Dalibor Stevanovic: Forecasting the COVID-19 Recession & Recovery ‘Adjusting for forecasting errors made during the financial crisis of 2007-2009 better aligns the COVID forecasts with observed data. The results suggest a slow recovery to pre-COVID-19 levels, lasting several years…



George-Marios Angeletos & Chen Lian: Confidence & the Propagation of Demand Shocks 'Intertemporal substitution in production... rational confusion (or bounded rationality) in consumption. The first element allows aggregate supply to respond to shifts in aggregate demand.... The second introduces a “confidence multiplier,” namely a positive feedback loop between real economic activity, consumer expectations of permanent income, and investor expectations... [that] amplifies the business-cycle fluctuations triggered by demand shocks (but not those triggered by supply shocks); it helps investment to comove with consumption; and it allows front-loaded fiscal stimuli to crowd in private spending...


Duncan Dowson & Bernard Hamrock (1980): History of Ball Bearings ‘The familiar precision rolling-element bearings of the twentieth century are products of exacting technology and sophisticated science. Their very effectiveness and basic simplicity of form may discourage further interest in their history and development. Yet the full story covers a large portion of recorded history and surprising evidence of an early recognition of the advantages of rolling motion over sliding action and progress toward the development of rolling-element bearings. The development of rolling-element bearings is followed from the earliest civilizations to the end of the eighteenth century. The influence of general technological developments, particularly those concerned with the movement of large building blocks, road transportation, instruments, water-raising equipment, and windmills are discussed, together with the emergence of studies of the nature of rolling friction and the impact of economic factors. By 1800 the essential features of ball and rolling-element bearings had emerged and it only remained for precision manufacture and mass production to confirm the value of these fascinating machine elements...

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