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April 2007

Who Is Behind the Niger Forgeries?

Nicholas Beaudrot finds himself unable to say what he is thinking:

Ezra Klein: What's Behind Door #1, Monty?: Jane Hamsher of Firedoglake spots former CIA analyst Ray McGovern suggesting ... well, I can't actually bring myself to say it, because to do so would bring voice to the idea that reality has plunged into some frightening chimera combining The Long Kiss Goodnight and Noam Chomsky's rantings. But it goes further than anything Marshall ever reported. Now, McGovern has been something of an anti-war gadfly since retirement, and he's not willing to reveal his evidence "yet", but perhaps there is something to look into here...

Adagia, at the Corner of College and Bancroft, April 30 2007 12:00 Noon

Eight Berkeley economics professors wanted to have lunch with Alan Taylor of U.C. Davis today. I attribute this to a combination of effects: an end-of-semester effect in which people have given up on completing all the projects they hoped to complete before the end of the semester, and as a result are no longer keeping their heads down and are willing to go out to lunch; and a we-like-Alan-Taylor effect; unfortunately, identification is not achieved.

"So if Britain with its structural trade surpluses could run up net foreign assets equal to twenty months' GDP by 1913, could the U.S. run up a net foreign liability balance equal to twenty months' GDP by 2023?"

"By symmetry, that would mean that the rest of the world would have to play the role of pre-World War I Britain. Yes, it could happen."

"And somebody would have to play the role of pre-World War I Argentina. Would that be the U.S?"

"Usually in international finance the role of Argentina is played by Argentina."

"Doesn't Dani Rodrik say that Argentina is doing very well now? That this time its boom is not led by government or consumption spending, but by investment?"

"Dani is a contrarian."

"Twenty months' GDP in 2023 would be what, $45 trillion?"

"$45 nominal trillion in 2023; about $30 trillion real at today's prices."

"And the current net foreign asset and liability position of the U.S. is?"

"We don't know. It's the difference between two large and poorly-measured numbers, gross foreign assets owned by Americans and gross American assets owned by foreigners. Subtract them and you get a number that is small in context--perhaps two months' worth of GDP, perhaps $2 trillion--and very, very poorly measured."

"And the capital income flows are still in balance?"

"Perhaps not. You've looked at the data much more closely than I have. And there are problems."

"Cash payouts by American-owned subsidiaries abroad are about the same proportion of book values as cash payouts by foreign-owned subsidiaries in the U.S., but earnings retained and reinvested by American-owned subsidiaries abroad are a much higher proportion of book values than earnings retained and reinvested by foreign-owned subsidiaries in the U.S."

"Which means?"

"Either that Daniel Gros is right, and that the standard statistics simply miss a great deal of factor payments from America to foreigners, or Dooley and company are right, and due to American managerial expertise Americans earn much higher rates of return on their investments abroad than foreigners do on their investments in the United States."

"'Dark matter'."

"Yes, dark matter--the source of the extraordinarily high profits of Eurodisney."

"There are too many physics metaphors in this subfield. We should have stuck to metaphors from theology."

"That was not a success."

"Not a success? I counted six mentions of 'original sin' in the Economist in one eighteen-month period."

"Not a success in that it was too often misinterpreted. People read Eichengreen and Haussmann to mean that countries that couldn't borrow in hard currencies--countries afflicted with 'original sin'--had sinned. They had done something bad--and deserved what happened to them."

"But wasn't that Augustine's point?"

"No. Augustine's point was that Adam had done something bad--eaten of the Tree of Knowledge of Good and Evil. As a result you were destined for Hell, even though the sin wasn't yours."

Give Tim Russert an Outside Line!

Tiny Revolution feels sorry for Tim Russert, because it turns out that NBC refuses to give him a phone that can make outgoing calls:

A Tiny Revolution: Am I The Only One Here Who Feels For Tim Russert?: On Bill Moyers' show tonight about the pre-war performance of the press on the WMD story, Tim Russert defended himself by saying:

...there were concerns expressed by other government officials. And to this day, I wish my phone had rung, or I had access to them.

It seems easy to make fun of Russert here, given that he's the Washington Bureau Chief for NBC. But the fact is Russert doesn't have a phone that makes outgoing calls. It's unfortunate, but NBC simply can't afford it. Russert's job there is to show up at 9 am, and wait until somebody calls him and tells him what's going on. He tries to sit by the phone all day, because if he misses a call, he has to wait until they call him back.

Also, keep in mind that these "other government officials" to which he refers are sealed in a titanium vault at the center of the earth. So how exactly would Russert get access to them? I'd like to see you try it, big shot.

Why oh why can't we have a better press corps?

Is It Really Harder to Make the Case for Free Trade These Days?

Paul Krugman wonders if it is harder to make the case for free trade these days. There are more losers from trade liberalization, he thinks, and it is much less clear that the losers are in some sense undeserving. Mark Thoma writes:

Economist's View: Krugman: Distribution and Trade Policy: Paul Krugman adds a few more thoughts via email related to the recent trade policy discussion:

Paul Krugman: Another thought or two on distribution and trade policy: The problem of losers from trade isn't new, obviously, either as a fact or concept. But if you look at the history of trade policy - say, in Matt Destler's book it's hard to avoid the sense that the issue has gotten bigger and harder. His final chapters have a definite sense both of nostalgia for the good old days and foreboding.

I'd put it like this: in the old days, when GATT negotiations were mainly with other advanced countries, the groups hurt tended to be highly specific and local - the left-handed widget makers of Northern South Dakota, worried about competition from their counterparts in Upper Lower Swabia. Economists could in good conscience argue that while individual groups were hurt by trade liberalization in their specific sector, the great majority of Americans benefitted from general trade liberalization. And politicians made trade deals by packaging together the interests of exporters, to offset the parochial interests of import-competing industries

But now we're talking about broad swaths of the population hurt by trade. It's a good bet that almost all US workers with a high school degree or less are hurt by Chinese manufactured exports, at least slightly. You could in principle put together win-win packages - say, trade liberalization together with an increase in the EITC paid for with higher taxes on high-income Americans, who come out winners from trade. But the reality is that we don't make those deals.

For those who like their jargon, by the way, I'm basically saying that the right model for thinking about this has gone from many-good specific factors to Heckscher-Ohlin.

I don't have answers to this. The moral case for open markets is their importance to poor countries: America would do OK even in a highly protectionist world, but Bangladesh wouldn't. The domestic politics of trade, however, are now very hard, and getting harder.

Well I think I have answers:

  • The kinds of win-win deals that Paul says we don't make are in fact deals that Democratic presidents do make--when they aren't blocked from making them, that is.
  • In an American family, both potential workers have to be working in export or import-competing manufacturing for the family as a whole to be injured by imports of manufactured goods from China. Construction workers benefit from expanded trade with China both through higher relative wages and through lower relative prices. Service-sector workers benefit through lower relative prices.
  • The losers are not undeserving of their previous relative good fortune, but the winners are not unjustly enriched either--and odds are that there are more and bigger winners.
  • Politics is much healthier when everybody knows that trade restrictions are temporary and fragile than when people believe that trade restrictions are permanent and durable--and thus really worth lobbying for when they are to your material advantage.
  • A richer world is a safer world for Americans: foreigners working making textiles for export to the United States are not foreigners in caves planning to attack the Great Satan. One important import that we buy through freer trade is a safer, richer, more peaceful world.

The narrow pure-economics case for freer trade is harder to make thsee days because it is less true than it was in the 1960s or the 1950s or the 1930s or the 1910s. But the broader political-economy case for freer trade is still strong and true.

The Disconnect Between Profits and Investment

Paul Krugman writes:

Another Economic Disconnect - New York Times: Edward Lazear... explained that what’s good for corporations is good for America. “Profits,” he declared, “provide the incentive for physical capital investment, and physical capital growth contributes to productivity growth. Thus profits are important not only for investors but also for the workers who benefit from the growth in productivity.”

In other words, ask not for whom the closing bell tolls; it tolls for thee.

Unfortunately... [i]n the Bush years high profits haven’t led to high investment, and rising productivity hasn’t led to rising wages. The second of those two disconnects has gotten a lot of attention.... Less attention... has been given to the first disconnect: the failure of high profits to produce an investment boom.... [W]ith corporate profits more than doubling since 2000... profits as a share of national income [in 2006] were at the highest level ever recorded. You might have expected this gusher... to produce a corresponding gusher of business investment. But the reality has been more of a trickle. Nonresidential investment — that is, investment other than housing construction — has grown very slowly by historical standards... remains far below its levels of the late 1990s, and it has been declining for the last two quarters.

Why aren’t corporations investing, and what does the lack of business investment mean for the economy?... Floyd Norris... [sees a] disturbing possibility. Instead of investing in physical capital, many companies are using profits to buy back their own stock. And cynics suggest that the purpose of these buybacks is to produce a temporary rise in stock prices that increases the value of executives’ stock options, even if it’s against the long-term interests of investors.... Researchers at the Federal Reserve have found evidence that company decisions about stock buybacks are strongly influenced by “agency conflicts,” a genteel term for self-dealing by corporate insiders....

Whatever the reasons, we now have an economy with incredibly high profits and surprisingly low investment. This raises some immediate, short-run concerns... optimistic projections for the economy depend on vigorous growth in business investment. And that doesn’t seem to be happening.

The bigger issue, however, may be longer term. Mr. Lazear was right... business investment plays an important role in raising productivity. High investment in equipment and software was one major reason for the productivity takeoff that began in the Clinton era, and continued in the early years of this decade. And low investment may be one reason productivity growth has slowed....

[N]ext time someone tells you... reduc[ing] corporate profits... will reduce business investment, bear in mind that today’s record profits aren’t being invested... [but] being used to enrich executives and a few lucky stock owners.

The Bush Administration: Worse than We Can Imagine

In the old days, a dignitary who admired the horse of a foreign prince might find himself given that horse as a present. The dignitary would then face a hard choice: keep the present and risk raising suspicions about whether he had been bribed, or reject the present and risk offending the prince.

One thing the dignitary would not do would be to accept the horse and then sell it. That would confirm that he had been bribed--that he valued not the deed of friendship and generosity by the prince but rather the cash it could be turned into instead. And that would offend the prince--tell the prince that the dignitary valued not the particular horse and its connection with the prince but the cash it could be turned into.

In these new days, we have Colin Powell:

A Saudi Prince Tied to Bush Is Sounding Off-Key - New York Times: A few nights after he resigned his post as secretary of state two years ago, Colin L. Powell answered a ring at his front door. Standing outside was Prince Bandar, then Saudi Arabia’s ambassador to the United States, with a 1995 Jaguar. Mr. Powell’s wife, Alma, had once mentioned that she missed their 1995 Jaguar, which she and her husband had traded in. Prince Bandar had filed that information away, and presented the Powells that night with an identical, 10-year-old model. The Powells kept the car — a gift that the State Department said was legal — but recently traded it away...

Prince Bandar ibn Sultan--or someone in his entourage--went to trouble to find a good-condition car of the same year and model that Alma Powell had said that she missed and to have it maintained and spruced up. It may have been legal for the Powells to accept the gift of the car and then sell it for cash. It doesn't seem to me to be ethical.

Who Are the 28%?

Scott Horton writes:

"Bush Support Tanking": The Wall Street Journal reports that public support for President Bush continues its free fall. It’s now at 28% approval—-the lowest of his presidency. NBC News reports that the American public agrees with Harry Reid, and disagrees with David Broder, by a very wide margin-—55 percent saying the Iraq War is lost, and 36% expressing hope that it might be winnable...

Larry Summers on What Must Be Done About Global Warming

In the Financial Times (which really is the best newspaper in the world), Larry Summers writes: / Comment & analysis / Comment - We need to bring climate idealism down to earth: With the accumulation of scientific evidence and its persuasive presentation to the public, the global warming debate has reached a new stage. Those who still deny that human activity is warming the planet, or claim that “business as usual” can continue indefinitely without profoundly adverse consequences, are increasingly seen as the moral and intellectual equivalent of those who deny that tobacco has adverse consequences for human health.... [T]here are huge opportunities to reduce emissions with economic benefit or negligible economic cost... [with current] worldwide subsidies to energy use... [of perhaps] $250b [a year].

The real question for debate is not whether something should be done – that debate is over among the rational. The crucial question now is what should be done so as to leave our descendants with the highest possible quality of life. Answering it effectively requires vision and ambition. But, as the example of Woodrow Wilson’s League of Nations teaches painfully, utopian vision and ambition unmoored from political, economic and social reality can be counterproductive....

[T]he global cap and trade approach directed at achieving the rapid emissions reductions enshrined in the Kyoto protocol... could be ineffective or even counterpoductive by substituting for more realistic approaches.... Kyoto is... the only game in town for those who do not want to be ostriches.... But it is surely useful to try to be clear about the potential pitfalls....

[T]he Kyoto approach depends on the questionable premise that nations will, in fact, be bound by binding targets.... [C]onsider the history of the Maastricht Treaty.... It broke down almost immediately when it looked like the targets would not be binding for big countries....

Whatever evidence there is of impressive emissions reductions comes from countries such as the UK, Germany and the former communist states, where coal use was being phased out for other reasons. The limited impact of Kyoto is evinced by the fact that carbon permits are now selling in the range of a negligible one euro a ton....

[C]arbon markets are invitations to engage in pork-barrel corporate subsidy politics on a massive scale. If greenhouse gas emissions are to be substantially reduced, the value of the associated emissions rights will be in the tens of billions of dollars.... [B]usinesses that can pass on carbon costs to their consumers are excited about schemes that compensate for these costs by allocating them permits related to their existing emissions levels. As investigations by this newspaper have highlighted, the clean development mechanism has resulted in substantial payments for emissions reductions that would have occurred anyway or could have been achieved at negligible cost. There is even reason to think that certain industrial gas emissions may have been increased so that credit could be claimed for their abatement.

[T]he most serious problem with the Kyoto framework is that it is unlikely to generate substantial changes in developing country policies... [which] are not likely to accept binding targets on their energy use or greenhouse gas emissions that fall way short on a per-capita basis of emissions levels in the industrial world. Nor is it reasonable to expect them... to commit to energy use goals that fall short of patterns observed in the rich countries....

[D]eveloping countries are where most of the future action has to be. They will account for 75 per cent of the increase in emissions over the next quarter century and are now making the infrastructure investments that will shape their future economies.... [A]ny international regime that does not include them will [simply] not work... as energy intensive activities relocate to the developing world....

Perhaps these problems and others... can be overcome with goodwill and extensive thought. But next month I shall suggest [alternative] approaches that... may over time provide a more secure foundation for the progress that the world must have.

links for 2007-04-30

Brad DeLong's CV as of April 30, 2007

J. Bradford DeLong: Academic CV

Professor of Economics
601 Evans Hall
University of California at Berkeley
Berkeley, CA 94720-3880

phone: (510) 643-4027
fax: (510) 642-6615

A. Education

Ph. D., Department of Economics, Harvard University, Cambridge, MA (June 1987).

M. A., Department of Economics, Harvard University, Cambridge, MA (June 1985).

B. A. summa cum laude, Committee on Degrees in Social Studies, Harvard University, Cambridge, MA (June 1982).

B. Positions

Co-Editor, The Economists' Voice (2005-present).

Member, U.C. Berkeley College of Letters and Science Executive Committee (2003-present).

Chair, Political Economy of Industrial Societies Major, University of California at Berkeley, Berkeley, CA (July 2001-present).

Professor, Department of Economics, University of California at Berkeley, Berkeley, CA (July 1997-present).

Visiting Scholar, Federal Reserve Bank of San Francisco, San Francisco, CA (July 1996-present).

Research Associate, National Bureau of Economic Research, Cambridge, MA (October 1995-present).

Co-Editor, Journal of Economic Perspectives (1996-2004).

Associate Professor, Department of Economics, University of California at Berkeley, Berkeley, CA (July 1993-June 1997).

Deputy Assistant Secretary for Economic Policy, United States Department of the Treasury, Washington, DC (April 1993-May 1995).

Faculty Research Fellow, National Bureau of Economic Research, Cambridge, MA (November 1987-September 1995).

Frederick S. Danziger Associate Professor, Department of Economics, Harvard University, Cambridge, MA (July 1991-June 1993).

Alfred P. Sloan Research Fellow, Alfred P. Sloan Foundation, New York, NY (July 1990-April 1993).

John M. Olin Fellow, National Bureau of Economic Research, Cambridge, MA (July 1991-June 1992).

Visiting Lecturer, European University Institute, Florence, Italy (March 1992-April 1992).

Assistant Professor, Department of Economics, Harvard University, Cambridge, MA (July 1988-June 1991).

Assistant Professor, Department of Economics, Boston University, Boston, MA (July 1987-June 1988).

Instructor, Department of Economics, Massachusetts Institute of Technology, Cambridge, MA (September 1986-June 1987).

Alfred P. Sloan Dissertation Fellow, Harvard University, Cambridge, MA (July 1985-June 1986).

National Science Foundation Graduate Fellow, Harvard University, Cambridge, MA (September 1982-June 1985).

C. Principal Refereed Academic Publications

J. Bradford DeLong and Konstantin Magin (fall 2007, forthcoming), "The U.S. Stock Market Equity Return Premium: Past, Present, and Future," Journal of Economic Perspectives

J. Bradford DeLong and Konstantin Magin (2006) "Contrary to Robert Shiller's Predictions, Stock Market Investors Made Much Money in the Past Decade: What Does This Tell Us?," The Economists' Voice: Vol. 3 : Iss. 7, Article 2

J. Bradford DeLong (2005) "Divergent Views on the Coming Dollar Crisis," The Economists' Voice: Vol. 2 : Iss. 5, Article 1

Dean Baker, J. Bradford DeLong, and Paul Krugman (2005), "Asset Returns and Economic Growth," Brookings Papers on Economic Activity 2005:1

J. Bradford DeLong (2004) "Should We Still Support Untrammelled International Capital Mobility? Or are Capital Controls Less Evil than We Once Believed?," The Economists' Voice: Vol. 1 : Iss. 1, Article 1

J. Bradford DeLong (2003), "Productivity Growth in the 2000s," NBER Macroeconomics Annual 2003

J. Bradford DeLong and Barry J. Eichengreen (2002), "Between Meltdown and Moral Hazard: Clinton Administration International Monetary and Financial Policy," in Jeffrey Frankel and Peter Orszag, eds., American Economic Policy in the 1990s (Cambridge: MIT Press)

J. Bradford DeLong and Lawrence H. Summers (2002), "The New Economy: Background, Questions, Speculations," in Economic Policies for the Information Age (Kansas City: Federal Reserve Bank of Kansas City)

J. Bradford DeLong (2002), "Review of Robert Skidelsky (2000), John Maynard Keynes, volume 3, Fighting for Britain," Journal of Economic Literature

J. Bradford DeLong (2001), "America's Historical Experience with Low Inflation," Journal of Monetary Economics

J. Bradford DeLong (2001), "Introduction to the North America Symposium," Journal of Economic Perspectives (Winter), pp. 81-83.

J. Bradford DeLong, Alan Krueger, and Timothy Taylor (2000), "Introduction to the Millennial Issue," Journal of Economic Perspectives (Winter)

J. Bradford DeLong (2000), "The Triumph [?] of Monetarism," Journal of Economic Perspectives (Winter)

J. Bradford DeLong (1999), "Seeing One's Intellectual Roots: A Review Essay on James Scott's Seeing Like a State," Review of Austrian Economics 12:2, pp. 257-64

J. Bradford DeLong (1999), "Financial Crises in the 1890s and 1990s: Must History Repeat?" Brookings Papers on Economic Activity Fall

J. Bradford DeLong (1999), "Why We Should Fear Deflation," Brookings Papers on Economic Activity Spring

J. Bradford DeLong (1999), "Introduction to the Symposium on Business Cycles," Journal of Economic Perspectives

J. Bradford DeLong (1996), "Keynesianism, Pennsylvania-Avenue Style: Some Economic Consequences of the 1946 Employment Act," Journal of Economic Perspectives 10:3 (Summer), pp. 41-53

J. Bradford DeLong, Christopher L. DeLong, and Sherman Robinson (1996), "In Defense of Mexico's Rescue", Foreign Affairs 75:3 (May/June), pp. 8-14

J. Bradford DeLong and Lawrence H. Summers (1994), "How Strongly Do Developing Countries Benefit from Equipment Investment?" Journal of Monetary Economics

Robert B. Barsky and J. Bradford DeLong (1993), "Why Does the Stock Market Fluctuate?" Quarterly Journal of Economics 108: 2 (May), pp. 291-312

J. Bradford DeLong and Lawrence H. Summers (1993), "Macroeconomic Policy and Long-Run Growth," Federal Reserve Bank of Kansas City Quarterly Review

J. Bradford DeLong and Andrei Shleifer (1993), "Princes and Merchants: City Growth Before the Industrial Revolution," Journal of Law and Economics 36 (October), pp. 671-702

J. Bradford DeLong and Lawrence H. Summers (1992), "Equipment Investment and Economic Growth: How Robust Is the Nexus?" Brookings Papers on Economic Activity (Fall)

J. Bradford DeLong and Kevin Lang (1992), "Are All Economic Hypotheses False?" Journal of Political Economy 100:6 (December), pp. 1257-72

J. Bradford DeLong (1992), "Productivity and Machinery Investment: A Long Run Look 1870-1980," Journal of Economic History 53: 2 (June), 307-24

J. Bradford DeLong and Andrei Shleifer (1992), "Closed End Fund Discounts: A Yardstick of Small-Investor Sentiment," Journal of Portfolio Management 18:2 (Winter), pp. 46-53

J. Bradford DeLong and Andrei Shleifer (1991), "The Stock Market Bubble of 1929: Evidence from Closed-End Funds," Journal of Economic History 52: 3 (September), pp. 675-700

Robert B. Barsky and J. Bradford DeLong (1991), "Forecasting Pre-World War I Inflation: The Fisher Effect and the Gold Standard," Quarterly Journal of Economics 106: 3 (August) , pp. 815-36

J. Bradford DeLong and Lawrence H. Summers (1991), "Equipment Investment and Economic Growth," Quarterly Journal of Economics 106: 2 (May), pp. 445-502

J. Bradford DeLong, Andrei Shleifer, Lawrence H. Summers, and Robert J. Waldmann (1991), "The Survival of Noise Traders in Financial Markets," Journal of Business 64: 1 (January), pp. 1-20

J. Bradford DeLong, Andrei Shleifer, Lawrence H. Summers, and Robert J. Waldmann (1990), "Noise Trader Risk in Financial Markets," Journal of Political Economy 98: 4 (August 1990), pp. 703-738

J. Bradford DeLong, Andrei Shleifer, Lawrence H. Summers, and Robert J. Waldmann (1990), "Positive-Feedback Investment Strategies and Destabilizing Rational Speculation," Journal of Finance 45: 2 (June), pp. 374-397

Robert B. Barsky and J. Bradford DeLong (1990), "Bull and Bear Markets in the Twentieth Century," Journal of Economic History 50: 2 (June), pp. 1-17

J. Bradford DeLong (1990), "In Defense of Henry Simons' Credentials as a Classical Liberal," Cato Journal 9: 1 (Winter), pp. 105-122

J. Bradford DeLong (1989), "Facets of Interwar Unemployment," Journal of Monetary Economics 49:3 (September), pp. 800-802

J. Bradford DeLong, Andrei Shleifer, Lawrence H. Summers, and Robert J. Waldmann (1989), "The Size and Incidence of Losses from Noise Trading," Journal of Finance 44: 3 (July), pp. 681-696

J. Bradford DeLong (1988), "Productivity Growth, Convergence, and Welfare: Comment," American Economic Review 78: 5 (December), pp. 1138-1154

J. Bradford DeLong and Lawrence H. Summers (1988), "How Does Macroeconomic Policy Matter?" Brookings Papers on Economic Activity 1988: 2 (Fall), pp. 433-480

J. Bradford DeLong and Lawrence H. Summers (1986), "Is Increased Price Flexibility Stabilizing?" American Economic Review 76: 5 (December), pp. 1031-1044

J. Bradford DeLong (1986), "Senior's `Last Hour': A Suggested Resolution of a Famous Blunder," History of Political Economy 18: 2 (Summer), pp. 325-333

D. Principal Non-Refereed and Academic Publications

J. Bradford DeLong (forthcoming 2008), "Two Months Before the Mast of Post-Modernism," in John Holbo, ed., Framing Theory's Empire (West Lafayette, IN: Parlor Press for Glassbead Books)

J. Bradford DeLong (2007), "What Should We Think About When Refounding the International Monetary System?" in Richard Samans et al., eds., _The International Monetary System, the IMF, and the G-20" (London: Palgrave Macmillan)

J. Bradford DeLong (2007), "Right from the Start?: What Milton Friedman Can Teach Progressives," Democracy: A Journal of Ideas 4 Spring

J. Bradford DeLong (2007), "A Graduate Teaching Note on Rietz (1988) 'The Equity Premium: A Solution' and Barro (2005) 'Rare Events and the Equity Premium'

J. Bradford DeLong (2006), "Aftathoughts on NAFTA," Berkeley Review of Latin American Studies (Fall)

J. Bradford DeLong and Susan Rasky (2006), "Twelve Things Journalists Need to Remember to Be Good Economics Reporters," Nieman Watchdog June 13

J. Bradford DeLong and Susan Rasky (2006), "Twelve Things Economists Need to Remember to Be Helpful Journalistic Sources" Nieman Watchdog June 13

J. Bradford DeLong (2006), "How Not to Cover the Economy," Nieman Watchdog January 23

J. Bradford DeLong and Martha Olney (2005), Macroeconomics 2nd ed. (New York: McGraw-Hill)

J. Bradford DeLong (2005), "Sisyphus as Social Democrat: A Review of Richard Parker, John Kenneth Galbraith," Foreign Affairs (May/June)

Marco Becht and J. Bradford DeLong (2005), "Why Has There Been so Little Blockholding in America?" in Randall Morck, ed., A History of Corporate Governance Around the World (Chicago: University of Chicago)

Stephen S. Cohen and J. Bradford DeLong (2005), "Shaken and Stirred," Atlantic Monthly January/February

J. Bradford DeLong (2004), "India Since Independence: An Analytic Growth Narrative," in Dani Rodrik, ed., Modern Economic Growth: Analytical Country Studies

J. Bradford DeLong (2004), "Rubin's Remarkable Achievement," American Prospect 15:2 February 1

J. Bradford DeLong (2003), "Comment on James Stock and Mark Watson, 'Has the Business Cycle Changed?'" August 29

Steven Dowrick and J. Bradford DeLong (2003), "Globalisation and Convergence," in Michael Bordo et al., ed., Globalization in Historical Perspective (Chicago: University of Chicago Press).

J. Bradford DeLong (2003), "Bequests: An Historical Perspective," in Alicia Munnell and Annika Sunden, eds., Death and Dollars: The Role and Impact of Gifts and Estates (Washington: Brookings Institution)

J. Bradford DeLong (2002), "Do We Have a 'New' Macroeconomy?" Innovation Policy and the Econony

J. Bradford DeLong (2001), "International Financial Crises in the 1990s: The Analytics: November

J. Bradford DeLong (2001), Macroeconomics (New York: McGraw-Hill)

J. Bradford DeLong (2001), "What Are Australia's Economic Prospects?" Reserve Bank of Australia

J. Bradford DeLong (2000), "Sources of American and Prospects for World Economic Growth," in David Gruen, ed., The Australian Economy in the 1990s (Sydney: Reserve Bank of Australia)

J. Bradford DeLong and A. Michael Froomkin (2000), "Speculative Microeconomics for Tomorrow's Economy," First Monday; also in Brian Kahin and Hal Varian, eds., Internet Publishing and Beyond: The Economics of Digital Information and Intellectual Property (Cambridge: M.I.T. Press)

J. Bradford DeLong (2000), "Overstrong Against Thyself: War, the State, and Growth in Europe on the Eve of the Industrial Revolution" , in Mancur Olson and Satu Kahkohnen, eds., A Not-So-Dismal Science: Development and the Political Economy of Institutions (Oxford: Oxford University Press), pp. 138-167

J. Bradford DeLong and A. Michael Froomkin (2000), "Review of Charles Ferguson, High Stakes: No Prisoners," Harvard Business Review January

J. Bradford DeLong (1997), "American Fiscal Policy in the Shadow of the Great Depression", in Michael Bordo, Claudia Goldin, and Eugene White, eds., The Defining Moment: The Great Depression and the American Economy in the Twentieth Century (Chicago: University of Chicago Press)

J. Bradford DeLong (1997), "America's Peacetime Inflation: The 1970s," in Christina Romer and David Romer. eds., Reducing Inflation: Motivation and Strategy (Chicago: University of Chicago Press)

J. Bradford DeLong and Robert J. Waldmann (1997), "Interpreting Procyclical Productivity Movements: Evidence from a Cross-Nation Cross-Industry Panel," Federal Reserve Bank of San Francisco Economic Review 1997:1 (Spring), pp. 33-52

J. Bradford DeLong (1996), "A Positive Program for Better Economic Growth," Parliamentary Brief (June)

Carlos Ramirez and J. Bradford DeLong (1996), "Banker Influence and Business Economic Performance: Assessing the Impact of Depression-Era Financial Reforms," in Michael Bordo and Richard Sylla, eds., Anglo-American Financial Systems: Institution and Markets in the Twentieth Century (New York: Irwin), pp. 161-178

J. Bradford DeLong (1995), "Low Marx: Eric Hobsbawm's Age of Extremes" (Berkeley, CA, 1995)

J. Bradford DeLong and Lawrence H. Summers (1994), "Equipment Investment and Economic Growth: Reply," Quarterly Journal of Economics 109:3 (August), pp. 803-807

J. Bradford DeLong and Lawrence H. Summers (1994), "How Robust Is the Growth-Machinery Nexus?" in Mario Baldassari, Luigi Paganetto, and Edmund Phelps, eds., International Differences in Growth Rates: Market Globalization and Economic Areas (New York: St. Martin's Press)

J. Bradford DeLong and Barry Eichengreen (1993), "The Marshall Plan: History's Most Successful Structural Adjustment Programme," in Rüdiger Dornbusch, Wilhelm Nölling, and Richard Layard, eds., Postwar Economic Reconstruction and Lessons for the East Today (Cambridge, MA: M.I.T. Press), pp. 189-230

J. Bradford DeLong (1993), "Very Long-Run Economic Growth, ca. 1870-1990," in Horst Siebert, ed., Economic Growth in the World Economy (Kiel: Institute for World Economics)

J. Bradford DeLong (1992), "J. P. Morgan and His Money Trust," Wilson Quarterly 16:4 (Fall), pp. 16-30

J. Bradford DeLong (1992), "Growth, Industrialization, and Finance," NBER Reporter (Fall), pp. 5-11

J. Bradford DeLong (1992), "Machinery Investment as a Key to American Economic Growth," in Mark Bloomfield, Margo Thorning, and Charls Walker, eds., Tools for American Workers (Washington, DC: American Council for Capital Formation)

J. Bradford DeLong and Richard Grossman (1992), "Excess Volatility on the London Stock Market, 1870-1990" (Cambridge, MA: Harvard University Department of Economics)

J. Bradford DeLong (1991), "Did J. P. Morgan's Men Add Value?: An Economist's Perspective on Financial Capitalism," in Peter Temin, ed., Inside the Business Enterprise: Historical Perspectives on the Use of Information (Chicago, IL: University of Chicago Press for NBER), pp. 205-36

J. Bradford DeLong and Marco Becht (1991), "'Excess Volatility' in the German Stock Market, 1876-1990" (Cambridge, MA: Harvard University Department of Economics)

J. Bradford DeLong (1989), "The 'Protestant Ethic' Revisited: A Twentieth-Century Look," Fletcher Forum 13: 2 (Summer), pp. 229-242

J. Bradford DeLong (1989), "Nassau Senior's 'Last Hour' and the 'Advances' Conception of Capital Revisited," History of Political Economy 21: 2 (Summer), pp. 309-310

J. Bradford DeLong (1987), "Review of N.F.R. Crafts, British Economic Growth during the Industrial Revolution," Journal of Economic History 47:3 (September), pp. 790-792

J. Bradford DeLong (1987), "Review of Bernard Elbaum and William Lazonick, The Decline of the British Economy," Journal of Economic History 47:3 (September), pp. 792-795

J. Bradford DeLong and Lawrence H. Summers (1986), "The Changing Cyclical Variability of Economic Activity in the United States," in Robert J. Gordon, ed., The American Business Cycle: Continuity and Change (Chicago, IL: University of Chicago Press for the National Bureau of Economic Research), pp. 679-719

J. Bradford DeLong and Lawrence H. Summers (1986), "A Comment on John Taylor's `Improvements in Macroeconomic Stability: The Role of Wages and Prices'," in Robert J. Gordon, ed., The American Business Cycle: Continuity and Change (Chicago, IL: University of Chicago Press for the National Bureau of Economic Research), pp. 667-675

J. Bradford DeLong and Lawrence H. Summers (1986), "Are Business Cycles Symmetrical?" in Robert J. Gordon, ed., The American Business Cycle: Continuity and Change (Chicago, IL: University of Chicago Press for the National Bureau of Economic Research), pp. 166-178

E. Other Works Worth a Note

1. Weblog Posts

J. Bradford DeLong (2007), "Adagia, at the Corner of College and Bancroft, April 30 2007 12:00 Noon" April 30

J. Bradford DeLong (2007), "Is It Really Harder to Make the Case for Free Trade These Days?" April 30

J. Bradford DeLong (2007), "Hedge Funds: Two-and-Twenty" April 25

J. Bradford DeLong (2007), "Anti-Speech Situations" April 25

J. Bradford DeLong (2007), "Hedge Funds: Two-and-Twenty" April 25

J. Bradford DeLong (2007), "On the Berkeley Energy Biosciences Institute" April 19

J. Bradford DeLong (2007), "Journamalism Watch: Robert Kuttner Unfairly Trashes Robert Rubin" April 16

J. Bradford DeLong (2007), "How Supply-Side Economics Trickled Down..." April 10

J. Bradford DeLong (2007), "Journamalism Watch: Michael Gordon, Max Frankel, Fred Hiatt" April 8

J. Bradford DeLong (2007), "The Monetary Economics of China" March 22

J. Bradford DeLong (2007), "Jacob Levy Hates People Who Are Intolerant!" March 11

J. Bradford DeLong (2007), "Un-Discourse Situations" March 11

J. Bradford DeLong (2007), "Talking Past Each Other" March 1

J. Bradford DeLong (2007), "A Short Dialogue on Santa Clara County v. Southern Pacific Railroad Company" February 22

J. Bradford DeLong (2007), "Special Super Journamalism Barack-Atah-Adonai-Elohenu-Melech-Ha-Olam Shabbat Candle-Lighting Blogging!" February 9

J. Bradford DeLong (2007), "Applied Utilitarianism: The Price of Oranges in Berkeley" February 2

J. Bradford DeLong (2007), "A Small Matter of Calculating the Value Function" January 28

J. Bradford DeLong (2007), "Long-Run Health-Care Cost Drivers" January 25

J. Bradford DeLong (2007), "Keynes, Marx, Trotsky, Yglesias" January 16

J. Bradford DeLong (2007), "More Dred Scott v. Sanford Blogging for Martin Luther King Jr. Holiday Weekend!" January 12

J. Bradford DeLong (2006), "What Do We Owe Our Great-Great Grandchildren?: The Stern Review on Global Climate Change Once Again" December 30

J. Bradford DeLong (2006), "What Should We Be Doing About Global Climate Change?" December 20

J. Bradford DeLong (2006), "Intellectual Garbage Collection: The Unreliability of Alan Reynolds" December 16

J. Bradford DeLong (2006), "Kelly Risk Analysis" December 13

J. Bradford DeLong (2006), "Partha Dasgupta Makes a Mistake in His Critique of the Stern Review on Global Climate Change" November 30

J. Bradford DeLong (2006), "32,100,000 vs 25,524,000: The Senate Vote" November 8

J. Bradford DeLong (2006), "Were Ken Lay and Jeff Skilling Innocent?" October 2

J. Bradford DeLong (2006), "In the Matter of ENRON CFO Andrew Fastow: Some Stupid Questions from White Collar Crime Prof Blog, and Answers" September 24

J. Bradford DeLong (2006), "The Education of Wiliam Grieder (Why Oh Why Can't We Have a Better Press Corpos?)" September 9

J. Bradford DeLong (2006), "Department of 'Huh?': George Bush Has Shifted Taxes, Not Reduced Them" September 8

J. Bradford DeLong (2006), "Introducing Serious, Permanent Bugs into Your Wetware" August 26

J. Bradford DeLong (2006), "Payroll Employment and Household-Survey Unemployment" August 26

J. Bradford DeLong (2006), "The Blue Car Is the Red Car: A Review of Feldman's _From Molecule to Metaphor" August 22

J. Bradford DeLong (2006), "Discontinuities in Human History" August 9

J. Bradford DeLong (2006), "Today's History Lesson: The Middle East: History Doesn't Repeat Itself, But It Rhymes" July 30

J. Bradford DeLong (2006), "Why Oh Why Can't We Have a Better Press Corps? (Michael Abramowitz of the Washington Post Edition)" July 30

J. Bradford DeLong (2006), "The History of the Shrill" July 27

J. Bradford DeLong (2006), "Why Oh Why Can't We Have a Better Press Corps? (Thomas Ricks of the Washington Post, This Is Your Clippings File Edition)" July 26

J. Bradford DeLong (2006), "Where Are the Heirs of Walter Lippman?" July 17

J. Bradford DeLong (2006), "Outsourcing: Time to Talk Back to the Media" June 27

J. Bradford DeLong (2006), "I Am Concerned: Samuel Tanenhaus and Whittaker Chambers" May 27

J. Bradford DeLong (2006), "The Progressivity of the Tax Code Once Again" May 26

J. Bradford DeLong (2006), "Greg Mankiw Criticizes Lieberman, Bush, and Krugman" May 22

J. Bradford DeLong (2006), "Recurrence: The Revolt of the Netherlands and the Insurgency in Iraq" March 9, 2006

J. Bradford DeLong (2006), "Dark Matter: Global Imbalances" February 26, 2006

J. Bradford DeLong (2005), "A Platonic Dialogue on Journalistic Fairness, the Internet, Judy Miller Sourcing Ethics, Cross-Potomac White-Collar Outsourcing, and Other Topics" December 21

J. Bradford DeLong (2005), "A Lost Teachable Moment: James Ferguson on Zambia" October 25

J. Bradford DeLong (2005), "Dingbat Kabuki! (Yet Another Why-Oh-Why Can't We Have a Better Press Corps Edition)" October 17

J. Bradford DeLong (2005), "Grading the Greenspan Fed" October 4

J. Bradford DeLong (2005), "A Meditation on Twentieth-Century Political-Military History: The Causualties of the Red Army During World War II" October 2

J. Bradford DeLong (2005), "Why Oh Why Can't We Have a Better Press Corps?" September 27

J. Bradford DeLong (2005), "The Coming Dollar Crisis?" September 15

J. Bradford DeLong (2005), "History, Politics, and Moral Philosophy: Explanation and Justification" August 24

J. Bradford DeLong (2005), "John McGowan Seeks a Guide for the Perplexed" August 2

J. Bradford DeLong (2005), "Tim Burke Critiques Jared Diamond" July 29

J. Bradford DeLong (2005), "Two Months Before the Mast of Post-Modernism" July 15

J. Bradford DeLong (2005), "Justifications for the Long-Run Productivity Growth Forecasts in the Trustees' Reports" March 25

J. Bradford DeLong (2005), "A Positive Program for Social Security" March 17

J. Bradford DeLong (2005), "Dogs vs. Cats, State vs. Treasury, Diplomats vs. Economists" February 28

J. Bradford DeLong (2005), "Thanks, Guys, About Twenty-Two Years Late" February 13

J. Bradford DeLong (2005), "Shame on the Washington Post" February 11

J. Bradford DeLong (2005), "Outline of a Social Security Deal?" January 30

J. Bradford DeLong (2004), "In Defense of the 1st and 4th Infantry Divisions" December 29

J. Bradford DeLong (2004), "A Letter to a Noble Friend on the U.S. Budget" December 29

J. Bradford DeLong (2004), "The Best of the Achaeans" December 6

J. Bradford DeLong (2004), "Academic Administrators" November 29

J. Bradford DeLong (2004), "Seth Stevenson Urges Us to Be Worse than Debbie" September 28

J. Bradford DeLong (2004), "The United States as a Developing Country during the Cold War" August 26

J. Bradford DeLong (2004), "On the Maximization of Social Welfare" June 30

J. Bradford DeLong (2004), "Harry Dexter White Was a Security Risk" June 7

J. Bradford DeLong (2004), "No Libertarians in the Seventeenth-Century Highlands" March 6

J. Bradford DeLong (2004), "What's Going on with the Economy?" February 23

J. Bradford DeLong (2004), "Administration 2004 Employment Projections One Last Time" February 18

J Bradford DeLong (2004), "What's the Antonym of 'White House Aide'?" February 16

J. Bradford DeLong (2004), "Department of Productivity Growth" February 10

J. Bradford DeLong (2004), "The Future of the Economy--The Next Year and the Next Decade" January 15

J. Bradford DeLong (2004), "Getting Robert Rubin's Job" January 14

J. Bradford DeLong (2003), "Thoughts on Rubinomics" December 20

J. Bradford DeLong (2003), "A Shiver in My Spine: Chevauchee" December 3

J. Bradford DeLong (2003), "How Rich Is Fitzwilliam Darcy?" November 15

J. Bradford DeLong (2003), "The Grand Strategy of the United States of America" October 21

J. Bradford DeLong (2003), "Why Oh Why Can't We Have a Better Press Corps? Katie Hafner Covers George Gilder" October 19

J. Bradford DeLong (2003), "Eliot Abrams Identifies Himself with Joe McCarthy" October 17

J. Bradford DeLong (2003), "The 'Embedded Economy' Thesis" October 15

J. Bradford DeLong (2003), "A Non-Socratic Dialogue on Social Welfare Functions" October 9

J. Bradford DeLong (2003), "Where Are the Grownups in the Republican Party?" September 27

J. Bradford DeLong (2003), "More Thoughts on Jackson Hole" September 4

J. Bradford DeLong (2003), "The Erosion of Okun's Law" September 3

J. Bradford DeLong (2003), "Outsourcing Our Future?" August 19

J. Bradford DeLong (2003), "Exorbitant Privilege, or, How Worrisome Is the U.S. Trade Deficit?" August 16

J. Bradford DeLong (2003), "Output and Hours since 1960" August 15

J. Bradford DeLong (2003), "More Good GDP (and Productivity) News About the Second Quarter" August 15

J. Bradford DeLong (2003), "David Brooks Gets Burned by Trusting Charles Murray" August 14

J. Bradford DeLong (2003), "In the Shadow of Malthus" July 26

J. Bradford DeLong (2003), "Crude Life Expectancy Estimates" July 25

J. Bradford DeLong (2003), "Germany on the Eve of the Great Depression" July 24

J. Bradford DeLong (2003), "Utility, Stacking the Deck, and 'Original Appropriation'" July 17

J. Bradford DeLong (2003), "The Wetware of the Digital Divide" July 8

J. Bradford DeLong (2003), "A Platonic Dialogue on the Practice of Monetary Policy" July 7

J. Bradford DeLong (2003), "The Long, Dark Night of the Soul of the Monetary Economist: A Platonic Dialogue" July 7

J. Bradford DeLong (2003), "Better Futures that Might Have Been" July 7

J. Bradford DeLong (2003), "What Should College Professors Be Paid?" July 6

J. Bradford DeLong (2003), "Inequality by Race" June 27

J. Bradford DeLong (2003), "On Affirmative Action: Andrew Sullivan Is Wrong Again" June 27

J. Bradford DeLong (2003), "Equality of Opportunity" June 24

J. Bradford DeLong (2003), "'The Weaknesses and Foibles of Modernity': What Leo Strauss Means" June 7

J. Bradford DeLong (2003), "Notes: The Character of the Absolutist State in Western Europe" May 12

J. Bradford DeLong (2003), "Elementary Statistics and William Bennett" May 6

J. Bradford DeLong (2003), "No More Circulation of Elites! Brad DeLong Abandons the Bipartisan Center" May 3

J. Bradford DeLong (2003), "Uncle Milton: Notes" April 17

J. Bradford DeLong (2003), "Measuring Business Cycles" April 15

J. Bradford DeLong (2003), "Why Can't Reporters Do a Better Job?" March 26

J. Bradford DeLong (2003), "The Impact on Web Quality of Positive Feedback Linking Practices" March 16

J. Bradford DeLong (2003), "Ontological Breakdown" March 14

J. Bradford DeLong (2003), "Thoughts on the Republican Economists' Letter" February 25

J. Bradford DeLong (2003), "On Machiavelli's 'Letter to Vettori'" February 11

J. Bradford DeLong (2003), "Deficits and Interest Rates Once Again" February 5

J. Bradford DeLong (2003), "A (Very Short) Guide for the Perplexed: Understanding the Budget Deficit Debate" January 21

J. Bradford DeLong (2003), "It's Time for Glenn Hubbard to Quit as CEA Chair: He's Burned Out" January 7

J. Bradford DeLong (2002), "Why Does the New York Times Publish This Dreck?: Abigail Thernstrom" December 18

J. Bradford DeLong (2002), "Glenn Reynolds: Ideological Hack" September 18

J. Bradford DeLong (2002), "Greenspan 5, DeLong 2" September 14

J. Bradford DeLong (2002), "Strangeness Squared: Berkeley's New Media Center Starts Off on the Wrong Foot" September 10

J. Bradford DeLong (2002), "A Platonic Dialogue on Eldred v. Ashcroft" September 9

J. Bradford DeLong (2002), "Glenn Hubbard Keeps Pitching" August 22

J. Bradford DeLong (2002), "The Two Decade-Long Fall in America's Private Savings Rate" July 3

J. Bradford DeLong (2002), "Red Eyes" June 26

J. Bradford DeLong (2002), "William Grieder: Hoping that the Flaws in the U.S. Economy Throw a Lot of People Out of Work" June 22

J. Bradford DeLong (2002), "My Very, Very Allergic Reaction to Noam Chomsky: Khmer Rouge, Faurisson, Milosevic" June 17

J. Bradford DeLong (2002), "The Repeal of the Estate Tax" June 11

J. Bradford DeLong (2002), "World Population Distribution 2000" May 31

J. Bradford DeLong (2001), "The Advent of the American Recession" December 15

J. Bradford DeLong (2001), "The Islamic Reformation" October 15

J. Bradford DeLong (2001), "The Industrial Revolution in Cotton Spinning" September 15

J. Bradford DeLong (2001), "Consumer Harm and the Microsoft Case:" September 15

J. Bradford DeLong (2001), "Trade with Mexico" March 15

J. Bradford DeLong (2001), "Unemployment in the 1990s" March 1

J. Bradford DeLong (2001), "New Estimates of CPI Bias from Dora Costa" February 20

J. Bradford DeLong (2001), "The World's Income Distribution: Turning the Corner?" February 15

J. Bradford DeLong (2001), "Output Growth in the Late 1990s" February 10

J. Bradford DeLong (2001), "Inflation in the Late 1990s" February 1

J. Bradford DeLong (2001), "Investment and the Recession of 2001" February 1

J. Bradford DeLong (2000), "To Tallahassee and Back" December 28

J. Bradford DeLong (2000), "Global Warming" August 15

J. Bradford DeLong (2000), "Forecasting Inflation" July 15

J. Bradford DeLong (2000), "NAFTA's (Qualified) Success" July 10

J. Bradford DeLong (2000), "East Asia's Recovery: Where Did All the Financial Crises Go>" June 21

J. Bradford DeLong (2000), "The End of the Inheritance Tax?" June 20

J. Bradford DeLong (2000), "My Despair at American Land-Use Planning" May 15

J. Bradford DeLong (2000), "You're Working to Change It, Right Dad? Karl Marx, Modern Feminism, and the Bohemian Club" February 21

J. Bradford DeLong (1999), "Dialing for Dollars: The Politics of Getting Funding for California Schools" October 15

2. Working Papers, Comments, and Notes

J. Bradford DeLong (2007), "The Domestic Macroeconomic Outlook" February 28

J. Bradford DeLong (2006), "Comment on Christina Wang, 'Financial Innovations, Idiosyncratic Risk, and the Joint Evolution of Real and Financial Volatilities'" November 17

J. Bradford DeLong (2006), "Lecture Notes on the Equity Premium I" March 2, 2006

J. Bradford DeLong (2005), "External Imbalances and Adjustment in the Pacific Basin" September 22

J. Bradford DeLong (2005), "Statement on Social Security Reform" May 12

J. Bradford DeLong (2005), "Some Simple Analytics for a 'Hard Landing'" April 20

J. Bradford DeLong (2005), "Asset Returns and Economic Growth: The Econ 1 Version" April 15

J. Bradford DeLong (2005), "Returns, Growth, and the Funding of Social Insurance: A Note" April 14

J. Bradford DeLong (2004), "Discussion of N. Gregory Mankiw and Matthew Weinzerl, 'Dynamic Scoring: A Back-of-the-Envelope Guide'" November 4

J. Bradford DeLong (2004), "The Ghost of Andrew Mellon" July 24

J. Bradford DeLong, Robert Greenstein, and Peter Orszag (2004), "Cleaning Up After the Elephants: Correcting Robert Samuelson's Review of Robert Rubin's Memoirs" June 3

J. Bradford DeLong (2004), "Comment on Montek Ahluwalia, 'Lessons from Indian Development'" March 10

J. Bradford DeLong (2004), "The Monetarist Counterrevolution" March 1

J. Bradford DeLong (2003), "A Framework for the Economic Analysis of Technological Revolutions" December 3, 2003

J. Bradford DeLong (2003), "The Tasks of Economic Historians" September 20

J. Bradford DeLong (2003), "Notes: More Demand Curves that Slope the Wrong Way: Shleifer and Vishny on the Limits to Arbitrage" April 10

J. Bradford DeLong (2003), "Notes: Risk Aversion" April 10

J. Bradford DeLong (2003), "Teaching Shleifer's 'Implementation Cycles'" February 14

J. Bradford DeLong (2002), "Financial Systems and Growth Prospects in Asia" September 27

J. Bradford DeLong (2002), "Vulgar Monetarism" July 24

J. Bradford DeLong (2002), "Macroeconomic Vulnerabilities in the Twenty-First Century" July 9

J. Bradford DeLong (2002), "Sustaining American Economic Growth: The Key Role of Education" July 8

J. Bradford DeLong (2002), "PEIS: Notes on Reform" June 6

J. Bradford DeLong (2002), "911--Can There Be an Economist's View?" McKenna Lecture at Claremont-McKenna College April 30

J. Bradford DeLong (2002), "Simple Economic Animations Library" January 12

J. Bradford DeLong (2001), "The Next Industrial Revolutions: CITRIS Kickoff Speech" September 3

J. Bradford DeLong (2001), "Notes: Kennedy School Conference on Economic Policy in the 1990s" June 24

J. Bradford DeLong (2001), "A Historical Perspective on the 'New Economy'" June 15

J. Bradford DeLong (2001), "The Monetarist Counterrevolution" April 15

J. Bradford DeLong (2001), "The New Economy: What Kind of a Historical Turning Point?" January 11

J. Bradford DeLong (2000), "Gore-Bush Debate vs. Michael Boskin" October 25

J. Bradford DeLong (2000), "Main Themes of Twentieth Century Economic History" October 23

J. Bradford DeLong (2000), "How Fast Is Modern Economic Growth?" June 11

J. Bradford DeLong and A. Michael Froomkin (1999), "Speculative Microeconomics for Tomorrow's Economy" November 14

J. Bradford DeLong and Carlos Ramirez (1996), "Understanding America's Hesitant Steps Toward Financial Capitalism"

J. Bradford DeLong and Richard Grossman (1996), "The British Stock Market and British Economic Growth, 1870-1914" (Berkeley, CA)

J. Bradford DeLong (1995), "Farewell to Treasury" (as prepared for delivery, May 24)

J. Bradford DeLong (1994), "The Equipment Investment Boom" May 18

J. Bradford DeLong (1994), "Economic Consequences of the Balanced-Budget Amendment" (Washington, DC, April)

J. Bradford DeLong (1993), "Globalization and Wage Stagnation" (Washington, DC, August)

J. Bradford DeLong (1993), "The Macroeconomics of War and Peace: Comment," NBER Macroeconomics Annual, pp. 247-50

J. Bradford DeLong (1993), "The Deficits of the 1980s" June 17

J. Bradford DeLong (1993), "The Investment Tax Credit and Economic Growth" (Washington, D.C.: American Council for Capital Formation)

J. Bradford DeLong (1992), "Deficit Reduction and the Short-Run Macroeconomic Outlook" (as of December 1992) (Cambridge, MA, December)

J. Bradford DeLong (1990), "'Liquidation' Cycles: Old-Fashioned Real Business Cycle Theory and the Great Depression" (Cambridge, MA: Harvard University Department of Economics)

J. Bradford DeLong and Lawrence H. Summers (1990), "Price Level 'Flexibility' and the Coming of the New Deal: A Response to Sumner," Cato Journal 9: 1 (Winter), pp. 729-735

J. Bradford DeLong and Lawrence H. Summers, "On the Existence and Interpretation of a 'Unit Root' in U.S. Real GDP" (Cambridge, MA: Harvard University Department of Economics, 1989)

3. Op-Eds

J. Bradford DeLong (2007), "The Secret Language of Central Bankers," Project Syndicate April 2

J. Bradford DeLong (2007), "Sailing into Harm's Way vs. the Dangerously Eloquent Jeff Faux," TPM Cafe February 27

J. Bradford DeLong (2007), "Wall Street Journal Econoblog: Arnold Kling vs. Brad DeLong on the New Deal" February 7

J. Bradford DeLong (2007), "Fearless Financial Markets," Project Syndicate February

J. Bradford DeLong (2007), "Inequality on the March," Project Syndicate January

J. Bradford DeLong (2006), "Saved by Taxes," Project Syndicate December

J. Bradford DeLong (2006), "Friedman Completed Keynes," Project Syndicate November 29

J. Bradford DeLong (2006), "A Man Who Hated Government: An Obituary for Milton Friedman" November 17

J. Bradford DeLong (2006), "Has Neoliberalism Failed Mexico?" Project Syndicate September

J. Bradford DeLong (2006), "The Odds of Economic Meltdown," Salon August 3

J. Bradford DeLong (2006), "Man's Fate/Man's Hope," Project Syndicate August

J. Bradford DeLong (2006), "The Invisible College," Chronicle of Higher Education Review 52:47 (July 28, 2006)

J. Bradford DeLong (2006), "The Box that Changed the World," Project Syndicate July

J. Bradford DeLong (2006), "The Tabloid Syndrome," Project Syndicate June

J. Bradford DeLong (2006), "The Myth of the Ownership Society," Project Syndicate May

J. Bradford DeLong (2006), "Bottom Dollar," Project Syndicate April

J. Bradford DeLong (2006), "Fiscal Apocalypse Now," Project Syndicate March

J. Bradford DeLong (2006), "Growth Is Good," Harvard Magazine February/March

J. Bradford DeLong (2006), "Europe's Free Riders," Project Syndicate February

J. Bradford DeLong (2006), "The False Promise of Private Pensions," Project Syndicate January

J. Bradford DeLong (2005), "Semi-Rational Exuberance," Project Syndicate December

J. Bradford DeLong (2005), "Eyes Wide Shut on Global Warming," Project Syndicate November

J. Bradford DeLong (2005), "For Whom America's Bell Tolls," Project Syndicate October

J. Bradford DeLong (2005), "America's Opposing Futures," Project Syndicate September

J. Bradford DeLong (2005), "Houses in the Air," Project Syndicate August

J. Bradford DeLong (2005), "Inviting the Avoidable," Project Syndicate July

J. Bradford DeLong (2005), "Europe's Neo-Liberal Challenge," Project Syndicate June

J. Bradford DeLong (2005), "Economists' New World Order," Project Syndicate May

J. Bradford DeLong (2005), "America's Interest-Rate Puzzle," Project Syndicate April

J. Bradford DeLong (2005), "In Search of Global Demand," Project Syndicate March

J. Bradford DeLong (2005), "Fiscal Follies in America and Beyond," Project Syndicate February

J. Bradford DeLong (2005), "Bush's Crash Test Economics," Project Syndicate January

J. Bradford DeLong (2004), "America's Coming Social Democracy?," Project Syndicate December

J. Bradford DeLong (2004), "Taming Voodoo Economics," Project Syndicate November

J. Bradford DeLong (2004), "Can High Oil Prices Be Good?," Project Syndicate October

J. Bradford DeLong (2004), "Doomsday for the Dollar?," Project Syndicate September

J. Bradford DeLong (2004), "What Sort of Ownership Society?" Nieman Watchdog August 30

J. Bradford DeLong (2004), "The End of Want?," Project Syndicate August

J. Bradford DeLong (2004), "Welcome to the Era of Incompetence," Project Syndicate July

J. Bradford DeLong (2004), "The European Economic Model Lives," Project Syndicate June

J. Bradford DeLong (2004), "Missing the Story of Structural Change," Nieman Watchdog May 21

J. Bradford DeLong (2004), "The Great Illusion," Project Syndicate May

J. Bradford DeLong (2004), "The Coming Age of Interest," Project Syndicate April

J. Bradford DeLong (2004), "America's Schizophrenic Economy," Project Syndicate March

J. Bradford DeLong (2004), "Protectionism Rides Again," Project Syndicate February

J. Bradford DeLong (2004), "The Richest Get Richer," Project Syndicate January

J. Bradford DeLong (2003), "The American Mirror," Project Syndicate December

J. Bradford DeLong (2003), "Robert Rubin Revisited," Project Syndicate November

J. Bradford DeLong (2003), "Bush's Pseudo-Conservative Revolution," Project Syndicate October

J. Bradford DeLong (2003), "The Weak Dollar's Impossible Strength," Project Syndicate September

J. Bradford DeLong (2003), "The Fragile Roots of Productivity Growth," Project Syndicate August

J. Bradford DeLong (2003), "Blithe Unconcern," Financial Times July 29

J. Bradford DeLong (2003), "Herbert Hoover and the Stability Pact," Project Syndicate July

J. Bradford DeLong (2003), "The New New Thing in Economics," Project Syndicate June

J. Bradford DeLong (2003), "The Roots of Islamic Backwardness," Project Syndicate May

J. Bradford DeLong (2003), "Is the US Economy Still in Recession?," Project Syndicate April

J. Bradford DeLong (2003), "The Final Defeat of Thomas Malthus?," Project Syndicate March

J. Bradford DeLong (2003), "Lula in the Shadow of Chavez," Project Syndicate February

J. Bradford DeLong (2003), "Any Text. Any Time. Any Where," Wired January 30

J. Bradford DeLong (2003), "The View from 2023," European Wall Street Journal January 27

J. Bradford DeLong (2003), "America's Second Gilded Age," Project Syndicate January 25

J. Bradford DeLong (2003), "The Customizer Is Always Right," Wired January 20

J. Bradford DeLong (2003), "Atlas Slumps," Project Syndicate January

J. Bradford DeLong (2002), "(One Piece of) the Real Headline News: A 5-lb. Bag of Flour for $0.69" December 13

J. Bradford DeLong (2002), "The Ghosts of Economics Past," Project Syndicate December

J. Bradford DeLong (2002), "America's Second Gilded Age," Project Syndicate November

J. Bradford DeLong (2002), "Neo-liberalism's Argentine Failure," Project Syndicate October

J. Bradford DeLong (2002), "Nobody Knows Anything: The Pace of Technological Change," Wired September 17

J. Bradford DeLong (2002), "The New German Problem," Project Syndicate September

J. Bradford DeLong (2002), "A Double-Dip Recession for the US?," Project Syndicate August

J. Bradford DeLong (2002), "Boomtime in Europe," Financial Times July 24

J. Bradford DeLong (2002), "Down and Out in the United States?," Project Syndicate July

Marco Becht and J. Bradford DeLong (2002) "Boardroom Truth and Beauty," Foreign Policy June 12

J. Bradford DeLong (2002), "Comparative Advantage," Chronicle of Higher Education Review June 12

J. Bradford DeLong (2002), "Profits and Productivity" June 5

J. Bradford DeLong (2002), "The Boom of the 1990s" March 30

J. Bradford DeLong (2002), "America's Rebound from Recession" March 27

J. Bradford DeLong (2002), "The Partnership Dance Between Business and Government" February 15

J. Bradford DeLong (2001), "George W. Bush's Tax Cut: The Economic Policy World Turned Topsy-Turvy," Fortune January 15

J. Bradford DeLong (2000), "Has the Federal Reserve Overdone It?" Fortune December 15

J. Bradford DeLong (2000), "How Much Credit Does Clinton Deserve for the Economy?" October 15

J. Bradford DeLong (2000), "The Impact of E-Business: A Historical Perspective" September 26

J. Bradford DeLong (2000), "The Two New Economies" Fortune August 12

J. Bradford DeLong (2000), "What Have We Learned from the International Financial Crises of the 1990s?" August 1

J. Bradford DeLong (2000), "The Meltzer Report," Worldlink May 10

J. Bradford DeLong (2000), "The EITC and the Decade of 'Welfare Reform'," New York Times May 2

J. Bradford DeLong (2000), "The Coming End of American Triumphalism" April 11

J. Bradford DeLong (2000), "Is Big Bad?" Los Angeles Times April 9

J. Bradford DeLong (2000), "What Is Truly 'New' About Our 'New Economy?' Fortune, April 4

J. Bradford DeLong (2000), "Where Did Reagan's Tax Cut Go?" March 21

J. Bradford DeLong (2000), "What Happened to the Phillips Curve?" New York Times March 9

J. Bradford DeLong (2000), "Marking My Beliefs to Market" March 3

J. Bradford DeLong (2000), "Looking into the Encyclopedia," Fortune February 26

Brad DeLong (1996), "A Wired Child," Harpers 292:1750 (March), p. 30

J. Bradford DeLong (1995), "Können Finanzmärkte zu liquide sein?: Gefahr der Verstärkung von Kurseinbrüchen," Neue Zuercher Zeitung: Elektronische Borse Schweiz December 5, p. B 14. (English version: "Can a Financial Market Be Too Liquid and Too Efficient?" (Berkeley, CA).)

J. Bradford DeLong and David Levine (1995), "Not a Capital Idea," San Francisco Chronicle December 5

J. Bradford DeLong (1995), "Ontological Breakdown, or, Pretending to Be a Help System", in Adam Engst et al., eds., TidBITS #291, August 21

J. Bradford DeLong and David Levine (1995), "Welfare Reform that Makes Poor Kids Poorer Will Never Pay Off," The Los Angeles Times October 15

[Ghostwritten] Lloyd M. Bentsen (1994), "Where Does the Deficit Come From?" Wall Street Journal (November 3

4. Reviews

J. Bradford DeLong (2006), "The Childish Babbling of a Say: A Review of Foley's Adam Smith's Fallacy" September 22

J. Bradford DeLong (2004), "Doug Irwin on Free Trade, and on Baumol and Gomory" August 10

J. Bradford DeLong (2004), "Robert Skidelsky's Biography of John Maynard Keynes" August 6

J. Bradford DeLong (2004), "History as Tragedy: Kagan's vs. Thucydides's Peloponnesian War" January 6

J. Bradford DeLong (2003), "Review of Alan Furst, Dark Star" July 7

J. Bradford DeLong (2003), "Review of Brink Lindsey, Against the Dead Hand" March 22

J. Bradford DeLong (2003), "Review of Harry Turtledove, Over the Wine-Dark Sea" February 19

J. Bradford DeLong (2002), "Review of Alan Blinder, _The Quiet Revolution: Central Banking Goes Modern" September 16

J. Bradford DeLong (2002), "Skepticism Toward Bjorn Lomborg, the Skeptical Environmentalist" August 27

J. Bradford DeLong (2002), "Review of Barbara Ehrenreich's Nickel and Dimed" August 13

J. Bradford DeLong (2002), "Dow 36000 Once Again" August 1

J. Bradford DeLong (2002), "More Thoughts on Stiglitz's _Globalization and Its Discontents" July 7

J. Bradford DeLong (2002), "Phillip Habib and Ariel Sharon: A Review of John Boykin's Cursed Is the Peacemaker"June 4

J. Bradford DeLong (2002), "Response to Skidelsky on His Biography of John Maynard Keynes" April 15

Marco Becht and J. Bradford DeLong (2002), "Review of Sanford Jacoby, Corporate Governance in Comparative Perspective: Prospects for Convergence" February 17

J. Bradford DeLong (2001), "The Last Development Crusade: Review of Bill Easterly's The Elusive Quest for Growth" August 15

J. Bradford DeLong (2001), "Review of Richard Evans, Lying About Hitler May 15

J. Bradford DeLong (2000), "Review of Robert Wright, Non-Zero" May 20

J. Bradford DeLong (2000), "Review of Eric Tarloff's Face-Time" April 12

J. Bradford DeLong (2000), "China's Advocate: A Review of Ken Pomeranz's The Great Divergence" March 16

J. Bradford DeLong (1999), "Review of Joseph Williams, Style: Toward Clarity and Grace" December 15

J. Bradford DeLong (1999), "Review of Jared Diamond, Guns, Germs, and Steel" November 20

J. Bradford DeLong (1999), "Review of Charles Petzold, Code: The Hidden Language of Computer Hardware and Software" November 15

J. Bradford DeLong (1999), "Review of Haynes and Broder, The System" August 12

J. Bradford DeLong (1997), "Review of LaFeber, The Clash: U.S.-Japanese Relations Throughout History" November 17

J. Bradford DeLong (1994), "Notes on John Maynard Keynes, A Tract on Monetary Reform (London: Macmillan, 1924)"

J. Bradford DeLong (1989), "Review of Nicholas Spulber, Managing the American Economy from Roosevelt to Reagan," Journal of Economic History 49:3 (December), pp. 1058-1059

5. Video and Audio

J. Bradford DeLong (2007), "The Federal Reserve and the Great Depression (Video)" March 16

J. Bradford DeLong (2007), "In Praise of Keynes's Tract on Monetary Reform (Video)" March 14

J. Bradford DeLong (2007), "Forecasting Recessions Is a Fool's Game (Video) March 8

J. Bradford DeLong (2007), "How Rich Is Fitzwilliam Darcy? (Video)" March 9

J. Bradford DeLong (2007), "KQED Forum: The Federal Budget" February 7

J. Bradford DeLong (2006), "KQED Forum: Interest Rate/Federal Reserve Update" December 13

J. Bradford DeLong (2006), "Aftathoughts on NAFTA: Video, Fifteen Minute Edited Version" October 20

J Bradford DeLong (2006), "The Very Long Run (Video)" October 17

J. Bradford DeLong (2006), "The Pace of Technological Change: Nightly Business Report" October 27

J. Bradford DeLong (2006), "Supply-Side Follies (Video)" July 14

J. Bradford DeLong (2006), "Feckless Republican Leaders on the Budget Deficit (Video)" July 4

J. Bradford DeLong (2006), "The Estate Tax Once Again (Video)" July 3

J. Bradford DeLong (2006), "PAYGO (Video)" July 3

J. Bradford DeLong (2006), "A Primer on the Federal Reserve (Video)" July 3

J. Bradford DeLong (2006), "Ben Bernanke and Inflation (Video)" June 8

J. Bradford DeLong (2006), "Why Social Security Is a Good Thing (Video)" May 17

J. Bradford DeLong (2006), "Time for a Fiscal Stabilization Board to Deal with the Deficit? (Video)" May 13

J. Bradford DeLong (2006), "The Latest Bush Tax 'Cut'" May 11

J. Bradford DeLong (2006), "Crossing the Rhine with Fire and Sword (Video)" April 30

J. Bradford DeLong (2006), "The Great Illusion (Video)" April 28

J. Bradford DeLong and Richard Schmalensee (2004), "Economics Roundtable: Presidential Economics" October 4

J. Bradford DeLong (2003), "Nightly Business Report: Chimera" December 18

J. Bradford DeLong (2003), "Nightly Business Report: Read Your Script!" October 21

J. Bradford DeLong (2003), "Productivity Growth: Nightly Business Report" August 15

J. Bradford DeLong (2002), "The Seasonal Pattern of Economic Activity: Nightly Business Report" December 30

J. Bradford DeLong (2002), "The U.S. Is Lucky in Its Central Bank: Nightly Business Report" November 25

J. Bradford DeLong (2002), "Go to College!: Nightly Business Report" August 21

J. Bradford DeLong (2002), "The Mysterious Incident of the High-Tech Boom Confined to the United States in the Nighttime: Nightly Business Report" June 24

6. Reading Lists

J. Bradford DeLong: Business Administration 130: Introductory Finance

J. Bradford DeLong: Economics 101b: Intermediate Macroeconomics

J. Bradford DeLong: Economics 113: American Economic History

J. Bradford DeLong: Economics 115: Twentieth Century Economic History

J. Bradford DeLong: Economics 202b: Core Macroeconomics I

J. Bradford DeLong: Economics 202b: Core Macroeconomics II

J. Bradford DeLong: Economics 202c: Economic Growth

J. Bradford DeLong: Economics 210a: Introduction to Economic History

J. Bradford DeLong: Economics 210b: Topics in Economic History

J. Bradford DeLong: Economics 236: Your Last Course in Macroeconomics:

J. Bradford DeLong: European Economic History Reading Course:

Mitt Romney Just Doesn't Get It

Justice requires that Osama bin Laden pay. And realpolitik requires it too. What sort of message does it send for a Republican presidential candidate to say that it's fine if a man who kills 3000 Americans dies in his bed?

Quote Of The Day | TPMCafe: By Eric Kleefeld: "It's not worth moving heaven and earth spending billions of dollars just trying to catch one person." — Mitt Romney, in an interview with the Associated Press, saying that the country's safety would not benefit significantly from catching Osama Bin Laden. This quote was buried in the AP article.

GDP = 1.3%

The Big Picture tells the story:

The Big Picture | GDP = 1.3%: By now, you know the GDP came in way below consensus.... The economy slowed to its weakest pace of gains in 4 years, when GDP was 1.2% during Q1 2003. Housing gets most of the blame (duh), but do not ignore the accelerating inflation factor as a key element. Most traders realize the Fed is watching that component closely; Hence, why you are not hearing the usual "Rate Cut" chants from the cheap seats. PCE rose 3.4% (it decreased 1.0% Q4) Even the nonsensival core PCE  (ex food and energy) was plus 2.2% (following 1.8% Q4).

International trade, Business Capex spending, Inventory growth, and decreased government spending all weighed on the economy to produce that 1.3% number. The one bright spot:  Durable goods. Plus 7.3% in Q1 follows +4.4% in Q4. Pretty much everything else was punk.

links for 2007-04-27

Federal Reserve Bank of San Francisco Lunchtime Seminar: Emmanuel Saez

Wojciech Kopczuk, Emmanuel Saez, and Jae Song (2007), "Uncovering the American Dream: Mobility and Inequality in Social Security Earnings Data since 1937"

ABSTRACT: This paper uses U.S. Social Security earnings administrative data to analyze the evolution of inequality and mobility since 1937. Uncapped earnings data since 1978 show that mobility [from percentile to percentile] at the top of the income distribution has been very stable. As a result, earnings averaged over periods longer than one year display the same dramatic increase in concentration as annual earnings since the 1970s. Annual earnings data shows that the Great Compression in earnings from 1939-1949 took place in two separate stages: a sharp compression during the war years followed by a slower compression in the post-war period (after a short-lived pause during 1945-46). Since 1937, year to year earnings mobility has followed an inverted U-shape pattern with a large but temporary increase during World War II and the immediate post-war years. Short-term mobility is now at its lowest point since 1937. Mobility measures over the career show that mobility over a life-time has always been relatively modest and has remained fairly stable over the period we analyze. The closing of the gender gap has contributed greatly to reducing long-term inequality across all workers, especially at the bottom of the distribution. However, long-term inequality has increased substantially for male workers in all segments of the distribution.

Early career: 25-36
Mid career: 37-48 Late career: 49-60

Probability of moving from (P0-40) to P(80-100):

  • From early to mid-career, 3%
  • From mid to late-career: 2%
  • From early to late career: 6% for those born in 1930, 7.5% for those forn in 1944, and perhaps 8.5% for those born in 1950 (Emmanuel thinks this is a geneder-feminism effect)

Probability of being in the top quintile of the income distribution during your early career if you are Black is:

  • 3.4% if you were born in 1930
  • 4% if you were born in 1938
  • 9% if you were born in 1945
  • 11.8% if you were born in 1950
  • 8% if you were born in 1960
  • 9% if you were born in 1968
  • 9.2% if you were born in 1974 (projected)

Why Hasn't Paul Wolfowitz Been Fired?

Krishna Guha reports: / World - Wolfowitz deputy under fire over climate : One of Paul Wolfowitz’s two handpicked deputies, Juan José Daboub, tried to water down references to climate change in one of the World Bank’s main environmental strategy papers, the bank’s chief scientist has told the Financial Times. Mr Daboub, a conservative former finance minister from El Salvador was brought into the bank by Mr Wolfowitz. He is already under fire for allegedly trying to remove references to family planning in the bank’s Madagascar country assistance strategy and reduce its prominence in its new health sector strategy.

The new claim will add to disarray at the highest ranks of the bank, which is in ­turmoil over revelations that Mr Wolfowitz personally arranged a large pay rise for his girlfriend as part of a secondment deal. Graeme Wheeler, Mr Wolfowitz’s other deputy, told the bank president to resign at a management meeting last week. Robert Watson, the chief scientist, said Mr Daboub tried to dilute references to climate change in the Clean Energy Investment Framework, a key strategy paper presented to the bank’s shareholder governments at its annual meeting in Singapore last September. “He tried to water it down. He tried to take out references to climate change,” Mr Watson said. Two other officials confirmed this account. The chief scientist said Mr Daboub, who oversees the sustainable development division, tried to remove some references to climate change completely and, in other cases, replace them with the phrases “climate risk” and “climate variability”, which convey greater uncertainty over the human impact on climate. Mr Watson said: “My inference was that the words ­‘climate change’ to him implied human-induced ­climate change and he still thought it was a theory and was not proved yet.”

He said that went completely against bank policy. “We have always felt that climate change is a very serious environmental issue and very serious development issue,” he said. Mr Watson, is one of the world’s leading climate change scientists, having been a top official at the National Aeronautics and Space Administration (Nasa), an adviser to former President Bill Clinton, and the chairman of the Intergovern­mental Panel on Climate Change from 1997 to 2002. Mr Watson said he and other managers in his division “pushed back” and insisted on some references to climate change in the paper. He said Mr Daboub conceded sufficiently to make the strategy paper credible. “There was clearly less reference to climate change than there would have been, but it did not matter,” Mr Watson said.

The chief scientist said the attempt to dilute references to climate change “came from Daboub’s office and from Daboub himself”. He said he believed Mr Wolfowitz knew nothing about it. Mr Daboub told the Financial Times that the bank’s staff “deserve recognition for their work, which includes trying to meet the concerns of a diverse range of stake­holders”. “I personally believe that climate change is a serious issue and I am pleased that the bank is playing an active role in addressing it.”

The allegation follows Mr Daboub’s response to reports – supported by staff testimony – that he had also tried to dilute references to family planning in bank ­documents. Mr Daboub has written to other managers insisting these claims are untrue, stating: “I am here to carry out the bank’s policies, not my own.”“Regarding the Madagascar CAS [country assistance strategy], none of the editorial changes that were made at my direction changed, or intended to change, the Bank Group’s programme in the area of family planning,” he wrote.

However, on April 19, directors representing European shareholder governments sent a memorandum to Joy Phumaphi, the newly arrived vice-president for human development, saying that they had “major concerns” about the health strategy submitted to them after editing by Mr Daboub’s office. The document “makes virtually no reference to sexual and reproductive health on a strategic level”, the directors said. “This is surprising, considering that the bank has committed almost $2bn (€1.5bn, £1bn) to sexual and reproductive health over the past 10 years.” Ms Phumaphi apparently took these concerns seriously and has submitted a new draft with more extensive references to family planning to the board. This version was considered by the board on Tuesday but serious divisions over language remained between the US and several European countries.

Separately, Mr Wolfowitz on Tuesday wrote to World Bank staff reiterating his commitment to make “major changes in the way my office and senior management team work”, in an attempt to counter calls for his resignation.

links for 2007-04-26

More Books that Arrived Today...

More books that arrived today:

David Colander (2007), The Making of an Economist Revisited (New York: Princeton University Press: 0691125856)
Natalie Angier (2007), The Canon: A Whirligig Tour of the Beautiful Basics of Science (New York: Houghton Mifflin: 0618242953)
Daniel Altman (2007), Connected: Twenty-Four Hours in the Global Economy (New York: FSG: 0374135320)

The pile is now distressingly large.

Eric Alterman on Neoconservativism

Alterman writes:

Stop, Thief!: Neoconservatives are serial grave-robbers. Back in the early eighties, Norman Podhoretz tried to claim both Ronald Reagan and George Orwell as part of his meshuggeneh mishpocheh. Now, say what you will about the dimwitted defender of right-wing terrorism and the scrupulously honest symbol of the Anglo-American democratic left, they do not belong in the same political movement. Honest admirers of both men pointed out the fallacy in this transparent tactic, but two decades later, no cure has been found. Last seen in the neocons' trunk leaving the literary graveyard were the intellectual remains of the liberals' liberal, the critic Lionel Trilling.

Trilling never uttered so much as a sympathetic syllable about the neocon/Reaganite worldview to which his would-be inheritors became so attached after his death in 1975. Yet there he was, sitting atop a pyramid of Reagan-worshipers--people whose politics he never endorsed and whose style of argument he abhorred--in a chart accompanying a Sam Tanenhaus-authored encomium to the neocons in the New York Times a few Saturdays ago. The trick with Trilling is really no different from that with the refashioned Orwell.... Both men wrote witheringly of those intellectuals who gave their hearts and minds over to Stalinism, prescribing tough-minded scrutiny in the face of emotional appeals.... Trilling viewed liberalism as "a political position which affirmed the value of individual existence in all its variousness, complexity, and difficulty." Nothing, however, could be further from the neoconservatives' creed... "the anti-intellectualism of the intellectuals."...

[Those] whose writings have held up best during the past thirty years are those who never gave themselves over to the neocon temptation--who never became apologists for Reagan and Bush, much less Pat Robertson and Jerry Falwell. Liberal and socialist anticommunists like Daniel Bell, Nathan Glazer, Irving Howe, Michael Harrington, Alfred Kazin and Garry Wills led a relatively lonely intellectual life in the eighties, as Podhoretz, Irving Kristol, Elliott Abrams and Jeane Kirkpatrick were all toasting themselves at the Reagan White House...

Dan Gross Has a Book Coming Out

Those who invest in a bubble at its peak are great public benefactors. They give away all their money, and we get the organizations, the producers' durable equipment, the inventions and innovations, and the structures that their money paid for. On top of that the rest of us build the economic growth of the post-bubble generation.

But there are no testimonials or plaques to these great philanthropists--the investors in Insull's utility empire in 1929 or in Cisco in late 1999. They are unknown to the rest of us.

Daniel Gross (2007), Pop: Why Bubbles Are Great for the Economy (New York: Collins: 0061151548)

Hedge Funds: Two-and-Twenty

The list of top ten hedge-fund earners for 2006 includes three people who I guess to be turnaround specialists and "industrial statesmen"--management entrepreneurs building or fixing organizations a la Andy Carnegie or Johnny Rockefeller or Charlie Coster of a century ago--Icahn of Icahn, Lampert of Sears, and Tepper of Appaloosa. It includes three people who I guess to be primarily wholesale bankers--Griffin of Citadel, Jones of Tudor, and Kovner of Caxton--making money through financial intermediation: taking on relatively long-term or securitized risk and hoping to God their information about the true value of those risks is better than the market's and that they are properly diversified. It includes two people who I guess to be primarily speculators--one high-tech and quantitative, Simons, and one lower-tech and judgment-based, Soros. And it includes two people--Cohen of SAC and Barakett of Atticus--about whom I am basically clueless about what they are doing.

Their high fees may be best conceptualized as a gap between book and market value: if they were publicly-traded corporations, you would have to buy into the stock of their organizations at a premium to book value. The hedge fund form, however, allows you to buy in at book value--minus fees. And the premium between book and market is then captured not (as it is in a public corporation) by all the previous equity investors, but just by the first initial tier.

Why this particular hedge-fund form of organization has risen to the top of the barrel right now is an interesting question. But it is clear that at the top we have people and organizations either with real skills and real edges operating at the financial economy's pressure points and adding mammoth long-run organizational and intermediational value--or people taking on huge adverse tail risks in hard-to-assess ways who have so far been lucky. It's hard to tell the difference.

Not at the top, further down the food chain, however... it is a mystery how the hedge funds staffed by very smart and hard-working people who nevertheless do not seem to have much of a risk-adjusted edge over the market indices nevertheless collect fees of 2% of assets and 20% of returns each year:

Suddenly, Hedge Fund Fees Seem High: Steve Rosenbush: The top-performing hedge funds and private equity firms have generated annual returns in excess of 50% during the last few years.... Now some institutional investors have started to complain, noting that the average hedge fund failed to keep pace with the market in 2006.... CalPERS Chief Investment Officer Russell Read said many hedge funds charge too much without delivering high enough returns or low enough risk. "We have no problem paying high-performance fees for a manager's selection, but we find taking on average market risk inherently unsatisfying," Read told attendees at the Geneva conference.... A hedge fund typically charges investors a management fee of 1.5% to 2%, and takes 15% to 20% of profits the fund generates. An index fund's management fee, by contrast, is typically just hundredths of 1%. The prominent Vanguard 500 Index Fund (VFINX) has an expense ratio of just 0.18%, for example....

[I]n 2006... CalPERS... $4.3 billion in hedge fund investments generated a return of 13.4% for the year. That was slightly ahead of the average hedge fund return of 13%, but just below the 13.6% return the Standard & Poor's 500-stock index generated in 2006....

One theory is that is is a disequilibrium phenomenon, and that market entry by those who promise to produce whatever alpha the typical hedge funds achieves and to produce it with lower fees will drive down the compensation structure:

Investment banks such as Goldman Sachs (GS), Merrill Lynch (MER), and Morgan Stanley (MS) have introduced lower-priced investment vehicles that may compete for some hedge fund business. Goldman, for example, introduced a product in Europe last fall called the Absolute Return Tracker... "expected to display returns over time that resemble some of the patterns of hedge funds as a broad asset class."... [S]ome private equity shops are trimming fees as a response to the sheer size of many new funds. The Blackstone Group, which is in the process of issuing about $4 billion worth of stock in its management company to the public, charges a management fee closer to 1%, industry experts say...

A second theory is that the 2-and-20 fee structure is a sociological fact embedded in the social network of midtown Manhattan and the City of London, and will stick--a modern-day equivalent of Fidelity Investor Services. For a generation, investors in Fidelity funds received net annual returns of S&P - 2.5% + noise, as high fees plus the price pressure that Fidelity generated against itself by herding with the Wall Street crowd took their toll. By contrast, investors in Vanguard received net annual returns of S&P - 0.6%. The gap compounds: Over 35 years Vanguard investors double their relative wealth. This gap drove John Bogle insane. But it did persist.

Simons, Griffin, Lampert, Soros, Cohen, Kovner

Two-and-twenty: two percent of assets under management, plus twenty percent of the (nominal) return on assets. That is said to be the typical fee charged to a hedge-fund investors. In an environment of 3% annual inflation and a 5% annual net real S&P index fund return, a hedge fund team has to deliver an average gross nominal return of 12% per year without taking on more systematic risk than the S&P in order to offer its investors a good deal. This is very hard to do.

Nevertheless, some people are doing it, and doing it repeatedly--or are doing it now, as long as they don't hit the tails of their portfolios' return distributions:

Top Hedge Fund Managers Earn Over $240 Million - New York Times: By JENNY ANDERSON and JULIE CRESWELL: James Simons, a 69-year-old publicity shy former math professor, uses complex computer-driven mathematical models to make bets on stocks, bonds and commodities, among other things. His earnings last year were $1.7 billion. As one of the leading hedge fund managers, Mr. Simons makes a sum that dwarfs that of the top chiefs on Wall Street. The highest paid on the Street, Lloyd C. Blankfein of Goldman Sachs, earned $54.3 million in salary, cash, restricted stock and stock options last year. (Unlike the total for Mr. Simons, Mr. Blankfein’s reported compensation does not include gains on investments.) And Mr. Simons, the founder of Renaissance Technologies, is not the only member of the billion-dollars-a-year club.

Two other hedge fund managers, Kenneth C. Griffin and Edward S. Lampert, each took home more than $1 billion last year, with George Soros missing the hurdle by a hair, give or take $50 million, according to an annual ranking of the top 25 hedge fund earners by Institutional Investor’s Alpha magazine, which comes out today. The rewards for managing hedge funds — lightly regulated private investment pools for institutions like endowments and wealthy individuals — have been lucrative for some time. Yet the survey also shows that for the hedge fund elite, the rich are getting much richer in a hurry. To make Alpha’s list, a manager needed to earn at least $240 million last year, nearly double the amount in 2005. That is up from a minimum of $30 million in 2001 and 2002. Combined, the top 25 hedge fund managers last year earned $14 billion — enough to pay New York City’s 80,000 public school teachers for nearly three years.

With the modern gilded age in full swing, hedge fund managers and their private equity counterparts are comfortably seated atop one of the most astounding piles of wealth in American history. Their ascendancy has been aided by an inflow of money from pension funds and other big investors, robust markets and fee-based compensation that can produce staggering amounts of individual wealth. Naturally, some look upon these masters of the new universe as this generation’s robber barons, using wealth to create wealth, often in secretive ways, and leaving little that is tangible in their wake. Others view them as new-economy financiers, evoking the likes of John D. Rockefeller or John Pierpont Morgan as they provide liquidity to the markets and broadly diversify risks in the banking and financial systems.

“You had railroads in the 19th century, which led to the opening up of the steel industry and huge fortunes being made,” said Stephen Brown, a professor at the Stern School of Business of New York University. “Now we’re seeing changes in financial technology leading to new fortunes being made and new dynasties created.” But as hedge funds and their private equity brethren begin to emerge more onto the public stage — playing increasingly bigger roles in art and cultural circles, tiptoeing into the Washington lobbying game, and even selling shares of their own firms to the public — all aspects of their activities, their own compensation in particular, are raising eyebrows.

“There is some question as to what the hell they are doing that is worth” that kind of money, said J. Bradford DeLong, an economist at the University of California, Berkeley. “The answer is damned mysterious.”...

While the debate rages, the new financiers are building up piles of money not seen since the heady days of the Internet boom. But unlike the wealth of many dot-com billionaires, who saw their fortunes collapse with the technology bubble, the gains of hedge funds are not simply returns on paper that fluctuate with the direction of the stock market. Instead the gains are huge cash payouts that most managers then reinvest in their funds, betting that they will continue to beat the markets. Still, the performance of these managers is as varied as their strategies, ranging from complex computer models to the more old-fashioned version of betting the farm on a few stocks. None of the managers contacted for this article returned calls or would comment....

Raymond T. Dalio, head of Bridgewater Associates, which has more than $30 billion in hedge fund assets, for example, took home $350 million last year even though his flagship Pure Alpha Strategy fund posted a net return of just 3.4 percent for the second consecutive year....

Mr. Simons, a former code breaker for the Defense Department, uses computer-driven models to detect pricing anomalies in stocks, commodities, futures and options. Even though he has some of the highest fees in the business — 5 percent of assets under management and 44 percent of profits — he trounces most of his competitors year after year. In 2006, the $6 billion Medallion fund posted gross returns of 84 percent; 44 percent after fees, explaining his $1.7 billion take. Some investors do not blink at paying those startling fees. “If you pay peanuts, you get monkeys,” said Jim Dunn, a managing director with Wilshire Associates, an investment advisory firm. “We don’t concern ourselves with fees. If you can provide Alpha, I’m less concerned about what you bring home.”...

[T]he hedge fund age illustrates that experience indeed pays. The average age of Alpha’s top 25 was 51, with only four thirty-somethings on the list. Among them is John Arnold, the 32-year-old from Centaurus Advisors who amassed net gains of 200 percent last year. Mr. Arnold hails from Enron’s energy desk, where he received a lifetime of trading and other experiences. His $3 billion fund, among the largest energy funds in the world, racked up huge gains by taking the other side of a natural gas bet that caused Amaranth to lose more than $6 billion in a week. But older, more familiar names dominate Alpha’s list. Boone Pickens, the 78-year-old oil tycoon, made $340 million on the back of strong returns at his energy funds and Carl C. Icahn, 71, the reborn activist investor, made $600 million...

Anti-Speech Situations

John Stuart Mill would say that the best cure for bad speech--for misinformation generated by ignorance or malevolence--is more speech. With a thick enough market for ideas, John Stuart Mill would think, we would be able to weigh and assess ideas much as we weigh and assess pieces of fruit in the marketplace, and pick the ones that offer the best value. An agora of opinions and information would work as well as a market for commodities. Indeed, the week before last, Bruce Bartlett praised the internet and weblogs for providing the potential for a quantum leap in the power of the public sphere of discourse--the arenas in which people who disagree but respect each other's intelligence and goodwill can exchange and consider each other's arguments.

But Kevin Drum fears for the sanity of those of us who try to put Mill's advice to the test:

The Washington Monthly: THE LORD'S WORK?....You know, I sort of admire the way Matt Yglesias continues to take on Charles Krauthammer and Brad DeLong continues to take on Donald Luskin--though I think Brad may have cried uncle on the Luskin thing a while back--but at some point you have to wonder if we're endangering our national resources by allowing this to go on. Surely every moment spent reacting to the increasingly feverish drivel from people like this reduces your IQ by some fraction of a point? And fractions add up. How long before Matt and Brad, Flowers for Algernon-like, end up behind the business end of a mop in an industrial bakery?...

I find myself much more depressed than John Stuart Mill. I look at how the Clinton and Bush administrations have been covered over the past fifteen years. And it leads to the conclusion that more speech--by professional journalists and opinionists, at least--is not the cure for but rather an amplification of bad speech. Many of my friends see this as a right-wing bias: that corrupt liars who pollute the stream of discourse receive financial rewards from the rich and powerful. But I think the problems are deeper and more destructive than that--the examples below should be at least as upsetting to reality-based conservatives as to reality-based liberals, and are focused on Republican misdeeds because Republicans are in power.

(1) We have Duncan Black noting how the corrupt and ignorant National Review receives an undeserved and dangerous legitimacy from having its propaganda acts treated as genuine arguments:

Eschaton: Matt Yglesias notes that Jonah Goldberg is complaining of "Goldberg Derangement Syndrome." This is a similar complaint to that of his fellow NROer [i.e., National Review contributor] Cliff May, who recently wrote:

I enjoy a good debate as much as the next guy but, increasingly, the next guy doesn’t want to argue — he wants to demonize me. He doesn’t want to win the debate; he wants to shut it down. Whether the topic is global warming or Saddam Hussein’s links to terrorists, daring to contradict the “consensus” brings hoots and hollers and worse.

If the question is, "how come the left blogosphere is so reflexively derisive whenever they encounter an argument from people like Goldberg and May," I think that May actually puts his finger on exactly why this is so: It's because so many conservatives want to argue things like global warming is fake and that there were significant ties between Al Qaeda and Saddam Hussein. These aren't arguments: they're conspiracy theories (as is another foundational conservative myth, that the media has a partisan liberal bias). They have the same basis in fact as the notion that "9/11 was an inside job." And so, consequently, such "arguments" are treated as conspiracy theories deserve to be treated: with derision and scorn. Taking them seriously only gives them and those who make them an undeserved and in fact dangerous legitimacy...

(2) The Wall Street Journal editorial page says that Paul Wolfowitz's corrupt direction that his girlfriend get a $50,000 a year raise demonstrates that Paul Wolfowitz is the right person to fight corruption:

He's a Corrupt Bastard, But He's OUR Corrupt Bastard (Shakesville): The Wall Street Journal said in an editorial that "the forces of the World Bank’s status quo," angered by Wolfowitz's efforts to fight "corruption-as-usual" and institute more accountability in the institution's lending practices, had seized on a trivial issue to bring him down. One former bank staffer said that "some of the countries who failed to block his election are trying to set him up, and he walked into that trap really well"...

(3) Charles Krauthammer. Here is the Carpetbagger Report:

The Carpetbagger Report: but Krauthammer’s latest was so entertaining, I can’t myself.

[D]ebate at home about Iraq becomes increasingly disconnected from the realities.... The Democrats in Congress are so consumed with negotiating... [how] to legislatively ensure [America's] failure [in Iraq]... that they speak almost not at all about the first visible results of [Bush's] strategy. And preliminary results are visible. The landscape is shifting in the two fronts of the current troop surge: Anbar province and Baghdad...

As it turns out, “preliminary results are visible,” but Krauthammer apparently can’t see them....[A] suicide bomber destroying Baghdad’s Sarafiya bridge and another suicide bomber detonating a device inside Iraq’s parliament... [as] Krauthammer bragged about progress towards peace in the city.... [M]ore “visible results” this morning: bombings in Karbala and the Baghdad area killed at least 56 people.... [Y]et, Krauthammer believes Democrats are “increasingly disconnected from the realities of the war on the ground.”...

[B]efore his column went to print, Krauthammer managed to sneak in a “to be sure” line: “The situation in Baghdad is more mixed. Yesterday’s bridge and Green Zone attacks show the insurgents’ ability to bomb sensitive sites. On the other hand, pacification is proceeding.” If multiple bombings are indicative of “pacification,” I’d hate to see what he considers escalating violence...

I think what I miss the most is the absence of reality-based conservatives. Real conservatives should recognize that they lose their honor by going all the way with the global-warming-isn't-real crowd, the Saddam-Hussein-and-Al-Qaeda-are-friends crowd, the we-are-making-rapid-progress-in-Iraq crowd, the Mussolini-and-Hillary-Rodham-Clinton-are-friends crowd, the Paul-Wolfowitz-is-THE-MAN-for-fighting-corruption crowd, and the George-W-Bush-is-our-fearless-leader crowd. And they should be smart enough to realize that they weaken their cause in the long run as well. But--with a few honorable exceptions, of whom Bruce Bartlett and (gulp) Andrew Sullivan come first to mind--the public voices of the reality-based conservatives are few and weak (although their private loathing for their corporate and political masters is in many cases loud and shrill).

And I find nothing in my volumes of Juergen Habermas to tell me how to deal with this problem.

Politico Plagued by Rookie Mistakes!

Roger Simon attacks John Edwards for praying as a Christian:

What was missing from Edwards' prayer - Does John Edwards include Jews in his prayers? Or Muslims? Or Hindus?  Or any other non-Christians? He didn’t the other day. The other day, in order to commemorate those killed at Virginia Tech, Edwards led a prayer “in Christ’s name” at Ryman Auditorium, which bills itself as “Nashville’s Premier Performance Hall.”

Edwards has a perfect right to pray publicly or privately any way he wants to. But people who are not Christians often feel left out of prayers like his. And if prayers are supposed to comfort, I wonder how comforted the loved ones of Liviu Librescu felt. Librescu, a professor at Virginia Tech, was gunned down after barricading the doorway of his classroom so his students could escape out the windows. Librescu was a Holocaust survivor, a Jew, and not addressed by Edwards’ prayer.

I went down the list of the other victims and I saw students whose hometowns were listed as being in Indonesia, India and Egypt. And it is quite possible they may have been Hindus or Muslims or a number of other non-Christian religions. Edwards probably did not know the religions of those killed at Virginia Tech when he gave his prayer, but isn’t that the point? Why not include all religions in your prayers?...

Mr. Simon seems not to know that prayers must be addressed to a god in whom one believes: a prayer to a God in whom one does not believe is the ultimate in insincerity.

Congestion Pricing in Manhattan

Andrew Samwick applauds plans for congestion pricing in Manhattan:

Vox Baby: Congestion Pricing in Manhattan: I applaud Mayor Bloomberg for proposing congestion pricing in Manhattan as part of his Earth Day initiatives, patterned after a similar system in London. From The New York Times on Sunday:

The proposal that is sure to attract the most attention, and possibly objections, is one to impose the $8 fee on car drivers, and $21 for truck operators, to drive in Manhattan south of 86th Street. The mayor said congestion on the city’s streets is the source of many of the city’s health, environmental and economic problems.“We can’t talk about reducing air pollution without talking about congestion,” he said. “As our city continues to grow, the cost of congestion to our health, to our economy and to our environment are only going to get worse,” he said. “The question is not whether we want to pay, but how do we want to pay — with an increased asthma rate, with more greenhouse gases, with more wasted time, lost business and higher prices. Or do we charge a modest fee to encourage more people to take mass transit.”

The fee the mayor is proposing would only be imposed during the week, between 6 a.m. and 6 p.m.. And motorists driving the major highways along Manhattan’s east and west sides would not be fined, so it would be possible to go from Brooklyn to Harlem along Franklin D. Roosevelt Drive without entering the zone. The article contains other information about the implementation that suggest that it has been reasonably well thought out. But this doesn't stop the critics from making a raft of self-serving claims. Let's take a look at a few:

State Assemblyman Richard Brodsky said he opposed the mayor’s proposal for a congestion fee because it is a regressive tax. “The middle class and the poor will not be able to pay these fees and the rich will,” said Mr. Brodsky, who is chairman of a committee that oversees the Metropolitan Transportation Authority. “There are a lot of courageous things in the mayor’s package, but this one is not very well thought out.”

According to this logic, all prices for services not linked to income are regressive, since the rich can more easily pay them than the poor. It might technically be true, but it isn't particularly helpful. Besides, when I go to Manhattan, I see the middle class and the poor on the subways and buses, not their own cars.

Here's some more, of the more nakedly self-serving variety:

Clayton Boyce, a spokesman for the American Trucking Association, a national industry group, told The Associated Press, “It will be a real problem for operations for trucking companies and shippers, including all the retailers in Manhattan, which is substantial. And all the people who get FedEx and UPS deliveries will have problems and will bear extra expense, so we definitely see problems with it,” he said.

It's time to give Mr. Boyce a refresher course in microeconomics. Start by considering what his answer might have been last week to the question, "What is the biggest problem your industry faces in providing excellent service to lower Manhattan?" Based on what I've seen on those streets, my answer would have been "congestion." So the mayor has proposed to tax the thing that has been encumbering the trucking industry, and its spokesman is complaining because his clients will need to pay the tax in proportion to the congestion they cause. Think of it by the numbers. How many packages are on the typical FedEx truck in Manhattan? If it were 210, then the extra expense would be a dime per package. That's trivial. How does $21 compare to the total value of each truck's cargo in a given day? It has to be tiny. And look at what the FedEx truck drivers get in return--fewer passenger cars clogging up the city streets where they need to make pickups and deliveries. They waste less time and less gas. It doesn't take much abatement of that wasted time and gas to make back the $21 per truck. The trucking industry should be this proposal's biggest supporters.

Tralfamadorians and the Transactional Interpretation of Quantum Mechanics

Over at Gordon's Notes, we read:

Gordon's Notes: The Tralfamadorians and the transactional interpretation of quantum mechanics: I tried, and I wasn't able to find a genuine Google hit on the search Tralfamadorians quantum mechanics transactional interpretation...

We can fix this! We just have!

Of course, Gordon's Notes had fixed it before us.

links for 2007-04-25

Anybody Want to Cover This Live on Their Weblog?

On my calendar for May:

U.C. Davis History Department - Schedule of Events: Colloquium on Blogging and Scholarship: Date: Wednesday, May 23, 2007: Time: 12:00 PM: Information: Colloquium on Blogging and Scholarship, May 23, 12:10, Andrews Room, with Tedra Osell, Scott Eric Kaufman, and Brad DeLong...

I don't know what I am going to say. I'm tempted to try a comparison of four intellectuals at four different moments in western print-culture: William of Occam, Niccolo Machiavelli, Adam Smith, and Tyler Cowen.

Oh. Justin Fox Has a Book Coming Out...

Justin Fox wrote, long ago:

Is The Market Rational? No, say the experts. But neither are you--so don't go thinking you can outsmart it. - December 9, 2002: Buy and hold. Diversify. Put your money in index funds. Pay attention to the one thing you can control--costs--and keep them as low as possible. Today that is pretty standard, if often unheeded, investment advice. Forty years ago it was revolutionary. The revolution started on college campuses, in particular at the University of Chicago, and it went by the unrevolutionary-sounding name "efficient markets."

"In an efficient market," wrote Chicago professor Eugene Fama in a landmark paper he delivered at the 1969 annual meeting of the American Finance Association, "prices 'fully reflect' available information." That is, in an efficient market you can't beat the market unless you have inside information. So why bother trying?

That logic led, among other things, to the creation of index funds that aim to mimic, not beat, the likes of the S&P 500 and the Wilshire 5000. Today such funds account for about 10% of total U.S. stock market capitalization, as well as 60% of what little money has flowed into equity mutual funds so far this year. But millions of small investors have continued to ignore the advice derived from efficient-markets theory, preferring instead to trade stocks and pile in and out of mutual funds in search of elusive market-beating returns (blowing much of their money on fees and commissions in the process).

Meanwhile, back on campus, a new generation of finance professors has been ripping Fama's teachings to shreds. The organizing principle for this new breed of scholars is not efficient markets but something called behavioral finance. Behavioral finance teaches that stock market investors are irrational, that future stock price movements are at least partly predictable from past behavior, and that careful analysis of past trends and financial reports can pay off. Which happens to be the way most investors see the market already.

Over the next few pages we're going to take you on a journey through the academic battles that have brought us to this point.... The message that the behavioral finance guys have for investors is that yes, you can beat the market, but--for reasons that are essential to the whole behavioralist case--you almost certainly won't. As a result, they end up offering much of the same investment advice that the efficient markets folks do. Only this time we might actually listen....

[L]et us document the behavioralists' triumph. Half of this year's economics Nobel went to their patron saint, Princeton psychologist Daniel Kahneman (the other half went to Vernon Smith of George Mason, whose economic experiments have also shot holes in efficient-markets dogma). Then there's the John Bates Clark Medal, awarded by the American Economic Association every two years to the most important U.S. economist under 40: The 1999 and 2001 editions both went to behavioralists. On the pop-culture front, Yale efficient-markets skeptic Robert Shiller's 2000 bestseller Irrational Exuberance was the most talked-about book by an economist in years.

The most dramatic development of all, though, may be that the office directly below Fama's at Chicago's Graduate School of Business now belongs to behavioralist pioneer Richard Thaler, 57. A magazine profile last year characterized Thaler, to the undying amusement of his students, as "thick-set," but that's not quite fair. He is not the jock that his upstairs neighbor is--Fama beats him at tennis. But Thaler, who arrived in Chicago in 1995 after years in the relative academic wilderness of Cornell University, appears to have eclipsed Fama as the most influential faculty member at the business school that has had more influence on the study of finance than any other....

Thaler, who was working on a Ph.D. in economics at Rochester in the early 1970s. His dissertation was an attempt to put a value on human life.... Thaler decided to ask a few friends how much they'd be willing to pay to eliminate a one-in-1,000 chance of immediate death and how much they would have to be paid to willingly accept an extra one-in-1,000 chance of immediate death. What he found was that they wouldn't pay much for the extra margin of safety but demanded huge sums to accept added risk--which isn't, strictly speaking, rational. "I came to two conclusions about these answers," Thaler wrote years later. "(1) I had better get back to running regressions if I want to graduate, and (2) the disparity between buying and selling prices was very interesting."... to be a newly minted psychology Ph.D., who sent Thaler a copy of a 1974 article by Israeli psychology professors Amos Tversky and Daniel Kahneman... argued that in making decisions involving probability and risk, people rely on mental shortcuts that "are highly economical and usually effective but ... lead to systematic and predictable errors."

It was that last part that was so significant. That people make judgment errors wasn't news, but if those errors were "systematic and predictable," well, that was something an equation-wielding economist could get up and run with..... The efficient-markets guys, meanwhile, not only had come to occupy the academic mainstream but also had moved in on Wall Street. Not surprisingly, their initial relations with the Street had been hostile. What the professors were saying, after all, was that highly paid fund managers and analysts were not worth a dime. Some of the professors clearly reveled in that: In one famous mid-1960s exchange, a money manager asked MIT's Paul Cootner, "If you're so smart, why aren't you rich?" To which Cootner replied, "If you're so rich, why aren't you smart?"

The answer to that second question was that people on Wall Street didn't have to be smart to get rich, since they could make money off fees and brokerage commissions even when their market calls stank. But the devastating bear market of the 1970s caused some investors to question whether the people with whom they'd entrusted their money really were worth the expense. One logical result of such thinking was the index fund, which instead of trying to outsmart the market simply tried to imitate it while charging much lower fees than actively managed funds do. The first index fund for institutional investors was started in 1971 by Wells Fargo Investment Advisors (now Barclays Global Investors) in San Francisco. The first such fund for retail investors--the Vanguard Index Trust--was launched five years later....

[W]hile Sharpe believes in efficient markets, he has also spent much of his career helping investors make choices. That, it turns out, makes him a big fan of behavioral finance. "As a practical matter, I still think it's prudent to assume that the market is pretty close to efficient in terms of pricing and risk and return and all that," Sharpe says. "On the other hand, we've certainly learned from cognitive psychology that ordinary human beings need to have alternatives framed in ways that can help them make right decisions rather than wrong decisions."

Most of the wrong decisions investors make, behavioral research has shown, stem from overconfidence.... As a result, much of what the behavioralists have to offer in terms of advice has to do with protecting retail investors from themselves.... Daniel Kahneman, when asked by a CNBC anchorman the day after his Nobel was announced in October what investment tips he had for viewers, responded, "Buy and hold."...

[T]he real-world phenomenon that cemented the behavioralists' victory also illustrates why, when it comes to actual investing advice, they sound so much like Fama and Sharpe. That real-world phenomenon was the stock market bubble of the late 1990s. According to strict efficient-markets thinking, there must be a rational explanation for what happened. Fama describes those sky-high Internet stock valuations as a risky but not crazy bet that one or two of those money-losing Net companies would end up as big as Microsoft. But he's almost all alone on this one. "We have just lived through the biggest bubble of all time," says Malkiel, who now calls himself a "random walker with a crutch." Fama's favorite collaborator, Dartmouth's French, is on the verge of using the b-word as well when he stops himself. "I work very closely with Gene," he says. "He would be very upset if I used that word in print."...

The dirty little secret of the behavioralists is that, for all their work on investor irrationality and market anomalies, they still believe that markets work pretty well and that trying to outguess the collective wisdom of millions of investors is usually futile.... But efficient-markets theory has a dirty little secret, too, which is that for the market to remain efficient, there have to be lots of rational investors who believe enough in the market's inefficiency to spend their careers trying to beat it....

[T]he argument of modern behavioralists includes a crucial observation that wasn't in Keynes--that professional investors are now under so much pressure from their customers that they cannot make the kind of long-term bets that might beat the market. If they do, as was the case with a lot of value-oriented mutual funds in the late 1990s, they can soon find themselves without any customers' money to invest. That gets us to a world in which an investor with enough staying power and contrarian gumption can beat the market, but the vast majority of mutual funds and hedge funds don't. In other words, the behavioralists have reconciled the success of a Warren Buffett (which efficient-markets purists have absurdly termed dumb luck) with the overwhelmingly empirical evidence that most professional money managers fail to beat the market.

This is, we posit, a major intellectual accomplishment. What does it mean for you? That's easy: Buy and hold. Diversify. Put your money in index funds. Pay attention to the one thing you can control--costs--and keep them as low as possible.

Justin Fox (forthcoming), The Myth of the Rational Investor: Wall Street's Impossible Quest for Predictable Markets (New York: Collins: 0060598999)

Does "Neoconservativism" Exist?

Over at his Time, inc. weblog, Justin Fox asks a good question: does the word "neoconservatism" have a meaning other than "things liberals don't like"?

The Curious Capitalist - Justin Fox: Economist Brad DeLong, as part of his long-running campaign to persuade the world that journalists are flawed (and many are; unlike academic economists, who are right about everything and also smell great!), had a post Saturday tearing into the Economist for allegedly mischaracterizing the neoconservative movement. Brad apparently thinks Daniel Moynihan and Daniel Bell weren't neoconservatives, while Norman Podhoretz and Irving Kristol were....

[I think] neocons were lefty, urban intellectuals who became disillusioned in the 1960s with the Great Society and the anti-war movement. They were "mugged by reality," as Podhoretz put it. Bell, Kristol and Podhoretz were all card-carrying neocons. Moynihan strikes me as a more complicated case, but... it's certainly not wrong to label him a neoconservative.

Sure, later on, Bell and Moynihan went in different directions than Kristol and Podhoretz.... But the Economist's claim that neoconservatism began "as a critique of the arrogance of power" has far more basis in historical fact than Brad's definition of the movement. He says that "real neoconservatives" combined extreme foreign policy hawkishness with supply-side economics and a belief "that African-Americans got too easy a ride in modern America, and needed to be made poorer and less powerful." As intellectual history, this is dubious (most of the neocons didn't care about economics, and I don't think it's fair to say that their anti-affirmative-action tendencies meant that they wanted blacks to be "poorer and less powerful"). But as political rhetoric, it may turn out out be brilliant.

Basically, Brad is defining neoconservatism as everything about American politics over the past 30 years that he didn't like....

Update: Brad DeLong has a comment.... I still think that, by removing Bell and Moynihan from the neocon storyline and throwing the supply siders and racists in, he's trying to define neoconservatism to match his own political dislikes. But the Kristol family is certainly helping him.... I came across an Irving Kristol essay on the "Neoconservative Persuasion" in which the senior Mr. K lists "cutting tax rates in order to stimulate steady economic growth" as a key neocon policy....

And comments:

paul_lukasiak April 23, 2007: Justin, while the Economist may be correct in the "origins" of the neocon movement, its like talking about the origins of Stalinism which had its roots in utopian visions of material and social equality. The fundamental point of the neo-con is its extreme REACTIONARY nature -- its basically a form of political schizophrenia. Far leftists saw stuff they didn't like in the left, and rather than MODERATE their positions, they created a "movement" that was in opposition to everything that people they had previously agreed with stood for.

Terrapin April 23, 2007: Justin - I agree with everythig p_luk said. I would only add that you cannot talk about Neocons without mentioning Leo Strauss and Trotsky. A quick Google ought to explain why.

Justin Fox April 23, 2007: Don't really disagree with either of you, but I still think neoconservatism was mainly about being tough on the Russkies and tough on crime. Then, after both those battles were more or less won, some younger remnants of the movement regrouped around the whole Project for a New American Century platform of pre-emptive military action. Yet I see a lot of people--not just DeLong--using the term these days to describe pretty much everything about the political right that they don't like. Oh, and two more things: Leo Strauss! Leon Trotsky!

paul_lukasiak April 23, 2007: so you're basic objection to Brad's post was his mentioning Israel/Palestine policy (I'd be willing to bet that the early neo-cons did take the position Brad says they did), and had economic proposals different from those Brad describes (that's a possibility.) Because the rest of his description of the origin neocons is all about Russia, a bigger military, and .... Well, maybe you were still too young, but "Law and Order" was Wallace/GOP code for "keep those negros under our thumb".

Brad DeLong April 23, 2007: Ummmm...

I did talk to Daniel Bell about this--and to Daniel Patrick Moynihan.

Bell's line was that Kristol and Podhoretz came to the Public Interest from a different place than he did, and that in the 1970s they took it to a place where he didn't want to be--that in Bell's view the right mission was to improve and enhance post-WWII American Cold-War Great-Society liberalism, while Kristol and Podhoretz wanted to destroy it.

Moynihan said that he had flirted with what became "neoconservatism," especially during his stint at the UN, but only flirted with it--that he and it had never gone all the way.

Nathan Glazer, if I remember the story right--was it Jeff Weintraub's story?--characterized himself in the mid 1980s as a recovering neoconservative, on a 12-step program.

IIRC, the abandonment of Bell-Moynihan "we must cross the river step-by-step by feeling for the stones with our feet" for today's Kristol-Podhoretz-Kagan idiocies came rather swiftly in the late 1970s, when the Public Interest and its ilk endorsed Laffer, Team B, Begin and Sharon, and Reagan in one big package.

Do take a look at Irving Kristol's retrospective on neoconservatism. IIRC, Bell and Moynihan each appear once, each time pleading for analytical modesty. They are not the central players.

paul_lukasiak April 23, 2007: "I did talk to Daniel Bell about this--and to Daniel Patrick Moynihan." ohmigawd.... is like that Marshall McLulan moment in Annie Hall! ;)

Brad DeLong April 24, 2007: Justin.... As for the supply-side, you might take a look at John Ehrman's take, at Of Irving Kristol, Ehrman writes, I believe accurately:

By 1975, however, concern with what he saw as the continuing anti-capitalist influence of the New Left as well as America's deteriorating economic performance led him to publish Jude Wanniski's "The Mundell-Laffer Hypothesis--A New View of the World Economy," which proved to be the beginning of the Public Interest's promotion of supply side economics."

The Public Interest was a really big booster of supply-side economics in the late 1970s--a thing for which Irving Kristol half-apologized in the mid 1990s, writing of his own "cavalier attitude toward the budget deficit.... The task, as I saw it, was to create a new majority, which evidently would mean a conservative majority, which came to mean, in turn, a Republican majority - so political effectiveness was the priority, not the accounting deficiencies of government." Papering over the split between balanced-budget Republicans (who were horrified of deficit-creating tax cuts) and tax cut Republicans (who couldn't care a fig for the long run) was a task that supply-side economics could perform, and so Kristol embraced it--not because he thought it was right (that word "cavalier") but because it was "politically effective."

Do remember: Daniel Bell was off the Public Interest masthead after 1972, and Daniel Patrick Moynihan would always bite if provoked by being called any form of "conservative"...

One thing I don't understand is the neoconservatives' descent into Straussianism--such views as the belief that fundamentalist Christianity should be encouraged because it is good for other people to believe in it...

Brad DeLong April 24, 2007: And another passage from Irving Kristol:

Though the educational establishment would rather die that admit it, multiculturalism is a desperate -- and surely self-defeating -- strategy for coping with the educational deficiencies, and associated social pathologies, of young blacks. Did these black students and their problems not exists, we would hear little of multiculturalism." ["Neo-Conservativism, The Autobiography of an Idea, Selected Essays 1949-1995"]

I think Paul Lukasiak has the right analogy: You can tell a "revolution betrayed" story of neoconservatism and say that everything would have been peachy if not for the hijacking of the movement by Irving Kristol, Norman Podhoretz, and their progeny; just as you can tell a "revolution betrayed" story of Communist Russia. But complaining that William Kristol, John Podhoretz, Paul Wolfowitz, John Bolton, and the Kagan brothers today do not have the analytical modesty and dislike of poorly-thought-out radical leaps of Daniel Bell and Daniel Patrick Moynihan is like complaining that J.V. Stalin failed to properly implement Marx's vision of a free and wealthy society of associated producers. Such a story has more than a little lunacy in it.

The most interesting question to ask of the "revolution betrayed" stories is why people feel compelled to tell them. Stalin at least (mis)cited Marx at every occasion. It's been a long, long time since I've heard a neoconservative refer to Bell or Moynihan as any sort of authority.

Impeach Bush, Impeach Cheney

George McGovern:

Los Angeles Times: VICE PRESIDENT Dick Cheney recently attacked my 1972 presidential platform and contended that today's Democratic Party has reverted to the views I advocated in 1972. In a sense, this is a compliment, both to me and the Democratic Party. Cheney intended no such compliment. Instead, he twisted my views and those of my party beyond recognition. The city where the vice president spoke, Chicago, is sometimes dubbed "the Windy City." Cheney converted the chilly wind of Chicago into hot air....

[Cheney] also said that the McGovern way is to surrender in Iraq and leave the U.S. exposed to new dangers. The truth is that I oppose the Iraq war, just as I opposed the Vietnam War, because these two conflicts have weakened the U.S. and diminished our standing in the world and our national security. In the war of my youth, World War II, I volunteered for military service at the age of 19 and flew 35 combat missions, winning the Distinguished Flying Cross as the pilot of a B-24 bomber. By contrast, in the war of his youth, the Vietnam War, Cheney got five deferments and has never seen a day of combat — a record matched by President Bush.

Impeach George W. Bush. Impeach Richard Cheney. Do it now.

Greg Anrig on the 1993 Clinton Budget Bill

He writes:

On the Same Team | TPMCafe: The ongoing debate among progressives about where reducing federal deficits should rank on the policy priority list is completely legitimate, but denigrating Clinton’s 1993 budget agreement is wrong-headed and counterproductive. Remember that every last Republican in Congress, along with some blue-dog Democrats, voted against the legislation entirely on the basis that its tax increases would purportedly send the economy into a tailspin, kill jobs, make deficits even worse, destroy investment markets, and a host of other calamities concocted by the fertile minds of Newt Gingrich and Wall Street Journal editorialists.

Any future Democratic president who attempts to raise revenues, whether for deficit reduction or any of the initiatives on the admirable wish list of the Economic Policy Institute, will be subjected to the same fear-mongering litany. And the most effective response will be to describe how after those alarms were raised in 1993, nothing but good economic news followed. It’s a really bad idea for liberals to help the right out by suggesting that the 1993 budget agreement had nothing to do with the prosperity that followed – especially when it also happens not to be true.

Jared Bernstein somewhat mischaracterizes Alan Blinder and Janet Yellen’s analysis of “The Fabulous Decade” when he writes that they were “unable to pin the Clinton boom on deficit reduction.” Rather, they show quite persuasively that the introduction of the legislation played a crucial role in reducing interest rates, as planned, which in turn helped to stoke investment – as planned. They also demonstrate that the legislation gave the Fed more room than it otherwise would have had to pursue an easy monetary policy. As Jared points out, a number of fortuitous forces also helped to produce the remarkable economic performance in the second half of the decade – which raised real incomes across the board for the first sustained period since before 1973. But the 1993 budget agreement clearly set in motion favorable conditions for the boom in investment that occurred, which was the overriding goal of the legislation.

Obviously, no one knows what would have happened had just one more Democrat in either the Senate or the House voted against the 1993 bill. But we do know that every last horror that opponents said would arise from raising taxes did not occur. Just the opposite. That history will be an essential touchstone for future Democratic presidents, regardless of the extent to which they may worry about deficits. So we should be venerating that history, not unjustifiably trashing it.

Fixing Social Security

Duncan Black reads the Social Security Trustees' Report:

Eschaton: "Fixing" Social Security: In the summary overview we have this:

Social Security could be brought into actuarial balance over the next 75 years in various ways, including an immediate increase of 16 percent in payroll tax revenues or an immediate reduction in benefits of 13 percent or some combination of the two.

Roughly, this would require increasing both the employee and employer share of the tax from 6.2% to 7.05% (there might be some employment/wage impacts of such a change so this is a rough take). A small price to pay to ensure Robert Samuelson never writes another column.

How about just uncapping FICA, and making a few adjustments to make it harder to hide employee compensation from FICA by calling it an investment return? That would get us to actuarial balance too.

Rachel Friedberg Goes on Vacation

Greg Mankiw directs us to a... I guess it's a celebrity profile... of Rachel Friedberg:

Calculating Paradise - Calculating Paradise: Beach Economics: By Laura Blumenfeld: Washington Post Staff Writer :Saturday, April 21, 2007; D01 PROVIDENCIALES, Turks and Caicos -- The plane came from the north and landed near warm sand. Rachel Friedberg, a Brown University economist, stepped out, holding her black wool pea coat, squinting. "Skin cancer. Dehydration. Sunstroke," she muttered. "Sand sticking to your body." The New England professor had arrived for vacation in Turks and Caicos, one of the Caribbean's fastest-growing economies. "Why would people on purpose, on purpose, go where the land ends, and stare at undifferentiated nothingness? Think of the opportunity cost of that time."

Lucid blue water makes most travelers forget about work. But for Friedberg, economics infuses everything: the equilibrium price of conch shells; the asset-value implications of Bruce Willis's beach compound; the labor market impact of a Filipino, rather than a Bahamian, massage therapist digging her oiled thumbs into Friedberg's sacrum.For the constant economist, Turks and Caicos offers something more exciting than night scuba diving: a case study on the economics of hyper-growth. Real GDP is growing at more than 14 percent, faster than China's growth of about 10 percent per year. The annual number of tourists surged from 88,000 in 1996 to an estimated 200,000 in 2006. Hotel and restaurant GDP was $155 million per year in 2005, of which hotels accounted for $142 million.

The self-governing British territory, 575 miles southeast of Miami, had been overlooked by tourists and investors until recently. Over the past four years, the pro-development government upgraded the airport and encouraged Carnival to build a $40 million cruise center in Grand Turk. A famous designer invested in an island and other celebrities followed. In Grace Bay, developers built sand palaces like Point Grace and the Palms, attracting such wealthy guests as Sean "Diddy" Combs and Sen. John F. Kerry (D-Mass.).

As Friedberg drove along the narrow coastal road from the airport, crews were laying power lines to accommodate growth. For every finished building, there seemed to be two under construction. The government levies no income tax, capital gains tax, inheritance tax or exchange controls. Administration posters fluttered from the lampposts: "Don't Stop the Progress!!! Bigger and Better in 2007." The car stopped at Northwest Point, one of the island's best sites for snorkeling. Turks and Caicos lies on the third-largest coral-reef system in the world. In the winter, herds of humpback whales pass 800 yards off the beach....

Friedberg, for her part, signals "pale, fashion-oblivious nerd," she said. Squeaking as she walked in $8 rubber sandals, Friedberg approached two sleek guests. They run XOJet, a private jet airline. For a one-way flight from the United States to the islands, said Kathleen Brennan, an executive in an orange bikini, XOJet charges $15,000.The price is reasonable, said XOJet chief executive Paul Touw, because the teak-and-glass villas here cost $7 million to $20 million. "These people could probably afford it," Touw said. With the profusion of private jets, Friedberg told Touw, "Turks and Caicos competes in the same market as Maryland's Eastern Shore." Either way, it's about three hours to the beach. On Grace Bay, the average price of properties rose 27 percent in three years, according to one study....

Friedberg dropped into the chair in Brinkley's whitewashed bedroom and asked, "When you're faced with people who have infinite money, how do you set a price?""These people have people working for them who examine every penny," Morgan said. "They'll dispute irrigation bills. We bill them for tiki fuel, and they're like, 'Why are you billing us for that?' ""But what's the market structure?" Friedberg inquired. And on went the professor, for five sugar-sanded, icing-blue-sky days, until she was back on the runway, on the plane, with the engines vibrating her armrest.Friedberg looked outside, down at the pale blue water. "Why would people purposefully leave? Why should universities be in freezing, miserable places instead of here, now that there's the Internet?" But the economist knew why. She sighed and said, barely audible over the revving engines: "Agglomeration effects."

Ezra Klein Watches the Journamalism of Robert Samuelson

Via Kash Mansouri:

The Street Light: Ezra on Samuelson: Ezra Klein has the perfect response to Samuelson's latest:

Watching Robert Samuelson contort himself over economic inequality is actually sort of fun*. In a column that accurately diagnoses the problem, it's remarkable how studiously he dodges identifying any causal mechanisms that could suggest the economy is in any way unfair, or tilted against workers... [S]ays Samuelson, "as for what's caused greater inequality, we're also in the dark." Particularly when you refuse to turn on the lights in the rooms you don't want to look.But even if Samuelson's diagnosis is riddled with omissions, his prescriptive paragraph is both brave and trenchant. "It would be healthier if the trend toward greater economic inequality reversed itself spontaneously."

Yes Robert. Yes it would.

*Fun may be the wrong word here.

Ezra Klein Misconceives the Future of Health Care--an Opportunity, Not a Problem

He writes:

Ezra Klein: Health Care Will Eat Us: Kash Mansori summarizes the pictures of Medicare and Social Security painted by the just-released Trustees' Report:

The SS program will only be able to cover about three-fourths of its expenses by the year 2041; the Medicare program will reach almost the same point in 2019. Fixing the SS shortfall would require a 16 percent increase in payroll taxes; fixing the Medicare shortfall would require a 122 percent increase in payroll taxes.

We could fix Social Security with our eyes closed. Hell, if the trends remain relatively favorable, we won't need to do anything at all.... But you never hear about conservative plans to reform Medicare. And the reason is that they don't quite knows what to do. Meanwhile, Medicare is just another way of saying "health care," as the exact problems that bedevil our public insurance afflict our private insurance, we just don't issue yearly reports on their effects. This is why liberals tend to focus on systemwide reform; unless you get costs down across the board, were in serious trouble.... Cost growth in the private sector is, depending on which data you believe, precisely what it is in the public sector or a little bit higher. Unless we get the whole system under control, we're all going to be hurting.

I think a better way to say it is "we're all going to be healthy" or "we're all going to be well-medicated." The coming health-care financing crisis is, at its deepest level, not a problem but an opportunity: an opportunity to live longer, healthier lives by finding a way to finance all the innovations in health care and medical inventions we will want to have. We may well fumble this opportunity, but we are more likely to fumble it if we regard health cost containment as an end in itself, rather than improved efficiency as the goal as we let people as consumers and voters decide how much they want to spend.

Plunge in Existing-Home Sales

The Associated Press reports:

Plunge in Existing-Home Sales Is Steepest Since ’89 - New York Times: Sales of existing homes plunged in March by the largest amount in nearly two decades, reflecting bad weather and increasing problems in the subprime mortgage market, a real estate trade group reported today. The National Association of Realtors reported that sales of existing homes fell by 8.4 percent in March, compared with February. It was the biggest one-month decline since a 12.6 percent drop in January 1989, another period of recession conditions in housing. The drop left sales in March at a seasonally adjusted annual rate of 6.12 million units, the slowest pace since June 2003. The steep sales decline was accompanied by an eighth straight fall in median home prices, the longest such period of falling prices on record. The median price fell to $217,000, a drop of 0.3 percent from the price a year ago.

The fall in sales in March was bigger than had been expected and it dashed hopes that housing was beginning to mount a recovery after last year's big slump. That slowdown occurred after five years in which sales of both existing and new homes had set records. David Lereah, chief economist at the Realtors, attributed the big drop in part to bad weather in February, which discouraged shoppers and meant that sales that closed in March would be lower. Existing home sales are counted when the sales are closed. Lereah said that the troubles in mortgage lending were also playing a significant part in depressing sales. Lenders have tightened standards with the rising delinquencies in mortgages especially in the subprime market, where borrowers with weak credit histories obtained their loans.

There was weakness in every part of the country in March. Sales fell by 10.9 percent in the Midwest. They were down 9.1 percent in the West, 8.2 percent in the Northeast and 6.2 percent in the South. "The negative impact of subprime is considerable," Lereah said. "I expect sales to be sluggish in April, May and June."

Ummm... if sales are down by 9.1% in the West--which means California, Arizona, Nevada, Oregon, Washington--how can that hav been due to bad weather in February? We don't have "weather." Couldn't the AP have asked that of Mr. Lereah?

links for 2007-04-24

Why Oh Why Can't We Have a Better Press Corps?

Alan Reynolds, once again sighted in the Washington Times trying to degrade the quality of debate about economic issues:

What is income? -- The Washington Times: Alan Reynolds: Two French economists, Thomas Piketty and Emmanuel Saez, can count on a flood of publicity every time they release a new estimate of the share of U.S. income supposedly received by the top 1 percent. Even veteran columnist Robert Samuelson of The Washington Post approached their latest "astonishing" estimates as unquestionable scripture. "The biggest gains occurred among the richest 1 percent," he exclaimed. "Their share of pretax income has gradually climbed from 8 percent in 1980 to 17 percent in 2005." Gradually? On the contrary, half of that increase happened in just two years, 1987 and 1988. The top 1 percent's share (of what?) was 13.2 percent in 1988, 14.9 percent in 2003....

Increases in the top 1 percent's income after the 1986 Tax Reform came from more business income being reported on individual tax returns, rather than corporate tax returns. The share of the top 1 percent income coming from business profits jumped from 11 percent in 1986 to 21 percent in 1988, and continued rising to 27 percent in 1994, the year after individual tax rates were increased. The business share was still 27 percent in 2002, but it rose to more than 29 percent in 2005 after individual tax rates were once again reduced. How and why that happened is a textbook example of why tax return data cannot be used to measure income distribution...

29% of 17% is 5% as the tax-return-estimate based share of business income reported by the top one-hundredth. If the tax law were different today, a good chunk of that 5% would be reported as capital income, and a smaller chunk as labor income. The estimates the people I talk to come up with is that the 1986 Tax Reform boosted the long-run measured share of the top one-hundredth relative to the true share by between 0 and 2 percentage points, leaving between 7 and 9 percentage points as the true underlying increase in the income share of the top one-hundredth.

Can anybody point to anything, anywhere, that Alan Reynolds has ever written that I would advise anybody who actually wants to learn stuff to read?

Joe Klein, Journamalist: "I'm Fake But Accurate!"

Joe Klein writes:

RE: Kos - Swampland - TIME: It was chronologically incorrent [incorrect or incoherent?] for me to make it seem that Kos was responding to the "shorter leash" comment, but substantively correct...

Translation: Joe Klen says:

I lied when I said:

Barack Obama found this out the hard way recently, when he said in an Associated Press interview that perhaps the best course of action was to "keep the President on a shorter leash"-—that is, approve funding but limit the funds, forcing Bush to keep coming back for money. This unleashed the ire of Markos Moulitsas Zuniga, proprietor of the Daily Kos blog, who wrote with typical restraint, "What a ridiculous thing to say. Not only is it bad policy, not only is it bad politics, it's also a terrible negotiating approach. Instead of threatening Bush with even more restrictions and daring him to veto funding for the troops out of pique, Barack just surrendered to him."

But it's OK for me to lie about Markos Moulitsas Zuniga because he is a bad person.

Why oh why can't we have a better press corps?

Matthew Yglesias Quotes Paul Krugman on Bush's "Surge"

Why a rational congress would have impeached George W. Bush years ago:

Matthew Yglesias / proudly eponymous since 2002: Paul Krugman: "There are two ways to describe the confrontation between Congress and the Bush administration over funding for the Iraq surge. You can pretend that it’s a normal political dispute. Or you can see it for what it really is: a hostage situation, in which a beleaguered President Bush, barricaded in the White House, is threatening dire consequences for innocent bystanders — the troops — if his demands aren’t met."

Indeed. Krugman seems disinclined to end his column on a defeast note, but the maddening thing of it is that all signs indicate that this tactic is likely to succeed and Bush will achieve his goal of ensuring that the war is left on the desk of the next president. Perhaps he thinks this'll mean it'll go down in the record books as something his successor "lost" rather than a catastrophic error he made.

A Letter on Paul Wolfowitz

Sent to the Financial Tmes: / World - Text of World Bank letter: Sir,

We are a group of ex-World Bank Group staff who occupied senior positions in the institution (MDs, Senior VPs, VPs, Directors), and write in our personal capacities. Some of us have worked under Paul Wolfowitz, some of us have not, but all of us are watching with great concern the ongoing events at the Bank because of their impact on development and the interests of the poor. At a time when fighting poverty remains crucial in building a more hopeful, more balanced, and more secure world, the World Bank must remain credible if it is to speak with the moral authority necessary to move the poverty agenda forward. For the Bank to succeed, it must be effective, especially on matters of good governance which Mr. Wolfowitz rightly emphasized as crucial to poverty reduction.

What staff objected to was not the principle -- which they applauded. Rather it was that the policy was implemented with no consultation, and little transparency or apparent consistency. Now, as a result of a process of broad consultation that he was forced to undertake by the Board, Mr. Wolfowitz has been able to forge a consensus on how to raise the bar on corruption in a practical way. It is this that can serve as a lasting legacy at the Bank.Mr. Wolfowitz says he believes in the mission of the Bank and wishes to continue. We believe that he can no longer be an effective leader. He has lost the trust and respect of Bank staff at all levels, provoked a rift among senior managers, developed tense relations with the Board, damaged his own credibility on good governance –his flagship issue, and alienated some key shareholders at a time when their support is essential for a successful replenishment of the resources needed to help the poorest countries, especially in Africa.

We have taken note of the fact that the ministers who met last weekend in Washington took the unusual step of expressing publicly their great concern about the situation in the Bank. And staff and some of our senior colleagues within the Bank have advised Mr. Wolfowitz that the best course of action for the future of the Bank would be for him to step down. This painful, unprecedented action was not a rash conclusion. We support it and salute the courage of our colleagues. Like them, we believe this is a regrettable but essential step to prevent the Bank’s effectiveness as a development institution, and its credibility as the international community’s trustee of resources for fighting poverty, from being fatally compromised. There is only one way for Mr. Wolfowitz to further the mission of the Bank: he should resign.

Gautam Kaji, former Managing Director; Peter Woicke, former Managing Director and EVP; Shengman Zhang, former Managing Director; Roberto Danino, former senior VP and general counsel; Gary Perlin, former Senior VP and CFO; Jean-Louis Sarbib, former senior VP; Shahid Javed Burki, former VP; Cesare Calari, former VP; David de Ferranti, former VP; Ian Goldin, former VP; Ian Johnson, former VP; Geoffrey Lamb, former VP; Johannes Linn, former VP; Callisto Madavo, former VP; Gobind Nankani, former VP; Christiaan Poortman, former VP; Jean-François Rischard, former VP; Jo Ritzen, former VP; Richard Stern, former VP; John Wilton, former VP; Michael Barth, former Director; Amar Bhattacharya, former Senior Adviser; Gerard Caprio, former Director; Michael Carter, former Director; Dennis de Tray, former Director; Paula Donovan, former Director; Marisa Fernandez-Palacios, former Director; Charles Griffin, former Director; Jean-Philippe Halphen, former Director; Ann Hamilton, former Director; Paul Isenman, former Director; Homi Kharas, former Regional chief economist; Harinder Kohli, former Director; Olivier Lafourcade, former Director; Philippe Liétard, former Director; Serge Michailof, former Director; Bernard Pasquier, former Director; Manuel Penalver Quesada, former Director; Enrique Rueda-Sabater, former Director; Alexander Shakow, former Director; Karl Voltaire, former Director

Falling Indicators of Human Development in Mississippi

Governor Haley Barbour manages to achieve a thing that many corrupt dictators have not: to lower the Human Development Index of the people he governs:

In Turnabout, Infant Deaths Climb in South - New York Times: Eric Eckholm: [I]n recent years the [infant] death rate has risen in Mississippi and several other states. The setbacks have raised questions about the impact of cuts in welfare and Medicaid and of poor access to doctors.... “I don’t think the rise is a fluke, and it’s a disturbing trend, not only in Mississippi but throughout the Southeast,” said Dr. Christina Glick, a neonatologist in Jackson, Miss., and past president of the National Perinatal Association.

To the shock of Mississippi officials, who in 2004 had seen the infant mortality rate — defined as deaths by the age of 1 year per thousand live births — fall to 9.7, the rate jumped sharply in 2005, to 11.4. The national average in 2003, the last year for which data have been compiled, was 6.9. Smaller rises also occurred in 2005 in Alabama, North Carolina and Tennessee. Louisiana and South Carolina saw rises in 2004 and have not yet reported on 2005.... Most striking, here and throughout the country, is the large racial disparity. In Mississippi, infant deaths among blacks rose to 17 per thousand births in 2005 from 14.2 per thousand in 2004, while those among whites rose to 6.6 per thousand from 6.1. (The national average in 2003 was 5.7 for whites and 14.0 for blacks.) The overall jump in Mississippi meant that 65 more babies died in 2005 than in the previous year, for a total of 481....

Dr. William Langston, an obstetrician at the Mississippi Department of Health, said in a telephone interview that officials could not yet explain the sudden increase and were investigating. Dr. Langston said the state was working to extend prenatal care and was experimenting with new outreach programs. But, he added, “programs take money, and Mississippi is the poorest state in the nation.” Doctors who treat poor women say they are not surprised by the reversal.

“I think the rise is real, and it’s going to get worse,” said Dr. Bouldin Marley, an obstetrician at a private clinic in Clarksdale since 1979. “The mothers in general, black or white, are not as healthy.”... “I don’t think there’s a lack of providers or facilities,” he said. “Some women just don’t have the get up and go.”

But social workers say that the motivation of poor women is not so simply described, and it can be affected by cuts in social programs and a dearth of transportation as well as low self esteem. “If you didn’t have a car and had to go 60 miles to see a doctor, would you go very often?” said Ramona Beardain, director of Delta Health Partners. The group runs a federally financed program, Healthy Start, that sends social workers and nurses to counsel pregnant teenagers and new mothers in seven counties of the Delta. “If they’re in school they miss the day; if they’re working they don’t get paid,” Ms. Beardain said.

Poverty has climbed in Mississippi in recent years, and things are tougher in other ways for poor women, with cuts in cash welfare and changes in the medical safety net. In 2004, Gov. Haley Barbour came to office promising not to raise taxes and to cut Medicaid. Face-to-face meetings were required for annual re-enrollment in Medicaid and CHIP, the children’s health insurance program; locations and hours for enrollment changed, and documentation requirements became more stringent. As a result, the number of non-elderly people, mainly children, covered by the Medicaid and CHIP programs declined by 54,000 in the 2005 and 2006 fiscal years. According to the Mississippi Health Advocacy Program in Jackson, some eligible pregnant women were deterred by the new procedures from enrolling.

One former Medicaid official, Maria Morris, who resigned last year as head of an office that informed the public about eligibility, said that under the Barbour administration, her program was severely curtailed. “The philosophy was to reduce the rolls and our activities were contrary to that policy,” she said.

Mississippi’s Medicaid director, Dr. Robert L. Robinson, said in a written response that suggesting any correlation between the decline in Medicaid enrollment and infant mortality was “pure conjecture.” Dr. Robinson said that the new procedures eliminated unqualified recipients. With 95 enrollment sites available, he said, no one should have had difficulty signing up...

I must say that I am surprised that you can--if you are a Republican appointee of Haley Barbour's--get your words into Erik Eckholm's New York Times article while refusing to talk to Erik Eckholm. If there is a point to mainstream journalism at all--rather than dueling press releases--it is that reporters get to ask questions. I have a call into Erik. I hope to have further insights into his thinking soon. Had I been him, I would have told Barbour and Robinson that inclusion of their words in the story depended on their making themselves available for questioning.

And, of course, Erik Eckholm doesn't have control over the data or the statistics.. He doesn't seem to know that there are 2.8 million people in Mississippi. He doesn't seem to know that about 15% of the non-elderly population--make that 350,000--were on Medicaid. Cut Medicaid enrollments by 50,000, by 1/7. 42,000 babies born in Mississippi each year. For the share who die to jump from 0.97% to 1.14%... That's a less than 1/3000 chance. That's worth saying.