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October 2013

O Porto Guardião: Alternate History Weblogging

Paul Krugman: Agglomerating A Revolution:

Nicks, Crafts and Wolf... argue that the cutting edge of Britain’s Industrial Revolution, the cotton textile industry, benefited hugely from agglomeration.... Crafts and Wolf suggest, in effect, that at least some of England’s comparative advantage in cloth came from external economies, not underlying national characteristics.... It’s interesting to at least contemplate the possibility that but for the accidents of history, cotton cloth might have been made by the banks of the Tagus rather than in the region of the Mersey.

Only if you give Portugal (i) Britain's super-cheap coal, and (ii) have it gain Britain's early-nineteenth century seaborne empire and thus have Britain's real wage levels--only then is even the agglomerated early-nineteenth technology profitable when deployed, and only if you deploy early-nineteenth century technology can you develop mid-nineteenth century technology.

And the problem was that it didn't have the coal, and the fact that it had to defend its border (not terribly successfully) against Spain meant that it couldn't focus on gaining and keeping the empire.

Truth to tell, as Bob Allen points out, only Britain, the Ruhr, and Silesia had the geography to give them cheap-enough coal; and only Britain (and, I suppose, Ireland) had both the ports and the islandishness to allow them to focus on dominating the world of the commercial revolution.

And if we had somehow had an 1805 in which the Portuguese navy won the Battle of Trafalgar while the coals were still in Newcastle, what would the world of today look like?


Donald Marron: CEA’s New Weekly Economic Index Says Shutdown Destroyed 120,000 Jobs: Noted

Donald Marron: CEA’s New Weekly Economic Index:

The Council of Economic Advisers just released an interesting paper examining the macroeconomic harm from the government shutdown and debt limit brinksmanship. To do so, they created a Weekly Economic Index from data that are released either daily or weekly (and weren’t delayed by the shutdown). These data include measures of consumer sentiment, unemployment claims, retail sales, steel production, and mortgage purchase applications. The headline result: They estimate that the budget showdown cost about 120,000 jobs by October 12.

Looking ahead, I wonder whether this index might prove useful in identifying future shocks...


The Word "Bush" Does Not Appear to Appear at All in Alan Greenspan's "The Map and the Territory"

Alan Greenspan: The Map and the Territory: Risk, Human Nature, and the Future of Forecasting

Yep. The word "Bush" does not seem to appear at all. I guess if you can't say something nice...

I find the word "Reagan" appearing seven times; "Eisenhower" four; "Ford" twelve; "Gore" not at all; "Obama" once.


The Word "Clinton" Appears Twice in Alan Greenspan's "The Map and the Territory"

Alan Greenspan: The Map and the Territory: Risk, Human Nature, and the Future of Forecasting:

Economic growth that creates new job openings does assuage the pain of job loss, but only up to a point. Through much of the twentieth century, we sought ways to contain the pain of the capitalist process. The most universally advocated was job retraining for job losers. In 1992, President Bill Clinton, however, described such government initiatives at the time as a “confusing array of publicly funded training programs.”21 Regrettably, my experience is that the political issue is not the outcomes of job training programs but whether the politician who advocates them gains electoral popularity as a result. This is the reason why there have been so many different overlapping job training programs on the books that lost their relevance years ago and should have been discarded. Community colleges appear to be doing a much better job...

Since 1969, during the Republican administrations, social benefit spending rose by 10.4 percent annually (Reagan’s mark was 7.3 percent). Meanwhile, “spendthrift” Democrats since 1965 oversaw a “mere” 8.1 percent annual increase (Clinton’s was 4.5 percent). Of the overall rise, 40 percent occurred during the twenty years of Democratic administrations and 60 percent during the twenty-eight years of Republican administrations. This seeming political anomaly was explained to me by President Richard Nixon (who introduced automatic indexing of Social Security benefits in 1972): “If we (Republicans) don’t preempt the Democrats and get the political credit, they (the Democrats) will.” Much to my retrospective distress, neither presidents Ford nor Reagan, for whom I worked, could or would effectively constrain... benefits...

Continue reading "The Word "Clinton" Appears Twice in Alan Greenspan's "The Map and the Territory"" »


Noted for Your Afternoon Procrastination for October 22, 2013

And:

  1. "The shale-gas boom in the United States won't do much to reduce U.S. carbon-dioxide emissions or tackle global warming. That's because, in addition to killing off coal-fired plants, cheap gas will also edge out cleaner energy sources like wind, solar, and nuclear": Brad Plumer: The shale-gas boom won’t do much for climate change. But it will make us a bit richer
  2. "To quote Inigo Montoya from The Princess Bride: 'You keep using that word. I do not think it means what you think it means.'… It's true that the warming of average global surface temperatures has slowed over the past 15 years, but what does that mean? One key piece of information that's usually omitted when discussing this subject is that the overall warming of the entire climate system has continued rapidly over the past 15 years, even faster than the 15 years before that…. The speed bump only applies to surface temperatures, which only represent about 2 percent of the overall warming…. While the warming of surface temperatures was relatively slow from 1998 to 2012, it was relatively fast from 1990 through 2006. Over longer time frames, for example from 1990 to 2012, average global surface temperatures have warmed as fast as climate scientists and their models expected":Dana Nuccitelli: Does the global warming 'pause' mean what you think it means?
  3. "A persistent theme of conservative intellectuals and commentators--in print and on Fox News--is the cultural decay of the country. But compared with almost any period in U.S. history, we live in… a culture that values family, religion, work and, above all, private business…. Extreme rhetoric is just a way to keep the troops fired up. But rhetoric gives meaning and shape to a political movement. Over the past six decades, conservatives’ language of decay, despair and decline have created a group of Americans who fervently believe in this dark narrative…. They are misty-eyed in their devotion to a distant republic of myth and memory and yet they are passionate in their dislike of the messy, multiracial, capitalist-and-welfare-state democracy that America actually has been for half a century--a fifth of this country's history. At some point, will they come to realize that you cannot love America in theory and hate it in fact?": Fareed Zakaria: Zakaria: Can conservatives love 'real' America?
  4. "The part of me that Apple's beautiful, terrible walled garden has not yet stamped out of existence still yearns for a more open notification system that would allow third-party applications to enjoy the same interface integration as Apple's "blessed" applications for each service": John Siracusa: OS X 10.9 Mavericks: The Ars Technica Review

Continue reading "Noted for Your Afternoon Procrastination for October 22, 2013" »


Alan Greenspan: "Fraud" in "The Map and the Territory"

Three and only three passages containing the word:

Parenthetically, I do not consider addressing fraud to be regulation. Rampant fraud can significantly diminish the effectiveness of market competition, but fraud is theft and an issue of law enforcement…

Much, though not all, of what advocates of broadened oversight of finance are combating falls under the scope of fraud. Again, this is not the province of regulation but of enhanced law enforcement. Misrepresentation, the major source of consumer complaints, is fraud and should be readily addressed in more widespread enforcement of existing law…

The dot-com and housing bubbles bred much fraud, much of which, I suspect, to date, has gone undetected. We will never be able to fully prevent such wrongdoing. Its malignant roots are too deeply embedded in our nature. So is our inbred sense of justice in seeking to punish wrongdoers. But regulatory punishment of bubble malfeasance, beyond proven criminal fraud, which of course should be vigorously prosecuted, does little to restore our economy to where we would like it to be. Revenge may be soul satisfying, but it is rarely economically efficient…


Bill Clinton Renominated You Twice, Mr. Greenspan...

And yet Greenspan forgets Bill Clinton's (and Al Gore's!) insistence that budget enforcement mechanisms be strengthened in order to "lock box" the budget surpluses--precisely in order to boost national savings and secure an economy strong enough to fund the entitlement programs.

Alan Greenspan:

The dot-com boom, for example, produced the budget surpluses of 1998 to 2001 for the federal government and many states. No elected officials in modern times seem to resist being enticed by unexpected surplus cash sitting around, uncommitted…

It wasn't enough for you to support the Bush tax cut of 2001, Mr. Greenspan?

Continue reading "Bill Clinton Renominated You Twice, Mr. Greenspan..." »


From a Culinary Perspective, the Heartland of America Is a Scary Place: The View from the Roasterie XVI: October 22, 2013: Kansas City Dark

So far, there are only four places where the food would not have been improved by the addition of Sriracha:

And then one runs across things like this, that I still suspect may be a hoax:

Continue reading "From a Culinary Perspective, the Heartland of America Is a Scary Place: The View from the Roasterie XVI: October 22, 2013: Kansas City Dark" »


I Don't Know What Map Alan Greenspan Has, or What Territory He Is Trying to Cover, But He Seems to Me to Be Lost...

Alan Greenspan: The Map and the Territory: Risk, Human Nature, and the Future of Forecasting:

The true size of the American subprime problem was hidden for years by the defective bookkeeping of the GSEs…. Not until the summer of 2007 did the full magnitude of the subprime problem begin to become apparent…. Had Fannie and Freddie not existed, a housing bubble could still have taken hold. But had such a bubble developed, it is likely that in and of itself, it would not have wreaked such devastation in late 2008…. Even given the excess[ive MBS holdings] of the GSEs, had the share of financial assets funded by equity been significantly higher in September 2008, arguably the deflation of asset prices would not have fostered a default contagion, if at all, much beyond that of the dot-com boom…"

Continue reading "I Don't Know What Map Alan Greenspan Has, or What Territory He Is Trying to Cover, But He Seems to Me to Be Lost..." »


Liveblogging World War II: October 22, 1943

David Royle on HMS Charybdis off the coast of Brittany:

Suddenly there was a terrific explosion. I left my seat, hit the deckhead and fell back across the table. I did not need to be told we had been torpedoed. All the lights had failed, my earphones were silent and had slipped round my neck. Water was rushing in somewhere and I heard the Bandmaster calling for the emergency lighting This too had failed.

The ship was now listing over to port, so that in the inky blackness one could not tell if one was standing on the deck or on dividing bulkhead. I had hung my lifebelt up, on entering the T.S.. – contrary to ships “Standing Orders”, and stumbling about nearly had my head yanked off. My earphones were still plugged in, and the strap round my head brought me up with a jerk.

Continue reading "Liveblogging World War II: October 22, 1943" »


Reading Alan Greenspan's "The Map and the Territory": The Introduction

Alan Greenspan's The Map and the Territory: Risk, Human Nature, and the Future of Forecasting starts with three paragraphs about the financial crisis. It then adds to it a fourth paragraph about forecasting, human nature, and the state of long-term expectation.

But right when I think I know what the book is gong to be about, Greenspan grabs the wheel and turns it hard right: "underinvesting in our economic future", "our broken political system", "the case for taking action now", "unavoidable short-term pain".

These issues are completely orthogonal to those of the financial crisis, the Lesser Depression, human nature, the state of long-term expectation, and economic forecasting.

Continue reading "Reading Alan Greenspan's "The Map and the Territory": The Introduction" »


M.S.: Why Oh Why Can't We Have a Better Press Corps: Ira Stoll on John F. Kennedy: This week in up-is-downism: Noted

M.S.: John F. Kennedy: This week in up-is-downism:

The public interest is not served by a #slatepitch race to the bottom. So I will confine my response to Ira Stoll's ridiculous argument in Time, "JFK Was a Political Conservative", to simply noting that John F. Kennedy, the Democratic president who inspired a generation of liberal idealists, championed liberal labour and civil-rights legislation, and, in accepting the 1960 presidential nomination of New York State's Liberal Party, announced "I'm proud to say I'm a liberal", was in fact a liberal.

Continue reading "M.S.: Why Oh Why Can't We Have a Better Press Corps: Ira Stoll on John F. Kennedy: This week in up-is-downism: Noted" »


Daniel Davies's Rules for Contrarians: Tuesday Hoisted from the Internet from Four Years Ago

Daniel Davies has some very special advice for Michael Kinsley and company:

Rules for Contrarians: 1. Don’t whine. That is all — Crooked Timber: I like to think that I know a little bit about contrarianism. So I’m disturbed to see that people who are making roughly infinity more money than me out of the practice aren’t sticking to the unwritten rules of the game.

Viz Nathan Mhyrvold:

Once people with a strong political or ideological bent latch onto an issue, it becomes hard to have a reasonable discussion; once you’re in a political mode, the focus in the discussion changes. Everything becomes an attempt to protect territory. Evidence and logic becomes secondary, used when advantageous and discarded when expedient. What should be a rational debate becomes a personal and venal brawl.

Okay, point one. The whole idea of contrarianism is that you’re “attacking the conventional wisdom”, you’re “telling people that their most cherished beliefs are wrong”, you’re “turning the world upside down”. In other words, you’re setting out to annoy people. Now opinions may differ on whether this is a laudable thing to do – I think it’s fantastic – but if annoying people is what you’re trying to do, then you can hardly complain when annoying people is what you actually do.

Continue reading "Daniel Davies's Rules for Contrarians: Tuesday Hoisted from the Internet from Four Years Ago" »


John Cassidy: The Inefficiency of the Market Isn't an Open Question: Noted

John Cassidy: The Inefficiency of the Market Isn't an Open Question:

In an article on the front page of Tuesday’s Times, Binyamin Appelbaum did a nice job of highlighting the difference in views between Robert Shiller and Eugene Fama…. But there’s a danger that some readers may come away… with the impression that the issue of whether financial markets are efficient remains unsettled. It isn’t…. Financial markets are sometimes chronically inefficient. The only outstanding question is how far this inefficiency extends….

Continue reading "John Cassidy: The Inefficiency of the Market Isn't an Open Question: Noted" »


Sy Mukherjee: Ohio Will Expand Medicaid Under Obamacare, Extending Health Coverage To Nearly 300,000 Residents: Noted

Sy Mukherjee: Ohio Will Expand Medicaid Under Obamacare, Extending Health Coverage To Nearly 300,000 Residents:

Ohio joined the list of states expanding Medicaid for Americans under 133 percent of the federal poverty line on Monday, after a special seven-member budgetary oversight panel made up of state lawmakers gave final approval to Gov. John Kasich’s (R) decision to grow the program via executive order…. That approval came on Monday in a 5-2 vote, securing Kasich a long-sought victory…. Medicaid expansion, a key provision of the Affordable Care Act, is expected to cut Ohio’s uninsurance rate by over 60 percent and extend basic health benefits to 275,000 of the poorest Ohio residents…. 26 states are trying to move forward with some form of Medicaid expansion, while 22 are not, and the rest still remain undecided.


Ricardo J. Caballero and Emmanuel Farhi: Safety Traps and Economic Policy: Noted

Ricardo J. Caballero and Emmanuel Farhi: Safety Traps and Economic Policy:

The global economy has a chronic shortage of safe assets which lies behind many recent macroeconomic imbalances. This paper provides a simple model of the Safe Asset Mechanism (SAM), its recessionary safety traps, and its policy antidotes. Safety traps share many common features with conventional liquidity traps, but also exhibit important differences, in particular with respect to their reaction to policy packages. In general, policy-puts (such as QE1, LTRO, fiscal policy, etc.) that support future bad states of the economy play a central role in the SAM environment, while policy-calls that support the good states of the recovery (e.g., some aspects of forward guidance) are less powerful. Public debt plays a central role in SAM as long as the government has spare fiscal capacity to back safe asset production.


Sumit Aggarwal et al.: Predatory Lending and the Subprime Crisis: Noted

Sumit Aggarwal et al.: Predatory Lending and the Subprime Crisis:

We measure the effect of an anti-predatory pilot program (Chicago, 2006) on mortgage default rates to test whether predatory lending was a key element in fueling the subprime crisis. Under the program, risky borrowers and/or risky mortgage contracts triggered review sessions by housing counselors who shared their findings with the state regulator. The pilot cut market activity in half, largely through the exit of lenders specializing in risky loans and through decline in the share of subprime borrowers. Our results suggest that predatory lending practices contributed to high mortgage default rates among subprime borrowers, raising them by about a third.


Mark Thoma Wonders What Arnold Kling Reads...

Mark Thoma: Economist's View: Ideology and Macroeconomics:

Arnold Kling….

In theory, there should be economists who, as they argued for more stimulus in 2009, should at the same time have been arguing for entitlement reform or other reductions in future spending. Other things equal, the bigger debt that we have accumulated over the past five years would make a non-ideological macroeconomist want to propose tighter fiscal policy somewhere down the road. But “nonideological” and macroeconomics are nearly oxymorons…

And Mark says:

Huh? See here (from 2005, before the recession had even started):

… To use fiscal policy to stabilize the economy however, you have to spend more or tax less in the bad times (increase the deficit) and then do the hard thing which is to raise taxes or cut spending in the good times (decrease the deficit).  To keep the budget in balance the good has to be matched somewhere by the bad…. The priming of the economy during the bad times must be matched by a slowdown during the good….

Or here (from 2008, a bit afer the recession started):

Short-run stabilization policy for the economy during a downturn involves either cutting taxes to stimulate consumption and investment (and sometimes net exports), or increasing government spending…. Ideally, the deficits that accumulate during bad times are paid for by raising taxes or cutting spending during the good times so that there is no net change in the budget in the long-run.

I would have doubted that there were people so obtuse as to fail to note that the argument has been: "classical fiscal policy as long as monetary policy can handle the stabilization policy mission; but expansionary fiscal policy is needed at the zero lower bound".

But Kling has proved me wrong.


Sheri Berman (2006): Interwar Socialism with German Nationalist Characteristics: Noted

Sheri Berman (2006): Interwar Socialism with German Nationalist Characteristics:

P. 110 ff: Over time... the... S[ocialist ]P[arty of]D[eutschland]'s position became increasingly problematic…. [T]he SPD's support of [the Hooverite plans of Chancellor] Bruening and its failure to put forward any distinctive plans of its own for dealing with the Great Depression elicited storms of protest. At the party's 1931 congress… the most electrifying speech, Fritz Tarnow… summed up the SPD's dilemma:

Are we standing at the sickbed of capitalism not only as doctors who want to heal the patient, but also as prospective heirs who can't wait for the end and would gladly help the process along with a little poison?… We are damned, I think, to be doctors who seriously want to cure, and yet we have to maintain the feeling that we are heirs who wish to receive the entire legacy of the capitalist system today rather than tomorrow. This double role, doctor and heir, is a damned difficult task….

Continue reading "Sheri Berman (2006): Interwar Socialism with German Nationalist Characteristics: Noted" »


Sources of Tea Party Discontent

I remember what policies Barack Obama has in fact pursued:

  • George H.W. Bush's tax policy.
  • Mitt Romney's health-care policy.
  • John McCain's climate-change policy.
  • George H.W. Bush's foreign policy.
  • Bill Clinton's spending policy.
  • Dwight Eisenhower's Federal Reserve policy.
  • George W. Bush's education policy.

Continue reading "Sources of Tea Party Discontent" »


Uncharted: May I, For One, Welcome Our New Robot Overlords? UNDER CONSTRUCTION

I find myself disappointed that this has not yet jelled into something coherent--especially because there are now only 99 hours until I have to take the stage on Friday…

Let us start out with the view from 30,000 feet: What do we people do to add value? Eight things:

  1. We apply large amounts of energy to move things around and transform them
  2. We use fine manipulators to do precision work as we move things around and transform them.
  3. We amuse, please, and encourage each other.
  4. We figure out how the large amounts of energy are to be applied, and trigger the application.
  5. We figure out how the precision work is to be done, and trigger the manipulation.
  6. We coordinate our collective efforts so that we are mostly pulling in more-or-less the same direction.
  7. We communicate to others both what is going on and better ways of doing useful things.
  8. We think of new (and hopefully better) ways of doing useful things, or new useful things to do.

Continue reading "Uncharted: May I, For One, Welcome Our New Robot Overlords? UNDER CONSTRUCTION" »


Noted for Your Morning Procrastination for October 21, 2013

And:

  1. "Strange to say, however, neither Bowles nor anyone else of similar views has, as far as I can tell, actually done what he urged: 'stop and think for a minute what happens if they just stop buying our debt'…. If you’re America or Britain, the central bank sets interest rates, and under current conditions that means holding them at zero. So what happens instead is that your currency depreciates, making exporters and import-competing industries more competitive. The effect on the economy as a whole is therefore expansionary, not contractionary. Things might be different if the private sector had large debts in foreign currency, as was true in Asia in the 90s. But it doesn’t": Paul Krugman: Liquidity Preference, Loanable Funds, and Erskine Bowles
  2. "The conservative Heritage Foundation released last week a new report on insurance premiums under Obamacare, and the conclusion was that favorite of conservative talking points: people are going to pay more for insurance under Obamacare. Only the foundation left out one key variable…. They didn't account for the financial help that the Affordable Care Act gives uninsured people to purchase insurance": Dylan Scott: One Big Problem With Heritage's New Obamacare Study
  3. "One thing that puzzled me during the American health-care debate was all the talk about socialized medicine and how ineffective it’s supposed to be. The Canadian plan was likened to genocide, but even worse were the ones in Europe, where patients languished on filthy cots, waiting for aspirin to be invented. I don’t know where these people get their ideas, but my experiences in France, where I’ve lived off and on for the past thirteen years, have all been good. A house call in Paris will run you around fifty dollars. I was tempted to arrange one the last time I had a kidney stone, but waiting even ten minutes seemed out of the question, so instead I took the subway to the nearest hospital": David Sedaris: Socialized Medicine in Old Europe
  4. "Imagine if you will that an alien life form has come to your planet… but somehow some people were just fine and dandy with… the seven-tongued alien sloth that has subsumed your entire world… enthusiastic in their support of the alien overlord no matter how much you explain to them that the aliens are indeed feasting on our brains and spleens. That is what it is like for a conservative in America in 2013…. This political loss has also come coupled with cultural shockwaves… majority minority, women… a social safety net, and… sex unions and marriages…. And unlike us squishy lefties, they aren’t beating up on themselves, wondering what did “we” do to cause this mass cultural rejection. Instead… the right is stuck in permanent ragegasm. This weekend’s weird protest against the fallout of the government shutdown they engineered is just the latest primal scream…. There will be more, stoked by the craven politicians who don’t care about improving America as long as they get re-elected and the media figures who retire to their palatial mansions as their audiences question the very essence of their lives": Oliver Willis: The Right’s Crisis Of Infinite Ragegasms

Continue reading "Noted for Your Morning Procrastination for October 21, 2013" »


Paul Krugman: The Worst Ex-Central Banker in the World: Noted

Paul Krugman: The Worst Ex-Central Banker in the World:

What Pearlstein doesn’t mention, but I think is important, is Greenspan’s amazing track record since leaving office — a record of being wrong about everything, and learning nothing therefrom. It is, in particular, more than three years since he warned that we were going to become Greece any day now, and declared the failure of inflation and soaring rates to have arrived already “regrettable.” The thing is, Greenspan isn’t just being a bad economist here, he’s being a bad person, refusing to accept responsibility for his errors in and out of office. And he’s still out there, doing his best to make the world a worse place.


He Couldn't Budge It without Really Trying, and Now He Claims It Was About to Collapse?: Goblin Valley Vandelism: The View from the Roasterie XV: October 21, 2013: Coffee: Bavarian Chocolate Flavored

Noted without comment, save:

  1. It does not appear that alcoholism was involved, and
  2. What is wrong with these people?!

Ryan Grenoble: Boy Scout Leaders Topple Ancient Rock Formation In Utah's Goblin Valley State Park (VIDEO): The stone formation they destroyed was nearly 200 million years old, but the Boy Scout leaders who toppled it claim it posed an imminent threat. The 3 men responsible, who filmed their activity in Utah's Goblin Valley State Park and uploaded the footage to Facebook, may face felony charges. A copy of the video was posted on YouTube by the Salt Lake Tribune and shows a scene of giddy revelry. One of the men, "Glenn," is seen attempting to push over one of the park's signature stone formations, known as "goblins." When Glenn can't budge the rock, the man filming tells him to "wiggle it."

Continue reading "He Couldn't Budge It without Really Trying, and Now He Claims It Was About to Collapse?: Goblin Valley Vandelism: The View from the Roasterie XV: October 21, 2013: Coffee: Bavarian Chocolate Flavored" »


Assessing Alan Greenspan: Monday DeLong Self-Smackdown

Greenspan in Retrospect

Six years ago, I wrote a highly complimentary review of Alan Greenspan's The Age of Turbulence:

Brad DeLong (September 2007): Review of Alan Greenspan's "The Age of Turbulence": For nearly 20 years Alan Greenspan… was the most powerful economic central planner the world has ever seen…. Why should a central planner be setting interest rates? The only reason is that this system appears to work less badly than the alternatives we have tried…. Greenspan is world famous because he was very good and very lucky…. He made roughly 36 substantive decisions about the direction interest rates should go. Six times I disagreed with him. Five of those six times, he was right…. That is an amazing record….

I still think most of the review still holds up well[1]. But the very end is now very questionable:

Continue reading "Assessing Alan Greenspan: Monday DeLong Self-Smackdown" »


Liveblogging World War II: October 21, 1943

Audie Murphy: To Hell and Back:

Now the light of the new day is streaking the sky, beneath which the enemy is creeping.

A combat patrol.

Seven gray-coated and helmeted forms emerging like ghosts from the mist of an Italian dawn. Beneath the uniforms, seven men. The warm blood throbs through their veins; their chests heave. And one casts an anxious eye toward the light that blooms in the sky.

Continue reading "Liveblogging World War II: October 21, 1943" »


Martin Ruhs: The Price of Rights: Regulating International Labor Migration: The Economic Policy Institute: Noted

Economic Policy Institute: The Price of Rights: Regulating International Labor Migration:

Whether Congress should open the U.S. labor market to more foreign workers is one of the most challenging questions it faces in the debate over how to reform federal immigration laws…. Dr. Martin Ruhs of Oxford University explores the tensions between human, labor, and citizenship rights and the determinants and ethics of labor immigration policies…. The Price of Rights examines labor immigration policies from over 50 countries, analyzes how high-income countries restrict the rights of migrant workers as part of their labor immigration policies, and discusses the implications for global debates about regulating labor migration and protecting migrants. Please join the Economic Policy Institute on Monday, October 21st from 1:00 to 2:30 p.m. for a discussion about The Price of Rights with the author and a discussant.


The Hamilton Project: Improving College Outcomes: A Modern Approach: Noted

The Hamilton Project: Improving College Outcomes: A Modern Approach:

On October 21st The Hamilton Project will host a forum focusing on the evolving role of higher education in American society and release three new policy proposals… ways to strengthen the Pell Grant program… reform the federal student loan repayment system… expand the availability of information on the “net” vs. “sticker” price of attending college…

Continue reading "The Hamilton Project: Improving College Outcomes: A Modern Approach: Noted" »


Binyamin Applebaum Gives a More-Polite-Version-of-Pearlstein's Review of ‘The Map and the Territory’ by Alan Greenspan:Noted

Binyamin Applebaum: ‘The Map and the Territory’ by Alan Greenspan:

Alan Greenspan… writes… that he has been thinking about bubbles since the financial crisis of 2008…. What economists like to call “the animal spirits” can be incorporated into economic models…. This is promising stuff. It might even make an interesting book. But the subject barely holds Mr. Greenspan’s attention for a single chapter.

Continue reading "Binyamin Applebaum Gives a More-Polite-Version-of-Pearlstein's Review of ‘The Map and the Territory’ by Alan Greenspan:Noted" »


Barry Ritholtz: Fama Has Shiller to Thank for his Nobel Prize: Noted

Barry Ritholtz: Fama Has Shiller to Thank for his Nobel Prize:

At the University of Chicago, there are two professors of economics named Eugene Fama…. Fama the Younger… developed a profound insight about the markets…. The Efficient Market Hypothesis, as Fama called it, meant that stock-picking was a futile exercise…. The relevance to finance was soon obvious: Most investors are better off owning the entire market, rather than guessing which stocks might do better or worse. We can quibble with some of Fama’s reasoning. It turns out that prices are not all that rational and frequently deviate from known data--but Fama got the big concept right…. For this, Fama is thought of as the intellectual father of… passive investing…. His work became hugely influential, and remains so to this day…. Had he stopped there, Fama the Younger probably would have flown to Sweden to pick up his Nobel Prize money decades ago.

Continue reading "Barry Ritholtz: Fama Has Shiller to Thank for his Nobel Prize: Noted" »


Richard Florida: What the Shutdown Revealed About the Economic Divides in U.S. Politics: Noted

Richard Florida: What the Shutdown Revealed About the Economic Divides in U.S. Politics:

The geography of Tea Party conservatives is largely what you’d expect. Half are in the South, and a quarter are in the Midwest. Not a single one is in the Northeast or the along the Pacific coast. All voted for Romney over Obama…. Charlotta Mellander… looking at the share of a state’s congressional delegation that had signed the August letter to Boehner (and thereby made it into Lizza’s "suicide caucus") and key economic and demographic characteristics…. The percentage of suicide caucus districts was negatively correlated with wages (-.30), incomes (-.33) and college graduates (-.36)… less diverse--both in terms of immigrant and gay and lesbian shares of the populations… less urban… [more] uninsured…. The last map gets at the deep economic fissures underlying Tea Party politics. It’s a map of America’s centers of innovation…. The Tea Party gets it stronghold in places that have been left behind by the knowledge economy… "committed to a past that never quite existed and hopes for a future that seems rather unlikely."

Continue reading "Richard Florida: What the Shutdown Revealed About the Economic Divides in U.S. Politics: Noted" »


Prairie Weather: Experiencing the ACA: Noted

Prairie Weather: Experiencing the ACA:

If you're genuinely interested in the experiences of others as they encounter the flawed computer system, then skip down to the comments. The system seems to work pretty damn well.

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Belle Sawhill: Higher Education and the Opportunity Gap | Brookings Institution

Higher Education and the Opportunity Gap | Brookings Institution:

Higher Education and the Opportunity Gap

By: Isabel V. Sawhill

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Print America faces an opportunity gap. Those born in the bottom ranks have difficulty moving up. Although the United States has long thought of itself as a meritocracy, a place where anyone who gets an education and works hard can make it, the facts tell a somewhat different story. Children born into the top fifth of the income distribution have about twice as much of a chance of becoming middle class or better in their adult years as those born into the bottom fifth (Isaacs, Sawhill, & Haskins, 2008). One way that lower-income children can beat the odds is by getting a college degree.[1] Those who complete four-year degrees have a much better chance of becoming middle class than those who don’t — although still not as good of a chance as their more affluent peers. But the even bigger problem is that few actually manage to get the degree. Moreover, the link between parental income and college-going has increased in recent decades (Bailey & Dynarski, 2011). In short, higher education is not the kind of mobility-enhancing vehicle that it could be.

The obvious solution would seem to be this: First, encourage more low-income children to go to college; and second, finance their education in order to narrow the opportunity gap — a strategy that policymakers have been pursuing for the past few decades. This prescription is fine as far as it goes, and indeed some success has been achieved in both motivating the less advantaged to aspire to college and in providing the financial assistance enabling them to do so. Most high school graduates say that they plan on getting a degree, and spending on Pell grants has risen sharply in recent years, even as deficits have constrained other types of spending (U.S. Department of Treasury, 2012).

The flaw in this simple argument is that the primary problem is no longer enrollment, it is completion. Almost half of all college students and much higher proportions of poor and minority students drop out before they complete a degree. Community colleges, the sector that enrolls the majority of less advantaged and older students, have experienced staggering dropout rates. About 54% of their students don’t complete a degree, receive a certificate, or transfer to a four-year institution within six years (NCES, 2011).

The reasons for lack of completion are many, including rising tuition costs that have only partially been offset by increased government aid and are especially burdensome for the least well off; a lack of information about what aid is available, particularly at more selective schools; and the demands of work and family that may make full-time attendance difficult or impossible. But probably the most important factor explaining lack of completion is inadequate preparation for college in the K–12 years. According to the 2009 National Assessment of Educational Progress (NAEP), only a small fraction of high school seniors are at or above proficiency in math and reading: 26% and 38%, respectively (U.S. Department of Education, 2009). Yet roughly two-thirds of high school graduates enroll in college.[2]

This lack of preparation is not the fault of institutions of higher education. Most colleges, especially the less selective schools at the community college level, have poured time and money into providing remedial courses to help underprepared students succeed, but the effort has done little to overcome the dropout problem. There have also been experiments with providing community college students with various supports such as counseling, the creation of “learning communities” that keep students together for mutual support, or providing extra financial resources to help meet living costs. However, these programs are costly and have had only modest success (Bettinger, Boatman, & Long, 2013).

It is not as if the incentives for completion don’t exist. The wage premium for a college degree has skyrocketed in recent decades, nearly doubling since 1980. When compared to simply graduating from high school, a bachelor’s degree produces an increase in earnings over one’s career of nearly $600,000, even after accounting for the fact that college graduates tend to be more able than noncollege graduates for reasons that have nothing to do with going to college. An associate degree produces a smaller, but still highly significant gain.

It is clear that different segments of the high school population need different postsecondary opportunities. Some are academically able and should be applying to selective schools. Others are much less well prepared and might benefit more from a one-year certificate in a high-demand field such as health, computers, or welding. One size doesn’t fit all.

A more academic literature has shown that there is a small but significant number of low-income, high-achieving students who do not apply to more selective schools but instead enter the community college system or other less selective institutions where they are less likely to graduate. They are often unaware of the fact that many top-tier universities are seeking a more diverse student body and would provide generous financial aid enabling them to attend. Although there are far more high achievers from wealthier families than among those who are less well off, this “undermatching” of talent with available resources is another indicator that class matters in the U.S. (Hoxby & Avery, 2013; Bowen, Chingos, & McPherson, 2009).

At the other end of the spectrum are a large number of high school students who are simply not prepared for the rigors of college-level work. In an earlier paper, co-authored with Stephanie Owen and entitled “Should Everyone Go to College?” we argued that a college degree is a very good investment, on average, but not for every high school student. The benefits depend not only on whether one completes a degree or certificate, but also on the selectivity of the school, the student’s major, and the type of occupation in which she ends up. For example, the rate of return on a bachelor’s degree from a noncompetitive four-year private institution is under 6% while the rate of return on a bachelor’s degree at our most competitive public institutions is over 12%. The difference in lifetime earnings between someone majoring in engineering vs. someone majoring in the arts is a whopping $1.5 million.

Of course, the value of a college degree should not be measured solely in terms of the payoff in the labor market. Higher education creates more informed citizens, better health, better parents, more job satisfaction, and other noneconomic benefits. Still, students would do well to carefully consider their objectives and expectations before choosing an institution or a major. Efforts to make more information available and to help high school graduates and their parents navigate the complexity of the financial aid system — as well as the multitude of institutional choices available to them — should be increased.[3]

More fundamentally, for a lower-income family, higher education is simply not affordable without heavy subsidies from the government or scholarship aid. Faced with messages that a college degree is the ticket to the middle class, and tuition levels that are beyond their reach, borrowing by students and their families has soared. In part this reflects an increase in the number of borrowers (Greenstone & Looney, 2013). But the levels of debt are both worrisome and inconsistent with the idea that higher education should be accessible to all those able to benefit from it.

In the meantime, the federal government is spending $136 billion a year on Pell grants, student loans, tax credits, and other forms of assistance for undergraduate students. While Pell grants are aimed at providing help to low-income students, loans and tax credits are heavily tilted toward middle-class families (Dynarski & Scott-Clayton, 2013).[4] Some reallocation of funding from the middle class to the poor would probably help to close the opportunity gap. But more money for Pell grants, by itself, will not solve the dropout problem. There is no evidence that Pell grants have increased graduation rates, as opposed to enrollments. A higher level of assistance for low-income students but one also tied more closely to performance might help to level the playing field in a more cost-effective way while simultaneously providing stronger incentives for better preparation at the K–12 level. For example, West Virginia’s PROMISE scholarships provide free tuition and fees for up to four years to academically qualified students who maintain a minimum GPA and course load in college. Research has shown that the program increased on-time graduation rates by 7 percentage points (Dynarski & Scott-Clayton, 2013).

More controversially, it may be time to consider an approach that is common in European and Asian countries. These countries require students to demonstrate that they are prepared before they are admitted to a university, using national testing systems. Some countries, such as Germany, also provide far more opportunities for nonuniversity bound students to acquire valuable skills. For those with the requisite ability, the cost of higher education is free or highly subsidized. These systems provide an incentive for students to study hard in secondary school and for the schools to work hard to prepare them for the rigors of college-level work. Universities can then concentrate on educating those most able to benefit, and taxpayers don’t end up subsidizing students to learn in college what they should have learned earlier in their school careers. The European and Asian systems are often more meritocratic than the U.S. system and far more cost-effective from a societal perspective (NCES, 2013).

With the advent of the Common Core standards, a version of this approach could be gradually introduced in the U.S. and financial assistance tied more strongly to performance in high school and college. Because of our tradition of not tracking students and of providing open access to community colleges, and because it would take time for the K–12 system as well as individuals to respond to new incentives, any such modifications would need to be introduced very slowly, and careful attention would need to be paid to how performance is measured.

Even then, critics will charge that such a system would limit access to higher education. They would note that even a year or two of college that ends with the student dropping out has some value in the labor market. They would also argue that access is critical and that our system with its great diversity of institutions from open-access community colleges to elite private schools is designed to promote choice and opportunity. That said, the U.S. is falling behind in international rankings of what students know and how many graduate from college, and it is not clear that we can continue to compete using our current “open-access” model. European countries spend far less per capita on higher education than does the U.S. but get a much greater bang for the buck in terms of college completion rates. To those who worry that this is because they only educate a select few, it is worth pointing out that European levels of income inequality and social mobility compare favorably with those in the U.S.

There is no question that the workforce of the future will need more education, but some of that education may be more effectively provided in high school, in career and technical education programs customized to provide the skills that employers need, and through inexpensive online learning rather than in traditional college classrooms. Community colleges are, of course, providing a great deal of career and technical education, and especially where that education leads to a certification or skill with value in the market place (nursing is a good example), they are providing a vitally important service and deserve more resources for this purpose.

Over the longer term, the focus needs to be on improved productivity in the higher education system.[5] There is a burgeoning interest in online learning combined with more personalized approaches in the classroom. Real innovation and more cost-effective forms of education will require measuring what students learn and not just counting credit hours accumulated. These kinds of innovations will remain controversial within some portions of the higher education community, but they should be welcomed by taxpayers, families, and administrators looking for a way to broaden access without bankrupting either families or state and federal governments. By bringing college-level learning within the reach of the less advantaged and older, nontraditional students looking for ways to retool their skills, innovation can be one solution to America’s opportunity gap.

In summary, I have argued that, despite our dedication to the idea of a higher education system open to all, we are not doing a very good job of leveling the playing field. The result is that opportunity is still linked too strongly to class. In the longer term, the solution needs to involve improving the K–12 system. It also needs to involve making learning and access to skills beyond this level a less costly process and one that does not necessarily require four to six years of college. In the near term, more could be done to better inform students and their families about available options, including the availability of financial aid for well-prepared students from low-income families; the importance of matching one’s interests and skills with what different institutions have to offer; and the availability of more work-focused career and technical training for those most likely to drop out of college saddled with too much debt.


Metafilter: First they came for the Black voters, but I did nothing, because…: Noted

Mark Kraft: First they came for the Black voters, but I did nothing, because... | MetaFilter:

The GOP's new target for voter disenfranchisement: women. As of November 5, Texans must show a photo ID with their up-to-date legal name. Only 66% of voting age women have ready access to a photo ID of this nature, as many women have not updated their photo IDs with either their married names or their name after a divorce. This disenfranchises 34% of women voters, while 99% of men are home free. Similar laws now exist or are in the process of being passed in numerous other states.

posted by markkraft (207 comments total) 40 users marked this as a favorite

They should just reenact coverture and give married men two votes. (GOP strategists, this is a joke; don't actually do this, you incredible nutjobs.)

posted by Admiral Haddock at 11:45 AM on October 18 [13 favorites]


For Five Years Ross Douthat Has Been Claiming Obamacare≠RomneyCare, and That the Marketplaces-Exchanges Are Not the Heritage Foundation's Intellectual Child

But now, apparently, it is finally time to strip of the mask and acknowledge what he has been pretending for five years is not so:

Ross Douthat: Obamacare: The Obamacare exchanges… are actually closer to the right-of-center vision for health care reform…. So if the exchanges fail and the Medicaid expansion takes effect (and, inevitably, becomes difficult to roll back), we’ll be left with an individual market that’s completely dysfunctional and a more socialized system over all. In that scenario, the Democratic Party would… [push for] Medicare… to 55- to 65-year-olds and Medicaid… [to] even more. Meanwhile, the task for serious conservative reformers… become[s] harder, because they would have to explain how their plan to build an effective, exchange-based marketplace differed from the Obama White House’s exchange fiasco.

So while Republican politicians may be salivating over a potential Obamacare crisis, the conservative policy thinkers I know are not. They’re hoping, as I’m hoping, that this isn’t as bad as it looks. The chance to say “I told you so” is always nice, but not if the price is a potentially irrecoverable disaster.

Could you have made a difference, Ross, if you had spent the last five years telling your copains of the right that ObamaCare=RomneyCare? Yes, you could have. But you didn't, did you?


Two Ways of Looking at a Randite: Hermaneutics **Hermeneutics** of Profound Suspicion vs. Hermaneutics **Hermeneutics** of Goodwill Toward Alan Greenspan Weblogging

Alan Greenspan's publisher did not send me a copy of his new The Map and the Territory. So at the moment I am running on the two different books read by Larry Summers and Steve Pearlstein:

Larry Summers: The Map and the Territory:

It was my privilege to work closely with Alan Greenspan for the eight years I served at the Treasury during the Clinton administration. His new book, The Map and the Territory, brings me back to fond memories of our conversations over the years. I haven’t always agreed with my friend but he has always left me wiser and with something to ponder. I have been struck… by the way… his approach… draws both on commitments to an individualist, libertarian philosophy and on extensive and deep immersion in economic statistics…. The range of topics and arguments makes this book a very important statement, whether one ultimately agrees or disagrees with the author. I found myself doing plenty of both. Greenspan’s range, vision and boldness is especially important at a time like the present, when Washington is preoccupied with the political and petty….

Continue reading "Two Ways of Looking at a Randite: Hermaneutics **Hermeneutics** of Profound Suspicion vs. Hermaneutics **Hermeneutics** of Goodwill Toward Alan Greenspan Weblogging" »


Steve Pearlstein: Alan Greenspan still thinks he’s right: Noted

Steve Pearlstein: Alan Greenspan still thinks he’s right:

[Greenspan's] latest book, oddly named “The Map and the Territory,” is meant to be an account of his intellectual journey to discover why, as the nation’s top bank regulator and its most famous economic prognosticator, he failed to see it all coming. Why had the markets, which for centuries had been so adept at self-correction, failed this time? Why had bank executives, with every incentive to protect their fortunes and reputations, knowingly gambled it all away?

What we find, however, is that Greenspan’s journey of discovery brings him right back to… an unshakable faith in free markets, an antipathy toward market regulation, and a conviction that progressive taxes and social spending are to blame….

Continue reading "Steve Pearlstein: Alan Greenspan still thinks he’s right: Noted" »


Noted for Your Morning Procrastination for October 20, 2013

And:

  1. "As Speaker of the House Joe Martin (R-MA) told an assembly of black Republicans in 1947: 'I’ll be frank with you: we are not going to pass a [non-discrimination in private business bill], but it has nothing to do with the Negro vote. We are supported by New England and Middle Western industrialists who would stop their contributions if we passed a law that would compel them to stop religious as well as racial discrimination in employment'": Zack Beauchamp: How Racism Caused The Shutdown
  2. "Officials at Georgia Institute of Technology are investigating an e-mail sent by a Phi Kappa Tau member to his fraternity brothers on 'luring your rapebait', The Atlanta Journal-Constitution reported. 'The institute does not condone this type of behavior and continues to provide resources and education designed to create a supportive campus environment for all students, even those who exercise extremely poor judgment'…. The e-mail, which appeared on several websites Monday, outlines strategies for getting women drunk and having sex with them": Whiskey Fire: Today in "Why We Don't Need Feminism Anymore" News, Or, Mansplain This!
  3. "Libertarians, Land claims, are ultimately 'looking for an exit'. A claim with many implications. Exhibit A for him is the perhaps justifiably notorious April 2009 issue of Cato Unbound, which I edited. In it, PayPal co-founder and radical libertarian Peter Thiel declared, 'I no longer believe that freedom and democracy are compatible.' In Land’s gloss: 'Even more than Equality-vs-Liberty, Voice-vs-Exit is the rising alternative, and libertarians are opting for voiceless flight.' Are we looking for an exit? And what would that mean?": Jason Kuznicki: Zombie Apocalypse or Marginal Revolution? Nick Land, Neo-Reactionaries, and the Heterotic Society
  4. "California's legislators are no more moderate, relative to their districts, under the top-two regime than they were before. Indeed, they may even be a bit more polarized. If you want to know why, as Nagourney writes, California has produced an impressive month of legislation and bill signings, look to the unified party control with massive Democratic majorities. If you want to know why, as Wilson writes, so few California Republicans signed on to the government shutdown effort, look to the fact that the Tea Party movement was never very well rooted on the West Coast": Seth Masket: The Mischiefs of Faction: It's Top-Two Friday!

Continue reading "Noted for Your Morning Procrastination for October 20, 2013" »


Lawrence Summers: Alan Greenspan's "The Map and the Territory": Noted

Larry Summers: The Map and the Territory, by Alan Greenspan:

[Greenspan] acknowledges having changed his mind in some quite fundamental ways, in particular by greatly elevating the significance he attaches to “animal spirits”, especially fear and panic…. Reluctantly but clearly, he sees a stronger warrant for regulation--particularly with respect to the capital and liquidity position of major financial institutions…. He is rightly dismissive of the notion that financial crises can ever be completely avoided, or that governments can totally avoid bailout responsibilities…. One can only agree and hope that rational expectation theorists will take Greenspan on board…. He is very worried about the problem of “too big to fail”…. On this he is surely right… suggesting that “too big to fail” can very easily lead to crony capitalism. “Too big to fail” is surely the besetting challenge for financial regulation in the years ahead. I wish Greenspan had been more specific in his recommendations, although “too big to fail”, like nuclear deterrence, may be an area where ambiguity is essential….

Continue reading "Lawrence Summers: Alan Greenspan's "The Map and the Territory": Noted" »


Paul Krugman: The China-Debt Syndrome: Noted

Paul Krugman: The China-Debt Syndrome:

Matthew Yglesias notes an uptick in Very Serious People warning that China might lose confidence in America and start dumping our bonds…. The crucial point… is… the Chinese wouldn’t hurt us if they dumped our bonds…. China selling our bonds wouldn’t drive up short-term interest rates, which are set by the Fed. It’s not clear why it would drive up long-term rates, either, since these mainly reflect expected short-term rates. And even if Chinese sales somehow put a squeeze on longer maturities, the Fed could just engage in more quantitative easing and buy those bonds up…. China could, possibly, depress the value of the dollar. But that would be good for America!…

But, you say, Greece. Well, Greece doesn’t have its own currency or monetary policy; capital flight there led to a fall in the money supply, which wouldn’t happen here. The persistence of scaremongering about Chinese confidence is a remarkable thing: it continues to be what Very Serious People say, even though it literally makes no sense at all. As Dean Baker once put it, China has an empty water pistol pointed at our head.


Max Brantley: Mount St. Mary principal responds on firing of gay teacher for marrying: Noted

Max Brantley: Mount St. Mary principal responds on firing of gay teacher for marrying:

I reported last night on the firing of a Mount St. Mary Academy English teacher, Tippi McCullough, because, on Wednesday, she married her long-time partner, Barbara Mariani, in New Mexico…. McCullough, in her 15th year at the school, said Principal Diane Wolfe told her she must resign or be fired (though a school employee had first called and warned her not to get married. She implied that a decision not to marry might protect McCullough's job.) McCullough had no interest in returning to work at a place unwelcome to her decision nor to go quietly. So she was fired. Sometime last night, her photograph was removed from the Mount St. Mary website….

The principal said that the signing of a legal document on marital status forced her to act in obedience to her own contract as school administrator. She said she'd have done the same had a staff member divorced without an annulment or happened to be an abortion provider.

Wolfe said she was just a messenger:

Continue reading "Max Brantley: Mount St. Mary principal responds on firing of gay teacher for marrying: Noted" »


Dread Pirate Mistermix: Death Panels are in the Past, Let’s Move On: Noted

Dread Pirate Mistermix: Death Panels are in the Past, Let’s Move On:

Atrios: "The obvious thing is that the Republicans totally stepped on their own chances of pointing out what a clusterfuck the Obamacare rollout is. They’ve never had a coherent narrative of just what was wrong with Obamacare, and when actual problems materialized they looked away for some reason." I’d have to consult a psychiatrist or a circus owner to get an expert opinion, but I have a couple of unschooled guesses why the Obamacare rollout isn’t occupying banner headlines on Fox and shooting to the top of Memeorandum…. Goldline isn’t going to pay for ads on a network reporting about petty inconveniences--it’s only the threat of impending apocalypse that moves product.