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November 2014

For the Weekend: S--- Is All F----- Up and B------- Edition: Come Thou Fount of Every Blessing

Yes, I know that Google will serve me up odd ads occasionally.

But, while searching to see if there is a live performance of Lisa Arrington's amazing version of Nettleton/Come Thou Fount of Every Blessing from "Return to Nauvoo"... serve me up "Concealed Carry" ads?

Continue reading "For the Weekend: S--- Is All F----- Up and B------- Edition: Come Thou Fount of Every Blessing" »

Liveblogging World War II: November 14, 1944: Letters


: A Soldier's Letters Home: November 14, 1944:

Dear Mother and Dad,

Yesterday was my birthday and it certainly seems like I got my present. I was assigned to the I04 Quarter Master Corp attached to the 104 division. My present job is that of a typist clerk in the Special Effects Department of the division. It is a newly created department and I was fortunate enough to be passing through a replacement depot when they requisitioned for five typist. Its one of those breaks that happen once in a live (sp) time. All the other boys who were with me went on to infantry regements (sp) where they are used as replacements. I'm still in Germany, but now instead of living in a pup tent I'm living in a German building. To be exact in a German kitchen. It feels great to get back on a typewriter again.

It's been snowing and raining intermittingly for the last few days. Its a wet snow and doesn't stick to the ground readily. Walking around here is very difficult because of the mud. In places its as deep as one foot.

Mom, I ope you forward the address of Russell Baruch to me. I'd like to write to him.

I the future I'll be able to write more letters home. I'll write soon because one of my buddys (sp) wants to use the typewriter.

Love, Hal

Law in the Raw: Live from the Roasterie

NewImageI do not know whether to laugh or cry at the fact that Linda Greenhouse says that for decades she has been struggling to maintain the belief that "the Supreme Court really is a court and not just a collection of politicians in robes". The Supreme Court has always--or at least since in Marbury vs. Madison it seized the power of judicial review--been both a court and a collection of politicians in robes. There are few things in our political system more fundamental than that we have a common-law Supreme Court that, when the chips are down, delineates and changes what the law is in oracular pronouncements from the bench--not final because it is infallible, but infallible because it is final.

The curious thing about the Rehnquist-Roberts Supreme Courts is that, historically, the Supreme Court has deployed its low-transforming power in the interest of overwhelmingly-felt principles of justice: it says that "we do not care what the law has been, here is what justice tells us the law ought to be". Bush v. Gore, Citizens United, NFIB v. Sibelius, and now King appear very different--they are, rather, naked pursuit of partisan advantage.

I can think of no parallels, safe perhaps Federalist Chief Justice John Marshall's acquittal of Aaron Burr in the hope that if Aaron Burr were set free he might cause Democratic-Republican President Thomas Jefferson additional trouble...

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Jon Gruber in 2011: Yes, Subsidies Are Available to People Purchasing Health Insurance on the Federal Exchange

Back in 2011 when Jon Gruber was writing Health Care Reform: The Graphic Novel he assumed that subsidies were available to all purchasing on any exchange--whether a state-initiated §1311 exchange, a joint exchange, or a federally-initiated §1321 exchange did not matter: families will pay no more than 9.5% of their income to purchase health insurance--not families living in states that have established §1311 exchanges: families full stop:

2014 11 13 Gruber 1 Scan Nov 13 2014 2 46 PM pdf 1 page

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Morning Must-Read: Nick Bunker: What the Beveridge Curve Tells Us

Nick Bunker: What the Beveridge Curve may tell us about the U.S. labor market: "The Federal Reserve Bank of Cleveland used historical data...

...on printed job advertisements to create a jobs opening rate for years prior to 2000. And if you look at their Beveridge Curve for economic recoveries going back over 60 years, you see the current shift is actually quite typical. The curve appears to shift quite a bit (up and over to the right) after large recessions and shifts back (down and over to the left) after the labor market recovers from the large shock...

Hoisted from Other People's Archives from September 20, 2008: Financial Crisis Edition

Via Felix Salmon:

Screenshot 11 13 14 9 01 AM

"MS" is "Morgan Stanley". "TFG" is "Tim Geithner". "GS" is Goldman Sachs". "BHC" is "Bank Holding Company". "FYI" is "For Your Information". "PDM team" is "Public Debt Management team". "EVP" is "Executive Vice President"--the Federal Reserve Bank of New York has ten Executive Vice Presidents and one Principal Vice President.

Hoisted from the Archives: The Dynamics of Political Language: Partisan Asymmetries Weblogging

NewImageThe Dynamics of Political Language: Partisan Asymmetries Weblogging (Brad DeLong's Grasping Reality...): The Dynamics of Political Language: Partisan Asymmetries Weblogging Comment on Jacob Jensen, Ethan Kaplan, Suresh Naidu, and Laurence Wilse-Samson, 'The Dynamics of Political Language':

Let me pick up and expand on the line of discussion initiated by David Gergen's excellent comment.

I think this paper does an excellent job of documenting and helping us understand ideological polarization.

I think this paper does not do a good job of understanding partisan polarization.

Theodore Roosevelt in 1896 was a Republican attack dog, denouncing Democratic Presidential candidate William Jennings Bryan as a mere puppet of the Alien Communist Anarchist John Peter Altgeld. Bryan, Roosevelt said:

would be as clay in the hands of the potter under the astute control of the ambitious and unscrupulous Illinois communist... free coinage of silver... but a step towards the general socialism which is the fundamental doctrine of his political belief... He seeks to overturn the... essential policies which have controlled the government since its foundation...

That's language as extreme as any we hear today.

Continue reading "Hoisted from the Archives: The Dynamics of Political Language: Partisan Asymmetries Weblogging" »

Noted for Your Morning Procrastination for November 13, 2014

Screenshot 10 3 14 6 17 PMOver at Equitable Growth--The Equitablog


Must- and Shall-Reads:

And Over Here:

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Morning Must-Read: Leaked Geithner Files, as Quoted by Peter Spiegel

Timothy Geithner: Leaked Geithner Files, as Quoted by Peter Spiegel:

Geithner: [T]hings deteriorated again dramatically in the summer which ultimately led to him saying in August, these things I would never write, but he off-the-cuff – he was in London at a meeting with a bunch of hedge funds and bankers. He was troubled by how direct they were in Europe, because at that point all the hedge fund community thought that Europe was coming to an end. I remember him telling me [about] this afterwards, he was just, he was alarmed by that and decided to add to his remarks, and off-the-cuff basically made a bunch of statements like ‘we’ll do whatever it takes’. Ridiculous.

Interviewer: This was just impromptu?

Geithner: Totally impromptu.... I went to see Draghi and Draghi at that point, he had no plan. He had made this sort of naked statement of this stuff. But they stumbled into it...


Continue reading "Morning Must-Read: Leaked Geithner Files, as Quoted by Peter Spiegel" »

Afternoon Must-Read: James Pethokoukis: Time for the American Right to Declare Peace on the US Welfare State

James Pethokoukis: Time for the American right to declare peace on the US welfare state: "While the recovery’s glacial pace...

...both in terms of GDP and jobs, is unacceptable, the safety net’s performance is encouraging. The pain from the Great Recession, as bad it was, would have been far worse for middle- and low-income Americans if we were still in a sort of 1920s, Coolidgean world that many on the right these days seem to long for.... Now declaring peace isn’t the same thing as surrendering to the status quo.... But the welfare state needs thoughtful and thorough reform. And that doesn’t mean just slapping arbitrary spending caps on federal programs and block granting them back to the states.... Edward Glaeser would alter the EITC by making it a clear and transparent wage subsidy to all workers making less than $9 an hour.... There are lots of other center-right ideas out there: expanding the child tax credit, providing lump-sum bonus payments to unemployed workers who find a job, relocation vouchers to the long-term unemployed in high-unemployment areas, premium-support Medicare reform, expanding healthcare access through tax credits and well-funded high-risk pools.... The safety net isn’t going away, nor should it, but it will need to look a different tomorrow than it does today...

Afternoon Must-Read: Martin Wolf: An Unethical Bet in the Climate Casino

Martin Wolf: An Unethical Bet in the Climate Casino: "The Republican victory in the midterm elections was a triumph for its strategy of sustained vilification...

...of the president and obstruction of his policies. The result will have big implications for the future of the US. But it also has implications for the rest of humanity.... The US is also the world’s second-largest emitter of greenhouse gases and among the highest emitters per head. The most important consequence of this election may therefore be to bury what little hope remained of getting to grips with the risk of dangerous climate change.... Other countries will not--indeed cannot--compensate....

Nothing now suggests that humanity will move off the path towards ever greater emissions, with potentially huge and irreversible consequence. Why is that? If one ignores the charge that the science is a hoax, one sees two justifications and two reasons. One justification is that cost of action to mitigate emissions would be inordinate. It should be noted, however, that the costs indicated above would be less, possibly substantially less, than the costs to the high-income countries of the recent financial crises.... Yet, fascinatingly, the very same people who consider the costs of mitigation excessive wish to lighten financial regulation and so increase the risk of a repetition of the recent calamity. In addition, many of the opponents of such action are firm believers in the ability of economies to respond to market forces. So why do they not believe that markets would adjust to higher carbon prices?

So what then are the real reasons? The first is ideology. If one accepts the existence of large global environmental externalities, one must also accept that there exists an important role for policy.... The second and more important reason is indifference to the fate of future generations...

Afternoon Must-Read: Daniel Drezner: Best APEC Summit Ever

Daniel Drezner: Best APEC summit ever: "This year’s APEC summit...

...stuff got done. Seriously, a LOT of stuff got done. For the United States, the centerpiece was three bilateral deals reached with China.... New targets for carbon emissions reductions by the United States and a first-ever commitment by China to stop its emissions from growing by 2030.... Mr. Obama and Mr. Xi also agreed to a military accord designed to avert clashes between Chinese and American planes and warships... as well as an understanding to cut tariffs for technology products. Those latter two agreements would be big deals in their own right.... The climate change agreement is even bigger, however, as it lays the groundwork for a global deal to be negotiated in Paris in 2015...

Afternoon Must-Read: Ian Millhiser: A Non-Lawyer’s Guide To The Latest Supreme Court Case Attacking Obamacare

Ian Millhiser: A Non-Lawyer’s Guide To The Latest Supreme Court Case Attacking Obamacare: "The Supreme Court announced on Friday that it would hear a lawsuit...

...known as King v. Burwell, seeking to undermine the Affordable Care Act by cutting of subsidies intended to help millions of Americans pay for health insurance. Obamacare gives every state government a choice.... The government’s arguments are correct and the plaintiffs’ arguments are misleading.... Congress can define the phrase ‘Exchange established by the State’ to also include exchanges established by the federal government... and that is exactly what Congress did in the Affordable Care Act. Two provisions.... The first provides that ‘[a]n Exchange shall be a governmental agency or nonprofit entity that is established by a State.’

Read in isolation, this passage can be read in one of two ways. One way to read it is as a passage limiting who can set up exchanges. If an Exchange ‘shall be’ an ‘entity that is established by a State,’ that seems to mean that no other kind of ‘Exchange’ can exist. If the passage is read this way, federally run exchanges would be illegal, because they are not an ‘entity that is established by a State.’ The other... is that it is meant to define the term ‘Exchange.’ Under this second possible reading, the word ‘Exchange’ is defined so that any Exchange is deemed to be ‘established by a State,’ even if it was actually established by the federal government....

A third provision... provides that if a state elects not to set up its own exchange, ‘the Secretary shall (directly or through agreement with a not-for-profit entity) establish and operate such Exchange within the State and the Secretary shall take such actions as are necessary to implement such other requirements.’... This may seem as bizarre as using the word ‘dog’ when you really mean ‘cat,’ but Congress has the power to define words in counterintuitive ways, and courts are obligated to follow those definitions.... King v. Burwell, in other words, is a straightforward case of statutory interpretation, and the law is clearly on the government’s side.... The subtitle of the Affordable Care Act which contains the provision plaintiffs rely upon is titled ‘Affordable Coverage Choices for All Americans.’ It is not entitled, ‘Affordable Coverage Choices for Americans Who Live In States That Elect To Set Up Their Own Exchanges’...

Noted for Your Afternoon Procrastination for November 12, 2014

Screenshot 10 3 14 6 17 PMOver at Equitable Growth--The Equitablog


Must- and Shall-Reads:

And Over Here:

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Over at Equitable Growth: Our Current Macroeconomic Problems Here in the United States: Daily Focus

NewImageOver at Equitable Growth:

A puzzling piece from the very sharp Gillian Tett of the FT. My tentative conclusion was that she has fallen victim to the anthropologist's disease--getting so far into the heads and the mindsets of the culture she is observing that she loses track of the fact that there is a world outside. I have been holding this for a couple of days for two reasons:

  • I hope I will think of something smarter to say, and
  • As long as this is on the front burner and I am thinking about it, I can procrastinate on other, more important, more urgent tasks.

But enough is enough... READ MOAR

Continue reading "Over at Equitable Growth: Our Current Macroeconomic Problems Here in the United States: Daily Focus" »

Over at Equitable Growth: Twenty-Eight Theses Toward Understanding the Economic Past and Future of Latin America: Daily Focus

NewImageOver at Equitable Growth:

180 Doe Library :: U C Berkeley :: 12:00 noon - 1:15 pm :: Monday November 3, 2014

  1. Situate it in its context: relative to the Anglo American economy, the Iberian economies, the pre-conquest era, and--recently--the Pacific Rim as an example of an economy that works well...

  2. Before 1850, it was Latin America that was the prize: Mexico, Peru, the Silver Mountain, the Sugar Islands

  3. It was Europe's most prosperous, civilized, and technologically progressive peoples that grasped that opportunity--Portuguese mariners, Aragonese merchants, backed by Castilian crusader steel.

  4. Parliamentary liberties and freedom of speech considerably more advanced in the Castile of Isabella Trastamera and the Aragon of Ferdinand Trastamera than in the England of Henry Tudor.

  5. Indeed, the Empire of Liberty had a better advocate in Simon Bolivar than in George Washington and his successors.

  6. Simon Bolivar freed not just his slaves, but all the slaves of Venezuela.

  7. George Washington freed his slaves--but only after his death. Thomas Jefferson freed his--if they were his descendants. James Madison and James Monroe did not free theirs. John Adams and John Quincy Adams had none, and the latter fought all his life for the petitions for freedom of the slaves in the United States to be heard in Congress. But Andrew Jackson spent his life trying to buy more slaves. Martin Van Buren's slave Tom ran away--and then, when he was found, Van Buren sold him for $50 to the slave-catcher. William Henry Harrison tried to turn Indian into slave territory when he was governor. John Tyler, James K. Polk, and Zachary Taylor--not until we get to Millard Filmore do we get another American President even close to as free-soil as the Adams's were: "God knows that I detest slavery, but it is an existing evil, for which we are not responsible, and we must endure it, and give it such protection as is guaranteed by the Constitution, till we can get rid of it without destroying the last hope of free government in the world..."

  8. Indeed, look at U.S. politics in the first 20 years after the Constitutional Convention. Washington thought his own Secretary of State--Jefferson--was on the point of betraying the U.S, to France, and would gladly sacrifice liberty in America to advance the cause of the French Revolution. Jefferson was certain that John Adams was plotting to restore the British monarchy--and Adams would have, if the alternative was the coming to power of some American Robespierre--and that Alexander Hamilton was ready to become a military dictator. Hamilton was shot dead by Jefferson's running mate and vice president, Aaron Burr, whom Jefferson then tried for treason. Burr was not convicted solely because the Chief Justice, John Marshall, thought that if he set Burr free he might be able to cause Jefferson yet more trouble. A banana republic--the ideal type of a banana republic, in fact--save that they grew no bananas...

  9. Living standards, natural resources, population densities, and rates of demographic expansion give Latin America an edge over Anglo America through the first quarter of the nineteenth century, at least.

  10. The coming of the steam engine and then, a generation later, the telegraph ought to have brought the world together in terms of ironing out economic divergences.

  11. The technologies of the Industrial Revolution? The first generation of industrial technologies circa 1780 were potentially profitable only in Britain, with its uniquely high real wages and uniquely low price of coal at the factory gate. But by 1850 steam engines, spinning jennies, power looms, and railroads were potentially profitable everywhere.

  12. Yet the story of economic development is of a steadily-widening relative-income gap: a widening gap between Anglo America and the Southern Cone on the one hand and the rest of Latin America up until 1918 or so; then a widening gap between Anglo America and all of Latin America save Venezuela up to 1950 or so; and then relative stasis--average growth in Latin America at about the same pace as Anglo America, with on average neither widening nor closing of the relative gap (save Venezuela and, after 1958, the peculiar case of Cuba).

  13. By 1950, down to perhaps a quarter of Anglo American levels...

  14. No worse than rest of exNorth Atlantic world, but no better..:

  15. Since 1950, relative parity is normal...

  16. Theories of economic relative retardation and growth inevitably fall into two broad categories: "the rich are so good, and the poor are so bad" theories; and "the rich are so bad, and the poor are so good" theories.

  17. International trade and the international economy in general as engines of extraction theories: comparative-advantage traps, debt traps, vulnerability to cyclical fluctuations traps. Escape from the trap via neo-mercantilist protection, inward focus on resource accumulation, and import-substitution industrialization--turn the global economy into your servant rather than your master through clever technocratic policies of one sort or another. Raul Prebisch. (Early) Fernando Henrique Cardoso. Immanuel Wallerstein.

  18. Unorthodox Marxist class-structure-a-fetter-on-development theories: latifundia and neo-feudalism, but not just rural neofeudalism: the heyday of the PRI in Mexico as a "new class" bureaucracy variant of robber baronage and clientage, focused on extracting rents for political powerbroker and their clients from the most productive pressure points of the economy--natural resources, high-productivity export manufacturing, tourism. Hernando de Soto, The Other Path. Andrei Shleifer et al., "Legal Origins". Acemoglu, Johnson, and Robinson, "Comparative Origins". What makes these people unorthodox Marxists is that Karl Marx believed in progress, and so a "bourgeois revolution" as inevitable: superstructure could not indefinitely contain the pressures being generated by the economic changes of the base. In the end, all of the feudal and neo-feudal and aristocratic and caste and estate-based blockages to market capitalism--and thus prosperity--would be "steamed away". "All that is solid melts into air..." really does not do the German justice...

  19. One-unfortunate-accident-after-another theories: The long nineteenth century required either fluency in English or an exceptionally-favorable geographic environment--which the Southern Code had--in order to successfully adapt and adopt the technologies of the Industrial Revolution. In the twentieth century bets on globalization crapped out with the coming of the Great Depression, Imperial Preference, and the Smooth-Hawley Tariff. Bets on import-substitution then missed the biggest expansion of world trade ever in the Thirty Glorious Years. The switch to "neoliberal" policies then got squashed by the oil shocks, the coming of monetarism, and more recently the rise of China. Plus collateral damage from the Cold War--the Cold War in Asia gave Japan and the rest of the Pacific Rim preferential access to Anglo-America's markets, the Cold War in Europe was fought on terrain where the propertied right that had bet on Naziism kept its head down, but the Cold War in Latin America was different...

  20. But do we really have to choose? (17) can be evaded via clever technocrats pursuing state-led development--but, in Lant Pritchett's words, what can be worse than state-led development policies pursued by an anti-developmental state? The anti-developmental state that trapped Latin America in (17) and was the product of unfortunate early wealth concentration and frontier absence in history via (18) could have been surmounted except for the unfortunate accidents of (19)--which pre-dated the Cold War: it was FDR who said that while Somoza may be an SOB he is our SOB. And unfortunate accidents would not have had as large deleterious effects had the global economy of (17) been more genuinely open and stable.

  21. From this perspective, Latin American relative retardation--even in the Southern Cone--from 1850-1950 looks overdetermined: it would have been a miracle had it not taken place.

  22. Still, literacy, life expectancy, prosperity, etc. vastly better than in 1825--and, relatively, better than Africa, South Asia, non-coastal East Asia (for the moment?), and (perhaps?) Muscovy and its dependencies. Relative retardation is relative to the North Atlantic plus the Asian Pacific Rim only.

  23. Nobody intelligent would say that they know the relative weight to be assigned to these different overdetermining factors. Only a strong desire to obtain tenure and to do so by publishing articles that establish or refute particular narrow theories could induce anybody sane to claim to do so.

  24. Looking forward: But do the burdens of the past still lie on the future?

  25. Chance of making the global economy your servant rather than your master? Here the news is bad: over the past two decades neither the North Atlantic nor the Pacific Rim has been able to master the global economy. Instead, episodes of policy disorder and macroeconomic stress that those of us who focused on the North Atlantic used to see as confined to Latin America are now global.

  26. Class structure a fetter on development? As income inequality in the United States surpasses that of Brazil, and as rent-seeking in everything from Berkeley NIMBYism to the ability of a very narrow fossil fuel-complex interest group to block urgent action on global warming to the ability of the princes of Wall Street to extract their fortunes, it is not that Latin America has promise of attaining the kind of institutional successes seen in the post-WWII North Atlantic. Rather, the North Atlantic--plus Japan--appear to be copying institutional failure, or at least underperformance.

  27. Could we pray for good luck? It is hard to see what else we can do.

  28. God knows the North Atlantic broadly construed--extending to Tokyo and Moscow--has not been immune to history. But it was a history of grasping technological possibilities perhaps too well, and reactions to them. Now, perhaps, North Atlantic history is becoming more "normal"...

1590 words

Liveblogging World War II: November 12, 1944: Sink the Tirpitz!


This Day in History: Brits sink the battleship Tirpitz:

In January 1942, Hitler ordered the Germany navy to base the Tirpitz in Norway, in order to attack Soviet convoys transporting supplies from Iceland to the USSR.... Attacks had already been made against the Tirpitz. RAF raids were made against it in January 1942, but they failed to damage it. Another raid was made in March; dozens of RAF bombers sought out the Tirpitz, which was now reinforced with cruisers, pocket battleships, and destroyers. All of the British bombers, once again, missed their target.

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Stan Lee on the Insidiousness of Bigotry: Live from the Roasterie


Boing Boing: Stan Lee on the Insidiousness of Bigotry: "'The bigot is an unreasoning hater – one who hates blindly, fanatically, indiscriminately.'

From the tumblr of Marvel Comics editor Tom Breevort comes this edition of the classic column Stan's Soapbox, in which Stan Lee lets loose on the evils of bigotry. At this time when efforts at inclusion from the major publishers often face vocal pushback from those with less forward-thinking viewpoints, it's important to remember that Marvel is based on a foundation of progressivism, whether it's the X-Men's underlying metaphor for society's animosity towards The Other or Captain America's FDR-inspired brand of New Deal liberalism.

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Afternoon Must-Read: Tim Duy: Employment Report, Yellen Speech

Tim Duy: Employment Report, Yellen Speech: "I am wondering what the Fed will do...

...if the unemployment rate touches 5% and wage growth and inflation remain anemic? Not my baseline scenario, but I am wondering how patient they will be.... Yellen made some interesting remarks.... 'As employment, economic activity, and inflation rates return to normal, monetary policy will eventually need to normalize too, although the speed and timing of this normalization will likely differ across countries.... This normalization could lead to some heightened financial volatility.... The Federal Reserve will strive to clearly and transparently communicate its monetary policy strategy....' Take note of the specific emphasis on financial volatility. The message is that market participants should not expect the Fed to react to every twist and turn in equity markets. More to the point, they expect volatility.... They are signalling that market participants misread the likely path of the Federal Reserve when 2 year yields collapsed last month. That said, I am fairly concerned that the Fed is not taking the flattening of the yield curve seriously enough. I see that as a signal that they have less room for normalization than they might think they have.

Afternoon Reading: Simon Wren-Lewis: Getting the Germany Argument Right

Simon Wren-Lewis: Getting the Germany Argument Right: "As the Eurozone experiences a prolonged demand-deficient recession...

...and given Germany’s pivotal role in making that happen, it is important to get the argument against current German policy right.... There are two wrong directions... to argue that Germany needs to undertake fiscal expansion because it has more ‘fiscal space’... to argue that Germany needs to expand to help its Eurozone neighbours.... The first... legitimises the fiscal rules which are ultimately the source of the Eurozone’s current difficulties.... The second... tunes in with the popular sentiment in Germany that the country is yet again being asked to ‘bail out’ its Eurozone neighbours... suggests that the current German macroeconomic position is appropriate.... The uncomfortable truth for Germany, which both the previous arguments can miss, is that the appropriate macroeconomic position for Germany at the moment is a boom, with inflation running well above 2%.... From the perspective of the Eurozone as a whole, the efficient solution would be above 2% inflation in Germany, and below 2% inflation elsewhere.... If your starting point is what happened in Germany from 2000 to 2007, then current German arguments can look incredibly self-centred. They seem to say: we suffered a recession from 2000 to 2007 which led to a beggar my neighbour outcome, now you have to suffer a worse recession to put right the problem we created. But... I think the German position is more about ignorance than greed.... The ultimate problem is that what Germany sees at virtue is pre-Keynesian macroeconomic nonsense, nonsense that is doing other countries a great deal of harm...

The High-Tide of Berkeley CA NIMBYism Passed?: Live from La Farine

Zach Franklin: Op-ed: No on Measure R isn’t nearly enough: "I am thrilled that we voted 3 to 1 to defeat Measure R...

and that the building of new housing in downtown Berkeley will continue. Let’s build on this momentum, and get serious about addressing the massive housing shortage in our community that is hitting working families hard. Downtown is great, but we have to do an order of magnitude more to bring supply and demand into balance.

Only 18% of Alameda County families can afford to buy the average home. In San Francisco the average rent is a staggering 46% of the average household income. According to the National Low Income Housing Coalition, a family must earn $37.62/hour to afford the average 2 bedroom in San Francisco, and $30.35 to rent a 2 bedroom in the “affordable” East Bay. And the trend line is pointing way up.

For folks who want an overview of how we got in this situation, I highly recommend this article from back in April. It’s a long read and has a SF/tech industry perspective, but the dynamics discussed here apply to the whole Bay Area.

A few of the takeaways that I think are particularly pertinent to Berkeley:

Continue reading "The High-Tide of Berkeley CA NIMBYism Passed?: Live from La Farine" »

Over at Equitable Growth: On Jeff Madrick's “How Mainstream Economic Thinking Imperils America”: Focus

Over at Equitable Growth:


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Liveblogging World War I: November 11, 1914: Battle of Cocos

Wikipedia: Battle of Cocos:

During the night of 8 November, Emden sailed to Direction Island. At 06:00 on 9 November, the ship anchored in the Cocos lagoon, deployed a steam pinnace (to tow a 50-strong landing party in two boats, led by Emden '​s first officer, Hellmuth von Mücke, ashore), and transmitted the coded summons for Buresk. The ship was spotted by off-duty personnel at the cable and wireless station, and although the ship was initially suspected to be Minotaur, the station's medical officer observed that the foremost funnel was false, and informed superintendent Darcy Farrant that it may be Emden in the bay. Farrant ordered the telegraphist on duty (already alerted by the German's coded signal) to begin transmitting a distress call by wireless and cable. Emden was able to jam the wireless signal shortly after it began, while the cable distress call continued until an armed party burst into the transmission room.

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Hoisted from Comments: Kaleberg: Material Well-Being in America since 1979--Muncie, IN: Live from teh Roasterie

Hoisted from Comments:

Kaleberg: Comment on Material Well-Being in America since 1979: "If you want to compare living standards in the US over time...

...consider digging up some old copies of the Lynds' classics, Middletown, published in the 1920s, and Middletown Revisited, published in the 1930s. These help set a baseline of the old working class, business class and ruling class before and during the Great Depression in Muncie, Indiana. Then pick up a copy of Middletown Families, published in the 1970s, around the peak of the American middle class. Then take a look at Muncie, Indiana, or any similar town today. In the 1970s, economic progress was obvious. The working class and business class were hard to distinguish. Today, economic progress is much less obvious, and many things have moved backwards.

It would be interesting to see a study similar in spirit to the originals done today, in Muncie or elsewhere. (Granted, academic writing style has changes, so no modern study would be as readable and full of insight as the original studies.)"

Continue reading "Hoisted from Comments: Kaleberg: Material Well-Being in America since 1979--Muncie, IN: Live from teh Roasterie" »

Dex Ai le Maréchal: Tuesday Reading List Weblogging

Understanding the career of William the Marshal, Comes Pembrokensis jure uxoris Isobel de Clare:

Liveblogging World War II: November 10, 1944: The Explosion of the USS Mount Hood (Crew of 250)


: World War II Today: The Explosion of the USS Mount Hood:

At 0850, local time, on 10 November 1944, USS Argonne lay moored to a buoy in Berth 14, Seeadler Harbor. The USS Mount Hood (AE-11) (Ammunition Ship-11) was 1,100 yards away. USS Argonne’s captain, Commander T. H. Escott:

At the time of the explosion, I was standing outside my cabin… in conversation with the executive officer. By the time we had recovered our stance from the force of the explosion, and faced outboard, the area in the vicinity of Berth 380 (where USS Mount Hood had lay moored) was completely shrouded in a pall of dense black smoke. It was not possible to see anything worth reporting. A second or so thereafter, fragments of steel and shrapnel began falling on and around this ship.

Some 221 pieces of debris, ranging in size from one to 150 pounds, were recovered on board, totalling 1,300 pounds. Several other pieces caromed off USS Argonne’s port side into the water alongside, and others landed on YF-681 (Freight Lighter-681) and YO-77 (Oil Barge -77), the latter alongside delivering fuel oil at the time.

USS Mindanao (ARG-3) (Internal Combustion Engine Repair Ship-3), suffered heavily, moored in a berth between the disintegrating ammunition ship and USS Argonne. Riddled with shrapnel, USS Mindanao suffered 23 killed and 174 wounded in the explosion. USS Argonne suffered casualties, too, as well as the destruction of a 12-inch searchlight, five transmitting antennas broken away, and steam, fresh-water, and salt-water lines ruptured… as well as extensive damage from concussion.

Monday Smackdown: Back to David Graeber's "Debt: the First 5000 Mistakes"

In the absence of even acceptable-quality DeLong Smackdowns this past week, what to do? Back to David Graeber! What do we have on the menu today? A continuation of our death march through chapter 11 of David Graeber's Debt, of course!

For the backstory...

First we have:

Kindle Cloud Reader

Well, no:

  1. Europe had a greater share of gold and silver mines than it had of population. That gave Europe a high price level, and so the things that Asia might have bought from Europe seemed to Asia to be too expensive. Europe produced little that the Middle East wanted to buy at the prevailing price level--but Graeber never bothered to acquire the literacy in economics he would have needed. So he does not grasp that...

  2. As of 1500, the Portuguese and Spanish (and shortly thereafter the Dutch, and eventually the English and the French) had ships were better. A lot better. They could sail further in worse weather without sinking. Invention and technological change mattered. That mattered a lot.

  3. Mediterranean naval wars were fought by Western Europeans, Egyptians with their ports on the Red Sea, and Turks--who by this time had ports on the Persian Gulf. What the Western Europeans learned, the Turks, Egyptians, etc. learned as well, with the Ottoman Muslims being rather better at Mediterranean oared galley-fighting up until the 1570s.

  4. "The principle that the seas should be a zone of peaceful trade"? "Unarmed Indian Ocean merchants"? Why does Graeber say things like this that are simply not true?

This is depressing.


Continue reading "Monday Smackdown: Back to David Graeber's "Debt: the First 5000 Mistakes"" »

Afternoon Must-Read: Steven Johnson: We Are Living the Dream

Steven Johnson (2012): We're living the dream; we just don't realize it: "Over the past two decades...

...what have the U.S. trends been for the following important measures of social health: high school dropout rates, college enrollment, juvenile crime, drunken driving, traffic deaths, infant mortality, life expectancy, per capita gasoline consumption, workplace injuries, air pollution, divorce, male-female wage equality, charitable giving, voter turnout, per capita GDP and teen pregnancy? The answer for all of them is the same: The trend is positive.... The quality-of-life and civic health trends in the developing world are even more dramatic.... We are much more likely to hear about these negative trends than the positive ones for two primary reasons. First... the positive trends in our social health are coming from a... complex network of forces.... The public sector doesn't have billions of dollars to spend on marketing campaigns to trumpet its successes.... We underestimate the amount of steady progress that continues around us, and we misunderstand where that progress comes from. We should celebrate these stories of progress, not so we can rest on our laurels but instead so we can inspire the next generation to build on that success.

Noted for Your Morning Procrastination for November 9, 2014

Screenshot 10 3 14 6 17 PMOver at Equitable Growth--The Equitablog


Must- and Shall-Reads:

And Over Here:

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Grandmothers Raising Grandchildren of Ahero, Kenya Annual Fundraiser

Bie Bostrom writes:

Announcement for Newman Hall Bulletin regarding sale of GrG baskets:

Grandmothers Raising Grandchildren of Ahero, Kenya will once again selling baskets and offer the new published book: 8Sketches of Joy--Drawings by the Children of Ahero Kenya* after each liturgy the weekend of November 8-9. GrG is a small not for profit organization founded by returned Peace Corps volunteers to help the grandmothers and great grandmothers of Ahero Kenya raise AIDS-orphaned grandchildren and great grandchildren. Come visit us in the lobby to see what we have done in the past year with the assistance of your generosity...

Ann Marie and I will match contributions made to GRG Ahero this weekend, up to $40 per household, up to a total of $5000.

As I said last year:

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Balkinization: Halbig, King, and the Limits of Reasonable Legal Disagreement

Neil Siegel: Halbig, King, and the Limits of Reasonable Legal Disagreement: In the debates over the constitutionality of the Affordable Care Act...

...I did not dismiss the arguments of those who disagreed with me. There often has been reasonable, irreconcilable disagreement over the meaning of the Constitution.... Halbig and King... are different. I can accept... that the relevant provisions of the ACA are ambiguous. What I cannot accept as reasonable or responsible... is the argument... that the ACA Congress clearly and unambiguously accomplished what no Member of Congress, no one in the Congressional Budget Office, none of the four dissenting Justices in NFIB v. Sebelius, and no state official realized that Congress had accomplished when it passed the ACA: self-destructively limit the tax subsidies that make health insurance affordable for millions of Americans to those who have the good fortune of happening to reside in states that set up their own health insurance exchanges....

Some may conclude that I am not as tolerant of reasonable legal disagreement as I think I am or used to be. Others may conclude that I care too much about the draconian financial consequences for millions of Americans and insurance companies if this litigation succeeds. I have considered these possibilities, and I have rejected them. The plaintiffs’ case is so weak and transparently political that it is dismaying to see it be taken seriously.

Aaron Swartz Day: Live from the Internet Archive

Aaron Swartz Day:

The Internet Archive is hosting an Aaron Swartz Day Celebration on what would have been Aaron’s 28th birthday: November 8, 2014, from 6-10:30 pm. Although we are looking ahead, rather than dwelling on the past, this year’s theme is ‘Setting the record straight.’ Now that we have brought people together and shared information with each other, the smoke has cleared a bit, and we can clearly explain to the world exactly what Aaron actually did and did not do.

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Weekend Reading: Sarah Varney: How Obamacare Went South In Mississippi

Sarah Varney: How Obamacare Went South In Mississippi: "Mississippians are all too familiar with the dirge of bleak statistics...

...During my travels, I often heard, ‘We know what the rest of the country thinks of us.’ It would become a point of pride, then, that in 2007, Mississippi was leading a race it wanted to win. That fall, a full year before Obama’s election to the White House put national health care reform on the agenda, the governor, Haley Barbour, called up the newly elected state insurance commissioner Mike Chaney, a Vietnam veteran from Vicksburg. The two Republicans had been friends since college; Chaney had been the rush chairman for Sigma Alpha Epsilon at Mississippi State University when Barbour pledged the fraternity. Now, the governor had an assignment for his old friend.

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Liveblogging World War I: November 8, 1914: Worcester News

: Worcester Daily Diary, November 8, 1914:

LOCAL CASUALTIES: 4: Privates John Thomas Boyle & Alfred Day, Company Sergeant Major William Williams - Second Battalion. Private Samuel Marsland - Third Battalion. ROLLING CASUALTY COUNT: 475

Second Battalion relieved the Connaught Rangers in the trenches North East of Polygone Wood.  Shrapnel fire during the relief. Battalion placed under the orders of  the GOC Sixth Infantry Brigade.  Few casualties.

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The Cost of Resistance to the ACA in Mississippi: Live from the Roasterie

As best as I can estimate, ObamaCare's Medicaid expansion right now has a benefit-cost ratio of 4-to-1. And, of course, its benefit-cost ratio for the power brokers of Missouri is ∞-to-1: they are not paying for it.

"Awesome in its evilness" was how Jon Gruber described ObamaCare nullification. How can anybody sane not agree?

Bill Gardner and Austin Frakt: The Cost of resistance to the ACA in Mississippi: "For conservatives: Many opponents believed both that the implementation of the ACA...

...would fail and that it would result in worse rather than better health care. But after a rough start, the ACA is largely meeting its implementation goals. It is significantly reducing the number of the uninsured. And whereas health outcomes are improving in Massachusetts, the first adopter of ACA-like reform, Varney’s article suggests that in Mississippi the health care system is showing signs of collapse. It’s hard to look at Mississippi and conclude conservatives were right, for the ACA was hardly given a chance in that state, as Varney details.... Part of what has happened to Mississippi is likely the result of specific policy choices by elected officials. But a lot of it was baked into a terrible history. Nevertheless, Governor Kasich’s question is, we believe, on point:

‘The opposition to [Obamacare] was really either political or ideological,’ Ohio Gov. John Kasich (R) told the Associated Press earlier this month. ‘I don’t think that holds water against real flesh and blood, and real improvements in people’s lives.’

Principles matter, but how do you weigh principles that dictate opposition to access to basic health insurance against the costs borne by Mississippi’s rural poor?...

Afternoon Must-Read: Nicholas Bagley: The Supreme Court Will Hear King. That’s Bad News for the ACA

Let me say that I disagree with the very sharp Nicholas Bagley: The decision of four Supreme Court justices to hear an appeal of King is not bad news for ObamaCare--it is bad news for Republican state-level politicians and for the people of nineteen states.

In the other 31 states, Obamacare is doing fine and is likely to keep doing fine in spite of whatever the Supreme Court rules in King. In those 31 states, they either have state exchanges that are unaffected by King or will quickly add a state wrapper to their federal exchange: no state politicians of any party are going to accept ObamaCare money to cover their Medicaid poor and deny exchange subsidies to their middle class.

But the politicians and Obamacare are now in much bigger trouble in the nineteen states with one-third of the population: Alabama, Alaska, Florida, Georgia, Kansas, Louisiana, Maine, Mississippi, Missouri, Montana, Nebraska, North Carolina, Oklahoma, South Carolina, South Dakota, Tennessee, Texas, Wisconsin, Wyoming. If King brings down the hammer, will the politicians of the nineteen nullification states throw away the $40 billion in exchange subsidies to their middle-class citizens that are currently anticipated for 2016? That seems a very heavy political lift.

And I very much doubt that the King appellants will be able to round up their fifth vote: the Supreme Court would have to overrule long lines of statutory interpretation and break a great deal of administrative law in pieces to get there.

They might: this is a very partisan Supreme Court that follows the election returns.

But I think Roberts wishes to have a place in history different from that of MacReynolds.

Nicholas Bagley: : The Supreme Court will hear King. That’s bad news for the ACA: "In a significant setback for the Obama administration...

the Supreme Court just agreed to review King v. Burwell, the Fourth Circuit’s decision upholding an IRS rule extending tax credits to federally established exchanges.... At least four justices... voted to take the case... The justices’ votes on whether to grant the case are decent proxies for how they’ll decide the case. The justices who agree with King wouldn’t vote to grant.... The justices who disagree with King... there are at least four such justices.... That means that either Chief Justice Roberts or Justice Kennedy will again hold the key vote. None of this bodes well for the government. That’s not to say the government can’t win. It might. As I’ve said many times, the statutory arguments cut in its favor. But the Court’s decision to grant King substantially increases the odds that the government will lose this case. The states that refused to set up their own exchange need to start thinking—-now—-about what to do if the Court releases a decision in June 2015 withdrawing tax credits from their citizens.

Continue reading "Afternoon Must-Read: Nicholas Bagley: The Supreme Court Will Hear King. That’s Bad News for the ACA" »

Afternoon Must-Read: Ricardo Hausmann: The Economics of Inclusion

Ricardo Hausmann: The Economics of Inclusion: "I believe that both inequality and slow growth...

...often result from a particular form of exclusion....Thanks to more than two centuries of sustained growth, average per capita income in the OECD countries is just under $40,000--3.3, 11.3, and 17.7 times more than in Latin America, South Asia, and Sub-Saharan Africa, respectively. Sustained growth has obviously not included the majority of humanity.... GDP per worker in... Nuevo León in Mexico is eight times that of Guerrero.... Why would capitalists extract so little value from workers if they could get so much more out of them?...To form part of the modern economy, firms and households need access to networks.... But connecting to these networks involves fixed costs....It is the fixed costs that limit the diffusion of the networks. So, a strategy for inclusive growth has to focus on ways of either lowering or paying for the fixed costs that connect people to networks. Technology can help.... But in other areas, the issue involves public policy.... A strategy for inclusive growth must empower people by including them in the networks that make them productive. Inclusiveness should not be seen as a restriction on growth to make it morally palatable. Viewed properly, inclusiveness is actually a strategy that enhances growth.

Lunchtime Must-Read: Ryan Avent: Forget the 1%. It's the Top 0.01% Who Are Really Getting Ahead in America

Ryan Avent: Forget the 1%: "It is the 0.01% who are really getting ahead in America...

...Saez and... Zucman... uses a richer variety of sources.... The share of wealth held by the bottom 90% is an effective measure of 'middle class' wealth.... In the late 1920s the bottom 90% held just 16% of America’s wealth—-considerably less than that held by the top 0.1%, which controlled a quarter of total wealth just before the crash of 1929.... By the early 1980s the share of household wealth held by the middle class rose to 36%—roughly four times the share controlled by the top 0.1%.... From the early 1980s... these trends have reversed.... The 16,000 families making up the richest 0.01%, with an average net worth of $371m, now control 11.2% of total wealth—-back to the 1916 share, which is the highest on record.... The top 0.1%... hold 22% of America’s wealth.... The outsize fortunes of the few would not be too worrying were they largely the product of entrepreneurial activity.... The club of young rich includes not only Mark Zuckerbergs... but also Paris Hiltons.... The share of labour income earned by the top 0.1% appears to have peaked... held in the form of shares... levelled off... held in bonds has risen... hint[ing] that America’s biggest fortunes may be starting to have less to do with building businesses...

The most interesting--and the most speculative--parts of Thomas Piketty's grand argument in Capital in the Twenty-First Century are, I think, implicit: underlying claims that:

  1. Most wealth will be deployed, at least at the relevant margin, not in productive entrepreneurial or labor-complementary activities but in at best parasitic rent-seeking activities.

  2. Democratic politics will not save us--that only exceptional circumstances in the twentieth century allowed for a democratic politics of progressive social insurance to level society and so promote social welfare in the face of the Gramscian hegemony of the bourgeoisie.

Both of these seem to me to be quite plausible, and perhaps true. But I think Piketty would have been very well-advised to have spent a lot more time backing them up in his book than he in fact did...

Noted for Your Lunchtime Procrastination for November 7, 2014

Screenshot 10 3 14 6 17 PMOver at Equitable Growth--The Equitablog


Must- and Shall-Reads:

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Hoisted from the Archives from Four Years Ago: What is Happening with Bond Prices?

What is Happening with Bond Prices?: August 18, 2010:

It is very hard to have a bubble in bonds because there is a date certain at which the principal is repaid. In year nine you cannot delude yourself into thinking that somebody will pay more than face value in year ten. And so in eight it is very hard to delude yourself into thinking that somebody in year nine will delude themselves into thinking that somebody will pay more than face value in year ten.

Nevertheless, Jeremy Siegel and Jeremy Schwartz think that we are in a bond bubble:

Continue reading "Hoisted from the Archives from Four Years Ago: What is Happening with Bond Prices?" »

Over at Equitable Growth: A Decent Monthly Establishment Employment Report This Morning: +214K Jobs: Daily Focus

Over at Equitable Growth:

Employment Situation Summary Table B Establishment data seasonally adjusted

But more important is to look at the Household Report trends: at the 59.2% for the adult employment-to-population ratio:

Employment Situation Summary Table A Household data seasonally adjusted

That means that the past year is the first year--the very first year--of the so-called "recovery" in which the employment-to-population ratio has not flatlined: READ MOAR

Continue reading "Over at Equitable Growth: A Decent Monthly Establishment Employment Report This Morning: +214K Jobs: Daily Focus" »

Liveblogging World War II: November 7, 1944: Franklin D. Roosevelt: Remarks to the Torchlight Paraders on Election Night. Hyde Park, New York.

FDR Wins Fourth Presidential Term:

Franklin D. Roosevelt: Remarks to the Torchlight Paraders on Election Night. Hyde Park, New York: "

I see some youngsters up a tree which reminds me of earlier days, when I wanted to get away from the discipline of the family, and I climbed that very tree up where that highest youngster is now, and I disappeared and I couldn't be found. And they got everybody—I think they got the fire department up trying to find me. And I realized that I was causing a good deal of commotion, so I said 'Yoo-hoo,' or something like that, and I came down.

Continue reading "Liveblogging World War II: November 7, 1944: Franklin D. Roosevelt: Remarks to the Torchlight Paraders on Election Night. Hyde Park, New York." »

Evening Must-Read: Hal Varian: Big Data

Hal Varian: Big Data: "In this period of ‘big data’... seems strange to focus on sampling uncertainty, which tends to be small with large datasets, while completely ignoring model uncertainty, which may be quite large. One way to address this is to be explicit about examining how parameter estimates vary with respect to choices of control variables and instruments.

In my view, we should accept that people are going to find a way to add the variables that account for the most in the data we have. Thus information-criterion penalties for adding variables need to be turned up to 11...

Afternoon Must-Read: Ben Bernanke: "Very Difficult" for ECB to Do QE

Jeff Cox: Ben Bernanke: "Very Difficult" for ECB to Do QE: "'The barriers to doing it...

...are not really economic. The legal and political barriers being thrown up are going to make it very difficult to do that.' Bernanke also fired back at critics of the Fed's own easing programs, accusing them of 'bad economics' for saying that QE... would lead to inflation.... 'There never was any risk of inflation. The economy was in great slack. If anything we were worried about deflation. Four years later there's not a sign of inflation. The dollar is strengthening. They're saying, "Wait another five years, it's going to happen". It's not going to happen.'"

Afternoon Must-Read: Matt O'Brien: The Latest Dumb Inflation Argument from a Billionaire

Matt O'Brien: Here’s the latest dumb argument from a billionaire that will hurt the economy: "Hedge fund billionaire Paul Singer....

...Never underestimate the ingenuity of inflation truthers.... His latest investor letter recycles all these ideas, inveighing against the Fed's 'fake prices,' 'fake money,' and 'fake jobs,' before zeroing in on where inflation is really showing up--his wallet: 'Check out London, Manhattan, Aspen and East Hampton real estate prices, as well as high-end art prices, to see what the leading edge of hyperinflation could look like.' That's right: Paul Singer thinks Weimar-style inflation might be coming because he has to pay more for his posh vacation homes and art pieces.... The Fed, you see, isn't worried about the Billionaire Price Index. It's worried about inflation on goods and services we all face.... Just because the super-rich are bidding up the prices of houses in the Hamptons doesn't mean that middle-class people, whose wages are flat, are going to bid up the price of, well, anything.... If this is the best the inflation truthers can do, they should probably follow Mark Twain's advice and keep their mouths closed...