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February 2015

Live from the Hotel Giraffe Lobby: Origins of Obama Derangement Syndrome

I remember how back in 2007 and 2008 I would say that one reason Barack Obama might be a better candidate than Hillary Rodham Clinton was simply that America was now less racist than it was sexist--that the conservative quarter of the country would not be motivated to throw the filth at Barack Obama that they had and that they would throw at Hillary Rodham Clinton.

I was wrong.

Ezra Klein muses on the racist origins of Obama Derangement Syndrome:

Continue reading "Live from the Hotel Giraffe Lobby: Origins of Obama Derangement Syndrome" »


Morning Must Look-At: Nick Bunker: The Case for Inaction on Interest Rates

The case for inaction on interest rates Washington Center for Equitable Growth

Nick Bunker: The Case for Inaction on Interest Rates: "Equitable Growth’s Ben Zipperer...

[argued] average wage growth should be at least 3.5 percent a year.... Wen does wage growth cross above this threshold?... Not until the employment rate for workers ages 25 to 54 crosses 79 percent.... As of January 2015, this prime-age employment to population ratio was 77.2 percent. The ratio has been on the rise, but it still has a ways to go before it hits 79 percent. Growing at its current rate, that rate won’t hit 79 percent until 2017 at the earliest.... With inflation below its target, worries about stalled or slowing economic growth abroad, a strengthening dollar, and an incomplete labor market recovery, the Federal Open Markets Committee should consider the consequences of raising interest rates too soon. Perhaps the best move is to do nothing and simply wait...

http://equitablegrowth.org/news/case-inaction-interest-rates/


Liveblogging World War II: February 23, 1945: The Mt. Suribachi Flag

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Wikipedia: Raising the Flag on Iwo Jima:

Raising the Flag on Iwo Jima is a historic photograph taken on February 23, 1945, by Joe Rosenthal. It depicts five United States Marines and a United States Navy corpsman raising a U.S. flag atop Mount Suribachi, during the Battle of Iwo Jima in World War II.

The photograph was extremely popular, being reprinted in thousands of publications. Later, it became the only photograph to win the Pulitzer Prize for Photography in the same year as its publication, and came to be regarded in the United States as one of the most significant and recognizable images of the war, and possibly the most reproduced photograph of all time.

Three Marines depicted in the photograph, Harlon Block, Franklin Sousley, and Michael Strank, were killed in action over the next few days. The three surviving flag-raisers were Marines Rene Gagnon, Ira Hayes, and sailor John Bradley. The latter three became celebrities after their identifications in the photograph. The image was later used by Felix de Weldon to sculpt the Marine Corps War Memorial which was dedicated in 1954 to all Marines who died for their country past and present, and is located adjacent to Arlington National Cemetery just outside Washington, D.C. The original mold is located on the Marine Military Academy grounds, a private college preparatory academy located in Harlingen, Texas.


Noted for Your Evening Procrastination for February 22, 2015

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

Plus:

Must- and Shall-Reads:

And Over Here:

Continue reading "Noted for Your Evening Procrastination for February 22, 2015" »


Evening Must-Read: Jared Bernstein: A Few Quick Fed Points

Jared Bernstein: A Few Quick Fed Points: "1) The sharply stronger dollar...

...pushes against Fed tightening.... 2) In their just released minutes, the Fed board clearly identified with the asymmetric risk.... 3) Some recent reports suggest a tension among FOMC members as to whether they should be data driven or just basically assume that inflationary pressures lurk around the next corner.... 4) Remember, nobody knows what the “natural rate of unemployment” is.... There you have four factors pointing towards holding rates steady at zero for the near term. Which factors point the other way? There’s the tightening job market, for sure, but see #4...

http://jaredbernsteinblog.com/a-few-quick-fed-points/


Afternoon Must-Read: Yanis Varoufakis: Confessions of an Erratic Marxist in the Midst of a Repugnant European Crisis

Yanis Varoufakis: Confessions of an Erratic Marxist in the Midst of a Repugnant European Crisis: "Europe is experiencing a slump that differs substantially...

... from a ‘normal’ capitalist recession, of the type that is overcome through a wage squeeze which helps restore profitability. This secular, long-term slide toward asymmetrical depression and monetary disintegration puts radicals in a terrible dilemma: Should we use this once-in-a-century capitalist crisis as an opportunity to campaign for the dismantling of the European Union, given the latter’s enthusiastic acquiescence to the neoliberal policies and creed? Or should we accept that the Left is not ready for radical change and campaign instead for stabilising European capitalism? This paper argues that, however unappetising the latter proposition may sound in the ears of the radical thinker, it is the Left’s historical duty, at this particular juncture, to stabilise capitalism; to save European capitalism from itself and from the inane handlers of the Eurozone’s inevitable crisis. Drawing on personal experiences and his own intellectual journey, the author explains why Marx must remain central to our analysis of capitalism but also why we should remain ‘erratic’ in our Marxism. Furthermore, the paper explains why a Marxist analysis of both European capitalism and of the Left’s current condition compels us to work towards a broad coalition, even with right-wingers, the purpose of which ought to be the resolution of the Eurozone crisis and the stabilisation of the European Union. In short, the paper suggests that radicals should, in the context of Europe’s unfolding calamity, work toward minimising the human toil, reinforcing Europe’s public institutions and, therefore, buying time and space in which to develop a genuinely humanist alternative.

http://yanisvaroufakis.eu/2013/12/10/confessions-of-an-erratic-marxist-in-the-midst-of-a-repugnant-european-crisis/


David Graeber Monday Smackdown: Juan Ginés de Sepúlveda Edition

I assure you that I have found some high-quality DeLong smackdowns on the internet, and they are in the pipeline.

Nevertheless, this past week I managed to man-up and read another page of chapter 11 of David Graeber's Debt: The First 5000 Mistakes (The backstory).

I am hoping that there will come a day on which the first new kindle screen from Graeber I read does not have egregious errors of fact or analysis on it.

I pray that there may come such a day.

But today is not that day:

Kindle Cloud Reader

There is only one single error on this kindle screen.

But it is rather a big one...

Continue reading "David Graeber Monday Smackdown: Juan Ginés de Sepúlveda Edition" »


Daily Economic History: Peter Temin's "Two Views of the Industrial Revolution"

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Peter Temin's "Two Views of the Industrial Revolution" is a very good paper.

Crafts, Harley, and by now many others--most recently the scarily-smart Robert Allen--have argued that technological change during the British Industrial Revolution was largely confined to the leading sectors. They are opposed by Ashton, Landes, and many, many others--most recently the truly-scarily-smart Joel Mokyr--arguing that the British Industrial Revolution was a broad-based sea-change in economy and society as a whole. The stakes are rather large.

Continue reading "Daily Economic History: Peter Temin's "Two Views of the Industrial Revolution"" »


Evening Must-Read: Simon Wren-Lewis: Greece: A Simple Macroeconomic Guide

What is one supposed to do when confronted by arguments that seem to me--and to everybody else who has been right about the evolution of the North Atlantic economy since 2008--so unprofessional as this piece in Vox? Simon Wren-Lewis begins the needed labor of Hercules here:

Simon Wren-Lewis: Greece: A Simple Macroeconomic Guide: "In 2010 periphery Eurozone countries...

...[had] government deficits [that] were too high, and... economies [that] had become uncompetitive.... The deficits needed to be reduced. Under flexible exchange rates this could have been done with relatively little cost.... In a monetary union, this cannot happen, so a period of unemployment is inevitable to restore competitiveness. The key macroeconomic question is how quick adjustment should be.... Slow is much more efficient. So it makes sense for some institution like the IMF to provide loans to the government to allow it to eliminate deficits gradually.... When it came to Greece, the Eurozone made three key mistakes. 1) Too much austerity too quickly, violating the logic.... 2) There was only partial (and delayed) default on Greek government debt.... 3) Adjustment... required in an environment of Eurozone recession and deflation, caused by needless fiscal austerity in the non-periphery countries.... This Vox piece [by Lars P Feld, Christoph M Schmidt, Isabel Schnabel, Benjamin Weigert, Volker Wieland]... displays so much that is wrong with macro arguments coming out of the Eurozone at the moment... ignores the basic macro... denial of the importance of wage and price rigidities... the speed of adjustment matters, and... the article makes no attempt to address this central issue... a complete collapse in GDP, where over half of young people are unemployed... [was not] just par for the course, [but] rather than a function of the amount of austerity imposed... lenders are demanding Greece run significant primary surpluses now, and they need not make this demand. I could go on and on..."

http://mainlymacro.blogspot.in/2015/02/greece-simple-macroeconomic-guide.html


Liveblogging World War II: February 21, 1945: USS Saratoga (CV-3) Off Iwo Jima

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USS Saratoga (CV-3) Special Feature:

On 21 February, Saratoga was detached with an escort of three destroyers [USS McGowan (DD-678), USS McNair (DD-679) and USS Melvin (DD-680)] to join the amphibious forces and carry out night patrols over Iwo Jima and night heckler missions over nearby Chi-chi Jima. However, as she approached her operating area at 1700 on the 21st, an air attack developed, and taking advantage of low cloud cover and Saratoga's insufficient escort, six Japanese planes scored five hits on the carrier in three minutes.

Saratoga's flight deck forward was wrecked, her starboard side was holed twice and large fires were started in her hangar deck, while she lost 123 of her crew dead or missing. Another attack at 1900 scored an additional bomb hit. By 2015, the fires were under control and the carrier was able to recover aircraft, but she was ordered to Eniwetok and then to the west coast for repairs, and arrived at Bremerton on 16 March.


Weekend Reading: Mike Konczal: Everyone Should Take It Easy on the Robot Stuff for a While

Mike Konczal: Everyone Should Take It Easy on the Robot Stuff for a While There's been a small, but influential...

...hysteria surrounding the idea is that a huge wave of automation, technology and skills have lead to a huge structural change in the economy since 2010. The implicit argument here is that robots and machines have both made traditional demand-side policies irrelevant or naïve, and been a major driver of wage stagnation and inequality. Though not the most pernicious story that gained prominence as the recovery remained sluggish in 2010 to 2011, it gained important foothold among elite discussion.

Continue reading "Weekend Reading: Mike Konczal: Everyone Should Take It Easy on the Robot Stuff for a While" »


Weekend Reading: Peter Temin (1997): Two Views of the Industrial Revolution

Peter Temin (1997): Two Views of the British Industrial Revolution:1

ABSTRACT: There are two views of the British Industrial Revolution in the literature today. The more traditional description sees the Industrial Revolution as a broad change in the British economy and society. This broad view of the Industrial Revolution has been challenged by Crafts and Harley who see the Industrial Revolution as the result of technical change in only a few industries. This article presents a test of these views using the Ricardian model of international trade with many goods. British trade data are used to implement the test and discriminate between the two views of the Industrial Revolution.

Continue reading "Weekend Reading: Peter Temin (1997): Two Views of the Industrial Revolution" »


Over at Equitable Growth: Talking Points on "America's Imminent Budget Crisis": Focus

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Over at Equitable Growth:

Talking Points

  • Right now, the financial markets are telling us that for the next 20 years at least they expect not a surplus but rather a shortage of federal debt.

  • The interest rates at which investors are willing to hold federal debt now and expect to hold federal debt in the future tell us that it is an extraordinary valuable asset

  • Those interest rates tell us that investors at least think the world economy would be better off with more federal debt than with less. READ MOAR

Continue reading "Over at Equitable Growth: Talking Points on "America's Imminent Budget Crisis": Focus" »


Noted for Your Afternoon Procrastination for February 20, 2015

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

Plus:

Must- and Shall-Reads:

And Over Here:

Continue reading "Noted for Your Afternoon Procrastination for February 20, 2015" »


Over at Equitable Growth: Mindless and Mindful Austerity: Focus

Graph 30 Year Treasury Constant Maturity Rate FRED St Louis Fed

Over at Equitable Growth: I see that the femina spectabilis Diane Lim is a very unhappy camper:

Diane Lim: Are We About to Let All of the Baby Boomers Off the Hook? (Please, No.): "‘Deficit reduction’ and ‘fiscal responsibility’ are ‘out’...

...‘Critical investments’ and ‘shared prosperity’ are ‘in.’  Deficits are down to an economically sustainable range.... Our policymakers are no doubt relieved to take a break from having to talk about the hard stuff (spending cuts and tax increases) and getting to focus on the nice-sounding stuff (spending increases and tax cuts).... Dismissing fiscal responsibility as a socially irresponsible idea is irresponsible.... READ MOAR

Continue reading "Over at Equitable Growth: Mindless and Mindful Austerity: Focus" »


Live from the Roasterie: Scott Lemieux on the Structure of the King Lawyers' Argument

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We can no longer say "the structure of the King plaintiffs argument..." for it is not clear that there are any King vs. Burwell plaintiffs, or that if there are any King plaintiffs they agree with any of the arguments that the lawyers from Jones, Day are making on their behalf. This is a huge black eye for Jones, Day, and is certainly making everyone reconsider what they thought they knew about the quality of their work. But I digress...

Scott Lemieux warms up by observing:

Scott Lemieux: Cato Comedy Classics: "So what’s the funniest thing about this?

  • The fact that former Cato interns wanted no part of the troofer lawsuit;
  • The title implying that Politico hacked into Cannon’s email, rather than the massively more likely possibility that the email was provided by one of the recipients, or *Cannon complaining about the Cato institute being described as ‘right-leaning.’

Before taking the stage for the main event:

Continue reading "Live from the Roasterie: Scott Lemieux on the Structure of the King Lawyers' Argument" »


Over at Value Added: Nick Bunker: What to Worry About on the Supply Side

Over at Value Added:

Nick Bunker: What to Worry About on the Supply Side: "The... crisis in 2008 and 2009 caused a massive decline in demand.... Perhaps it is [now] time to consider the potential problems on the supply side of the U.S. economy.... Greg Ip does just that...

...issues with both the growth rate of productivity and the supply of labor... John Fernald... on the lack of new advancements in information technology... Stephen G. Cecchetti... and Enisse Kharroubi... [on the] over-bloated financial sector... Equitable Growth’s Robert Lynch... [on] educational inequality.... Supply and demand aren’t... easily untangled.... With the lack of acceleration of wage growth, the labor market appears to still have some slack.... Short-term considerations can help alleviate our long-run problems.... We can’t forget about the supply-side problems that lurk further downstream. Our future prosperity depends on it.


Afternoon Must-Read: Paul Krugman: Chastened Exceptionalism

Paul Krugman: Chastened Exceptionalism: "Jamelle Bouie has a very good article responding to Rudy Giulani’s attack on Obama’s patriotism...

...There are many Americans who love their country in pretty much the way the president does... special, often an enormous force for good in the world, but also fallible.... You don’t have to be black to see things that way.... There’s the guy who described one of our foreign wars as ‘the most unjust ever waged by a stronger against a weaker nation’... Ulysses S. Grant... [on] the Mexican-American War.... We are becoming... more sophisticated... people do understand that... [those] shouting ‘USA! USA!’... are often less patriotic than the people they’re trying to shout down.... We really are an exceptional country... that has played a special role... [and] always stood for some of humanity’s highest ideals. We are not... about tribalism--which is what makes all the shouting about American exceptionalism so ironic, because it is... an attempt to tribalize...

http://krugman.blogs.nytimes.com/2015/02/20/chastened-exceptionalism/


Lunchtime Must-Read: Mike Konczal: Everyone Should Take It Easy on the Robot Stuff for a While

Mike Konczal: Everyone Should Take It Easy on the Robot Stuff for a While There's been a small, but influential hysteria...

...surrounding the idea is that a huge wave of automation, technology and skills have lead to a huge structural change in the economy since 2010. The implicit argument here is that robots and machines have both made traditional demand-side policies irrelevant or naïve, and been a major driver of wage stagnation and inequality. Though not the most pernicious story that gained prominence as the recovery remained sluggish in 2010 to 2011, it gained important foothold among elite discussion...

http://www.nextnewdeal.net/rortybomb/one-where-larry-summers-demolished-robots-and-skills-arguments


Morning Must-Read: Adam Posen: US Companies Pay Well and Do Better

Adam Posen: US Companies Pay Well and Do Better: "Walmart was the latest major American employer...

...to voluntarily announce a raise for all of its lowest-paid employees.... Aetna raised all of its employees’ wages to at least $16 an hour.... It is possible to profit from paying your employees well.... For decades, labour economists have gathered evidence on... [how] higher wages can motivate employees to work harder, to treat customers better, make them more reluctant to leave their jobs and help them to bring fewer worries and distractions to work. That can increase productivity and reduce an employer’s costs.... All jobs can be done better or worse, and that lower-paid workers respond to incentives other than just fear of losing their job. This is not just a relative wage story.... This is also not just a minimum wage story.... Efficiency wage increases will not solve all current economic problems. Fordist fantasies that paying a higher wage would meaningfully stimulate increased purchases, for example, have to be left aside.... Nor will such initiatives take the place of needed training to make sure workers have the proficiencies.... The shortfall of long-term investment in the US, public and private, cannot be made up for with low-skilled labour...

http://blogs.ft.com/the-exchange/2015/02/20/us-companies-pay-well-and-do-better/


Liveblogging World War II: February 20, 1945: Nazi Propaganda in Breslau

World War II Today quotes from:

Richard Hargreaves: Hitler's Final Fortress: Breslau:

Breslau, the beleaguered German city in the east, now declared by Hitler to be Festung Breslau, Fortress Breslau, was completely surrounded by Soviet troops, some only two miles from the city centre. Nazi propaganda would make much of a Hitler Youth Battle Group counter-attack carried out the city’s southern park, in which 120 boys beat back the Red Army and supposedly left 170 Soviet soldiers dead. The most severe penalties were being imposed on any comments that might be interpreted as defeatism or subversion, so there was no mercy for any act of desertion:

These death sentences should serve as a warning to every soldier and at the same time give decent soldiers — and the entire fortress as well — the satisfaction that cowardly traitors face a merciless, shameful end. The summary execution of cowards and shirkers not only eradicates them, it also brings down shame upon their families by wiping out their honour and condemns them to poverty, depriving them of all benefits.

Continue reading "Liveblogging World War II: February 20, 1945: Nazi Propaganda in Breslau" »


Noted for Your Nighttime Procrastination for February 19, 2015

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

Plus:

And Over Here:

Must- and Shall-Reads:

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Evening Must-Read: The Hamilton Project: Future of Work Event: Tweets

The Hamilton Project (@hamiltonproj) | Twitter:

You can watch the full #FutureOfWork forum on @cspan http://cs.pn/1z3WKBP
That concludes our #FutureOfWork event.Thanks to our panelists for a great discussion. Visit http://bit.ly/1BZmC4U for video & audio

Continue reading "Evening Must-Read: The Hamilton Project: Future of Work Event: Tweets" »


Afternoon Must-Read: Simon Wren-Lewis: Endogenous Supply and Depressed Demand

Simon Wren-Lewis: Endogenous Supply and Depressed Demand: "Without fiscal austerity the US, UK and Eurozone...

...could currently be at output levels that are above current estimates of potential or natural output.... But are these estimates of potential output really independent of the path of actual output?... We know that stylised view is wrong for a variety of reasons. Labour that has been unemployed may become deskilled. Firms that are forced to cut back on investment in a recession may take time to rebuild their productive capacity. However there may be other ways it is wrong for reasons that are much more difficult to quantity. In particular, if investment falls in a recession, new technology that has to be embodied in new machines may fail to emerge, so the rate of technological progress may appear to decline. These processes may not matter too much in normal (mild and short lived) booms and busts. However following a large recession they may become more important.... After a severe recession which appears to result in a loss of capacity, you use policy to explore the boundaries of just how much capacity has really been lost, and run the risk that inflation may rise as you do so. You do not sit back, tell yourself that below target inflation is probably temporary, and do nothing. And, of course, you do not plan for more fiscal austerity.

http://mainlymacro.blogspot.com/2015/02/endogenous-supply-and-depressed-demand.html


Today's Economic History: 1870 as the Inflection Point in Trade and Transport

Today in Overlooked History British Minister Run Over By Train The Faster Times

Over at Equitable Growth: Mid-nineteenth century Massachusetts transcendentalist author and activist Henry David Thoreau’s response to the coming of the railroad was: “get off my lawn!”:

To make a railroad round the world.... Men have an indistinct notion that if they keep up this activity of joint stocks and spades long enough all will at length ride somewhere in next to no time and for nothing, but though a crowd rushes to the depot and the conductor shouts “All aboard!” when the smoke is blown away and the vapor condensed, it will be perceived that a few are riding, but the rest are run over--and it will be called, and will be, “a melancholy accident”...

Indeed, the very first day of operation of the Liverpool and Manchester Railroad, September 15, 1830, George Stephenson’s locomotive, The Rocket, killed the Right Honorable William Huskisson, former President of the Board of Trade--that is, he had been Britain’s Secretary of Commerce (in addition to Secretary of State for War and the Colonies, and Leader of the House of Commons). READ MOAR

Continue reading "Today's Economic History: 1870 as the Inflection Point in Trade and Transport" »


Morning Must-Read: Nick Bunker: Income Inequality Over the Business Cycle

I must say, Stephen Rose used to do very good work. But more and more I find that the stuff he puts out these days has a "gotcha" in it--a decision as to what to look at that is debatable, that shapes his conclusions massively, and that he does not warn me about his importance. Having to dig for what the "gotcha" is in each case is time consuming, boring, and annoying. I think he should stop.

Vir spectabilis Nick Bunker does the heavy lifting:

Nick Bunker: Income Inequality Over the Business Cycle: "Stephen Rose argues that income inequality...

Continue reading "Morning Must-Read: Nick Bunker: Income Inequality Over the Business Cycle" »


Liveblogging World War II: February 19, 1945: Battle of Iwo Jima

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Wikipedia: Battle of Iwo Jima:

After the heavy losses incurred in the battle, the strategic value of the island became controversial. It was useless to the U.S. Army as a staging base and useless to the U.S. Navy as a fleet base. However, Navy Seabees rebuilt the landing strips, which were used as emergency landing strips for USAAF B-29s.

The Imperial Japanese Army positions on the island were heavily fortified, with a dense network of bunkers, hidden artillery positions, and 18 km (11 mi) of underground tunnels. The Americans on the ground were supported by extensive naval artillery and complete air supremacy over Iwo Jima from the beginning of the battle by U.S. Navy and Marine Corps aviators. Iwo Jima was... the only battle by the U.S. Marine Corps in which the American casualties exceeded the Japanese, although Japanese combat deaths numbered three times as many American deaths. Of the 22,000 Japanese soldiers on Iwo Jima at the beginning of the battle, only 216 were taken prisoner, some of whom were captured because they had been knocked unconscious or otherwise disabled. The majority of the remainder were killed in action, although it has been estimated that as many as 3,000 continued to resist within the various cave systems for many days afterwards....

Continue reading "Liveblogging World War II: February 19, 1945: Battle of Iwo Jima" »


Noted for Your Nighttime Procrastination for February 18, 2015

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

Plus:

And Over Here:

Continue reading "Noted for Your Nighttime Procrastination for February 18, 2015" »


Hoisted from the Archives: (A Small Part of) How Russia Suffered in World War II

Red Army: Battle Strength and Casualties During WWII

A Meditation on Twentieth Century Political Military History Brad DeLong s Grasping Reality

The feel-bad piece from the month of October, 2005 on this weblog: the scale of the sacrifice made by the Red Army to defeat the Nazis:

Continue reading "Hoisted from the Archives: (A Small Part of) How Russia Suffered in World War II" »


Nobody Has Any Business Citing the Heritage Foundation. For Anything. Nobody. Live from La Farine

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Have I mentioned that no matter what else Jonathan Chait writes, we love him for things like this?

Jonathan Chait: Obamacare-Hater Stephen Moore Can’t Find Single True Fact: "Obamacare has increased enrollment in its health care exchanges...

...to more than 11 million, and the conservative response to the law’s demonstrable success at carrying out its goals has been fascinating to behold. Measured by volume, the right-wing backlash has diminished severely, as great roaring waves of furious anger have given way to irregular ripples of discontent. But measured by its content, very little has changed.... To take a typical example, here is Stephen Moore, "chief economist at the Heritage Foundation, making his case", such as it is, that Obamacare has failed to meet its cost targets. Perhaps the most revealing aspect of Moore’s column is the fact that, five years after its passage, the chief economist of the most influential conservative think tank in the United States lacks even a passing familiarity with it....

Continue reading "Nobody Has Any Business Citing the Heritage Foundation. For Anything. Nobody. Live from La Farine" »


Over at Equitable Growth: The Intellectual War Over the Rise of the Machines Continues...: Focus

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Over at Equitable Growth: I see that the vir illustris Lawrence Mishel, our neighbor here in the Great Center-Left Atrium Building at 1333 H St. N.W., has had his ire awakened by the femina clarissima Melissa Kearney and her forthcoming Hamilton Project event on robots tomorrow: http://www.hamiltonproject.org/papers/future_of_work_in_machine_age/...

Lawrence Mishel: Failed Theory Posed by Wall Street Dems Puts Hillary Clinton in a Bind: "There was a time where it was plausible to argue that more education and innovation were the primary solutions to our economic problems. But that time has passed.... You cannot tell that, however, to the... Hamilton Project.... The new framing paper... details how 'advancing computer power and automation technology' creates a challenge for: READ MOAR

Continue reading "Over at Equitable Growth: The Intellectual War Over the Rise of the Machines Continues...: Focus" »


Liveblogging World War I: February 18, 1915: U-Boats

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German Admiralty: Declaration: "German Admiralty Declaration

All the waters surrounding Great Britain and Ireland, including the whole of the English Channel, are hereby declared to be a war zone.  From February 18 onwards every enemy merchant vessel found within this war zone will be destroyed without it always being possible to avoid danger to the crews and passengers.

Neutral ships will also be exposed to danger in the war zone, as, in view of the misuse of neutral flags ordered on January 31 by the British Government, and owing to unforeseen incidents to which naval warfare is liable, it is impossible to avoid attacks being made on neutral ships in mistake for those of the enemy.

Navigation to the north of the Shetlands, in the eastern parts of the North Sea and through a zone at least thirty nautical miles wide along the Dutch coast is not exposed to danger.


Evening Must-Read: Stephen G Cecchetti and Enisse Kharroubi: Why Does Financial Sector Growth Crowd Out Real Economic Growth?

Stephen G Cecchetti and Enisse Kharroubi (2014): Why Does Financial Sector Growth Crowd Out Real Economic Growth? (Basel: BIS) http://equitablegrowth.org/?p=9307 "We... concluded that the level of financial development is good only up to a point...

...after which it becomes a drag on growth, and that a fast-growing financial sector is detrimental.... Financial sector growth benefits disproportionately high collateral/low productivity projects... the strong development in sectors like construction, where returns on projects are relatively easy to pledge as collateral but productivity (growth) is relatively low.... Where financiers employ the [most] skilled workers... productivity growth is lower than it would be had... entrepreneurs attract[ed] the [most] skilled labour.... [Thus] financial booms in which skilled labour work for the financial sector, are sub-optimal when the bargaining power of financiers is sufficiently large.... We focus on manufacturing industries and find that industries that are in competition for resources with finance are particularly damaged by financial booms... manufacturing sectors that are either R&D-intensive or dependent on external finance suffer disproportionate reductions in productivity growth when finance booms...

http://www.bis.org/publ/work490.pdf


Morningstar Annual Institutional Conference, March 5-6 in Phoenix: Live from Pinnacle Peak

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Morningstar Announces Agenda for Annual Institutional Conference, March 5-6 in Phoenix:

Brad DeLong, Roger Ibbotson, Ben Inker, Kevin Kliesen, Sallie Krawcheck, and Richard Thaler to present.

CHICAGO, Feb. 17, 2015 /PRNewswire/ -- Morningstar, Inc. (NASDAQ: MORN), a leading provider of independent investment research, today announced the agenda for the Morningstar Institutional Conference taking place March 5-6 at the JW Marriott Desert Ridge Resort & Spa in Phoenix, Arizona. The conference, formerly the Morningstar Ibbotson Conference, is Morningstar's premier event for institutional investors and wealth managers featuring thought leaders from academic institutions, the financial services industry, and Morningstar. Attendees will discuss current investment trends, the latest portfolio strategies, and perspectives on the U.S. and global economies.

Morningstar is pleased to welcome back Richard H. Thaler, the Ralph and Dorothy Keller Distinguished Service Professor of behavioral science and economics at the University of Chicago Booth School of Business. Thaler will discuss how investor behavior affects retirement plan design and how to apply behavioral principles to money management.

Continue reading "Morningstar Annual Institutional Conference, March 5-6 in Phoenix: Live from Pinnacle Peak" »


Lunchtime Must-Read: Simi Kedia and Thomas Philippon: The Economics of Fraudulent Accounting

Lunchtime Must-Read:

Simi Kedia and Thomas Philippon: The Economics of Fraudulent Accounting: "We argue that earnings management and fraudulent accounting...

...have important economic consequences. In a model where the costs of earnings management are endogenous, we show that in equilibrium, low productivity firms hire and invest too much in order to pool with high productivity firms. This behavior distorts the allocation of economic resources in the economy. We test the predictions of the model using firm-level data. We show that during periods of suspicious accounting, firms hire and invest excessively, while managers exercise options. When the misreporting is detected, firms shed labor and capital and productivity improves. Our firm-level results hold both before and after the market crash of 2000. In the aggregate, our model provides a novel explanation for periods of jobless and investment-less growth.

http://pages.stern.nyu.edu/~tphilipp/papers/sktp.pdf


Noted for Your Lunchtime Procrastination for February 17, 2015

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

Plus:

Must- and Shall-Reads:

And Over Here:

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Hoisted from Archives from 1982: Letter from Margaret Thatcher to Friedrich Hayek

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I would still dearly love to see what this is a reply to.

But I don't think I ever will.

Which is, in itself, very very interesting: it suggests that whatever I imagine Hayek wrote to Thatcher, the reality is worse...

Letter from Margaret Thatcher to Friedrich Hayek (Brad DeLong's Grasping Reality...):

February 17, 1982

Thank you for your letter of 5 February. I was very glad that you able to attend the dinner so thoughtfully organized by Walter Salomon. It was not only a great pleasure for me, it was, as always, instructive and rewarding to hear your views on the great issues of our times.

I was aware of the remarkable success of the Chilean economy in reducing the share of Government expenditure substantially over the decade of the 70s. The progression from Allende's Socialism to the free enterprise capitalist economy of the 1980s is a striking example of economic reform from which we can learn many lessons.

However, I am sure you will agree that, in Britain with our democratic institutions and the need for a high degree of consent, some of the measures adopted in Chile are quite unacceptable. Our reform must be in line with our traditions and our Constitution. At times the process may seem painfully slow. But I am certain we shall achieve our reforms in our own way and in our own time. Then they will endure.


Morning Should-Read: Nick Bunker: Income Over the Lifetime

Www newyorkfed org research staff reports sr710 pdf

Morning Should-Read:

Nick Bunker: Income Over the Lifetime: "How exactly does income growth vary over the lives of workers?...

Guvenen... Karahan... Ozkan... and... Song.... Income growth--pretty much all of it--happens in the first decade of workers’ careers.... A worker at the median of the income spectrum will have a growth rate of about 38 percent, while a worker at the 99th percentile will see his income grow by 1,450 percent.... Variance decreases as a worker moves up the income ladder.... [until] worker starts earning over the 90th percentile... variance increases as incomes get close to the very top of the ladder.... The distribution of income growth is quite different from what is usually suspected. Instead of an anticipated smooth bell curve, the distribution has a very high peak and long tails, in addition to being negatively skewed...


Morning Must-Read: Matthew Klein: Crush the Financial Sector, End the Great Stagnation?

Matthew Klein: Crush the Financial Sector, End the Great Stagnation?: "Productivity growth in the rich world started slowing...

...down around the same time that the financial sector’s share of economic activity started rising rapidly.... The interesting question, then, is whether this process can be put into reverse. Maybe there is a deeper wisdom behind financial regulations that appear to be (at best) pointless. Harassment that encourages an unproductive, resource-hoarding industry to get smaller might be exactly what’s needed in economies plagued by chronically slow growth.

http://ftalphaville.ft.com/2015/02/16/2119138/crush-the-financial-sector-end-the-great-stagnation/


Liveblogging World War II: February 17, 1945: Tokyo Raids

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CV6.org: Tokyo Raids: February 16 - 17, 1945:

As a night carrier, Enterprise's primary role during the daylight hours was to provide Combat Air Patrol for the Task Force. Night Air Group 90, however, was then at the cutting edge of electronic warfare, and launched several secret missions, as well as dusk and night strikes.

At 0400 February 16, two hours before the other carriers launched their first strikes, Enterprise launched an 'RCM' mission. RCM stood for Radar Counter-Measure, and the single, specially-modified TBM Avenger's mission was to confuse Japanese radar installations, disrupting the enemy's ability to intercept the morning strikes and guess TF 58's intentions.

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Liveblogging World War II: February 16, 1945: Tokyo Raids

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CV6.org: Tokyo Raids: February 16 - 17, 1945:

On return from supporting the Lingayen Bay landings on Luzon, Philippines, and operations in the South China Sea, Enterprise and the other units of Task Force 38 entered Ulithi Atoll on January 25-26, 1945. All hands were ready to let off steam, following several months of operations in support of MacArthur's liberation of the Philippines. While the fleet replenished and underwent repair, men were given leave for a few hours at a time. For enlisted men, much of this time was spent on Mog Mog, drinking beer, swimming and idling on the beach - an uncommon luxury in a war often fought on beaches.

Mog Mog, however, generally didn't make a favorable impression on its visitors. Though it was 'a great change in routine' (Arnold Olson), John MacGlashing, in his history of Enterprise's Night Air Group 90, notes 'During the beach parties on Ulithi the enlisted personnel voted unanimously that the trip to the beach was not worth the limit of three (3) beers.' E. Rex Mitchell was underwhelmed as well: 'The beer was only cool the day I went ashore but I drank my ration of three bottles, up from the previous two olive drab cans.' (The Big E and Me)

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Putin? Winning? Winning What?: Live from Potemkin's Villages

Maps of Russia Geography pages for Dr Rollinson s Courses and Resources

I read the Economist, and I shake my head in confusion:

The Economist: The View from the Kremlin: Putin’s War on the West: "Look at the world from his perspective...

...and Mr Putin is winning... the Kremlin’s undisputed master... a throttlehold on Ukraine.... His overarching aim is to divide and neuter [the western] alliance.... Only the wilfully blind would think his revanchism has been sated.... To him, Western institutions and values are more threatening than armies. He wants.... supplant them with his own model... [in which] nation-states trump alliances, states are dominated by elites, and those elites can be bought.... The biggest target is NATO’s commitment to mutual self-defence. Discredit that—by, for example, staging a pro-Russian uprising in Estonia or Latvia, which other NATO members decline to help quell--and the alliance crumbles....

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