Grasping Reality on TypePad, by Brad DeLong

• Umberto Eco: "You must overcome any shyness and have a conversation with the librarian, because he can offer you reliable advice that will save you much time. You must consider that the librarian (if not overworked or neurotic) is happy when he can demonstrate two things: the quality of his memory and erudition and the richness of his library, especially if it is small. The more isolated and disregarded the library, the more the librarian is consumed with sorrow for its underestimation. A person who asks for help makes the librarian happy..." https://www.insidehighered.com/views/2015/03/18/review-umberto-eco-how-write-thesis
• Afternoon Must-Read: Arindrajit Dube and and Ben Zipperer: Pooling Multiple Case Studies Using Synthetic Controls: An Application to Minimum Wage Policies http://equitablegrowth.org/?p=10184
• Lunchtime Must-Read: David Dayen: Barney Frank Explains the Financial Crisis http://equitablegrowth.org/?p=10182
• Christina Romer: Spurious Volatility in Historical Unemployment Data http://eml.berkeley.edu/~cromer/Spurious%20Volatility.pdf
• Today's Must-Must-Read: Paul Krugman: The Missing Deflation and the Argument for a Higher Inflation Target http://equitablegrowth.org/?p=10170

Note to Self: is the state’s failure to expand Medicaid and failure to aggressively inform citizens about the availability of exchange subsidies going to push Texas into recession this year?

Live from Pret-a-Manger: OK. Who in Washington DC these days rates an escort of two police cars, four black Chevy suburban SUVs, and a Cadillac Escalade SUV?

Afternoon Must-Read: Umberto Eco: How to Write a Thesis: "You must overcome any shyness and have a conversation with the librarian...

My Lecture: The Economics of the U.S. Government Budget in the Very Long Run

It is time for me to reedit and revise this before I give it again. How should it change? What does it say that no longer needs to be said? What does it not say that now needs to be said?

Zimbabwe!: Here is a piece of currency, a dollar bill. It is from Zimbabwe. It is for $100,000,000,000,000 Zimbabwean dollars.

Live from California Pizza Kitchen: With the battery on my Macbook Air now down to two hours, I am going to have to learn to practice much better electron hygiene...

Paul Krugman sends us to Mark Crawford on the Battle of Dinwiddie Court House.

George Pickett seems to have had:

1. A case of the slows--being unwilling to try to move to control key crossroads until the weather was good.
2. The standard Pickett move of charging straight at people behind earthworks on higher ground.
3. Not knowing what was going on on the battlefield--baking shad, in fact--until the shooting begins.

Thank God most Confederate generals were no more competent than him...

Mark Crawford: Battle of Dinwiddie Court House:

The winter of 1864-65 was ending, but to the soldiers in the trenches dug into the tortured landscape around Petersburg, Virginia, the onset of spring in the devastated region simply promised a wet, muddy agony brought on by the heavy rainfall of the season....

Ulysses S. Grant... decided to open his spring offensive — which would become known as the Appomattox campaign — with a thrust at Lee's vulnerable right flank in an effort to pierce the rail line and force the Southern general to evacuate Petersburg. Desiring to move swiftly, Grant ordered elements of Maj. Gen. Philip Sheridan's cavalry division... to lead the advance... strike out for Dinwiddie Court House, a small hamlet that lay beyond the right of the Confederate line and that would serve as a launching point for further assaults.... Lee divined Grant's intentions, and to protect his right he ordered... 19,000 soldiers to... Five Forks, a few miles north of Dinwiddie Court House....

Over at Equitable Growth: It is the absence of any recognition of the asymmetric power of the Federal Reserve's policy tools that leaves me most puzzled by the extremely-sharp Marty Feldstein this morning:

I already posted it: here

Must- and Should-Reads:

• Today's Must-Must-Read: Mark Buchanan: Climate Change? Nothing to Worry About... If You're Happy to Ignore Physics
• Afternoon Must-Read: Barry Eichengreen: Why Our Success in Managing the 2008 Banking Crisis Was the Mother of Failure
• Afternoon Must-Read: Dan Drezner: Austerity Is Still Popular Despite an Abject Record of Failure
• Ricardo Hausmann: Secular Stagnation for Free
• Pilita Clark: Review of Gernot Wagner and Martin Weitzman: "Climate Shock: The Economic Consequences of a Hotter Planet"
• Matt O'Brien: Why you shouldn’t lose sleep over the biggest ‘bubble’ in the markets today

Over at Equitable Growth--The Equitablog

• Lots to Worry About in Climate Change
• Why the Hegemony of the New Keynesian Model?
• Over at Project Syndicate: The Monetarist Mistake
• Reading the Federal Reserve's Tea Leaves Dot Plots
• Nick Bunker: Labor’s share lost?

Plus:

• Things to Read on the Afternoon of March 30, 2015

And Over Here:

The Curious Case of the Curious Sea Lions Clifford Asness and Aaron Brown

Over at Medium: I have a different take on Asness and Brown than Mark Buchanan does — largely because I take Asness and Brown’s claim to be just doing “climate-knowledge-free statistics” to be made in bad-faith.

I take their paper to be an episode of a weird and perverse rhetorical game that has now come to be called “Sealioning”. READ MOAR

J. Bradford DeLong: Department of Economics, U.C. Berkeley #3880, Berkeley, CA 94720-3880; 925 708 0467; delong@econ.berkeley.edu

J. Bradford DeLong is:

• The Department of Economics at U.C. Berkeley, where he works;
• The Blum Center, where he is chief economist;
• The Washington Center for Equitable Growth, where he is a weblogger; and
• The National Bureau of Economic Research, where he is a Research Associate

J. Bradford DeLong was (during the Clinton administration) a deputy assistant secretary for economic policy at the U.S. Treasury.

His best work extends from business cycle dynamics through economic growth, behavioral finance, political economy, economic history, international finance to the history of economic thought and other topics, including:

“Aftathoughts on NAFTA” (2006),

“America’s Peacetime Inflation: the 1970s” (book chapter, 1997),

"American Fiscal Policy in the Shadow of the Great Depression",

"Asset Returns and Economic Growth".“Did JP Morgan’s Men Add Value?” (book chapter, 1991),

“The Case for Mexico’s Rescue” (1996),

"Equipment Investment and Economic Growth",

“Fiscal Policy in a Depressed Economy” (BPEA, 2012),

“Have Productivity Levels Converged? Productivity Growth, Convergence, and Welfare in the Very Long Run” (AER, 1989),

“Is Increased Price Flexibility Stabilizing?” (AER, 1986),

"Keynesianism, Pennsylvania-Avenue Style",

“Meltdown to Moral Hazard: the International Monetary and Financial Policies of the Clinton Administration” (book chapter, 2001),

“The Melting-Away of North Atlantic Social Democracy”,

“Noise Trader Risk in Financial Markets” (JPE, 1989),

"Princes and Merchants: European City Growth Before the Industrial Revolution",

"Review of Robert Skidelsky (2000), John Maynard Keynes, volume 3, Fighting for Britain", “Should We Fear Deflation?” (BPEA, 1989),

“The Scary Debate Over Secular Stagnation”,

“Speculative Microeconomics for Tomorrow’s Economy” (First Monday, 2000),

“The Survival of Noise Traders in Financial Markets” (JF, 1991), and

"Why Does the Stock Market Fluctuate?".

He can currently be found on the internet at Twitter:@delong, Equitablog, and Grasping Reality. Email him at: email:[email protected]

Picture: https://www.dropbox.com/s/8l71gkj3zhbudh2/Shiffrar-BradDeLong-HiRes2.jpg?dl=0

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• http://www.typepad.com/site/blogs/6a00e551f08003883400e551f080068834/post/6a00e551f08003883401b8d0f84513970c/edit
• http://www.bradford-delong.com/2015/03/j-bradford-delong-short-biography.html

Live from the Roasterie: Why the Hegemony of the New Keynesian Model? The baseline New Keynesian model was not, originally, intended to become a workhorse.

It was intended as a proof-of-concept: to demonstrate that introducing very small market-imperfection frictions into a DSGE framework generated very Keynesian-monetarist conclusions. But the extraordinary shortcuts needed for tractability were and are a straitjacket that makes it extremely hazardous for policy analysis. It cannot fit the time series. And when it does fit the time series, it does so for the wrong reasons.

So why require everything to fit in this Procrustean Box? This is a serious question--closely related to the question of why models that are microfounded in ways we know to be wrong are preferable in the discourse to models that try to get the aggregate emergent properties right.

Across the Wide Missouri: John C. Danforth: In the Name of Politics: "Republicans have transformed our party into the political arm of conservative Christians....

...The elements of this transformation have included advocacy of a constitutional amendment to ban gay marriage, opposition to stem cell research involving both frozen embryos and human cells in petri dishes, and the extraordinary effort to keep Terri Schiavo hooked up to a feeding tube. Standing alone, each of these initiatives has its advocates.... But the distinct elements do not stand alone. Rather they are parts of a larger package.... In my state, Missouri, Republicans in the General Assembly have advanced legislation to criminalize even stem cell research in which the cells are artificially produced in petri dishes and will never be transplanted into the human uterus. They argue that such cells are human life that must be protected, by threat of criminal prosecution, from promising research on diseases like Alzheimer's, Parkinson's and juvenile diabetes.

Critics... well, probably better to call them "friends" have pointed out to me that last summer I didn't spend enough time linking to Dan Kervick's and Matt Brunig's contributions to the Piketty debate. I remember reading them at the time. And I cannot figure out why I didn't focus more on them--save probably because both seemed to me to be thinking along the lines I was thinking along, I didn't think that there was much new there. But usually I am anxious to promote people saying things that I think are smart and right, so it is a puzzle...

Diary March 30, 1915:

Western Front: Flanders: Intelligence officers of XV Corps, French Tenth Army, learn from PoWs that extensive German preparations near Zillebeke east of Ypres to employ ‘asphyxiating gases’ (ie chlorine cylinders). Champagne: Reims Cathedral under bombardment. Vosges: German counter-attack in Fecht valley reaches Herrenberg.

Southern Fronts: Serbia: Austrian river steamer Belgrad tries to break Allied Danube blockade (night 30/31), hits Russian mine and is sunk by Serb 75mm field guns.

Eastern Front: Austrian GHQ morale 'below zero. The Chief (Conrad) never stops grumbling'.

African Fronts: Southwest Africa: McKenzie’s South African Central Force (11,000 men) occupies Aus 80 miles inland from Lüderitz.

Home Fronts: Britain: King offers total alcohol abstinence in Royal Household for duration of war.

Over at Project Syndicate: The Monetarist Mistake:

Two months ago here, I briefly noted that I had found the best explanation for why the collective economic policymakers of the North Atlantic have left and continue to leave the job of fighting and guiding recovery from our Lesser Depression at most half-done. The best explanation is to be found in my friend, teacher, and patron, Barry Eichengreen’s Hall of Mirrors.

But I have short shrift to both the argument of the book, and to its praise. It is the best book on 2008-present that has yet been written. And Eichengreen’s book’s central argument deserves to be the centerpiece of a much larger discussion. READ MOAR

Over at Equitable Growth: It is always instructive to look at the materials that the Federal Reserve's Federal Open Market Committee pumps out, especially their semi-anonymized (hi, Charlie Evans, with your 3% longer-run value) estimates of what the appropriate federal funds rate would be.

Thus we can see, comparing January 2012 when the Federal Reserve began publishing its dot-plots to today, the Federal Reserve collectively and slowly come to recognize current reality. Back at the start of 2012 the FOMC participants all thought that in the "longer run"--which at the beginning of 2012 I take to be next year, 2016--the federal funds rate ought to be back at its normal mid-expansion level, which they all took to be in the 3.75%-4.5% per year range. Today, of course, only one participant (Charles Plosser?) still thinks the federal funds rate ought to be in that range next year, and at the very bottom of it. READ MOAR

Captured Continental Army Second-in-Command Charles Lee Does Strategic Planning for the British Reconquest of America:

Richard Pryor owns at his own roast!:

Eleanor Roosevelt: My Day, March 28, 1945:

NEW YORK, Tuesday—I saw a bluebird and a robin yesterday! It is not as warm here and spring is not as far along as in Washington. Still, the feel of it is in the air, and there is a fresh, green look about the shoots that are poking their heads above ground which makes you want to settle down in the country and have nothing whatsoever to do with bricks and mortar for a long while. But bricks and mortar exist and engagements go on, and people concentrate in big cities, so here I am in New York, where at 1 o'clock I go to the Cosmopolitan Club to speak at one of their membership lunches.

Must- and Should-Reads:

• Evening Must-Read: Michael Strain: How to Cut Taxes and Help the Poor
• Kenneth Thomas: Wikileaks Releases Trans-Pacific Partnership Investment Chapter
• Today's Must-Must-Read: Ilyana Kuziemko et al.: What Do Americans Think Should Be Done About Inequality?
• Nick Bunker: Risk-Sharing and Student Loans

Over at Equitable Growth--The Equitablog

• With a First-Quarter-of-2015 Projected Real GDP Growth Rate of 1.3%/Year…
• cite>Auto Title Loans: Am I Wrong in Noting a Flagging in Heartland Regional Boosterism?
• **: Today's Must-Must-Read: Ilyana Kuziemko et al.: What Do Americans Think Should Be Done About Inequality?
• Carter Price: Latest U.S. economic growth numbers highlight corporate investment
• Nick Bunker: Weekend reading

Plus:

• Things to Read at Night on March 27, 2015

And Over Here:

Oh, this is going to be fun!

Let's start with J.W. Mason:

Live from the Federal Reserve Bank of San Francisco: The first day in months when San Francisco feels like San Francisco rather than like San Diego! The Fog City climate has its definite charms--especially if there are sufficient outside propane heaters so one can sit outside and watch the fog billow about one...

Over at Equitable Growth: ...the U.S. economy will have grown at a rate of:

• 2.8%/year over the past four quarters.
• 2.5%/year over the past eight quarters.
• 2.2%/year over the past twelve quarters. READ MOAR

Bombardment & Invasion Of Tokashiki, Okinawa, 03/27/1945:

Vox.Com: 40 Maps That Explain the Middle East:

Wikipedia: Battle of Iwo Jima:

At 18:00 on 16 March (25 days after the landings), the 5th Marine Division still faced Kuribayashi's stronghold in a gorge 640 m (700 yd) long at the northwestern end of the island. On 21 March, the Marines destroyed the command post in the gorge with four tons of explosives and on 24 March, Marines sealed the remaining caves at the northern tip of the island.

Comment of the Day: Graydon: Internet Media and the Fall of GigaOm: The Honest Broker for the Week of March 15, 2015 (Brad DeLong's Grasping Reality...): "Mentor's visualization is missing that there's no feedback in favour of reader value...

Live from La Farine: Yes, Woody Allen is a sexual predator. And because all of his art is about him, that turns it into toxic sludge. Why do you ask?

I had always thought that if Woody Allen was that kind of a sexual predator, I would more likely than not someday hear something through the St. Louis branch of my family coming from my mother's second cousin Mariel Hemingway.

Lo and behold, now I have:

April Fools' Festival, Day XVII: Note that the Insane Clown Posse picture at the top right is not a happy clown. This is an insane clown. And this is a somewhat dangerous clown...

Shorter Thomas Friedman: Because my cell phone company drops calls when I take the Acela, it is very important that Michael Bloomberg run for President in 2012. He should run on the platform of Obama's policies. Thus he should split the vote for those policies between two candidates, and so raise the chances for Mitt Romney--who is running against those policies--to squeak in.

Live from the Elmwood Cafe: Global Warming in Action?:

As I have said, the extraordinary number of payday loan and title loan storefronts in Kansas City MO/KS relative to Portland OR takes me aback every time I go from one to the other. READ MOAR

Must- and Should-Reads:

• Afternoon Must-Read: Matea Gold and Tom Hamburger: In 2016 Campaign, the Lament of the Not Quite Rich Enough
• Morning Must-Read: Alejandro Badel: Economic Mobility across Federal Reserve Districts
• Morning Must-Must-Read: David Wessel: Why Are Unions so Focused on Fighting Trade Deals?
• Morning Must-Read: Charles Gaba: Dear Pete Sessions: "Bazillion" Is Not a Real Number Either
• Today's Must-Must-Read: Robert Skidelsky: Messed-Up Macro
• Evening Must-Read: Mark Thoma: The Attack of the Anti-Keynesians
• Roel Beetsma et al.: "Panel regressions based on the action-based datasets of De Vries et al. (2011) and Alesina et al. (2014) show that [fiscal] consolidations... affect confidence negatively..."
• James Kwak: The Tax Break for (Fewer Than) 41 Families: The Myth of the Estate Tax and the Family Farm
• Kevin Drum: "Oh dear. Here's some bad news for Ted Cruz.... For years, business lobbyists complained about what they derided as 'job killer'.... But new numbers from the U.S. Bureau of Labor Statistics tell a different story. Total jobs created in the 12 months ending Jan. 31 show California leading other states.... Them's the breaks. There's no more 'Texas Miracle'.... We're in the middle of a California Miracle.... California is rebounding strongly from the housing crisis while Texas is suffering from the global collapse in oil prices. There is, frankly, nothing very miraculous about either story. It's just the business cycle at work in a fairly normal and predictable way..."

Over at Equitable Growth--The Equitablog

• The Assumptions Behind the Federal Reserve’s Choice of 2% per Year Were Erroneous
• A Rant Against the Use of the Word “Bubble” in the Context of the Bond Market
• Marriage: How Good an Idea at the Margin?

Plus:

• Things to Read on the Afternoon of March 25, 2015

And Over Here: