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March 2015

Links and Tweets: March 2015

Sanzio 01 The School of Athens Wikipedia the free encyclopedia

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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?


April Fools' Festival Day XX: "Smoking Doesn't Kill" and Other Op-Eds from Indiana Governor Mike Pence

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Andrew Kaczynski: "Smoking Doesn't Kill", and Others:

“Time for a quick reality check. Despite the hysteria from the political class and the media, smoking doesn’t kill.”

On climate change, Pence says CO2 from burning fuels can’t be the cause of increased global temperatures because it “is a naturally occurring phenomenon in nature…” not an unnatural one. He also mixes up India and Indonesia.

Pence says George Washington was a Republican: “Republicans, from George Washington to George W. Bush just have better ideas.” Washington didn’t belong to any political party and famously warned against them in his farewell address.


Daily Economic History: U.S. Government Budget: Distant Past, Near-Present, and Distant Future: The Honest Broker for the Week of April 5, 2015

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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.

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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...


Today's Must-Must-Read: Paul Krugman: The Missing Deflation and the Argument for a Higher Inflation Target

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Today's Must-Must-Read: Paul Krugman: The Missing Deflation and the Argument for a Higher Inflation Target: "The Fed wasn’t alone in being surprised by the failure of actual deflation to emerge...

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Liveblogging History: March 31, 1865: Dinwiddie Courthouse and Five Forks

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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....

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Department of "Huh?!": Martin Feldstein and the Interest Rate Path Edition

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:

Martin Feldstein: The Fed Needs to Step Up Its Pace of Rate Increases: "The Federal Reserve['s]... projected path for increasing the short-term federal-funds rate over the next few years is dangerously slow....

Only in 2017 would the real fed-funds rate even exceed 1%.... The Fed is... projecting that its policies will cause unemployment to decline to 5% by the end of 2015 and even lower in the next two years. Historical experience suggests that means inflation would eventually increase year after year.... READ MOAR

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Noted for Your Afternoon Procrastination for March 30, 2015

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Must- and Should-Reads:

Over at Equitable Growth--The Equitablog

Plus:

And Over Here:

Continue reading "Noted for Your Afternoon Procrastination for March 30, 2015" »


Lots to Worry About in Climate Change

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

Lots to Worry About in Climate Change Bull Market Medium

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

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Today's Must-Must-Read: Mark Buchanan: Climate Change? Nothing to Worry About... If You're Happy to Ignore Physics

Today's Must-Must-Read: Mark Buchanan: Climate Change? Nothing to Worry About... If You're Happy to Ignore Physics: "Cliff Asness and Aaron Brown.... Fortune magazine ran an article about the Asness-Brown paper under the title ‘Top hedge fund manager: Global warming isn’t a danger.’...

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J. Bradford DeLong Short Biography

Berkeley

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:

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:brad.delong@gmail.com

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




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.


Hoisted from the Archives from 10 Years Ago: John C. Danforth Looks at His Republican Party

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.

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DeLong Smackdown/Monday Worth Reading: Dan Kervick and Matt Bruenig

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...

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Liveblogging World War I: March 30, 1915: Diary

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

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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

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Reading the Federal Reserve's Tea Leaves Dot Plots

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

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Weekend Reading: Janet Yellen: Normalizing Monetary Policy: Prospects and Perspectives

US Equity ETFs Market Realist

Janet Yellen: FRB: Speech--Yellen, Normalizing Monetary Policy: Prospects and Perspectives--March 27, 2015:

I would like to thank President Williams for his kind introduction and the Federal Reserve Bank of San Francisco for inviting me to what promises to be a very stimulating and important conference.

As you know, last week the Federal Open Market Committee (FOMC) changed its forward guidance pertaining to the federal funds rate. With continued improvement in economic conditions, an increase in the target range for that rate may well be warranted later this year. Of course, the timing of the first increase in the federal funds rate and its subsequent path will be determined by the Committee in light of incoming data on labor market conditions, inflation, and other aspects of the current expansion.

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April Fools' Festival, Day XVIII: Andrew Golis Finds Ashley Parker and Alexander Burns of the New York Times Clowning Around

Andrew Golis: Twitter:

@agolis: What an insidious and stupid formulation http://nyti.ms/1M9xO8v:

Twitter

@agolis: Notice the way it subtly precludes the possibility that anything 'divisive' or 'ideological' could be in the state or local interest. And the way that it broadly grants the idea that Schumer's advocacy on behalf of business interests is in the state and local interest.

@michaelbd: @agolis Spoken like a really divisive ideologue who hates New York, Andrew.

@michaelbd: @agolis What’s good For Wall Street is good. Finis. Anyone who disagrees is probably some nobody from upstate.

@agolis; @michaelbd and nothing worth doing is ever something people intensely disagree about.

@root_e: @agolis @msbellows NYTimes is into the consensus of people who buy or sell $10M and up condos.

@agolis: @jmartNYT @michaelbd there are so many intense value judgments baked into that. why not say 'Schumer has cannily maintained broad support w an econ agenda amenable to Wall St & Main St biz interests'?


Weekend Reading: Jen Ebberler: Inventing Trajan: The Evidence, or How Do We Know What We Think We Know?

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Jen Ebberler: Inventing Trajan: The Evidence, or How Do We Know What We Think We Know?: "For a period of time that is chock full of historiographers and biographers, the reign of Trajan is badly documented...

...It's weird, almost as if writers purposely avoided the topic. There is a rich record of coins, civic and private monuments, and inscriptions.... Most of the scholarship on Trajan is done by archaeologists and others with a strong, non-textual orientation.... Neither Suetonius nor Tacitus treated Trajan's rule explicitly. Book 10 of Pliny's Letters has a complicated textual history, and it's unclear exactly how we are to understand its relationship to Books 1-9 (or, even, when it became attached to Books 1-9). Trajan is surprisingly absent from Pliny's letters otherwise....

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Weekend Reading: John Maynard Keynes on the "Euthanasia of the Rentier"

John Maynard Keynes: The General Theory of Employment, Interest and Money: 24. Concluding Notes on the Social Philosophy towards which the General Theory might Lead: "THE outstanding faults of the economic society in which we live are its failure to provide for full employment and its arbitrary and inequitable distribution of wealth and incomes...

...The bearing of the foregoing theory on the first of these is obvious. But there are also two important respects in which it is relevant to the second.... The removal of very great disparities of wealth and income... through... direct taxation... [is] deterred by... the fear of making skilful evasions too much worth while... of diminishing unduly the motive towards risk-taking, but mainly, I think, by the belief that the growth of capital depends upon the strength of the motive towards individual saving, and that for a large proportion of this growth we are dependent on the savings of the rich out of their superfluity.

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Liveblogging World War II: March 28, 1945: Eleanor Roosevelt

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.

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Noted for Your Nighttime Procrastination for March 27, 2015

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Must- and Should-Reads:

Over at Equitable Growth--The Equitablog

Plus:

And Over Here:

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People Claiming That Even John Maynard Keynes Is No True Keynesian!: April Fools Festival Day XVIII

Oh, this is going to be fun!

Let's start with J.W. Mason:

J.W. Mason: The Call Is Coming from Inside the House: "Economists don’t listen to themselves.... Liberal economists like Krugman who want the state to take a more active role in managing the economy continue to teach  an economic theory that has no place for activist policy...

...One of Krugman’s bugaboos is the persistence of claims that expansionary monetary policy must lead to higher inflation.... As an empirical matter, of course, Krugman is right. But where could someone have gotten this idea that an increase in the money supply must always lead to higher inflation? Perhaps from an undergraduate economics class? Very possibly--if that class used Krugman’s textbook.

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Today's Economic History: John Maynard Keynes on the Trade Cycle

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John Maynard Keynes: The General Theory of Employment, Interest and Money: 22. Notes on the Trade Cycle: "The essential character of the Trade Cycle, and, especially, the regularity of time-sequence and of duration which justifies us in calling it a cycle...

...is mainly due to the way in which the marginal efficiency of capital fluctuates.... By a cyclical movement we mean that as the system progresses in, e.g., the upward direction, the forces propelling it upwards at first gather force and have a cumulative effect on one another but gradually lose their strength until at a certain point they tend to be replaced by forces operating in the opposite direction... until they too, having reached their maximum development, wane and give place to their opposite.... [And] the substitution of a downward for an upward tendency often takes place suddenly and violently, whereas there is, as a rule, no such sharp turning-point when an upward is substituted for a downward tendency....

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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...


With a First-Quarter-of-2015 Projected Real GDP Growth Rate of 1.3%/Year...: Focus

Graph Real Gross Domestic Product FRED St Louis Fed

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

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Today's Economic History: Pre-WWI Farm Technology

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Laura Ingalls Wilder: February 18, 1911: "Conditions have changed so much in the country within the last few years that we country women have no need to envy our sisters in the city...

...We women on the farm no longer expect to work as our grandmothers did. With the high prices to be had for all kinds of timber and wood we now do not have to burn wood to save the expense of fuel, but can have our oil stove, which makes the work so much cooler in the summer, so much lighter and cleaner. There need be no carrying in of wood and carrying out of ashes, with the attendant dirt, dust and disorder.

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Liveblogging World War II: March 26, 1945: Iwo Jima

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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.

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Today's Must-Must-Read: Ilyana Kuziemko et al.: What Do Americans Think Should Be Done About Inequality?

Today's Must-Must-Read: Ilyana Kuziemko et al.: What Do Americans Think Should Be Done About Inequality?: "While respondents who view information about inequality are more likely to believe that inequality is a serious problem...

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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:

Continue reading "" »


The Worst Column from Thomas "Suck on This!" Friedman EVAR!

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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.

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Live from Elmwood Cafe: Annamarie Andriotis: The Pitfalls of Payday-Like ‘Title Loans’: "As a federal regulator is expected to release new rules for payday loans, a study suggests borrowers who take out ‘title loans’ against the value of their cars encounter many of the same issues...

...On average, title-loan borrowers pay $1,200 in fees per year on loans averaging $1,000, according to a report released Wednesday by the Pew Charitable Trusts, an independent nonprofit based in Philadelphia. The findings come as the Consumer Financial Protection Bureau plans a Thursday public hearing on payday loans...

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

Continue reading "" »


Noted for Your Afternoon Procrastination for March 25, 2015

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Must- and Should-Reads:

Over at Equitable Growth--The Equitablog

Plus:

And Over Here:

Continue reading "Noted for Your Afternoon Procrastination for March 25, 2015" »