Grasping Reality on TypePad, by Brad DeLong

Must- and Should-Reads:

• Today's Must-Must-Read: Charles Evans et al.:: Risk Management for Monetary Policy Near the Zero Lower Bound
• Must-Read: Vivekinan Ashok et al.: Support for Redistribution in an Age of Rising Inequality: New Stylized Facts and Some Tentative explanations
• Must-Read: Martin Weale and Tomasz Wieladek: Macroeconomic Effects of Asset Purchases
• Today's Must-Must Read: Peter Gosselin and Jennifer Oldham: If Economists Were Right, You Would Have a Raise by Now
• Must-Read: Izabella Kaminska: Closed-System Blockchains
• MMust-Read: Greg Ip: How Europe’s Easy Monetary Policy Crossed the Atlantic
• Duncan Black: "Grfiters Gonna Grift: And media organizations like Politico make it so damn easy because it's their grift too. 'The group’s website provides few details.... But the team behind the Progressive Coalition for American Jobs includes... Mitch Stewart... Lynda Tran... 270 Strategies... Jeremy Bird..."

Over at Equitable Growth--The Equitablog

• Carter Price: Testing the permanent income hypothesis
• Nick Bunker: Are recoveries from financial crises always slow?

Plus:

• Things to Read on the Morning of March 20, 2015 - Washington Center for Equitable Growth

And Over Here:

Erik Wallen: Twilight of the Gods: A Swedish Waffen-SS Volunteer’s Experiences with the 11th SS-Panzergrenadier Division Nordland, Eastern Front 1944-45:

The retreat and occupation of the new positions was not followed by the combat pause we so badly needed. In an unchangeable, implacable onslaught the Russian artillery hammered on with its shells. Explosive bullets whistled uninterruptedly with devastating results. The struggle had changed character. Previously it had raged over fields and groves and through separate small villages. But now it rolled from house to house, from street to street.

Trip Gabriel: Huckabee Pursues Unconventional Ways to Fund a Campaign: "In a wood-paneled study lined with books and framed family photos...

the prospective presidential candidate looks into the camera. ‘I’m Mike Huckabee,’ he says with all the folksy charm that propelled a career as a preacher, politician and broadcaster. But this is no campaign ad. It is an Internet infomercial for a dubious diabetes treatment.... Huckabee... tells viewers to ignore ‘Big Pharma’ and instead points them to a ‘weird spice, kitchen-cabinet cure,’ consisting of dietary supplements. ‘Let me tell you, diabetes can be reversed,’ Mr. Huckabee says. ‘I should know because I did it. Today you can, too.’... He has pursued some highly unconventional income streams--not just the diabetes endorsement, but selling ads on email commentaries he sends to thousands of his supporters....

Afternoon Must-Read: "Keep the government's hands off my Medicare!" was supposed to be a joke at the expense of a small uninformed fringe, not a typical and widespread reaction:

Wikipedia: USS Franklin (CV-13):

Before dawn on 19 March 1945... a single aircraft... pierced the cloud cover and made a low level run on the ship to drop two semi-armor-piercing bombs. The damage analysis came to the conclusion that the bombs were 550 lb (250 kg)... One bomb struck the flight deck centerline, penetrating to the hangar deck, effecting destruction and igniting fires through the second and third decks, and knocking out the Combat Information Center and air plot. The second hit aft, tearing through two decks. At the time she was struck, Franklin had 31 armed and fueled aircraft warming up on her flight deck. The hangar deck contained 22 additional planes, of which 16 were fueled and five were armed. The forward gasoline system had been secured, but the aft system was operating. The explosion on the hangar deck ignited the fuel tanks on the aircraft, and gasoline vapor explosion devastated the deck. Only two crewmen survived the fire on the hangar deck. The explosion also jumbled aircraft together on the flight deck above, causing further fires and explosions, including the detonation of 12 'Tiny Tim' air-to-surface rockets.

Must- and Should-Reads:

• Morning Must-Read: Danielle Paquette: Survival of the Fittest Might Have Actually Been Survival of the Richest​
• Nighttime Must-Read: James Pethokoukis: The Disappointing Unseriousness of the House GOP's Budget
• Martin Wolf: Strong Currents Keep Interest Rates Down
• Afternoon Must-Read: Nick Bunker: Are recoveries from Financial Crises Always Slow?
• Today's Must-Must Read: Alice Rivlin: Thoughts about monetary and fiscal policy in a post-inflation world
• Barry Ritholtz: The Worldwide Deficit of High-Quality Debt
• Lunchtime Must-Read: Mark Thoma: On Paul Krugman's: 'John and Maynard’s Excellent Adventure'
• Morning Must-Read: Alicia Munnell et al.: Are Retirees Falling Short?
• Menzie Chinn: "Currency appreciation will be a drag; this implies a policy of slower monetary tightening is in order..."
• Arloc Sherman: "Safety net programs cut poverty nearly in half in 2013, lifting 39 million people out of poverty... rebut[ting] claims that government programs do little to reduce poverty..."

Over at Equitable Growth--The Equitablog

• DRAFT: Discussion of Matthew Rognlie: "Deciphering the Fall and Rise in the Net Capital Share"
• What Game Is the Federal Reserve Playing?

Plus:

• Things to Read at Nighttime on March 18, 2015 - Washington Center for Equitable Growth

And Over Here:

The Federal Reserve:

1. Now expects to be more patient in their plans of when and how far they will raise interest rates than they were last December.
2. Just removed the sentence in which they said they would be patient from their post-meeting statement.

Afternoon Must-Read: Scooped by Nick Bunker! Well, that post can now go in the trash!

Live from La Farine: Alissa Walker: Here Are the Water Restrictions California Should Have Passed Today: "After confronting the truth that we have only one year of water left, California passed new water restrictions today which are WIMPY AS HELL...

Lunchtime Must-Read: Ah. But, Mark, what real-world questions were DSGE models built to answer? I cannot think of any...

Over at Equitable Growth:

J. Bradford DeLong :: U.C. Berkeley and NBER :: [email protected] :: BPEA :: Spring 2015 8:30 AM March 20, 2015

Let me thank Matt for doing some very serious and thoughtful digging. The upshot is that I am in an ideal position for a discussant: There are very interesting and important numbers here. These numbers have not been put together in this way before. There is here an author who is wise enough not to believe he has nailed what the numbers mean to the floor. READ MOAR

First World War.com: The Attempt on the Dardanelles Narrows, 1915:

Having paused to consolidate following the clear failure of the previous month's attempts to batter the Turkish protective fortresses, a further naval effort was briefly launched on 18 March in an attempt to break through The Narrows: so-named because just 1,600 heavily-mined metres separated the shore on either side. The naval attacks upon the Dardanelles Straits on 19 & 26 February had nevertheless succeeded in achieving the first element of naval Commander-in-Chief Sir Sackville Carden's three-point blueprint for seizing control of the Straits and thus access to Constantinople and a supply route to Britain's ally in the east, Russia. The Straits - 65km in length and 7km in width (aside from 'The Narrows') were overlooked by steep and heavily fortified cliffs: the Gallipoli peninsula to the northwest and the coast of Asia Minor to the south.  Navigation through the wildly varying current was additionally considered problematic.

Must- and Shall-Reads:

• Today's Must-Must-Read: Lars E.O. Svennson: "Riksbank Deputy Governor Jansson Again Tries to Defend the Indefensible,
• Nighttime Must-Read: Grégory Claeys et al.: European Central Bank Quantitative Easing: The Detailed Manual
• Today's Must-Must-Read: Matt O'Brien: What People Talk About When They Talk About Zero Interest Rates
• Peter Gosselin and Jennifer Oldham: If Economists Were Right, You Would Have a Raise by Now
• Paul Krugman: "The way to deal with secular stagnation... is to raise the long-run neutral interest rate above zero. If we can do this via structural reform and/or self-financing infrastructure investment, fine. If not, raise the inflation target.... If you’re really worried about secular stagnation, you should advocate a combination of a raised inflation target and a burst of fiscal stimulus to help the central bank get there..."
• Afternoon Must-Read: Jared Bernstein: The U.K. vs. the U.S. Minimum-Wage Debate
• Matthew Zeitlin: Blog Fight! War Of Words Breaks Out In A Multi-Trillion Dollar Industry
• Afternoon Must-Read: Helaine Olen: Poor Stories from [David] Brooks and [Ross] Douthat
• Tim Duy: The End of "Patient" and Questions for Yellen
• Nighttime Must-Read: Nick Bunker: One Slack Measure to Rule Them All?
• Nighttime Must-Read: Simon Wren-Lewis: Eurozone Fiscal Policy
• Lunchtime Must-Read: Paul Krugman**: A Whiff of Stagflation

Over at Equitable Growth--The Equitablog

• Today's Must-Must-Read: Lars E.O. Svennson: Riksbank Deputy Governor Jansson Again Tries to Defend the Indefensible...
• Today's Must-Must-Read: Matt O'Brien: What People Talk About When They Talk About Zero Interest Rates
• Marking-One's-Beliefs-to-Market Should Be a Collective Endeavor...: Focus
• Must-Read: Helaine Olen: Poor Stories from [David] Brooks and [Ross] Douthat
• Must-Read: Paul Krugman (2005): A Whiff of Stagflation
• Must-Read: Simon Wren-Lewis: Eurozone Fiscal Policy
• Must-Read: Jared Bernstein: The U.K. vs. the U.S. Minimum-Wage Debate: ""
• Must-Read: Grégory Claeys et al.: European Central Bank Quantitative Easing: The Detailed Manual
• Nick Bunker:One Slack Measure to Rule Them All?
• Nick Bunker: The high economic costs of incarceration
• Duncan Wheldon Looks at the Eurozone Outlook
• Jessica Fulton: Entrepreneurialism and access to capital for women and minorities: ""

Plus:

• Things to Read at Nighttime on March 17, 2015

And Over Here:

I thought that this was going to be mostly pieces from the archives, but no!

"It's a larger problem on the right: Everybody is scared of Fox" -@kausmickey quits @DailyCaller after column pulled http://t.co/1gd6p1yZN2

— David Folkenflik (@davidfolkenflik) March 17, 2015

It is perhaps 19 years too late for Mickey Kaus to have a "There's gambling going on here!" Colonel Renault moment with respect to Fox News and its place in the conservative media ecosystem in which he has embedded himself, no?

And, of course, there are all the golden oldies, including:

Live from teh Roasterie: After a winter spent on the prairie along the Lower Missouri River, I find myself drinking quad lattes on a semi-regular basis. Is this a sign of successful adaptation? Or is this a sign of danger?

James Kwak: Who’s a Freeloader?: "Daniel Rodgers’s review [of Williamson et l.]... is titled “‘Moocher Class’ Warfare”...

...Tea Party members like Medicare and Social Security, which they think they have earned through their work, but don’t like perceived freeloaders who live off of other peoples’ work. From the [Williamson et al.] paper (p. 33):

Eleanor Roosevelt: MY DAY, March 17, 1945:

Yesterday in Washington I lunched with a group of women who appeared on a panel arranged by Mrs. Charles Tillett, vice-chairman of the Democratic National Committee, and a number of other women interested in the meeting.

Kept Simple watches John Podhoretz star in the clown show:

Here is JPod saying that explicit racism is cool as long as you're using it just to get votes. https://t.co/80ACvgXBBH

— kept_simple (@kept_simple) March 17, 2015

So this is a measure of Bibi's commitment to Israeli democracy: He just warned his supporters that Arabs are voting in large numbers.

— Jeffrey Goldberg (@JeffreyGoldberg) March 17, 2015

@JeffreyGoldberg why don't you just tweet "Bibi stinks" every 45 seconds? It's about the same.

— John Podhoretz (@jpodhoretz) March 17, 2015

@jpodhoretz Because I'm running on battery and have other things to do. Btw, what do you think about Bibi's warning about Arabs voting?

— Jeffrey Goldberg (@JeffreyGoldberg) March 17, 2015

@JeffreyGoldberg gee, what a shocker he'd try to scare right wingers to the polls. Whoever heard of such a thing. Get me my smelling salts.

— John Podhoretz (@jpodhoretz) March 17, 2015

One of the things that was supposed to get done in January but didn't was a revision of this piece--it is now three years out-of-date, after all, and while it is still useful it is less useful than it was, or would be were I to properly review and update it. But it did not get done in January. It is not going to get done in February. So I am putting it up both as a useful (albeit somewhat out of date) resource, but primarily as a reproach to myself to get cracking on the revision in my copious spare time...

.pdf. docx .epub .pages versions on iCloud

FEBRUARY 2012 VERSION: Budgeting and Macroeconomic Policy: A Primer

by J. Bradford DeLong

Budgeting and Macroeconomic Policy: A Primer

Today's Must-Must-Read: This is an important point that is worth saying as often as necessary--perhaps as often as possible:

Over at Equitable Growth: Apropos of my too-hot-for-Equitable-Growth, Time for a Rant!: Why Oh Why Cannot We Have Better Economists?, Paul Krugman inquires asks whether:

have forgotten, or perhaps never noticed, was Levine’s rant against me back in 2009, accusing me of failing to understand the depth and power of modern economic analysis.

I cannot remember reading it. It is a doozy--I will put it way down at the bottom. I will cut off the list of errors and just note the first four things I found wrong with it: READ MOAR

Over at Medium: I really should leave this to the highly-esteemed Nick Rowe: dealing with things like this is his comparative and absolute advantage.

But Steve Blough trolls me this morning over on the Twitter Machine about the truly remarkable ignorance of economics professor David K. Levine:

@Delong wishing you ill I send you to David Levine. The slaughter of innocent straw men is appalling. http://t.co/66Be7k03FD

— Steve Blough (@SteveBlough) March 16, 2015

And so I rise to the bait: READ MOAR

Nighttime Must-Read: Senator Tom Cotton (R-AR): "We have to stand up to Iran’s attempts to drive for regional dominance. They already control Tehran increasingly they control Damascus and Beirut and Baghdad and now Sana’a as well..."

John Adams: Letter to Abigail Adams, 16 March 1777, letterbook copy:

Philadelphia March 16, 1777

The Spring advances, very rapidly, and all Nature will soon be cloathed in her gayest Robes. The green Grass, which begins to shew itself, here, and there, revives in my longing Imagination my little Farm, and its dear Inhabitants. What Pleasures has not this vile War deprived me of? I want to wander, in my Meadows, to ramble over my Mountains, and to sit in Solitude, or with her who has all my Heart, by the side of the Brooks. These beautifull Scaenes would contribute more to my Happiness, than the sublime ones which surround me.

Over at Medium: Bull Market: WRITTEN IN RESPONSE TO: [Bedtime for market efficiency](Bedtime for market efficiency)

The last time I saw Richard Thaler speak, he talked about the “Beauty Contest” game. In the “Beauty Contest” game, a bunch of people each pick a number between 0 and 100. The winner is the person whose number is closest to 2/3 of the average. And he talked about the person who, when he proposed to try the game on a group of alumni at a development function, advised him not to: it would be boring because everyone would choose zero.

I steal my title from my esteemed ex-roommate and coauthor Robert Waldmann, who writes:

In... What's the Matter with Kansas? Thomas Frank asks why lower middle-class people in middle America vote for Republicans against their own self-interest.

I wonder why wealthy investors vote for Republicans against their self-interest.

Brad DeLong wonders why they favor tight money and austerity against their self-interest....

Must- and Shall-Reads:

• Abhijit V. Banerjee and Sendhil Mullainathan: The Shape of Temptation: Implications for the Economic Lives of the Poor
• Tim Duy: Will the Dollar Impact US Growth?
• Daniel Kuehn: Why Inequality Matters
• Guntram B. Wolff and André Sapir: Euro-area governance: what to reform and how to do it
• Austan D. Goolsbee and Alan B. Krueger: A Retrospective Look at Rescuing and Restructuring General Motors and Chrysler
• David Beckworth: "Interestingly, this is not the first time European monetary policy has served to stabilize the core economies while destabilizing the periphery. The first go-round occurred in 1992 under the European Monetary System (EMS)..."
• Tim Jost: Another Perspective On King v. Burwell
• Alexis Goldstein: Because Finance Is Boring
• Alexis Goldstein: alexisgo.com
• James Kwak: jameskwak.net
• Frontline Analysts

Over at Equitable Growth--The Equitablog

• Must-Read: Abhijit V. Banerjee and Sendhil Mullainathan: The Shape of Temptation: Implications for the Economic Lives of the Poor
• Must-Read: Tim Jost: Another Perspective on King v. Burwell
• Must-Read: Daniel Kuehn: Why Inequality Matters
• Must-Read: Tim Duy: Will the Dollar Impact US Growth?

Plus:

• Things to Read on the Evening of March 15, 2015

And Over Here:

Monday Smackdown Watch: Perhaps the most urgent question of the day is: nature or nurture. Is the absence of empathy for the human condition on the part of writers for the pre-Gabriel Snyder Old New Republic a result of their nature--that the New Republic of Marty Peretz and those willing to go the extra mile to cater to his bigotries were predisposed to hire such people--or of their nurture--that their discussions while at the Old New Republic trained them to make arguments like this one?

The estimable Patrick Nielsen Hayden, widely-envied by many not least for his office in the Flatiron Building, administers today's Monday Smackdown: