Brad DeLong's Grasping Reality

Soldiers from the Soviet Union and United States Meet at the River Elbe:

Just outside the town of Torgau in eastern Germany, elements of the United States Army’s 69th Infantry Division and the 5th Guards Army of the Soviet Union came face to face following a long campaign of rolling back Adolf Hitler’s conquest of the continent. Less than two weeks later, the Allies would celebrate victory in Europe....

Live from La Farine: As I have said before, one important reason I was for Barack Hussein Obama rather than Hillary Rodham Clinton was my belief that America was now more sexist than racist and that Obama would be treated by the Republicans and the political class with the respect appropriate for a serious presidential candidate and for a president.

The second part of that belief was clearly wrong.

The first part, however, may well be right: get ready for the sewage avalanche:

Live from La Farine: For every time somebody emails me, privately, and tells me that Dean Baquet--in spite of his failure to commission a deep dive on New York Times dysfunction and Jeff Gerth and company on Whitewater, in spite of his failure to commission a deep dive on New York Times dysfunction and Judy Miller on Iraq, in spite of such things as yesterday's misrepresentations of the Department of State's role in CFIUS--sincerely wants to turn the Grey Lady into a trusted information intermediary, two or three examples of things like the following cross my desk:

Looking for something I had written relevant to Ken Rogoff's attempt to explain the current constellation of asset prices, I found it on my weblog for September 2005.

And then I went on the reread the whole month:

The highlight was what I was looking for--the extremely sharp-witted Robert Barro had a very interesting but, I concluded, ultimately unpersuasive paper on "Rare Events and the Equity Premium". The problem is that any rare catastrophe large enough to permanently crash the U.S. stock market almost surely crashes the real returns on Treasury bonds as well--hence cannot explain the ex-ante equity return premium vis-a-vis Treasuries:

• Comment on Barro, "Rare Events and the Equity Premium http://delong.typepad.com/sdj/2005/09/comment_on_barr.html 2005-09-30

Must- and Should-Reads:

• Ted Genoways: "Climate change is making the Texas panhandle, birthplace of the state’s iconic Longhorn, too hot and dry to raise beef. What happens to the range when the water runs out?"
• Dave Gilson: "It's Not the 1% Controlling Politics. It's the 0.01 Percent.... About 1,200 Americans control more than 40 percent of election contributions...
• Must-Must-Read: Daniel Davies: Greece--The Next Steps and Scenarios
• Umair Haque: The Asshole Factory
• Nick Bunker: The path to more U.S. exports?
• Must-Read: Jérémie Cohen-Setton: The Critique of Modern Macro
• Must-Read: Brian Buetler: Obamacare Opinion Poll: Repeal Popularity Driven by Old People
• Lawrence Mishel et al.: Wage Inequality: A Story of Policy Choices
• Must-Read: Miles Corak: “After Piketty”: 12 Policy Proposals
• Bob Litan: Economists: Don’t Leave Home without One
• Tony Atkinson: 'Inequality: What Can Be Done?'
• Alice Rivlin: Priorities for Economic Policy
• Sharon K. Long et al. : Taking Stock: Gains in Health Insurance Coverage under the ACA as of March 2015
• Eduardo Porter: Big Mac Test Shows Job Market Is Not Working to Distribute Wealth
• Nick Bunker: U.S. firms’ high debt loads amplified the Great Recession
• Arin Dube: Public Assistance, Private Subsidies and Low Wage Jobs
• Must-Read: Tony Yates: With Enemies Like These?
• Must-Read: Paul Krugman: That Old-Time Economics

Over at Equitable Growth--The Equitablog

• Thinking About Ken Rogoff: Overleverage, Secular Stagnation, Savings Glut, Impaired Financial Trust
• How Does Ben Bernanke Add Value to Citadel?
• April 21, 2015 Trans-Pacific Partnership Briefing Conference Call: Questions for US Government Representatives

Plus:

• Things to Read at Lunchtime on April 23, 2015

And Over Here:

Over at Equitable Growth: Ken Rogoff--of whom my standard line is: everything he says is very interesting, and almost everything he says is completely correct--is weighing in: on secular stagnation, the global savings glut, the safe-asset shortage, the balance-sheet recession, whatever you want to call it.   His view is that excessive debt issue and overleverage are at the roots of most of our problems. He thus believes that our difficulties will end when deleverage has reduced the overhang of risky and underwater debt to a sustainable level: READ MOAR

Live from the Roasterie: Perhaps the strangest thing about hanging out on the Missouri-Kansas border is the moderate Republicans who come up to one: "Isn't the failure to expand Medicaid insane?" they say

Memo, Edward Stettinius to Harry S. Truman, April 23, 1945. President's Secretary's File, Truman Papers:

Across the Wide Missouri: Does George Packer really think the purpose of American politics is to thrill him?

Over at Equitable Growth: Before fees, the performance of Ken Griffin's Citadel is almost surely above the market's risk/return line. After fees and since 2007, I doubt it. After fees, investors in Ken Griffin's Citadel hedge fund appear have lagged the S&P500's 6%/year nominal return since its peak in 2007. And it is not as though Griffin is selling a greater degree of safety than the S&P500 offers: Citadel came very, very close to blowing up in 2008, and the most I can say is that I do not know what its true beta is. READ MOAR

Tweet of the Day: Carter C. Price: https://twitter.com/CarterCPrice/status/589813587209805824: .@TheEconomist section on family companies a how-to guide for #Piketty future--makes stronger case than r > g http://econ.st/1OtVZKy

I must say I did not know what to make of this a year ago. I know even less what to make of this now:

Guy Liddell: Diary:

I confess I had not realized until now how bad the Bush and the Brownback eras have been for Wichita, even with the oil boom...

Over at Equitable Growth: Trying to get the issues straight in my mind here...

>antonio.white@xxxxxx.xxx: Dear Mr. Delong: I hope this note finds you well. In light of recent activity in Congress related to the Trade Promotion Authority legislation, I write to invite you to join an off-the-record conference call with XXXXXX senior staff for an update on the current state of play. The call is scheduled for today, Tuesday, April 21 at 3:45 p.m. ET

Dear Mr. White:

Thank you very much for your invitation. I will try. I will have to move a couple of things--and I am not the most important person involved in them...

But if you want to know where my concerns are, let me start by quoting something that I wrote before http://www.bradford-delong.com/2015/03/the-debate-over-the-trans-pacific-partnership.html: READ MOAR

Why is it that all the racists who show up in my Twitter feed are so very, very eager to demonstrate that they have no claim to be part of any "cognitive elite"?

"No. This Is Verbal Abuse. Argument Is Next Door..."

• Liveblogging History: 753 BC: Livy on the Founding of Rome
• "Comment of the Day: Adam Morrow: 'At the family practice office I worked at the past 2 months (a Federally qualified community health center)...":
• "Tweet of the Day: Mark Dow: On Twitter on Tony Yates on John Taylor":
• "Across the Wide Missouri: Andrew Liptak: Craving a new military science fiction thrillride? Pick up these books"
• Monday Smackdown: Uwe Reinhardt Eviscerates John Goodman
• Liveblogging World War II: April 20, 1945: Winston S. Churchill on Franklin Delano Roosevelt
• Weekend Reading: Tony Yates on John Taylor
• "Tweet of the Day: @grodeau: buying German bonds at negative interest rates is like throwing dimes in front of the steamroller!":
• Across the Wide Missouri: Bill Clinton: 20th Anniversary of the Oklahoma City Bombing
• Henry Swann Liveblogs World War II: April 19, 1945: German Complicity in Nazi Atrocities
• Keynesian Multipliers, Investment Accelerators, and Crowding-in
• Weekend Reading: Vivian Gornick's Review of ‘Eleanor Marx: A Life,’ by Rachel Holmes

Might Like to Be Aware of:

• Thomas Mann: [Barney Frank's Memoir](http://www.brookings.edu/blogs/fixgov/posts/2015/04/16-barney-frank-memoir-mann>
• Marko Kloos: "I am relieved beyond measure to see that The Three-Body Problem by Liu Cixin (translated by Ken Liu) has been added to the Best Novel Hugo shortlist in place of Lines of Departure.... This reaffirms to me... that withdrawing Lines of Departure from the shortlist was 1000% the right call to make..." http://www.munchkinwrangler.com/2015/04/16/gladness/
• Charles Francis Adams (1879): Notes on Railroad Accidents
• Helen Lewis: The Hugo Awards Hijack: Nasty, Dishonest--But It Just Proves Progressives Right
• John O'Neill: "On Saturday, April 18th, I informed the administrators at Sasquan that we have withdrawn Black Gate from consideration for the 2015 Hugo Award.... I have serious concerns about the legitimacy of the 2015 Hugo ballot, as it was largely dictated by a single individual, Vox Day, who campaigned for a slate of nominees on his website (the Rapid Puppies slate). To a lesser extent, it was also influenced by Brad Togersen’s Sad Puppies slate. Together, the two slates successfully placed 61 nominees on the ballot. Black Gate was part of the Rabid Puppies ballot, although we were unaware of our inclusion until we were informed of our nomination..."
• John Scalzi: Keeping Up With the Hugos, 4/20/15
• Kyle York: Lesser-Known Trolley Problem Variations.
• John Scalzi: Keeping Up with the Hugos, 4/20/15 | Whatever
• Marko Kloos (@markokloos): ["If there has ever been a day that called for a big slice of NY cheesecake and a double dram of Scotch on the side, today is it.. https://."[(https://twitter.com/markokloos/status/588501714279538688)

Over at Equitable Growth:: How is it that people can think that an excess supply of money can show up as an excess demand for financial assets--and thus produce large losses on leveraged portfolios and thus a financial crisis when it unwinds--without also showing up as an excess demand for currently-produced goods and services--and thus as inflation? That is the question that perplexes Paul Krugman as he tries to decode the thought of John Taylor and the BIS financial-stabilistas. It perplexes me too:

Tears from laughter flow as John Goodman, the promoter of high deductibles, now laments their effect http://t.co/FSkTcJ6Dji via @forbes

— Uwe Reinhardt (@uereinhardt) April 5, 2015