Grasping Reality on TypePad, by Brad DeLong

Who taught in Wheeler Auditorium this spring?

UNDERGRAD. BUSINESS ADMINISTRATION 10 P 001 LEC
Course Title: Principles of Business
Location: MWF 9-10A, WHEELER AUD
Instructor: BRIGINSHAW, J (VAP Accounting)

I must say, if Terry Eagleton wants to make the case and elicit sympathy for the Oxford of his youth as it exists in his imagination, this is not at all the way to go about it:

Must-Read: There are, I think, six things that Paul Romer is objecting to, all gathered together under the portmanteau of "mathiness":

1. Claiming that, as a matter of methodology, "good science" requires assumptions that bake my politics into the cake.
2. Claiming that a theory is in some sense "confirmed" when in fact it makes no claims about anything observable.
3. Hiding your reasoning in a blizzard of irrelevant algebra.
4. Uncritically applying to the real world conclusions based on dubious assumptions.
5. Focusing on internal consistency rather than external relevance.
6. Foundations that are fake--that assume agents and markets that are not in the appropriate sense like the real agents and markets.

The problem with his paper, I think, is that while these six are correlated things, they are six different an distinct things.

Simon Wren-Lewis: Paul Romer and Microfoundations: "A distinction between scientific consensus and political discourse...

Herbert Hoover Riding the Horse of His Pride:

Over at Equitable Growth: I see that over on the Twitter machine Noah Smith is engaging Paul Romer, in an attempt to get Paul to elucidate his "Mathiness" paper. I think Noah Smith misunderstands Paul Romer.

As I see it, Paul Romer believes that George Stigler laid down the methodological principal that one should always assume perfect competition in one's microfoundations, and in so doing Stigler was acting as an ideologue rather than a technocrat, and that this is harmful.

It seems to me that Paul is more right than wrong.

Mario Draghi: ECB: The ECB’s Recent Monetary Policy Measures: Effectiveness and Challenges: "Over the past year the ECB has taken a series of major monetary policy measures...

...culminating in our decision in January this year to expand our asset purchases towards public sector securities. While the aim of these measures is the same as it has always been – maintaining price stability over the medium-term – their form is unprecedented for our central bank. And as such our policy decisions have become more complex in two key ways.

Thomas Jefferson: Williamsburgh May 16. 1777:

Dear Sir

Matters in our part of the continent are too much in quiet to send you news from hence. Our battalions for the Continental service were some time ago so far filled as rendered the recommendation of a draught from the militia hardly requisite, and the more so as in this country it ever was the most unpopular and impracticable thing that could be attempted. Our people even under the monarchical government had learnt to consider it as the last of all oppressions.

https://www.youtube.com/embed/YQbPewOXukw

Must-Read: As I often say, you win the game of economic theory working in the Chicago tradition if you come up with a theoretical reason why a situation that appears rife with externalities and market failures is in fact one in which the bare-market allocation is in some sense Pareto Optimal. People who start out from the belief the governments are incompetent by necessity and that private property as always the greatest thing--even greater than sliced bread--should not work in the Chicago tradition, as what they produce is lousy. (conversely, you win the game of economic theory working in the Berkeley tradition if you come up with a theoretical reason why a situation in which it looks like the market works is actually rife with market failures and externalities. People who start out from the belief the government failure does not exist do not do good work in the Berkeley tradition.)

Live from La Farine: How does opposition to contraception and abortion and advocacy of discrimination against homosexuals get tied up with the gold standard and the elimination of the pro-poor redistributionist social ethic of Jesus Christ? It is a mystery.

First, what is the American Principles Project. Well, the American Principles Project's founder is Robert P. George. Enough said.

UPDATE: No, not enough said. Thanks to the Idler for finding this true gem in First Things:

Robert P. George: Killing Abortionists: A Symposium: "I am personally opposed to killing abortionists...

....However, inasmuch as my personal opposition to this practice is rooted in a sectarian (Catholic) religious belief in the sanctity of human life, I am unwilling to impose it on others who may, as a matter of conscience, take a different view. Of course, I am entirely in favor of policies aimed at removing the root causes of violence against abortionists. Indeed, I would go so far as to support mandatory one-week waiting periods, and even nonjudgmental counseling, for people who are contemplating the choice of killing an abortionist. I believe in policies that reduce the urgent need some people feel to kill abortionists while, at the same time, respecting the rights of conscience of my fellow citizens who believe that the killing of abortionists is sometimes a tragic necessity-not a good, but a lesser evil. In short, I am moderately pro-choice...

Must- and Should-Reads:

• Must-Read: Paul Krugman: Fraternity of Failure
• Michael Leachman and Michael Mazerov: State Personal Income Tax Cuts: Still a Poor Strategy for Economic Growth
• Must-Read: Ta-Nehisi Coates: President Obama on Color-Blind Policy and Color-Conscious Morality
• Must-Read: Larry Elliott: Thomas Piketty to Investigate Inequality in New Role at LSE
• Must-Read: Ezra Klein: Why Adam Posen Thinks Obama’s TPP Is Worth Passing
• Elias Isquith: Bruce Bartlett: “Utter Insanity and Stupidity”
• Must-Read: John Herrmann: Notes on the Surrender at Menlo Park
• Must-Read: Martin Sandbu: Free Lunch: Below potential, But How Far?
• Paul Krugman (1998): America the Boastful
• Jagdish Bhagwati (1998): The Capital Myth: The Difference between Trade in Widgets and Dollars

Over at Equitable Growth--The Equitablog

• "Neoliberalisms", Left and Right
• Nick Bunker: Weekend reading
• Nick Bunker: How exactly do we measure U.S. economic well-being?
• Marshall Steinbaum and John Schmitt: Would graduating more college students reduce wage inequality?
• Nick Bunker: Looking for the roots of total factor productivity growth

Plus:

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

And Over Here:

Must-Read: Paul Krugman: When Maestros Cry: "Via Mark Thoma, today in liberal fascism: Apparently I’m part of the liberal speech police...

Must-Read: The more I look at the British labor market, the more likely it seems to me that low productivity growth is the result of two things: (a) the reduction in financial services's profitability in London, and (b) a reemployment system gone mad which is creating an awful lot of low productivity matches between workers and jobs: people who are to be holding out for a job with more hours at which they could be more productive, but were being driven to take whatever will get the social insurance system off their backs--hence the huge number of zero-hour jobs and the large number of people who are not employed, really, but are rather casual labor who might be called on next week. And if aggregate demand in Britain picked up, my guess would be that a lot of the low productivity would turn out to be a mirage.

Martin Sandbu: Free Lunch: Below potential, But How Far?: "The central issue in the Inflation Report published yesterday by the Bank of England is...

Must-Read: It used to be the bookstores collected order flow and then ordered books from distributors who ordered them from publishers who edited and printed them from manuscript by authors. Then Amazon appeared and is still seeking to eliminate as many intermediaries between authors and book readers as it can. Is Facebook about to try the same thing? And how long before reporters with followings start collecting their paychecks from Facebook directly? Interesting questions...

John Herrmann: Notes on the Surrender at Menlo Park: "Platforms grow by incorporating the labor of users and partners...

Live from the Roasterie: Quite an extraordinary piece of rhetoric from a Bush-scion Chickenhawk who thought back in 1971 that he might have a http://articles.philly.com/1992-10-11/news/26000431_1_son-jeb-war-policy-jeb-bush): Jeb considered filing for conscientious-objector status to avoid the war, according to Barbara Bush. She said in an interview with United Press International in 1984 that her husband told Jeb, 'Whatever you decide... I will back you 100 percent.' Jeb eventually decided to submit to the draft, she said.">conscientious objection to military service:

Brian Buetler: "After facing the most predictable question of the election cycle...

Harry S. Truman: The President's News Conference:

THE PRESIDENT. I am very sure that the first thing you are principally interested in is the free press in Germany. I would like to read a little statement here, and if you want to ask me some questions about it, I will try to answer them.

Q. Will you read slowly, Mr. President?

THE PRESIDENT. I will read it very slowly.

General Eisenhower has advised me that he has issued no policy or order dealing with the importation of publications into Germany. The General has expressed the personal opinion that a free press and a free flow of information and ideas should prevail in Germany in a manner consistent with military security.

General Eisenhower has emphasized, however, that there can be no restoration of a free German press in Germany until the elimination of Nazi and militarist influence has been completed. We are not going to lose the peace by giving license to racialist Pan-Germans, Nazis and militarists, so that they can misuse democratic rights in order to attack Democracy as Hitler did.

Now I agree with General Eisenhower on that.

And if you want to ask me some questions, why fire away.

Over at Equitable Growth]1 Today's best piece I have read on the internet is by the extremely sharp John Quiggin:

John Quiggin: The Last Gasp of (US) [Left-]Neoliberalism: "US neoliberalism is... closer to Blair’s Third Way than to Thatcher....

...[US] neoliberalism maintained and even extended ‘social liberalism’, in the US sense of support for equal marriage, reproductive choice and so on. In economic terms, its central claim was that the goals of the New Deal... could best be pursued through market-friendly policies that would earn the support of the financial sector.... [The] signature issues for US neoliberals were free trade, cuts in ‘entitlement’ spending, and school reform... a ‘grand bargain’, in which Republicans would accept minimal increases in taxation in return for the abandonment of most of the Democratic program. The Clinton administration was explicitly neoliberal.... And, while Obama’s 2008 election campaign was masterfully ambiguous, his first Administration neoliberal through and through.... But developments since then, including the global financial crisis, the failure of school reform and increasing awareness of entrenched inequality have destroyed the appeal of neoliberalism...

I think that John Quiggin is largely correct--if you correct "abandonment" to "reconfiguration". READ MOAR

Live from the Palace of Westminster: David Cameron**: "For too long, we have been a passively tolerant society...

...saying to our citizens: as long as you obey the law, we will leave you alone. It’s often meant we have stood neutral between different values. And that’s helped foster a narrative of extremism and grievance. This government will conclusively turn the page on this failed approach...

: Visual History of Decreasing World Hunger and Improving Food Provision: ""

Must-Read: The key negotiating questions on TPP are how to make the pharmaceutical IP carve-out work, and how to make sure ISDS levels regulatory playing fields up rather than down. The judgment call from a technocratic point of view is how much are these worth--should they be put forward as negotiating-position dealbreakers, and should they really be dealbreakers?

Ezra Klein: Why Adam Posen Thinks Obama’s TPP Is Worth Passing: "Companies, Posen continues, have taken ISDS...

Must-Read: Larry Elliott: Thomas Piketty to Investigate Inequality in New Role at LSE: "The LSE has announced that the author of Capital in the Twenty-First Century...

Must-Read: My assorted progeny complain that I have not referred enough things from Ta-Nehisi Coates recently. They are correct. In America today, unfortunately, formally race-blind policy discourse on poverty and inequality is and will not for a long time be truly race-blind at all:

Ta-Nehisi Coates: President Obama on Color-Blind Policy and Color-Conscious Morality: "You will hear no policy targeted toward black people...

Live from The Roasterie: Do Americans no longer buy non-Apple laptops? Or is it just that Americans whose jobs allow them to sit in cafes that sell $4 espresso drinks in the morning no longer buy non-Apple laptops?

Over at Equitable Growth: Paul Krugman digs in in defense of old economic thinking: behavioral finance to explain bubbles, money illusion plus anchoring to explain wage and price inertia, and then the three-commodity--outside money, bonds, and currently-produced goods and services--temporary-equilibrium model of Hicks and Metzler to provide the backbone of a useful macroeconomics:

Must- and Should-Reads:

• Dani Rodrik and Sharun Mukand: "Perhaps liberal democracy has little to do with the balance of power among social groups and their strategic motivations. Maybe it requires instead, the development over time of a culture of tolerance and civil liberties. Or maybe both are needed to sustain institutions that uphold property, political, and civil rights in the long term..."
• Kimberly Ann Elliott: "Bangladesh and Cambodia... are paying the full freight... 15 percent and up average tariffs.... If Vietnam were to get substantial new access to the US market, I think that could have potentially serious trade diversion implications..."
• Greg Ip: Bond Market Plunge Shows How Stability Can Breed Instability
• David Wessel: "Shelby['s]... avoids nearly all the tough issues of legitimacy... seven-member commission is [not to]... touch questions raised by the archaic ownership structure of the Fed or... having nominally private companies making public-policy decisions... ignoring the bizarre and outdated governance of the system is a missed opportunity..."
• Ashoka Mody: "The Greek government's mounting financial woes are leading it to contemplate the previously unthinkable: defaulting on a loan from the International Monetary Fund. Instead of demanding repayment and further austerity, the IMF should recognize its responsibility for the country's predicament and forgive much of the debt..."
• Akhil Reed Amar: "The most important limit, the one we fought the Revolutionary War for, is that the people doing this to you are the people you elect...."
• Evan Soltas: Student Loans and the Next Crisis
• Must-Read: Marshall Steinbaum: What explains rising wealth inequality?
• Must-Read: Andrew Jalil and Gisela Rua: Inflation Expectations and Recovery from the Depression in 1933
• Must-Read: Lawrence Summers (2011): A Conversation on New Economic Thinking
• Must-Must-Read: Matthew Yglesias: "Brookings did a symposium

Over at Equitable Growth--The Equitablog

• : Choose Your Heterodoxy: Farmer vs. Krugman
• Nick Bunker: Looking for the roots of total factor productivity growth

Plus:

• Things to Read on the Evening of May 13, 2015

And Over Here:

Must-Read:Ed Kilgore: “Democrats in Disarray,” Part II: "I complained this morning about the permanent audience for ‘Democrats in Disarray’ stories...

Across the Wide Missouri: $4.50 toast comes to Kansas City!

Heirloom Bakery & Hearth

White-bread (actually whole-wheat millet, multigrain, sunflower flax, molasses raisin walnut, rosemary-wheat, cheesy pesto, cinnamon-swirl brioche, challah, and homestyle white-bread) yuppie culture continues to spread across the land!

Matthew Yglesias: "Brookings did a symposium on the 40th anniversary of Arthur Okun's famous book...

John Maynard Keynes (1924): Obituary for Alfred Marshall: "ALFRED MARSHALL was born at Clapham on July 26, 1842...

...the son of William Marshall, a cashier in the Bank of England, by his marriage with Rebecca Oliver. The Marshalls were a clerical family of the West, sprung from William Marshall, incumbent of Saltash, Cornwall, at the end of the seventeenth century. Alfred was the great-great-grandson of the Reverend William Marshall, the half-legendary herculean parson of Devonshire, who, by twisting horseshoes with his hands, frightened local blacksmiths into fearing that they blew their bellows for the devil. His great-grandfather was the Reverend John Marshall, Headmaster of Exeter Grammar School, who married Mary Hawtrey, daughter of the Reverend Charles Hawtrey, Sub-Dean and Canon of Exeter, and aunt of the Provost of Eton.

pdf

In October 2005 I was surprised to see a member of the Bush family--the smart one, Jeb ("John Ellis"--but what a Connecticut Yankee is doing choosing a nickname and thus calling himself after a rebel cavalry general who spent his time in Pennsylvania catching free Blacks to sell as slaves, rather than being Lee's army's eyes, is beyond me)--simply failing to get the point of what his father was saying on the tennis court when George H.W. Bush would threaten to "unleash Chiang":

• Unleash Chiang Kai-Shek http://delong.typepad.com/sdj/2005/10/unleash_chiang_.html 2005-10-06

Comment of the Day: Patrianakos: said in reply to Redwood Rhiadra: "No, RR. We DFH's don't loathe Hillary...

...The Village loathes Hillary, the way it loathed Bill. If she beats Uncle Bernie, we'll be there in November. It's not like we could live with any of the R's.

Must-Read: Lawrence Summers (2011): A Conversation on New Economic Thinking: "We have a bunch of people who kind of assume that the regulators are smart...

Winston Churchill: Speech of May 13, 1945

It was five years ago on Thursday last that His Majesty the King commissioned me to form a National Government of all parties to carry on our affairs. Five years is a long time in human life, especially when there is no remission for good conduct. However, this National Government was sustained by Parliament and by the entire British nation at home and by all our fighting men abroad, and by the unswerving co-operation of the Dominions far across the oceans and of our Empire in every quarter of the globe.

Must- and Should-Reads:

• Alex Harrowell: "It might, however, be what you’d expect in a market that is still pretty close to a high-unemployment equilibrium, but one that expresses the insufficiency of effective demand via underemployment rather than unemployment. If we were, that would explain why it is so difficult to reduce the deficit and why wages are so poor, and also why productivity is so poo..."
• Paul Krugman (1999): "It's possible to summarize what [Tom] Friedman has to say fairly quickly... it's what you read in just about every ... Business Week. Information technology... has made the world a small place... richly rewards countries and societies that meet its needs... strong property rights, open minds, and a flexible attitude.... This story is told via hundreds of anecdotes, most of them involving the author.... [Friedman's] clear implication of his various parables and metaphors is that Japan is in trouble because it is hidebound and inefficient.... Yet, as Friedman himself points out, Japan's export sector remains world-class.... The immediate problem is not inadequate supply but inadequate demand. Put in a nutshell, the Japanese simply save too much; that is, although Friedman's only reference to Keynes is a disparaging one... Japan is in fact suffering the most classically Keynesian crisis since the 1930s. And the United States.... If the role-reversal between the United States and Japan has more to do with old-fashioned macro-economics than with the inexorable new logic of globalization, maybe the rules of the game haven't changed as much as Friedman thinks--and maybe, also, America's winning streak is not forever. Did somebody say 'bubble economy'?"
• Must-Read: Dan Walters: Finally, war on Prop. 13 breaks out
• Must-Read: Ashok Rao: How Do Net International Positions Matter?
• Melissa Kearney et al.: Six Economic Facts About Transportation Infrastructure in the United States
• Must-Read: Joshua Brown: The Magnificent Five: Some Ridiculously Kind Words from Tren Griffin
• Must-Read: Jesse Cross-Call: Medicaid Expansion Is Producing Large Gains in Health Coverage and Saving States Money
• Martin Wolf (2011): Managing the Eurozone’s Fragility
• Paul Krugman (2011): The Pain in Spain
• Jonathan Portes (2011): Macroeconomics: what is it good for?
• Must-Read: Medicins san Frontiers: The Trans-Pacific Partnership: A Threat To Global Health?
• Lydia Di Pillis: Nail salon workers aren’t the only ones who need protection from abusive workplaces

Over at Equitable Growth--The Equitablog

• Department of "Huh?!": Noah Smith Claims the British Economy Today Is Not in a Keynesian Slump
• "Establishing" Health Exchanges: Ways Out of the King v. Burwell Trap
• The Brookings-Okun Event: "As Our Case Is New, We Think Anew, and Act Anew..."

Plus:

• Things to Read on the Evening of May 12, 2015

And Over Here:

Lord, Enlighten Thou Our Enemies: Let us start with John Stuart Mill's prayer:

'Lord, enlighten thou our enemies,' prayed nineteenth-century British economist and moral philosopher John Stuarrt MIll: http://olldownload.libertyfund.org/Texts/MillJS0172/Works/Vol10/PDFs/Mill_1277.pdf:

Sharpen their wits, give acuteness to their perceptions, and consecutiveness and clearness to their reasoning powers: we are in danger from their folly, not from their wisdom; their weakness is what fills us with apprehension, not their strength...

Re: John Scalzi: The Myth of SF/F Publishing House Exceptionalism

I don't doubt that Baen Books under Jim Baen was primarily a print-good-stories-that-Jim-Baen-thinks-will-sell-and-get-people-to-buy-more-Baen-books enterprise. And I don't doubt that Jim Baen was very good to John Ringo.

But.

Consider three things:

First, Walter Jon Williams's take. Walter Jon Williams tells stories of unhappy dealings with Jim Baen. WJW is a very, very good writer indeed who writes cracking good stories that have a beginning, a middle, and a (more than satisfactory end--in fact, who writes stories that are so good that everyone would benefit from some more serious publisher marketing muscle behind him. He casts a rather different light on Baen. See http://www.walterjonwilliams.net/2011/04/1983-the-writers-life/, on life in the days when Jim Baen was both an editor at Tom Doherty's Tor Boks and running his own Baen Software computer-game company: "Those were the days when there were only three people in the Tor offices. Jim Baen the editor, Tom Doherty the publisher, and Mrs. Doherty the bookkeeper....

Over at Equitable Growth: Real production in Great Britain is far below what we thought back in 2007 it would be today if British growth proceeded according to trend:

READ MOAR

Must-Read: Zeynep Tufekci: Social Media Exercise

@stevenbjohnson We mostly moved out of manual labor, hence we exercise. We have social structures designed to polarize, hence we... TBD.

— Zeynep Tufekci (@zeynep) May 12, 2015

Must-Read: The truly extraordinary thing about California's Proposition 13 was not that it nearly froze residential real estate taxes as long as residents owned the property, but that it nearly froze commercial and industrial real estate taxes essentially forever. I do not understand how that provision made it into Jarvis-Gann in the first place--or how it has survived in California for so long...