Grasping Reality on TypePad, by Brad DeLong

Rich Lowry: Yet More on the Confederate Battle Flag: "If anyone banging on about the Confederacy at the moment on Twitter...

...were born in the 1840s in the South, outside of a few select areas, they, too, would have fought for the Confederacy. That should lend a measure of modesty to this debate.

Ooopsie!

Rich Lowry: Yet More on the Confederate Battle Flag: "If anyone banging on about the Confederacy at the moment on Twitter...

...were born in the 1840s in the South, outside of a few select areas, they, too, would have fought for the Confederacy. (UPDATE: It should go without saying that this isn’t true of blacks.) That should lend a measure of modesty to this debate.

Why should it go without saying?

Across the Wide Missouri: Christopher Grimes: Southerners Silenced too Long by Symbolism of Confederate Flag: "When I was growing up in Georgia in the 1970s and 80s...

...the Confederate battle flag was part of the visual and cultural landscape... emblazoned on everything from bumper stickers to shot glasses and beach towels.... In Tallapoosa... the flag was painted on the wall of the high school gym. Our football team was called The Rebels.... Our ‘fight song’... was ‘Dixie’. And added to all this Confederate imagery was our school mascot, a mustachioed southern gentleman dressed in the same shade of grey that famed general Robert E Lee wore to the civil war battle of Appomattox....

Today's Economic History: James Narron and Don Morgan: Crisis Chronicles: Railway Mania, the Hungry Forties, and the Commercial Crisis of 1847: "Money was plentiful in the United Kingdom in 1842...

...and with low yields on government bonds and railway shares paying handsome dividends, the desire to speculate spread—as one observer put it, ‘the contagion passed to all, and from the clerk to the capitalist the fever reigned uncontrollable and uncontrolled’ (Francis’s History of the Bank of England). And so began railway mania.

Comment of the Day: The Idler: What About Today's Republican Party?: "the idler said... 'We face the very strange combination of...

Must-Read: Tony Atkinson: After Piketty? : "First we need to clarify the objectives...

Comment of the Day: Tracy Lightcap: "I've pretty much gone over to R completely in my own work and in my teaching...

From Arthur Goldhammer's forthcoming translation of de Tocqueville's Recollections:

I returned to the chamber and regained my seat. Nearly all the deputies had left. The benches were filled by people from the streets. Lamartine, still at the podium and framed by the two flags, continued to harangue the crowd, or, rather, converse with it, for there were as many orators as listeners, or so it seemed to me. The confusion was at its height.

Think are intellectual property protections are insufficiently strong?

Five years ago I put a tickler in to see what would happen to this. Glad to see that sanity reigned after all:

This Day in History: First Battle of the Isonzo - Jun 23, 1915 - HISTORY.com:

On June 23, 1915, exactly one month after Italy declared war on Austria-Hungary, the Italian army attacks Austro-Hungarian positions near the Isonzo River, in the eastern section of the Italian front; it will become the first of twelve Battles of the Isonzo fought during World War I.

Must- and Should-Reads:

• Shachar Kariv: Behavioral Finance Q&A
• Must-Read: Barry Ritholtz (2011): What Caused the Financial Crisis? The Big Lie Goes Viral
• Must-Read: Jonathan Ostry et al.: Don’t Sweat the Debt If Fiscal Space Is Ample
• Victor Ricciardi: Behavioral Finance Curriculum--What Topics and Teaching Approaches to Utilize in a Course?
• Must-Read: Richard Baldwin: VoxEU Told You So: Greek Crisis Columns since 2009
• Must-Read: Karl Whelan: Greece, The Euro and Gunboat Diplomacy
• Bob Greenstein: "New CBO report starts by saying long-term budget picture has worsened but data in report clearly show the opposite: http://t.co/ShuYlAMNzh"
• Justin Fox: Who Is a Corporation Supposed to Serve?
• Ambrose Evans-Pritchard: Greek Debt Crisis the Iraq War of Finance
• Jared Bernstein: Correcting CBO and touting some fiscal oxygen

Over at Equitable Growth--The Equitablog

• Why Small Booms Can Cause Big Busts
• Stimulus or Stymied?: The Macroeconomics of Recessions (January 2013): The Honest Broker

Plus:

• Things to Read on the Evening of June 23, 2015

And Over Here:

Over at Project Syndicate: As bubbles go, it was not a very big one.

From 2002 to 2006, the share of the American economy devoted to residential construction rose by 1.2 percentage points of GDP above its previous trend value, before plunging as the United States entered the greatest economic crisis in nearly a century. According to my rough calculations, the excess investment in the housing sector during this period totaled some $500 billion – by any measure a tiny fraction of the world economy at the time of the crash.

Live from Sandbridge Beach: Invictus: Red State, Blue State: Kansas & Washington: "We have interesting experiments going on in the state of Kansas and the city of Seattle...

Must-Read: Barry Ritholtz (2011): What Caused the Financial Crisis? The Big Lie Goes Viral: "Rather than admit the error of their ways...

Must-Read: Jonathan Ostry et al.: Don’t Sweat the Debt If Fiscal Space Is Ample: "High public debt ratios dominate today's fiscal policy discussions...

Eleanor Roosevelt: :

HYDE PARK, Thursday—I have been sent, by the Communist Political Association, a statement of the resolution which they are considering and will vote on as an expression of the American Communist point of view and as their guide for action. As a document, it is excellent; but I think I should clarify, for two groups in this country, the column which I wrote a short time ago.

Links:

• Victor Ricciardi: Behavioral Finance Curriculum--What Topics and Teaching Approaches to Utilize in a Course?
• Margie and Ray's Seafood Restaurant, Crab House, and Raw Bar
• Sue Gin
• William G. McGowan - Wikipedia, the free encyclopedia
• Alex Pappademos: ‘Mad Max’ as Hell: The Masterful, Maniacal, Surprisingly Feminist ‘Fury Road’
• Armamentarium

Tweets:

• Must-Read: Richard Baldwin: VoxEU Told You So: Greek Crisis Columns since 2009
• RT @zeynep: Ugh. Slate takes its hate-link baiting for clicks strategy to its logical, ugly conclusion. (#NotallSlate but a lot) https://t.… Jun 22, 2015
• RT @ntableman: Am I the only one who loves listening to @baratunde? http://t.co/IMK2TLMKae Jun 22, 2015
• RT @LOLGOP: Even the Pope gets Climate Change and even Mitt Romney gets why the state shouldn't sanction the Confederate flag. These are no… Jun 21, 2015
• RT @tanehisicoates: All countries fail, somehow, to live to their ideals. Confederacy did not merely "fail" to be just. Injustice was the e… Jun 21, 2015
• RT @reidepstein: Walker on Confederate flag: "The placement of a Confederate flag on the Capitol grounds is a state issue." Jun 21, 2015
• RT @AdamWeinstein: How can you claim you'll stand up to Russia & Iran if you can't stand up to an army that surrendered 150 years ago? htt… Jun 21, 2015
• RT @GrumpyMoll: "Convincing Americans that Obama doesn’t want you to have Obamacare will not be easy." haha MT Republicans lying Jun 21, 2015

Must-Read: Richard Baldwin: VoxEU Told You So: Greek Crisis Columns since 2009: "Vox columnists have been analysing the situation with uncanny foresight right from the beginning...

The Miami News:

Must-Read: Karl Whelan: Greece, The Euro and Gunboat Diplomacy: "As for the euro, I fear that Europe’s leaders...

Must- and Should-Reads:

• Martin Wolf: Why Climate Uncertainty Justifies Action
• Catherine Mann: Too Much Bank Lending Can Slow Economic Growth
• Tracy Alloway: Meet the New Shadow Bank (It's a Lot Like the Old Shadow Bank): Mutual Funds and ETFs have the same weakness as repo, says Barclays
• Matt Bruenig: People Aren't Better Off Than Income Trends Show
• Jonathan Chait: Jeb Gave George W. Stupidest Idea Ever, Stole It

Over at Equitable Growth--The Equitablog

• Things to Read on the Afternoon of June 20, 2015

And Over Here:

Must-Read: Josh Marshall: Is Israel's Big Problem Jewish Journalists in America?: "The whole thing descends to a parodic, almost Dolezalesque level of gobsmacking when [Michael] Oren...

Walter Jon Williams: Waterloo: "Here we view the climactic scene from the 1970 film Waterloo...

...directed by the Russian director Sergei Bondarchuk, who I’ve always thought of as “Sergei Ponderous,” from his heavy-handed directorial style. (It was Bondarchuk who directed the 6 1/2 hour version of War and Peace, which I once viewed on a midnight-till-dawn showing in a London theater. If you survived the French invasion, you got champagne.) Bondarchuk was lucky enough to be able to borrow what seems to be the entire Yugoslav Army.... The sheer scale of the battle, with nearly 200,000 men (and a few women) clawing at each other on a very compact, muddy battlefield, so constricted that it’s hard to believe that any of those bullets missed... the sheer slaughter that produced 40-50,000 dead— the precise number is impossible to determine, because the French were so broken they never managed a head count afterwards:

Must-Read: Mark me down as one of those people who never understood what the Federal Reserve saw in the data or the forecast to make an end-of-2016 short-term safe nominal interest rate of 3%/year appropriate in the first place. It seemed to me to indicate a dangerous degree of unrealistic groupthink around the FOMC table and among the senior staff. It now strongly looks as though by the end of 2016 the Federal Reserve will have undershot all three of its inflation, its growth, and its employment targets for nine straight years:

Liz McCormick: Memo to Bond Market From Fed: You Were Right on Interest Rates: "Federal Reserve policymakers are coming around to the bond market's wisdom...

Live from La Farine: Lindsey Graham: "Part of who we are... used by people in a racist way...": "This[flag] is part of who we are...

...The flag represents — to some people — the Civil War, and that was the symbol of one side.... It’s been used by people in a racist way...

Live from Above Hetch-Hetchy: Why has King v. Burwell not been DIGed--or, at least, why haven't the lawyers and funders for the plaintiff been told to go back and get a new and different lead plaintiff?

Because at least the four justices who voted to grant certiorari are so partisan that they are willing to throw more than two centuries of Supreme Court precedent that the court decides only real cases out the window.

One does have to wonder what is going through the mind of John Roberts. How much credibility does he think he and his fellow partisan right-wing horsemen have to waste after Bush v. Gore and Citizens United, anyway?

Must-Read: Matt Bruenig: People Aren't Better Off Than Income Trends Show: "When people embark on this sort of priming...

Must-Read: Antonio Fatas: Interest Rates: Natural or Artificial?: "Ben Bernanke... central banks are simply reacting to economic conditions rather than driving the interest rate...

Comment of the Day: James Wimberley: Premier Je Suis, Second Je Fus, Mouton Ne Change: "I can't resist quoting François Villon's puff...

...for Chateau Balestard la Tonnelle, on the other side:

Must- and Should-Reads:

• Must-Read: Glenn Hubbard Taking Capital's Gains: Capital's Ideas and Tax Policy in the Twenty-First Century Must-Read: Òscar Jorda, Moritz Schularick, and Alan M. Taylor: Leveraged Bubbles Must-Read: Antonio Fatas: Interest Rates: Natural or Artificial? Must-Read: Miranda Dietz: Are California Employers Dropping Health Insurance for Part-Time Workers? | Are California Employers Dropping Spousal Coverage or Limiting Eligibility for Health Insurance? | Are California Employers Cutting Hours to Avoid Providing Health Benefits?
• Must-Read: Hershbein et al.: What Increasing Education Will and Will Not Do for Earnings and Earnings Inequality: A Response to the WCEG’s Steinbaum and Schmitt

Over at Equitable Growth--The Equitablog

• Nick Bunker: Weekend reading
• Nick Bunker: How much is the Internet worth to the average American?
• Nick Bunker: What is predistribution?
• Ben Zipperer: Bolstering the bottom by indexing the minimum wage to the median wage
• Musing About Ezra Klein's Views of the Political Economy of ObamaCare
• Startup Geometry Podcast: Brad DeLong and Scott Gosnell

Plus:

• Things to Read at Lunchtime on June 19, 2015

And Over Here:

Comment of the Day: Charles Steindel: State-Level Fiscal Policy: "While I agree with what you literally say...

Over at Equitable Growth: Ezra Klein has a very nice explainer on the likely consequences of the possible announcement next week of a 5-4 partisan Supreme Court vote to disrupt ObamaCare via the case King v. Burwell:

Ezra Klein: King v. Burwell Won’t Destroy Obamacare: "A ruling for the plaintiffs in King won't change anything about Obamacare...

...in California, or New York, or Massachusetts, or even Kentucky. And it won't be a long-term problem for the states using a federal exchange out of convenience rather than ideology; they'll just set up their own exchanges.... Pennsylvania, Arkansas, Delaware, and Maine are already working on backup plans. So King can't destroy Obamacare. What it can do is let Republican elected officials destroy Obamacare in states where they have a majority. That's a very different thing, and it will lead to very different political dynamics.... Resistant red states will be left with a wrecked insurance market — and a hefty tax bill.... READ MOAR

Must-Read: Hershbein et al.: What Increasing Education Will and Will Not Do for Earnings and Earnings Inequality: A Response to the WCEG’s Steinbaum and Schmitt: "The insight that relative wages adjust to the supply and demand of workers with different levels of education...

Must-Read: Miranda Dietz: Are California Employers Dropping Health Insurance for Part-Time Workers? | Are California Employers Dropping Spousal Coverage or Limiting Eligibility for Health Insurance? | Are California Employers Cutting Hours to Avoid Providing Health Benefits?: "Data from California indicate that the most pronounced declines in coverage...

Eduard Bernstein, Karl Kautsky, and Hugo Haase: Leipzig, June 19, 1915: The Order of the Day:

The hour of decision has arrived. German Social Democracy confronts a question that is of the greatest importance to the destiny of the German people and the future of the civilized world.

During the past few weeks, prominent personalities and influential groups have been giving voice to demands – if anything in even more radical form – for which certain sectors of the press, as well as organizations to which no particular importance had been attached, have systematically stirred up support. Programs are being drawn up that put the stamp of a war of conquest on the present war. It is still fresh in everyone’s memory that the President of the Prussian House of Lords, Wedel-Piesdorf, declared during the session on March 15, 1915: Germany is now the victor:

Minutes of Meeting held at the White House, June 18, 1945:

Must-Read: David Smith: Why has R, despite quirks, been so successful?: "Bow Cowgill said, 'The best thing about R is that it was written by statisticians...

The worst thing about R is that it was written by statisticians.

R is undeniably quirky... and yet it has attracted a huge following for a domain-specific language, with more than two million users wordwide. So why has R become so successful, despite being outside the mainstream of programming languages? John Cook adeptly tackles that question in a 2013 lecture, 'The R Language: The Good The Bad And The Ugly'.... To understand a domain-specific language, you have to understand the domain, and statistical data analysis is a very different domain than systems programming.

Ray Ginger: On Clarence Darrow: "Ray Ginger on Clarence Darrow, from Ray Ginger (1975), The Age of Excess: The United States from 1877-1914 (Prospect Heights, IL: Waveland Press: 0192486013954), pp. 358-9:

Lawyer: Clarence Darrow: The name of Clarence Seward Darrow (1857-1938) conjures up the Monkey Trial and Leopold-Loeb. He is remembered as the foremost defense lawyer of his generation, spokeman for the accused in dozens of murder trials. This view is badly distorted. He was a courtroom advocate only in his waning years. The truth is far more complex.

Live from Pete's coffee: There is something pathetic about being the first customer at the Pete's Coffee as it opens. This is especially the case if you have not yet finished your discussion of Jorda et al...

Òscar Jorda, Moritz Schularick, and Alan M. Taylor: Leveraged Bubbles: "The critical assumption was that central banks would be in a position to manage the macroeconomic fall-out...

They could clean-up after the mess. While the aftermath of the dotcom bubble seemed to offer support for this rosy view of central bank capabilities, the 2008 global financial crisis dealt a severe blow to the assumption that the fall-out of asset price bubbles was always and everywhere a manageable phenomenon. This observation meshes well with the key finding of this paper: not all bubbles are created equal.... When credit growth fuels asset price bubbles, the dangers for the financial sector and the real economy are much more substantial. The damage done to the economy by the bursting of credit-boom bubbles is significant and long-lasting. These findings can inform ongoing efforts to devise better guides to macro-financial policies at a time when policymakers are searching for new approaches in the aftermath of the Great Recession.

http://conference.nber.org/confer/2015/EASE15/Jorda_Schularick_Taylor.pdf

Must-Read: Antonio Fatas: Interest Rates: Natural or Artificial?: "Ben Bernanke... central banks are simply reacting to economic conditions rather than driving the interest rate...

bottlerocketscience: Startup Geometry Podcast EP 004: Brad DeLong:

http://traffic.libsyn.com/windcastle/Startup_Geometry_EP_004__Brad_DeLong.mp3

Show Notes:

Must-Read: Simon Wren-Lewis: Speak for Yourself, or Why Anti-Keynesian Views Survive: "[Russ Roberts:] ‘The evidence for the Keynesian worldview is very mixed...

Must-Read: Òscar Jorda, Moritz Schularick, and Alan M. Taylor: Leveraged Bubbles: "The critical assumption was that central banks would be in a position to manage the macroeconomic fall-out...

Live from the Garonne Estuary: Château Mouton Rothschild

Suppose you were heading from Bordeaux to London in the twelfth century by sea.

Suppose wanted to stop someplace to pick up something to use as ballast.

Where would you stop?

Yep. You would stop at what is now Château Mouton Rothschild on the left bank of the Garonne. That is the ideal place to stop, pick up whatever blast you need for ship stability, and rebalance your cargo before you head out beyond Isle de Cordouan into the waves of the North Atlantic.

What do you think the chances are that the best place in the world to grow grapes for making claret--the place with the absolute-best, ahem, terroir--just happens to also be the ideal place to pick up ballast for the Bordeaux-London voyage?

And, in fact, what are the odds that the sea-run ballast pick-up point would just happen to be for Bordeaux-London? That the sea run would be that between the capital of the lands that Eleanor d'Acquitaine brought to the Angevin Empire and the London capital and court of Henri II de Plantagenet?

"But what about the Burgundies?" you ask. Had not the Dukes of Burgundy managed to acquire overlordship of the seventeen provinces at the mouths of the Meuse and the Rhine, Burgundy would be nowhere. And the great days of the Burgundian court came to an end with the death of Charles the Rash...

Must-Read: Glenn Hubbard Taking Capital's Gains: Capital's Ideas and Tax Policy in the Twenty-First Century, 68 National Tax Journal, 409–424 (June 2015): "This essay examines Thomas Piketty’s proposal in Capital in the Twenty-First Century for wealth taxation...

M.S.: Inequality: The 1 percent needs better defenders: "Perhaps [it was] John Kenneth Galbraith... [who] said that the way to debate...

Must- and Should-Reads:

• Ashok Rao: Parsing the US Investment Position
• Ha-Joon Chang, Thomas Piketty, David Blanchflower, et al.: Osborne plan has no basis in economics
• Must-Read: Josh Bivens: A Vital Dashboard Indicator For Monetary Policy: Nominal Wage Targets
• CBO: Long-Term Budget Outlook 2015
• Must-Read: Martin Wolf: Divorce Greece in Haste, Repent at Leisure

Over at Equitable Growth--The Equitablog

• Nick Bunker: What Is Predistribution?
• The Past Two Decades: The Coming of the Information Economy Looks to Have Doubled Our True Rate of Economic Growth

Plus:

• Things to Read on the Morning of June 17, 2015

And Over Here:

Must-Read: Martin Wolf: Divorce Greece in Haste, Repent at Leisure: "Some argue... Greece at least would be far better off...

What about today's Republican Party?

Let me give a stream-of-consciousness-personal-psychodrama-confessional-oversharing answer to that question:

I am not a political scientist. I am not an especially deep student of politics.

My government experience came from working in 1993-1995 in Lloyd Bentsen's Treasury Department, when he had just gone from being senator from Texas and chairman of the Senate Finance Committee Treasury Secretary. He and his staff, broadly, believed that what you did in order to govern--with a kinder and gentler, technocratic, equitable-growth approach to policy--was to start with a centrist block, Bentsen and his friends and allies, people from Jack Danforth on the right to Daniel Patrick Moynihan on the left. You would then call for bids from the left and right. You would ally with whichever was willing to give you better deal to build a majority. And you would then vote your bill out of the Senate Finance Committee 12-5 and roll it through initial passage, conference, and presidential signature.