Grasping Reality on TypePad, by Brad DeLong

Must-Read: Mark Thoma: An Essential Part of Job Creation Policy Is Missing: "Candidates have focused on how to create jobs that pay a decent wage...

Justin Wolfers asked if any of the signers to this took their much-deserved reputational hit for signing it, or whether any of them have provided any sort of apologia.

The answer is "No: reporters somehow quote them, but do not ask them why they got it so wrong in late 2010. Reporters do not ask them how they have revised their visions of the Cosmic All as a result of getting it wrong. Reporters remain eager to take their quotes down and publish them as if they were the informed views of experts."

And the other real shame--besides the journalistic one of pretending that this embarrassment never happened and continuing to burnish the reputation and media presence of the signers--is that, to my knowledge at least, not a single one of the signatories has gone back and explained (a) why they were so certain that QE was a disaster, (b) why they were wrong, (c ) how they have changed their working model of the economy according to Bayes's Rule, and (d) how their policy recommendations will be different in the future. Marking their beliefs about the world to market is just not something that any of these people ever do...

The tripe:

An Open Letter to Ben Bernanke | e21 - Economic Policies for the 21st Century:

Robert F. Burns: Letter](http://www.robertfburns.com/Letter1945November23.html):

Paris, France

November 23, 1945

Dear Mom,

Well, we had an all-out Thanksgiving Dinner yesterday. Actually it was supper for that was when most of the students would be there.

• Mallory Ortberg (2014): How To Maintain Control Of The Shared Armrest: A Guide For Women Flying Alone
• John Scalzi: "The last few days are a reminder that a large number of Americans are in fact shrieking, bigoted cowards, and that's a sad thing, indeed."
• Mistermix: "Kevin Drum lost his even keel yesterday.... I have a slightly different opinion: the press is under no obligation to treat Republican candidates for President with the same care as escaped mental patients, or your mouthy racist uncle after a half dozen boilermakers..."
• Doug: "The Coalition Of The Wetting is even more frightened than I expected. Niall Ferguson: 'I am, instead, going to tell you that this is exactly how civilisations fall. […] Like the Roman Empire in the early 5th century, Europe has allowed its defences to crumble. […] Poor, poor Paris. Killed by complacency.' At this point, I guess we should all know that bed wetting is a core conservative value"
• Jonathan Bernstein: "States with Democrats in charge accept [Medicare expansion]. States with Republicans... have mixed records.... But once a state goes along with Medicaid expansion, it doesn’t go back on it even if a strongly conservative Republican is elected governor..."
• Corinne Gretler: "Swiss watch exports had their biggest decline in six years in October, led by a 39 percent slump in shipments to Hong Kong.... Shipments declined 12 percent to 2 billion Swiss francs ($2 billion), the Swiss customs office said..."
• Dylan Matthews: Economists Tested 7 Welfare Programs to See if They Made People Lazy. They Didn't
• LifeSpan TR800-DT5 Desktop Treadmill

Eleanor Roosevelt: My Day:

Wednesday—In the hearts of many people this Thanksgiving Day there will be a deep and fervent sense of thankfulness. The war is at an end, and many boys and men who were in constant danger are home again with their families.

Clay Shirky: The Digital Revolution in Higher Education Has Already Happened. No One Noticed:

In the fall of 2012, the most recent semester with complete data in the U.S., four million undergraduates took at least one course online, out of sixteen million total, with growth up since then. Those numbers mean that more students now take a class online than attend a college with varsity football. More than twice as many now take a class online as live on campus. There are more undergraduates enrolled in an online class than there are graduate students enrolled in all Masters and Ph.D. programs combined. At the current rate of growth, half the country’s undergraduates will have at least one online class on their transcripts by the end of the decade. This is the new normal.

Paul Krugman (2003): Serf's Up!: "According to [Evsey] Domar, serfdom actually withered away before the Black Death...

Over at Equitable Growth: Two seventeen-year old quotes from Paul Krugman:

In a flexible-price economy, the necessity [for equilibrium] of a negative real interest rate does not cause unemployment.... The economy deflates now in order to provide inflation later.... This fall in the price level occurs regardless of the current money supply, because any excess money will simply be hoarded, rather than added to spending.... The central bank... finds itself [thereafter] presiding over inflation no matter what it does...

And:

A liquidity-trap economy is "naturally" an economy with inflation; if prices were completely flexible, it would get that inflation regardless of monetary policy, so a deliberately inflationary policy is remedying a distortion rather than creating one...

Thinking about these two quotes has led me to change my rules for reading Paul Krugman. READ MOAR

Ann Pettifor: What Are the Economic Possibilities for Our Grandchildren?:

It is a great honour to speak at this celebration of Kings and Keynes. The greatest honour I can do to both Keynes and Kings College is to get down to business and speak frankly.

The world desperately needs to recover Keynes, but to do so it also needs to confront some deeply uncomfortable truths about the nature of power and the acceptance or otherwise of ideas.

Robert H. Jackson: Opening Statement before the International Military Tribunal:

May it please Your Honors:

The privilege of opening the first trial in history for crimes against the peace of the world imposes a grave responsibility. The wrongs which we seek to condemn and punish have been so calculated, so malignant, and so devastating, that civilization cannot tolerate their being ignored, because it cannot survive their being repeated. That four great nations, flushed with victory and stung with injury stay the hand of vengeance and voluntarily submit their captive enemies to the judgment of the law is one of the most significant tributes that Power has ever paid to Reason.

aul Robeson: Joe Hill:

Live from Sutarjda Dai Hall: Clausen Center Conference on Global Economic Issues: November 21, 2015 9AM-5PM:

Comment of the Day: Joe Barsugli: "Once the Rockets Are Up...": "I was surprised to see the Soldatenstube...

Well, this is certainly surprising; this is certainly a black swan!:

Nassim N. Taleb, noted promoter of junk science, is now defending homeopathy https://t.co/a7mHOTVgei pic.twitter.com/c3vpQnpxuh

— Boing Boing (@BoingBoing) November 20, 2015

And it collides on my desk with (a) Shakespeare's Macbeth, and (b) my own grappling with how I have been very surprised by what did and did not happen to our policies and our economies since 2005...

So let's raise the curtain:

Live from the Roasterie: Back in 2011 I was uncertain as to whether Rex Sinquefield was a con artist or a mark, a grifter or a grifter. It seems clear now what he has chosen to be: a con artist and a grifter. I certainly see none of the enthusiastically-promised and much-claimed boost in Kansas employment, either relative to the country as a whole or relative to past trends, since the state became Brownbackistan:

Comment of the DayRobert Waldmann: Gramm-Leach-Bliley: "I think a major defect of Gramm-Leach-Bliley (Glass-Steagal repeal)...

History.com: Nuremberg Trials Begin:

Twenty-four high-ranking Nazis go on trial in Nuremberg, Germany, for atrocities committed during World War II.

Over at Equitable Growth--The Equitablog:

• Nick Bunker: Corporate Surpluses, Savings, and Economic Growth: "Either we figure out a way to induce more investment from the corporate sector, or we consider the best use of these savings for the broader economy..."
• John Authers: Number-Crunchers Lift Lid on Investor Choice: "Retail investors...fatally drawn to chasing performance..." :: Must-Read: This is what Akerlof and Shiller's Phishing for Phoolsis about...
• Simon Wren-Lewis: mainly macro: Politically Impossible: "Should I have demanded a retraction? I didn’t: life is short... perhaps it said more about the writer than it did about me..." :: The writer, BTW, is Chris Giles, whom we have seen before...
• Megan McArdle: Why Democrats Fixate on Glass-Steagall: "Glass-Steagall... is the perfect Washington Issue... negligible impact but great popular charm... politicians... sound as if they are addressing some major problem without having to go to the trouble of actually doing so..." :: But narrow-banking advocate Milton Friedman would be especially shrill today that the repeal of Glass-Steagall should be repealed...
• Ta-Nehisi Coates**: 2015 National Book Award Non-Fiction Winner
• Macro Advisers Forecasts: 1.9% GDP Growth in Q4

Must-Read: This is what Akerlof and Shiller's Phishing for Phoolsis about...

John Authers: Number-Crunchers Lift Lid on Investor Choice: "Retail investors...fatally drawn to chasing performance...

Live from Stephens Hall: Caitlin Rosenthal and Espen Storli: Making Markets: Histories of Commodity Grading and Trading: 9:00 am - 5:00 pm 470 Stephens Hall...

Must-Read: The writer, BTW, is Chris Giles. In light of this, does the almost-always excellent Financial Times have a significant quality-control problem here?

Simon Wren-Lewis: mainly macro: Politically Impossible: "An article in the Financial Times recently said of me...

Live from the Roasterie: Henceforth, can we call any members of the Republican Party "Americans"?:

Chris Doyle: On Twitter:

Top response to the refugee haters from the State department Spox today -he read this out #refugeeswelcome pic.twitter.com/tqm32Nj5fw

— Chris Doyle (@Doylech) November 18, 2015

Or "Christians"?:

Oliver Willis: On Twitter:

if only we had a seasonally appropriate story about middle eastern people seeking refuge being turned away by the heartless

— Oliver Willis (@owillis) November 16, 2015

I do not recognize these people as belonging to this country. This is not who we are supposed to be. This is not who we were...

Must-Read: The reason to repeal the repeal of Glass-Steagall is that (1) it has not led to increased competition and lower fees in investment banking, and (2) it creates a point of vulnerability at which financiers can make bets with the government's money. narrow-banking advocate Milton Friedman was especially shrill on this point: that deposit insurance was necessary, but that banks with government-insured deposits should be restricted to buying Treasuries and only Treasuries:

Megan McArdle: Why Democrats Fixate on Glass-Steagall: "Team Steagles... seem[s] to have become a powerful force in the Democratic Party...

Must-Watch: Ta-Nehisi Coates: 2015 National Book Award Non-Fiction Winner:

Ta-Nehisi Coates: Between the World and Me

Must-Note: Macro Advisers says: the economy is growing at less than any reasonable estimate of potential output this quarter...

In fact, let's look at the past eight quarters:

2015Q4: 1.9%
2015Q3: 1.5%
2015Q2: 3.9%
2015Q1: 0.6%

That is a 2.0% growth rate for 2015, after a 2.5% growth rate in 2014, after a 2.4% growth rate for 2013. No signs of growth faster than potential output. No signs of inflation.

Jennie Eliot: Your Uncharted Interview Video: To Brad, Peter....

All links in one place: 

• Full video with highlights
• Shortened link for sharing on social media
• Link to the post on our website containing the full interview text you provided
• Shortened link for sharing on social media...
• Link... [to] the other interview videos from the Uncharted event

And let me add:

• On Fold.cm: Are We Approaching "Peak Human"?
• Live Tweets
• Are We Approaching Peak Human?: The Honest Broker for the Week of November 9, 2015
• Uncharted 2015 Program

Plus:

• Trekonomics Panel at New York Comic Con: The Honest Broker for the Week of September 28, 2015

Daniel Little: Historical GDP estimates for early modern China: "Li Bozhong is one of China's most influential economic historians...

...Li's most recent book... appl[ies] the methodology of historical national accounts to China... to arrive at systemic and internally validated estimates of economic activity in a region over a period of time.... The results are highly interesting, and they challenge several key assumptions that have been made about the early Qing economy....

Live from the Roasterie: Is there an argument for Judge Alex Kozinski's point of view--that once a judge has resigned, there should be no further inquiry?

Stephanie Woodard**: Smutty, Racist E-Mails of Montana Judge Might Be Buried: "I’ve been reporting on the continuing brouhaha over... Montana judge [Richard Cebull]...

Wikipedia: Joe Hill:

Joe Hill, born Joel Emmanuel Hägglund in Gävle, Sweden, and also known as Joseph Hillström (October 7, 1879 – November 19, 1915) was a Swedish-American labor activist, songwriter, and member of the Industrial Workers of the World (IWW, also known as the "Wobblies"). A native Swedish speaker, he learned English during the early 1900s, while working various jobs from New York to San Francisco. Hill, an immigrant worker frequently facing unemployment and underemployment, became a popular songwriter and cartoonist for the radical union. His most famous songs include "The Preacher and the Slave" (in which he created the phrase "pie in the sky"), "The Tramp", "There is Power in a Union", "The Rebel Girl", and "Casey Jones—the Union Scab"....

By this time using the name Joe or Joseph Hillstrom (possibly because of anti-union blacklisting), he joined the Industrial Workers of the World (IWW) or Wobblies around 1910, when working on the docks in San Pedro, California. In late 1910 he wrote a letter to the IWW newspaper Industrial Worker, identifying himself as a member of the IWW local chapter in Portland, Oregon....

Over at Equitable Growth--The Equitablog:

• Matthew H. Hersch: Equitable growth and Southern California’s aerospace industry
• Jonathan Moreno: Explaining the “History of Technology” series and equitable growth
• Nick Bunker: The consequences and causes of declining geographic mobility in the United States: "U.S. workers are not only moving west at a declining rate, but they are becoming less likely to move east, north, and south as well..."
• Prime-age female employment in the U.S. and Canada http://equitablegrowth.org/?p=16112
• Jared Bernstein: Models of the Minimum Wage: "We can introduce some ideas... that comport a bit more with reality.... At the end of the day... when the theory doesn’t match the evidence, trust the evidence..." :: The rationale for a minimum wage is the theory that the low-wage labor market suffers market failures analogous to those of natural monopolies...
• Miles Corak: Inequality: A Fact, an Interpretation, and a Policy Recommendation: "A common storyline...[:] inequality has not increased... there is little that can be done... effort... fighting inequality diverts attention from more pressing problems..." :: That Miles Corak... [says] 'a common storyline' is a measure of... right-of-center echo chamber...
• Isabel Sawhill: Where Have All the Workers Gone?: "Among male heads of household... between... 25-54 [nt working], 27 percent say it is because they are ill or disabled.... [But] we excluded from the sample anyone on disability..." :: I really want to see what happens to these numbers in a high-pressure low-slack economy...
• Gabriel Zucman : GSPP Policy Research Seminar: Wealth Inequality in the United States Since 1913: Evidence from Capitalized Income Tax Data: "The rise of wealth inequality is almost entirely due to the rise of the top 0.1% wealth share..." :: It's all at the peak...
• Duncan Weldon: Are the Robots Taking Enough Jobs?: "The next wave of labour-saving technology looks to be replacing human brains, rather than human brawn, and the impact could be far more wide-reaching..." :: Human smiles and human truly creative thought look to remain economically valuable. So learn how to smile!

Must-View: Prime-age female employment in the U.S. and Canada:

http://equitablegrowth.org/?p=16112

Must-Read: The economics of the regulation of natural monopolies tells us that such entities reduce utility by artificially restricting what they produce in order to improve their terms-of-trade and profits--and that one tool to deal with this is rate regulation. The Card-Krueger and other evidence on low-wage employment suggests the same rationale for the minimum wage:

Jared Bernstein: Models of the Minimum Wage: "We can introduce some ideas... that comport a bit more with reality...

...In the low-wage labor market... workers/employers are not that responsive in terms of employment to changes in wages (dlog(emp)/dlog(wage)=small number like -0.1 to -0.3, or something…). When you draw inelastic supply and demand curves, you end up predicting a lot less unemployment.... If this model is more accurate, significant estimates of job loss effects are hard to pull out of the data. Which they are.... [The world is] trying to tell us something about low-wage workers and their employers’ tempered responsiveness to increases in the wage floor.... There’s [also] a model... [of a] a monopsony labor market.... The monopsony model may sound arcane—the classic example is the one-company coal town--but it may not be too much of a reach to conclude that the low-wage labor market in a given town or city works kind of like this.... The competitive model as conventionally drawn is misleading. Economic models vastly simplify... can yield some insights.... But at the end of the day... when the theory doesn’t match the evidence, trust the evidence.

http://jaredbernsteinblog.com/models-of-the-minimum-wage-for-what-theyre-worth/

Must-Read: That Miles Corak describes the three aspects of rising-inequality denial as "a common storyline" is a measure of who completely divorced from reality even so-called policy professionals in the right-of-center echo chamber have become. Sensible technocratic dialogue is thus going to remain very, very difficult for quite a while to come...

Miles Corak: Inequality: A Fact, an Interpretation, and a Policy Recommendation: "A common storyline.... Inequality has not increased...

I remember that at the start of my second semester of Ec 10--Principles of Economics--my section leader, the extremely sharp Rick Erickson, explained that it was very important to distinguish the trend from the business cycle. And, he went on to say, there were two types of economists: those who distinguished between trend and cycle, who he said you should listen to, and those who confused trend and cycle.

So, hoisted from my archives from four years ago:

Live from Newark Airport: Paul Krugman: Fear and Friends: "The news from Paris was horrifying, and deserved... commentary...

Must-Read: I really want to see what happens to these numbers in a high-pressure low-slack economy...

Isabel Sawhill: Where Have All the Workers Gone?: "Among male heads of household between the ages of 25-54...

Must-Read: Gabriel Zucman is talking at Berkeley on November 30 on the sharpness of the peak in wealth accumulation. It's not any sort of broad-based phenomenon: it's all at the peak--the surge in incomes at the very top, coupled with their inability or unwillingness to increase their spending to match...

Gabriel Zucman : GSPP Policy Research Seminar: Wealth Inequality in the United States Since 1913: Evidence from Capitalized Income Tax Data: "We estimate wealth by capitalizing the incomes reported by individual taxpayers...

Must-Read: Human smiles and human truly creative thought look to remain economically valuable. So learn how to smile!

Must-See: Ron Lee, Hilary Hoynes, Henry Brady, Alex Gelber, Jesse Rothstein (November 18, 2015): Do Millennials Stand a Chance? Giving the Next Generation a Fair Shot at a Prosperous Future:

Wednesday, November 18, 2015 from 8:00 AM to 11:00 AM (PST) :: California Memorial Stadium :: 210 Stadium Rim Way

William Pitt: Speech on the Proposed Address to the Throne:

I RISE, my Lords, to declare my sentiments on this most solemn and serious subject. It has imposed a load upon my mind, which, I fear, nothing can remove, but which impels me to endeavor its alleviation, by a free and unreserved communication of my sentiments.

Live from Newark Airport: I must say, first Ebola and now Syrian refugees.... It makes me wonder: The next time one of these Republican clowns is in executive office, Daesh comes to them and says: pay us $3 billion and we won't explode a bomb in the U.S. this year, or don't pay us $3 billion and we will.

How does any one of these Republican clowns say?

And have their been messages yet to Sam Brownback in Kansas, Mitch Daniels Mike Pence in Indiana, Bobby Jindal in Louisiana, etc., asking them for $30 million for "security" for 2015 for their states? And what have they answered?

Matthew Yglesias: Obama's Sick Burn on Republican Critics of His Refugee Policy: "After a meeting with President Benigno Aquino of the Philipines...

Eleanor Roosevelt: My Day, November 17, 1945:

CHICAGO, Friday—In a recent issue of a national publication there appear these words:

As we Americans have been told so often, millions of people face what may become the worst winter in the history of human suffering. The instrument we think will save them is UNRRA, but it won't. In fact, it is so far from adequate that we had best junk it and start anew.

Over at Equitable Growth--The Equitablog:

• Painful Lessons from the Great Recession
• Nick Bunker: How high can the minimum wage go?
• Larry Mishel: Uber Is Not the Future of Work: "Driving mostly for supplementary income on a transitory basis..." :: I'm with Larry Mishel here: Why do people think Uber-type companies are an important deal, again? Uber, AirBNB, Criagslist... and what else?
• Steven Pearlstein: The Value and Limits of Economic Models: "The alleged failings of economics are now widely understood.... Rodrik no doubt set out to offer an evenhanded view of modern economics, [but] in the end he winds up delivering a fairly devastating critique..." :: Let me agree with Steve Perlstein here: the economics that Dani Rodrik praises is not the strongest current, outside of our liberal-arts non-business school ivory towers, and not always even in them.
• John Fernald: The Pre-Great-Recession Slowdown in U.S. Productivity Growth: "Counting “free” digital goods wouldn’t raise market productivity much..." :: I do not understand what John Fernald is getting at here: Who cares if it is not "market" but "home" production?
• Mark Thoma: Where Fed's Critics Got It Wrong in GOP Debate: "The Federal Reserve was instrumental in easing the impact of the Great Recession..." :: Critics of expansionary macro policies in a high-slack low-inflation economy have taken over Republican-Party economic policy. Can somebody please tell me what is going on?

Must-Read: I'm with Larry Mishel here: Why do people think Uber-type companies are an important deal, again? Uber, AirBNB, Criagslist... and what else?

Larry Mishel: Uber Is Not the Future of Work: "The rise of Uber has convinced many... that freelancing via digital platforms is becoming increasingly important...

Must-Read: Let me agree with Steve Perlstein here: the economics that Dani Rodrik praises is not the strongest current, outside of our liberal-arts non-business school ivory towers, and not always even in them.

Steven Pearlstein: The Value and Limits of Economic Models: "The alleged failings of economics are now widely understood...

Hoisted from the Archives from Nigh on Five Years Ago: What Have We Unlearned from Our Great Recession?

Must-Read: I do not understand what John Fernald is getting at here: Who cares if it is not "market" but "home" production? We focus on GDP as a proxy for utility, and we focus on nonfarm business as a proxy for properly-measured GDP, no?

John Fernald: The Pre-Great-Recession Slowdown in U.S. Productivity Growth: "Counting “free” digital goods wouldn’t raise market productivity much...

History.com: German scientists brought to United States to work on rocket technology:

The United States ships 88 German scientists to America to assist the nation in its production of rocket technology. Most of these men had served under the Nazi regime and critics in the United States questioned the morality of placing them in the service of America. Nevertheless, the U.S. government, desperate to acquire the scientific know-how that had produced the terrifying and destructive V-1 and V-2 rockets for Germany during WWII, and fearful that the Russians were also utilizing captured German scientists for the same end, welcomed the men with open arms.

Must-Read: After being wrong for eight straight years, critics of expansionary macro policies in a high-slack low-inflation economy--those who say that fiscal stimulus is sugar, and monetary expansion is opium--have not only not rethought their positions, but have taken over economic policy, in rhetoric at least, everywhere in the Republican Party. Can somebody please tell me what is going on?

Mark Thoma: Where Fed's Critics Got It Wrong in GOP Debate: "The Federal Reserve was instrumental in easing the impact of the Great Recession...