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November 2015

Monday Smackdown: Hoisted from Archives from Five Years Ago: Economists Clueless About the Economy Weblogging

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:

Continue reading "Monday Smackdown: Hoisted from Archives from Five Years Ago: Economists Clueless About the Economy Weblogging" »


Liveblogging World War II: November 23, 1945: Major Robert F. Burns

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.

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Links for the Week of November 22, 2015

Sanzio 01 The School of Athens Wikipedia the free encyclopedia

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Liveblogging History: November 22, 1945: My Day by Eleanor Roosevel

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.

Continue reading "Liveblogging History: November 22, 1945: My Day by Eleanor Roosevel" »


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

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.

Continue reading "Weekend Reading: Clay Shirky: The Digital Revolution in Higher Education Has Already Happened. No One Noticed" »


What Is the Free-Market Solution to a Liquidity Trap? Higher Inflation!

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

Continue reading "What Is the Free-Market Solution to a Liquidity Trap? Higher Inflation!" »


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

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.

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Liveblogging World War II: Robert H. Jackson: Opening Statement before the International Military Tribunal

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.

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"Black Swans" Is the Wrong Way to Think About It: "Great Birnam Wood to High Dunsinane Hill Come" Weblogging...

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

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:

Continue reading ""Black Swans" Is the Wrong Way to Think About It: "Great Birnam Wood to High Dunsinane Hill Come" Weblogging..." »


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:

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Things to Read for Your Lunchtime Procrastination on November 20, 2015

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Over at Equitable Growth--The Equitablog:

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

Chris Doyle: On Twitter:

Or "Christians"?:

Oliver Willis: On Twitter:

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...

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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.


Should We Fear Peak Human?: Master Post for Uncharted 2015 Brad DeLong-Peter Leyden Session

Are We Approaching Peak Human Brad DeLong Interview Uncharted YouTube

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

All links in one place: 

And let me add:

Plus:


Today's Economic History: Historical GDP for Early Modern China

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....

Continue reading "Today's Economic History: Historical GDP for Early Modern China" »


Liveblogging History: November 19, 1915: Execution of Joe Hill

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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....

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Things to Read for Your Morning Procrastination on November 19, 2015

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Over at Equitable Growth--The Equitablog:

Continue reading "Things to Read for Your Morning Procrastination on November 19, 2015" »


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...

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(Late) Monday Smackdown: Greg Mankiw Says: The Rich Get Poorer!: Hoisted from the Archives from Four Years Ago

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:

Greg Mankiw (2011): The Rich Get Poorer: "Here is a fact that you might not have heard from the Occupy Wall Street crowd...

...The incomes at the top of the income distribution have fallen substantially over the past few years. 

Continue reading "(Late) Monday Smackdown: Greg Mankiw Says: The Rich Get Poorer!: Hoisted from the Archives from Four Years Ago" »


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...

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Liveblogging the American Revolution: November 18, 1777: The Earl of Chatham

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.

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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...

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Liveblogging History: November 17, 1945: Eleanor Roosevelt

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.

Continue reading "Liveblogging History: November 17, 1945: Eleanor Roosevelt" »


Things to Read for Your Afternoon Procrastination on November 17, 2015

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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?

Continue reading "Things to Read for Your Afternoon Procrastination on November 17, 2015" »


Painful Lessons from the Start of the Lesser Depression: Hoisted from the Archives from Nigh on Five Years Ago

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

Graph Real Gross Domestic Product 3 Decimal FRED St Louis Fed

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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...

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Liveblogging the Cold War: November 16, 1945: "Once the Rockets Are Up..."

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.

Continue reading "Liveblogging the Cold War: November 16, 1945: "Once the Rockets Are Up..."" »


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...

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