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December 2015

Weekend Reading:: James Boyle (1991): A Process of Denial: Bork and Postmodern Conservatism

A Process of Denial: Bork and Postmodern Conservatism:

[I]t is naive to suppose that the [Supreme] Court's present difficulties could be cured by appointing Justices determined to give the Constitution its true meaning,' to work at 'finding the law' instead of reforming society. The possibility implied by these comforting phrases does not exist.... History can be of considerable help, but it tells us much too little about the specific intentions of the men who framed, adopted and ratified the great clauses. The record is incomplete, the men involved often had vague or even conflicting intentions, and no one foresaw, or could have foreseen, the disputes that changing social conditions and outlooks would bring before the Court... --Robert Bork, Fortune December 1968 p.140-1....

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Weekend Reading: Philip Klein: A Trump win would validate liberals' caricature of Republicans

Philip Klein: A Trump win would validate liberals' caricature of Republicans:

For decades, liberals have created a caricature of Republicans as being more about bombast and white resentment than substance and principles. Should Donald Trump win the GOP presidential nomination, it would help validate this cartoonish portrait.

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Must-Read: The extremely-sharp Miriam Ronzoni excellently puts her finger on a substantial hole in Thomas Piketty's Capital in the Twenty-First Century.

Piketty starts, I think, from the observation that the French Second Empire and Third Republic--extraordinarily egalitarian in politics for white native-born males either as equal subjects of the Bonaparte dynasty or equal citizens of the Republic--were extraordinarily unfriendly to egalitarian economic measures. And, in addition, capital was able to adjust and rig the system of property rights in order to neutralize the forces of supply and demand that economists see as naturally making a high-capital economy a low-profit rate economy. Piketty strongly believes that a non-plutocratic society requires a low level of r-g, a low level of the difference between the profit rate r and the growth rate g. With r fixed save in times of societal catastrophe by the hegemonic power of capital even in political democracies, escape from plutocracy this hinges on boosting g, on a higher overall economic growth rate.

But, Ronzoni points out, this fatalistic analytical conclusion by Piketty has no impact on his suggested political strategy. A trust in Habermasian discourse and in the effectiveness of mobilization for social democracy appears out of thin air--both in the later pages of Piketty's text, and in his post-publication career as a public intellectual. It's not even "pessimism of the intellect, optimism of the will". It's simply a disconnect:

Miriam Ronzoni: Where Are the Power Relations in Piketty’s Capital?: "My concern about Piketty’s proposal is that there seems to be a friction...

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Weekend Reading: Charles Gaba: Avik Roy's Latest Is Kind of Embarrassing...

Charles Gaba: Avik Roy's latest is kind of embarrassing:

Out of all of the 2,500+ blog entries I've posted over the past 2+ years here, the one I'm most proud of was 'A Response to Avik Roy', from March 25, 2014 (written right in the thick of the crazy, frenzied final week countdown of the first ACA Open Enrollment Period). This was the period when this website was at it's very peak of traffic and I was at the very peak of my media attention. I was doing nothing but updating the site for about 16 hours per day, interrupted only by eating, sleeping and being interviewed by every outlet under the sun. Needless to say, I was frazzled, exhausted and short-tempered, and in fact I ended up falling victim to a nasty case of shingles as a result immediately after the close of the April 15th 'Overtime Period' a couple of weeks later.

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Liveblogging History: December 12, 1945: Penicillin

Alexander Fleming: Penicillin:

I am going to tell you about the early days of penicillin, for this is the part of the penicillin story which earned me a Nobel Award. I have been frequently asked why I invented the name "Penicillin". I simply followed perfectly orthodox lines and coined a word which explained that the substance penicillin was derived from a plant of the genus Penicillium just as many years ago the word "Digitalin" was invented for a substance derived from the plant Digitalis. To my generation of bacteriologists the inhibition of one microbe by another was commonplace. We were all taught about these inhibitions and indeed it is seldom that an observant clinical bacteriologist can pass a week without seeing in the course of his ordinary work very definite instances of bacterial antagonism.

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The Archives: December 12, 2015

Smart people who can teach you things who you should intellectually engage with! The highly-estimable Nick Rowe! Scott Lemieux! Chad Orzel!

Plus many people... most of them right-wing... who really have no place in any public sphere focused on reality-based discourse.

When will I be allowed to drop dealing with people like David Broder... John Cochrane... Victor Davis Hanson... Chuck Lane and his merry band of misrepresenters... Megyn Kelly... and Enrique Diaz-Alvarez down the memory hole? When will the day come when they no longer trouble the public sphere?

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Live from Evans Hall: I would merely point out that the out-of-touch elite is not confined to the Republican Party.

There are substantial elements within the Brookings-Third Way wing of the Democratic coalition that would rather cut Social Security than establish a sensible retirement-income system, and that would rather cut Medicare than improve the efficiency of health care finance and delivery, after all. As all of the authors of the Brookings-AEI joint "consensus plan for reducing poverty and restoring the American dream" write:

there are reasonable ways both to cut spending and to raise revenue that are consistent with our core values. For example, Social Security spending is projected to consume over one percentage point more of national income in 2040 than it does today...

Why a one-percentage-point rise in the GDP share of Social Security is something that calls in any technocratic sense for cuts to the Social Security system is something that eludes me. What cutting Social Security has to do with reducing poverty eludes me. But it is something that all fifteen of the authors thought was so obvious as to require no explanation or justification whatsoever...

Paul Krugman: Empowering the Ugliness: "The story is quite different in America...

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Must-Read: I would beg the highly-esteemed Mark Thoma to draw a distinction here between "inappropriate" and unwise. In my view, it is not at all inappropriate for Fed Chair Janet Yellen to express her concern about excessive inequality. Previous Fed Chairs, after all, have expressed their liking for inequality as an essential engine of economic growth over and over again over the past half century--with exactly zero critical snarking from the American Enterprise Institute for trespassing beyond the boundaries of their role.

But that it is not inappropriate for Janet Yellen to do so does not mean that it is wise. Mark's argument is, I think, that given the current political situation it is unwise for Janet to further incite the ire of the nutboys in the way that even the mildest expression of concern about rising inequality will do.

That may or may not be true. I think it is not.

But I do not think that bears on my point that Michael R. Strain's arguments that Janet Yellen's speech on inequality was inappropriate are void, wrong, erroneous, inattentive to precedent, shoddy, expired, expired, gone to meet their maker, bereft of life, resting in peace, pushing up the daisies, kicked the bucket, shuffled off their mortal coil, run down the curtain, and joined the bleeding choir invisible:

Mark Thoma: Why It's Tricky for Fed Officials to Talk Politically: "I think I disagree with Brad DeLong...

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The Archives: December 11, 2015:

Two things most worth noting from this archive trawl:

  1. The Federal Reserve's insistence a year ago that it knew better than the bond market what 2015 would bring. Guess what? It did not. Yet I see no signs in the Fed of its doing any Bayesian updating, either with respect to its own internal thinking or with respect to how much much it thinks the bond market has something to say...

  2. The very strange left-wing Democratic Party opposition to Antonio Weiss's appointment to the Treasury--without having any alternative candidate who the Democratic left could say it preferred. This strikes me as irresponsible. My view: if you don't like who Obama has chosen to nominate for a job, tell him who is qualified for the job and would take it who would do it better, or go home..

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Must-Read: Norm Ornstein quite a while ago had a good line about why moderate Republicans have never fought to keep their core moderate voters engaged in the party by, for example, threatening to walk to the moderate Democrats if their core voters' concerns are dissed: "It’s almost like you are in a religion. You look at misbehavior on the part of the leaders of that religion, and you are shocked and dismayed, but you are not leaving your religion. And you are still going to go to church: you just can’t give up something that you held in a lifelong way.... Democrats are just different... don’t have the same discipline...

Matthew Yglesias: Trumpism Is a Natural Consequence of the GOP Refusing to Moderate on Taxes or Immigration: "On one level, yes, Trump is an outlier...

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Live from La Farine: We have been tiptoeing around the problem with Republican likely primary voters.

The problem is this: They do not understand and have not internalized America's core freedom-loving and immigrant-friendly values.

The fact that the country has failed to absorb this deviant population culturally and ideologically is, perhaps, the biggest challenge facing America today:

Kevin Drum: Republican Voters Like What Donald Trump Is Selling: "These aren't polls of tea partiers...

Republican Voters Like What Donald Trump Is Selling Mother Jones

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Live from La Farine: It is very clear to me that Nino Scalia has found one minority that deserves support from extra-strict scrutiny: peculiar doctrines held by the current hierarchs of a religious sect to which five Supreme Court justices belong. Perhaps he could get himself out of his pickle by reasoning forward from there?

Adam Liptak: Justice Antonin Scalia Questions Logic Behind Gay Rights Protections: "The Supreme Court’s decisions protecting gay rights were not rooted in the Constitution...

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Must-Read: As someone who in 1993 put my copy of "Civilization" in the microwave, on the grounds that I could be either a computer-game addict or a deputy secretary of the Treasury, but probably not both, I have very mixed feelings about this...

Ben Thompson: Digital Dopamine: "Consider the one app category that continues to succeed wildly on the App Store...

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Today's Economic History: Oliver Wendell Holmes in Lochner

Oliver Wendell Holmes: Dissent: Lochner v. People of State of New York: "I regret sincerely that I am unable to agree with the judgment.... This case is decided upon an economic theory...

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Inequality, Technocracy, Utility, and the Federal Reserve

Storify: Inequality, Technocracy, Utility, and the Federal Reserve: A Short Twitter Dialogue on Various Matters of Moral Philosophy, or, IT'S OK FOR THE FED CHAIR TO TALK ABOUT INEQUALITY!!!!

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Things to Read for Your Lunchtime Procrastination on December 10, 2015

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Over at Equitable Growth--The Equitablog:

  • Nick Bunker: JOLTS and the health of the U.S. labor market
  • Tim Duy: And That's a Wrap: "We are now well beyond the issue of the first rate hike..." When the next adverse macro economic shock comes, the Fed needs to be in a position to cut the federal funds rate by up to 500 basis points.
  • Frances Coppola: Eurodespair: "The German establishment seems hellbent on steering the Eurozone ship on to the rocks..."
  • FT Alphaville: Alphachatterbox: "Our podcast chat... (updated with transcript)..." :: The best extended interview-format pieces I have seen

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Must-Read: The principal question the Federal Reserve should be discussing right now is: When the next adverse macro economic shock comes, the Fed needs to be in a position to cut the federal funds rate by up to 500 basis points. What should we be doing now to create an economy as fast as possible that is strong enough to allow for such a federal funds rate? Yet I am seeing no chatter around this question at all. Perhaps the silence is simply a consensus of despair?

Tim Duy: And That's A Wrap: "The service sector number continues to bounce around a respectable range...

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The Archives: December 9, 2015

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I must say, this anniversary reminds me that people really should read Michael Kinsley's The Old New Republic rants about how inflation will come TO KILL US ALL ANY DAY NOW EVEN THOUGH THERE IS NO RATIONAL ARGUMENT THAT IT SHOULD!!!

They were truly amazing in their day. If you want my precis, I think this will do:

Kinsley's earlier article contains eighteen occurrences of "Krugman"--yet not a single link to... not a single quote from... Krugman.... One single link... quote from... Stuckler and Basu.... "Stuckler" did not appear... "Basu" did not appear in Kinsley's article at all.... And what is the connection of Stuckler and Basu's article to the never-quoted and never-linked to but mentioned-eighteen-times Paul Krugman? It is, Kinsley writes: "[Krugman] did not write the paper about how austerity kills, but it fits comfortably with everything else he’s been writing on the subject." In short: Krugman didn't write it, and I am too lazy to quote from anything Krugman did write, so I will say it "fits comfortably" with what he writes, and proceed as if Krugman did write it...

Kinsley: May 21, 2013 | May 16, 2013 | April 1, 2010

I see considerable moral fault here--moral fault that applies to Frank Foer, who was really not even trying to do his job as editor.

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Comment of the Day: Gene O'Grady: Early Monday Smackdown: David Graeber Resurfaces in My Twitterstream!: "Can we leave Graeber aside, with respect for what his mother did...

...and try to review a book like Richard Seaford's Money and the Early Greeks, which makes similar arguments to what Graeber does but with (apparently) more competence, and -- which is always useful -- examines a single particular, although not small, area of history?


Today's Economic History: Eduardo Manzano on Mulk and Ulama

Eduardo Manzano: Why Did Islamic Medieval Institutions Become so Different from Western Medieval Institutions?: "There is a pattern here; a pattern that shows Western Medieval institutions...

...as more recognizable, more prominent, more assertive than their Islamic counterparts. Obviously, this does not mean that Islamic institutions did not exist: there was no central religious organization, but religious dogma and rituals were consistently shared by a huge number of believers; socio-political institutions were somehow foggy, but coercion was exerted in Islamic social formations; town or city halls were never built, but Medieval Islamic cities expanded and worked successfully, integrating large populations. So, institutions certainly did exist in Islamic societies. The challenging issue is that they seem to have been consistently different from the ones we find in the Medieval West....

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Thoughts on Recent Proposed Health Care Mergers: Guest Post by Michael DeLong

GUEST POST: Michael DeLong michaeldelong94@gmail.com: This year, health care companies have been striking deals at an impressive rate: Anthem/Cigna, Aetna/Humana, and Centene/Health Net. Plus in October 2015 Allergan reported that it was going to be bought by Pfizer.

Thus gigantic companies worth $270 billion are now in the process of being merged. It seems highly likely that these mergers will limit competition and choice, result in higher insurance premiums and hospital prices, help companies evade regulation, to the significant financial harm of health-care consumers.

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Things to Read for Your Morning Procrastination on December 8, 2015

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Over at Equitable Growth--The Equitablog:

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Live from the Roasterie: The Party--Republican, that is--ain't doin' no decidin'. Or, rather, the Party decided for JEB!--and the base rejected the Party's choice, and now the Party cannot re-decide for Kasich or Rubio (or Romney) in time for it to do much good. That is how I see it.

Scott Lemieux: Who Says the Party Has to Decide?: "Relevant to yesterday’s post is the conviction of some GOP money men that the Great Jeb! is coming...

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Must-Read: As John Maynard Keynes wrote 80 years ago:

It is certain that the world will not much longer tolerate the unemployment which, apart from brief intervals of excitement, is associated... with present-day capitalistic individualism. But it may be possible by a right analysis of the problem to cure the disease while preserving efficiency and freedom...

But not with European orthodox policymakers and establishment elites who appear clueless with respect to what the real stakes are here:

Paul Krugman: That 30s Show: "A few years ago de Bromhead, Eichengreen, and O’Rourke looked...

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Liveblogging World War I: December 8, 1915: Nicola Tesla

New York Times: Tesla's New Device Like Bolts of Thor:

Nikola Tesla, the inventor, winner of the 1915 Nobel Physics Prize, has filed patent applications on the essential parts of a machine the possibilities of which test a layman's imagination and promise a parallel of Thor's shouting thunderbolts from the sky to punish those who angered the gods. Dr. Tesla insists there is nothing sensational about it, that it is but the fruition of many years of work and study. He is not yet ready to give the details of the engine which he says will render fruitless any military expedition against a country which possesses it. Suffice to say that the destructive invention will go through space with a speed of 300 miles a second, and manless airship without propelling engine or wings, sent by electricity to any desired point on the globe on its errand of destruction, if destruction its manipulator wishes to effect.

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Must-Read: As John Maynard Keynes famously wrote, a government dedicated to producing a high-pressure economy is needed to enable entrepreneurship, enterprise, and growth. A government that does not only fail to work to generate high-pressure now, but also lacks a plan for fighting the next recession, is a government that drives the Confidence Fairy far away indeed:

Lawrence Summers: Central Bankers do Not Have as Many Tools as They Think: "It is agreed that the ‘neutral’ interest rate...

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