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April 2016

Procrastinating on April 30, 2016

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Over at Equitable Growth: Must-Reads:

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Debunking America’s Populist Narrative: No Longer So Live at Project Syndicate

Debunking America’s Populist Narrative: BERKELEY – Listen to the dog-whistles—or, rather, dog-screams—of American politics this just-begun election season and this is what you hear: of Chinese and Mexicans together with Wall Street and lousy trade deals who outsourced factories and robbed you of your rightful good job, of Mexicans who come here willing to work for less and force you to listen to words in a Spanish you cannot understand, and of Muslims of whom you live in fear that their bombs will blow you to bits. These dog-scream undercurrents are scary, and scarier than usual. They are scary for foreigners who, by virtue of living in this world, find themselves not just in the room but in bed with the psychologically-unstable hyperpower elephant that is the United States. They are scary for Americans who thought or hoped or perhaps only wished that they lived in the Republic of George Washington, Abraham Lincoln, and Teddy and Franklin Roosevelt. READ MOAR

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Live at Project Syndicate: Rescue Helicopters for Stranded Economies

Finally we re doing the helicopter drop of printed money for ordinary Britons This is Money

Live at Project Syndicate: Rescue Helicopters for Stranded Economies: BERKELEY – For countries where nominal interest rates are at or near zero, fiscal stimulus should be a no-brainer.... Some point to the risk that, once the economy recovers and interest rates rise, governments will fail to make the appropriate adjustments to fiscal policy. But... governments that wish to pursue bad policies will do so no matter what decisions are made today.... Aversion to fiscal expansion reflects raw ideology, not pragmatic considerations.... This debate is no longer an intellectual discussion--if it ever was. As a result, a flanking move might be required. It is time for central banks to assume responsibility and implement ‘helicopter money’... **Read MOAR at Project Syndicate


Liveblogging World War I: April 27, 1916: Harry S. Truman to Bess Wallace

Harry S. Truman: To Bess Wallace:

Commerce, Okla. April 27, 1916

Dear Bess:

Your letter came today. I have been looking for it since Tuesday. I think this postmaster is nearly as bad as the cross-eyed woman was before him. He held out a letter of Mr. Hughes' in the general delivery this week. If I had not asked for it, I guess he'd never have gotten it. We have been very busy this week firing the superintendent and sinking the shaft. The superintendent won't fire worth a cent. Says he is going to stay until Saturday and draw his fifty dollars. I suppose I shall have trouble with him on that day.

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Procrastinating on April 27, 2016

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Over at Equitable Growth: Must-Reads:

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Must-Read: An excellent read from the very sharp David Glasner. I, however, disagree with the conclusion: the standard reaction of most economists to empirical failure is to save the phenomena and add another epicycle. Why not do that in this case too? Why not, as someone claimed to me that John Taylor once said, stabilize nominal GDP by passing a law mandating the Federal Reserve keep velocity-adjusted money growing at a constant rate?

David Glasner: What’s Wrong with Monetarism?: "DeLong balanced his enthusiasm for Friedman with a bow toward Keynes...

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Must-See: Raj Chetty and Nathaniel Hendren: The Impacts of Neighborhoods on Intergenerational Mobility: W@4PM, Wells-Fargo Room: Stream: http://bluejeans.com/617756972 : "We characterize the effects of neighborhoods on children’s earnings and other outcomes in adult- hood...

...by studying more than five million families who move across counties in the U.S. Our analysis consists of two parts. In the first part, we present quasi-experimental evidence that neighborhoods affect intergenerational mobility through childhood exposure effects. In partiular, the outcomes of children whose families move to a better neighborhood – as measured by the outcomes of children already living there – improve linearly in proportion to the time they spend growing up in that area. We distinguish the causal effects of neighborhoods from confounding factors by comparing the outcomes of siblings within families, studying moves triggered by displacement shocks, and exploiting sharp variation in predicted place effects across birth cohorts, genders, and quantiles. We also document analogous childhood exposure effects for college attendance, teenage birth rates, and marriage rates. In the second part of the paper, we identify the causal effect of growing up in every county in the U.S. by estimating a fixed effects model identified from families who move across counties with children of different ages. We use these estimates to decompose observed intergenerational mobility into a causal and sorting component in each county. For children growing up in families at the 25th percentile of the income distribution, each year of childhood exposure to a one standard deviation (SD) better county increases income in adulthood by 0.5%. Hence, growing up in a one SD better county from birth increases a child’s income by approximately 10%. Low-income children are most likely to succeed in counties that have less concentrated poverty, less income inequality, better schools, a larger share of two-parent families, and lower crime rates. Boys’ outcomes vary more across areas than girls, and boys have especially poor outcomes in highly-segregated areas. In urban areas, better areas have higher house prices, but our analysis uncovers significant variation in neighborhood quality even conditional on prices.


Live from La Farine: Duncan Black is anxious:

Duncan Black**: Hard to Kick the Habit: "Hope to be wrong, but suspect that team Clinton (very broadly defined)...

...will still be talking about BernieBros in September. I'm quite happy for Hillary Clinton to be the nominee, as I always thought she would be. I'm not happy with the months of 'we would have won it easy if not for these meddling kids who won't vote in November' rhetoric. Better figure out how to appeal to them. Stop calling them immature and stupid. The goal is to win, not to make early excuses for why you're going to lose.

Nah. After yesterday the word--and the obvious thing--is to stand down.

Mind you: The day will come when it will be time to gleefully and comprehensively trash people to be named later for Guevarista fantasies about what their policies are likely to do. The day will come when it will be time to gleefully and comprehensively trash people to be named later for advocating Comintern-scale lying to voters about what our policies are like to do. And it will be important to do so then--because overpromising leads to bad policy decisions, and overpromising is bad long-run politics as well.

But that day is not now. That day will be mid-November.


Lloyd Bentsen Dies: Ten Years Ago on the Internet

Brad DeLong : Lloyd Bentsen Dies: As my boss Alicia Munnell said in 1993: "After a week working for Bentsen you understand why he is the Treasury Secretary and you are not, and you are happy that that is the way it is."

Former Democratic Sen. Lloyd Bentsen Dies - Yahoo! News: HOUSTON - Lloyd Bentsen, a courtly Texan who represented the state in Congress for 28 years and served as President Clinton's first treasury secretary, died Tuesday, his family said. He was 85....

Bentsen's distinguished political career took him from the humble beginnings of a county office in the Rio Grande Valley in the 1940s to six years in the U.S. House, 22 in the U.S. Senate and two in the Clinton Cabinet, where he was instrumental in directing the administration's economic policy.

A shrewd legislative operator, the silver-haired politician maneuvered with ease in Democratic and Republican circles alike on Capitol Hill, crafting deals behind the scenes in a dispassionate, reserved fashion.....

The scion of a wealthy Rio Grande Valley family, Bentsen first distinguished himself in World War II, where he flew 50 bomber missions over Europe. Returning home as a decorated veteran, the 25-year-old was elected Hidalgo County judge in 1946. Two years later, he moved to the House.

In his first House term, Bentsen was one of a handful of Southern congressmen voting against the poll tax, which was used to keep blacks from voting...

A better legislator and cabinet secretary than the political judgment of the American people deserves. He liked the old story about Marshall Lyautey--and said it was one of Jack Kennedy's favorite stories, too:

Marshall Lyautey, retired on his chateau, asked his gardener if the following morning he wouldstart planting a row of oak trees.

"But Mon Marechal," said the gardener, looking at the eighty-year old Lyautey. "The trees will take more than fifty years to grow."

"Oh," said the Marshal. "In that case, plant them today. We have no time to lose."


MOAR Clarmont Hotel Drunjblogging: Jim VandeHei Edition

Live Drunjblogging from Claremont Hotel Bar: Even when confronted with this:

Donald J. Trump: On Twitter:

Jim VandeHei still lacks the ovaries to woman up and say: This year, vote for the Democrat.

SAD!!1!


Claremont Hotel Bar Drunkblogging Continued: MOAR Link Sluttage for Steve Randy Waldmann!!


Live Drunkblogging/Monday Smackdown: The Execrble Jim VandeHei

Little sumpin ipa Google Search

Live Drunkblogging from the Claremont Hotel Bar: Watching the sunset over San Francisco Bay out the big picture windows. My drinking companions have gone. I am not yet drunk enough to have forgotten that I shouldn't blog drunk. But I have drunk enough that I do not care. In other words, I have had one Lagunitas "Little Sumpin Extra" ale. (Hey: cut me a break1! It's 17 proof! And lots of it!~)

This isn't even Anglisc!

Jim VandeHei: Bring on a Third-Party Candidate: "A third-party candidate could build on death-by-drones by outlying...

...the type of modern weapons, troops and war powers needed to keep America safe. And make plain when he or she will use said power. Do it with very muscular language--there is no market for nuance in the terror debate...

Did it ever occur to Jim VandeHei that George W. Bush and Richard Cheney and Donald Rumsfeld and Condi Rice and Colin Powell's idiocy has killed many more innocent peope than died on 9/11? And that all of their relatives are rightfully pissed?!


Live Drunkblogging/Monday Smackdown: The Execrble Jim VandeHei

Little sumpin ipa Google Search

Live Drunkblogging from the Claremont Hotel Bar: Watching the sunset over San Francisco Bay out the big picture windows. My drinking companions have gone. I am not yet drunk enough to have forgotten that I shouldn't blog drunk. But I have drunk enough that I do not care. In other words, I have had one Lagunitas "Little Sumpin Extra" ale. (Hey: cut me a break1! It's 17 proof! And lots of it!~)

Jim VandeHei: Bring on a Third-Party Candidate: "I have spent the past two decades in the Washington, D.C., bubble...

...the heart of Establishment America--covering politics and building a company, Politico, focused solely on politics. But I’ve also spent a lot of time in my hometown of Oshkosh, Wis., and my adopted hometown of Lincoln, Maine, two blue-collar towns in the heart of Normal America.

Let's stop right there:

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A Baker's Dozen from an Underappreciated Weblogger for Late April 2016: Steve Randy Waldmann

Yesterday I wrote:

Internet Google Search

"You are not doing enough in the way of promiscuous link-sluttage", my conscience says to me, occasionally. "You are not doing enough in the way of making people who come to your weblog aware of very smart people whom they ought to be paying attention to--but are not. You have an obligation not only to punch up, but to extend a hand down--to promote people who, by accidents of chance and historical contingency, are just as smart (or more) and are as (or more) worth reading as you are."

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Liveblogging the Cold War: April 26, 1946: Blue Angels

The History Of The Blue Angels Part One The Tactical Air Network

The History Of The Blue Angels, Part One:

On April 26, 1946, Admiral Chester Nimitz issued a directive ordering the formation of a flight demonstration team. The purpose of this team was to boost Navy morale, demonstrate naval air power and maintain the public’s interest in Naval aviation. Admiral Nimitz also hoped to use the team to generate public and political support for the Navy to receive a larger portion of a shrinking defense budget after the conclusion of World War II.

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Memo to Self: Monetary Policy since 1985

Over at Equitable Growth:

FRED Graph FRED St Louis Fed


Major Federal Reserve Policy Moves since 1985:

The Federal Reserve overshoots and overtightens. But the effect on the economy is diminished because more-responsible fiscal policy leads to a fall in the term and risk premiums:

Preview of Pounding Nails in Nevada

Read MOAR

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A Methodological-Moral Struggle Over the Sanders Economic-Policy Proposals

Graph Real Potential Gross Domestic Product FRED St Louis Fed

Over at Equitable Growth: First, everybody needs to start here: Christina and David Romer: Senator Sanders's Proposed Policies and Economic Growth.

OK. Finished?

Paul Krugman weighs in, with another point for model-building as an intuition pump rather than as a filing system--if the model doesn't produce the results you want and think belong in your filing system, you should worry rather than simply throwing it out and getting another model. Plus a bunch of other issues--empirical, methodological, political, and--alas!--moral. Read MOAR

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Links for the Week of April 24, 2016

Comment of the Day: PGL: Links for the Week of April 24, 2016: "'In economics, stimulus spending ran aground on Robert Barro’s Ricardian equivalence theorem'...

...This is from Cochrane attack on Krugman (how he got it so wrong). Of course we know Cochrane is the one gets this theorem incredibly wrong as did Robert Lucas in his 2009 attack on Christina Romer.


Comment of the Day: Scott P.: From Halberstam's 'War in a Time of Peace': "When Scowcroft briefed the president...

...he always felt [H.W.] Bush’s sense of distance on the issue. The president would seem puzzled about the complexity of the Balkans, asking again and again which side was which, who were the Bosnians, who were the Bosnian Serbs, who were the Bosnian Muslims, who were the Kosovars, and who were the Croats and the Slovenians.... It clearly confused him, all these disparate places, strange names, and different ethnic groups...


Links for the Week of April 24, 2016

Most-Recent Must-Reads:

Most-Recent Links:

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Live from Soda Hall: Hugh Hancock: 5 Magical Beasts And How To Replace Them With A Shell Script "Interestingly, there's another mystical summoned creature...

...that fits rather well here: the homunculus. After all, what are MOOCs doing but creating a small version of the magus (or professor) you wish to consult, and thus enabling the magus themselves to be in many more places at once, using their knowledge to do many more things?"


Trying to Start a New Weblog Feature...

Internet Google Search

"You are not doing enough in the way of promiscuous link-sluttage", my conscience says to me, occasionally. "You are not doing enough in the way of making people who come to your weblog aware of very smart people whom they ought to be paying attention to--but are not. You have an obligation not only to punch up, but to extend a hand down--to promote people who, by accidents of chance and historical contingency, are just as smart (or more) worth reading than you are."

"So what can I do?" I say.

"Periodically put up a post praising somebody, and providing a baker's dozen of links", it--she--he--I guess my conscience is not strongly gendered at all--says.

"I keep on thinking I should", I say. "But I forget!"

"Then publicly commit to doing it on the 24th of each month. Then you will be humiliated if you miss one. And that will provide you with motivation!"

So, guys, who on the internet should be first? Who receives less attention than they would in a world with a just internet?

And if the 24th of next month goes by without me living up to this promise... I expect to hear from all of you...


Comment of the Day: Redwood Rhiadra: In reply to Derrida Derider: "'Hillary Clinton ordered the CIA to carry out 9/11...

...in order to destroy evidence of her criminal acts which was stored in a CIA office in Tower 7'. I've actually heard that one. From a Democrat (Sanders fanatic, naturally). He was entirely serious. And he wasn't a 'truther' until last year - Clinton's impending candidacy has driven the hard left insane.


Weekend Reading: Mark Schmitt: The Dangerous Politics of Hard Promises

Newt Gingrich started the practice of large-scale lying to the base as a thing: give to us and vote for us and once we have majorities we will save America and your life will be great! The long-term consequence is that the base regards the Republican political establishment and its infrastructure as con men and grifters out for a buck. That is, largely, accurate. What the base doesn't (yet) realize is that the "insurgents"--from Herman Cain and Ben Carson to Donald Trump and Rand Paul--are con men and grifters as well:

Mark Schmitt: The Dangerous Politics of Hard Promises: "Broken promises: That's a theme at the center of the campaign rhetoric of the two leading Republican candidates for president...

...Donald Trump and Ted Cruz, and a plausible explanation for the failure of the establishment candidates. At the center of Cruz's stump speech is a series of absolute promises, culminating in a pledge to 'utterly demolish ISIS'--and he has four different Super PACs that bear the name 'Keep the Promise' (the original, and I, II, and III, named like financing rounds in a hedge fund). Congressional Republicans promised in 2014 that they would repeal and replace the Affordable Care Act; defund Planned Parenthood; abolish the IRS; and humiliate, if not convict, Hillary Clinton over the Benghazi tragedy — all pledges they were unable to come even close to meeting. The conservative blogger Erick Erickson put it most succinctly: 'The Republican Party created Donald Trump, because they made a lot of promises to their base and never kept them.' In Trump's account, the Republicans failed out of incompetence, and he'll do better. Cruz's story is that they failed because they lacked his ideological spine.

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Liveblogging World War I: April 24, 1916: Easter Rising

Wikipedia: Easter Rising:

Early on Monday morning, 24 April 1916, roughly 1,200 Volunteers and Citizen Army members took over strongpoints in Dublin city centre. A joint force of about 400 Volunteers and Citizen Army gathered at Liberty Hall under the command of Commandant James Connolly.

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Must-Read: I gotta go back and reread Blanchard and Katz on regional adjustment in the early 1992. How much of it is that adjustment is faster? How much of it is that the shock they study--to LA-sector aerospace employment--was different? How much of it is that back then aggregate demand policy was supportive of adjustment?

Mark Muro: Adjusting to Economic Shocks Tougher: "In the last six months a burst of new empirical work...

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Must-Read: It used to be that we collectively paid Wall Street 1% per year of asset value--which was then some 3 years' worth of GDP--to manage our investment and payments systems. Now we pay it more like 2% per year of asset value, which is now some 4 years' worth of GDP. My guess is that, at a behavioral finance level, people "see" commissions but do not see either fees or price pressure effects.

Plus there is the cowboy-finance-creates-unmanageable-systemic-risk factor, plus the corporate-investment-banks-have-no-real-risk-managers factor. We are paying a very heavy price indeed for having disrupted our peculiarly regulated and oligopoly-ridden post-Great Depression New Deal financial system:

James Kwak: Profits in Finance: "Expense ratios on actively managed mutual funds have remained stubbornly high...

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Procrastinating on April 24, 2016

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Over at Equitable Growth: Must-Reads:

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Must-Read: Erik Loomis: Jacobin: Walking on the Fighting Side of Me: "Were you thinking, I really need to know what Jacobin has to say about Merle Haggard? Probably not...

...Unfortunately, Jacobin decided to publish a Merle Haggard obituary of sorts, by Jonah Walters. It is, without exaggeration, the worst essay I have ever seen in that publication and one of the worst essays on music I have ever read. It is essentially an exercise in Aesthetic Stalinism, arguing that Merle Haggard was a terrible person and overrated artist because he was supposedly the voice of American reaction for a half-century...


(Early) Monday DeLong Smackdown (Perhaps?): Carbon Pricing, Coal, Free Trade, Comparative Advantage, and Technology Transfer

Over at Equitable Growth: Typically smart thoughts by Paul Krugman on carbon pricing:

Paul Krugman: 101 Boosteris: "I see that @drvox is writing a big piece on carbon pricing...

...I don’t want to step on his forthcoming message, but what he’s said so far helped crystallize something I’ve meant to write about... ‘101 boosterism’... a takeoff on Noah Smith’s clever writing about ‘101ism’, in which economics writers present Econ 101 stuff about supply, demand, and how great markets are as gospel, ignoring the many ways in which economists have learned to qualify those conclusions in the face of market imperfections. His point is that while Econ 101 can be a very useful guide, it is sometimes (often) misleading.... My point is... even when Econ 101 is right, that doesn’t always mean that it’s... the most important thing.... Economists... delight in talking about issues where 101 refutes naïve intuition, but that doesn’t... mean... these are the crucial policy issues.... Read MOAR

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Must-Read: I must say I am getting more than a whiff of the disastrous trope that "it is the duty of an organic intellectual to support the Movement" here.

The technocratic view is that there will be a bunch of competing ideological views and material interests pulling and hauling, and that by always wading in and joining the tug-of-war side that has the better policy idea at the moment in the issue under dispute one will get better governance and higher societal well-being. The opposite view is: There is a Movement, the Movement is good because the Movement is supported by the class whose interest is the general interest and by Correct Ideological Thought, and all progressives must support the movement.

That is a disastrous pattern of thought. I am 100% with Noah Smith here:

Noah Smith: Policy Recommendations and Wishful Thinking: "There was a bit of a blow-up earlier this year over Gerald Friedman's analysis of Bernie Sanders' economic plans...

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Live from the Roasterie: Republicans have now used the tabloids to claim that:

  1. Ted Cruz's father was a JFK assassin.
  2. Marco Rubio is a BDSM bottom.

    This is what they do to their own. Exactly what kind of shit show is coming?