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April 2016

Procrastinating on April 23, 2016

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Over at Equitable Growth: Must-Reads:

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Liveblogging the American Revolution: April 24, 1778: North Channel Naval Duel

Wikipedia: North Channel Naval Duel:

The North Channel naval duel was in some respects a reverse, small-scale dress-rehearsal for Jones's 1779 battle with HMS Serapis. Drake had been built as a merchant ship with defensive capability, and bought by the Royal Navy to help fill the gap left when many ships had to be sent to America; even the 20 four-pound guns were not official Navy issue, just the ones which had originally been bought by the merchants. The hull was the wrong shape for rapid battle manoeuvres, and not designed to resist cannon fire. Ranger had been built as a fighting ship, and modified by Jones for maximum efficiency; for example, although there were ports for 20 guns, he found it safest to install only 18 six-pound guns. That made a total broadside weight of 54 pounds, slightly more than Drake's 40 pounds total—but those dozens of Irish volunteers meant that if Drake could grapple and board Ranger the Americans would be in trouble.

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Liveblogging Postwar: April 23, 1946: Eleanor Roosevelt,

Eleanor Roosevelt: My Day:

"HYDE PARK, Monday—The majority of the House of Representatives, in their handling of the OPA bill, certainly thought only of the immediate future. And that is, I am afraid, what a great many people in our country seem to be doing at the present time. The House majority ignored the polls which have been taken recently, almost all of which show that people are anxious to have price controls continue, and are even willing to be curtailed again on a rationing basis if they can feel that they are helping to feed starving peoples throughout the world.

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Liveblogging the American Revolution: April 22, 1778: John Paul Jones Attack on Whitehaven

Whitehaven and Western Lakeland: John Paul Jones Attack of 1778:

Late at night on April 22nd 1778, the USS Ranger stood about 2 miles off the unsuspecting town of Whitehaven on a clear but cold and frosty night. Two boats were let down into the water and filled with about 30 men armed with pistols and cutlasses. John Paul Jones took charge of one with his Swedish second in command, one of the few he felt he could trust, Lieutenant Meijer. The other boat was commanded by Lieutenant Wallingford of the US marines and Midshipman Ben Hill. The two boats rowed against the tide for 3 hours to reach the harbour where Jones planned to destroy hundreds of ships by setting them alight as they lay stranded in the low water and packed tight together, several abreast, against the piers.

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Today's Economic History: Possible Adam Tooze Reading Group at Unfogged...

Live from the Gehenna That Was Europe in the First Half of the Twentieth Century: If you haven't read Adam Tooze, you very much need to do so...

Mossy Character: Adam Tooze Reading Group: "This came up in comments...

...who's interested in a reading group for Adam Tooze? Tooze has written two popular books, The Wages of Destruction, about the Nazi war economy, and The Deluge, about America's role in the world political economy 1916-31. Both are long, dense, and revelatory.

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(Early) Monday Smackdown: The Washington Post as a Waste of Electrons

So chasing a link to a piece by the very sharp Anat Admati called "In banking, it’s all other people’s money", I wind up seeing:

In banking it s all other people s money The Washington Post

Yes. It's George F. Will.

Sorry, Anat: You really shouldn't be publishing in this outlet. I will look for your stuff elsewhere.

Sorry Monkey Cage, sorry Wonkblog: you do good work, but it seems to me that your first-order impact is to add to the Google-fu of a very bad and misleading place, and you shouldn't be doing that.

So please find someplace else to publish, OK?


Live from the Roasterie: The hawk-eyed Justin Wolfers finds that Trump has the best post-convention etch-a-sketch moderate-reset excuse EVAR!!

Justin Wolfers: Justin Wolfers on Twitter: "Sounds like the WWE. And the plot arc is no less predictable. Nor more convincing. https://t.co/GK6hP7mFM5":


Liveblogging Postwar: April 21, 1946: The Socialist Unity Party of Germany

GHDI: Principles and Aims of the Socialist Unity Party of Germany:

Twelve years of fascist dictatorship, six years of Hitlerian war, have flung the German people into the most dreadful economic, political, and moral catastrophe of their history. Germany was turned into a field of ruins.

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Liveblogging Postwar: April 20, 1946: Eleanor Roosevelt

Eleanor Roosevelt: My Day:

HYDE PARK, Friday—The other afternoon, I held a small meeting of business men in the hope of getting some help on the benefit which the board of the Wiltwyck School in New York is going to give on May 21st. We have secured Melvyn Douglas' musical production, 'Call Me Mister,' for that night and we hope that the public will buy tickets and pack the house. But that alone would not give us enough support for the school, so we hope to have a souvenir program to acquaint the public with Wiltwyck and bring us in considerable revenue through advertising.

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Liveblogging World War I: April 19, 1916: President Wilson's Speech to Congress Regarding Unrestricted U-Boat Warfare

Woodrow Wilson: Speech to Congress Regarding Unrestricted U-Boat Warfare:

In pursuance of the policy of submarine warfare against the commerce of its adversaries, announced and entered upon by the Imperial German Government, despite the solemn protest of this Government, the commanders of German undersea vessels have attacked merchant ships with greater and greater activity, not only upon the high seas surrounding Great Britain and Ireland, but wherever they could encounter them, in a way that has grown more and more ruthless, more and more indiscriminate, as the months have gone by, less and less observant of restraints of any kind; and they have delivered their attacks without compunction against vessels of every nationality and bound upon every sort of errand.

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Procrastinating on April 20, 2016

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Over at Equitable Growth: Must-Reads:

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Live from the Rumpublicans' Self-Made Gehenna: May I say that anchor babies for mass deportation scare me? They seem to me to fail some kind of Republican Voight-Kampff test--to lack basic ability to empathize and put themselves mentally in the place of others who wish to share in the American project:

Preview of Untitled 2

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Must-Read: A few words on judicial doctrine, economic thinking, and political economy...

Back when Robert Bork in his The Antitrust Paradox proposed large-scale rewriting of laws from the bench to privilege "economic efficiency" above all of the other somewhat-conflicting goals of our competition policy and so bring order to a disordered piece of the law, I saw it as neutral-to-good. But the default judicial judgment of any merger then became:

  1. It must reduce costs via economies of scale
  2. It is not inefficient unless it reduces the quantity supplied--and companies these days are so clever at price discrimination that they can still find a way to serve those low-value consumers whose willingness-to-pay is only a little bit larger than monopoly cost.

And the government faced a very steep Sisyphean uphill boulder-rolling to rebut those presumptive judgments and block, well, block much of anything.

And it has turned out that, in practice, both (1) and (2) have been largely wrong...

Paul Krugman: Robber Baron Recessions: "Profits are at near-record highs...

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Must-Read: But... but... but...

Is this the wrong graph somehow?:

FRED Graph FRED St Louis Fed

Yes, investment spending is weak relative to its past business-cycle peak values. But all of the relative weakness is in residential construction:

FRED Graph FRED St Louis Fed

You can say that business investment should be even stronger--high profits, high profit margins, depressed wage costs mean that capital's complement labor is cheap, very low financing costs (if you can borrow risk-free). But business investment is also a function of capacity utilization, and you would not expect it to be high in a low-pressure economy, especially one in which confidence is low that the trend growth of nominal GDP will be sustained.

Why is this the wrong graph?

Paul Krugman: Robber Baron Recessions: "Profits are at near-record highs...

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Monday Smackdown: Benn Steil and the Council on Foreign Relations

Hoisted from 2011: Department of "Huh?!": Unclear on What Central Banks Are Department:Benn Steil, a student of "geoeconomics" at the Maurice R. Greenberg Center for Geoeconomic Studies at the Council on Foreign Relations, is trying to scare his listeners into thinking that something very bad might happen because (i) the ECB is "undercapitalized" and (ii) the ECB is busy buying up the bonds of europeriphery sovereigns:

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Links for the Week of April 17, 2016

Latest Must-Reads:

Latest Links:

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Live from the BernieBro Asylum: Today's exhibit on why we need a better press corps: Adam Davidson. He says that it's "useful" to bullshit your voters by promising them that your policies will have effects that they will not:

Adam Davidson: Bernienomics Might Not Be Feasible — But It’s Useful: "On this most fundamental question--about the potential [of Bernie's policies] to transform the economy, to blow past trade-offs and constraints...

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Live from the Hay-Adams: Memo to Self: With 2405 of 4051 Democratic pledged delegates chosen...

Hillary Rodham Clinton has 1302 and Bernie Sanders 1103 pledged delegates...

Meaning Hillary has to pick up 723 of all 1645 remaining pledged delegates--i.e. 44%...


Regress in Macroeconomic Knowledge Over the Past 83 Years Blogging

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Over at Equitable Growth: Today, in 2016, Raghu Rajan thinks helicopter drops are "a step too far into the dark..."

His predecessor 83 years ago at the University of Chicago, Jacob Viner, thought they were one of the obvious technocratic steps to take, along with further raising the monetary base (i.e., in his day going off of the gold standard) even with short-term safe nominal interest rates at the zero lower bound (as they also were in his day).

Here's Raghu:

Raghuram Rajan 2016): "If you read the writings of economists...

...it is not clear what’s keeping us still so slow, seven or eight years after the crisis. Ken Rogoff would say it is still the debt overhang and the deleveraging. [Robert] Gordon and others might say it is low productivity and still others may say it is the poorly understood consequences of population aging. But what do we do? And here I think there is more of a consensus that monetary policy pretty much has run its course. There are still guys who are looking for helicopter drops of money but I think that is a step sort of too far into the dark, where I am not sure there is a political consensus to do that in the major economies, if it comes to that... Read MOAR

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Liveblogging Postwar: April 18, 1946: Jackie Robinson

Michaelangelo Conte: Player recalls Jackie Robinson making history in Jersey City, April 18, 1946:

A player for the Jersey City Giants baseball team who squared off against Jackie Robinson on April 18, 1946 -- when Robinson made history by breaking the color barrier in organized baseball -- said the significance of the game didn't sink in first.

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Liveblogging the Cold War: April 17, 1946: Harry S. Truman: The President's News Conference

Harry S. Truman: The President's News Conference:

THE PRESIDENT. [1.] I have got a couple of ambassadorial appointments to announce: George V. Allen of Maryland--to Iran; and Edward F. Stanton of California--to Siam.

And then there will be available for you, when you go out, a report by Howard Bruce on surplus property. It is a most interesting report, and gives an outline of the surplus property situation as it is today, with certain recommendations which are being carried out.

And that's about all I have to offer.

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A New Forward Path on Trade? Anything More than Wishful Thinking?

1 singapore city skyline dusk panorama 2011 Globalization Wikipedia the free encyclopedia

Over at Equitable Growth: Many people are looking. Jared Bernstein is one:

Jared Bernstein: I’m not the only one seeking a new path forward on trade: "Larry Summers lands where I do... the ‘revolt against global integration’...

...can lead to regressive Trumpian protectionism or to a new, more inclusive approach to expanded trade. Larry lays out the benefits of expanded trade both in terms of consumer benefits and ‘economic integration as a force for peace and prosperity.’ But, after suggesting people don’t always adequately recognize these upsides, he notes:

The core of the revolt against global integration…is not ignorance. It is a sense--unfortunately not wholly unwarranted--that it is a project being carried out by elites for elites, with little consideration for the interests of ordinary people. They see the globalization agenda as being set by large companies that successfully play one country against another. They read the revelations in the Panama Papers and conclude that globalization offers a fortunate few opportunities to avoid taxes and regulations that are not available to everyone else. And they see the kind of disintegration that accompanies global integration as local communities suffer when major employers lose out to foreign competitors.... Read MOAR

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For the Weekend...

The Avengers: There are always men like you:

Loki: Kneel before me! I said: KNEEL!! Is not this simpler? Is this not your natural state? It’s the unspoken truth of humanity that you crave subjugation. The bright lure of freedom diminishes your life’s joy in a mad scramble for power. For identity. You were made to be ruled. In the end, you will always kneel.

Old German: Not to men like you.

Loki: There are no men like me.

Old German: There are always men like you.


Live from the Great Stagnation: Why in the past two centuries hasn’t there been a tea blend developed that I like more than Earl Grey? What is wrong with our innovation system—or with me?

Wikipedia: Earl Grey: "In one case study, a patient who consumed four litres of Earl Grey tea per day reported muscle cramps, which were attributed to the function of the bergapten in bergamot oil as a potassium channel blocker. The symptoms subsided upon reducing his consumption of Earl Grey tea to one litre per day."


Weekend Reading: Gavin Kennedy on Adam Smith: "Bound by The World Order in Which He Lived"

Adam smith and david hume Google Search

Gavin Kennedy: "Bound by The World Order in Which He Lived:" On Why Adam Smith Was a Realist, Not an Ideologue:

Smith wrote The Wealth of Nations (WN) from years of prior research by several others, as well as his own labors (20 years), going back to early classical times. If he had not done so, others eventually would have replaced him and WN. Ideas about political economy became a small flood in the 19th century—today it's a raging tsunami of competing ideas and explanations, much of them non-scientific, often twisted for ideological purity; much of what the tsunami of daily drivel sweeps up as representative of Smith’s ideas is quite false. Hence, the title of my first book: Adam Smith’s Lost Legacy (2005).

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Weekend Reading: Fareed Zakaria and Four Fed Chairs

Discussion Federal Reserve Video C SPAN org

Federal Reserve Discussion:

Calvin Sims: Next, the Federal Reserve and how the Fed makes decisions. Current Fed chair Janet Yellen was joined by Ben Bernanke, Alan Greenspan, and Paul Volcker. This is one hour 15 minutes. [applause]

Calvin Sims: Welcome everyone. I am the president of -- we are excited this evening to have the fabulous four Fed chairs -- fabulous four Fed chairs. It is going to be spectacular for a variety of reasons. I want to take a cue for Adam McKay. He wants said there is nothing that people love more than a Federal Reserve joke. [applause] I will tell you a joke. It is a joke by a Federal Reserve chair, who served from 1951 to 1970. You may have heard this but it is worth restating. He said the job of the Federal Reserve is to take away the punch bowl just before the party gets going. [laughter] We will learn the process of taking away the punch bowl, or adding something to the punch in the bowl.

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Procrastinating on April 16 2016

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Over at Equitable Growth: Must-Reads:

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Liveblogging the Thirty Glorious Years: April 16, 1946: Eleanor Roosevelt

Eleanor Roosevelt: My Day:

HYDE PARK, Monday—The memorial dinner given in New York City on the anniversary of my husband's death, and attended by his friends, was a great success. As we were all rather weary, I think perhaps the list of speakers was a little long, but I nevertheless had a very warm feeling, as though many people there were glad to see each other again and to draw from each other the sense of consolidated strength to go forward with the unfinished business that lies before us.

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Must-Note: The Economist has long had a house style of no bylines--a deliberate institutional decision about the voice with which they want to speak that has, I think, more downsides the upsides. But we can argue about that.

But what I discovered today is that Pro-Market: The blog of the Stigler Center at the University of Chicago Booth School of Business has bylines only for Luigi Zingales, Asher Schechter, and Guy Rolnick. The rest are merely anonymous "Pro-Market Writers".

This cannot be the right approach, for a large number of reasons that I'm sure you can think of as well as I:

Pro-Market Writers: The White House Acknowledges: The U.S. Has a Concentration Problem; President Obama Launches New Pro-Competition Initiative: "The White House acknowledged the steep price Americans pay due to anti-competitive behavior...

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