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August 2016

Live from TrumpLand: Ian Haney-Lopez: How the GOP became the “White Man’s Party”:

On the Democratic side, in 1970...Richard Scammon and Ben Wattenberg published The Real Majority, cautioning their party that “Social Issues” now divided the base. “The machinist’s wife in Dayton may decide to leave the Democratic reservation in 1972 and vote for Nixon or Wallace or their ideological descendants,” Scammon and Wattenberg warned:

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What I See as a Marketing Ploy by the University of Chicago...

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Live from DerpLand on the Midway: Jesse Singal reads University of Chicago dean John Ellison's "no trigger warnings, no safe spaces" letter via a hermeneutics of charity. I, by contrast, read the letter via a hermeneutics of derp:

Jesse Singal: The University of Chicago's Anti-Safe-Space Letter Matters:

The University of Chicago’s dean of students John Ellison... sen[t]... a rather assertive letter... to the incoming class of 2020... a flawed letter that could have been a little less provocative--maybe that was the point....

Let's look first at Jesse admitting that he has a sow's ear here:

Let’s get the weirdest part of the letter out of the way....

Our commitment to academic freedom means that we do not support so-called “trigger warnings,” we do not cancel invited speakers because their topics might prove controversial, and we do not condone the creation of intellectual “safe spaces” where individuals can retreat from ideas and perspectives at odds with their own.

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A Brief History of (In)equality: No Longer Fresh at Project Syndicate

Elephant graph Google Search

No Longer Fresh at Project Syndicate: A Brief History of (In)equality: Here we have a very nice set of slides http://tinyurl.com/dl20160725a. It comes from a talk in Lisbon given by Barry Eichengreen, my sixth-floor office neighbor here at the Berkeley Economics Department. The slides have one of the great virtues of economic history: We, unlike other economists, are allowed to at least gesture at and even glory at the complexities of a situation. We are not forced, as other economists are, into ruthless oversimplification in pursuit of conceptual clarity—to be followed by the intellectually-faulty imperialism overloading more of an explanation of the world on a simple model then it can rightfully bear. Read MOAR at Project Syndicate

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Why Do We Talk About Helicopter Money?

Forbidden Planet Images of Krell Technology

Why do we talk about "helicopter money"? We talk about helicopter money because we seek a tool for managing aggregate demand--for nudging the level of spending in an economy up to but not above the economy's current sustainable productive potential--that is all of:

  1. Effective and successful--even in the very low interest rate world we appear to be in.
  2. Does not excite fears of an outsized central bank balance sheet--with its vague but truly-feared risks.
  3. Does not excite fears of an outsized government interest-bearing debt--with its very real and costly amortization burdens should interest rates rise.
  4. Keeps what ought to be a technocratic problem of public administration out of the mishegas that is modern partisan politics.

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Liveblogging History: August 25, 1916: National Park Service

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All-len-All: Congress Establishes the National Park Service:

By 1916, the Interior Department was responsible for 14 national parks and 21 national monuments but had no organization to manage them. Interior secretaries had asked the Army to detail troops to Yellowstone and the California parks for this purpose. There military engineers and cavalrymen developed park roads and buildings, enforced regulations against hunting, grazing, timber cutting, and vandalism, and did their best to serve the visiting public. Civilian appointees superintended the other parks, while the monuments received minimal custody.

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Must-Read: Ruixue Jia (2014): The Legacies of Forced Freedom: China's Treaty Ports:

This paper investigates the long-run development of China's treaty ports from the mid-eighteenth century until today. Focusing on a sample of prefectures on the coast or on the Yangtze River, I document the dynamic development paths of treaty ports and their neighbors in alternate phases of closedness and openness. I also provide suggestive evidence on migration and sector-wise growth to understand the advantage of treaty ports in the long run.


Live from BushLand: Does Colin Powell want to have a reputation? Did Colin Powell suggest that Hillary Clinton should use her private email account as Secretary of State? Yes. Did he remember so advising her? Yes. Does he remember that now? He claims not to...

Joe Conason: [Did Colin Powell Advise Clinton To Use A Private Email?][]:

Did Colin Powell suggest that Hillary Clinton should use her private email account as secretary of state—as he had admittedly done in that same job several years earlier?...

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Liveblogging the American Revolution: August 24, 1778: General Orders,

George Washington: General Orders:

Parole Framingham—C. Signs Fez—France.

Brigade returns of all the horses in each Regiment and by whom kept to be made out immediately and delivered in to the orderly Office by 12 ôClock tomorrow.

The honorable the Congress have been pleased to agree to the following Report of their Committee and to pass the resolution annexed to it:

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Liveblogging the Cold War: August 23, 1946: Eleanor Roosevelt

Eleanor Roosevelt: My Day:

NEW YORK, Thursday--None of us can help being worried and indignant over the shooting down of two of our unarmed transport planes which had wandered over the Yugoslav border. Conceding that there may be some hidden reason why our planes are forbidden to fly over a friendly country, it still seems a little difficult for the layman to understand.

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Liveblogging the American Revolution: August 22, 1778: Battle of Rhode Island

Wikipedia: Battle of Rhode Island:

Since d'Estaing's fleet outnumbered Howe's, the French admiral, fearful that Howe would be further reinforced and eventually gain a numerical advantage, reboarded the French troops, and sailed out to do battle with Howe on August 10. As the two fleets prepared to battle and maneuvered for position, the weather deteriorated, and a major storm broke out. Raging for two days, the storm scattered both fleets, severely damaging the French flagship. It also frustrated plans by Sullivan to attack Newport without French support on August 11.

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Liveblogging the Cold War: August 21, 1946: The Marshall Mission to China

George C. Marshall: [To Colonel Marshall S. Carter][]:

August 21, 1946 Radio No. GOLD 1360. [Nanking, China]

Secret, Eyes Alone

Reference your WAR-97857.1 My view is as follows: situation critical in the extreme, small prospect for early termination of hostilities agreement—therefore likelihood great of spread of fighting into Jehol Province and Manchuria.

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Procrastinating on August 23, 2016

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Over at Equitable Growth: Must-Reads:

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Must-Read: Stanley Fischer is off message. The right message for Stanley Fischer to be saying right now is not: "We are close to our targets... within hailing distance..."

Personal consumption expenditures Market based PCE excluding food and energy chain type price index FRED St Louis Fed

The right message is:

  1. We are deeply disappointed in our failure to hit our inflation target over the past five years.
  2. By the end of this year, our failure will have left us with a price level 3% lower than we had committed to trying to attain back at the end of 2010.
  3. That means a 3% higher real debt burden on all those who borrowed than they--trusting us--planned for back in 2010.
  4. That means a 3% windfall for all those who loaned.
  5. In fact, since 1995 we have undershot our cumulative target by 7%.
  6. Thus those who believe that our 2%/year target is not an average but a ceiling have some evidence on their side.
  7. Nevertheless, we regard 2%/year not as a ceiling but as an average going forward.
  8. And we will strive to do better in the future than we have in the past.
  9. We will strive as hard as we can to have inflation on a core PCE basis average 2% per year over the next five years.
  10. We really could use some help from more expansionary fiscal policy.
  11. Please hold us accountable.

Dean Baker: Stanley Fischer Rewrites Fed Inflation Target, Prepares to Throw People Out of Work:

MarketWatch.... quotes Stanley Fischer... as saying, "We are close to our targets" for inflation and unemployment...

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I Do Not Understand the View from the Financial Markets...

Over at Equitable Growth: I want to say that people like Global Head of Credit Products Strategy at Citigroup Matt King are simply not thinking clearly. The macroeconomic regularities that seem obvious to me simply are not there to him. What he ought to be saying is:

  1. Mammoth safe asset shortage--in large part because since 2007 nobody trusts any of his peers' issuing departments to create a AAA asset.
  2. Hence destructively low yields.
  3. Hence those that can need to bend every policy nerve toward creating large amounts of safe assets--which means borrow-and-spend on the part of governments: expansionary fiscal policy.

But that is rarely what he or his peers are saying. Thus I hesitate. Could they possibly be misreading the situation in such an obvious way? What are they seeing and thinking about that I am missing?

Thus I never know what to do with pieces like this: Read MOAR Over at Equitable Growth:

Alexandra Scaggs: There’s No Yield, and Citi Isn’t Going to Take It Anymore:

Citi’s Matt King has some harsh words for central bankers...

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Live from the Banks of the Missouri: Thursday, October 13, 2016: 2016 Kansas Economic Policy Conference: Reimagining Kansas: Policy Implications Now and in the Future:

  • 8:30: Registration, Coffee & More
  • 9:00: Welcome: Bernadette Gray-Little, Chancellor, The University of Kansas.,
  • 9:10: Introduction - Kansas: Then and Now 1890-2015 Steven Maynard-Moody, Director, Institute for Policy & Social Research and Professor, School of Public Affairs & Administration, The University of Kansas

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The Wayback Machine: From Ten Years Ago: August 17-August 23, 2006

Peabody and sherman original Google Search

  • 2006-08-22: The Blue Car Is the Red Car: Once upon a time we had a red car--a red two-door 1987 Acura Integra without air conditioning that we bought in the spring of 1988. We called it "the red car." After thirteen years we replaced it with a blue four-door 2000 Acura Integra with air conditioning. And for the first couple of months we had it, we would occasionally and accidentally (whatever that means) refer to it as "the red car"--even though we knew full well that it was the blue car. You see, I would argue, the neural circuits were well-engraved: an Acura Integra, the smaller of our cars, the more responsive of our cars, the non-station wagon--the features of the blue car were nearly identical to the features of the red car, so when our brains grasped for a verbal referent they had a good chance of picking the standard phrase we used for the red car. And, of course, neither of us had any trouble understanding what the other meant by the phrase "the red car"...

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Monday Smackdown: Mike Sax Regrets the Inability of Chris Cillizza and His Fellow Journamalists at the Washington Post to Use Google...

Mike Sax: Colin Powell Protests too Much:

It's amazing what he doesn't remember now that he did remember two months ago. He was very happy to kick Hillary in the teeth over the weekend. Of course, [Chris Cillizza was very happy to write about it][]. It's about the only thing Cillizza ever writes about himself anymore at The Fix:

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Macroeconomic Policy Reform: A Tentative Agenda

Real Potential Gross Domestic Product FRED St Louis Fed

Over at Equitable Growth: It was 24 years ago this week that Larry Summers and I warned that if we were to push the target inflation rate much below roughly 5%/year, then, in the immortal words of Dr Suess's the Fish in the Pot:

"Do I like this? Oh, no, I do not. This is not a good game", said our fish as he lit. "No, I do not like it, not one little bit!"

As I see it, if we want good macroeconomic business-cycle stabilization policy over the next generation, we need to do one or more of four things. I think the more of them we do, the better. And I want Summers and Bernanke to chair a commission this fall and winter to establish the order in which we should attempt to do these four things, and to start building the political and technocratic coalition to get them accomplished: Read MOAR Over at at Equitable Growth

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Must-Read: For a single carrier in a market, the obvious strategy to offer is the "narrow network, low price Silver as the #1 and a broad network Silver at a significantly higher premium as the #2 benchmark Silver" in order to pump Exchange subsidy money out of CMS, and then spend that pumped money to make everybody happy, no? There are ways to do that, no? The single carrier markets will see a lot of market power exercised, but won't the main impact of it be to raise costs to CMS rather than to diminish the well-being of Exchange purchasers?

Just thinking aloud here...

Richard Mayhew: ObamaCare APTC Hacks:

There are other exchange strategies that don’t rely as much on manipulating... [Silver Plan price] structures...

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Doesn't Anybody Know How to Play This Game?: U.C. Berkeley Administration Blogging

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Nicholas Dirks, Chancellor of the University of California at Berkeley, writes an email...

And my response is: Shouldn't that read "finish the search[es]" rather than "launch the search[es]"? Doesn't anybody know how to play this game?

If you can without significant loss of administrative coherence leave the positions of Executive Vice Chancellor and Provost, of Vice Chancellor for Administration and Finance, and of Vice Chancellor for Student Affairs open not just until a new Chancellor appears next March but for eight months beyond that until November 2017, you really do not need either an Executive Vice Chancellor and Provost, a Vice Chancellor for Administration and Finance, or a Vice Chancellor for Student Affairs.

I would bet Berkeley needs a long-term appointee in at least one of these three jobs. If not, I see easy permanent administrative savings of about $1,000,000/year--the equivalent of a $25M gift--from dismantling those three offices.

Therefore the searches should be all tee-ed up with at most six finalists so that the new Chancellor next March can make a quick decision and get the show on the road...

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Comment of the Day: Maynard Handley: Live from Trumpland: Who is attracted to voting for Trump?:

We enrage them not just because in many cases we are the nerds they bullied in class, who somehow have now ended up "running the world." We enrage them because we lecture them about how they need to be more open to those who compete with them for jobs and housing and wealth--minorities, immigrants, and women--even though in most cases we are ourselves not exposed to said competition...

I think this misses one essential psychological point: it is not being lectured to that people dislike, it is being lectured to by someone who turns out to be RIGHT...

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Monday Smackdown: Why Do People Pay David Brooks (and Niall Ferguson) for This?

Preview of Test

In remembrance of a truly excellent lunch at the Firefly Grill in Effingham, Illinois--the kind of place that David Brooks claims simply does not exist--and in mockery of Niall Ferguson's claims that the election is 50-50 and is "Fishtown vs. Belmont, Chick-Fil-A vs. quinoa", we once again the hoist from the bowels of the Internet the extremely sharp Sasha Issenberg's immortal mockery-takedown of David Brooks.

People who have never read this should read the whole thing.

And can anybody tell me why, after this, the New York Times didn't take Brooks's opinion-hole away from him and give it to Sasha? Or at least leave it blank, out of shame? I mean, no statistics plus faked anecdotes--what is the value in David Brooks here?

Sasha Issenberg (2004): Boo-Boos in Paradise:

As I made my journey [through Franklin County, PA], it became increasingly hard to believe that Brooks ever left his home [in Montgomery County, MD]:

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Live from Trumpland: Who is attracted to voting for Trump? And why am I not--even as more than half of my income class is going to pull the lever for Trump this fall? Is it my urbanity? My education level? My unwillingness to fall for one of the most obvious grifts on the planet? The fact that I took too many American Studies courses as a child and so identify not as "white" but as "Yankee"--a descendant predominantly of East Anglian and Severn Valley Puritans, the position of whose culture and values in America today is not a result of relative numbers?

Josh Marshall wrestles with this hard problem, and comes up with a Polanyiesque interpretation: the disappointment by the market economic system of what had been thought as reasonable expectations leads to a politics of revenge--but not just of revenge against the Masters of the Universe, revenge against those who are somehow getting above themselves and getting free stuff:

Josh Marshall: Trumpism is a Politics of Loss and Revenge:

Trump support is highly correlated with areas experiencing rising mortality rates for whites--a massively important societal development, in addition to a tragedy....

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Links for the Week of August 21, 2016

Most-Recent Must-Reads:


Most-Recent Links:

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(Early) Monday DeLong Smackdown: Pseudoerasmus of Chokurdakh on DeLong and Eichengreen on the Marshall Plan

Pseudoerasmus: Greece from Postwar Orthodoxy to “Democratic Peronism”:

In a paper which passes for a reasonable parody of the Washington Consensus fad of the 1990s...

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Procrastinating on August 21, 2016

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Over at Equitable Growth: Must-Reads:

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Must-Read: I'll take "Doom for $2000", Nicolas...

If free trade, the industrial research lab, the gold standard, and high finance to lobby for peace and channel money to régimes that played by the rules of the game were the key stabilizing institutions of Gold Standardism, and if labor unions, Keynesian demand management, social insurance, and high-throughput oligopolistic assembly-line manufacturing were the key stabilizing institutions of Fordism, what are the next key stabilizing institutions? There is no guarantee that there will be any. There was, after all, a 33-year gap between the breakdown of Gold Standardism in 1913 and the first clear signs of the successful construction of Fordism in 1946. If we see 2000 as the last gasp of successful Fordism... we may have a long slog. For who in 1913 would have predicted the future and bet that labor unions, Keynesian demand management, social insurance, and high-throughput oligopolistic assembly-line manufacturing were the key institutions to be building?

Nicolas Colin: Doom, or Europe’s Polanyi Moment?:

The Great Transformation... is really about the social and economic institutions that are necessary to support the market system and to make economic development more sustainable and inclusive...

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Lincoln douglas debates Google Search

Live from the Nineteenth-Century Equivocating Political Stump: Abraham Lincoln: Speech at Ottawa (August 21, 1858): "Now, gentlemen, I don't want to read at any greater length...

...but this is the true complexion of all I have ever said in regard to the institution of slavery and the black race. This is the whole of it, and anything that argues me into his idea of perfect social and political equality with the negro, is but a specious and fantastic arrangement of words, by which a man can prove a horse-chestnut to be a chestnut horse. [Laughter.]

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(Early) Monday Smackdown: A North Carolina Miracle?--No, of Course Steven Moore Has No Principles. Why Would You Ask?

Live from the Wingnutosphere: I do confess that I was surprised when, on Trish Regan's show, Steve Moore abandoned his previous support of the TPP. He claimed that it had "lots of pages" and that "the other parties won't follow its provisions". Well, it had "lots of pages" back when you supported it, Steve--if you are going to cut tariffs on lots of items and draw detailed rules for what people owe foreigners for the intellectual property they use, "lots of pages" comes with the deal. It had "lots of pages" when you were urging Marco Rubio to vote for it, Steve. It has "lots of pages" now. And on enforcement, the entire point of the TPP is that it gives us tools to penalize countries that do not follow its rules, and thus provide them with incentive to obey its provisions. We don't have those too now. TPP gives them to us.

Even as a (mild, nearly on the fence) TPP skeptic, I was gobsmacked both by the rapidity of Moore's rapid reversal of field and by the vacuity of his arguments against it--and by Trish Regan's failure to call him on it.

Why did Moore reverse field? Why were Moore's only arguments so vacuous? Why did Regan not call him on it? Well, because Donald Trump says that he is against the TPP as negotiated by Obama, of course. (Though dollars gets you donuts that should he become president, there will be a few cosmetic changes, it will suddenly become a good, well-negotiated trade agreement, and Trump will be for it, and Moore will revert to his position of three months ago.)

But there's more (or, rather, Moore). Let me outsource the rest of this to PGL:

Pro Growth Liberal (2015): Stephen Moore Declares a North Carolina Miracle:

Stephen Moore has another silly parade of disinformation...

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“Winter, Spring, Summer, Fall; Death is the Fifth, and Master of All”: The Fifth Season by N. K. Jemisin | Tor.com

Live from the Kansas City Convention Center: Niall Alexander: [“Winter, Spring, Summer, Fall; Death is the Fifth, and Master of All”: The Fifth Season by N. K. Jemisin][]:

An orogene, or—if you want to be a bigot about it, as most of the people of the Stillness do, to be sure—a rogga...

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