- 2006-08-30: Hoisted from Comments: Understanding Danny Okrent: I Don't Think We Can Blame Donald Luskin for This: Jim Dandy writes, apropos of Danny Okrent's belief that Paul Krugman sought to deceive his readers by mixing-and-matching numbers from the household and the establishment survey.... 'We certainly know who "they" were [Donald Luskin], but that flying attack monkey shall remain unnamed, having already been confined to "stupidest man" territory.' My guess is that that is probably not the case. We know that Okrent thinks Luskin is creepy. If A thinks B is a creep, A would have to be really stupid, a COMPLETE idiot, totally unfit for paid employment, to take B's word for technical details without verifying them. So I think the balance of the probabilities is that Okrent's source for this was not Luskin.
- 2006-08-30: Econ 101b: Fall 2006: August 31 Lecture Notes: Growth Theory: More introduction to growth theory lecture notes--what I'm going to be working from during the lecture on August 31.
2006-08-29: "Mix and Match": Gene Epstein of Barrons writes, asking: "I wish Brad DeLong would just open my book [Econospinning] 'at random' to the 12 pages that make up the second chapter (called 'Two Ways to Measure Employment'). The chapter recounts a garden-variety case of econospinning by New York Times columnist Paul Krugman. My version of the story is that Krugman not only confused one set of employment data with another to make a point about the job outlook in a May 2004 column... [but] when Krugman was given the chance to correct the error by then-Public Editor Daniel Okrent, he denied he had made it."... There is a certain horrifying fascination in watching the right wing's minions and useful idiots in the press attempt to attack Paul Krugman on matters of economic substance. The Mickey Kauses, the Andrew Sullivans, the Donald Luskins, the Danny Okrents--all seem unarmed men in a battle of wits, or perhaps an air assault by a circular firing squad of flying attack monkeys.... [In this] new episode, in which Gene Epstein of Barrons arrives at the scene to do what Danny Okrent won't--to defend Okrent's claim of Krugman's "mixing and matching"--and thus to join Okrent in virtual self-immolation.... "Epstein: Just re-read the second-to-last paragraph in [Krugman's May 25, 2004] column. 'And employment is chasing a moving target...'... Isn't '140,000' a number? It comes from the Household Survey.... The only way to get Krugman's 'four years' is to mix the data together"... No. As I emailed Epstein: "No [the 140,000 a month number] doesn't [come from the Household Survey].... IIRC, Paul calculated the 140,000 number by taking Census--not CPS--estimates of the rate of adult population growth and multiplying that growth rate by the current level of payroll employment. I don't see how the CPS could have entered into it...." And it gets worse. You see, the Bush Administration in its 2004 Economic Report of the President did the same calculation as Krugman, using the same census and establishment survey sources. You can see it on p. 94.... As I said, a certain horrifying fascination. Why oh why can't we have a better press corps?
2006-08-29: Econ 101b: Fall 2006: More Notes for August 29 Lecture: Two Resources: Gapminder: http://tools.google.com/gapminder/ Solow growth model scenario spreadsheet: http://delong.typepad.com/print/20060829_Solow_growth.xls. A Cautionary Tale (TO BE FIXED): De-development in Zambia, 1975-2004: http://delong.typepad.com/print/20060829_Zambian_dedevelopment.pdf
2006-08-28: Econ 101b: Fall 2006: Handout: August 29 Lecture: Introduction to the Course, and Introduction to the Theory of Economic Growth. A few graphs: World income distribution and telephone usage 2005; World income distribution and telephone usage 1975; U.S. nonfarm employment, 1940-2006; U.S. real GDP per worker, 1950-2006. A simple model, the Solow model, for analyzing an economy with labor L, capital K, and technology E... The Solow model assumes: The labor force grows at a constant proportional rate n. The rate of improvement of "technology" is a constant proportional rate g. Savings leads to investment of a fraction s of output Y in increasing the capital stock K. A constant proportion delta of the capital stock K wears out each period. How much of the cross-country and cross-time pattern of economic growth can we explain with this simple model? Solow Model Handout. Course website: http://berkeley101bfall2006.vox.com/
2006-08-28: SYLLABUS: ECON 101b: MACROEONOMICS: FALL 2006
2006-08-27: A Lamentable Uncuriosity...: To my right, National Review Online contributor Cathy Seipp: "Anyway, we got to the 1:45 p.m. movie about 10 minutes early, and were happy that a row of four center seats in the handicapped row were free.... But around 2 p.m., after the previews were over and the movie was about to start, three old ladies walked in -- no wheelchair, no walkers, not even canes -- and demanded our seats. 'No', I said, looking down towards the end of the handicapped row, where there were some empty seat still available. The rest of the row had filled up, as usual, with perfectly able-bodied people. 'You can go sit there'. 'Are you handicapped?' one demanded, yelling to be heard over the soundtrack. Luckily, the Fentanyl patch I was wearing was visible near my collarbone (usually it's near the hip) and also pretty obvious because I'd needed to keep it on with rubber tape that day. These pain patches are so powerful (unless you're 'opioid tolerant', like me) that they come with rather alarming instructions.... 'Well', I snapped, 'there's enough morphine in this to knock out a horse, and it's still not really working. Does that answer your question?'... They grumpily clomped off. But I don't see how being old and slightly weak entitles you to the best seats in the house just because you couldn't be bothered to get to the movie early, or even on time. I can see it's a problem, though, how to handle that handicapped row..." To my left, National Review Online contributor John Derbyshire: "Liberty vs. equality. There has been no rollback of the tort-spawning, job-killing egalitarianism of the 1990s. Title IX and the Americans with Disabilities Act are still on the books..." I wonder: Does Cathy Seipp know why there are now handicapped rows in movie theaters?
2006-08-26: Introducing Serious, Permanent Bugs into Your Wetware: Voluntarily introducing serious, permanent bugs into your wetware.... Here we find Michael Fitzgerald, a man who has seriously misprogrammed substantial chunks of his frontal lobes by reading Karl Marx's Capital--something that, I am becoming convinced, should only be done by somebody with immunity to the mental virus--by a trained intellectual or social or economic historian, or by a trained neoclassical economist.... Where does one begin? Let me make two observations only: First, I observe that the idea that the best way to understand the political economy of the 1970s is through intensive, group, line-by-line study of an unfinished, inconsistent, and ambiguous text first drafted in the 1850s by a very smart, sometimes far-sighted, but definitely not divine human being--that that idea is already a delusion peculiar to those who were a little too good in school in seeking truths from reading books rather than seeking truths from facts. Second, I observe that Marx's claim that the "twofold character of the commodity, as use-value and exchange-value," is a difficulty in need of "exploration" is a claim that can only be made by a deranged Hegelian mystic.... Fitzgerald says that Marx's analysis of use-value and exchange-value "reveal[s] in an elementary form the contradictory character of capitalist production" which requires the abolition of private property and market exchange in order for the "mystical veil" of market prices to be stripped off "the life process of material production" and "production by freely associated men... consciously regulated by them in accordance with a settled plan." In what sense is this dual role of commodities a "contradiction"? Marx never offered me a coherent answer. And Fitzgerald does no better.... A moment's look back at history reveals that the distinction between use-value and exchange-value is not something invented by or peculiar to the capitalist mode of production: it is found in all human societies, no matter how large or small. The cattle slaughtered and cooked by the thralls of Hrothgar, King of the Geats, have use-value to Hrothgar: He and his family can eat (some of) them. The cattle have exchange-value to Hrothgar as well: He feeds them to his warriors at their nightly banquets in his great hall of Heorot. In exchange for livery and maintenance, the warriors fight Hrothgar's wars. Success in war gains Hrothgar more thralls, more cattle, and a bigger and better reputation as a great Drighten. If you try to ground an analysis of capitalism-in-particular on a feature (the distinction between objects' direct usefulness and their role in social processes of reciprocity, redistribution, or market exchange) that capitalism shares with every other human social system--well, you won't get anywhere. And those who read Capital "in a group, out loud, line by line, paragraph by paragraph... discussing and arguing over every page, through volumes one, two and three, even unto Theories of Surplus Value" don't get anywhere at all.
2006-08-26: Why Oh Why Can't We Have a Better Press Corps? (Jonathan Weisman and Washington Post Bad, Dick Polman and Philadelphia Inquirer Good Edition): Outsourced to Jamison Foser, who writes about journamalist Jonathan Weisman and journalist Dick Polman.... "Washington Post reporter Jonathan Weisman participated in an August 25 online discussion on the newspaper's website.... Jonathan Weisman.... 'Cheney's statements present a quandary for us reporters. Sometimes we write them up and are accused of being White House stenographers and stooges for repeating them. Then if we don't write them up, we are accused of being complicit for covering them up. So, all you folks on the left, what'll it be? Complicity or stenography?' We can't speak for all the 'folks on the left', but we suspect most of them would choose 'Option C: Journalism'. Indeed, several participants in the online discussion made exactly that point. As one put it: '[R]esearch and intelligent questions based on said research that makes up "Reporting". Retyping statements without research is ':Stenography". Avoiding asking tough questions because it makes your original stenography look really, really bad is "Complicity"'. Weisman, showing nothing but contempt for his readers--and, though it seems he didn't realize it, for his profession--responded with a series of churlish comments like 'Please apply for my job' and 'Sometimes, you folks really drive us nuts'. We can assure Mr. Weisman that the feeling is mutual.... It always helps to remember the lesson of Senator Joe McCarthy. The 1950s demagogue... was enabled at every step of the way by journalists who believed their job was to only report 'what was said'. McCarthy was a senator, therefore, if he said something (true or not), it was deemed news. When he made wild charges about 60 or 80 or 100 communists in the State Department, it was reported as news. The 'fact' that he was making such charges was considered sufficient; as the New York Times wrote back then, after reviewing their own McCarthy coverage, 'It is difficult, if not impossible, to ignore charges by Senator McCarthy just because they are usually proved false. The remedy lies with the reader.' Washington reporter Richard Rovere, in a book he wrote two years after the senator's death, complained about 'the system that required (reporters) to publish "news" they knew to be fraudulent but prohibited them from reporting their knowledge of its fradulence. [sic]'. In today's world, given the credibility problems that have plagued administrations of both parties, that 'system' is not adequate. Nor was it then."
2006-08-24: Income Distribution in Historical-International Perspective: Nicholas Gruen posts on income distribution in historical international perspective: "Here’s a diagram from a recent paper (pdf) [by Roine and Waldenström] on the Swedish distribution of income. It shows that the kinds of income distribution through time that Andrew Leigh and Anthony Atkinson came up with for Australia and NZ are typical of most western countries. It also shows that you can lean pretty successfully against the wind - as the Swedes have. And also that you can lean pretty ineffectively against the wind - like the French have. I’ve asked the authors of the paper for a better resolution picture - but I think it’s fairly clear even in it’s somewhat foggy state." It's as Piketty and Saez said: the advent of social democracy is found everywhere in the industrial world; the more recent coming of the Second Gilded Age is primarily an Anglo-Saxon phenomenon.
2006-08-24: Why Oh Why Can't We Have a Better Press Corps? (Gene Epstein of Barrons Tries to Strike Back Edition): Where in the Holy Name of the One Who Is does the print media find such people? And why in the Holy Name of the One Who Is does it employ them? I wrote: "Finance I (Remedial) (Why Oh Why Can't We Have a Better Press Corps?): Tyler Cowen did a bad thing in recommending Econospinning, by Gene Epstein: 'Imagine lengthy polemics against the use of numbers in the work of Paul Krugman (most of all), the Op-Ed page of The Wall Street Journal, Brad DeLong, Steve Levitt, and Barbara Ehrenreich, among others. Except the vehicle isn't the blogosphere, it is a book!...' I open the book at random and get page 143..." Econospinning author Gene Epstein writes back, more than confirming all my initial negative impressions. The third sentence I write--the third sentence--is a quote from Tyler Cowen saying that Gene Epstein's Econospinning contains "lengthy polemics against the use of numbers in the work of... Brad DeLong." Yet Epstein has the stupids to claim that I fail to "make due acknowledgment... [that I am] mentioned critically in [his] book": "[DeLong's] sweeping dismissal of my book... falls far short of [DeLong's] own standard. Just for starters, I needn't tell him that a reviewer of a book should always make due acknowledgment when he himself is mentioned critically in that book..."