Grasping Reality on TypePad, by Brad DeLong

*Duncan Black: They Know Even Less Than What They Say:

Just the regular reminder that all of the people paid millions to tell us all it what means were scornful at the idea that Donald Trump could win the Republican primary, despite the polls telling us he probably would for months. I'd say only the dirty hippie liberals understand the Republican electorate, but it's worse than that. Only dirty hippie liberals know how to read a f---ing poll.

Live from the Journamalists' Self-Made Gehenna: Paul Krugman: How the Clinton-Trump Race Got Close:

Monday’s presidential debate was a blowout....

Live from the Journamalists' Self-Made Gehenna: Yet Another Maggie Haberman/New York Times in the tank edition:

Does anybody think that this from New York Times "reporter" Maggie Haberman:

1. Is true in its claim that Donald Trump has tried to shift attention away from Alicia Machado with his 5 AM attack tweets?

1. Is fair in its presentation of Trump's remarks about Ms. Machado as merely composed of: "descriptions of a Miss Universe winner (he used to own the pageant) as overweight?

And this raises three very natural questions:

1. What is Mr. Baquet's theory of journamalism according to which this is not the way to bankruptcy?

2. What is Ms. Haberman's theory of journamalism according to which this is not the way to end one's career?

3. Why isn't anybody at 620 Eighth Avenue yelling, screaming, banging on the walls, and saying: "there gotta be some changes made!"?

Nuremberg Trial: THE PRESIDENT: The Judgment of the international Military Tribunal will now be read. I shall not read the title and the formal parts....

Herald Democrat: Hughes Says He Had Not Urged Senators to Fight President's Eight-Hour Bill:

Saratoga Springs. NV: Charles Evans Hughes told the Republican unofficial state convention here why had not urged Republican senators to filibuster "to the last ditch" against the passage of the Adamson eight-hour law passed to avert the threatened railroad strike.

The nominee declared he did not believe in filibustering for one thing, and that if the majority in congress had determined to pass the bill there was no reason whatever why its passage should have been delayed by filibustering tactics. "It (the administration) acted with swiftness.” Mr. Hughes said "and it cannot now cry that a Republican candidate a thousand miles away should have saved it from carrying out its fixed determination..."

Over at Equitable Growth: Must-Reads:

• John Maynard Keynes (1936): The General Theory of Employment, Interest and Money, Chapter 13: The three divisions of liquidity-preference....
• David Glasner: Price Stickiness a Symptom Not a Cause: Nick [Rowe], following a broad consensus among economists, identifies price stickiness as a critical cause of fluctuations in employment and income....
• John Maynard Keynes (1937): The General Theory of Employment: Now a practical theory of the future based on these three principles has certain marked characteristics...
• John Maynard Keynes (1936): The General Theory of Employment, Interest and Money, Chapter 12: So far we have had chiefly in mind the state of confidence of the speculator or speculative investor himself...
• Simon Wren-Lewis: A General Theory of Austerity, Cynicism and Opportunism: Was austerity an unfortunate accident?...
• Mike Konczal: The "new liberal economics" is the key to understanding Hillary Clinton's policies: We’re witnessing the emergence of an important new vision...
• Dan Davies: On Deutsche Bank

Live from the Republicans' Self-Made Gehenna:

George H.W. Bush: Voting for Hillary #I'mWithHer: not a moron.

George P. Bush: Not just voting for but working for Trump: a moron.

George W. Bush: Lied us into a stupid and destructive war: a moron.

But it is Jeb Bush who looks to be: the biggest moron:

Kristin Salaky: Jeb Bush Thinks It Would Be 'Powerful' Statement If Nobody Voted This Year:

Bush said that he's "at peace" with his decision on who to vote for, even though he refused to disclose who that would be. He did say that it would not be Clinton or Trump...

Refusing to take a stand on an important decision.

When reporters asked what would happen if everyone followed his lead, Bush took it a step further. "Well, if everybody didn't vote, that would be a pretty powerful political statement, wouldn't it?" Bush said...

Yes: it would be a statement that 240 years of the American Republic is at an end, wouldn't it?

Some outlets reported that Bush was privately supporting Johnson, and The New York Daily News reported he'd hinted at his support for Johnson publicly at a Manhattan Institute event this week, mouthing the Libertarian's name to someone who said he didn't want to vote for either Trump or Clinton. Bush denied that report, though. "I don't think so," Bush said when reporters asked if he had done that, according to CNN...

That's some non-denial denial we have here!

He also addressed a previous report that his father, former President George H.W. Bush, was going to support Clinton, saying that he found it "inappropriate" that someone would repeat what his "frail" father said at a private event...

George H.W. Bush--a lot smarter and wiser than JEB!!--shouldn't tell people who he is voting for? And people to whom George H.W. Bush has said smart things shouldn't repeat them to others? A very strange idea of "inappropriate" we have here...

Live from Trumpland: Another unhinged rabid Hillary-hater for Hillary:

Dorothy Rabinovitz: Hillary-Hatred Derangement Syndrome:

The end of the election is now in sight. Some among the anti-Hillary brigades have decided, in deference to their exquisite sensibilities, to stay at home on Election Day, rather than vote for Mrs. Clinton. But most Americans will soon make their choice. It will be either Mr. Trump or Mrs. Clinton—experienced, forward-looking, indomitably determined and eminently sane. Her election alone is what stands between the American nation and the reign of the most unstable, proudly uninformed, psychologically unfit president ever to enter the White House.

Must-Read: Dan Davies: On Deutsche Bank:

Must-Read: Mike Konczal: The "new liberal economics" is the key to understanding Hillary Clinton's policies:

We’re witnessing the emergence of an important new vision...

Comment of the Day: Robert Waldmann: Physical Chemistry:

Mass shouldn't affect boiling points...

Live from the Journamalists' Self-Made Gehenna: Storify: Jack Shafer Has Little If Any Clue What an "Open Inquiry" Is: But what do you expect from someone who brought us Stephen Landsburg?

Live from the Court of Charles II Stuart: Sarah Jennings[?] on Louise de Kérouaille:

The king made her the Duchess of Portsmouth, and for this she was called 'Fireship' by Nelly Gwynn and others, I believe unjustly, for her children were healthy enough...

Live from the Journamalists' Self-Made Gehenna: So deep in the tank that they do not remember that they are supposed to not be in the tank. I don't think that "generally-reputable" means what you think it means:

Josh Kraushaar: @HotLineJosh:

Generally-reputable commentators (Gingrich, Goodwin to name a few) citing online polls as evidence Trump won debate.

Steve M: Newt Gingrich went on Sean Hannity's radio show today and said this:

And there are rumors that Hillary was actually given the questions in advance. I don't know if it's true but it would not shock me because they all operate in the same circle. They go to the same cocktail parties, they all know each other, her operatives and the news media producers on the left are all close friends, and this whole thing is a setup.

Must-Read: Economic anxiety!

John Judis: Deep Stories:

[Arlie Russell] Hochschild traces the origins of the deep story to two specific historical moments that she believes left many white Americans in the South in a state of mourning...

John Maynard Keynes (1937): The General Theory of Employment:

I: I am much indebted to the Editors of the Quarterly Journal for the four contributions relating to my General Theory of Employment, Interest and Money which appeared in the issue for November, 1936. They contain detailed criticisms, much of which I accept and from which I hope to benefit. There is nothing in Professor Taussig's comment from which I disagree. Mr. Leontief is right, I think, in the distinction he draws between my attitude and that of the "orthodox" theory to what he calls the "homogeneity postulate." I should have thought, however, that there was abundant evidence from experience to contradict this postulate; and that, in any case, it is for those who make a highly special assumption to justify it, rather than for one who dispenses with it, to prove a general negative. I would also suggest that his idea might be applied more fruitfully and with greater theoretical precision in connection with the part played by the quantity of money in determining the rate of interest (Cf. my paper on "The Theory of the Rate of Interest" to appear in the volume of Essays in honor of Irving Fisher). For it is here, I think, that the homogeneity postulate primarily enters into the orthodox theoretical scheme.

Must-Read: Simon Wren-Lewis: A General Theory of Austerity, Cynicism and Opportunism:

Was austerity an unfortunate accident?...

Must-Read: Is there anybody who can teach all of Hyman Minsky while standing on one foot? Yes: one person can:

John Maynard Keynes (1936): The General Theory of Employment, Interest and Money, Chapter 12:

So far we have had chiefly in mind the state of confidence of the speculator or speculative investor himself...

Must-Read: John Maynard Keynes (1937): The General Theory of Employment:

Now a practical theory of the future based on these three principles has certain marked characteristics...

Must-Read: David Glasner is a Clower/Leijonhufvud student. Listen to him. Mind you, I am not sure that the Clower/Leijonhufvud point-of-view is the best first approximation. But the argument made against it is never that it is a wrong approach, but always that it is difficult to do journeyman work in. Keynes was definitely very attracted to it, in some of his moods. For example:

Ricardian analysis... Marshall's contribution.... Edgeworth and Professor Pigou and other later and contemporary writers have embroidered and improved... [while] still dealing with a system in which... At any given time facts and expectations were assumed to be given in a definite and calculable form; and risks... capable of an exact actuarial computation... probability... reducing uncertainty to the same calculable status as that of certainty itself....

There are two important sub issues here that are often confused:

1. At the individual level, Bayesian probability versus Knightian uncertainty.

2. At the aggregate emergent-properties-of-systems level, the consistency of plans and expectations with respect to all of the missing futures markets:

David:

David Glasner: Price Stickiness a Symptom Not a Cause:

Nick [Rowe], following a broad consensus among economists, identifies price stickiness as a critical cause of fluctuations in employment and income....

Must-Read: John Maynard Keynes (1936): The General Theory of Employment, Interest and Money, Chapter 13:

The three divisions of liquidity-preference....

Over at Equitable Growth: Must-Reads:

• Beating America’s Health-Care Monopolists: Fresh at Project Syndicate - Equitable Growth
• The Stakes of the Helicopter Money Debate: A Primer - Equitable Growth
• Musings on the Science of "Scaling": Blum Center U.C. Berkeley - Equitable Growth
• Nick Bunker: Underemployment for recent U.S. college graduates - Equitable Growth
• Bridget Ansel: All work and no pay for many women around the globe - Equitable Growth Nick Bunker: What’s the optimal tax for capital income? - Equitable Growth
• Blum Center: The Science of Scaling: Building Evidence to Advance Anti-Poverty Innovations: September 26 @ 8:00 am - 5:00 pm, 100 Blum Hall, Haviland Road, U.C. Berkeley, Berkeley, CA 94720 United States The Development Impact Lab (DIL), headquartered at UC Berkeley and funded by USAID...
• Thomas Baekdal: What Killed The Newspapers? Google Or Facebook? Or...?: Google didn't actually kill the newspaper advertising market...
• Noah Smith: Economics Has a Major Blind Spot: Economists often don’t take politics into account. As a result, econ models leave out important pieces, and the advice of economists often falls on deaf ears or is seen as impractical...
• Dani Rodrik: Put Globalization to Work for Democracies: Look closely at the economies that converged with richer counterparts — Japan, South Korea, China — and you see that each engaged globally in a selective, strategic manner...
• Hans-Werner Sinn: Secular Stagnation or Self-Inflicted Malaise?: Some economists believe that this is evidence of “secular stagnation”....
• Scott Sumner: Who Is Peter Navarro?: Tyler Cowen linked to a paper by Peter Navarro.... It's a complete mess...
• Emmanuel Saez and Stefanie Stantcheva: A Simpler Theory of Optimal Capital Taxation: We derive formulas for optimal linear and nonlinear capital income taxation...

Todd Braisted: Massacre Averted: How two British Soldiers saved 350 American Lives:

An officer in Lord Cornwallis’ column wrote that “The 71st Regt. & Simcoe’s Corps cross’d the north river last night and appear’d at Tapawn soon after we arrived there but met with nothing in their way.” Colonel Cooper and his men were gone.

Wikipedia: Baylor Massacre:

On September 22, 1778, Lt. Gen. Sir Henry Clinton ordered Maj. Gen. Sir Charles Grey, Maj. Gen. Lord Cornwallis, and Brigadier General Edward Mathew to mobilize troops in an effort to provoke Gen. George Washington into a battle...

Eleanor Roosevelt: My Day:

HYDE PARK, Wednesday—The very brief excerpts given in the newspapers from the recent speech delivered by Anthony Eden certainly made me wish I could read it as a whole.

By-Laws Rules and Regulations of the International Monetary Fund:

A--SCOPE OF RULES AND REGULATIONS

Live from the Journamalists' Self-Made Gehnna: Paul Campos**: Take the skinheads bowling:

Presidential candidate debates are kind of ridiculous under normal circumstances...

...but under these circumstances you can change “kind of ridiculous” to “surreal beyond the literary powers of James Joyce on LSD to describe adequately.” I mean how do you “debate” somebody who doesn’t know anything about anything, who simply makes up whatever he feels like saying at the moment, and who is therefore essentially doing a kind of stand-up routine version of authoritarian ethno-nationalism?... We might as well decide some question of potentially existential significance via a bowling contest, except the winner will be determined by whoever Maureen Dowd thinks looks like a better bowler, as opposed to counting how many pins get knocked down.

Must-Read: I have long thought that the right way to think about consumption vs. income taxes is that a consumption tax is like a labor income tax plus a one-time credibly-unrepeated initial capital levy. Since it taxes something in completely inelastic supply--the initial capital stock--that escapes income taxation, it has to be more "efficient" than an income tax. This has tended to make me a friend of progressive consumption taxes. But here we have Saez and Stantcheva making a powerful argument that we need capital taxation as well. I am going to have to think hard about this:

Emmanuel Saez and Stefanie Stantcheva: A Simpler Theory of Optimal Capital Taxation:

We derive formulas for optimal linear and nonlinear capital income taxation...

Must-Read:: Scott Sumner is surprised at how unprofessional Peter Navarro of U.C. Irvine is. So am I. I had always thought of him as interesting but flaky--but here it looks as though he does not even know that he has homework to do:

Scott Sumner: Who Is Peter Navarro?:

Tyler Cowen linked to a paper by Peter Navarro.... It's a complete mess...

James Fallows: Trump Time Capsule #108: Bush, Fahrenthold, Kagan:

A four-month-old article... by Robert Kagan... [with whom] I disagree... on just about everything...

But in the months since he originally published his essay, called “This Is How Fascism Comes to America,”  I think his arguments have come to seem more rather than less relevant. Especially this....

We’re supposed to believe that Trump’s support stems from economic stagnation or dislocation.... But what Trump offers his followers are not economic remedies--his proposals change daily. What he offers is an attitude, an aura of crude strength and machismo, a boasting disrespect for the niceties of the democratic culture that he claims... has produced national weakness.... His incoherent and contradictory utterances... provoke and play on feelings of resentment and disdain, intermingled with bits of fear, hatred and anger. His public discourse consists of attacking... “others”.... His program, such as it is, consists chiefly of promises to get tough with foreigners and people of nonwhite complexion. He will deport them, bar them, get them to knuckle under, make them pay up or make them shut up.

Please also read Garrett Epps’s essay yesterday, to parallel sobering effect. All this is part of what the country knows about this candidate, as it considers whether to make him president; and what the likes of Paul Ryan and Mitch McConnell know as well, as they stand beside him.

J. Bradford DeLong and Michael M. DeLong: Beating America’s Health-Care Monopolists: BERKELEY – The United States’ Affordable Care Act (ACA), President Barack Obama’s signature 2010 health-care reform, has significantly increased the need for effective antitrust enforcement in health-insurance markets. Despite recent good news on this front, the odds remain stacked against consumers.

As Berkeley economics professor Aaron Edlin has pointed out, consumer abstention is the ultimate competitor. Companies cannot purchase or contrive a solution to consumers who say, “I’m just not going to buy this.” But the ACA requires individuals to purchase health insurance, thus creating a vertical demand curve for potential monopolists. Under these conditions, profits – and consumer abuse – can be maximized through collusion. Read MOAR at Project Syndicate

Live from the Journamalists' Self-Made Gehenna: Paul Krugman: How Did The Race Get Close?: Both candidates were pretty much who we already knew they were. This was the Hillary Clinton of the Benghazi hearing confronting the Donald Trump we’ve seen at every stage.... But... how did the race get so close?.... My guess is that... the mainstream media went all in on “abnormalizing” Mrs. Clinton...

Live from the Journamalists' Self-Made Gehenna: Jay Rosen: Asymmetry:

I thought I would write down some of the precepts and maxims I have used to understand press behavior..

Must-Read: WTF!?!? Hans-Werner Sinn appears simply to have failed to understand what the modern "secular stagnation" argument is. The facts that a very large credit bubble in the mid-2000s did not produce a high-pressure rising-inflation economy and that ultra-low interest rates today do not produce full recover are arguments for the secular stagnation hypothesis, not against it:

Hans-Werner Sinn: Secular Stagnation or Self-Inflicted Malaise?:

Some economists believe that this is evidence of “secular stagnation”....

Must-Read: Dani Rodrik: Put Globalization to Work for Democracies:

Look closely at the economies that converged with richer counterparts — Japan, South Korea, China — and you see that each engaged globally in a selective, strategic manner...

Live from Trumpland: If you need yet another reason to never again buy anything from Microsoft or from any company that advertises on any NBC channel:

Live from Trumpland: James Fallows: A 'Trump-Pence' Car in Deepest Hollywood:

A reader in Southern California... sent several photos with accompanying description.... If Richard Hofstadter were rewriting The Paranoid Style in American Politics, he would need a multi-volume special edition to cover 2016. Over to the reader:

I work on a studio lot in Los Angeles. Hollywood is lousy with liberals, so you can imagine my surprise when I pulled in next to a car with a Trump 2016 sticker. [The reader sent a photo.]

Live from Trumpland: Josh Barro: Why Hillary Clinton Won the Debate:

The political events of the last 15 months have ruined my confidence in my own ability to predict how the electorate will react to events...

Live from the Electorate: Nate Silver: The historical correlation...:

Here's the historical correlation between post-debate instant polls and changes to actual polls—not bad. Would predict 2-4% Clinton gain. pic.twitter.com/F1FkHqaM4Y

— Nate Silver (@NateSilver538) September 27, 2016

Charles Steindel: What Killed The Newspapers?:

While everyone loves fancy technological explanations...

If they stay around there too long, they fall victim to the culture and start purveying misinformation. Here from last February we have Neil Irwin claiming that part-time workers who would prefer full-time jobs are "unemployed". They are not. They are working.

Why do this, Neil? It misinforms your readers. It destroys your own credibility:

Neil Irwin: The Real Jobless Rate Is 42 Percent? Donald Trump Has a Point, Sort Of:

Donald Trump seems quite certain that the real unemployment rate is higher than the 4.9 percent that the Bureau of Labor Statistics has reported it to be. A lot higher. “Don’t believe these phony numbers when you hear 4.9 and 5 percent unemployment,” Mr. Trump said in his victory speech after the New Hampshire primary Tuesday night. “The number’s probably 28, 29, as high as 35. In fact, I even heard recently 42 percent.” Mr. Trump might be bombastic, but he’s not entirely wrong....

Live from the Journamalists' Self-Made Gehenna: Martin Longman: Delete your newspaper:

Delete your newspaper. https://t.co/UD4sb1nFHa

— Martin Longman (@BooMan23) September 27, 2016

Must-Read: Noah Smith: Economics Has a Major Blind Spot:

Economists often don’t take politics into account. As a result, econ models leave out important pieces, and the advice of economists often falls on deaf ears or is seen as impractical...

Must-Read: Thomas Baekdal: What Killed The Newspapers? Google Or Facebook? Or...?:

Google didn't actually kill the newspaper advertising market...

Comment of the Day: Luke: Safe Spaces:

The delicate PC petals of the British Army had a long tradition of safe spaces. By custom you weren't allowed to discuss politics, religion or women in the officers' mess. I think it was originally to prevent duels, but the custom remained long after duels ended.

The swelling wave of argument and discussion around "helicopter money" has two origins:

First, as Harvard's Robert Barro says: there has been no recovery since 2010.

The unemployment rate here in the U.S. has come down, yes. But the unemployment rate has come down primarily because people who were unemployed have given up and dropped out of the labor force. Shrinkage in the share of people unemployed has been a distinctly secondary factor. Moreover, the small increase in the share of people with jobs has been neutralized, as far as its effects on how prosperous we are, by much slower productivity growth since 2010 than America had previously seen, had good reason to anticipate, and deserves.

The only bright spot is a relative one: things in other rich countries are even worse.

This is not at all the so-called "replication crisis".

The devices built work as assessed by all engineering yardsticks: cheap, easy to maintain, rugged, and simple to operate. The interventions conducted work as assessed by all social science standards: they pass gold-standard RCT tests with effects that are statistically and substantively significant.

And yet...

"Scaling" is very hard...

Must-Read: Blum Center: The Science of Scaling: Building Evidence to Advance Anti-Poverty Innovations:

September 26 @ 8:00 am - 5:00 pm
100 Blum Hall, Haviland Road
U.C. Berkeley
Berkeley, CA 94720 United States

The Development Impact Lab (DIL), headquartered at UC Berkeley and funded by USAID...

Test...

Over at Equitable Growth: Must-Reads:

• William Spriggs: Trying to Teach Old Dogs New Tricks: Last December, after a long period of keeping the Fed funds rate near zero, the FOMC voted unanimously to raise the Fed funds rate by one-quarter to one-half points....
• Mark Pesce: Zombie Moore's Law: Hardware Eats Software: Intel announce some next-generation CPUs that aren’t very much faster... delays... some of its 10nm process CPUs; and Apple’s new A10 chip, powering iPhone 7, is as one of the fastest CPUs ever...
• hrtbps: Your Workplace Requires People to Call You: “My Right Honourable Friend”!
• Nick Rowe: Cheshire Cats and New Keynesian Central Banks: How can money disappear from a New Keynesian model, but the Central Bank still set a nominal rate of interest and create a recession by setting it too high?...
• Barry Eichengreen: Closing Remarks to Policy Challenges in a Diverging Global Economy: It is one of the great pleasures of my association with the Federal Reserve Bank of San Francisco to give these closing remarks...
• Brookings Productivity Puzzle Panel: Video - Equitable Growth