Grasping Reality on TypePad, by Brad DeLong

2006-09-12: Martin Wolf's Virtual Symposium: The Political Economy of Globalization and Growth: The Financial Times has restarted Martin Wolf's Economic Forum. I would like to see it succeed (even though I believe it is badly in need of women and people who live in cities of low average per-capita income (he says, wondering whether Tokyo is richer than the greater San Francisco out the window)). Here are some interesting things that came out of the last week...

2016-09-12: Something I Wrote Six Years Ago That It Is Time to Revisit...: How much of this do I still believe?: NAFTA's (Qualified) Success: July 2000.... It is nearly seven years since the ratification of NAFTA.... The major argument for NAFTA was that it was the best thing the United States could do to raise the chances for Mexico to become democratic and prosperous, and that the United States had both a strong interest and a neighborly duty to try to help Mexican political and economic development. By that yardstick NAFTA has been a clear success.... But haven't all these good things for Mexico come at a substantial cost for Americans? In a word, no.... You have to work really, really hard to find any significant effect--positive or negative--of increased economic integration with Mexico. American jobs that have been displaced because of increased imports from Mexico amount to less than two percent of all job elimination--the sum of those who lose their jobs and those who leave their jobs--in America. Far from shrinking, employment in autos and auto parts in America has grown by more than twenty percent since the beginning of NAFTA. Far from falling, hourly earnings of U.S. automotive workers have risen since the beginning of NAFTA. But by the same token American jobs created by increased exports to Mexico are a very small fraction of job creation. NAFTA's effects are too small to materially influence the overall state of the American labor market for good or ill...

2006-09-10: The Bloggy Wisdom of Martin Peretz: The Bloggy Wisdom of Martin Peretz Is there a person less suited to be a weblogger for the New Republic--a person likely to do more to embarrass and shred the New Republic's reputation than even Lee Siegel did--than Marty Peretz? But it's twue! It's twue! Franklin Foer has lost his mind. Today we are taught that Scooter Libby is innocent because Joe Wilson is a second-rater because he is an expert on Africa...

2006-09-10: Neoliberalism Plus?: Robert Wade on world development and the global economy.... 'The Princeton political scientist Atul Kohli has proposed a threefold typology: a "neopatrimonial state"... a "cohesive-capitalist state"... the "fragmented-multiclass state".... We should also give up talk of "the developing world" in contrast to "the developed world," and talk instead of a "1:3:2 world" (one billion people live in the rich countries, three billion live in countries where growth rates are faster than those of the rich countries, and two billion live in countries where they are substantially slower). When will the states representing the slow-growing two billion link up with the states representing the fast-growing but low-income three billion to force changes in the rules of engagement in the international economy?...' I think the answer is "never." The current neoliberal rules of engagement make it difficult for the rich post-industrial core to succumb to protectionist and nativist pressures that would slow growth for the three billion significantly. And the current neoliberal rules of engagement give the largely-kleptocratic rulers of the two billion nice lives as well. Wade seems, if I read him correctly, to ask us to think about neoliberalism plus--where the "plus" seems to take the form of some sort of benevolent developmental imperialism to remove the rulers and reform the institutions of the two billion.

2006-09-09: Air Cover on Veblen Effects from Daniel Davies and Lizard Breath: It is peculiar. I was sitting there, having nice utilitarian-technocratic thoughts about American economic policy, writing things like "I'm enough of a believer in CPI bias to want to say 'real compensation for male nonsupervisory workers has stagnated since 1973'--I think it has grown, but only very slowly, and much less rapidly than productivity. On the other hand, I'm enough of a touchy-feely sociology-lover to believe that a good chunk of the utility the rich derive from their conspicuous consumption is transferred to them from the poor: the happiness America's working poor and middle class derive from the compensation distribution--given their compensation, the compensation of the rich, and the lifestyles of the rich and famous--seems to me to be certainly less than that of their counterparts back in 1973." And Greg Mankiw decides that he wants to change things from a utilitarian-technocratic discussion about social welfare among various states of affairs to a discourse about the moral flaws of the poor: "I am uncomfortable making envy a basis for public policy." To which I respond by focusing on the moral flaws of the rich: "It's not the hard work and entrepreneurship [of the rich] that is to be discouraged. Make inventions, build enterprises, donate money for hospitals and libraries--that is all extremely meritorious and praiseworthy. It's the conspicuous consumption that is the problem. Surely spite is at least as offensive an other-regarding preference as envy, isn't it?" And then all of a sudden we are accused of wanting to throw acid in Cindy Crawford's face. It's a long, strange trip...

2006-09-08: The Stupidity! It Burns!! It Burns!!!: Andrew Sullivan writes.... "I fear Maliki's government is powerless against the Shiite militias that have increasingly infiltrated it." Maliki's government is the Shiite militias. The Shiite militias are Maliki's government. There is no "infiltration."

2006-09-07: Eric Alterman Watches Jonathan Weisman: Altercation.... "One of the many, many problems with journalists’ attack on bloggers for lacking professional ethics is not only that many journalists lack any professional ethics—see under “television news, cable, entire,”—but that even when journalists at the top of their profession do their job entirely professionally, their practices often lead us no closer to the truth, and often mislead us away. For instance.... 'an emailer asked reporter, Jonathan Weisman, “Dick Cheney said he was stuck with the grave decision of whether to shoot down the flight that crashed in Pennsylvania or not. The recently released NORAD tapes confirm that the government first knew of the flight one minute before it went down. Is Cheney lying, again, or was he thinking very fast that day, with his drama unfolding within 60 seconds? I've yet to read anywhere that Cheney has been queried about his story. THANKS." Weisman replied: "If I can get him on the phone, I will query him. 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?"' The contempt dripping from Weisman’s typist is evident but his logic is not. Why would it be impossible for Weisman, even without getting Cheney on the phone, and ha ha, what a riot, asking a politician an impolite question—publish what Cheney actually said alongside the evidence that the man is not telling the truth? That would not be “complicity.” That would not be “stenography.” (And by the way sir, in the case of this administration, “complicity” and “stenography” are synonymous.) It would be solid, sensible journalism. Has the Washington Post fallen so far from the ideal of actually trying to tell the public the truth when officials want it hidden that their reporters are actually unfamiliar with the practice?..." Yes, Eric, they have fallen so far. As I have said before, my first encounter with Jonathan Weisman came when he got a story wrong and I protested. His response?: "[F]or someone who got the longest quote in my [Glenn] Hubbard profile, you mercilessly slammed me really good..." I should, Weisman thinks, be grateful because he gave me "the longest quote" in his article. And--in Weisman's view--what sources really want is not that the story be right but that they be quoted at length in the Washington Post. "Telling the public the truth" doesn't enter the picture...

2006-09-07: Eric Alterman Watches Jonathan Rauch Jump the Shark: Altercation.... "Jonathan Rauch writhes: 'This “party of death” — “those who think that the inviolability of human life is an outdated or oppressive concept” — is not perfectly congruent with the Democratic Party, but in Ponnuru’s words, it has made the Democrats a “wholly owned subsidiary.” That distinction may seem less meaningful to many readers than it does to Ponnuru, who has been accused by his critics of political partisanship.... He is, however, the soul of fair-mindedness compared with many of his fellow pundits. (For instance, the conservative writer Ann Coulter, in her new book, “Godless: The Church of Liberalism,” distinguishes Republicans from Democrats this way: “We’re the Blacks-Aren’t-Property/Don’t-Kill-Babies Party. They’re the Hookup party.” Now that’s partisanship.)...' Now you see the service that Coulter provides to conservatives and that network brass provide to them by giving her a platform. It’s impossible to be considered beyond the bounds of sensible discourse when your only standard is a screaming, hysterical dishonest lunatic, but that here, is what appears to be Rauch’s only allowable standard."

2006-09-06: Good Books I Have Read: Donald Sassoon "One Hundred Years of Socialism: The West European Left in the Twentieth Century": Various students are reading: Donald Sassoon (1997), One Hundred Years of Socialism: The West European Left in the Twentieth Century: (New York: New Press: 1565843738). Should be called "One Hundred Years of Social Democracy," but nevertheless a very good book.

2006-09-04: I'm Not Going Back Over There!!: I'm Not Going Back Over There!! Some correspondents are asking me to go back to http://slate.com. They don't know what they're asking. You don't know what it's like over there. I can't go back. I can't. Please don't make me. PGL and Kevin Drum find Mickey Kaus complaining about all those rich people artificially inflating our poverty figures by taking the year off from work: '"Affluent people who, by reason of their affluence, are able to take off a year with no income and therefore show up as 'poor' in the income stats..." Yep. Rich people who don't work, so they don't have any earned income; don't have pensions and Social Security; don't own property, so they don't have any rental income; don't own stocks, so they don't have any dividend income; they don't have any oil wells or literary properties, so they don't have any royalty income; and don't own bonds or have bank accounts, so they don't have any interest income. Rich people without any earned income, pension income, Social Security income, rental income, royalty income, dividend income, or interest income. But they are "affluent." There are sure a lot of them. Why, I run into thousands every day. At Safeway.' PGL and Kevin can deal with Mickey Kaus as they want. I'm not going back over there...

2006-09-04: Dog Whistle Politics and the John McWhorter Fallacy: Pithlord watches ex-Berkeley professor John McWhorter commit the shameful act of laying down covering fire for Republican Senator from Virginia George "Let's give a welcome to Macaque, here--welcome to America and the real world of Virginia" Allen. He focuses on the fact that McWhorter's argument is self-denying--that it is valid only if it is invalid; and that if it is valid, then it is invalid. Pithlord writes.... "McWhorter's Fallacy logically compels the conclusion that no politicians will ever say antyhing blameworthy. If people accept McWhorter's Fallacy, then, of course, they won't criticize politicians for what they say. But if that is true, then rational politicians, fearing no criticism and seeking the psychic satisfaction of insulting people, will start saying blameworthy things again.... Anyone thinking of modelling this should give me credit. I realize it might be a bit embarrassing to suggest your idea came from an anonymous fellow on the Internet named 'Pithlord', so I suggest P. Lord of the Institute for Pith and Substance. You're welcome." John McWhorter is Senior Fellow at the Manhattan Institute and until 2003 was Associate Professor of Linguistics at UC Berkeley. He is the author of Winning the Race: Beyond the Crisis in Black America and The Power of Babel: A Natural History of Language...

2006-09-01: Why Oh Why Can't We Have a Better Press Corps?: Mickey Kaus.... "Alterman... [is] quoting... Rick Lyman paraphrasing... Robert Greenstein, whose... outfit... specializes in devising esoteric measurements to suggest that good poverty news is really bad poverty news..." But what is the "good poverty news" in the Census Bureau's report?.... If you parse Kaus closely, he doesn't actually say that there is "good poverty news." He talks about how Bob Greenstein "specializes in... suggest[ing] that good poverty news is really bad poverty news" and about how Eric "Alterman [got] his bogus spin." He wants his readers to think that there is a whole bunch of good poverty news that is being spun as bad, but he doesn't actually say so.... Kaus and his ilk)... won't lie to you--quite. They will do their best to leave you with a misleading impression--in this case, that the Census Bureau's poverty report was good poverty news that is being spun as bad. And it will probably work--unless you're a trained professional.

2006-09-01: Why Oh Why Can't We Have a Better Press Corps? (Yet Another Washington Post Edition): Ezra Klein.... "I went to Cato to see right-wing health economist Arnold Kling debate the Washington Post's Sebastian Mallaby and contrarian progressive economist Jason Furman.... I welcome Kling's proposal for a health care equivalent of the Congressional Budget Office (a nonpartisan research facility). From there, we part. Kling's other solution relies on a massive increase in the amount of health costs that come out of pocket.... This makes sense in a very specific sort of world--one in which you believe consumers have the capacity to make rational health care decisions--and to a very specific sort of person--one who believes those who make mistakes with their health care should simply pay the costs, be they financial ruin or death. I am not that sort of person, and I am highly dubious of that world. I see no evidence for the claim that a gas station manager in Bakersfield, California, will be able to second- or third-guess his cardiologist's recommendation of an angioplasty.... What so strikes me about the "skin-in-the-game" approach towards health care is its unmistakable cruelty.... It abandons us with our mistakes -- it's a philosophy emphasizing the justness of consequences, an approach I find neither just nor realistic. A good example of this came from Mallaby, who mocked Minnesota's insurance climate for mandating coverage of massage and wigs. (Minnesota, incidentally, has the lowest uninsured rate in the nation.) Ho, Ho, Ho. He had a good laugh over that one, I'm sure. Except the wigs are for chemotherapy survivors--the sort of thing none of us expect to need, but may one day find necessary to continuing our lives. Good wigs, sadly, are very expensive, and few major businesses appreciate Cancer Chic among their employees.... And massages, which sounds silly, are often more effective, less costly, and safer than over-the-counter medicines in treating back pain. Few folks know that. Like Mallaby, they've not read the studies. Unlike Mallaby, they're not professional domestic policy thinkers..." I challenge the classification of Sebastian Mallaby as a "professional domestic policy thinker."... Duncan Black meditates on Sebastian Mallaby and becomes a mite... shrill.... "I was thinking more about Sebastian Mallaby's mocking of requiring insurers to cover wigs.... Here's a guy who undoubtedly has pretty damn good insurance through his employer.... I'm sure his employment contract contains a long term disability rider.... I'm not going to claim to have a deep understanding of living life as a member of the working poor... but I do know the experience of someone in that situation is exactly like Mallaby's... not...". Memo to Cato: putting Sebastian Mallaby on a panel as a health care "expert" gains you brownie points among the journamalists of the Washington Post. It doesn't boost your reputation among the reality-based community.

2006-09-01: Lyndon Johnson, Yes. William Jennings Bryan, No.: I'm enough of a believer in CPI bias to want to say "real compensation for male nonsupervisory workers has stagnated since 1973"--I think it has grown, but only very slowly, and much less rapidly than productivity. On the other hand, I'm enough of a touchy-feey sociology-lover to believe that a good chunk of the utility the rich derive from their conspicuous consumption is transferred to them from the poor: the happiness America's working poor and middle class derive from the compensation distribution--given their compensation, the compensation of the rich, and the lifestyles of the rich and famous--seems to me to be certainly less than that of their counterparts back in 1973. The easiest and most important thing the government can do... is to make the tax system more progressive, not less.... react to growing pretax inequality by taxing the rich more, and subsidizing the poor more (through policies like the EITC) as well. But when I read Paul's call for "smart, bold populism," I am reminded of earlier calls a couple of decades ago by Milton Friedman, Marty Feldstein, and their ilk for smart, bold conservatism or smart, bold libertarianism. But they did not get what they ordered: on the economic policy front the policies of Reagan and of Bush II have been a horrible botch. What populist policies that we can think of would be smart? And how can we make our high politicians allergic to populist policies that are stupid? Lyndon Johnson, yes. William Jennings Bryan, no.