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December 2016

Must-Read: There is a deeper layer here. The Bastiat whom Bryan Caplan reads is not the true Bastiat. The true Bastiat is an American neoliberal--private where private belongs, public where public is needed, circumstances alter cases, and societal well-being is the yardstick. Cf. Keynes "The End of Laissez-Faire". Bring Bastiat evidence of powerful employer-side monopsony in the low-wage labor market, and in all likelihood he would been on the Card and Krueger side:

Matt Bruenig (2012): The Never-Ending Libertarian Quest to Appear Clever: "I have been following an amusing back-and-forth between Bryan Caplan (I, II, III) and Matt Yglesias...

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Live from Trumpland: Look for a lot of this from the right over the next four years--people deliberately missing the point that Trump is not up to the job, and that his decision are at best random monkeyshines:

Scott Eric Kaufman: [Media Criticism: Tears Brent Bozell into Shreds and Gobbets, and then Eats the Gobbets...][]: "And the Award for Missing the Point goes to...

...Brent Bozell, of the ironically named “Media Research Center,” who refuted Oliver Stone’s comment that “Nixon always said Reagan was a dumb son of a bitch” by quoting a number of prominent figures in Reagan’s administration who thought Reagan was really smart.... Bozell to Stone:

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Musings: Donald Trump Ought Not to Be a Hard-Money Gold-Standard Austerian Pain-Caucus President

3 Month Treasury Bill Secondary Market Rate FRED St Louis Fed

When I was working in the Treasury in 1993, I was struck by how much it was the case that President Bill Clinton was still the ex-Governor of Arkansas, and that arguments that would have been powerful and important when directed at a Governor of Arkansas still resonated in his mind much more strongly than they perhaps should have if they were evaluated purely on technocratic grounds.

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Question to Self: Germany

Germany does not have the rise of the overclass. And Germany does have the wage stagnation--even though it is done everything right to preserve manufacturing employment and nurture communities of engineering practicing excellence.

Can I take the Germany-U.S. comparison as strong evidence against the "globalization has driven wage stagnation" hypothesis?


Bob Allen and Friends: Before the Industrial Revolution

Preview of Untitled

How much to make of the post-1400 pre-1650 divergence between London and Amsterdam on the one hand and Valencia and Florence on the other? We want to grab for the explanation that the Black Death (and associated fourteenth-century demographic disasters) was a huge deal--and then things returned to Malthusian normal in southern Europe. But not so in northern Europe. And Delhi laborers are hanging up there, as well-off as Londoners (as best as Bob Allen and company can tell) in 1625 and 1650...


Should-Read: I would note that Simon Wren-Lewis endorses 95% of what Ann Pettifor says--as long as the target is not "mainstream macroeconomics" but rather what Simon calls "media macro"...

Simon Wren-Lewis: Ann Pettifor on Mainstream Economics: "Unfortunately her piece is spoilt by a final section that is a tirade against mainstream economists which goes way over the top...

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The Phrase "Structural Reform" Considered Harmful...

Preview of Fiscal Policy in the New Normal IMF Panel

The worst possible "structural reform" program is one that moves a worker from a low productivity job into unemployment, where they then lose their weak tie social network that allows them to get new jobs.

They then get used to sitting in their sisters' basement splaying video games and surfing the internet all day.

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Should-Read: Where a high Tobin's Q--ratio of stock market value to replacement cost--is driven by market power, we would not expect high Q to carry high investment with it. But how much has market power increased? And how much shadow market power is driven by common ownership by financiers of all the firms in any particular industry? Or do financiers simply prefer low-investment firms because they are high-payout firms, and thus firms' cash flows are of relatively short duration?

Nick Bunker: What Could Boost U.S. Business Investment?: "German Gutierrez and Thomas Philippon... why business investment... has been so lackluster since the turn of the 21st century...

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Procrastinating on December 13, 2016

Preview of Procrastinating on November 20 2016

Over at Equitable Growth: Must- and Should-Reads:

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Hoisted from the Archives: The Critique of the Golgotha Program

Golgotha Google Search

Hoisted from the Archives: Robert Waldmann Has an Interpretation of Karl Marx that Is New to Me...: I would not have thought it was possible.

Robert Waldmann has an interpretation of Karl Marx's "Critique of the Gotha Program" that I have never seen before.

Robert argues that the correct interpretation of Marx's phrase "from each according to his ability, to each according to his need," in context, is this:

Shorter Critique of the Gotha Program: We socialists cannot now--and probably never will--be able to inscribe on our banners the wacka-wacka primitive Christian slogan "from each according to his ability, to each according to his need." And the Lasalleans are really stupid for thinking that we can and should do it now...

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Notebook: Discussion of "Communism" and Related Subjects

Cf. also: Communism and Really Existing Socialism: A Reading List for Post-Millennials

Must-Reads:

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Procrastinating on December 12, 2016

Preview of Procrastinating on November 20 2016

Over at Equitable Growth: Must- and Should-Reads:

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Links for the Week of December 11, 2016

Most-Recent Must-Reads:


Most-Recent Should-Reads:


Most-Recent Links:

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European Fiscal Policy: And All Does Not Go Merry as a Marriage Bell

Preview of European Fiscal Policy And All Does Not Go Merry as a Marriage Bell

I find myself thinking of Ludger Schuknecht's very powerful and apposite comments about just what, even if you believe--as I do--that there are substantial spillovers for Germany and for the world for Germany to use its fiscal space for expansionary policies right now, it is supposed to use its fiscal space for...

The fiscal space is in Germany. The infrastructure needs are in Sicily.

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For the Weekend...

Osip Mandelstam: The Wolf-Fanged Age:

On my shoulders pounces the wolf-fanged age,
But I am no wolf by my blood;
Thrust me, instead, like a hat up the sleeve
Of the Siberian steppe’s warm fur coat,

So I can’t see the coward or the soft bit of grime
Or the bloodied bones on the wheel;
So that all night the blue-fox furs might shine
For me in their primeval beauty...

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Live Not from Chicago: Why, yes, I am cursed trying to fly into snowy places in January for AEA meetings, so I engage in passive resistance and try to avoid doing so. Why do you ask?

East of the Cascade Range and north of the Ohio River in January? Just say no!

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No. The New York Times Is Not Interested in Being a Trustworthy Information Intermediary. Why Do You Ask?

Scott Lemieux: Today in False Equivalence: "I am beginning to wonder why I subscribe.... [Anemona Hartocollis]...

Bias incidents on both sides have been reported. A student walking near campus was threatened with being lit on fire because she wore a hijab. Other students were accused of being racist for supporting Mr. Trump, according to a campuswide message from Mark Schlissel, the university’s president.

Yeah, pretty much the same thing. Why are those liberal students so mean!


Will the U.S. Economy Boom Over the Next Four Years?

Preview of Central Banks and Economic Structure Since 2009 the Federal Reserve and other global north

The very sharp Ken Rogoff predicts a boom over the next four years: "The biggest missing piece... is business investment, and if it starts kicking in... output and productivity could begin to rise very sharply.... You don’t have to be a nice guy to get the economy going.... It is far more likely that after years of slow recovery, the US economy might at last be ready to move significantly faster..."

I really can't see it as likely.

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Must-Read: On one level, simply do not panic: Obama12 52.9%, Obama08 51.0%, Bush04 50.7%, Gore00 48.4%, Kerry04 48.3%, Clinton16 48.0%, Bush00 47.9%, Romney12 47.2%, Trump16 46.2%, McCain08 45.7%. This is the same country with the same activated political coalitions we have seen since 2000. Trump and social media have simply given the Republican Id the excuse to speak its mind. Would the Republican Id be less upset if middle-class income growth had been stronger over the past ten years? Well, middle-class income growth was strong from 1990-2000 thanks to the Clinton boom. How did that work?

Kevin Drum: It's Time To Bury "Economic Anxiety" Once and For All: "If you insist on continuing to look at this year's election through an economic lens...

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Procrastinating on December 8, 2016

Preview of Procrastinating on November 20 2016

Over at Equitable Growth: Must- and Should-Reads:

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Procrastinating on December 7, 2016

Preview of Procrastinating on November 20 2016

Over at Equitable Growth: Must- and Should-Reads:

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Must-Read: Never bet on an inside straight. Never eat at a place called "Mom's". Never go up against a Sicilian when death is on the line. And never construct a currency union vastly larger than any conceivable optimal currency area:

More perils lie in wait for the eurozone

Martin Wolf: More Perils for the Eurozone: "Divergence in the performance of members of the single currency is a real challenge...

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BREXIT, Trump, and Eurozone Breakup Odds

Preview of strike No strike Few Enemies on the Left

Q: Have BREXIT and Trump increased the probability of a breakup of the eurozone?

A: Yes.

That Britain voted for BREXIT, even under the false pretense of an extra 350 million pounds a week for the health service, is a strong indication that the tide of globalization and integration is not irresistible. That Americans... well, Americans did not vote for Trump--they voted for Clinton. That the quirks of the electoral college have made Trump president-elect is a strong indication that the tide of globalization and integration is not irresistible.

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Note to Self: If we want to have a better world, we either need to change the politics to restore the stabilization policy mission to fiscal authorities--and somehow provide them with the technocratic competence to carry out that mission--or give additional powers to central banks, powers that we classify or used to classify as being to a degree "fiscal".

See: http://www.bradford-delong.com/2016/11/imf-panel-fiscal-policy-in-the-new-normal-partial-transcript.html