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September 2017

Should-Read: In which David Glasner argues that John Maynard Keynes passed up a very valuable opportunity to preach about the disequilibrium foundations of equilibrium economics. But perhaps he thought that he had already made the point at great enough length before?:

The error often made by careless adherents of the Quantity Theory... is as follows:

Everyone admits that the habits of the public... and the practices of banks... change from time to time as a result of obvious developments.... The Theory has often been expounded on the further assumption that a mere change in the quantity of the currency cannot affect k, r, and k'.... It would follow from this that an arbitrary doubling of n... must have the effect of raising p to double what it would have been otherwise. The Quantity Theory is often stated in this, or a similar, form.

Now "in the long run" this is probably true. If, after the American Civl War, the American dollar had been... defined... 10 per cent below its present value, it would be safe to assume that n and p would now be just 10 per cent greater than they actually are and that the present value of k, r, and k' would be entirely unaffected. But this long run is a misleading guide to current affairs. In the long run we are all dead. Economists set themselves too easy, too useless a task if in tempestuous seasons they can only tell us that when the storm is long past the ocean is flat again. In actual experience, a change in n is liable to have a reaction both on k and k' and on r...

David Glasner: In the General Theory Keynes First Trashed and then Restated the Fisher Equation: "I will not offer a detailed explanation here of the basis on which Keynes criticized the Fisher equation in the General Theory... https://uneasymoney.com/2017/09/05/in-the-general-theory-keynes-first-trashed-and-then-restated-the-fisher-equation/

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Intermediate Macroeconomics U.S. Dashboard

Live from Federal Reserve Economic Data: Brad DeLong's FRED Economic Statistics Dashboard https://research.stlouisfed.org/useraccount/dashboard/215: What I want my Econ 101b students to see and think about before they come to class next January:

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The Kansas Republican Governance Experiment. Or Is That "Governance 'Experiment'"? Or Is That "'Governance' Experiment"?

Just look at this:

All Employees Total Nonfarm in Kansas FRED St Louis Fed

Kansas is—in some strong sense—unbelievably loony.

No sooner does Sam Brownback manage to plant his behind in the Governor's chair in Topeka, KS than does Kansas's share of American nonfarm jobs and people start to drop like a stone.

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Should-Read: The late Zvi Griliches—who had taught Robert Lucas—once said to me that he had found Lucas a good technician and a very hard worker, but that he worried about Lucas as someone influential enough to set intellectual fashions.

A case in point. It would not have been that hard for Lucas to discover what "crossing over" of chromosomes was, would it?

And, yes, I do think it has had a bad effect on the advance of knowledge:

Robert Lucas: A Professional Memoir: "There was nothing spooky about Mendel’s genetic theories...

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Should-Read: Secular stagnation as the result of a collapse in the financial sector's risk-bearing capacity. Calls for a "somewhat comprehensive socialization of investment", no? If the private sector cannot figure out a way to mobilize society's collective risk-bearing capacity to bear the risks of enterprise, then the public sector is all we got, no?

Ricardo Caballero, Alp Simsek: Risk intolerance and the global economy: A new macroeconomic framework: "Interest rates continue to decline across the globe, while returns to capital remain constant or increasing...

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Inequality of Opportunity: May I Have My Context Back, Please?: Hoisted from 2007

The Hearty Boys Bible Study and Summary of Luke s Gospel Part 3 16 19 31

Jeebus, Greg. Context, please!

The whole point of inheritance—financial, cultural, sociological—is precisely not to give everyone "the same shot". Inequality of Result + "inheritance" = Inequality of Opportunity. And that's not a good thing. Unless, that is, you think that you choose your parents, and should benefit if you were smart enough to choose them wisely...

Hoisted from February 12, 2007: May I Have My Context Back, Please? http://www.bradford-delong.com/2007/02/may_i_have_my_c.html:

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Procrastination on September 4, 2017

We re All Public Intellectuals Now The National Interest

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

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Ten Good Recent Books...

  1. Stephen King: Joyland http://amzn.to/2eF9nql
  2. Stephen Bungay: The Most Dangerous Enemy: A History of the Battle of Britain http://amzn.to/2wCDQd8
  3. Till Düppe: Finding Equilibrium: Arrow, Debreu, McKenzie and the Problem of Scientific Credit http://amzn.to/2gAc35E
  4. Richard Feynman: QED: The Strange Theory of Light and Matterhttp://amzn.to/2eEJjf9
  5. Louis Gerstner: Who Says Elephants Can't Dance? Inside IBM's Historic Turnaround http://amzn.to/2eEZmcO
  6. Michael Desch, ed.: Public Intellectuals in the Global Arena: Professors or Pundits? http://amzn.to/2w0rNV5
  7. Frederick Lewis Allen: Only Yesterday: An Informal History of the 1920s http://amzn.to/2w0uzcL
  8. Menzie D. Chinn and Jeffry A. A. Frieden: Lost Decades: The Making of America's Debt Crisis and the Long Recovery http://amzn.to/2eF2F3C
  9. Anna Castle: Murder by Misrule: A Francis Bacon Mystery http://amzn.to/2vZYYIr
  10. Sidney Blumenthal: Wrestling With His Angel: The Political Life of Abraham Lincoln Vol. II, 1849-1856 http://amzn.to/2w0Ihwd

Worth Reading from Grasping Reality: Late December 2006

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One Year and Twenty-Five Days Ago at Grasping Reality: August 9, 2016

Worth Highlighting:

  • Must-Read: This, from Paul Krugman, is 100% correct: The last eight years have taught us that as long as the distribution of near-term possible outcomes includes at least a 10% or so chance of landing back at the zero nominal safe interest rate lower bound, the policies we should follow now are pretty much the policies we ought to follow at the bound. Of course, this is the situation we will be in until the trend and expected inflation rate hits 4%/year: we are going to be in this situation for a looooooonnnngggg time... http://www.bradford-delong.com/2016/08/must-read-this-from-paul-krugman-is-100-correct-the-last-eight-years-have-taught-us-that-as-long-as-the-distribution.html

  • The Heritage Foundation, the Club for Growth, and Stephen Moore Have No Principles Whatsoever. Why Do You Ask? http://www.bradford-delong.com/2016/08/the-heritage-foundation-the-club-for-growth-and-stephen-moore-have-no-principles-whatsoever-why-do-you-ask.html: Now that Stephen Moore has signed up with Donald Trump, he is opposed to the Trans Pacific Partnership. Why? When I was on Trish Regan's show with him, he [said].... (1) The agreement is long, and has lots of pages in it. (2)The agreement does not commit the Asians to stop copying our intellectual property. (3) The agreement does allow the U.S. to impose retaliatory penalties on other signatories if they do copy our intellectual property, but they will copy anyway. (4) The agreement is unlike NAFTA, which is a good thing. But only six short months ago... No intellectual principles whatsoever. None: Larry Kudlow, Arthur Laffer, and Stephen Moore (2015): TPP Good For Both Sides Of The Pacific...

  • Comment of the Day: Shame on the editors of Vanity Fair http://www.bradford-delong.com/2016/08/comment-of-the-day-_shame-on-the-editors-of-vanity-fair_-rw-its-been-a-long-time-many-years-in-fact-s.html: RW: "It's been a long time, many years... but I do seem to recall a version of Michael Kinsley capable of writing cogent and, yes, even generous pieces; his long descent into incoherent, petty sniping has not been pretty."... Michael Kinsley at his best was always... close to the edge: very smart but close to the edge of not being wise.... When Vanity Fair's editors publish something like this, they are, I think, being rather cruel...

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Ten Years and One Month Ago in Grasping Reality...


Links and Such for the Week of September 3, 2017

Must-Reads:

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Weekend Reading: Francis Cornford: The Political Motive: From Microcosmographia Academica

University Politics F M Cornford s Cambridge And His Advice To The Young Academic Politician Amazon co uk Gordon Johnson Books

Francis Cornford: The Political Motive https://www.cs.kent.ac.uk/people/staff/iau/cornford/cornford6.html: "You will begin, I suppose, by thinking that people who disagree with you and oppress you must be dishonest...

...Cynicism is the besetting and venial fault of declining youth, and disillusionment its last illusion. It is quite a mistake to suppose that real dishonesty is at all common. The number of rogues is about equal to the number of men who act honestly; and it is very small. The great majority would sooner behave honestly than not. The reason why they do not give way to this natural preference of humanity is that they are afraid that others will not; and the others do not because they are afraid that they will not. Thus it comes about that, while behaviour which looks dishonest is fairly common, sincere dishonesty is about as rare as the courage to evoke good faith in your neighbours by showing that you trust them.

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Weekend Reading: Eulogies for Neville Chamberlain

Neville Chamberlain Peace in Our Time

Winston Churchill**: Their Finest Hour: "On November 9, [1940,] Mr. Neville Chamberlain died at his country home in Hampshire... http://amzn.to/2wyIJ6V

...I had obtained the King’s permission to have him supplied with the Cabinet papers, and until a few days before the end he followed our affairs with keenness, interest, and tenacity. He met the approach of death with a steady eye. I think he died with the comfort of knowing that his country had at least turned the corner. As soon as the House met on November 12, I paid a tribute to his character and career:

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Comment of the Day: Longtooth: For the Filing Cabinet: Using Computers and Data Science Here in the Twenty-First Century...: "I got curious to see how fast a standard vba program could do the monte-carlo simulation with my laptop and unoptimized code... http://www.bradford-delong.com/2017/08/for-the-filing-cabinet-using-computers-and-data-science-here-in-the-twenty-first-century.html?cid=6a00e551f08003883401b7c91c51e5970b#comment-6a00e551f08003883401b7c91c51e5970b

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Winston Churchill in 1939 on the Stalin-Hitler Pact

Winston S. Churchill: The Gathering Storm http://amzn.to/2vyylPb: "Poland has again been overrun by two of the great Powers...

...which held her in bondage for a hundred and fifty years but were unable to quench the spirit of the Polish nation. The heroic defence of Warsaw shows that the soul of Poland is indestructible, and that she will rise again like a rock, which may for a time be submerged by a tidal wave, but which remains a rock. Russia has pursued a cold policy of self-interest.

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Should-Read: I don't understand this:

If it is a personnel issue and not a program issue, you fire the person.

If it is a program issue and not a personnel issue, you spin out the group, wish them best wishes in their future endeavors, and direct funders their way.

But this seems to me to fit neither case. Sending young rising stars "many of whom... [you] have mentored" out into the wilderness with a boss who you believe "repeatedly violated the standards of honesty and good faith" is not doing them a favor:

Anne-Marie Slaughter: When The Truth is Messy and Hard: "I have racked my brain... as to what I... could or should have done differently about the departure of Barry Lynn and Open Markets from New America.... https://medium.com/@slaughteram/when-the-truth-is-messy-and-hard-1655a36e313f

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