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October 2017

Procrastinating on October 10, 2017

We re All Public Intellectuals Now The National Interest

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

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Must-Read: As I often say, this was nailed by Keynes long ago, in his obituary for his teacher Alfred Marshall. I would add that there is often—and these days, for those on the right, always, as the Gresham's Law downward spiral wreaks its will—more money and more status to be gained by becoming a hack who chooses the model that pleases your political masters rather than an economist who chooses the model that brings insight:

Simon Wren-Lewis: Economics: too much ideology, too little craft: "Paul Krugman argued... that... belief in the need for new economic thinking after the financial crisis was incorrect...

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Should-Read: External benefits from the development of communities of engineering practice developing around successful labor-intensive manufacturing export industries has been a standard road to economic development since... well, since the days when the mechanized textile industry located itself in the (lower wage) English midlands because London and Amsterdam both had higher-wage things to do with their labor. The problem is that China may well be the last country for which this is possible. So what next for our hopes for development and convergence?

Edward Hadas: Review: Dani Rodrik gives economists a better name: "Straight Talk on Trade: Ideas for a Sane World Economy... this easy-to-read and sometimes loosely connected collection of columns and essays...

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Should-Read: Larry Summers: America’s tax plan is not worth its name: "The US administration’s tax plan... a mélange of ideas put forth without precision or arithmetic.... The claims of Steven Mnuchin, Treasury secretary, Gary Cohn, director of the National Economic Council, and Kevin Hassett, chair of the Council of Economic Advisers, are some combination of ignorant, disingenuous and dishonest...

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Monday Smackdown: Paul Krugman on Kevin Hassett et al.

Paul Krugman: The Schlock Of The New: "I’m still thinking about Kevin Hassett’s appearance at the Tax Policy Center...

Insults aside, he offered a new analysis of corporate tax incidence – an approach that is novel, innovative, and completely boneheaded. Oh, and it just happens to say what his political masters want to hear. As I see it, this is part of a broader pattern.

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Monetary Policy Outlook: The United States (Fall 2017)

What Will (Probably) Happen?

  • What the Federal Reserve thinks:
    • that the U.S. economy is near full employment...
    • that U.S. potential-output growth rate is 2%/year...
    • that it should be "normalizing" interest rates...
  • A positive shock to growth (or inflation) will see the Fed raise faster and further:
    • Do not expect real growth much above 2%/year under this Fed...
    • Do expect the Federal Funds rate to rise at about (3/4%/year)/year—or faster—as long as the economy can stand it without recession...
    • A negative shock to inflation will see slowed but not stopped "normalization"...
  • A negative shock to growth will see:
    • The Federal Reserve quickly return the Federal Funds rate to zero...
    • And then dither, with many tools but none of them powerful to affect the economy…

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Must-Read: Using technology and, more important, social institutions to build and deploy tools in ways that augment labor, rather than substitute for labor:

Wolfgang Dauth, Sebastian Findeisen, Jens Südekum, and Nicole Woessner: The rise of robots in the German labour market: "Robots have had no aggregate effect on German employment, and robot exposure is found to actually increase the chances of workers staying with their original employer... http://voxeu.org/article/rise-robots-german-labour-market

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Links and Such for the Week of October 8, 2017

Must-Read:

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Should-Read: This, from the extremely sharp James Kwak is—if I may say so—itself unfair.

The claim that Barack Obama had a filibuster-proof majority in the Senate is especially so.

Yes, Obama made a lot of mistakes. Yes, his bonding with a let's-calm-down-and-not-do-anything-rash Tim Geithner who had no clue about the situation was very damaging. Yes, the Democrats had 60 votes in the Senate for six months. But that wasn't Obama's filibuster-proof majority: that was Max Baucus, Ben Nelson, Blanche Lincoln, Tom Carper, and Joe Lieberman's filibuster-proof majority. This is not uncommon: the present Senate majority is not Donald Trump's or Mitch McConnell's; it is John McCain, Susan Collins, and Lisa Murkowski's majority:

James Kwak: The Importance of Fairness: A New Economic Vision for the Democratic Party: "A central shortcoming of the party is that, on economic issues, it has nothing to say to people trapped on the wrong side of our country’s growing inequality divide... https://baselinescenario.com/2017/06/15/telling-a-better-story-a-new-economic-vision-for-the-democratic-party/

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Comment of the Day: I would not say that Kevin Warsh is innumerate—I have never seen him claim anything like 36.5/85 = 0.20—but he does not reason coherently:

Sans Souci: : "'Bernanke['s view]... may well be true according to economic textbooks'...

...DEPARTMENT OF "HUH!?!?": QE HAS RETARDED BUSINESS INVESTMENT!? http://www.bradford-delong.com/2015/10/department-of-huh-qe-has-retarded-business-investment.html... I score this for Bernanke: 6-0, 6-0, 6-0.

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Comment of the Day: Phil Koop: (Early) Monday John Cochrane "Arithmetic Is for Losers" Resmackdown: "'And yet this was, once, an economist...' 'An economist who becomes a Fellow of the Hoover Institution does not die, but he does not grow or obtain more life.'"

I gotta add on to this quote:

‘He merely continues, until at last every minute is a weariness. And if he often uses the Bullshit to make himself active, he fades: he becomes in the end invisible permanently, and walks in the twilight under the eye of the Dark Power that rules the Bullshit. Yes, sooner or later – later, if he is strong or well-meaning to begin with, but neither strength nor good purpose will last – sooner or later the Dark Power will devour him.’

‘How terrifying!’ said Frodo. There was another long silence. The sound of Sam Gamgee cutting the lawn came in from the garden...


Procrastination for October 7, 2017

We re All Public Intellectuals Now The National Interest

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

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Weekend Viewing: Bradley A. Hansen: A Do It Yourself Video Course on Modern Economic Growth

Take a look at:

Bradley A. Hansen: A Do It Yourself Video Course on Modern Economic Growth http://bradleyahansen.blogspot.nl/2017/03/a-do-it-yourself-video-course-on-modern.html

In my view, the things he notes most worth watching are:

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For the Weekend: Stephen Vincent Benet: The Devil and Daniel Webster VI

Daniel Webster

For the Weekend: Stephen Vincent Benet: The Devil and Daniel Webster VI http://gutenberg.net.au/ebooks06/0602901h.html: "Well, most men wouldn't have asked for better company than Dan'l Webster and a jug...

...But with every tick of the clock Jabez Stone got sadder and sadder. His eyes roved round, and though he sampled the jug you could see he couldn't taste it. Finally, on the stroke of 11:30 he reached over and grabbed Dan'l Webster by the arm.

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Weekend Reading: Noah Smith, Also, Misses the Old John Cochrane, and Wonders Where He Went: Health-Care Blogging Edition

Noah Smith: Noahpinion: Handwaving on health care: "There's a particular style of argument that some conservative economists use to dismiss calls for government intervention in markets:

  • Step 1: Either assert or assume that free markets work best in general.
  • Step 2: List the reasons why this particular market might be unusual.
  • Step 3: Dismiss each reason with a combination of skeptical harumphing, handwaving, anecdotes, and/or informal evidence.
  • Step 4: Conclude that this market should be free from government intervention.

In a recent rebuttal to a Greg Mankiw column on health care policy, John Cochrane displays this argumentation style in near-perfect form.

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(Early) Monday John Cochrane "Arithmetic Is for Losers" Resmackdown

Clown show Google Search

Ah. A correspondent informs me that he has John Cochrane's response to my claims that:

  • 36.5/85 ≠ 20%,
  • he should not write that 36.5/85 = 20%, and
  • the Wall Street Journal should not print that 36.5/80 = 20%.

Could somebody at Hoover please do an intervention?

And if Hoover won't, could somebody at Stanford please do an intervention on Hoover?

Comment of the Day: Marc C.: Monday Smackdown: The Elementary Arithmetic of a Value-Added Tax (VAT): "Asked Cochrane if he would respond. [Cochrane wrote]:

No. The response is obvious and elementary. It's easy to calculate the VAT rate under various assumptions. Brad's insults, slanders, ad hominem attacks, and outright lies do not merit responses.

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Should-Read: Peter Leyden et al.: Future of Work http://reinvent.net/events/event/future-of-work-kickoff-event/ | http://reinvent.net/events/event/future-of-work-kickoff-event-23-panel/ | http://reinvent.net/events/event/future-of-work-kickoff-event-33-panel-2-qa/ | http://reinvent.net/events/event/future-of-work-kickoff-event-44-breakout-sessions-conclusion/: "I'm Pete Leydon, and I am the founder of Reinvent...

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Quillifer Walter Jon Williams 9781481489973 Amazon com Books

Should-Read: Highly recommended:

Walter Jon Williams: Quillifer: "Sir Basil gaped at me, then laughed...

...“My advocate!” he scorned. “That is precisely what I need, another advocate! And further, one who reads his Mallio in the Rawlings translation, hah!”

He pointed a finger at me. “Look you—how would you translate the following: ‘Quatenus permittit aurum prodit lex’?”

I was a little surprised to find myself at school again, but rose to the challenge. “‘Laws goeth where gold pleaseth.’” Though there was no way to translate “prodit” in all its subtlety, with its hint of betrayal, and of keeping the subject on a short leash, and bound by strict Necessity.

“Ay, plain but serviceable enough,” Sir Basil judged. “Yet Rawlings has it, ‘Howsoever gold and laws goeth ever in company.’ He understands not even that prodit, which is plain as—” He made a fist. “As the corruption of the common law by the judiciary!”

“I have the Delward translation at home,” I said. “But I preferred not to risk it on the journey”...


Procrastination for October 5, 2017...

We re All Public Intellectuals Now The National Interest

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

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Politics in the Way of Progress: Live Over at Project Syndicate

Il Quarto Stato un icona dei lavoratori Patria Indipendente

Live at Project Syndicate: Politics in the Way of Progress https://www.project-syndicate.org/commentary/populist-politics-block-development-goals-by-j--bradford-delong-2017-10: BERKELEY – There are 17 United Nations Sustainable Development Goals (SDGs), which aim to tackle problems including poverty, hunger, disease, inequality, climate change, ecological degradation, and many others in between. Clearly, 17 is too many. As Frederick the Great supposedly said, “He who defends everything defends nothing.” Similarly, those who emphasize everything emphasize nothing.

This points to the problem of forging goals through consensus: they can end up being a wish list for everything short of heaven on Earth. But, to be effective, goals should operate like turnpikes, which allow you to make progress toward a specific destination much faster than if you had taken the scenic route. The purpose of consensus building, then, should be to get us to the on-ramp, after which it becomes harder to make a wrong turn or reverse course... Read MOAR at Project Syndicate


Brink Lindsey and the Road to Utopia

Il Quarto Stato un icona dei lavoratori Patria Indipendente

Let me put a spotlight on the very sharp Brink Lindsey here...

Brink Lindsey believes utopia is in our grasp. Our problems today are, he thinks, at their root problems about the creation of truly human identities that people can embrace.

This is a remarkable shift.

Previous human societies have had very different problems:

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