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December 2017

R.I.P. Joseph N. Froomkin, 1927 Harbin, China - 2017 Chevy Chase, MD

Joseph N Froomkin 1928 2017

From the perspective of a child growing up in D.C.'s upper northwest in the 1960s and 1970s, Joe Froomkin seemed to have a very different kind of job then did other dads:

There were lobbyists, whose jobs seemed to be some variant on: “What do you want to hear?”

There were lawyers, whose jobs seemed to be some variant on: “What is the best argument that could be made for this position?”

And there were economists, of which Mr. Froomkin was always the one I saw most closely, whose jobs seemed to be: “This is what is going on, and I know you do not like to hear me say this now, but in the future you will be glad you heard this”—always backed up by arguments that were counterintuitive but seemed powerful when you thought about them.

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Comment of the Day: But, alas, I think Robert Waldmann has the completely wrong. Draw the graph, Robert! What areas on what graphs does Greg's calculation correspond to? Please tell me!: Robert Waldmann: DeLong & Krugman vs Mankiw and Mulligan III: "Just click the links...

...I finally understand that Brad too is asking a very similarly odd question. The only difference is that Brad considers a tax on capital (tau)k not on capital income (t)f'(k)k. This makes the difference...

No, I do not think that it does.

Continue reading "" »


Weekend Reading: "Nor Trust in Wodan / Walhall's High Drighten..."

Nor Trust in Wodan Walhall's High Drighten... http://www.bradford-delong.com/2002/12/nor_trust_in_wo.html: The raw ingredients out of which J.R.R. Tolkien fashioned The Lord of the Rings are equal parts Norse-Anglo-Saxon-Germanic myth, chivalric romance, and Christian apocalyptics (evil personified and mighty, but also powerful guardian spirits, and over all a God who arranges things so that the highest prizes fall to those who suffer).

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Weekend Reading: Courtney Milan: Judge Kozinski

Weekend Reading: Courtney Milan: Judge Kozinski: "Judge Kozinski had a way of summoning his clerks...

...He could make our phones beep by pressing the intercom button. Two beeps meant, “drop everything, grab pen and paper, and run to his office.” Sometimes he’d summon us all, or he’d summon some of us and not the others, or he’d just want one of us.

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(Early Hoisted) Monday DeLong Smackdown Watch: Cosma Shalizi

Smackdown

From 2012: Well-wisher Cosma Shalizi: Comment on Brad DeLong: Economists on the Ineffectiveness of Fiscal Policy; Sh@t Is All F@#^ Up and Bullsh@t Weblogging: "More elaborately: our gracious host would really like to be just a little bit to the left of a technocratic center...

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Greg Mankiw... Sigh: The Inestimable Value of the Samuelsonian Triad

Greg: Ahem! DRAW THE GRAPH! Please...

Greg Mankiw: Paul Krugman... Sigh: "Paul says I have never admitted to making a math error. Well, I would if I thought I made such an error. I make them all the time. But in this case I am not convinced. Neither is University of Chicago professor Casey Mulligan, who thinks Paul made a math error. I spoke with several other economists (some of whom share Paul's politics) and they don't see Paul's point either..."

It's probably no use, given my lack of success here with:

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America’s Broken Political System: Fresh at Project Syndicate

America s Broken System

Project Syndicate: America’s Broken Political System: Whether or not the tax bill survives the conference process and becomes law, the big news won’t change: the Anglo-Saxon model of representative government is in serious trouble. And there is no solution in sight. For some 400 years, the Anglo-Saxon governance model–exemplified by the republican semi-principality of the Netherlands, the constitutional monarchy of the United Kingdom, and the constitutional republic of the United States of America–was widely regarded as having hit the sweet spot of liberty, security, and prosperity. The greater the divergence from that model, historical experience seemed to confirm, the higher the likelihood of repression, insecurity, and poverty. So countries were frequently and strongly advised to emulate those institutions.

Nobody would dare offer that same advice today... Read MOAR at Project Syndicate


In Which I Find Myself Not So Much Pro-Nancy MacLean as Anti-Anti-Obvious and True Things Nancy MacLean Wrote..

Negroes

Losing friends on Twitter: What can I do here? What should I have done differently?

It is a matter of basic empirical historical fact that to a typical upper class white Virginian in the 1950s, "individual liberty" included, as principal and basic parts, the liberties:

  • not to be bullied by unions into paying your workers higher wages.
  • not to be forced by the federal government into integrating either state or state-funded services, or especially public accommodations.
  • not to be forced to join and then taxed to pay for a Social Security program.

Empirical fact. Historical fact. A seamless web of "individual liberty". These were among its principal components.

To deny that these were (a large) part of what "individual liberty" meant to a typical upper class white Virginian in the 1950s—to claim that you need "textual evidence" proving that this was how any particular one thought, for the "belief" that this was the case is a "slender reed"—that is a truly remarkable hill to choose to die on:

Continue reading "In Which I Find Myself Not So Much Pro-Nancy MacLean as Anti-Anti-Obvious and True Things Nancy MacLean Wrote.." »


Should-Read: Alwyn Young: Consistency without Inference: Instrumental Variables in Practical Application: "I use the bootstrap to study a comprehensive sample of 1400 instrumental variables regressions in 32 papers published in the journals of the American Economic Association...

...IV estimates are more often found to be falsely significant and more sensitive to outliers than OLS, while having a higher mean squared error around the IV population moment. There is little evidence that OLS estimates are substantively biased, while IV instruments often appear to be irrelevant. In addition, I find that established weak instrument pre-tests are largely uninformative and weak instrument robust methods generally perform no better or substantially worse than 2SLS...


Do Not Expect too Much from Individual Senators

Clown Car

Joseph Britt: @zathras3 on Twitter:Thread by @de1ong in response to an observation I made about @SenBobCorker & the Senate #TaxBill-it understates resources available to a senior Senator, but is dead accurate on damage to the Senate done by McConnell trashing Regular Order.

Continue reading "Do Not Expect too Much from Individual Senators" »


Must-Read: Well, well, well, I was wrong: Glenn Hubbard has issued a peep—but not, I note, an op-ed. And Douglas Holtz-Eakin—well, I do not know what Douglas Holtz-Eakin is doing: Jonathan Chait: The Republican War on Economics: "On Meet the Press Sunday, Chuck Todd asked Susan Collins how she could support a huge tax cut after having complained about excessive debt...

Continue reading "" »


How to Be an Unprofessional Republican Economist in Four Easy Steps...

Clown Car

Another day passes without any of the Unprofessional Republican Economists—not the nine, not the three, not the hundred-odd—with the exception of Jagdish Bhagwati—even emitting a peep about how the tax "reform" bill will not, in fact, pay for itself, and will raise the national debt above the appropriate counterfactual baseline...

It is worth reiterating just how unprofessional this has been. The authors take the following logical steps in constructing their argument:

Continue reading "How to Be an Unprofessional Republican Economist in Four Easy Steps..." »


Comment of the Day: With respect to my time as DAS at the Treasury... I would have quit before I would have done the equivalent of what Holtz-Eakin has done. And one of scariest moment of my life was Lloyd Bentsen during the NAFTA debate looking at one of our presentations, looking at me, and saying: "Do you really believe this, or are you just trying to please me? It it is the second, you are useless to me." Plus there was Laura Tyson shutting down the message people who wanted her to shade her health care reform presentation with: "Fine. If that's what you want, I will go out there and say: 'This press conference is cancelled: right now is the only time in the next six months I could get an appointment at the HMO'": Robert Waldmann: : "It isn't just laughable. I think it is possible (and uninteresting) to prove that the communicative intent of the text is not the laughable interpretation...

Continue reading "" »


Must-Read: I do not think Jason and Larry are shrill enough here. The Nine Unprofessional Republican Economists sought to convince people like Susan Collins that the tax "reform" would roughly pay for itself with their "raise the level of GDP in the long run by just over 4%. If achieved over a decade, the associated increase in the annual rate of GDP growth would be about 0.4% per year". They then seek, subsequently, to preserve some shred of their professional reputations by claiming that "we did not offer claims about the speed of adjustment to a long-run result".

The hair being split is, I have been told, that "if" here does not mean "it could be that" but "although it is not the case, for example that jump".

I haven't found anybody who does anything but laugh at that.

So let me give Jason and Larry the mic: Jason Furman and Larry Summers: Susan Collins is wrong to say that the tax cuts will pay for themselves, despite the economists she cites: "Sen. Susan Collins... defended her vote on the Senate GOP tax bill...

Continue reading "" »


Should-Read: Greg Leiserson looks to me to be correct here: the structure of the Tax Foundation's model is inconsistent. Or, rather, the only consistency is: "what assumption about this piece will produce a result more to the liking of our Republican political masters?": Greg Leiserson: The Tax Foundation’s treatment of the estate tax in its macroeconomic model: "Notably, this justification for the assumption that the marginal investor is domestic even as the rate of return is fixed...

Continue reading "" »


Should-Read: Why are the Tax Foundation's numbers so much different than everybody else's? And why do I now classify their model as "unprofessional"? Because the U.S. is not a "small open economy with perfect capital mobility" and because the neoclassical long run takes much more than 30 years to arrive. Here we have a good, short explainer: Matt O'Brien: Republicans are looking for proof their tax cuts will pay for themselves. They won’t find it: "The Tax Foundation... starts from the premise that the United States isn't a big open economy like it actually is, but rather a small open one like Ireland...

Continue reading "" »


Gains from Trade: Is Comparative Advantage the Ideology of the Comparatively Advantaged?

And the video from October is up:

INET Edinburgh Panel: Gains from Trade: Is Comparative Advantage the Ideology of the Comparatively Advantaged?:


My notes and slides:

Ricardo's Big Idea, and Its Vicissitudes

https://www.icloud.com/keynote/0QMFGpAUFCjqhdfLULfDbLE4g

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Dan Alpert, et al: Sales Factor Apportionment and International Taxation

The Biggest Container Ship Ever In The U S

November 29, 2017

The Honorable Orrin Hatch, Chairman
US Senate Committee on Finance
219 Dirksen Senate Office Building
Washington, DC 20510

The Honorable Kevin Brady, Chairman
US House Committee on Ways & Means
1102 Longworth House Office Building
Washington, DC 20515

The Honorable Ron Wyden, Ranking Member
US Senate Committee on Finance
219 Dirksen Senate Office Building
Washington, DC 20510

The Honorable Richard Neal, Ranking Member
US House Committee on Ways & Means
1106 Longworth House Office Building
Washington, DC 20515

Continue reading "Dan Alpert, et al: Sales Factor Apportionment and International Taxation" »


Must-Read: I would note that the Trumpublicans are unweaving the web of neoconservative foreign policy facts-on-the-ground even as we write: the neoconservatives' anger, rage, and... "shrillness", to coin a word, has substantial policy deviation causes. By contrast, the Trumpublicans "always cut taxes when you can, and rely on the Democrats to clean up your mess" has been Standard Operating Procedure for the Republican Party and for Republican policy economists (with the very honorable exception of Marty Feldstein, when he felt he could afford to be brave) since November 1980. You might say: "but this time there is a 1% of GDP transfer to the top 1% without any growth benefit at all". The question is: Is that a substantial policy deviation from SOP of the same magnitude as the ones the neocons are facing?: Paul Krugman: La Trahison des Clercs, Economics Edition: "A former government official... asked... have any prominent Republican economists taken a strong stand against the terrible, no good, very bad tax legislation their party just rammed through the Senate?...

Continue reading "" »


Must-Read: And Glenn Hubbard and Larry Lindsey plumb the depths of unprofessionalism to a degree I find genuinely surprising in private (o, I am not surprised by Douglas Holtz-Eakin here.): Rich Yeselson: Senator Susan Collins and Three Highly Unprofessional Republican Economists: "Sen[ator] Collins on @MeetThePress today said that she had talked to [Holtz-]Eakins, Lindsay, and Hubbard and they believed that the supply side stimulus would produce an increase on government revenue...

Continue reading "" »


(Early) Monday Smackdown: Tax Reform Intellectual Garbage Cleanup Edition

Clown Car

Live from Souvenir on Claremont: (Early) Monday Smackdown: Tax Reform Intellectual Garbage Cleanup Edition:

1) I am informed—by "persons who say they are familiar with the matter"—that Barro, Boskin, Cogan, Holtz-Eakin, Hubbard, Lindsey, Rosen, Shultz, and Taylor are not lying when they say on Wednesday "we did not offer claims about the speed of adjustment to a long-run result...." even though the previous Saturday they had written about a raise in "the level of GDP in the long run by just over 4%. If achieved over a decade, the associated increase in the annual rate of GDP growth would be about 0.4% per year..."

Why aren't they lying on Wednesday?

Because the "if" does not mean: "it could be the case that..."

Instead, the "if" means: "for illustrative purposes, if you have trouble converting from changes in levels to growth rates, as an illustrative example, suppose that in a counterfactual world (which is definitely not this world)..."

Continue reading "(Early) Monday Smackdown: Tax Reform Intellectual Garbage Cleanup Edition" »


Eleven California Republican House Members Voting to Make Their Districts and Constituents Poorer

  • 2.97 billion dollars: Mimi Walters (Laguna Niguel, 45) (R+3): 46% of returns, 8.5% of AGI, .
  • 1.89 billion dollars: Ed Royce (Fullerton, 39) (Even): 40% of returns, 7.6% of AGI.
  • 1.49 billion dollars: Steve Knight (Palmdale, 25) (Even): 42% of returns, 7.4% of AGI.
  • 1.34 billion dollars: Duncan Hunter (Lakeside, 50) (R+11): 37% of returns, 6.5% of AGI.
  • 1.28 billion dollars: Ken Calvert (Corona, 42) (R+9): 42% of returns, 6.9% of AGI.
  • 960 million dollars: Kevin McCarthy (Bakersfield, 23) (R+14): 34% of returns, 5.9% of AGI.
  • 910 million dollars: Devin Nunes (Tulare, 22) (R+8): 30% of returns, 5.5% of AGI.
  • 860 million dollars: Jeff Denham (Atwater, 10) (Even): 30% of returns, 5.3% of AGI.
  • 770 million dollars: Doug LaMalfa (Richvale, 1) (R+11): 31% of returns, 5.1% of AGI.
  • 540 million dollars: Paul Cook (Yucca Valley, 8) (R+9): 29% of returns, 4.6% of AGI.
  • 350 million dollars: David Valadao (Hanford, 21) (D+5): 17% of returns, 3.5% of AGI.

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Ken Calvert: Republican House Member Voting to Make His District and Constituents Poorer

Calvert Riverside

**KEN CALVERT**

District 42: Inland Empire: Corona—West Riverside

R+09: Safeness of Seat   
42%:  Percent of Returns   
6.9%: Percent of AGI   
$1.28 billion SALT in 2014

304,000 tax returns in 2014
$18.545 billion AGI in 2014
$1.2819 billion deduction amount in 2014

35.1%: Income <$50K/year
12.0%: Poverty Rate
35.8%: White Collar
5.0% : Income >$200K/year

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Steve Knight: Republican House Member Voting to Make His District and Constituents Poorer

Knight Palmdale

**STEVE KNIGHT**

District 25: Antelope Valley: Northeast Los Angeles 
Suburbs and Exurbs

Even: Safeness of Seat   
42%:  Percent of Returns   
7.4%: Percent of AGI   
$1.49 billion SALT in 2014

304,000 tax returns in 2014
$20.131 billion AGI in 2014
$1.4947 billion deduction amount in 2014

36.6%: Income <$50K/year
14.0%: Poverty Rate
37.4%: White Collar
8.0% : Income >$200K/year

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Mimi Walters: Republican House Member Voting to Make Her District and Constituents Poorer

Walters Orange County

**MIMI WALTERS**

District 45: Central Orange County: 
Irvine, Lake Forest

R+03: Safeness of Seat   
46%:  Percent of Returns   
8.5%  Percent of AGI of AGI   
$2.97 billion SALT in 2014

340,000 tax returns in 2014
$34.883 billion AGI in 2014
$2.9682 billion deduction amount in 2014

26.8%: Income <$50K/year
8.3% : Poverty Rate
51.4%: White Collar
13.8%: Income >$200K/year

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Kevin McCarthy: Republican House Member Voting to Make His District and Constituents Poorer

McCarthy Bakersfield

**KEVIN McCARTHY**

District 23: Bakersfield: South Central Valley

R+14: Safeness of Seat   
34%:  Percent of Returns   
5.9%: Percent of AGI   
$960 million SALT in 2014

274,000 tax returns in 2014
$16.247 billion AGI in 2014
$0.9595 billion deduction amount in 2014

47.6%: Income <$50K/year
19.8%: Poverty Rate
31.2%: White Collar
3.8% : Income >$200K/year

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Ed Royce: Republican House Member Voting to Make His District and Constituents Poorer

Royce East LA

**ED ROYCE**

District 39: Northern Orange County: 
Anaheim-Fullerton

Even: Safeness of Seat    
40%:  Percent of Returns   
7.6%: Percent of AGI   
$1.89 billion SALT in 2014

328,000 tax returns in 2014
$24.575 billion AGI in 2014
$1.8797 billion deduction amount in 2014

30.9%: Income <$50K/year
11.6%: Poverty Rate
42.4%: White Collar
9.6% : Income >$200K/year

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Duncan Hunter: Republican House Member Voting to Make His District and Constituents Poorer

Hunter Suburban San Diego

**DUNCAN HUNTER**

District 50: Inland San Diego: Escondido, 
El Cajon

R+11: Safeness of Seat   
37%:  Percent of Returns   
6.5%: Percent of AGI   
$1.34 billion SALT in 2014  

318,000 tax returns in 2014
$20.811 billion AGI in 2014
$1.3425 billion deduction amount in 2014

40.8%: Income <$50K/year
13.4%: Poverty Rate
31.6%: White Collar
5.6% : Income >$200K/year

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Devin Nunes: Republican House Member Voting to Make His District and Constituents Poorer

Nunes Tulare

**DEVIN NUNES**

District 22: Central Valley: 
Tulare—East Fresno

R+08: Safeness of Seat   
30%:  Percent of Returns   
5.5%: Percent of AGI   
$910 million SALT in 2014

288,000 tax returns in 2014
$16.627 billion AGI in 2014
$0.9124 billion deduction amount in 2014

49.6%: Income <$50K/year
22.5%: Poverty Rate
33.2%: White Collar
4.1% : Income >$200K/year

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David Valadao: Republican House Member Voting to Make His District and Constituents Poorer

Valadao Hanford

**DAVID VALADAO**

District 21: Central Valley: 
Southern Fresno-Eastern Bakersfield

D+05: Safeness of Seat   
17%:  Percent of Returns   
3.5%: Percent of AGI   
$350 million SALT in 2014

250,000 tax returns in 2014
$10.019 billion AGI in 2014
$0.3539 billion deduction amount in 2014

63.2%: Income <$50K/year
29.8%: Poverty Rate
16.8%: White Collar
1.6% : Income >200K/year

Continue reading "David Valadao: Republican House Member Voting to Make His District and Constituents Poorer" »