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February 2018

Should-Read: John Holbo was surely not the first or the only but is undoubtedly the wittiest person to point out that, from a certain point of view, feudalism is libertarianism: no over mighty states, only voluntary contracts everywhere. The late-Roman peasant voluntarily ensuring himself, his family, and his descendants to the local big man in the hope of getting protection from the marauding Huns is perfectly free, in a sense. They have entered into contracts that both sides find mutually advantageous. They are not oppressed by any over-mighty state: John Holbo (2010): Libertarianism, Property Rights and Self-Ownership: "Jacob Levy has earnestly maintained in comments that it is unfair to judge libertarianism by the standard of Bryan Caplan’s attempts to turn the Gilded Age into a Golden Age of ladyfreedom...

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Must-Read: Very late to the party, these two. Did the party begin with McConnell-Boehner-Ryan's "root and branch opposition to everything proposed by the Negro: he isn't our president—never mind that his health policy is Mitt Romney's, his climate policy is John McCain's, and his foreign policy is George H.W. Bush's"? Did the party start with Newt Gingrich's demonization strategy—that facts should not be allowed to get in the way, ever—and its synergy with Rupert Murdoch's desire to terrify old white people so that their eyeballs would stay glued to the screen and they could be sold overpriced gold funds and fake diabetes cures? Did the party start with the Reagan-Atwater nudge-nudge-wink-wink trip to Philadelphia, MS, where the point was to ostentatiously not mention the places association with civil rights martyrs? Did the party start with the embrace of Richard Nixon's repudiation of Republican special concern with the well-being of African-Americans? Did the party start with Barry Goldwater's belief that states' rights trumped civil rights whenever they came into conflict? Did the party start with Taft's decision that Joe McCarthy was a very useful guy to have around? The argument that Trump marks a sharp break is belied by McConnell-Ryan's wholehearted support for him—and by Gingrich. I would be happier—and would give Rauch and Wittes more of my mindshare—if they would say they are rethinking their past decision to "strenuously avoid... partisanship". They don't: Jonathan Rauch and Benjamin Wittes: Wittes and Rauch: Boycott the Republican Party: "If conservatives want to save the GOP from itself, they need to vote mindlessly and mechanically against its nominees...

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Analyzing Growth: Lecture Support for Econ 113 S2018

I am going to want my American Economic History students this semester to be able to handle three sets of economic tools:

  1. Supply and demand, with the calculation of equilibrium prices and quantities, consumer and producer surplus, tax (and other) wedges, and deadweight losses

  2. Keynesian national income accounting/monetarist quantity theory, for depressions and inflationary gaps

  3. Compound growth, with doubling and thousand-fold times for constant compounding rates

So I will park the calculations file for the lecture of (3) here for convenience...

https://github.com/braddelong/LSS18E101b/blob/master/2018-02-04_Econ%20113%20Analyzing%20Growth.ipynb

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Should-Read: A nice piece by Paul Krugman on Twitter this morning about the two Silicon Valley bubbles—NASDAQ and BitCoin. NASDAQ at least had some fundamentals underlying it. BitCoin not so much: the ability to create for free a commodity with identical qualities to BitCoin and then peg it for a while before tiptoeing away renders it unstable, in the absence of a hegemon, in a way that gold is not: Paul Krugman: "I am surely not the only person experiencing a fair bit of cryptofreude—pleasure in watching the Bitcoin etc bubble deflate...

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Should-Read: A very good point from Susan Houseman—and really important: "manufacturing" in America is very different from "computer manufacturing". The second is doing very well, in spite of offshoring of all kinds and in spite of our "Dutch Disease" produced by capital inflows and service exports. The first, not so much: Susan Houseman: Understanding the [Post-2000] Decline in Manufacturing Employment: "How did so many people erroneously point to automation as the culprit? It was, Houseman said...

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Should-Read: Amazon—and other employers—have become very good at squeezing money out of mayors and others in relatively depressed areas in return for job-creation headlines. This does not mean that it is a pure winners's curse situation: agglomeration economies are very real. but it does mean that the premium on not electing a stupid and corrupt mayor has just gone way up: Janelle Jones and Ben Zipperer: Unfulfilled promises: Amazon fulfillment centers do not generate broad-based employment growth: "When Amazon opens a new fulfillment center, the host county gains roughly 30 percent more warehousing and storage jobs but no new net jobs overall...

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Should-Read: I agree with David here: BitCoin will have long run value only if some organization decides that it wants BitCoin to have long-run value, in which case it is no longer a decentralized emergent phenomenon, but rather a managed one—managed in the interest of the stabilizing entity, not of BitCoin holders: David Glasner: Noah Smith on Bitcoins: A Failure with a Golden Future : "Noah Smith and I agree that... Bitcoins have no chance of becoming a successful money...

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Should-Read: That the truly valuable skills will lie in understanding what are robots and software 'bots can and cannot do—how they think, and how their thinking is different from ours—so that we can use them for good rather than evil seems a good bet: Andrew Wachtel: Universities in the Age of AI: "Over the next 50 years or so, as AI and machine learning become more powerful, human labor will be cannibalized by technologies that outperform people in nearly every job function...

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