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March 2018

Do We Really Care Whether the Profits from American Slavery Were Reinvested to Spur Faster American Economic Growth or Not?

Happy american slave plantation picture Google Search

Do We Really Care Whether the Profits from American Slavery Were Reinvested to Spur Faster American Economic Growth or Not?

Brian Fennesey: "Gavin Wright keeping the slave-capitalism debate lively: Slavery was profitable to slaveholders but it kept the region underdeveloped and claims about its centrality to US economic growth are exaggerated! #DukeMonumentsSymposium...

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On Twitter: Author: Don't mind me: The real me is just locked in a room receiving incomprehensible messages and then sending out replies constructed via a rule book that I do not understand. There is no real intelligence at home in here...

@dsquaredigest: The first of those two.

@NewYorker: Where does the mind end and the world begin? Is the mind locked inside its skull, sealed in with skin, or does it expand outward, merging with things and places and other minds that it thinks with?

The "Let's Be Agnostic About Race Science" Clowns Are in My Twitter Timeline Again...

Clowns (ICP)

Over on Twitter: 1500 generations since radiation from the Horn of Africa is not very many, n'est-ce pas? A genetic difference that gives you a—huge—extra 0.1% chance of surviving to reproduce will take a gene's frequency from 1% to 5% of the population in that time.

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In Defense of Smartphones Mother Jones

Should-Read: It is time for Sherry Turtle to 'fess up that she was wrong about the sociological impact of high-tech. The very change in its name should have clued her in: from "computer technology" to "information technology" to "information and computer technology—ICT". It is not isolating each of us in their own virtual world in which they do not encounter humans. It is, rather, making us hyper-social—with big costs as we have (so far) failed to develop effective enough ways to manage hypersociality, but also very big benefits: Kevin Drum: In Defense of Smartphones: "Sherry Turkle is an MIT professor who thinks social media is decimating face-to-face contact...

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Should-Read: Good conservative ideas become liberal ideas. The only conservative ideals left are those that are not good. Some of them are not good, but because they are plutocratic the plutocrats like them, and they often pass. Some of them are not good, but because they are fascist the fascists like them, and they often pass. The others? Conservatives run from them: consider the conservative flight from RomneyCare. Why do conservatives run from them? Because once they become attractive to liberals they no longer serve as identity markers, and identity markers are primary: Mike Konczal: Why Are There No Good Conservative Critiques of Trump’s Unified Government?: "We aren’t just seeing the chaos of... Trump...

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Explication, Language, and Mathematics in Economics: Thinking Like an Economist

In Defense of Funny Diagrams

A great deal of stuff relevant to teaching, reading, and doing economics. Also highly relevant to: Brad DeLong: Optional Teaching Topic: How to Think Like an Economist... (Provided, That Is, You Wish to...) (Pre-Class? Mid-Class?):

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Should-Read: I think I have an answer to Charles Manski's question "why does heritability research persist?" It persists because it is well-funded. It is well-funded because it makes some people feel better. It makes some people feel better because it can be read to reinforce white supremacy: Charles F. Manski (2011): Genes, Eyeglasses, and Social Policy: "Suppose that nearsightedness derives entirely from the presence of a particular allele of a specific gene...

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Should-Read: I am not sure I see the problem here: diagnoses are assignments of patients to human-specified categories. You cannot take the human doctors out of the loop here—they are the people who retrospectively assess whether the diagnosis is correct. The potential problems seem to me to still be far down the road—at the point where the ML algorithm starts saying "people with this diagnosis have done better under that treatment regimen" without any ability to explain why: A. Michael Froomkin, Ian R. Kerr, Joelle Pineau: When AIs Outperform Doctors: The Dangers of a Tort-Induced Over-Reliance on Machine Learning and What (Not) to Do About it: "Someday, perhaps soon, diagnostics generated by machine learning (ML) will have demonstrably better success rates than those generated by human doctors...

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Should-Read: If it has not been employment-displacing, how can it reduce the share of value added received by labor? There must be something strange going on with the counterfactual. But what?: David Autor and Anna Salomons: Is Automation Labor-Displacing? Productivity Growth, Employment, and the Labor Share: "Is automation a labor-displacing force?...

...This possibility is both an age-old concern and at the heart of a new theoretical literature considering how labor immiseration may result from a wave of ‘brilliant machines,’ which is in part motivated by declining labor shares in many developed countries. Comprehensive evidence on this labor-displacing channel is at present limited. Using the recent model of Acemoglu and Restrepo (2018b) as an analytical frame, we first outline the various channels through which automation impacts labor ́s share of output. We then turn to empirically estimating the employment and labor share impacts of productivity growth—an omnibus measure of technological change—using data on 28 industries for 18 OECD countries since 1970. Our main findings are that although automation—whether measured by Total Factor Productivity growth or instrumented by foreign patent flows or robot adoption—has not been employment-displacing, it has reduced labor’s share in value-added. We disentangle the channels through which these impacts occur, including: own-industry effects, cross-industry input-output linkages, and final demand effects accruing through the contribution of each industry’s productivity growth to aggregate incomes. Our estimates indicate that the labor share-displacing effects of productivity growth, which were essentially absent in the 1970s, have become more pronounced over time, and are most substantial in the 2000s. This finding is consistent with automation having become in recent decades less labor-augmenting and more labor-displacing...

Should-Read: In which Martin Wolf begs for China to act like the adult in the house: Martin Wolf: How China can avoid a trade war with the US: "The objectives of these US actions are unclear... to halt alleged misbehaviour... or, as the labelling of China as a “strategic competitor” suggests, is it to halt China’s technological progress altogether—an aim that is unachievable and certainly non-negotiable...

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Should-Read: I know I thought Saddam Hussein probably had an active nuclear weapons program because otherwise George W. Bush administration policy was just insane. Was Max Boot back in 2003 caught in the same trap?: Max Boot: Why I changed my mind about John Bolton: "To accommodate... Trump, the Republican Party has betrayed its principles on issues including Russia, immigration, free trade and fiscal austerity...

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What Do I Know About "The tech boom and the fate of democracy"?

I will be very interested in finding out!

Annalee Newitz: The tech boom and the fate of democracy: Wed, Apr 11, 2018 at 7:00 PM | Eli's Mile High Club, 3629 Martin Luther King Junior Way, Oakland, CA 94609: "Right now the U.S. tech economy is booming, but what will be the long-term effects of automation and AI?...

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Comment of the Day: I have never understood this belief in "snapback". Previous "snapbacks" had all taken place in the context of the Federal Reserve driving the real interest rate far below the Wicksellian neutral rate and a supportive fiscal policy. Neither of those were present. Where was snapback supposed to come from after 2009?: Charles Steindel: : "It was a belief that the recession was primarily the result of the collapse of the financial system...

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Should-Read: "Hysteresis" in response to 2007-2009 is, I have to admit, much less than I feared it would be six years ago. But it is also much much bigger than zero. The points about the calculation and measurement of potential output are especially important: Valerie Cerra and Sweta C. Saxena: The Economic Scars of Crises and Recessions: "According to the traditional business cycle view... our new study casts doubt on this traditional view and shows that all types of recessions...

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Remember What George W. Bush Was Like Back When He Listened to Those Like John Bolton

Clowns (ICP)

Hoisted from Others' Archives: Let us all remember what George W. Bush was really like: John Rogers (2005): Lunch Discussions #145: The Crazification Factor: "John: ... I mean, what will it take? That last speech literally made no sense. It was crazy drunken bar talk!...

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Professor DeLong Says Tax Bill Has 70% Chance of Passing | Bloomberg Daybreak Asia 2017-12-01

Professor DeLong Says Tax Bill Has 70% Chance of Passing | Bloomberg Daybreak Asia 2017-12-01

The Trump Ryan McConnell Tax Cut My Angry Face

Professor DeLong Says Tax Bill Has 70% Chance of Passing: From 2017-12-01: Not a transcript but much more what I wish I had said—that is, heavily edited and revised to increase clarity, decrease stupidity, and file a little bit of the ragged stream-of-consciousness rough edges off.

Nevertheless, holds up very nicely, no? (BTW, this is my angry face):

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Should-Read: I agree with Joe Weisenthal. Certainly I did not have incomprehensible optimism back in 2009/2010. And to the extent I was hopeful, the hope drained away quickly with every talk I had with Obama Administration or European technocrats describing what they were facing. Someday I hope Christie Romer will write up her impressions of the Federal Reserve's Jackson Hole Conference—kind of a Masque of the Red Death situation in terms of being clueless as to what was about to go down. The financiers and policymakers were happy because a Great Depression had been avoided and because ultra-low interest rates had boosted asset values and made them close to whole. But...: Joe Weisenthal: On Twitter: "Every time I see a version of this chart (this time from Deutsche Bank's Torsten Slok) I'm blown away by what seems (in retrospect) to be incomprehensible optimism back in 2009/2010...

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Should-Read: And I am still looking for somebody with a stronger stomach than I to tell me how Bob Barro (and, I presume, Mike Boskin) lowered their estimates of the real GDP boost from the tax cut bill from 7% last December to 0.4% today: Paul Krugman: Tax Cuts and Wages Redux: "After Republicans rammed through their big tax cut, there were a rash of stories about corporations using the tax break to give their workers bonuses...

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Weekend Reading: M. Tullius Cicero to C. Pomponius Atticus, October 1, 54 BC: 4.XVII: On "Western Civilization"—Oxfordians Are too Stupid and Uncivilized to Be Worth Enslaving

Vercingetorix Throws Down His Arms at the Feet of Julius Caesar 1899 Giclee Print by Lionel Noel Royer at Art com

Weekend Reading: I am flashing to C. Julius Caesar sending British academics who talk about the glories of "western civilization" to the Spanish coal mines or to the gladiator schools: "The result of the British war is a source of anxiety.... There isn't a pennyweight of silver in that island, nor any hope of booty except from slaves, among whom I don't suppose you can expect any instructed in literature or music..." (ex quibus nullos puto te litteris aut musicis eruditos exspectare).

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Should-Read: Is it really the case that America's biggest problem today is that the bulk of relatively poor and less educated older whites—especially males, especially southern and rural—are easily grifted and not too good at understanding what is really going on in the world around them? I mean: politics as Facebook- and Fox News-enabled gigantic 419 scam? Seems likely: Amitabh Chandra: Hillbilly Elegy:

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Weekend Reading: Some Underrepresented Minority Perspectives on U.C. Berkeley Graduate Econ

Cursor and bradford delong com Grasping Reality with Both Hands

Weekend Reading: Trevon D Logan: On Twitter: "Great advice here. (I admit I’m biased though...)"

@DaniaFrancis: Another example of the excellence coming out of Berkeley Econ. I kick myself again.

@TrevonDLogan: I remember your visit. Andrea and I were so hoping you’d come. In the end, there are not good or bad choices but just paths. I knew you’d reach your destination no matter what!

@DaniaFrancis: Thank you! I wasn’t so sure myself, but I’m glad I did!

@KimberlyNFoster: Does anyone love their PhD program? Why is it that we only hear struggle stories from PhD students?

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Should-Read: Surreptitiously gathering data that users have not authorized you to gather in order to sell it to people who want to manipulate you is not a sustainable business model, Facebook: Sean Gallagher: Facebook scraped call, text message data for years from Android phones: "A New Zealand man was looking through the data Facebook had collected from him in an archive he had pulled down from the social networking site...

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Should-Read: On the one hand, of course, obviously yes: looking at just the import surge from China without looking at exports or domestic investment financed paints a very false picture. Trade balances and the factor content of what is exported and domestically financed is not that much different from the factor content of what is imported. The key crux to globalization backlash, of course, is that with international imports one can blame brown people in Mexico or yellow people in China for the loss of midwestern jobs and so build a national political movement. One cannot do the same by blaming textile workers in the Carolinas for the decline of Lowell and Fall River: Robert Feenstra, Hong Ma, Akira Sasahara, and Yuan Xu: Reconsidering the ‘China shock’ in trade: "While previous studies focus on the job-reducing effect of the surging imports from China or other low-wage countries on US employment...

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Should-Read: One does wonder how deep the rot went: the self-evident truth of the Declaration of Independence that all men are created equal was presumably a self-evident lie. And I do not see how anyone looking at the KKK and lynching frolics of the Jim Crow south good regard at least the majority of its whites as in any way "advanced". Those—like Steve Teles and Henry Farrell who argue that for pro-segregation whites like James Buchanan it was not the case that "'individual liberty' had a coded meaning" of white supremacy take note of what was at the core: Matthew Yglesias: "The highbrow intellectual leaders of the modern conservative movement explicitly conceptualized it as a white nationalist undertaking. Trump is true to this legacy and his intra-movement critics are the innovators...

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Should-Read: This seems to be an argument that much of productivity growth is driven by firm decisions that are not well correlated with their reported levels of investment. Investment has been low since the global financial crisis, but not that low—not nearly low enough to account for the noun very large labor productivity growth gap that has emerged: Simon Wren-Lewis: mainly macro: The Output Gap is no longer a sufficient statistic for inflationary pressure: "From 1955 to 2007 prosperity grew at an average rate of almost two and a quarter percent each year...

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Should-Read: Financing a free-to-users social network by selling users' private information to companies who want to sell you things that you will be happy you bought is a sustainable business model. But Facebook apparently never got the memo. It never realized that financing a free-to-users social network by selling users' private information to companies who want to sell you things that you be unhappy you bought is not sustainable. Nor is financing a free-to-users social network by selling users' private information to companies and others who wish you ill. Facebook was unable to distinguish between those three categories to whom it sold your eyeballs. And so I suspect that, in the long run, it is going down: Hannah Kuchler: The anti-social network: Facebook bids to rebuild trust after toughest week: "Mark Zuckerberg began 2018 vowing to 'fix Facebook'.... That job is more urgent than ever...

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Should-Read: Can someone with a larger tolerance for reading b---s--- than I tell me how Robert J. Barro trimmed his estimate of the effects of the Trumpublican tax cut bill from "smaller than 8.4%.... not by much... I made a rough downward adjustment of the long-run level effect from 8.4% to 7%..." to 0.4%?: Robert Barro and Jason Furman: The macroeconomic effects of the 2017 tax reform: "The result is that GDP would rise by 0.4 percent in the law-as-written case...

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Should-Read: Just when you think the mainstream media could not sink any lower into misogyny and stupidity, it's the Atlantic Monthly!: Scott Lemieux: Are you provoked yet?: "Both James Bennet and Fred Hiatt have been asked to hold David Bradley’s beer...

...Jessica Valenti: Hey remember when @TheAtlantic’s new political writer [Kevin Williamson] said women who have abortions should be executed by hanging? I SURE DO...

Kevin D. Williamson (@KevinNR): @Green_Footballs Yes, I believe that the law should treat abortion like any other homicide.

Kevin D. Williamson (@KevinNR): I have hanging more in mind. @LeveyIsLaw @charlescwcooke

Should-Read: I first read The Protestant Ethic and the Spirit of Capitalism 39 years ago. How is it that nobody has told me this before?: Peter Baehr (2001): The "Iron Cage" and the "Shell as Hard as Steel": Parsons, Weber, and the Stahlhartes Gehäuse Metaphor in the Protestant Ethic and the Spirit of Capitalism: "In the climax to The Protestant Ethic, Max Weber writes of the stahlhartes Gehäuse that modern capitalism has created...

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Globalization: What Did Paul Krugman Miss?

The China Shock

This is a very nice short framework-for-thinking-about-globalization-and-the-world piece by Paul Krugman: Paul Krugman (2018): Globalization: What Did We Miss?

It is excellently written. It contains a number of important insights.


I have, unusually, a number of complaints about it. I will make them stridently:

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