Grasping Reality on TypePad, by Brad DeLong

Should-Read: Martin Wolf: Economics failed us before the global crisis: "Macroeconomics... invented by John Maynard Keynes.... The tests... are whether its adepts understand what might go wrong in the economy and how to put it right...

Should-Read: Ed Luce: Anti-Semitism in the age of Donald Trump: "Whether you are a Muslim, Hispanic, African-American or a globalist, America’s president has made it safe to disparage you...

A Question I Asked a Much Shorter Version of at the Berkeley "How Did Tax Reform Happen?" Symposium: I have a question for Alan Auerbach: a question hinted at in his slide that contrasted the analyses of the tax cuts from economists from those from “economists“. It was also hinted at in David Kamin's slide the one that contrasted:

1. the analyses of policy shops with models—including the highly unreliable Tax Foundation (yes, crowding out is a thing; no, the long run does not come in ten years)
2. that found very small growth effects with the unmotivated and unjustified claims of the Trump administration.

There are two problems:

1. David's slide omitted a number of estimates of the effect that were even higher
2. Alan's slide omitted the fact that the most absurd estimates I saw came not from "economists" but from economists—Ph.D. economists with tenured appointments at places like Princeton, Harvard, Columbia and Stanford.

Graydon Saunders has “committed book” again. The Human Dress is live at Google Play Books. If this is the kind of thing you like, you will like this thing—I like it very, very much. Vikings and zombies and magicians and dinosaurs and much much much more.

Asked at: Berkeley Haas School Center for Responsible Business 2018 Microsoft Conference on Business, Technology, and Human Rights: The Future of Work: I think I understand why previous waves of technology have boosted the employment and wages of unskilled workers. It is because “unskilled” human work is a very hard AI problem. Thus enormous numbers of jobs have been created for humans—jobs that are in a sense drudgery, but necessary drudgery:

From The Fall and Rise of the Smithian Economy https://www.icloud.com/pages/0T3bT42JX6K1UcyTZT0kVUVGg | https://www.icloud.com/keynote/0IrNvoyDNCe6k7FuDAxsKllFQ | https://www.icloud.com/pages/0ytOBbemlXLZtytkJqlvb_gXw: I am very happy to be here this morning, giving the Suzanne Scotchmer Memorial Lecture.

I am happy even though I was mousetrapped into doing this.

A couple of years ago I discovered that Toulouse had a Suzanne Scotchmer Memorial Lectrure. My first response was to blather on the Internet: how come Berkeley, where she worked for the bulk of her career, did not have such a lecture? Paul Seabright took advantage of this, saying: “Well, then, you have to come to Toulouose to deliver such a lecture!” And lo and behold here I am—and very happy.

Should-Read: Noah Smith: Why Money Managers Are Paid So Much Is a Mystery: "Mutual-fund managers are paid less for beating the market than for marketing—i.e., the ability to collect assets...

Should-Read: Charlie Stross: Test Case: "There are ramifications...

Should-Read: Benjamin D. Sommers, Atul A. Gawande, and Katherine Baicker: Health Insurance Coverage and Health—What the Recent Evidence Tells Us: "An analysis of mortality changes after Medicaid expansion suggests that expanding Medicaid saves lives at a societal cost of $327,000 to $867,000 per life saved...

Should-Read: Lant Pritchett: Alleviating Global Poverty: Labor Mobility, Direct Assistance, and Economic Growth: "A well-designed, well-implemented, multi-faceted intervention can in fact have an apparently sustained impact on the incomes of the poor (Banerjee et al 2015)...

Caffeine: Better Living Through Chemistry

As the semester wears on...

• Nov 1-Jan 14, 2018: no caffeinated coffee drinks
• Jan 15-Feb 14, 2018: one latte before afternoon lectures (64 mg.)
• Mar 14, 2018: one double latte before afternoon lectures (128 mg.)
• Mar 15-Apr 14, 2018: one large coffee before afternoon and after morning lectures (192 mg.)
• Apr 15-May 14, 2018: ?????

What drink—and how many—should I switch to on April 15?

Should-Read: Simon Wren-Lewis: Beliefs about Brexit: "I want to... ask why public opinion seems oblivious to the failures of all those claims before the negotiations that ‘we hold all the cards’ compared to the reality that the UK has largely agreed to the terms set out by the EU...

Should-Read: John Scalzi: No, In Fact, You Should Not Write For Free: "I can see where Douglas has gone wrong... some of it boils down to a matter of definition of what constitutes 'free' writing...

Live from the Riyadh Ritz-Carlton: I wonder if he got affinity program points for his stay?: Erik Schatzker: Alwaleed Reveals Secret Deal Struck to Exit Ritz After 83 Days: "So you were not harmed or mistreated in any way?

Should-Read: Lawrence Summers: “A strong, fully employed economy—where firms looking for workers is a larger issue than workers looking for firms...

Live from the Orange-Haired Baboon Cage: Marcy Wheeler: "'What did the president do, and what the fuck was he thinking when he did it?' are questions not about the cover-up, but about the substantive crime. And that's the question Mueller's Watergate prosecutor has now posed to the president's lawyers..."

Live from: "It Was Not Just a Mistake—It Was a Crime...: Duncan Black: Eschaton: Heckuva Job: "There were the evil bastards, and then there were the Model UN debate team crowd, young boy blunders putting on their first big boy suits writing for big boy magazines...

Should-Read: Kevin Kelly: The Myth of a Superhuman AI: "'I’ve heard that in the future computerized AIs will become so much smarter than us that they will take all our jobs and resources, and humans will go extinct. Is this true?' That’s the most common question I get whenever I give a talk about AI...

Should-Read: The Washington Post these days is a really bad neighborhood. Bad actors. Bad actions: David Brady: We... would be delighted by... lift[ing] all single mothers out of poverty.... Making a substantial fraction of people not poor would reduce poverty. Duh: "In @washingtonpost, Robert Samuelson has written a 'critique' of our NY Times piece...

Live from the Orange-Haired Baboon Cage: Steve M.: TRUMP—NOT COMPLETELY OFF THE CHAIN?:

@Tara_Mckelvey: "Whisked" is right – members of the pool were told to rush - (i.e. run) - to the vans in the motorcade at the White House. We're here at the golf club now, waiting for developments

@christinawilkie: Trump just arrived at his Sterling, Va., Trump National golf club. It’s only 44 degrees outside, but it was pretty imperative that Trump not spend the entire day inside watching television.

@mcdowell_is: Redirection is a parenting technique often used with toddlers.

@hey_leia: And those with dementia.

@TEE1031: And those with behavioral health issues & personality disorders

Should-Read: Gillian Tett(January 2017): Donald Trump’s campaign shifted odds by making big data personal: "CA has built a franchise by promoting a proprietary technique known as “psychographs”...

Should-Read: Paul Krugman: Trump and Trade and Zombies: "Until now, the most visible neo-goldbug in the administration has been David Malpass... the former chief economist of Bear Stearns...

Should-Read: Noah Smith: How Universities Make Cities Great: "Abel and Deitz find that university research expenditures have a strong effect on the number of educated people in a region—over four times as strong as the effect of degree production...

Should-Read: Those beats won't sweeten themselves!: Zack Kanter: "Absolutely bizarre, fawning NYT piece [by Zach MacFarquhar]. I’m not sure I’ve read anything quite like it in recent memory..."

Should-Read: A very nice paper indeed: J. Vernon Henderson, Adam Storeygard, Tim L. Squires, and David N. Weil: The Global Spatial Distribution of Economic Activity: Nature, History, and the Role of Trade: "We study the distribution of economic activity, as proxied by lights at night, across 250,000 grid cells of average area 560 square kilometers...

Should-Read: This makes no sense at all. There is nothing in the formal or informal record suggesting that any of the potential deciders and influencers inside the Trump Administration support the steel and aluminum tariffs as some kind of Xanatos Gambit to persuade China to adopt intellectual property rules more to the liking of U.S. firms doing business in China. Absolutely nothing: Martin Feldstein: The Real Reason for Trump’s Steel and Aluminum Tariffs: "The US tariffs will... increase the likelihood that China will accelerate the reduction in subsidized excess capacity...

Should-Read: Dan Shaviro: Another new publication!: "'Evaluating the New U.S. Pass-Through Rules'...

Should-Read: A rather odd piece in its rhetorical pose. It really is not a critique of Allen's hypothesis about the especially strong incentives in Industrial Revolution England to invent and innovate in coal energy and machine intensive ways: it is a reinforcement of it: an argument that British patriarchy reinforced and augmented the imperial, coal-resource, cultural, scientific, and technological forces converging to make the British Industrial Revolution: Jane Humphries (2013): The lure of aggregates and the pitfalls of the patriarchal perspective: a critique of the high wage economy interpretation of the British industrial revolution: "The lure of aggregates and the pitfalls of the patriarchal perspective...

Wakanda and the Resource Curse: Wakanda’s prosperity is based on its possession of vibranium, a stable transuranic elements with unique And extraordinary chemical properties. Yet those of us who have studied the history of emerging markets with powerful natural resource advantages would fear for the present and future of an emerging market country that based its prosperity on such a road so very vulnerable to the “resource curse“.

Should-Read: Matt Townsend et al.: America’s ‘Retail Apocalypse’ Is Really Just Beginning: "The reason isn’t as simple as Amazon.com Inc. taking market share...

Should-Read: Hospital services are somewhat misleading, because they buy us a lot more today than they bought us back in the 1990s. College tuition as well: it is a decline in financial aid as a proportion to cost that has driven the cost up so much. College textbooks is a monopoly intellectual property story. It is an extraordinary-shift-in-relative-prices story. But a large part of that story is a political story: Barry Ritholtz: Inflation: Price Changes 1997 to 2017: "It is notable that the two big outliers to the upside are health care (hospital, medical care, prescription drugs) and college (tuition, textbooks, etc.)...

Should-Read: Charles Plosser and Richard Fisher are really bad economists, and were really bad central bankers: Charles Plosser (2008): Meeting of the Federal Open Market Committee on March 18, 2008: "We have talked a lot about taking out insurance around this table...

Weekend Reading: Kevin Rudd: Xi Jinping's China: "Next week marks the 216th anniversary of the founding of the West Point Military Academy...

Should-Read: Jason Del Rey: Amazon is creating a health care company with the help of Warren Buffett and JPMorgan Chase: "Amazon... plans to work with Warren Buffett’s Berkshire Hathaway and JPMorgan Chase to create a new health care company...

Should-Read: Pamela Jakiela and Owen Ozier: Gendered Language: "Gender languages assign many—sometimes all—nouns to distinct sex-based categories, masculine and feminine...

Absolutely brilliant from Henry Farrell: If being muted by Jonathan Chait were to regularly produce such good thought, Chait should mute everybody immediately!:

Should-Read: Brad DeLong (2012): Ahem! Niall Ferguson Fire-His-Ass-from-NewsBeast-Now Department: Niall Ferguson writes:

Should-Read: Lane Kenworthy: Soci 109: Analysis of Sociological Data (2015): "This course introduces you to techniques and software for analyzing quantitative social science data...

Should-Read: Absolutely brilliant from Henry Farrell. If being muted by Jonathan Chait were to regularly produce such good thought, Chait should mute everybody immediately!: Henry Farrell: We’re all going to need safe spaces: "Speech doesn’t scale, and at a certain point, the scarce resource isn’t speech but attention...

Should-Read: I think that the very sharp Jonathan Chait has this one right: Jonathan Chait: Nancy Pelosi Is Good at Her Job and She Should Keep It.: "There is zero sign Pelosi’s age has impeded her work...

Should-Read: FT: Thoughts for the weekend: "'To wit, Phil Gramm was right: We are in a mental recession, not an actual recession.' - 2008 comments from President Trump's new economic advisor [Larry Kudlow]..."

Should-Read: By and large a good statement. However, while free speech extends to statements made with "conscious indifference to their truth content", I do not believe that academic freedom does. Professors who make and reiterate and decide to die on the hill that is statements made with "conscious indifference to their truth content" are violating the norms of academic responsibility as much as those who commit plagiarism or falsify experimental results. I do not believe that the Trustees of the University of Pennsylvania should continue to employ Professor Wax: Ted Ruger (Dean): Lawyers, Guns & Money: "Dear members of the Penn Law community...

Should-Read: Iason Gabriel: The case for fairer algorithms: "Software used to make decisions and allocate opportunities has often tended to mirror the biases of its creators, extending discrimination into new domains...

Should-Read: This is not an economist's forecast. This is affinity fraud. Directed against Trump? Against Kudlow's Fox News viewers? Against some group of right-wing investors? In all cases, the hope is that the marks have short memories—or that something else will turn up. Paul Bedard: Larry Kudlow predicts 4%-5% growth, 'investment boom': "Larry Kudlow, picked to be President Trump’s new economic adviser...

Should-Read: Robert Waldmann: A Dynamic Macroeconomic Model with Downward Nominal Rigidity II: "This note explores the implications of downward nominal rigidity...

I confess that I am a great fan of Applied History. Theoretical arguments and conceptual frameworks are, ultimately, nothing but distilled, crystalized, and chemically cooked history. After all, what else could they possibly be? And it is very important to know whether the distillation, crystallization, and chemical cooking processes that underpin the theory and made the conceptual frameworks were honest ones. And that can be done only by getting good historians into the mix—in a prominent and substantial way.

But if this is what "Applied History" is to be, AY-YI-YI-YI-YI-YI-YI!!!!

Niall Ferguson: Fetch the purple toga: Emperor Trump is here: "Think of Harvey Weinstein, the predator whose behaviour was for years an 'open secret' among precisely the Hollywood types who were so shrill last year in their condemnation of Donald Trump for his boasts about 'grabbing' women by the genitals...

Live from the Orange-Haired Baboon Cage: Emptywheel: "Shorter Donald Trump: I'm suing you for $20M for telling people I'm David Dennison which I've just confirmed by suing you for $20M...

Confused: Why isn't Donald violating the NDA by admitting he's David Dennison here?

Where does he pay the $1M? https://www.politico.com/f/?id=00000162-3136-d513-a767-ffbf3e740000

Live from Inside Your Brain: Peter Cooper: Cafe Wall Optical Illusion: "The most mind-boggling optical illusion I've seen in a while. Those horizontal bars really are parallel:"

Should-Read: Jonathan Chait: New Trump Economist Kudlow Has Been Wrong About Everything: "The Republican Party... supply-side economics... not merely a generalized preference for small government with low taxes...

There has long been discussion of whether Larry Kudlow believes what he says. (1) Is he one of the professional Republican commentators like Stephen Moore, James Glassman, and Kevin Hassett who knows that what he says is wrong, but says it because it is just a game—that feeding one's readers and viewers something that is not bullshit is simply not a goal, and telling the truth will serve when it does not conflict with one's goals? Or (2) is he just not aware of the world outside him, in the sense in which people are usually oriented toward reality?