Grasping Reality on TypePad, by Brad DeLong

Atrios: "I'm actually happy for 'leave the first lady alone' to be a new rule but remember when the New YorkTimes did an incredible deep dive into the question of "do Bill and Hill still have sex?" and neither of them were first spouse at the time. Lots of 'new rules' which will not apply as soon as Democrats have power again and while this will be, a bit, the fault of said Democrats, political journalists need to stop pretending to be unaware of this..."

Jeet Heer: "Frank Wilhoit: 'Conservatism consists of exactly one proposition.… There must be in-groups whom the law protects but does not bind, alongside out-groups whom the law binds but does not protect.' This seems increasingly true..."

• Paul Krugman Is Optimistic About Inflation: Paul Krugman: "It would be a big mistake if the Fed lets fear of inflation distract it from the urgent task of heading off a financial meltdown..."

• Michael Dobbs of the Washington Post: He says that "we"—that is, the Washington Post's reporters and editors—failed to do their job in 2002-3. But there is one question: why has it taken him until 2008 to tell us this?..."
• Kate Kelly of the Wall Street Journal on the Final Days of Bear Stearns
• Dealing with the Mortgage Mess: Judge Tchaikovsky Does Her Job and Judges: Tanta: "The whole point of stated income lending was to make the borrower the fall guy: the lender can make a dumb loan—knowing perfectly well that it is doing so—while shifting responsibility onto the borrower, who is the one 'stating' the income and—in theory, at least—therefore liable for the misrepresentation. This is precisely where Judge Tchaikovsky has stepped in and said 'no dice'..."
• Yet Another Republican "We Have Always Been at War with Eurasia" Moment: We watch the dead-ender wingnuts attack Scott McClellan, and conclude it is time to shut down the Republican Party—a new opposition with totally new personnel is needed, badly...
• Warren P. Strobel and Jonathan S. Landay Report the News: In any other industry, the two of them would now be running the show. Only in journalism does failure of the magnitude of America's Washington press corps manage to perpetuate itself on such a gigantic scale. Here is what they have to say...

Not all conservatives are Milo. Very few conservatives are Milo, in fact: Rakesh Bhandari: "Some conservative Cal students have falsely complained that they are penalized by GSI's or Profs for their political views. One student falsely said an econ prof forced him to write in favor of open borders; another complained that he was penalized for a realism paper in IR..."

To be overly fair, it is very difficult to make an anti-open borders argument within the framework of rootless cosmopolite neoclassical economics.

Interesting and, I think, correct on the costs, benefits, risks, and opportunities from the keen-witted President of the Federal Reserve Bank of Minneapolis: Neel Kashkari: The Fed should not move too quickly to raise rates: "The US recovery took place after the Federal Reserve undertook extraordinary monetary policies...

Doug Campbell: Sitting in on a growth theory lecture:

Doug Campbell @TradeandMoney: Sitting in on a growth theory lecture. What is clear is that this field of economics is largely a scam. Top growth theorists know nothing at about topic they study. It’s remarkable to behold. Some of the misguided beliefs in yesterday's talk: (1) that property rights institutions are a key to growth. (Actually, it looks like a wide-variety of institutions are consistent with economic growth...)

Noah Smith: "MS-13" is just Republican for "Hispanic people":

Yes, it is hard to like Sean Wilentz these days. Little there but two-minute hates against "pwogwessives", who believe in the moment, in Sean's imagination, whatever bad thing he momentarily wants them to believe: Dan Nexon: I wanted to like this essay:

Paul Krugman: I had a letter from a Sheriff Joe supporter:

Paul Krugman @paulkrugman: Trump is going all in on (a) claiming that undocumented immigrants are responsible for a huge crime wave; (b) Democrats supporter immigrant criminal gangs. Both claims are lies, pure and simple https://t.co/0orSpr9o5e. One important thing to realize about the immigrant crime wave thing is that the people who believe it mostly come from places where there are hardly any immigrants. https://t.co/wNse30FZwp:

Heather Rose Jones: I will die on this hill:

Heather Rose Jones @heatherosejones: Dear author of corporate training manuals: the word you are looking for is "tenet" -- "the three tenets of quality risk management"—not "tenant". I am judging you. 2 replies 0 retweets 2 likes Reply 2 Retweet Like 2 Direct message

Brad DeLong @de1ong: It isn’t a metaphor? Three people rent rooms in the house of risk management? :-(

Heather Rose Jones @heatherosejones: I will die on this hill.

Brad DeLong @de1ong: touché...

Downtown Josh Brown: My dad has $1.8 million dollars worth of GE:

Downtown Josh Brown: @ReformedBroker: "My dad has $1.8 million dollars worth of GE. What should he do?”

Brad DeLong: @de1ong: Send them to read The Money Game: “the stock does not know that you own it”. You say the problem would not arise if they had read it? Oh well...

The Roman Empire: October 49 BC-May 1453 AD: Branko Milanovic: Economic Reflections on the Fall of Constantinople: "May 29 marks the anniversary of the Fall of Constantinople in 1453...

"Civility" looks very different depending on where you stand...

From here http://crookedtimber.org/2018/05/23/neo-marxism/ I have excerpted three short paragraphs very much worth reading and thinking about:

• The Harvard Crimson Writes...: "Would you be free either tomorrow or Friday for an interview? If so, what time would work best for you?" I reply: Don't know what I can say that I haven't already said.... I had a very good time as a Harvard undergraduate because I found a niche in it—Social Studies—that functioned like a small liberal arts college and because I very quickly found my way as a sophomore into the graduate economics classes (which I had the math to handle). But many others I know did not,... There is an enormous disproportion between resource inputs and educational outputs. This is a place where the ethos of the senior Arts and Sciences faculty—well, I remember one dinner at one New England college, where a political science professor just back from a semester visiting Harvard said that his first week there Harvey Mansfield had stopped by, looked into his office, and said: "You should close your door. If you don't, undergraduates may wander in"...

• New York Times Death Spiral Watch (William Kristol Edition): Outsourced to Ezra Klein: "William Kristol, columnist for The New York Times's once-respected op-ed page, informed me this morning that 'we are on course to win the Iraq war'..."

Suck on This! Day: Duncan Black has commanded us to spend tomorrow celebrating our great good fortune in having geniuses like Thomas Friedman shaping our foreign policy thinking, and wonderful newspapers like the New York Times to publish them. Here's Duncan:

The... anniversary of Tom Friedman going on Charlie Rose and telling the world that the Iraq war was fought to tell Iraqis to "Suck On This"... because we could! I hope some of you will find your own creative ways to celebrate this most special of days.

Friedman: I think it [the invasion of Iraq] was unquestionably worth doing, Charlie.... We needed to go over there, basically, um, and um, uh, take out a very big state right in the heart of that world and burst that [terrorism] bubble, and there was only one way to do it.... What they needed to see was American boys and girls going house to house, from Basra to Baghdad, um and basically saying, "Which part of this sentence don't you understand?" You don't think, you know, we care about our open society, you think this bubble fantasy, we're just gonna to let it grow? Well, Suck. On. This. Okay. That Charlie was what this war was about. We could've hit Saudi Arabia, it was part of that bubble. We coulda hit Pakistan. We hit Iraq because we could...

#shouldread
#hoistedfromthearchives

Note to Self: My cousin Phil Lord and his partner Chris Miller are geniuses for casting Donald Glover as Lando Calrissian in Solo: A Star Wars Story. And we will never see what they wanted to do with the script. But looking at the financials I do not see how this thing is supposed to make any money...

Doug J. Balloon: "'The coarsening of discourse' is a standard conservative pundit lament, but nothing illustrates the unfortunate reality better than the writings of conservative pundits themselves. Read a typical George Will column. It's probably wrong but the most aesthetically disturbing thing you're likely to encounter is a Mark Twain quote taken badly out of context. Read a typical Bobo, Bret, or Douthat column and you'll find discussions of how many sex partners a teen should have, defenses of pedophilia, and sex robots..."

#shoulread

Ah. Someone who wishes me ill informs me that William Saletan has surfaced, but cannot tell his own story straight: William Saletan (2018): Stop talking about race and IQ. Take it from someone who did: "A person with a taste for puncturing taboos learns about racial gaps in IQ scores and the idea that they might be genetic...

...He writes or speaks about it, credulously or unreflectively. Every part of his argument is attacked: the validity of IQ, the claim that it’s substantially heritable, and the idea that races can be biologically distinguished. The offender is denounced as racist when he thinks he’s just defending science against political correctness. I know what it’s like to be this person because, 11 years ago, I was that person.... Here’s my advice: You can talk about the genetics of race. You can talk about the genetics of intelligence. But stop implying they’re the same thing. Connecting intelligence to race adds nothing useful. It overextends the science you’re defending, and it engulfs the whole debate in moral flames...

What William Saletan does not say is: "Not only did I write credulously and unreflectively about claimed genetic racial gaps in IQ scores, but I did an incompetent and zero-assed job of doing my research. Why? Because I have insufficient work ethic, I am not very good at my job, I wanted to believe, I wanted to 'puncture taboos', and I thought trying to make African-Americans feel smaller was kinda fun."

Am I wrong? Anybody want to push back on whether Saletan does his homework? Anybody have anything from William Saletan worth reading to bring forward?

Let's turn the mike over to the not unintelligent Cosma Shalizi:

Alexander Hamilton and James Madison: The Federalist Papers No. 9: "It is impossible to read the history of the petty republics of Greece and Italy without feeling sensations of horror and disgust at the... state of perpetual vibration between the extremes of tyranny and anarchy...

• DeLong: Capital and Its Complements

• David Glasner: Neo- and Other Liberalisms: "The point of neoliberalism 1.0 was to moderate classical laissez-faire liberal orthodoxy...

• Not quite true. It is what the Left New Dealers' consensus was. They had lost power in the U.S. But enough of them made it across the Atlantic to do a lot of good: Daniel Davies: If you like the German social, political and economic model, it's worth remembering that what it really represents is the consensus of American opinion on how to build a stable non-Communist polity if you were starting from scratch, circa 1945..."

• The Stupidest Man Alive: David Paul Kuhn: "Digby alerts us to David Paul Kuhn writing for the Stupidest Publication Alive, the Politico...

David Glasner: Neo- and Other Liberalisms: "The point of neoliberalism 1.0 was to moderate classical laissez-faire liberal orthodoxy...

The usual dodge here is to make "the money" a trader deploys proportional to the gap between the current price and their estimate, and so dodge this question completely: Dan Davies: "The 'Manski Bounds'.... How surprisingly little information you can extract from prices.... All the price tells you is that half the money thinks the true value is more than that and half thinks it's less. It doesn't tell you how much more or how much less. I think this matters a lot when you're trying to analyse fast moving markets like TRY or BTPs. Most of the people selling are selling because their guess about true value has moved a long way, not because the price has moved and they switched from the bid to the offer..."

#shouldread

• Exercise: Replicating the Estimate of the Capital Share in Mankiw, Romer, and Weil (1992)

• Alex Bell et al.: Who becomes an inventor in America? The importance of exposure to innovation: "Using deidentified data on 1.2 million inventors from patent records linked to tax records...

• More and more it looks as though minimum wage laws—and unions—are positive second-best interventions that raise societal wellbeing by blunting the impact of employer monopsony: Kevin Rinz and John Voorheis: The Distributional Effects of Minimum Wages: "States and localities are increasingly experimenting with higher minimum wages in response to rising income inequality and stagnant economic mobility...

• If you did not read this over at Equitable Growth Value Added a year and a half ago when it came out, you should go read it now: Emmanuel Saez (2016): Taxing the rich more—evidence from the 2013 federal tax increase: "In 2013, a surtax on high earners was levied to help pay for the Affordable Care Act at the same time as the 2001 tax cuts for high-income earners that were signed into law by President George W. Bush expired...

• Things Middle-Aged White People Do (Flooring Edition): "You think you are funny," said one of our floor guys, "and I laugh because you are paying me. But if you ever buy new construction, check—especially it the rugs are tacked down, and especially always check if there are runners on the stairs..." Oh.

Miles Kimball: Link to Basic Resources for Intermediate Macro:

• Reminders About Logarithms
• The Logarithmic Harmony of Percent Changes and Growth Rates
• The Shape of Production: Charles Cobb's and Paul Douglas's Boon to Economics
• Cobb-Douglas with Constant Returns to Scale Exercise
• Returns to Scale Exercise
• %ΔQ = elasticity %ΔP; %Δ (PQ) = %ΔP+%ΔQ
• Supply and Demand: Elasticities and Comparative Statics
• Rule of 70 Exercise

Anyone who wants to be a B student, an A student or learn even more than that should read the book Make It Stick. I can summarize the main point this way. If you want to get knowledge into long-term memory, reading and rereading won't do the trick. Your brain only puts something into long-term memory if you prove to your brain that it is worth remembering that thing by trying to remember it. So the activity of trying to remember things is the key to learning something not just for the exam tomorrow but learning it for good.

Besides telling my students what I just said in the last paragraph, the way I use this principle in my class is by treating exams primarily as learning opportunities and only secondarily as evaluation devices. Exams cause students to try to remember things. Before each of the three exams, I ask students to do over the weekend the exam from the previous year as a practice exam—under time pressure. Then I go over that practice exam carefully in the class right before the exam. After the exam, I consider the class where I go over the answers one of the most important class periods for learning.

When I write each exam, I am thinking about what I most want students to remember down the road, since I know they will remember what ended up on the exams much more than any other specific things from the class. The answers to the exam questions represent the bulk of the key ideas and some of the key skills I want the students to take away from the class...

Peter C. Brown et al. (2014): Make It Stick: "Drawing on cognitive psychology and other fields, Make It Stick offers techniques for becoming more productive learners, and cautions against study habits and practice routines that turn out to be counterproductive. The book speaks to students, teachers, trainers, athletes, and all those interested in lifelong learning and self-improvement..."

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Teaching Economics: http://delong.typepad.com/teaching_economics/contents.html

An enormous amount that I think is right here. And I bunch I think is wrong. And now I have laid down a marker that I have to write down what I think is wrong here, which I will... someday... in my copious spare time But what is right: Miles Kimball: On Teaching and Learning Macroeconomics: "Many... important ideas are missing from most macroeconomic textbooks.... Here are some... I consider so important that I teach them in class:

Public Sphere:

• Carlos (2007): Internet race and IQ debate: Andrew Sullivan Edition:): "Doug, the guy is also a perfect vector for promoting nitwit ideas through a credulous population...

• WTF happened to Brendan Nyhan? The braineater has eaten his brain: Josh Marshall: "There are several problems with this logic.: The first is that you are applying jury trial standards to what are political questions. You are also applying statutory standards where they do not exist. As a factual matter the obstruction question is not in doubt...

• Paul Krugman says that the public sphere—even the good part of the public sphere—has gone wrong because of the threat and the menace that is twitter: Paul Krugman: Monopsony, Rigidity, and the Wage Puzzle: "This discussion is taking place marks a kind of new frontier in the mechanics of scientific communication–and, I think, an unfortunate one...

Carlos (2007): Internet race and IQ debate: Andrew Sullivan Edition:): "Doug, the guy is also a perfect vector for promoting nitwit ideas through a credulous population...

WTF happened to Brendan Nyhan? The braineater has eaten his brain: Josh Marshall: "There are several problems with this logic.: The first is that you are applying jury trial standards to what are political questions. You are also applying statutory standards where they do not exist. As a factual matter the obstruction question is not in doubt...

Not quite true. It is what the Left New Dealers' consensus was. They had lost power in the U.S. But enough of them made it across the Atlantic to do a lot of good: Daniel Davies: "If you like the German social, political and economic model, it's worth remembering that what it really represents is the consensus of American opinion on how to build a stable non-Communist polity if you were starting from scratch, circa 1945..."

#shouldread

David Frum: 15 Criminal-Law Questions Surrounding the President: "Open questions...

Note to Self: J. Bradford DeLong Fall 2018 Schedule: https://www.icloud.com/numbers/0G9LA14Y90ziASotpvoQPx4Qw
For an appointment outside or to reserve a slot during office hours, send email to: delong@econ.berkeley.edu

Note to Self: Working on Today...:

• Computer Literacy: An Educational Experiment http://delong.typepad.com/teaching_economics/an-educational-experiment.html
• Last semester's grading
• Oxford Proposal: Macroeconomics: A Very Short Introduction
• Equitable Growth
• Books- Martha Wells- The Murderbot Diaries https://www.icloud.com/keynote/0OCCvTnS2wOyEF3hrNUALf0dQ

Very strongly recommended: Martha Wells: Artificial Condition: The Murderbot Diaries.

This is one scene: perhaps the best "tell, not show" scene I have read in a long time: Martha Wells: The Last Stand of the Four ComfortUnits of Ganaka Mining Pit: "In the corridor near the living quarters, I found the other ready room, the one for the ComfortUnits...

• A Question I Asked About "Separation of Powers" at the 2008 Computers, Freedom, and Privacy Conference, Omni Hotel, New Haven, CT: A question for Professors Balkin and Haq.... I would put the institutional breakdown's causes in the election of 1994 taught the Republican legislators of Capitol Hill that their jobs are at risk if they fail to support the president of their own party. Hence we now have all the defects of a parliamentary system--lock-step partisan support for the deeds of the executive--and none of its principal advantage which is the vetting of the executive by the experienced legislators of the ruling party...

It is now 20 years since David Brin wrote The Transparent Society. Book holds up very well, all things considering: CFP Panel on the Transparent Society: David Brin's Book Ten Years Later: Michael Froomkin:

The Transparent Society Ten Years Later : This year marks the 10th anniversary of the publication of David Brin's controversial book, "The Transparent Society". The book argues that in the face of the explosion of sensors, cheap storage, and cheap data processing we should adopt strategies of vision over concealment. A world in which not just transactional information, but essentially all information about us will be collected, stored, and sorted is, Brin says, inevitable. The only issue left to be decided is who will have access to this information; he argues that freedom, and even some privacy, are more likely to flourish if everybody - not just elites - has access to this flood of data. The book remains controversial and much-talked-about. The panel will explore how Brin's claims hold up ten years later and whether (or how far) we're on the road to a Transparent Society.

Here is my presentation:

Alexandra Petri: Rules for babies on the Senate floor: "With babies present, senators may be held to a higher standard than previously...

"How is Harvard like socialist Yugoslavia, comrade?" "I do not know: how is Harvard like socialist Yugoslavia, comrade?" "Like socialist Yugoslavia, the value of the outputs is less than the value of the input, comrade."

: Alma Mater Blogging...: Greg Mankiw's desire to move Harvard to someplace better adapted to human life than Massachusetts was triggered by:

John Holbo used to talk about “Dark Satanic Millian Liberalism“. But what he never said was that it has its origins in John Stuart Mill himself.

Here are three passages from Principles of Political Economy I find interesting:

• Jared Diamond on Easter Island's Collapse: Needless to say, most societies—or at least most societies that we are aware of because they hang around for long enough to leave stone, pottery, or papyrus trails—do not behave this way. They evolve a social institution called private property to give individuals both control over scarce and exhaustible resources and an incentive to ensure wise and balanced extraction and careful and efficient use. It appears that the Easter Island people somehow failed to do so...

• Warranted Stock Market Valuations and the Price-Earnings Equation Once Again: It can be shown http://delong.typepad.com/sdj/2007/05/a_teaching_note.html that the "right" way to value the stock market is with the price-earnings equation: P = E/[r - (1/θ - 1)ρ]. Here: (1) E are the earnings—the sustainable permanent cyclically-adjusted and correctly accounted for Haig-Simons earnings—paid on the index, (2) r is the appropriate real rate at which to discount cash flows of the riskiness of the stock market, (3) θ is the payout ratio of dividends to earnings, and (4) ρ is the wedge (which may be positive or negative) between the appropriate external real interest rate r and the internal rate of return the firm can earn on its reinvested earnings. If we are willing to assume that ρ is close to zero, than this equation is approximately: P/E = 1/r. The price-to-permanent earnings ratio is one divided by the market's expected discount rate. It's just worth pointing out that whenever the stock market is at valuation ratios that Gongloff and company consider "normal" then equities are an absolutely amazing deal relative to all kinds of bonds...

Monday Smackdown/Hoisted from the Archives (August 2015): "We Always Thanked Robert Lucas for Giving Us a... Monopoly" Over Valuable Macroeconomics: The extremely sharp Paul Romer gets something, I think, very very wrong...

Paul Krugman says that the public sphere—even the good part of the public sphere—has gone wrong because of the threat and the menace that is twitter: Paul Krugman: Monopsony, Rigidity, and the Wage Puzzle: "This discussion is taking place marks a kind of new frontier in the mechanics of scientific communication–and, I think, an unfortunate one...

Best shadow graduation speech I have seen in quite a while: Simon Kuper: My life tips for graduates: embrace your ignorance: "You are graduating almost entirely ignorant. This isn’t your fault...

• Bloomberg San Francisco Bureau at Pier 3: It is amazing what you can do with an old cargo terminal/wearhouse built out over San Francisco Bay... with a few coats of paint... and some hardwood flooring... and more miles of gigabit ethernet cabling than I have ever seen in my life... and teh scuba divers to lay the foundations for the elevators...