Grasping Reality on TypePad, by Brad DeLong

Paul Krugman: @paulkrugman: "The American Economic Association has a new discussion forum set up by Olivier Blanchard. First up is the question of whether low interest rates are leading to excessive risk-taking https://www.aeaweb.org/forum/311/have-low-interest-rates-led-to-excessive-risk-taking...

Paul Krugman tells us: Paul Krugman: @paulkrugman: "The American Economic Association has a new discussion forum set up by Olivier Blanchard. First up is the question of whether low interest rates are leading to excessive risk-taking https://www.aeaweb.org/forum/311/have-low-interest-rates-led-to-excessive-risk-taking..." So I mossed on over and left three comments: one on the forum, one on secular stagnation, and one on whether there is any reason to fear low interest rates:

Is There Any Reason to Fear Low Interest Rates?: Have low interest rates led to excessive risk taking?: I suspect that the right way to make the accurate point that this line of discussion is hunting for is to focus not on the amount of risk but on, rather, who is bearing the risk...

I think I have got it: Re: Scott Aaronson: It’s hard to think when someone Hadamards your brain: Frauchiger and Renner say: State |ψ>:

$ |\psi> = \frac{|00> + |01> + |10>}{\sqrt{3}} $

and Alice and Bob will measure the first and second qubits of this state in the basis {+,-}. There are three components to the state |ψ>, and in them:

Kevin Drum: Technology Is the Key to Success, But Probably Not the Technology You Enjoy: "I’d put it more bluntly: unless they’re forced to at the point of a metaphorical gun... service-sector managers are lazy... in a very specific way: they don’t really understand technology...

Hamilton Project: Place-Based Policies for Shared Economic Growth: "Depending on where they live, people across the United States experience drastically different economic outcomes...

Back in the 1990s we in the Clinton administration put Breyer on the Supreme Court in the belief that the Court needed somebody who genuinely understood antitrust. But the Republican justices have given him zero deference, even though he knows the issues and they do not. And this is an increasing problem: Fiona Scott Morton: [There is a lot to fix in U.S. antitrust enforcement today(https://equitablegrowth.org/there-is-a-lot-to-fix-in-u-s-antitrust-enforcement-today/): "Last month’s court decision allowing AT&T Inc. to acquire Time Warner Inc. is an example of the inability of our current system of courts and enforcement.... Judge Richard Leon demonstrated a lack of understanding of the markets, the concept of vertical integration, corporate incentives, and the intellectual exercise of forecasting what the unified firm would do... a poor decision...

Jan Bakker, Stephan Maurer, Jörn-Steffen Pischke, and Ferdinand Rauch: Trade and growth in the Iron Age: "The first millennium BC... the growth effects of one of the first major trade expansions... the systematic crossing of the open sea in the Mediterranean by the Phoenicians. A strong positive relationship between connectedness and archaeological sites suggests a large role for geography and trade in development even at such an early juncture in history...

Kate Bahn: @lipstickecon: "This FRB report concludes that declining prime-age LFP is due to the decline in "traditional blue-collar jobs" without deconstructing what made these 'traditional' jobs good-unions...

Henry Farrell: "There's a history: "behind Tucker Carlson's warning to Fox viewers that 'If you're looking to understand what's actually happening in this country, always assume the opposite of whatever they're telling you on the big news stations.' And it's the history of US conservative media...

SEC: Elon Musk Charged with Securities Fraud for Misleading Tweets: "On August 7, 2018, Musk tweeted to his 22 million Twitter followers that he could take Tesla private at $420 per share (a substantial premium to its trading price at the time), that funding for the transaction had been secured, and that the only remaining uncertainty was a shareholder vote...

Patrick Wallis, Justin Colson, and David Chilosi: Structural Change and Economic Growth in the British Economy before the Industrial Revolution, 1500–1800: "Male labor sectoral shares for England and Wales before 1800...

Xeni Jardin: UPDATE: "I faced it with carbs, coffee, hugs, spiritual practice, dogs, and weed." "I don’t know how to face the fact that a serial rapist who showed us his rape face is going to become a Supreme Court Justice today. And then he’s going to become a tool for impunity and harming women, people of color, but really—all of us. He’s going to hurt us...

Right-wing neoconservative nutboy Eliot Cohen gets this one right, I think. The reasons to get Kavanaugh on SCOTUS were (1) to demonstrate that the Republican Party rewarded being a Tea Party-Unfederalist apparatchik, and so (2) strengthen the Tea Party-Unfederalist social network. Those are not in the interest of anyone not already high up in that social network. Opposed are that (a) Kavanaugh is not near the top of those likely to be most effective as a conservative justice because he is not a first-rank persuasive intellect, (b) Kavanaugh is not near the top of those likely to be most effective as a conservative justice because he is mean and uncollegial, (c) Kavanaugh is not near the top of those likely to be most effective as a conservative justice because he does not have a judicial temperament, (d) Kavanaugh is not near the top of those likely to be most effective as a conservative justice because he too obviously lacks judicial principles, and (e) you take electoral damage from pushing him through. It is a mystery why he has not been withdrawn yet—especially with the July 1 entry on his calendar. Eliot Cohen focuses on (c): Eliot Cohen: The Republican Party Abandons Conservatism: "But if we expect steely resolve from a police officer confronting a knife-wielding assailant... we should expect stoic self-control and calm from a conservative judge, even if his heart is being eaten out.... The conservative virtues remain real virtues, the conservative insights real insights, and the conservative temperament an indispensable internal gyro keeping a country stable and sane...

Apropos of Wigner has many friends...: Renato Renner: It’s hard to think when someone Hadamards your brain: "Hi Scott: There are currently many who are blogging about our result, so I started to use my little quantum random number generator on my desk: outcome 0 means I don’t react to it, outcome 1 means I write a reply. For your blog the outcome was 1! Now, we are already in a situation that involves superposed agents...

Diane Coyle: The Long Arc of UK Productivity: "Nick Crafts has a compact book... about the trajectory of the British economy... Forging Aahead, Falling Behind and Fighting Back.... Nick’s somewhat idiosyncratic–but highly plausible–view that the seeds of the country’s post-world war 2 relative decline were sown in the institutions that enabled it to perform so well during the 19th century...

Judea Pearl: "Confounders, Colliders, and Mediators: As you surely know by now, mistaking a mediator for a confounder is one of the deadliest sins in causal inference and may lead to the most outrageous errors. The latter invites adjustment; the former forbids it..."

Antitrust law and policy is probably the most "relatively autonomous" piece of our whole legal system. The laws as enacted by Congress and signed by the President change rarely and slowly. How those laws are enforced—and how business is then conducted in the shadow of the possibility of resort to the courts for antitrust cases—changes much more radically and substantially. It is a dance of intellectual fashion, some serious benefit-cost analysis, and a great deal of lobbying and lobbying-funded motivated reasoning. My view is that the answers to the three questions Michael Kades suggests the FTC examine are: yes, no, and no, respectively. But it is very good that the FTC is thinking about this: Michael Kades: In re: Competition and Consumer Protection in the 21st Century: "Equitable Growth suggests that the hearings include the following three topics: 1. Is monopoly power prevalent in the U.S. economy?...

James Politi: Us Tariffs See Small Businesses Plead for Mercy as Trade War Bites: "One by one, they paraded before a panel of US administration officials this week to plead for mercy in the escalating trade war with Beijing, at a public hearing on the $200bn in new tariffs threatened by Donald Trump against imports from China...

It could have happened this way—a Heisenberg: the GOP's attempts to inoculate Kavanaugh against an accusation that Christine Blasey Ford had decided not to make pubic lead them to leak enough to reporters to convince CBF to come forward: Nicole Belle: Don't Kid Yourself. The GOP KNOWS Kavanaugh Tried To Rape Someone: "Blasey Ford... sends a letter to her representative... Anna Eshoo.... Eshoo passes Blasey Ford's letter on to Dianne Feinstein.... After several back-and-forths, Blasey Ford tells Feinstein's office she does not want to be put through testifying publicly...

Simon Wren-Lewis: Would a Corbyn Brexit Heal the Nation or Wound Labour?: "The answer I think is that they want to keep the minority of Labour voters who still favour Leave voting Labour.... They believe that BINO with sweeteners would convince enough Labour Leavers that Labour had got the job done, and these voters would not worry too much about the details...

Bayesian odds Brett Kavanaugh has a drinking problem at 70%: Josh Marshall: "Kavanaugh asks Sen Klobuchar multiple times if she's had alcoholic blackouts..." Jeet Heer: @HeerJeet: "For me, this exchange between Kavanaugh and Klobuchar was... I won't say triggering but it really made and impression and resonated...

How do you avoid the conclusion that Brett Kavanaugh is a CRAZYPANTS LIAR?: Brett Kavanaugh: “I may have met her, we did not travel in the same social circle, she was not a friend, not someone I knew...”

1. Björn Richter, Moritz Schularick, and Ilhyock Shim: The Costs of Macroprudential Policy: "Macroprudential measures['] effects on the core objectives of monetary policy to stabilise output and inflation are largely unknown.... The output costs of changes in maximum loan-to-value ratios are rather small.... Such policies successfully reduce household and mortgage credit growth.... Central banks could be in a position to use macroprudential instruments to manage financial booms without interfering with the core objectives of monetary policy in a major way...

2. Mark Thoma: C.V.

3. Fandango Restaurant: "Pacific Grove...

4. Brett Kavanaugh

   • Frank Wilhoit: [The Travesty of liberalism1709279: "Conservatism consists of exactly one proposition, to wit: There must be in-groups whom the law protects but does not bind, alongside out-groups whom the law binds but does not protect
   • Brad DeLong: Why Would Anybody Sane Ever, Ever Choose Brett Kavanaugh Over Amy Barrett?: "Amy Barrett has faith and principles: they do not know what the key issues will be 20 years from now, and they are scared to appoint somebody who may turn out to be like Justices Kennedy and Souter, actually have principles and faith, and so go off the reservation...
   • Stephanie Mencimer: The Many Mysteries of Brett Kavanaugh’s Finances: "Who made the down payment on his house? How did he come up with $92,000 in country club fees?...'"
   • Wikipedia: Amy Barrett
   • Wikipedia: Brett Kavanaugh
   • Neal Katyal: @neal_katyal: "Regardless of where one stands on the Kavanaugh nomination... with his former clerks, his mentoring and guidance is a model for all of us in the legal profession...
   • Paul Krugman: @paulkrugman: "The way law professors rushed to endorse Kavanaugh—who got his career start pursuing conspiracy theories...
   • Stephanie Kirchgaessner and Jessica Glenza: 'No Accident' Brett Kavanaugh's Female Law Clerks 'Looked like Models', Yale professor Told Students: "'I have no reason to believe he was saying, "Send me the pretty ones", but rather that he was reporting back and saying, "I really like so and so", and the way he described them led them to form certain conclusions"...

5. CIA: Soviet Jokes for the DDCI

6. Urban Dictionary: UHB: "Comes from the film Metropolitan in a bar scene where two young republicans define themselves as cultured post-modern upper-middle class sophisticates; thus, Urban Haute Bourgeoisie, or UHB. 'That girl won't date UHB, she's strictly prole; dating a frickin' electrician!'...

7. Sententiae Antiquae: Tell Me Aristotle, Why Do We Have Butts?

8. Wikipedia: Ken Ribet

9. Wikipedia: Lisa Goldberg

10. Beatrice Cherrier: Theory Vs Data, Computerization, Old Wine and New Bottles: Morgenstern and Econometric Society Fellows, 1953: "Morgenstern proposed that candidates be required to 'have done some econometric work in the strictest sense' and be 'in actual contact with data they have explored and exploited for which purpose they may have even developed new methods'...

11. James Davis Nicoll: Why I Don't Think Lunar Catapults Will Be Useful Weapons Against Targets on Earth: "If the catapults were able to fire stuff at velocities comparable to Earth's escape velocity... the energy content of the incoming rocks is something like 6x10^7 J/kg. For comparison, fission peace enhancement devices are good for about 9x10^12 J/kg, ims, and fusion PED for 8x10^14 J/kg. It still compares well to TNT's 4.6x10^6 J/kg but note we are not talking the five to seven orders of magnitude between atomic and chemical but one order of magnitude...

12. Ruthanna Emrys and Anne M. Pillsworth: Old Powers Rising: Nadia Bulkin’s “Pro Patria”: "The book Fileppo puts on Joseph’s desk is leatherbound, redolent of the dungeon. The King in Yellow. Sounds like a child’s book, and Joseph immediately hates the thing. Adela, however, would like to read it. Fileppo looks over dark-skinned Adela and remarks that the book hasn’t been translated yet. Grimly she says she doesn’t need it translated. She knows their former conquerors’ tongue...

13. Center for Effective Global Action

Kate Bahn sends us to NPR's Planet Money: Kate Bahn: My Girl Joan Robinson: "My girl Joan Robinson is discussed in this episode of @planetmoney on underrated economists https://www.npr.org/sections/money/2018/08/22/641002632/the-underrated-economists...

How much of this correlation is causal? And how much is associational? I do not think we really know, in spite of studies of the build-out of broadband in France. The U.S. is a different country. Nevertheless, I for one think that it is long past time to put universal broadband in the same bucket as basic sanitation and rural electrification—as something that is part of the citizens' share of being an American: Delaney Crampton: Why accessibility to broadband matters in reducing economic inequality in the United States: "A strong correlation between household income and in-home connectivity—a pattern that persists across both rural and economically depressed urban communities...

Kieran Healy: @kjhealy: "Gazing around that Friday afternoon, they found themselves longing for those far-off days when sky above the port was the color of television, tuned to a dead channel...

Cosma Shalizi (2009): Peter Spirtes, Clark Glymour and Richard Scheines, Causation, Prediction and Search: "Re-read as part of preparing for my lecture on casual discovery. I spent much of the winter of 2000 working my way through the first edition, and wound up completely imprinted on its way of thinking about what causal relationships are, how we should reason about them, and how we can find them from empirical evidence... http://www.stat.cmu.edu/~cshalizi/350/lectures/31/lecture-31.pdf...

.... On causation and prediction it now has an equal in Pearl's book (and I admit the latter looks prettier), but on search, that is, on discovering causal structure, there is still no rival. Their key observation is that even though correlation does not imply causation, correlations must have causal explanations. (This idea goes back to Herbert Simon, and Hans Reichenbach [see above] at least.)

So patterns of correlations, among more than just two variables, constrain what causal structures are possible. Sometimes they constrain the causal structure uniquely, in other cases it's only partially identified by the dependencies. And of course there is always the possibility of making a mistake with limited data. But none of this is any different for causal discovery than it is for any other form of statistical inference. The great contribution of this book is showing that causal discovery can be just another learning problem. They have transformed metaphysical misery into ordinary statistical unhappiness...

#shouldread

Thomas A. Russo (2008): Credit Crunch: Where Do We Stand?: "The recent market has been, in many respects, worse than it was in August. The lack of confidence in pricing has led most buyers away from mortgage products, and there are few buyers in the market with both the balance sheet and expertise to understand any 'bargains'...

Matthew Yglesias: @mattyglesias: "In Bush v Gore, Citizens United, Shelby County, throwing out Medicaid expansion, etc the 21st Century SCOTUS has mostly been an accelerant of democratic decline rather than a safeguard and the sooner people realize that the better...

2018Q2GDP: Paul Krugman: @PaulKrugman: "I'm still on vacation, but did see this morning's economic number. Lots of stuff to say about why it's no big deal, but this picture captures most of it...

Arindrajit Dube and friends have a pick-up discussion on how to characterize the impact of employer monopsony power: Arindrajit Dube: @arindube: "I think growing evidence suggets "laissez faire" equilibrium is monopsonistic. So shocks like de-unionization, outsourcing and eroding wage norms can push down pay in ways hard to understand with competitive lab mkts. But the shock may not be increased concentration itself...

IMHO, this is closely akin to William Julius Wilson's "the declining significance of race"—i.e., the rising significance of class: Robert Manduca: How rising U.S. income inequality exacerbates racial economic disparities: "In 1968... median African American family income was 57 percent of the median white American family income. In 2016, the ratio was 56 percent. The utter lack of progress is striking...

Duncan Black: Remember When Bill Clinton Ended Welfare As We Know It And Took That Off The Table Forever?: "There's barely anything resembling 'welfare' (aside from rich people welfare) but that doesn't stop them: '(CNN) Republican Rep. Jason Lewis has repeatedly demeaned recipients of welfare and government assistance, calling them "parasites" and "scoundrels," and said the black community had "traded one plantation for another.' Conservative white people believe there's a secret welfare system for black people. You cannot convince them otherwise, no matter what you do..."

"[All of] his college acquaintances who weren't part of the hard-partying prep school crew though [Kavanaugh] was an incredible ass----. And he was an ass---- when he was working for Ken Starr and an ass---- when he was part of hacking and stealing Democrats' emails in the 2000s. And an ass---- as a judge, e.g. the SeaWorld case that Steve Greenhouse wrote about recently. That's the word David Rothkopf uses, and I think it's the word that all information, even dubious freshman memories, supports..."

Wigner has many friends, and they can disagree: Daniela Frauchiger and Renato Renner: Quantum Theory Cannot Consistently Describe the Use of Itself. Lidia del Rio: Journal club: Frauchiger-Renner No-Go theorem for Single-World Interpretations of Quantum Theory: "In this talk I will go over the recent paper by Daniela Frauchiger and Renato Renner, "Single-World Interpretations of Quantum Theory Cannot Be Self-Consistent" (arXiv:1604.07422)...

...The paper introduces an extended Wigner's friend thought experiment, which makes use of Hardy's paradox to show that agents will necessarily reach contradictory conclusions-unless they take into account that they themselves may be in a superposition, and that their subjective experience of observing an outcome is not the whole story. Frauchiger and Renner then put this experiment in context within a general framework to analyse physical theories. This leads to a theorem saying that a theory cannot be simultaneously (1) compliant with quantum theory, including at the macroscopic level, (2) single-world, and (3) self-consistent across different agents. In this talk I will (1) describe the experiment and its immediate consequences, (2) quickly review how different interpretations react to it, (3) explain the framework and theorem in more detail...

Scott Aaronson: It’s Hard to Think When Someone Hadamards Your Brain: "So: a bunch of people asked for my reaction to the new Nature Communications paper by Daniela Frauchiger and Renato Renner, provocatively titled 'Quantum Theory Cannot Consistently Describe the Use of Itself'...

Hal Varian: Bots vs. Tots: "US labor market is already beginning to tighten. Expect a tight labor market for the next 15-25 years. Retirees continue to consume. Robots don’t consume. Labor supply is growing more slowly than labor demand. Old intuitions no longer helpful...

Equitable Growth: TONIGHT! Join us for #ResearchOnTap: Economic mobility: The impact of race and place, ft. #EGgrantee(s) @InequalityHKS’s Ellora Derenoncourt, @DavidGrusky & @TrevonDLogan w/ @KA_Marketplace: 919 19th Street NW, Washington, DC 20006 6-8 PM

Josh Marshall: @joshtpm: "Even before this came up, Brett Kavanaugh seems to lie a lot. The stuff with the Manny Miranda hacking scandal is what really stood out to me. Aside from denying the central accusations, he’s even more obviously lying about the ‘Renate alumni’ stuff...

Robert E. Litan and Ian Hathaway: Is America Encouraging the Wrong Kind of Entrepreneurship?: "William Baumol... idea... that may help explain America’s productivity slump. Baumol’s writing raises the possibility that U.S. productivity is low because would-be entrepreneurs are focused on the wrong kind of work...

Will McGrew directs us to David Leonhardt's rant against the mainstream media's addiction to gauging the overall health of the economy by statistical measures that are relevant only to the rich: Will McGrew: Weekend Reading: “Earnings Inequality” Edition: "Criticizing the relevance of the economic data the government makes available, David Leonhardt echoes an argument...

I have been a "China is unlikely to keep its model going for more than another five years—a decade tops" perma-bear since 1988. All I understand is that I do not understand the Chinese economy. I wish I did understand it: Arvind Subramanian and Josh Felman: R.I.P. Chinese Exceptionalism?: "Over the past few decades, China’s growth has appeared to violate certain fundamental laws of economics.... China’s debt keeps on rising.... For any normal country, the build-up of extensive surplus capacity would lead to sharp declines in investment and GDP growth. And that, in turn, would produce financial distress, followed by a crisis if the warning signs were ignored. But China has had a different experience...

Simon Wren-Lewis: Another Lesson of the GFC Unlearnt: The Consensus Assignment Is Dead: "Martin writes: 'There was broadly shared understanding.... Fiscal and budgetary policy should be set to achieve microeconomic and distributive goals, and the desired share of the state in the economy; while monetary policy should take care of stabilising aggregate demand.'... This is what I call the Consensus Assignment...

On Kavanaugh, Alexandra Petri is on fire: Alexandra Petri: The Kavanaugh Accusations Are Horseplay, You Say?: "To comment, I have a horse (not that Kavanaugh was even at the party, of course, of course): 'To Whom It May Concern: I am a horse. I know horseplay. This, my friend, is not horseplay. Ask yourself: Was someone frolicking in a beautiful, verdant field? Was a mane billowing in the breeze? Did you feel a stirring of joy in your heart for the first time in months, like a crocus bursting from the winter soil? Was a long tail flapping freely in the breeze? Was it unbelievably majestic? Was Misty of Chincoteague there?...

Statement from James Roche: "I was Brett Kavanaugh's roommate at Yale University in the Fall of 1983. We shared a two-bedroom unit in the basement of Lawrence Hall on the Old Campus. Despite conditions, Brett and I did not socialize beyond the first few days of freshman year. We talked at night as freshman roommates do and I would see him as he returned from nights out friends. It is from this experience that I concluded that although Brett was normally reserved, he was a notably heavy drinker, even by the standards of the time...

I confess that I have been procrastinating on various things. Why? Because I have been unable to tear my eyes away from the multiple train crash that is the confirmation process... the career... the life of Brett Kavanaugh. My view of this is a third- or fourth-hand view. It is the view of Georgetown Prep from Sidwell Friends. And it may well be wrong. But I think that it is right. So, with that warning, here goes:

The first... oddity... is Brett Kavanaugh‘s reaction to Christine Blasey Ford. It really ought to have been something like this:

Women of Yale: Open Letter from Women of Yale in Support of Deborah Ramirez: "We stand behind Deborah Ramirez, Yale ’87, and with Dr. Christine Blasey Ford. These two women have come forward with grave allegations against Supreme Court nominee Brett Kavanaugh, a Yale graduate...

c

• "Find them, French them, Feel them, Finger them, F-ck them, Forget them...:
• FFFFFFourth of July
• Summer of 100 Kegs
• What Happens at Georgetown Prep, Stays at Georgetown Prep
• Devil's Triangle
• Bowling Alley Assault
• Rehobeth Beach Police Fan Club
• Boofing
• Beach Week Ralph Club
• 100 Keg Club

One does wonder just what the frack the Jesuits running Georgetown Prep thought they were doing...

Paul Krugman: The Careerism and De Facto Soft Corruption of the Center_: "given Kavanaugh's record (sexual assault aside) and the Whelan stunt it's now clear that the right-wing judicial establishment is full of charlatans and cranks.... What's different is how respectfully the judicial crazies have been treated by the non-right-wing legal establishment...

Duncan Black: Who Talks Like This: "I have some opinions about elite law-and The Law as a "scholarly" endeavor-which I might share sometime after a few lines of coke (joke), but something which drives me nuts is how they all talk about each other in terms of 'giant intellects' and 'intellectual prowess' and 'my friend, the jurist, has always impressed me with his deep intellect'...

Rob Johnson and George Soros: A Better Bailout Was Possible: "A critical opportunity was missed when the burden of post-crisis adjustment was tilted heavily in favor of creditors relative to debtors.... When President Barack Obama’s administration arrived, one of us (Soros) repeatedly appealed to Summers... [for] equity injection into fragile financial institutions and... writ[ing] down mortgages to a realistic market value.... Summers objected that ... such a policy reeked of socialism and America is not a socialist country...