Grasping Reality on TypePad, by Brad DeLong

Howard Shelanski and Michael Kades: Judge Kavanaugh-Would He Increase the Divide Between the Public and Judicial Debate Over Antitrust Enforcement?: "Over the past decade, the Supreme Court has, with one exception that we discuss below, followed a path of reduced enforcement, reflected in decisions weakening prohibitions against vertical restraints...

Benjamin Page and William Gale: CBO estimates imply that TCJA will boost incomes for foreign investors but not for Americans: "CBO estimates that TCJA will increase U.S. GDP by 0.5 percent in 2028.... Most of that additional capital will be financed by foreigners... net payments of profits, dividends, and interest to foreigners also will rise... boost GNP by just 0.1 percent in 2028.... To maintain that larger capital stock a larger share of output must be devoted to offsetting depreciation.... Thus, long-run incomes for Americans as measured by NNP will be more or less unchanged by the TCJA...

Richard Thaler: The Power of Nudges, for Good and Bad: "All nudging should be transparent and never misleading.... It should be as easy as possible to opt out.... There should be good reason to believe that the behavior being encouraged will improve the welfare of those being nudged.... Government teams in Britain and the United States that have focused on nudging have followed these guidelines scrupulously. But the private sector is another matter. In this domain, I see much more troubling behavior...

Brad DeLong: Gee, I Have Argued Myself From Half-Agreeing With @EconMarshall To 90% Agreeing With Him, Haven’t I?_:

Suresh Naidu: Sorry that came out wrong, deleted. Straightforward: a substantial amount of economic power and inefficiency is not eliminated by deconcentration/free entry. Not clear, lots of problems are made worse by free entry/competition. Low margins mean harder to unionize. Innovation is done by big firms. On simple efficiency grounds things can get worse in market with advantageous selection (eg loans) or with any negative ext. It depends!

Mike Konczal: If we are worried about margins being too low, boy do I have exciting news for you:

Sure, but between that, Tobin's Q, "profit share", consistent rate of return under declining real rates, and the break of investment and profitability, something is broken. One can contest any of the individual methods, but together they paint a clear picture.

Suresh Naidu: The " always more competition" fix implies we want to expand output but it is not clear we do in every market (eg airline monopoly might be 10th best emissions regulation).

(((E. Glen Weyl))): 10th best reasoning is fine for policy technocrats, but I think a pretty poor basis for thinking about imaginaries for broad social change and democratic movement building. Imaginaries that move us beyond monopolistic corporate forms, but using market mechanisms, seem promising. I am talking about building coalitions and democratic discourse rather than just being technocratic experts.

Note to Self: WTF?!?! At a ten-percent pre-tax social return to investment, that would require a 1 trillion—a 5%-point of national income—permanent upward jump in the annual flow of investment into America. Given that it looks like Trump is raising the annual deficit by 400 billion, that would require a 1.4 trillion—a 75-point of national income—permanent upward jump in the sum of annual private savings plus the annual trade deficit. On what planet and on what definition of "reasonable" is it "reasonable" to argue that Trump's tax cuts are going produce such a thing? Greg Mankiw: The Bad Economics Behind Trump's Policies: "One might reasonably argue that Trump’s tax cuts will increase growth over the next decade by as much as half a percentage point per year...

The so brilliant as to be goddess-like Chye-Ching Huang gets this one, I think, wrong: In response to: Jared Bernstein: "For the [Trump-McConnell-Ryan tax] cuts to have more than near-term growth impacts, they’d have to boost biz investment a lot more than we’ve seen so far, though these are early days. Both WSJ and Slate show “muted” investment results..." She writes: Chye-Ching Huang: "My concern is the frame that "growth' is what we should be focused on. If what we care about is how workers are doing—and GOP lawmakers claimed the 2017 tax law would help workers—we should focus on the metric that directly shows how they're doing! If the claimed point of tax cuts for corporations was to raise wages, we should first and foremost look at real wage rates to assess the results...

But those economists shilling for Trump-McConnell-Ryan committed not just to wage increases, but to a particular mechanism for wage increases: (1) U.S. a small open economy -> (2) tax cuts produce a huge jump in investment -> (3) faster growth -> (4) factor shares revert -> (5) higher wages.

To see whether this argument makes sense we can—and should—look at this causal mechanism at every one of its five steps.

That is the current question—would (small) minimum wage increases have no effect on employment because labor-supply curves are steep, or would they boost employment by curbing employers with monopsony power from pushing both wages and employment below their competitive equilibirum values? Yet you would not know it from the very sharp and good-hearted ex-New York Times labor beat reporter Steven Greenhouse. What is he doing? He is, I think, reflexively saying "both sides!": Steven Greenhouse: "Some argue that it's foolish to support a higher minimum because it could reduce employment. But there's a huge debate among economists on this. One school—see David Neumark—finds that a higher minimum reduces employment. The other—see Arin Dube—finds little effect on employment...

Now this is simply wrong. The majority of economists believe that raising the minimum wage from its current level would significantly boost the incomes of the working poor and have little adverse effect on employment. A large minority of economists believe that raising the minimum wage would actually increase employment—that employers currently use their monopsony power to push wages and employment below their competitive equilibrium values, and that a higher minimum wage would reduce their ability to do this and so boost both. The majority and the large minority all, however, agree that there is uncertainty here. It is only a small minority of economists who follow David Neumark on this—who are confident that a higher minimum wage now would have a noticeable negative effect on employment. Thus Steve gets it wrong.

Barry Ritholtz: What Minimum-Wage Foes Got Wrong About Seattle: "An initial study said the increase to $15 would cost workers jobs and hours. That didn’t happen.... The increase was an 'economic death wish' that was going to tank the expansion and kill jobs, according to the sages at conservative think tanks. The warnings were as unambiguous as they were specific...

1. Comment of the Day: Graydon: Insecurity Management: "I think you're missing the central thing about Drake's writing. It is not so much that, yeah, these are not the best circumstances and our feels are in abeyance; that happens, that's depicted. But among that depiction you get what I think of as the essential Drake thing, which is a vehicle crew. They may not like each other much; they may not, in some senses of the word, trust one another. But they are entirely predictable to one another, and reliable...

1. Jon Schwarz: The 10 Most Awful Articles in the Weekly Standard’s Short Life: "Honorable Mention. Self-Flattering Quote by Anonymous Weekly Standard Minion [David Brooks], 2018: This isn’t an article, but deserves to be included here due to its timeless, crystalline beauty: According to a nameless Weekly Standard staffer, the magazine’s original masthead constituted 'one of the greatest collections of writerly talent ever put together outside the New Yorker. What makes this so perfect is that it shows the Weekly Standard training its keen power of observation upon itself.... Tucker Carlson, John Podhoretz and Charles Krauthammer somehow become James Thurber, Dorothy Parker and E.B. White. No matter the subject, the Weekly Standard assessed it with the exact same hubris, blindness, and lunatic hyperbole...

2. Ray Dalio: Principles for Navigating Big Debt Crises

3. PS editors: PS Commentators’ Best Reads in 2018: "Project Syndicate contributors once again share some of the books that resonated with them the most over the past year. From sweeping histories to ambitious new works of fiction, readers of all tastes and persuasions should find something to pique their interest in this year’s selection...

4. Barry Ritholtz: How to Use Behavioral Finance in Asset Management, Part I: "Annual Mea Culpas: I learned this from Ray Dalio about a decade ago: every year I make a list of what I got wrong and what I learned from the experience.... Acknowledging your mistakes...

5. Cosma Shalizi (2007): g, a Statistical Myth: "Factor analysis is handy for summarizing data, but can't tell us where the correlations came from; it always says that there is a general factor whenever there are only positive correlations. The appearance of g is a trivial reflection of that correlation structure. A clear example, known since 1916, shows that factor analysis can give the appearance of a general factor when there are actually many thousands of completely independent and equally strong causes at work...

6. Sean Illing: What Is Fascism? Yale Philosopher Jason Stanley Explains How It Works: "This is probably a good time to pivot to the glittering elephant in the room: Donald Trump. Is he a fascist?" Jason Stanley: "I make the case in my book that he practices fascist politics. Now, that doesn’t mean his government is a fascist government. For one thing, I think it’s very difficult to say what a fascist government is...

7. Raymond Fisman, Keith Gladstone, Ilyana Kuziemko, and Suresh Naidu (2017): Do Americans Want to Tax Capital?: Evidence from Online Surveys: "A vast theoretical literature in public finance has studied the question of the desirability of capital taxation. Distinct from questions of the optimality of taxing wealth is whether it is politically feasible. We provide, to our knowledge, the first investigation of individuals’ preferences over jointly taxing income and wealth, via a survey on Amazon’s Mechanical Turk...

8. Wikipedia: Tzoah Rotachat

9. Carlos Lozada: Anti-Trump Conservatives Want to Reverse the GOP’s Destruction. But They Helped Light the Fuse: "What kind of conservatism can survive, let alone thrive, in American politics today? The question hangs over the Never Trump volumes.... Flake... keeps the faith. 'With hard work... and maybe a little luck, we will right this ship'... #orangehairedbaboons #moralresponsibility

10. Megan Burbank: A "neat" thing I have learned from writing food reviews: "There is nothing more upsetting to some people than a woman saying she ate a lot without caging it in guilt or apology. It was truly weird to discover people will actually chastise you for saying you ate a lot IN A FOOD REVIEW, where eating is, you know, essential. The absurdity mounts: the first time this happened to me it was on a story where I said I biked 7 miles before eating (and after). Look, no one should be food-shamed, I have so little time for it, and fitness is not a virtue, but I biked 14 miles. I gotta refuel! The second was on a story where I said I ate three pastries and was pretty gleeful about the whole thing. but if somebody enjoying what they eat is personally upsetting...

11. Mariana Zerpa: Short and Medium Run Impacts of Preschool Education: Evidence from State Pre-K Programs: "I also provide a discussion of two local average treatment effects under different counterfactual child care arrangements. I find implied effects that are very large, although not very different from the estimates found in the literature on Head Start. This finding highlights the relevance of estimating intention- to-treat effects on the full affected cohorts.... The relevance of externalities and peer effects in early childhood experience is an open question that is part of a promising research agenda...

12. Benjamin F. Jones and Benjamin A. Olken: Do Leaders Matter?: National Leadership and Growth Since World War II: "We use deaths of leaders while in office as a source of exogenous variation in leadership, and ask whether these plausibly exogenous leadership transitions are associated with shifts in country growth rates. We find robust evidence that leaders matter... strongest in autocratic settings where there are fewer constraints on a leader’s power...

13. Matthew Yglesias, Ezra Klein, and Dylan Matthews: 2020 Democratic Nomination Predictions: Who’s Overrated and Underrated: "Nobody outside Amy Klobuchar’s state knows who the senior senator from Minnesota is, except for hardcore political junkies. But here’s the thing that hardcore political junkies know about her: She’s probably the most popular politician in America.... Even though Klobuchar isn’t well-known, she clearly has some political skills.... To the extent that Democrats want to put their various factional disputes aside and just try to win the damn election, Klobuchar smells a lot like the electability candidate...

Matthew Yglesias, Ezra Klein, and Dylan Matthews: 2020 Democratic Nomination Predictions: Who’s Overrated and Underrated: "Nobody outside Amy Klobuchar’s state knows who the senior senator from Minnesota is, except for hardcore political junkies. But here’s the thing that hardcore political junkies know about her: She’s probably the most popular politician in America.... Even though Klobuchar isn’t well-known, she clearly has some political skills.... To the extent that Democrats want to put their various factional disputes aside and just try to win the damn election, Klobuchar smells a lot like the electability candidate...

#shouldread

Carlos Lozada: Anti-Trump Conservatives Want to Reverse the GOP’s Destruction. But They Helped Light the Fuse: "What kind of conservatism can survive, let alone thrive, in American politics today? The question hangs over the Never Trump volumes.... Flake... keeps the faith. 'With hard work... and maybe a little luck, we will right this ship'...

Comment of the Day: Graydon: Insecurity Management: "I think you're missing the central thing about Drake's writing. It is not so much that, yeah, these are not the best circumstances and our feels are in abeyance; that happens, that's depicted. But among that depiction you get what I think of as the essential Drake thing, which is a vehicle crew. They may not like each other much; they may not, in some senses of the word, trust one another. But they are entirely predictable to one another, and reliable. And it's that obligation of reliability that lets people get their head out of hell, whether as imperfectly as Danny Pritchard does it or as entirely as the protagonist of Redliners does. (You can see much the same flavour of reliable between Gunnar and Brennu-Njáll.)...

Raymond Fisman, Keith Gladstone, Ilyana Kuziemko, and Suresh Naidu (2017): Do Americans Want to Tax Capital?: Evidence from Online Surveys: "A vast theoretical literature in public finance has studied the question of the desirability of capital taxation. Distinct from questions of the optimality of taxing wealth is whether it is politically feasible. We provide, to our knowledge, the first investigation of individuals’ preferences over jointly taxing income and wealth, via a survey on Amazon’s Mechanical Turk...

Sean Illing: What Is Fascism? Yale Philosopher Jason Stanley Explains How It Works: "This is probably a good time to pivot to the glittering elephant in the room: Donald Trump. Is he a fascist?" Jason Stanley: "I make the case in my book that he practices fascist politics. Now, that doesn’t mean his government is a fascist government. For one thing, I think it’s very difficult to say what a fascist government is...

Cosma Shalizi (2007): g, a Statistical Myth: "Factor analysis is handy for summarizing data, but can't tell us where the correlations came from; it always says that there is a general factor whenever there are only positive correlations. The appearance of g is a trivial reflection of that correlation structure. A clear example, known since 1916, shows that factor analysis can give the appearance of a general factor when there are actually many thousands of completely independent and equally strong causes at work...

Barry Ritholtz: How to Use Behavioral Finance in Asset Management, Part I: "Annual Mea Culpas: I learned this from Ray Dalio about a decade ago: every year I make a list of what I got wrong and what I learned from the experience.... Acknowledging your mistakes...

1. Comment of the Day: Cervantes: There's No Process: "Individual-1 told Mnuchin to do something to talk up the stock market and Mnuchin thinks this will have that effect. So he's an idiot. That's basically all there is to it. Possibly Individual 1 suggested these specific steps, possibly they're Mnuchin's idea. Doesn't matter since they're both idiots anyway...

1. Vastly superior to Tom Holland—and vastly, vastly superior to the likes of Niall Ferguson—on the decline and fall of the Roman Republic: Edward J. Watts: Mortal Republic: How Rome Fell into Tyranny https://books.google.com/books?isbn=0465093825: "If the early and middle centuries of Rome’s republic show how effective this system could be, the last century of the Roman Republic reveals the tremendous dangers that result when political leaders cynically misuse these consensus-building mechanisms to obstruct a republic’s functions. Like politicians in modern republics, Romans could use vetoes to block votes on laws, they could claim the presence of unfavorable religious conditions to annul votes they disliked, and they could deploy other parliamentary tools to slow down or shut down the political process if it seemed to be moving too quickly toward an outcome they disliked... #books #history

2. Hyman Minsky: [Stabilizing an Unstable Economy](https://delong.typepad.com/hyman-minsky-stabilizing-an-unstable-economy-2008.pdf" title="hyman-minsky-stabilizing-an-unstable-economy-2008.pdf) #books #finance #macro

3. Aline Bütikofer, Sissel Jensen, and Kjell G. Salvanes: The Role of Parenthood on the Gender Gap Among Top Earners: "A recent literature argues that a ‘motherhood penalty’ is a main contributor to the persistent gender wage gap in the upper part of the earnings distribution. Using Norwegian registry data, this column studies the effect of parenthood on the careers of high-achieving women relative to high-achieving men in a set of high-earning professions. It finds that the child earnings penalty is substantially larger for mothers with an MBA or law degree than for mothers with a STEM or medical degree... #gender #equitablegrowth

4. The Committee for a Responsible Federal Budget is only one of many organizations that bought the snakeoil from Paul Ryan. We have a significantly less responsible federal budget as a consequence: Michael Grunwalde: Paul Ryan's Legacy of Red Ink: "The speaker of the House’s reputation as a budget hawk has somehow survived his actual record... #orangehairedbaboons

5. Trump Is a Bully, But He Is Your Bully—He is going to bully corporations into giving you good jobs...

6. Paul Krugman: "Disputes over trade can seem gentlemanly because economists, at least, mostly talk sense. Disputes over macroeconomic policy can't, because they don't. Sad!

7. Menzie Chin: On Recession: Hassett, Prediction Markets, and Markets: "Council of Economic Advisers Kevin Hassett said he is willing to bet, based on the economy and indicators, that there will not be a recession any time soon.... My first observation is  that Hassett’s statement regarding current growth rates surprising. Atlanta Fed GDPNow does indicate 2.9% growth SAAR in 2018Q4 (12/18), but as of 12/14 the New York Fed’s nowcast indicates 2.42% growth, while the St. Louis Fed nowcast is 2.65%. Macroeconomic Advisers today nowcasts 2.6%, latest Goldman Sachs is 2.7% (12/17). I don’t know of any nowcasts for over 3% for 2018Q4 Q/Q SAAR.... The second observation is that the prediction market’s odds on a recession over the next year is not as low as suggested by Hassett’s comments.... The current probability of recession using the term spread is in the 15% range, a bit less than the 30% or so from the prediction markets...

8. Pseudoerasmus: Labour repression & the Indo-Japanese divergence: "I illustrate the relevance of labour relations to economic development through the contrasting fortunes of India’s and Japan’s cotton textile industries in the interwar period, with some glimpses of Lancashire, the USA, interwar Shanghai, etc....

9. John Maynard Keynes: Essays in Persuasion

10. John Maynard Keynes: Essays in Biography

11. John Steinbeck: The 1930s: A Primer: "Except for the field organizers of strikes, who were pretty tough monkeys and devoted, most of the so-called Communists I met were middle-class, middle-aged people playing a game of dreams. I remember a woman in easy circumstances saying to another even more affluent: “After the revolution even we will have more, won’t we, dear?” Then there was another lover of proletarians who used to raise hell with Sunday picnickers on her property. I guess the trouble was that we didn’t have any self-admitted proletarians. Everyone was a temporarily embarrassed capitalist. Maybe the Communists so closely questioned by investigation committees were a danger to America, but the ones I knew--at least they claimed to be Communists--couldn’t have disrupted a Sunday-school picnic. Besides they were too busy fighting among themselves...

12. Robert Feenstra, Hong Ma, Akira Sasahara, 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 the US employment, the job-creating effect of exports has receive much less attention. This column employs two approaches—an instrumental variable regression analysis and a global input-output approach—to argue that the negative effects of import competition on US employment are largely balanced out once the country’s job-creating export expansion is taken into account....

13. This by the very sharp Henry Farrell seems to me to be largely wrong. Farrell thinks that parties, plural, became "unwilling to compete for voters across tricky political issues". I see it as right-wing party, singular, taking the neo-fascist turn to which the system was always vulnerable—winning mass support for policies of plutocracy and kleptocracy by mobilizing fear and hatred of a distinct and sinister internal and external other. Four times in the past hundred yeras have we seen this in the United States. Teddy Rooevelt vs. the Malefactors of Great Wealth, Ike Eisenhower vs. the McCarthyites, and Richard Nixon's Flaws vs. Richard Nixon and Pat Buchanan were three earlier episodes. We won through because of conservative elitss that valued liberty and an open society. We may win through again: Henry Farrell: The Hollowing Out of Democracy: "There are strong similarities between what is happening in the United States, Hungary, the United Kingdom, and France... where democracy is backpedaling rapidly, such as the Philippines. This is the product both of common shocks... and of cross-national reinforcement... the family resemblances are undeniable. What Davies arguably gets wrong though is the significance of these changes...

Jon Schwarz: The 10 Most Awful Articles in the Weekly Standard’s Short Life: "Honorable Mention. Self-Flattering Quote by Anonymous Weekly Standard Minion [David Brooks], 2018: This isn’t an article, but deserves to be included here due to its timeless, crystalline beauty: According to a nameless Weekly Standard staffer, the magazine’s original masthead constituted 'one of the greatest collections of writerly talent ever put together outside the New Yorker. What makes this so perfect is that it shows the Weekly Standard training its keen power of observation upon itself.... Tucker Carlson, John Podhoretz and Charles Krauthammer somehow become James Thurber, Dorothy Parker and E.B. White. No matter the subject, the Weekly Standard assessed it with the exact same hubris, blindness, and lunatic hyperbole...

This by the very sharp Henry Farrell seems to me to be largely wrong.

Farrell thinks that parties, plural, became "unwilling to compete for voters across tricky political issues". I see it as right-wing party, singular, taking the neo-fascist turn to which the system was always vulnerable—winning mass support for policies of plutocracy and kleptocracy by mobilizing fear and hatred of a distinct and sinister internal and external other.

Four times in the past hundred yeras have we seen this in the United States. Teddy Rooevelt vs. the Malefactors of Great Wealth, Ike Eisenhower vs. the McCarthyites, and Richard Nixon's Flaws vs. Richard Nixon and Pat Buchanan were three earlier episodes. We won through because of conservative elitss that valued liberty and an open society. We may win through again: Henry Farrell: The Hollowing Out of Democracy: "There are strong similarities between what is happening in the United States, Hungary, the United Kingdom, and France... where democracy is backpedaling rapidly, such as the Philippines. This is the product both of common shocks... and of cross-national reinforcement... the family resemblances are undeniable. What Davies arguably gets wrong though is the significance of these changes...

John Steinbeck: The 1930s: A Primer: "Except for the field organizers of strikes, who were pretty tough monkeys and devoted, most of the so-called Communists I met were middle-class, middle-aged people playing a game of dreams. I remember a woman in easy circumstances saying to another even more affluent: “After the revolution even we will have more, won’t we, dear?” Then there was another lover of proletarians who used to raise hell with Sunday picnickers on her property. I guess the trouble was that we didn’t have any self-admitted proletarians. Everyone was a temporarily embarrassed capitalist. Maybe the Communists so closely questioned by investigation committees were a danger to America, but the ones I knew--at least they claimed to be Communists--couldn’t have disrupted a Sunday-school picnic. Besides they were too busy fighting among themselves...

Paul Krugman: "Disputes over trade can seem gentlemanly because economists, at least, mostly talk sense. Disputes over macroeconomic policy can't, because they don't. Sad!...

Jacob Levy: Populism's Dangerous Companions: "It’s an interesting and illuminating exercise to single out a shift from debates about cultural moralism to those about nationalism as the important destabilizing influence.... Jerry Falwell Jr.’s sycophancy toward a serial adulterer, multiple divorcé, and seeker of sexual favors from nude models and porn actresses is a nice synecdoche for the apparent surrender of the old religious right, even in the United States, on everything except abortion...

Comment of the Day: Cervantes: There's No Proccess...: "Individual-1 told Mnuchin to do something to talk up the stock market and Mnuchin thinks this will have that effect. So he's an idiot. That's basically all there is to it. Possibly Individual 1 suggested these specific steps, possibly they're Mnuchin's idea. Doesn't matter since they're both idiots anyway....

#commentoftheday

Aline Bütikofer, Sissel Jensen, and Kjell G. Salvanes: The Role of Parenthood on the Gender Gap Among Top Earners: "A recent literature argues that a ‘motherhood penalty’ is a main contributor to the persistent gender wage gap in the upper part of the earnings distribution. Using Norwegian registry data, this column studies the effect of parenthood on the careers of high-achieving women relative to high-achieving men in a set of high-earning professions. It finds that the child earnings penalty is substantially larger for mothers with an MBA or law degree than for mothers with a STEM or medical degree...

Vastly superior to Tom Holland—and vastly, vastly superior to the likes of Niall Ferguson—on the decline and fall of the Roman Republic: Edward J. Watts: Mortal Republic: How Rome Fell into Tyranny https://books.google.com/books?isbn=0465093825: "If the early and middle centuries of Rome’s republic show how effective this system could be, the last century of the Roman Republic reveals the tremendous dangers that result when political leaders cynically misuse these consensus-building mechanisms to obstruct a republic’s functions. Like politicians in modern republics, Romans could use vetoes to block votes on laws, they could claim the presence of unfavorable religious conditions to annul votes they disliked, and they could deploy other parliamentary tools to slow down or shut down the political process if it seemed to be moving too quickly toward an outcome they disliked...

1. Reading: Homer, Odysseus, Emily Wilson, David Drake: Hoisted from the Archives: I am distressed to find myself somewhat more sympathetic than I want to be with Plato's recommendation that only "hymns to the gods and praise of famous men" be allowed in the Just City—because allowing more would lead to sensation and melodrama and would excite the baser instincts of men. And I have now opened up the following can of worms: How do we educate people to read—listen—watch—properly, so that they become their better rather than their worse selves?...

1. Jon Schwarz: The 10 Most Awful Articles in the Weekly Standard’s Short Life VIII: "'The Worst Thing About Gay Marriage', by Sam Schulman, 2009: Here Sam Schulman first expresses amazement at the rapidity with 'which gays have attained the right to hold jobs — even as teachers and members of the clergy', and explains 'all these rights … have made gays not just ‘free’ but our neighbors'. (In the past all LGBT Americans were apparently sequestered away in underground caverns.) Also, the only reason for marriage is 'protecting and controlling the sexuality of the child-bearing sex'. Then Schulman frets that gay marriage will obviously lead to brothers marrying brothers and fathers marrying sons.... The upshot is that after the initial excitement of gay incest marriage, all the gay Americans will realize marriage is pointless and will stop getting married; this will cause marriage of all genres to collapse (?); and human society will evaporate... #journamalism #orangehairedbaboons #moralresponsibility

2. Jon Schwarz: The 10 Most Awful Articles in the Weekly Standard’s Short Life IX: "'He Was Honest, Eventually' by the Scrapbook, 2018: On its surface this is simply a banal unsigned post on a Weekly Standard blog about Barack Obama and Medicare for All. But it deserves recognition because it was published just as it was revealed that Facebook had chosen the Weekly Standard as one of five U.S. publications to which it would outsource factchecking. Hence the magazine showed real moxie here by managing to make three glaring factual errors in two sentences. First, Medicare would not entail 'the full-on nationalization of the health-care industry'. Rather, it would entail nationalization of much of the healthcare insurance industry. Anyone who doesn’t understand the difference doesn’t understand this issue at all. Second, Medicare is not 'America’s most expensive and worst-run health-care program' #journamalism #orangehairedbaboons #moralresponsibility

3. Jon Schwarz: The 10 Most Awful Articles in the Weekly Standard’s Short Life X: "'Going Soft on Iran' by Reuel Marc Gerecht, 2004.... And as we know, there’s nothing neoconservatives care about more than democracy. In this article, former CIA case officer Reuel Marc Gerecht writes of his yearning for Iranians to experience it. If you want to read more about how much the Weekly Standard supports democracy in Iran, well, there’s a lot there for you... #journamalism #orangehairedbaboons #moralresponsibility

4. Harald Dale-Olsen: Wages, Creative Destruction, and Union Networks: "Do unions promote creative destruction?...

5. Andreas Ferrara: World War II and African American Socioeconomic Progress: "This paper argues that the unprecedented socioeconomic rise of African Americans at mid-century is causally related to the labor shortages induced by WWII...

6. Equitable Growth: Workers Re-entering : "Workers previously out of the labor force are re-entering at higher rates, continuing the long-term upward trend...

7. Very much worth reading: Henry Farrell and Bruce Schneier: Common-Knowledge Attacks on Democracy: "Democracies draw upon the disagreements within their population to solve problems.... In a well-functioning democracy, each such group vies for political influence by persuading voters that its way of understanding problems and associated solutions is the best one. This is to the democracy’s benefit. It provides a mechanism through which a polity can harness the diversity of perspectives within it, the better to solve complex problems. This requires contestation over who the rulers should be, and what broad social goals they will seek to implement. Political parties and other collective actors hope that they (or their allies) will be in control for a given period, and each vies against others to win public support to that end.... Autocracies adopt a very different approach to common and contested knowledge...

8. David Spiegel: 38% of Rich Republicans Would Not Re-Elect Trump: "Just 34 percent of America’s millionaires... say they would vote to re-elect President Trump if the election were held today...

9. WTF!? Geoffrey Kabaservice? For one thing, the Democratic Party became the more fiscally-conservative party back in 1991 when the Republican Party was hijacked by Newt Gingrich. Do you really not know this? Why put it 45 years later, in 2036? Now I do realize that this is supposed, at some level, to be a joke: our geophysicists are not predicting catastrophic city-threatening sea-level rises by the 1930s; nor does value-added in infrastructure construction come from the "white working class of the heartland". But why tell this particular joke? What is gained, and for whom, by telling it?: Geoffrey Kabaservice: What Will History Books Say About 2018?: "By 2036, the Democratic Party—whose middle- and upper-class constituents were deeply disturbed by the impending threat of national bankruptcy—had become the fiscally conservative party. The Republicans, meanwhile, had become the party more supportive of government spending... on universal social benefits like Social Security and Medicare, as well as the spending programs that were the sole economic lifeline for the 30 percent of the population that still lived in the semi-inhabited small towns and environmentally ravaged rural areas of the American heartland. The peculiar arithmetic of the Electoral College meant that Republicans still commanded supermajorities in the Senate.... But the Grand Bargain of the 2030s rallied the whole country around the slogan, 'Build the Walls!'—the massive seawalls, constructed mostly by the white working class of the heartland, that saved the coastal cities from inundation by rising oceans...

10. Jonah Goldberg appears to finally—finally!—wake up to the fact that America's conservatives have for sixty-three years identified themselves as the bad guys—as those entitled to not play fair and to break all the rules, in William F. Buckley's words back in 1955, "to take such measures as are necessary to prevail, politically and culturally, in areas in which it does not predominate numerically"—to abandon any idea of "consulting a catalog of the rights of American citizens" or of "bow[ing] to the demands of the numerical majority": Jonah Goldberg: Why the Trump Presidency Will End Poorly: "When I say President Trump is not a man of good character, I... preface it with a trigger warning for... my fellow conservatives. Most... do not wish to be reminded.... Others... have convinced themselves that Trump is a man of good character... rushes to rebut the claim... are redefining good character in Trump’s image, and they end up modeling it...

11. Tony Yates is unhappy with Mervyn King: Tony Yates: Why Mervyn King’s Defence of Brexit “Isn’t Worthy of a Bank of England Governor”: "Mervyn King, Mark Carney’s predecessor as the governor of the Bank of England, has burnished his Brexit credentials in an opinion piece for Bloomberg. King has made his pro-Brexit views known already. The trigger for reprising them was the publication of the Bank of England’s assessment of different trajectories either through or without Brexit...

12. Howard Gleckman: The TaxVox Lump of Coal Award For The Worst Tax Idea of 2018: "Trump’s promise to cut middle-class taxes by 10 percent.... The credulous response to Trump’s promised middle-class tax cut. Journalists and policy analysts just can’t help themselves. The president makes an off-the-cuff campaign promise and, like mice on a wheel, they chase after it as if it is a... real thing. They opine on what his phantom tax cut might look like. They prognosticate over the odds of Congress passing the non-existent plan. They even debate who exactly is the middle class.... he 2018 lump of coal (not a real thing) goes to the president who made an absurd, impossible-to-keep promise, and all those self-described experts who took him seriously. Congratulations, or something...

13. Anna North: Facebook scandals: how they’re hurting Sheryl Sandberg’s Lean In brand: "Facebook had hired the Republican-aligned PR firm Definers Public Affairs, which had promulgated the message that anti-Facebook protests were being backed by billionaire George Soros.... Sandberg initially said she didn’t know Facebook had hired Definers, but she admitted in a Facebook post the day before Thanksgiving that... she had 'received a small number of emails where Definers was referenced'...

The Vicar of Bray:

Tony Yates is unhappy with Mervyn King: Tony Yates: Why Mervyn King’s Defence of Brexit “Isn’t Worthy of a Bank of England Governor”: "Mervyn King, Mark Carney’s predecessor as the governor of the Bank of England, has burnished his Brexit credentials in an opinion piece for Bloomberg. King has made his pro-Brexit views known already. The trigger for reprising them was the publication of the Bank of England’s assessment of different trajectories either through or without Brexit...

Jonah Goldberg appears to finally—finally!—wake up to the fact that America's conservatives have for sixty-three years identified themselves as the bad guys—as those entitled to not play fair and to break all the rules, in William F. Buckley's words back in 1955, "to take such measures as are necessary to prevail, politically and culturally, in areas in which it does not predominate numerically"—to abandon any idea of "consulting a catalog of the rights of American citizens" or of "bow[ing] to the demands of the numerical majority": Jonah Goldberg: Why the Trump Presidency Will End Poorly: "When I say President Trump is not a man of good character, I... preface it with a trigger warning for... my fellow conservatives. Most... do not wish to be reminded.... Others... have convinced themselves that Trump is a man of good character... rushes to rebut the claim... are redefining good character in Trump’s image, and they end up modeling it...

WTF!? Geoffrey Kabaservice? For one thing, the Democratic Party became the more fiscally-conservative party back in 1991 when the Republican Party was hijacked by Newt Gingrich. Do you really not know this? Why put it 45 years later, in 2036? Now I do realize that this is supposed, at some level, to be a joke: our geophysicists are not predicting catastrophic city-threatening sea-level rises by the 1930s; nor does value-added in infrastructure construction come from the "white working class of the heartland". But why tell this particular joke? What is gained, and for whom, by telling it?: Geoffrey Kabaservice: What Will History Books Say About 2018?: "By 2036, the Democratic Party—whose middle- and upper-class constituents were deeply disturbed by the impending threat of national bankruptcy—had become the fiscally conservative party...

Jon Schwarz: The 10 Most Awful Articles in the Weekly Standard’s Short Life X: "'Going Soft on Iran' by Reuel Marc Gerecht, 2004.... And as we know, there’s nothing neoconservatives care about more than democracy. In this article, former CIA case officer Reuel Marc Gerecht writes of his yearning for Iranians to experience it. If you want to read more about how much the Weekly Standard supports democracy in Iran, well, there’s a lot there for you...

David Spiegel: 38% of Rich Republicans Would Not Re-Elect Trump: "Just 34 percent of America’s millionaires... say they would vote to re-elect President Trump if the election were held today...

Very much worth reading: Henry Farrell and Bruce Schneier: Common-Knowledge Attacks on Democracy: "Democracies draw upon the disagreements within their population to solve problems.... In a well-functioning democracy, each such group vies for political influence by persuading voters that its way of understanding problems and associated solutions is the best one. This is to the democracy’s benefit. It provides a mechanism through which a polity can harness the diversity of perspectives within it, the better to solve complex problems. This requires contestation over who the rulers should be, and what broad social goals they will seek to implement. Political parties and other collective actors hope that they (or their allies) will be in control for a given period, and each vies against others to win public support to that end.... Autocracies adopt a very different approach to common and contested knowledge...

Equitable Growth: Workers Re-entering : "Workers previously out of the labor force are re-entering at higher rates, continuing the long-term upward trend...

Andreas Ferrara: World War II and African American Socioeconomic Progress: "This paper argues that the unprecedented socioeconomic rise of African Americans at mid-century is causally related to the labor shortages induced by WWII...

Harald Dale-Olsen: Wages, Creative Destruction, and Union Networks: "Do unions promote creative destruction?...

Jon Schwarz: The 10 Most Awful Articles in the Weekly Standard’s Short Life IX: "'He Was Honest, Eventually' by the Scrapbook, 2018: On its surface this is simply a banal unsigned post on a Weekly Standard blog about Barack Obama and Medicare for All. But it deserves recognition because it was published just as it was revealed that Facebook had chosen the Weekly Standard as one of five U.S. publications to which it would outsource factchecking. Hence the magazine showed real moxie here by managing to make three glaring factual errors in two sentences. First, Medicare would not entail 'the full-on nationalization of the health-care industry'. Rather, it would entail nationalization of much of the healthcare insurance industry. Anyone who doesn’t understand the difference doesn’t understand this issue at all. Second, Medicare is not 'America’s most expensive and worst-run health-care program'...

Jon Schwarz: The 10 Most Awful Articles in the Weekly Standard’s Short Life VIII: "'The Worst Thing About Gay Marriage', by Sam Schulman, 2009: Here Sam Schulman first expresses amazement at the rapidity with 'which gays have attained the right to hold jobs — even as teachers and members of the clergy', and explains 'all these rights … have made gays not just ‘free’ but our neighbors'. (In the past all LGBT Americans were apparently sequestered away in underground caverns.) Also, the only reason for marriage is 'protecting and controlling the sexuality of the child-bearing sex'. Then Schulman frets that gay marriage will obviously lead to brothers marrying brothers and fathers marrying sons.... The upshot is that after the initial excitement of gay incest marriage, all the gay Americans will realize marriage is pointless and will stop getting married; this will cause marriage of all genres to collapse (?); and human society will evaporate...

Hoisted from the Archives: Homer's Odyssey Blogging: "Like Little Birds... They Writhed with Their Feet... But for No Long While...": Let me riff off of something that crossed my desk.... Emily Wilson's reflections on her translation of the Odyssey, and on the Odyssey itself. There is one passage that always has been, to me at least, horrifyingly freaky in a very bad way. As David Drake—one of my favorite science fiction and fantasy authors—puts it:

Odysseus caps his victory by slowly strangling–the process is described in some detail–the female servants who have been sleeping with Penelope’s suitors. This is only one example (although a pretty striking one) of normal behavior in an Iron Age culture which is unacceptable in a society that I (or anybody I want as a reader) would choose to live in... a hero with the worldview of a death camp guard...

Indeed:

1. We Are with Her!

2. Note to Self: I need to resolve this. I am profoundly dissatisfied with teaching the origin of business cycles and "general gluts" via John Stuart Mill's 1829 "excess demand for money is excess supply of everything else", and in an economy of sticky prices, wages, and debts produces the recessions and depressions that we all know and love so well. It is a quick way to get into the subject. It is a convincing way. But it is not a correct way...

3. Comment of the Day: Leah Boustan: "First Gilded Age ➡️ Progressivism; Second Gilded Age ➡️ conspiracy theories, nationalism, blaming outsiders. The problem with the Kuznets Curve is that, at some point, inequality gets so bad that it prompts a political reaction but it’s not obvious what reaction will be...

4. Comment of the Day: Maynard Handley: Ancient Technologies of Organization and Mental Domination, Clerks, Linear B, and the Potnia of Athens: "I think this sort of theorizing about ancient religion is too much based on current monotheic religion which has a very strong us vs them (gods are VERY different from humans) post ~100CE or so vibe. The right way (IMHO) to think of ancient religion (and much of lived medieval European religion vis a vis saints) is that gods played the same role as celebrities in our time. They bigger, better, more outrageous than us. Some of us are lucky enough to be their hairdressers and pool cleaners, a few more maybe saw them one time on the street walking down Rodeo Drive, ad the rest of us have to make do with photos and whatever gossip is being reported right now...

5. Fall 2018—Smart Things I Wrote Here too Short to Be Highlighted Posts...: How did "Evangelicals" miss the memo that God saves you later only if you save the image of God in your neighbor today?.... It's not the white working class who have been totally grifted by Trump—it's those who call themselves "Evangelicals"...

6. Hoisted from 2012: This Post Got Lost Somehow: Why Next to No Political Reaction to the Second Gilded Age?: Theodore Roosevelt wove his political career out of being head of the Republican party and head of the Progressive Movement... non-Progressive Republican President Taft simply offended him one time too many... Roosevelt decided to blow up the Republican Party and hand the presidency to Woodrow Wilson from 1912-1920.... By the late 1920s Progressivism is rising again—even Hoover is running as a Progressive. Then when the Great Depression comes Franklin Roosevelt comes in and he takes the entire progressive agenda off the shelf and promptly begins to implement it. We haven’t had anything like that over the past thirty years. And here I’m simply going to throw up my hands and say that I don't know why...

7. Saddest of all were Ron McKinnon and Jagdish Bhagwati...: Ah, yes. There is a distinct asymmetry between economists who are Democrats and economists who are Republicans.... Paul Krugman: "Thinking about Trump's attempt to bully the Fed, I found myself remembering the open letter by a who's who of conservative economists (plus some 'economists') accusing Ben Bernanke of 'currency debasement'. Four years later, Bloomberg went to ask signatories why they were wrong; none of them—not one—would admit having been wrong...

1. Paul Krugman: "Thinking about Trump's attempt to bully the Fed, I found myself remembering the open letter by a who's who of conservative economists (plus some 'economists') accusing Ben Bernanke of 'currency debasement' https://economics21.org/html/open-letter-ben-bernanke-287.html. Four years later, Bloomberg went to ask signatories why they were wrong; none of them—not one—would admit having been wrong https://www.bloomberg.com/news/articles/2014-10-02/fed-critics-say-10-letter-warning-inflation-still-right... #economicsgonewrong #monetarypolicy #fiscalpolicy

2. Terry Bisson: They're Made of Meat

3. Menzie Chinn: “Top US Economist Stephen Moore: Powell Should Resign”: "Sunday (12/23/2018)... Stephen Moore.... [Trump] 'was infuriated that the Fed, through very tight monetary policy, reversed the economic expansion. Donald Trump wanted to drain the swamp. Well, John, the Fed is the swamp. The big question now that’s been debated about is whether Donald Trump has the authority as president to replace the Federal Reserve Chairman. The law says he can replace the Federal Reserve Chairman for cause. I would say, well, the cause is that he’s wrecking our economy.... (12/16/2015) Stephen Moore: Fediculous: Years Of Loose Money Destabilized The Economy**: The Fed is expected to bid farewell to seven years of its zero interest rate policy.... The high from easy money, just as with any hallucinogenic drug, has been temporary at best and likely damaging in the longer run.... Over time, prices and output economy-wide adjust to the larger volume of money. The printing press, alas, is not a job creator. If it were, Mexico and Argentina would be the richest countries in the world, and people would be lining up at the U.S. southwest border to get out rather than to get in...#economicsgonewrong #orangehairedbaboons #monetarypolicy

4. Stephen Moore: Fediculous: Years Of Loose Money Destabilized The Economy

5. Hendrik Bessembinder: Do Stocks Outperform Treasury Bills?: "The majority of common stocks... since 1926 have lifetime buy-and-hold returns less than one-month Treasuries. When stated in terms of lifetime dollar wealth creation, the best-performing 4% of listed companies explain the net gain for the entire US stock market since 1926.... The important role of positive skewness... skewness in monthly returns and to the effects of compounding. The results help to explain why poorly diversified active strategies most often underperform market averages... #finance #behavioral

6. Irwin Collier: Chicago. Unions and wages problem set. Murphy, 2008: Suresh Naidu: "didn't know Murphy was so into comparative labor institutions: obviously A+B) is scandinavian-style economy-wide collective bargaining, with C) put in small open economy, and D) is trades/craft unionism a la Anglo-American model...

7. Vagrant Cow: "Humans are just monkeys with car keys. Adjust your expectations accordingly...

8. Cosma Rohilla Shalizi and Andrew C. Thomas: Homophily and Contagion Are Generically Confounded in Observational Social Network Studies: "Homophily, or the formation of social ties due to matching individual traits; social contagion, also known as social influence; and the causal effect of an individual's covariates on their behavior or other measurable responses. We show that, generically, all of these are confounded with each other. Distinguishing them from one another requires strong assumptions.... We sketch three constructive responses... to randomize over the network, to place bounds on unidentifiable effects, and to use the division of the network into communities as a proxy for latent homophily...

9. Sign me up with Jacob Levy here: by publishing Francis Buckley, Cato is not providing a forum for but rather assisting in an attack on reasonable public discourse and discussion, along the lines of Henry Farrell and Bruce Schneier's arguments about Common-Knowledge Attacks on Democracy: Jacob T. Levy: "Make America Free Again" Isn't Trump's Agenda: "I cannot, however, let Francis Buckley’s apology for Donald Trump, for whom he has previously worked as a speechwriter, pass without comment, as it is marked by grave falsehoods. It is false in its particulars, for example, that, 'on average immigrants are less educated than they were in the past'... And it is false in its larger central claims. Among these are that the Trump presidency stands for the rejection of the privilege of inherited wealth; a return to respect for the rule of law; and equal opportunity to prosper rather than 'the old boy network', deal-making, and cronyism. I hardly know where to begin...

10. Let me shill for our other weblog at Equitable Growth: Competitive Edge: (I would point out that "the Octopus" is usually the Southern Pacific Railway, not Standard Oil. You can argue the merits with respect to whether Standard Oil's monopoly was a net plus by society; nobody argues the merits for the Southern Pacific except for those paid to do so, and the crazed.): Terrell McSweeney: Competitive Edge: Antitrust Enforcers Need Reinforcements to Keep Pace with Algorithms, Machine Learning, and Artificial Intelligence: "The Washington Center for Equitable Growth is launching a new blog titled 'Competitive Edge'... on a broad range of topics: potential areas for antitrust enforcement, concerns about existing doctrine, practical realities enforcers face, proposals for reform, and broader policies to promote competition.... The octopus image, above, updates an iconic editorial cartoon first published in 1904 in the magazine Puck to portray the Standard Oil monopoly...

11. Yastreblyansky: The non-general in his labyrinth: "Baker and Haberman also find some sources to say things are going just fine: '"It’s absolutely fair to say that it’s better to have Nancy Pelosi as a foil than Paul Ryan as a foil", said Marc Short, the president’s former legislative affairs director..... "The reality is the Democrats could overplay their hand."... Fred Fleitz, who worked for nearly six months this year as chief of staff for John R. Bolton, the current national security adviser, said the new team is more cohesive and better suited to Mr. Trump than one constantly undermining him.' (Fleitz has actually fled the White House, in the wake of the Trump mismanagement of the Khashoggi murder, and gone home to Frank Gaffney's Center for Security Policy, but I'm glad he found something nice to say.) But... a president going to work later every day, and keeping the TV on in the office so he can be watching Fox whenever an ongoing meeting gets boring or irritating, and seeing himself surrounded by enemies even inside the family, really is a picture of someone getting less and less capable of coping... as failure succeeds failure...

12. Damon Jones: @nomadj1s: "Highlights from the #econlife panel 9/25/18. Questions & advice on The Job Market™. Featured panelists: @paulgp, @PJakiela, @seema_econ, & @NWPapageorge...

13. Paul Krugman: Hard-Money Men, Suddenly Going Soft: "I have been insufficiently cynical about modern conservative economics.... While I yield to nobody in my appreciation of the right’s fiscal fraudulence, I took its monetary hawkishness seriously. I thought that all those dire warnings about the inflationary consequences of the Federal Reserve’s efforts to fight high unemployment, the constant harping on the evils of printing money, were grounded in genuine—stupid, but genuine—concern. Silly me. It’s no surprise that Individual-1, who lambasted the Fed for keeping interest rates low while Barack Obama was president, is demanding that it keep rates low now that he’s in the White House. After all, nobody has ever accused Donald Trump of having consistent, principled views about monetary policy (or anything else). But it is a shock to see so many conservative voices—including, incredibly, the editorial page of The Wall Street Journal—echoing Trump’s demands... #orangehairedbaboons #econmicsgonewrong

Paul Krugman: Hard-Money Men, Suddenly Going Soft: "I have been insufficiently cynical about modern conservative economics.... While I yield to nobody in my appreciation of the right’s fiscal fraudulence, I took its monetary hawkishness seriously. I thought that all those dire warnings about the inflationary consequences of the Federal Reserve’s efforts to fight high unemployment, the constant harping on the evils of printing money, were grounded in genuine—stupid, but genuine—concern. Silly me. It’s no surprise that Individual-1, who lambasted the Fed for keeping interest rates low while Barack Obama was president, is demanding that it keep rates low now that he’s in the White House. After all, nobody has ever accused Donald Trump of having consistent, principled views about monetary policy (or anything else). But it is a shock to see so many conservative voices—including, incredibly, the editorial page of The Wall Street Journal—echoing Trump’s demands...

Yastreblyansky: The non-general in his labyrinth: "Baker and Haberman also find some sources to say things are going just fine: '"It’s absolutely fair to say that it’s better to have Nancy Pelosi as a foil than Paul Ryan as a foil", said Marc Short, the president’s former legislative affairs director..... "The reality is the Democrats could overplay their hand."... Fred Fleitz, who worked for nearly six months this year as chief of staff for John R. Bolton, the current national security adviser, said the new team is more cohesive and better suited to Mr. Trump than one constantly undermining him.' (Fleitz has actually fled the White House, in the wake of the Trump mismanagement of the Khashoggi murder, and gone home to Frank Gaffney's Center for Security Policy, but I'm glad he found something nice to say.) But... a president going to work later every day, and keeping the TV on in the office so he can be watching Fox whenever an ongoing meeting gets boring or irritating, and seeing himself surrounded by enemies even inside the family, really is a picture of someone getting less and less capable of coping... as failure succeeds failure...

Let me shill for our other weblog at Equitable Growth: Competitive Edge: (I would point out that "the Octopus" is usually the Southern Pacific Railway, not Standard Oil. You can argue the merits with respect to whether Standard Oil's monopoly was a net plus by society; nobody argues the merits for the Southern Pacific except for those paid to do so, and the crazed.): Terrell McSweeney: Competitive Edge: Antitrust Enforcers Need Reinforcements to Keep Pace with Algorithms, Machine Learning, and Artificial Intelligence: "The Washington Center for Equitable Growth is launching a new blog titled 'Competitive Edge'... on a broad range of topics: potential areas for antitrust enforcement, concerns about existing doctrine, practical realities enforcers face, proposals for reform, and broader policies to promote competition.... The octopus image, above, updates an iconic editorial cartoon first published in 1904 in the magazine Puck to portray the Standard Oil monopoly...

Note to Self: I need to resolve this. I am profoundly dissatisfied with teaching the origin of business cycles and "general gluts" via John Stuart Mill's 1829 "excess demand for money is excess supply of everything else", and in an economy of sticky prices, wages, and debts produces the recessions and depressions that we all know and love so well. It is a quick way to get into the subject. It is a convincing way. But it is not a correct way. There are, however, two problems:

1. What is the "correct" way, exactly?
2. How can we teach something closer to the "correct" way than Mill's "excess demand for money is excess supply of everything else" without losing our audience?

In the meanwhile, think upon:

Daniel Kuehn: Whack-A-Mole General Gluts and Money: The interest rate is really one price functioning in two markets.... You can arbitrage your way out of whack-a-mole gluts. You cannot arbitrage your way out of an overdetermined system...

Nick Rowe: Walras' Law vs Monetary Disequilibrium: "Walras' Law says that a general glut (excess supply) of newly-produced goods (and services) has to be matched by an excess demand for... money... bonds; land; old masters; used furniture; unobtainium; whatever.... Monetary Disequilibrium Theory says that a general glut of newly-produced goods can only be matched by an excess demand for money. There's only one mole to whack. Money is special. A general glut is always and everywhere a monetary phenomenon...

Paul Krugman: There's Something About Macro: "Money as an ordinary good begs many questions: surely money plays a special sort of role.... [Plus] there is something not quite right about pretending that prices and interest rates are determined by a static equilibrium problem.... Finally, sticky prices play a crucial role... [but] the assumption of at least temporarily rigid nominal prices is one of those things that works beautifully in practice but very badly in theory...

And please tell me what to do instead of Mill (1829)!

Sign me up with Jacob Levy here: by publishing Francis Buckley, Cato is not providing a forum for but rather assisting in an attack on reasonable public discourse and discussion, along the lines of Henry Farrell and Bruce Schneier's arguments about Common-Knowledge Attacks on Democracy: Jacob T. Levy: "Make America Free Again" Isn't Trump's Agenda: "I cannot, however, let Francis Buckley’s apology for Donald Trump, for whom he has previously worked as a speechwriter, pass without comment, as it is marked by grave falsehoods. It is false in its particulars, for example, that, 'on average immigrants are less educated than they were in the past'... And it is false in its larger central claims. Among these are that the Trump presidency stands for the rejection of the privilege of inherited wealth; a return to respect for the rule of law; and equal opportunity to prosper rather than 'the old boy network', deal-making, and cronyism. I hardly know where to begin...

Comment of the Day: Leah Boustan: "First Gilded Age ➡️ Progressivism; Second Gilded Age ➡️ conspiracy theories, nationalism, blaming outsiders. The problem with the Kuznets Curve is that, at some point, inequality gets so bad that it prompts a political reaction but it’s not obvious what reaction will be...

Comment of the Day: Maynard Handley: Ancient Technologies of Organization and Mental Domination, Clerks, Linear B, and the Potnia of Athens: "I think this sort of theorizing about ancient religion is too much based on current monotheic religion which has a very strong us vs them (gods are VERY different from humans) post ~100CE or so vibe. The right way (IMHO) to think of ancient religion (and much of lived medieval European religion vis a vis saints) is that gods played the same role as celebrities in our time. They bigger, better, more outrageous than us. Some of us are lucky enough to be their hairdressers and pool cleaners, a few more maybe saw them one time on the street walking down Rodeo Drive, ad the rest of us have to make do with photos and whatever gossip is being reported right now...

• How did "Evangelicals" miss the memo that God saves you later only if you save the image of God in your neighbor today?.... It's not the white working class who have been totally grifted by Trump—it's those who call themselves "Evangelicals":
   

Hoisted from 2012: Brad DeLong: Why Next to No Political Reaction to the Second Gilded Age?: Oh dear, that's a really tough question. So let me make it tougher by sharpening it and give it historical context. During the Gilded Age of the 1890s and 1900s you had strong political movements saying "something is going remarkably wrong with this, this isn’t the country we thought we were going to live in". The way that the historian—I'm blanking—Ray Ginger? Harley Shaiken: Yes, Ray Ginger. Brad DeLong: Ray Ginger put it in two absolutely brilliant books—Altgeld’s America and The Age of Excess—even the Republicans thought that they wanted to live in Abe Lincoln’s America, where when you are young you split wood into fence rails and go to law school at night and when you are middle-aged you become a lawyer and get rich and when you are old you enter politics and save the Union and free the slaves. They wanted to live in that kind of world, of upward mobility, in which opportunity is wide open even to the son of a penniless and not very successful rural farmer. But by 1890 they discovered that they weren’t living in Abe Lincoln's America at all...

Hendrik Bessembinder: Do Stocks Outperform Treasury Bills?: "The majority of common stocks... since 1926 have lifetime buy-and-hold returns less than one-month Treasuries. When stated in terms of lifetime dollar wealth creation, the best-performing 4% of listed companies explain the net gain for the entire US stock market since 1926.... The important role of positive skewness... skewness in monthly returns and to the effects of compounding. The results help to explain why poorly diversified active strategies most often underperform market averages...