Fairly Recently: Must- and Should-Reads, and Writings... (December 27, 2018)
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...
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...
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"...
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...
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...
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
Terry Bisson: They're Made of Meat
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
Stephen Moore: Fediculous: Years Of Loose Money Destabilized The Economy
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
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...
Vagrant Cow: "Humans are just monkeys with car keys. Adjust your expectations accordingly...
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...
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...
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...
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...
Damon Jones: @nomadj1s: "Highlights from the #econlife panel 9/25/18. Questions & advice on The Job Market™. Featured panelists: @paulgp, @PJakiela, @seema_econ, & @NWPapageorge...
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
