Fairly Recently: Must- and Should-Reads, and Writings... (December 10, 2018)
Why Doesn't Italy Have Better Options?: If the past ten years ought to have taught the Great and Good of Europe anything, it is that ensuring prosperity, growth, and high employmennt is job #1. Figuring out how to dot the financial i's and cross the financial t's is distinctly secondary. But, as Adam Tooze writes, instead the Great and Good of Europe seem to wish to "hold the line on debt and deficits" without offering anything "positive in exchange, such as a common European investment and growth strategy or a more cooperative approach to the refugee question". He calls this, with great understatement, "a high-risk and negative strategy". I cannot see how anyone can disagree.
Note to Self: Should I be the first person to see if I can get an airplane book entitled The Impeachment of Individual-1 on the shelves?
Note to Self: Coffee with Brink Lindsey, co-author of The Captured Economy: How the Powerful Enrich Themselves, Slow Down Growth, and Increase Inequality: "Brink Lindsey and Steven M. Teles identify a common factor behind... breakdowns in democratic governance that allow wealthy special interests to capture the policymaking process for their own benefit...
Monday Smackdown: Revisiting the Trump-McConnell-Ryan Tax Cut Debate Assuming "the capital stock adjusts so that the after-tax marginal product of capital equals the exogenously given world interest rate r..." was unprofessional. That is not a relevant model for a large country with a floating exchange rate. If you want an investment boom, cut the deficit—like Clinton-Mitchell-Gephardt did over 1993-1996...
Weekend Reading: J.R.R. Tolkien: The Bespelling of Morgoth: From The Lay of Leithian: Canto XIV: "For Lúthien hath many arts/for solace sweet of kingly hearts'...
Weekend Reading: Robert Skidelsky on Writing the Biography of John Maynard Keynes: Fifteen Years Ago on the Internet Weblogging: "I don't want to argue the case for biography on utilitarian grounds. People do, of course, read biography partly to understand what formed the character and work of an outstanding person. But they also read it because it is the oldest form of story- telling, which long antecedes fiction. We want to know, and seem always to have wanted to know, how famous people lived their lives and to hear the stories of their exploits and the great events in which they were involved. There is no dimunition of this interest, which is why biography remains one of the most popular reading genres...
Why we surf the internet: Abi Sutherland: Return of the Dreadful Phrases: "Seneca is (dubiously) said to have told us that errare humanum est (to err is human) sed perseverare diabolicum, but to persist [in error] is diabolical..." oldster: Can I get a citation for that Seneca quote? I cannot find it. And I think it is vanishingly likely that he would use the word "diabolicum", which gets into Latin as a transliteration of New Testament Greek. So maybe he said something like "errare humanum est" somewhere, but I strongly suspect that second half comes much later than Seneca. I feel bad for being so pedantic. But then again, the "dreadful phrases" threads are natural display-cases for pedantry, so maybe it is less out of place here?...
I used to think that the fact that the Senate is an institution that has lost its purpose and now gives rural residents grossly excessive and illegitimate political power was no biggie. Yes, the constituents off a Senate majority would have to be bought-off in any significant piece of legislation. But rural populations were poor, relatively speaking, and becoming poorer—that their excessive political voice partially cushioned them from the signs and arrows of outrageous fortune was not the worst thing in the world. But that would require that they be rational and somewhat pubilc-spirited actors—not the easily-grifted victims of racist neo-fascist clowns. We need Senate reform. It should start with Senate committee chairships automatically going to the senators from the most populous states, and continue from there: Paul Krugman: The New Economy and the Trump Rump: "Why we went from regional divide to political chasm: ... A little over a year ago, Amazon invited cities and states to offer bids for a proposed second headquarters. This set off a mad scramble over who would gain the dubious privilege of paying large subsidies in return for worsened traffic congestion and higher housing prices. (Answer: New York and greater D.C.) But not everyone was in the running. From the beginning, Amazon specified that it would put the new facility only in a Democratic congressional district. O.K., that’s not literally what Amazon said. It only limited the competition to 'metropolitan areas with more than one million people' and 'urban or suburban locations with the potential to attract and retain strong technical talent'... #politics #orangehairedbaboons
Since 2008, it is clear to me, the unemployment rate has no longer served as a sufficient statistic for whether the labor market is loose or tight. We need to look, and look hard at those who do not have jobs and do not say that they are looking for jobs but who would take jobs if they existed. And we need to look very hard at hours: David Bell and David Blanchflower: Underemployment in the US and Europe : “The most widely available measure of underemployment is the share of involuntary part-time workers in total employment. This column argues that this does not fully capture the extent of worker dissatisfaction with currently contracted hours. An underemployment index measuring how many extra or fewer hours individuals would like to work suggests that the US and the UK are a long way from full employment, and that policymakers should not be focused on the unemployment rate in the years after a recession, but rather on the underemployment rate...
Bill Janeway: This Is How the Unicorn Bubble Will Burst: "So-called 'unicorns' have become household names.... Bill Janeway... explains the lessons that all these companies must eventually learn and how the bubble will burst...
Claire Montialoux and Ellora Derenoncourt: Minimum Wages and Racial Inequality: "The earnings difference between black and white workers fell dramatically in the United States in the late 1960s and early 1970s... the extension of the minimum wage played a critical role...
An excellent paper from Fukui, Nakamura, and Steinsson about how how the American feminist revolution supported business-cycle recoveries in rather 1970s and 1980s. Back then there was a huge reservoir of women who would take jobs, and had not preciously held jobs only because of the lagging of social structure behind economic and cultural change. Thus increases in demand in recovery focused on this industrial reserve army could very easily find good matches between unfilled jobs and unemployed workers: Masao Fukui, Emi Nakamura, and Jon Steinsson: Women, Wealth Effects, and Slow Recoveries: "A female-biased shock generating a 1% increase in female employment leads to only a 0.15% decline in male employment (and this estimate is statistically insignificant). In other words, our estimates imply very little crowding out of men by women in the labor market.... 70% of the slowdown in recent business cycle recoveries can be explained by female convergence... #gender #businesscycles #macro
Nick Bunker: "To use the language of Clarida’s speech, Powell seems to be signaling they being data dependent by updating estimate of r-star, not the current health of economy...
It is a surprise to most economists to learn that the outbreak of inflation in the 1970s was not due to central bankers and governments trying to exploit the Phillips curve to run a high-pressure economy. The most important shocks were the oil shocks. The second most important shocks were those that caused the productivity growth slowdown. The third most important shocks were Johnson’s and Nixon‘s unwillingness to listen to their economic advisers, and Martin‘s and Burns’s unwillingness to pull a Volcker. Perhaps it is because it is such a surprise that so few have learned it, and how many forget it immediately after it is pointed out to the. And since the 1970s be strong belief that another 1970s is always and everywhere looking around the corner has been very damaging: and since the 1970s the strong believe that another 1970s is always been everywhere looking around the corner has been very damaging: Paul Krugman (2011): The Demand-Side Temptation: “[Nick] Rowe goes on to suggest that demand-side logic is dangerous... could lead to irresponsible policies. Well, there have been times and places.... But what I think Nick misses is the power of the contrary narrative, of the notion of the government as being like a family that must tighten its belt when the rest of us do, of the evils of printing money (hey, I can’t do that, why can Bernanke?)... #economicsgonewrong #inflation #economichistory #monetarypolicy
Beatrice Cherrier: @Undercoverhist: "The second part of this article is totally accurate, but omitting key information in the first part seriously weakens the overall message (any resemblance to other Duke historians…) The CHOPE received money from conservative Pope and Earhart, which funded, among others, Van Horn’s anti-Hayekian research (https://t.co/v43aoW6L3N). Then got a large grant from progressive INET (https://t.co/mhYbtnkLPO) which funded, among other, Austrian research... #historyofeconomicthought #economicsgonerigh
And another piece from grant recipient Ellora Derenoncourt: Ellora Derenoncourt: Can you move to opportunity? Evidence from the Great Migration: "The northern United States long served as a land of opportunity for black Americans, but today the region’s racial gap in intergenerational mobility rivals that of the South. I show that racial composition changes during the peak of the Great Migration (1940-1970) reduced upward mobility in northern cities in the long run, with the largest effects on black men... #equitablegrowth #race
Eric Levitz: Tribalism Isn’t Our Democracy’s Problem. The GOP Is: "Ordinary Republican and Democratic voters don’t disagree about public policy much more than they used to, but they still fear and loathe each other more than at any point in our nation’s modern history.... electoral politics has always been 'identity' politics. What is new is how cleanly the two-party system currently divides Americans along lines of racial, religious, and regional identity.... Few rural white Evangelical Christians can vote for a Democrat in 2018 without betraying all of their definitions of who 'their people' are... #politics #orangehairedbaboons
Adam Tooze: Italy: How Does the E.U. Think This Is Going to End?: "Over the past 10 years, Italy’s gross domestic product per capita has fallen... unique among large advanced economies.... More than 32 percent of Italy’s young people are unemployed. The gloom, disappointment and frustration are undeniable. For the commission to declare that this is a time for austerity flies in the face of a reality that for many Italians is closer to a personal and national emergency... #macro #finance #fiscalpolicy #austerity
BLS: Minimum Wage: "The 1966 amendments also extended coverage to public schools, nursing homes, laundries, and the entire construction industry. Farms were subject to coverage for the first time if their employment reached 500 or more man days of labor in the previous year's peak quarter... #equitablegrowth #labormarket #minimumwage
