Fairly Recently: Must- and Should-Reads, and Writings... (February 5, 2019)
Hoisted from the Archives: "Gunpowder Empire": Should We Generalize Mark Elvin's High-Level Equilibrium Trap?: Looking forward from even as late as 1750, therefore, it is not insane to project that the Gunpowder Empire is in the natural course of events the climax socioecological state of the Sociable Language-Using East African Plains Ape. The notional quartering of farm sizes worldwide from 500 BC to 1500 had been offset by the development of maize, of double-crop wet rice, of the combination of the iron axe and the moldboard plow that could turn northern temperate forests into farms, the domestication of cotton, and the breeding of the merino sheep. People in 1500 were as well fed and clothed as they had been in 500 BC. But what would have been the next agricultural miracle technologies... to... compensate for the further quartering of farm sizes that would have been inevitable had population growth continued and human numbers topped 2 billion in 3500[?] And where would the breakthrough to steampower—or even to enough fodder to feed enough draft animals for oxen and horses to replace or even supplement human backs and thighs—to interrupt this Gunpowder-Empire climax socioecology of the Sociable Language-Using East African Plains Ape come from?...
Comment of the Day: Graydon: "Anyone who can put off investing is going to do so; there's Brexit, there's 'Ok, yeah, there isn't an adult anywhere in the Trump administration', plus there's the complete lack of statistics. Uncertainty is high and rising. Incompetence has real costs...
Blogging: What to Expect Here...: The purpose of this weblog is to be the best possible portal into what I am thinking, what I am reading, what I think about what I am reading, and what other smart people think about what I am reading...
This is, in its historical context, just bizarre: What happened to the 90% debt-to-annual-GDP redline? What happened to the claim that the idea of secular stagnation—that interest rates were likely to be at or neat the zero lower bound for decades to come—would be forgotten in a decade? What happened to the claim that "low sovereign bond yields do not necessarily capture the broader ‘credit surface’ the global economy faces"?: Ken Rogoff: Never Mind The Debt: If There’s A Hard Brexit Britain Will Have to Splash the Cash: "What’s the point of saving for a rainy day if you don’t use the savings in an epic storm? Instead of attempting to reduce the UK’s debt-to-GDP ratio (now 84%), the government should find ways to strengthen investment in physical and human capital, to help the poorest, who will be hit the hardest, and to incentivise international businesses not to abandon ship.... It has never been remotely obvious to me why the UK should be worrying about reducing its debt–GDP burden, given modest growth, high inequality and the steady (and largely unexpected) decline in global real interest rates. It is one thing to have an exit plan for controlling the rate of debt increase after a deep financial crisis; it is entirely another thing to be in any rush to bring debt levels down.... Yes, it is wise not to let debt grow inexorably, but there is also no need to run suddenly into reverse...
Carmen Reinhart and Ken Rogoff (2013): Austerity Is Not the Only Answer to a Debt Problem: "Ultra-Keynesians would go further and abandon any pretence of concern about longer-term debt reduction. This position has been in the rhetorical ascendancy in recent months.... It throws caution to the wind on debt.... The basic rationale is that low interest rates make borrowing a free lunch. Unfortunately, ultra-Keynesians are too dismissive of the risk of a rise in real interest rates. No one fully understands why rates have fallen so far so fast, and therefore no one can be sure for how long their current low level will be sustained...
From last November: Rahm Emmanuel's words have not aged well: Charles P. Pierce: Rahm Emanuel Suggests Democratic Party Rift Between Beto O'Rourke, Nancy Pelos—Wants Outreach to Trump Voters:Political Genius Rahm Emanuel Strikes Again.... I'll never understand why Mark Penn isn't selling velvet Elvis paintings at an abandoned gas station by now, but I've learned to live with that disappointment.... In one of the first really bad moves President Barack Obama made after being elected, he brought Emanuel in as his chief of staff. (I rank this just behind installing Tim Geithner at Treasury as the worst hire of the newly formed Obama administration.) It was he who cut out the legs from under a larger stimulus program and it was he who encouraged the administration's retreat from the public option on health care...
We had a dry run for this age of disinformation back in the McCarthy era. Back then the journalistic profession failed in much the same way as it has failed in our age that started with Iraq War weapons-of-mass destruction disinformation. Yet The journalistic community group no lessons from McCarthy—other than to deify Edward R. Murrow. The McCarthy era was less serious than ours, largely because Republican politicians withdrew their support for McCarthy when Eisenhower became president. But will anything cause a similar shift today?: Claire Wardle: 5 Lessons for Reporting in an Age of Disinformation: “Doing journalism in an age of disinformation is incredibly hard, and I simply don’t think the news industry has even started grappling with the difficult questions being raised...
A totally awesome and excellent choice here—if he cannot increase the amount of attention the media pays to the very important and massively underquoted EPI, nobody can: Economic Policy Institute: Pedro da Costa Joins the Economic Policy Institute as Communications Director: "The Economic Policy Institute is pleased to announce journalist and economics commentator Pedro Nicolai da Costa as the institute’s new communications director. He will work to promote EPI’s research and policy proposals through traditional and digital media. 'I am delighted to welcome Pedro to the EPI team', said EPI President Thea Lee. 'For years, he has been an important voice in the economic discourse—and his deep knowledge of economics and passion for creating a more equitable economy will be tremendous assets to EPI'...
Channeling the great Aba Lerner: Simon Wren-Lewis: The Interest Rate Lower Bound Trap and the Ideas that Keep Us There: "Inflation... is the ultimate constraint on... fiscal stimulus.... If inflation is stuck below target and your measure of the output gap says that gap is zero, you should ignore the output gap measure and enact a fiscal stimulus. So why has this not happened in Japan, or the UK, or the Eurozone?... There are three candidates...
It would be good if this wing of the Republican Party became very strong indeed. Of course, it is still not clear to me how Brink’s approach is different from that of the Rubin Wing of the Democratic Party. Then again, a world in which the Rubin Wing of the Democratic Party were to be the dominant force in the Republican Party would surely be a world with much more space for a real debate about what policies would produce equitable growth than the world we have. Plus those policies could then be implemented! I am still scarred by the fact that not single Republican legislator would support John McCain‘s climate policy, Mitt Romney’s healthcare policy, or George H.W. Bush‘s foreign policy when they were advocated by a Democrat who happened to be a black man. And I still do not know how I should react to this... desertion: Brink Lindsey: Republicanism for Republicans: “This essay is addressed to those conservatives and Republicans, from leaners to stalwarts, whose loyalties to movement and party are now badly strained or even severed.... I understand what you’re going through.... We cannot simply wait for Trump to pass from the scene, or for Democrats to win big, and hope that things will then somehow go back to normal.... We need a new political language.... The answer is right under our noses, hiding in plain sight. The project... is... to develop and articulate the principles and program of the republican wing of the Republican Party...
This is a very nice piece of work. Unfortunately, the major conclusion I draw from it is that there is much slippage between numbers of patents on the one hand and true economically relevant Innovation on the other. So I cannot see what conclusions to raw from what is a lot of hard and ingenious work: Bryan Kelly, Dimitris Papanikolaou, Amit Seru, and Matt Taddy: Measuring Technological Innovation over the Long Run: "We use textual analysis of high-dimensional data from patent documents to create new indicators of technological innovation. We identify significant patents based on textual similarity of a given patent to previous and subsequent work: these patents are distinct from previous work but are related to subsequent innovations...
The first truly good conceptual framework I have seen on where the future of employment growth may lie: David Autor: The Future Of Work: "Three trends... help explain where employment... may be headed.... 'Frontier work'... Jetson jobs... all about new technology... Supervisor, Word Processing (1980); Robotic Machine Operator (1990); Chief Information Officer (2000); Technician, Wind Turbines; and Intelligence Analyst (2010).... 'Wealth work',... jobs that primarily provide fancy-schmancy services to the rich... Hypnotherapist and Gift Wrapper (1980), Fingernail Former and Marriage Counselor (1990), Mystery Shopper, Horse Exerciser—our personal favorite—and Barista (2000); Oyster Preparer and Sommelier (2010).... 'Last mile'... what's left after machines have eaten the tasks... the atrophied husk remaining of a job when most of it has been automated... an airline ticket agent. A couple of decades ago... greet customers, help check baggage, and assign seats on the plane. Now... throwing bags on a conveyor belt and checking IDs. And so you can think of that as sort of the last mile, the last little bit of the job that remains...
Cory Doctorow: How To: Make Up Swears: "the 'pyrrhic foot' of a 'familiar profanity compounded with a non-profane word of two unaccented syllables'... especially good for coming up with nongendered swears that are not slurs, which is useful if you're trying to insult an individual.... The best of these mean nothing, but sound wonderful, evocative and fun to say...
Laura Davison: [Rubio Tweets Tax Bill He Voted For Helps Companies Over Workers(https://www.bloomberg.com/news/articles/2018-12-13/rubio-slams-trump-tax-law-for-helping-corporations-over-workers): "Florida Republican aligns himself with Democrats on tax law Stock buybacks have jumped as wages show modest increase...
Jonathan Portes (2013): Comment on Reinhart and Rogoff's FT Article: "My letter to the FT... deliberately concentrates on the case for borrowing now to finance investment, where Reinhart and Rogoff have belatedly joined a growing consensus.... I omitted a couple of points where their article is simply incoherent.... They argue that we should be cautious about borrowing because interest rates might rise: 'Unfortunately, ultra-Keynesians are too dismissive of the risk of a rise in real interest rates. No one fully understands why [real interest] rates have fallen so far so fast, and therefore no one can be sure for how long their current low level will be sustained...
Cal Daily News: Campus Must Prioritize The Health of Cal Football Players: "Sure, the rules and regulations surrounding football go far beyond Cal, and the NCAA has revised rules regarding targeting and kickoffs to lower injury risk, but there’s still much the campus can do. A significant percentage of the revenue from football games—Cal’s most lucrative sport—should go toward CTE research and support for the players who are most likely to develop it. If the campus truly wants to support its athletes, it needs to prove it...
Marko Kloos: "I don’t know who first called Bitcoin “Dunning-Krugerrands”, but I applaud that person every time I read an article about cryptocurrency fails like this https://gizmodo.com/crypto-exchange-says-it-cant-repay-190-million-to-clie-1832309454...
Vik's Chaat House: Menu
Brad DeLong: FT Alphachatterbox: Hamiltonian Economics
Nicholas Lardy: Xi Jinping’s turn away from the market puts Chinese growth at risk: "Credit is flowing to state-owned companies, not more productive private ones.... Xi... has also repeatedly emphasised the role of state industrial policy and state-owned companies, despite overwhelming evidence that the latter are inefficient. Even after receiving various direct subsidies, the Chinese ministry of finance acknowledges that more than two-fifths of these state companies persistently rack up losses. They are kept afloat with massive increases in bank credit that are almost entirely responsible for the increase to record levels of leverage in China’s corporate sector.... Predictably, the return on assets of the largest state-owned companies has fallen by more than half since the merger mania began. At the same time, the productivity of private companies has increased, and in the industrial sector is now almost three times that of their state-owned counterparts.... Without a return to a more marketed-oriented economic policy, even if bilateral trade disputes with the US are resolved, the likelihood is that China’s growth will slow further—with unpleasant consequence...
Azeen Ghorayshi, Jason Leopold, Anthony Cormier, and Emma Loop: Secret Files Show How Trump Moscow Talks Unfolded While Trump Heaped Praise On Putin: "Ahead of Michael Cohen’s testimony, read the original paper trail behind the campaign to build Europe’s tallest tower in Moscow—and how it played out alongside Donald Trump’s presidential campaign...
Data! Suppose that you were a rich person in Europe, and wanted to diversify and put some of your wealth not in landed estates or commercial ventures or bureaucratic office or mortgage loans, but instead simply wanted to lend it to the least-risky sovereign you could find. Paul Schmelzing has collected the data. It is very interesting. I have only one data complaint: I think he should swap out the debt of the Italian city-state average—Genoa, Florence, and Venice—that he regards as the safest sovereign from 1300 to 1500 for the debt of Barcelona, which was as financially sophisticated and was secure under the aegis of the crown of Aragon in a way that the Italian city-states were not. None of them was sacked and defaulted from 1300 to 1500. But they could have been. And I read the higher interest rates of the late 1400s as powerful evidence that the debts of Genoa, Florence, and Venice ere not regarded as safe: they might decisively lose in the wars of the condottieri, or the Turk might come. Do note that these interest rates are a different concept than the Piketty rate of profit on capital. These are, I think, best thought of as the profit rate minus an interest-rate discount for the safety and liquidity that the debt of the world's most prudent sovereign could offer. It thus depends not just on the then-current long-term rate of profit but also on perceived risks of other investments, risk tolerance, and the safe asset supply the sovereign is currently offering: Paul Schmelzing: The ‘Suprasecular’ Stagnation: "Growth rates have been stubbornly low since the financial crisis, and many have noted that the interest rate environment has been weakening since the 1980s. This column places recent episodes in the context of longer-term economic history, going back to the 14th century. Trends over recent decades are generally in line with a long-term ‘suprasecular’ trend of declining real rates. Negative real rates could become a more frequent phenomenon, and indeed constitute a ‘new normal’...
Emil Verner and Gyozo Gyongyosi: Household Debt Revaluation and the Real Economy: Evidence from a Foreign Currency Debt Crisis: "The large (over 30%) and unexpected depreciation of the Hungarian forint in late 2008... a shock to local household debt... a rise in default rates and a persistent decline in local durable and non-durable consumption...
Natalie Pierson: Comparative Look at the Gunpowder Empires
Michael Kremer (1993): Population Growth and Technological Change: One Million B.C. to 1990
Robert C. Allen (2006): The British Industrial Revolution in Global Perspective: How Commerce Created The Industrial Revolution and Modern Economic Growth
Wikipedia is Anglocentric. There were not two but three "Protestant Winds": the wind that scattered the Spanish Armada in 1588, the wind that blew William of Orange to England in 1688, and the wind that blew the armies of his ancestor William the Silent to the relief of Leyden in September-October 1574 Wikipedia: Protestant Wind
Kim-Mai Cutler: The new NIMBY mayor of Cupertino made an entirely tasteless joke about building a wall around Cupertino and then making San Jose pay for it in his State of the City address...
Jason Kottke: Patreon had revenue from day one and could have been a fully independent company. Perhaps smaller but sustainable…a great business focused solely on their users. The VC funding model of “go big or go home” doesn’t work well w/ so many people’s livelihoods on the line...
#noted #weblogs
