Grasping Reality on TypePad, by Brad DeLong

A very nice Twitter rant from Tom Nichols. In fact, I think it is worse—if they could be bought off, it would be fine. But they can't be bought off since they have no idea what they want. The people of the hill country of Kentucky needed the end of pre-existing condition exclusions for the upper half of and access to Medicaid for the lower half of the working class. They buy-off was accomplished. And yet...: Tom Nichols: "If Trump wanted to add 15 more countries to NATO and fund the World Bank from Social Security taxes, Lindsey Graham would propose the legislation and guys in diners in Ohio would be explaining why it was the right thing to do—as long as some intellectual objected first. I'm not sure how long we have to go on pretending Trump's policies reflect a 'view', any more than any other group of populist idiots. What does the current Italian govt want to do? Heard about them lately? They're bogged down in dumb stuff. Because populism isn't a program. It's stupefying to watch intelligent men and women wishcasting 'idea'" onto Trumpism or Leavers or Europopulists. There's no 'there' there. It's the Seinfeld of political movements: about nothing, but passionately about nothing. Yes, yes, I know. Immigration. Income inequality. Gas prices. Mostly, it's about change, and why people hate it, and why they want to be bought off rather than accept it. More transfers for me, and also, please magically create an idealized version of 1970 that never existed. The tell is that people are aggrieved over things that aren't true. Ask Americans-or even the French-how many Muslims live in their country. How much they think gas should be. What they think was better in 1970 or 1980 or 1990. They can't tell you in any real way. In fact, ask them what they want. As a thought exercise, say: 'You win. What do you want?' They can't really answer that, either, because they know the answer is impossible (or racist, or self-serving). Mostly, they want to piss off other people. That's the key. That's why you can never find a compromise with the hard-core 35 percent in the U.S., or the rioters in Europe. (Short of just sending cash to them as a buy-off.) Imputing 'policy' preferences to them is a mug's game, and it's long past time to stop playing it...

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...

?????? it certainly seems to me as though Donald Trump wants there to be a Sino-American trade war—after all they are, as he says, easy to win. If the U.S. wants a tussle with China over intellectual property, the right strategy is for the U.S to back off now, go to the TPP members, apologize for its actions in rejecting the TPP in early 2017, join the TPP, and then negotiate as part of a United front with other TPP members. The U.S. by itself has no leverage —the IP China can grab is worth more than the cost of losing access to the U.S. market. So I have no idea what Marty thinks he is saying here: Martin Feldstein: There Is No Sino-American Trade War: "Chinese negotiators recently offered to buy enough American products to reduce the bilateral trade deficit to zero by 2024. Why, then, have US negotiators rejected that as a way to end the dispute?...

Anatole Kaletsky: How EU Leaders Can Prevent a No-Deal Brexit: "Once May’s negotiating strategy is properly understood, the EU’s rational response becomes obvious: total inflexibility on the Brexit deal’s substance, but removal of the Brexit deadline..... No concessions of any kind on the withdrawal agreement... the commitment to Ireland... no hints about future trade deals. But they should also state publicly that they no longer consider March 29 a hard deadline and would be happy to extend the Brexit negotiating period for as long as is necessary not only to agree on a new UK-EU relationship, but also to demonstrate that what is agreed satisfies both sides...

Donald Tusk: "I've been wondering what that special place in hell looks like, for those who promoted #Brexit, without even a sketch of a plan how to carry it out safely...

Vincent Gabrielsen: Financing the Athenian Fleet

Wikipedia: Sergei Guriev

Barry Eichengreen: The European Economy since 1945: Coordinated Capitalism and Beyond: https://books.google.com/books?isbn=0691138486

Trolly McTrollface: The #XRPArmy, Explained: "Together, the members of the XRP Army identified by my clustering algorithm, had produced 32 tweets, 1998 retweets, 2264 likes, and 1986 replies, from a dataset of 100,000 data points. Yes, you’ve read that right: less than 1.5% of the content the XRP Army produces are original tweets. They are very rarely initiators of a thread, electing instead to jump in on existing discussions...

Austin Carr: Inside Wisconsin’s Disastrous 4.5 Billion Deal With Foxconn - Bloomberg: "A huge tax break was supposed to create a manufacturing paradise, but interviews with 49 people familiar with the project depict a chaotic operation unlikely to ever employ 13,000 workers.... 'This is the Eighth Wonder of the World.' So declared President Donald Trump.... For some Foxconn workers watching, the president’s rhetoric didn’t match reality. The LCD components weren’t made in the USA, according to sources familiar with the operation. They were shipped from a Foxconn factory in Tijuana...

2018 was only the fourth hottest year in our records! Time for some more contrarianism from Steve Dubner and Steve Levitt about how since 2016 "over the past several years the average global temperature has in fact decreased"?: Oliver Millman: 2018 Was World's Fourth Hottest Year on Record, Scientists Confirm: "World 1.5F hotter than average set between 1951 and 1980. Current five-year stretch the warmest since records began...

Rick Perlstein: How Doris Kearns Goodwin Came to Resemble Lyndon Johnson: "Doris Kearns Goodwin... in 1993 she made a wounded remark that Joe McGinnis, the author of a new Kennedy book, had plagiarized her. McGinnis contends that he cited Goodwin appropriately in his book. Whatever the case, for Goodwin to call out McGinnis was a debased act, an alienated act, in itself. For when she did it, Goodwin acted as if she had not already privately acknowledged a few years earlier stealing from an author's work herself—Lynne McTaggart's Kathleen Kennedy (1993)—then bribing her to keep quiet about it. We don't call such things bribes, of course; they are 'settlements'. Either way they are one of the more corrupt prerogatives of power in our time...

There is no merit-based case for David Malpass to run the World Bank. Ivanka would be a massively superior candidate: Dylan Matthews: David Malpass’s World Bank Nomination, Explained: "Malpass is... an infamously bad... forecaster.... Chief economist to Bear Stearns in 2007 and 2008 as the firm collapsed due to the subprime crisis. In August 2007... wrote a Wall Street Journal op-ed titled, 'Don’t Panic About the Credit Market'.... Undeterred, Malpass spent the Obama years calling for the Fed to adopt higher interest rates, and in 2012 even argued that maintaining low rates would lead to a recession. The Fed kept rates low, a recession didn’t ensue, and most economists credit the steady recovery to the Fed’s willingness to maintain rates near zero. If anything, it erred in not trying hard enough to push long-term interest rates down...

Ken Houghton: The Bank is the Colour of Malpasspractice, not Dead Televisions

Bruce Bartlett (October 9, 2012): Partisan Bias and Economic Forecasts: "On Sept. 27... James Pethokoukis, now employed by the conservative American Enterprise Institute, said that the United States economy was 'running out of steam' and that there was now a 50 percent chance of a recession within a year. 'It may be several years before we see unemployment below 8 percent'.... On Friday, the Bureau of Labor Statistics announced that the unemployment rate in September was 7.8 percent. On Sept. 29... David Malpass... took a similarly bearish view.... Current economic data, he said, “point to a recession in 2013.” On Oct. 1, Brian Wesbury... raised the risk of a recession to 25 percent in his weekly client letter.... In July, Mr. Malpass was predicting 2 percent real gross domestic product growth in 2012 and 3 percent in both 2013 and 2014.... [In] September survey, Mr. Wesbury was predicting 2.3 percent real growth in 2012.... The average forecast for all economists surveyed by The Journal in September was 1.9 percent real G.D.P. growth in 2012, 2.4 percent in 2013 and 2.9 percent in 2014.... None of the economists surveyed has predicted even a single quarter of negative real growth within the forecast window. Typically, a recession requires two back-to-back quarters of negative real growth...

Tsinghua University: Qian Yingyi: "Born in Beijing... graduated from Tsinghua University in Mathematics... Ph.D. in Economics from Harvard University after earning an M.Phil. in Management Science/Operations Research from Yale University and an M.A. in Statistics from Columbia University. He was on the economics faculties at Stanford University, the University of Maryland, and the University of California, Berkeley.  He was the Dean of the School of Economics and Management at Tsinghua University in 2006-2018.... He is the author of the book How Reform Worked in China: The Transition from Plan to Market (The MIT Press, 2017)...

Wikipedia: Andrew Jalil

An argument that all of behavioral economics is just a set of footnotes to Pierre Laplace: Joshua B. Miller and Andrew Gelman: Laplace’s Theories of Cognitive Illusions, Heuristics, and Biases: "Essai Philosophique sur les Probabilities anticipated many ideas developed within the past 50 years in cognitive psychology and behavioral economics, explaining human tendencies to deviate from norms of rationality in the presence of probability and uncertainty.... Laplace’s theories and reasoning... how modern they seem, how much progress he made without the benefit of systematic experimentation, and the novelty of a few of his unexplored conjectures. We argue that this work points to these theories being more fundamental and less contingent on recent experimental findings than we might have thought... #behavioral

Dominique Barthélemy (2009): The Serf, the Knight, and the Historian

Michael Mitterauer: Why Europe?: The Medieval Origins of Its Special Path: "While most historians have located the beginning of Europe’s special path in the rise of state power in the modern era, Mitterauer establishes its origins in rye and oats. These new crops played a decisive role in remaking the European family, he contends, spurring the rise of individualism and softening the constraints of patriarchy. Mitterauer reaches these conclusions by comparing Europe with other cultures, especially China and the Islamic world, while surveying the most important characteristics of European society as they took shape from the decline of the Roman empire to the invention of the printing press. Along the way, Why Europe? offers up a dazzling series of novel hypotheses to explain the unique evolution of European culture...

Information Technology and Innovation Foundation

Dietz Vollrath (2017): Who Are You Calling "Malthusian"?: "I’m not sure how to reply. I’m not a Malthusian 'believer', because that isn’t a thing. But I do think that several of Malthus’ assumptions about how economies function, in particular prior to the onset of sustained growth during the 1800’s, are well founded. And those assumptions have implications that help make sense of the world in that period of time...

This is, I think, wrong: The Reagan-Thatcher era was solidified not by renewed economic growth but rather by the conquest of inflation and upward redistribution of wealth to the already-wealthy: Gideon Rachman: The Trump era could last 30 years | Financial Times: "The rapid spread of this new political style could be just the beginning of a new era that lasts decades. But there is one major qualification to this idea, that distressed liberals should hang on to. If the period of emulation and intensification is to last, the populist movement needs more than electoral success. It also needs to point to results in the real world. The trente glorieuses were deemed glorious because living standards were visibly rising across the west. In the same way, the Reagan-Thatcher era was solidified by renewed economic growth and victory in the cold war. By contrast, Brexit is in deep trouble and the Trump administration is floundering. Unless populists can deliver tangible results, their new era could yet die in its infancy...

Back in the depths of the Great Recession, employers said that they wanted, needed, and required college graduates and the highly experienced. But what they meant was that they thought high unemployment meant that they could get overqualified workers when they went to the labor market. Now that unemployment has fallen, these needs and requirements have vanished. Employers still want over-qualified workers. But they are no longer asking for them becuase they no longer expect to be able to get them: Matthew Yglesias: The “Skills Gap” Was a Lie: "Alicia Sasser Modestino, Daniel Shoag, and Joshua Ballance... the skeptics were right... employers responded to high unemployment by making their job descriptions more stringent. When unemployment went down thanks to the demand-side recovery, suddenly employers got more relaxed again.... The skills gap was the consequence of high unemployment rather than its cause. With workers plentiful, employers got choosier. Rather than investing in training workers, they demanded lots of experience and educational credentials. And while job skills are obviously important, when the labor market is healthy employers have incentives to try to impart skills to workers rather than posting advertorial content about how the government should fix this problem for them...

David Weil: In Conversation: "Franchising started to spread... a form of business organization that allows you to shed and yet control.... Information technology facilitated this because you have lower-cost mechanisms to monitor subsidiary organizations.... The end result is you have broken apart the employment relationships.... If you think this is just about employers trying to weasel out of their responsibilities, you miss this more fundamental change... [are] underestimating the difficulty of unwinding that behavior or changing that behavior in some way to deal with the consequences in the labor market...

Barry Ritholtz: Art of the Deal, Scott Walker Style: "As we discussed, the Foxconn-Wisconsin tax giveaway is unfolding as per expectations. Via Businessweek, here is 'The Art of the Deal', Scott Walker style: 'Interviews with 49 people familiar with Foxconn’s Wisconsin project, including more than a dozen current and former employees close to its efforts there, show how hollow the boosters’ assurances have been all along.... Insiders describe a chaotic environment with ever-changing goals far different from what Trump and others promised. Walker and the White House declined to comment for this story, although a Trump administration official says the White House would be “disappointed” by any reduced investment. The only consistency, many of these people say, lay in how obvious it was that Wisconsin struck a weak deal. Under the terms Walker negotiated, each job at the Mount Pleasant factory is projected to cost the state at least 219,000 in tax breaks and other incentives. The good or extra-bad news, depending on your perspective, is that there probably won’t be 13,000 of them.' Shocking, but not surprising...