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February 2019

Simon Wren-Lewis: The Tory Party Lost Its Way from 2010, Not 2016: "'I have had it up to here with the Conservative party.' So writes a one time editor of the Spectator, Matthew d'Ancona. It is a good read: for example 'a chilling populism is now creeping into the language of mainstream Toryism: the language of treachery, snarling tribalism and impatience with anything that smacks of prudence, compromise or caution'. He is talking about Brexit of course, and he is entirely right. What he misses, in my view, was that this problem did not begin with the EU referendum, but six years earlier, with the Tory ‘modernisers’, Cameron and Osborne...

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Note: The Ten Americans Who Did the Most to Win the Cold War: Hoisted from the Archives

Berlin No More Walls Pamela Anderson

Hoisted from the Archives: Note: The Ten Americans Who Did the Most to Win the Cold War:

  • Harry Dexter White: Treasury Assistant Secretary* who was the major force behind the Bretton Woods Conference and the institutional reconstruction of the post-World War II world economy. He accepted enough of John Maynard Keynes's proposals to lay the groundwork for the greatest generation of economic growth the world has ever seen. It was the extraordinary prosperity set in motion by the Bretton Woods' System and institutions--the "Thirty Glorious Years"--that demonstrated that political democracy and the mixed economy could deliver and distribute economic prosperity.

  • George Kennan: Author of the "containment" strategy that won the Cold War. Argued--correctly--that World War III could be avoided if the Western Alliance made clear its determination to "contain" the Soviet Union and World Communism, and that the internal contradictions of the Soviet Union would lead it to evolve into something much less dangerous than Stalin's tyranny.

  • George Marshall: Architect of victory in World War II. Post-World War II Secretary of State who proposed the Marshall Plan, another key step in the economic and institutional reconstruction of Western Europe after World War II.

  • Arthur Vandenberg: Leading Republican Senator from Michigan who made foreign policy truly bipartisan for a few years. Without Vandenberg, it is doubtful that Truman, Marshall, Acheson, and company would have been able to muster enough Congressional support to do their work.

  • Paul Hoffman: Chief Marshall Plan administrator. The man who did the most to turn the Marshall Plan from a good idea to an effective aid program.

  • Dean Acheson: Principal architect of the post-World War II Western Alliance. That Britain, France, West Germany, Italy, and the United States reached broad consensus on how to wage Cold War is more due to Dean Acheson's diplomatic skill than to any single other person.

  • Harry S Truman: The President who decided that the U.S. had to remain engaged overseas--had to fight the Cold War--and that the proper way to fight the Cold War was to adopt Kennan's proposed policy of containment. His strategic choices were, by and large, very good ones.

  • Dwight D. Eisenhower: As first commander-in-chief of NATO, played an indispensable role in turning the alliance into a reality. His performance as President was less satisfactory: too many empty words about "rolling back" the Iron Curtain, too much of a willingness to try to skimp on the defense budget by adopting "massive retaliation" as a policy, too much trust in the erratic John Foster Dulles.

  • Gerald Ford: In the end, the thing that played the biggest role in the rise of the dissident movement behind the Iron Curtain was Gerald Ford's convincing the Soviet Union to sign the Helsinki Accords. The Soviet Union thought that it had gained worldwide recognition of Stalin's land grabs. But what it had actually done was to commit itself and its allies to at least pretending to observe norms of civil and political liberties. And as the Communist Parties of the East Bloc forgot that in the last analysis they were tyrants seated on thrones of skulls, this Helsinki commitment emboldened their opponents and their governments' failures to observe it undermined their own morale.

  • George Shultz: Convinced Ronald Reagan--correctly--that Mikhail Gorbachev's "perestroika" and "glasnost" were serious attempts at reform and liberalization, and needed to be taken seriously. Without Shultz, it is unlikely that Gorbachev would have met with any sort of encouragement from the United States--and unlikely that Gorbachev would have been able to remain in power long enough to make his attempts at reform irreversible. *Also, almost surely an "Agent of Influence" and perhaps an out-and-out spy for Stalin's Russia. If so, never did any intelligence service receive worse service from an agent than Stalin's Russia did from Harry Dexter White....


#hoistedfromthearchives #politics #security #history #highlighted

Is employer-side monopsony the reason the effective labor demand appears to be so inelastic when incresaes in the minimum wage are concerned? Or are we just not being creative enough? And why does the idea that, in America today, minimum-wage increases are "job killers" continue to have rhetorical purchase?: Doruk Cengiz, Arindrajit Dube, Attila Lindner, and Ben Zipperer: The Effect of Minimum Wages on Low-Wage Jobs: Evidence from the United States Using a Bunching Estimator: "Infer[ring] the employment effect of a minimum wage increase by comparing the number of excess jobs paying at or slightly above the new minimum wage to the missing jobs paying below it... using 138 prominent state-level minimum wage changes between 1979 and 2016. We find that the overall number of low-wage jobs remained essentially unchanged over five years following the increase. At the same time, the direct effect of the minimum wage on average earnings was amplified by modest wage spillovers at the bottom of the wage distribution...

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On how to do microfoundations right: Atif Mian: In Conversation with Heather Boushey: "Our number of theories is much larger than the number of observations we have, which is a limiting factor of macroeconomics just from an empirical standpoint.... This is where I feel micro data comes in.... Let me just give you one quick example.... The 2000s... you see credit going up, you see aggregate income going up as well.... If it were higher incomes that were driving credit growth, then since income growth is concentrated in the top 1 percent, we should really expect the top 1 percent to borrow a lot more.... Yet that clearly was not the case. So, even a basic breakdown of the data along a more micro level starts to give you a lot more insights than you might be able to deduce from just looking at the macro aggregates...

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I confess I do not understand the Brexiteers. Consider Clive Crook these days at all. It used to be the case—before George W. Bush's "victories" in the 2000 election and in the Iraq War—that I disagreed with him but that his arguments were coherent and made sense. Ever since then, however, he seems to have lost coherence. And now there seems to be no reason.

He says that the Britain-EU relationship is a very valuable thing "achieved to great mutual advantage" but had the drawback that it did not allow Britain to throw citizens of other EU countries out when it wishied. In this case one would think the Theresa May deal would be an acceptable thing, because that is what it delvers. But no. Let's try to follow his thought, and fail: Clive Crook: The European Union Could Also Use a Brexit Policy: "Europe could have avoided Brexit altogether... agreed to the request for modest concessions on free movement of people... David Cameron made.... Europe wasn’t really saying it couldn’t be done; it was merely refusing to do it. The result of that intransigence was the referendum and Brexit...

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Fairly Recently: Must- and Should-Reads, and Writings... (February 14, 2019)

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  1. Jill Abramson, Formerly of the New York Times, Has Both a Depraved Heart and a Social Intelligence Deficit: She thus made seven changes to Malooley's first sentence, in the process dividing it into two.... She thus made one change to Malooley's second sentence. She then left Malooley's third sentence alone. Clearly the effort of making seven discrete changes to the first sentence had exhausted her...

  2. Note to Self: Thinking About Blanchard's Presidential Address...: Blanchard's calculations of the effect of debt on welfare in his AEA Presidential Address all take the form of evaluating the welfare of a generation of economic agents young in some period t after the resolution of all period-t stochastic elements. That is a fine thing to do. That is not quite the same thing as the effect on expected well-being behind the veil of ignorance...

  3. Note to Self: All of these people are now very, very quiet: Robert J. Barro, Michael J. Boskin, John Cogan, Douglas Holtz-Eakin, Glenn Hubbard, Lawrence B. Lindsey, Harvey S. Rosen, George P. Shultz and John. B. Taylor.... James C. Miller III... Barry W. Poulson... Charles W. Calomiris... Donald Luskin... 95 others... Susan Collins...

  4. Note to Self: Speaker: "We are bursting at the seams! We have more students than robots!...


  1. Jeff Yarbro: @yarbro: "The Constitution anticipates a President like this. It does not anticipate a Congress so indifferent to a President like this...

  2. Abba P. Lerner (1943): Functional Finance and the Federal Debt

  3. Patrick Iber: "I hereby donate 'Reichstag Fyre Festival' to the public domain...

  4. Alex Ward: 25th Amendment: Andrew McCabe says in 60 Minutes Interview that DOJ Discussed Option to Oust Trump: "McCabe is back with a vengeance.... Some top Trump officials feel the president isn’t up to the job...

  5. Wikipedia: 1989 murders of Jesuits in El Salvador: "Ignacio Ellacuría, S.J. Ignacio Martín-Baró, S.J. Segundo Montes, S.J. Juan Ramón Moreno, S.J. Joaquín López y López, S.J. Amando López, S.J. Elba Ramos. Celina Ramos...

  6. The Browser

  7. Michael K. Spencer: The Failure of Crypto Tribalism: "The majority of ICOs aren’t genuine companies, don’t have real products and never were intended to be sustainable business models. That’s a severe problem in ethics of these young engineers and young executives playing with Dapps and investors who are prone to fraud, hype and crypto trafficking of the worst kind-deceit...

  8. Zack Beauchamp: Watch Rep. Ilhan Omar hold Elliott Abrams, Trump Venezuela envoy, accountable - Vox: "A rare example of elite accountability...

  9. John Scalzi: Courtesy of @joshtpm, a principle henceforth to be known as "Trump's Razor": Josh Marshall: Dominance and Humiliation, No Middle Ground: "I’ve been praised in recent months for having some handle on the Trump phenomenon. The truth is a little different. Early on I realized that when it came to Trump if I figured out the stupidest possible scenario that could be reconciled with the available facts and went with it, that almost always turned out to be right. The stupider, the righter.... I just kept following that model and it kept working...

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Paul Krugman: What’s Wrong With Functional Finance?: "MMT seems to be pretty much the same thing as Abba Lerner’s 'functional finance'.... So what I want to do in this note is explain why I’m not a full believer in Lerner’s functional finance; I think this critique applies to MMT as well, although if past debates are any indication, I will promptly be told that I don’t understand, am a corrupt tool of the oligarchy, or something...

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Note to Self: Thinking About Blanchard's Presidential Address...: Blanchard's calculations of the effect of debt on welfare in his AEA Presidential Address all take the form of evaluating the welfare of a generation of economic agents young in some period t after the resolution of all period-t stochastic elements. That is a fine thing to do. That is not quite the same thing as the effect on expected well-being behind the veil of ignorance, from the nunc stans, taken without any knowledge of the resolution of period-t or indeed of any earlier stochastic elements. But I have not yet been able to wrap my head around what the differences are, or how they matter for conclusions. My notes...

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Odds are now 50-50 that the entire Eurozone is or is about to be in a recession: Lucrezia Reichlin: The Threat of a Eurozone Recession: "My company, Now-Casting Economics, first detected a slowdown in the eurozone... started in the third quarter of 2017 and has affected all major eurozone economies, particularly Germany and Italy. This runs contrary to the widely held view of the eurozone as comprising a core of successful countries–especially Germany–and a debt-ridden, slow-growth periphery...

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Dan Drezner: Anatomy of a Questioning: "the more I think about it, the more convinced I am that Omar’s line of questioning was spot-on.... If you,,, appoint someone who has a history of lying to Congress about human rights abuses... it is entirely fair to question him about prior acts of bad faith. And it was certainly striking to see someone so 'firmly contemptuous of congressional pressure' become the object of it.... Omar... was fully within her rights to bring up the unsavory and criminal portions of Abrams’s backstory.... The other uncomfortable truth, however, is that while Omar might be right to interrogate Abrams, she is mostly in the wrong about Venezuela...

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Real Gross Domestic Product FRED St Louis Fed

Note to Self: Current forecast for 2018QIV GDP growth: 2.0%. Current forecast for 2019Q1 GDP growth: 1.5%. All of these people are now very, very quiet:

  • Robert J. Barro, Michael J. Boskin, John Cogan, Douglas Holtz-Eakin, Glenn Hubbard, Lawrence B. Lindsey, Harvey S. Rosen, George P. Shultz and John. B. Taylor: How Tax Reform Will Lift the Economy: "A conventional approach to economic modeling suggests that such an increase in the capital stock would **raise the level of GDP in the long run by just over 4%. If achieved over a decade, the associated increase in the annual rate of GDP growth would be about 0.4% per year...

  • Robert Barro (endorsed by Mike Boskin): How US Corporate-Tax Reform Will Boost Growth: "Gauging the effects of the tax-law changes on the costs (referred to as user costs) that businesses attach to investment in equipment and structures. Then I estimate long-run responses of the capital-labor ratio to the changes in user costs.... If we thought of C-corporations as corresponding to the whole economy, the changes in capital-labor ratios would imply a rise in long-run real per capita GDP by about 8.4%.... I made a rough downward adjustment of the long-run level effect from 8.4% to 7%...

  • James C. Miller III, Douglas Holtz-Eakin... Barry W. Poulson... Charles W. Calomiris... Donald Luskin... 95 others: Pass tax reform and watch the economy roar: "A twenty percent statutory rate on a permanent basis would, per the Council of Economic Advisers, help produce a GDP boost 'by between 3 and 5 percent'.... It is critical to consider that $1 trillion in new revenue for the federal government can be generated by four-tenths of a percentage in GDP growth. Sophisticated economic models show the macroeconomic feedback generated by the TCJA will exceed that amount—more than enough to compensate for the static revenue loss...

  • Susan Collins: Twitter: "On @MeetThePress today said that she had talked to [Holtz-]Eakin, Lindsay and Hubbard and they believed that the supply side stimulus would produce an increase on government revenue. This is problem when other side alleged serious people are really hacks.

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Lawrence Glickman: The Strategic and Political Use of Threats of Backlashes: "Douthat claims that if the Dems adopt the Green New Deal, it 'will empower climate-change skeptics, weaken the hand of would-be compromisers in the GOP' and 'possibly help Donald Trump win re-election.' But wait a minute. Isn’t the current GOP already a Party of climate-change denialists and isn’t its Congressional arm completely lacking in 'would-be compromisers'?... Even granting the dubious assumption that the Congressional GOP includes many potential compromisers, this suggests that, if triggered, they will reactively support policies that exacerbate the problem they purported wish to solve. Douthat’s claim seems to be that the GND will have the devastating consequences of leading the GOP to... embrace precisely the policies and tactics that they are employing already...

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Jemima Kelly: Niall Ferguson Joins Blockchain Project Ampleforth: "Ampleforth: not just an ideal school to send your kids if you're Catholic and can afford it, but also, 'an ideal money'. More specifically (and perplexingly): 'A decentralised store of value protocol that is volatile in price and supply at launch, but is strictly better than Bitcoin at steady state because it converges on a stable unit of account.' And Niall Ferguson, the rightwing British historian and who once called himself a 'fully paid-up member of the neo-imperialist gang', has joined its advisory board.... Here's Ferguson...

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Jill Abramson, Formerly of the New York Times, Has Both a Depraved Heart and a Social Intelligence Deficit

At one point, Jill Abramson formerly of the New York Times had something like this—the lead of an written by Jake Malooley—on her computer screen:

Vice cop

She then copied the text from "when..." to the second "...Darfur" and pasted the three sentences it into an editing window in her manuscript:

Vice cop

She then did not:

  1. enclose it in quotation marks,
  2. add "(quoted from Jake Maloolley: https://www.timeout.com/chicago/things-to-do/vice-cop)", or
  3. move it to a "scratch-sources" part of the document.

Instead, she first deleted the word "Jason":

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Dylan Matthews (2009): How It Works: "It's instructive for people my age who are thinking of careers in foreign policy to know that you can back death squads in Central America, deny mass atrocities, brazenly defy Congressional dictates, get convicted of withholding information from Congress, back a covert coup d'état, actively undermine the peace process in Israel, and be in charge of implementing the Bush administration's 'freedom agenda' and end up with a senior fellowship at the Council on Foreign Relations and an offer to be CFR's president should Richard Haass leave. I believe the term for this is 'perverse incentive'...

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I confess I do not understand columns like this from the intelligent if not-always-reliable John Harwood.

"Congressional Republicans stepping away from President Trump" is constant and professional Washington access-journalist make-believe. "Congressional Republicans think Trump is a nut but are terrified to cross him because they fear a primary challenge" has been reality since January 21, 2017 and is still reality today.

The 60-vote filibuster threshold in the Senate and the 40-member Tea Party caucus in the House opposed on principle to governing meant and mean that, absent Reconciliation, any legislation required the approval of Ryan, Pelosi, McConnell, and Schumer before January 4—or at least their willingness to not make opposition a matter for caucus discipline—and requires the approval of Pelosi, McConnell, and Schumer today.

Trump's role with respect to Republican House Members and Senators was and is the same as Putin's role with respect to Trump: in each case, the first party has the second party on a leash because the second party knows that the first party, if enraged, could destroy their career. But because that threat can only be used once and has power only as long as it is not used, the leash is a long one:

John Harwood: Republican Leaders Are Breaking with Trump on Border Wall: "That soft, shuffling sound you hear is Congressional Republicans stepping away from President Trump.... GOP leaders signaled clearly that they, like Congressional Democrats, will no longer play border-wall make-believe with President Trump.... GOP leaders always understood that pledge as fanciful, even as they cautiously avoided saying so out loud. Last December, when Trump changed his mind and chose a government shutdown over a bipartisan spending compromise, they reluctantly went along. But 35 days of political pain, ending with Trump's initial surrender last month, changed their calculations.... The Democratic takeover of the House fundamentally altered Washington's power equation...

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Peter Beinart—who has, I think, atoned sufficiently for his time enabling and supporting the bigotries, prejudices, and ignorances of Marty Peretz and his Old New Republic—gets, I think, this one substantially wrong.

There are many Americans who feel a deep cultural and religious and political affinity with Israel. Israel is, after all, a fellow near-democracy, in some sense one of the foundations of North Atlantic civilization, and the image of Israel has always been an explicit model for America since the first days of Puritan settlement.

Conservative white Christians, however, support and seek a different Israel—a Likud-AIPAC Israel. They want an expansionist Israel for theological reasons: Israel's expansion—and the subsequent destruction by Gog and Magog of all who do not convert to Christianity—is a step on the road to the Second Coming of Jesus. Thus they seek not a secure, democratic, and peaceful Israel but rather a state with a firebase on every West Bank hilltop ruling from the Mediterranean Sea to the River Jordan—or perhaps Euphrates.

Plus there are the bribes: I am told that Likud Prime Minister Menachem Begin gave Jerry Falwell a Lear Jet:

Peter Beinart: The Sick Double Standard In The Ilhan Omar Controversy: "Omar’s tweet was inaccurate. Yes, of course, AIPAC’s influence rests partly on the money its members donate to politicians. But it also rests on a deep cultural and religious affinity for Israel among conservative white Christians, who see the Jewish state as an outpost of pro-American, “Judeo-Christian” values in a region they consider hostile to their country and faith...

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Back when the Washington Post was trying to decide how to deal with the internet—and had not yet doubled down on "access journalism", i.e. working for your sources rather than for your readers—Dan Froomkin lucked into the "White House Watch" column, doing explainer journalism on the White House press corps—telling us why the White House press corps was doing what it was doing that week. This was an extremely useful thing to do. Now he is starting it up again. Worth spending your money on: Dan Froomkin: A Case Study in Normalizing Trump, from the New York Times: "Disappointed in how normalizing NYT’s coverage of Trump interview was this morning. He was talking complete megalomaniacal gibberish, they make it sound like he was answering their questions.... I’m glad Sulzberger talked to Trump a bit about press freedom, but the NYT... can also confront him with reality...

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Martin Wolf: The Libertarian Fantasies of Cryptocurrencies: "the state can be a dangerous monster. But it is also essential: it is humanity’s ultimate insurance mechanism. The world of anarchy is one of competing bandits. It is far better to have just one, as the late Mancur Olson argued in Power and Prosperity. Moreover, he added, liberal democracy helps tame that bandit. States exist to provide essential public goods. Money is a public good par excellence. That is why dispensing with the role of governments in money is a fantasy. The history of the so-called cryptocurrencies demonstrates this.... The best way to view cryptocurrencies is as speculative tokens of no intrinsic value. One could have value if it became the currency of choice of a jurisdiction. Yet there is a compelling reason why, in normal circumstances, people use the currency of their own government.... As the Financial Times’ Izabella Kaminska and Martin Walker of the Center for Evidence-Based Management argued in evidence for the House of Commons Treasury committee, so far the cryptocurrency craze has made online criminality easier, created bubbles, fleeced naive investors, imposed grotesque waste in so-called 'mining', offered funding for malfeasance and facilitated tax evasion.... It is no longer enough to bleat in favour of 'innovation' or 'freedom'...

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The long con, behavioral economics, and the mass- and social-media nature of the modern public sphere collide in ways that I do not understand, but that I think may be very important: Neil Steinberg: What's next? 'Hi, This Is A Scam! Grab Your Wallet So We Can Cheat You!': "'Social Security numbers do not get suspended', the Federal Trade Commission points out on its web page devoted to this scam. 'Ever'. Are there people who don’t know this? Apparently so. Which raises the question: Why base your scam on something a halfway savvy person knows to be false? For exactly that reason.... Fraud is... about identifying the most credulous, the choicest marks, and going after them. It’s a manpower issue.... Scams fall into two categories: fear and greed.... Fear and/or greed already in the victims-to-be make them party to their own defrauding, but inspires an unspoken complicity that blunts their ability to realize they’ve been had. The resilience of the cheated is plain if we look at... those who supported Donald Trump...

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A very welcome shift from a central that two months ago looked hell-bent on a policy likely to cause recession. What explains the shift, however? I do not understand why their policy was what it was two months ago. While I understand their policy now, and while I approve of their shift, I do not understand the why: Frances Coppola: What Is The Real Reason For The Fed's Sudden Decision To Stop Raising Interest Rates?: "The Fed has put the brakes on. At its latest monetary policy meeting, the FOMC left interest rates unchanged and said it would be 'patient' about further interest rate rises. Furthermore, the FOMC’s forward guidance about the pace of balance sheet reduction says that it is 'prepared to adjust any of the details for completing balance sheet normalization in light of economic and financial developments', including reversing course and doing more QE if necessary. Yet only a month ago, the Fed was signaling two interest rate rises in 2019 and no change in the pace of balance sheet reduction. What has caused this sudden change of heart?...

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"Now, the thing is, legitimate-seeming businesses can't just give you porn links all the time, because that's Not Safe For Work, so the job of most modern recommendation algorithms is to return the closest thing to porn that is still Safe For Work": Apenwarr: Forget Privacy: You're Terrible at Targeting Anyway: "Let's get rich on targeted ads and personalized recommendation algorithms. It's what everyone else does! Or do they? The state of personalized recommendations is surprisingly terrible. At this point, the top recommendation is always a clickbait rage-creating article about movie stars or whatever Trump did or didn't do in the last 6 hours. Or if not an article, then a video or documentary. That's not what I want to read or to watch, but I sometimes get sucked in anyway, and then it's recommendation apocalypse time, because the algorithm now thinks I like reading about Trump, and now everything is Trump. Never give positive feedback to an AI...

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Would somebody please tell me what the Brexiters want?

Do they want to stay in the customs union? Do they want a hard border in the Irish Sea? Do they want a hard border within Ireland? What is Theresa May asking for? What are the "alternative arrangements to prevent a hard border with Northern Ireland" and yet allow the collection of customs and the exclusion of commodities that do not meet European standards that they seek?

14.5% of British GDP is exported to the EU. 3.5% of EU GDP is exported to Britain. Demonstrating that being in the EU is a good deal relative to other options is an important value for the EU. Evans-Pritchard never says—nor does he comment that the German economists whom he praises also call for the UK government to abandon its "red lines". What is Theresa May willing to give up that the EU values in order to secure the removal of the Irish Backstop?:

Ambrose Evans-Pritchard: German Anger Builds Over Dangerous Handling of Brexit by EU Ideologues: "A group of top German economists has told the EU to tear up the Irish backstop and ditch its ideological demands in Brexit talks, calling instead for a flexible Europe of concentric circles that preserves friendly ties with the UK.... The report implicitly rebuked the European Commission for mishandling its negotiations with Britain and for trying to use the legal advantage of the Article 50 process to dictate a harsh settlement, with little regard for long-term strategic and diplomatic interests...

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What is going on with "Brexit"? To everybody outside Britain—no, not outside Britain, outside England—it is a bizarre and incomprehensible mystery. But here, I believe, Hari Kunzru gets as close as an outsider can to understanding why the English political class is engaged in this farcical tragedy of policy: Hari Kunzru: Fool Britannia: "Heroic Failure: Brexit and the Politics of Pain, by Fintan O’Toole.... The battle over Europe has been fought not over the... open border between Northern Ireland and the Republic... NHS funding, or traffic flow through Dover, let alone harmonized airline regulations or the trading benefits of a Canada-plus model... but through Spitfires, Cornish pasties, singing 'Jerusalem' on the last night of the Proms, and what the Irish historian and journalist Fintan O’Toole calls 'the strange sense of imaginary oppression that underlies Brexit'...

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Fairly Recently: Must- and Should-Reads, and Writings... (February 12, 2019)

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  1. Hoisted from the Archives: Cosma Shalizi (2007): Those Voices Again...: : "Q: Do you ever get tired of beating that dead horse? A: It's not dead yet; that horse will keep kicking until the last person who thinks there's something to The Bell Curve is hanged in the entrails of the last Durkheimian...

  2. Note to Self: Kim Clausing: Open: The Progressive Case for Free Trade, Immigration, and Global Capital: "Monday, February 11, 2019 from 4:00 PM to 6:00 PM (PST). IRLE. 2521 Channing Way. Berkeley, CA 94720: https://books.google.com/books?isbn=0674919335: "With the winds of trade war blowing as they have not done in decades and Left and Right flirting with protectionism, Kimberly Clausing shows how a free, open economy is still the best way to advance the interests of working Americans. She offers strategies to train workers, improve tax policy, and establish a partnership between labor and business...

  3. Please Help Me Out Here!: The Charge of the Brexit Brigade: “Forward, the Brexit Brigade!” Was there a man dismayed? Not though the soldier knew Someone had blundered...

  4. It Is Saturday Morning, and Joe Weisenthal Is Trying to Start a... Symposium... on Twitter: Make mine Professor Cornelius Ampleforth’s navy-strength bathtub gin: Joe Weisenthal: @TheStalwart: "Should I do a tweetstorm on what I think mainstream Keynesians like @paulkrugman @Nouriel and @ObsoleteDogma get wrong about Bitcoin?... I think most Keynesian types see Bitcoin as a horribly inefficient medium of exchange, whose loudest advocates include many scammers, charlatans, misanthropes, and Austrian economics adherents. And tbh, this is basically all true. But...

  5. This Is Nuts. When's the Crash?: The highly-estimable FT Alphaville has long had a series: This is nuts. When's the crash?. That is my reaction to learning that Hoover Institution senior fellows are now crypto... It is not at all clear to me whether they are grifters or griftees here... I had known about John Taylor, but had thought that was a strange one-off. And now Niall Ferguson. Is anybody even pretending to have a business model other than pump-and-dump? I think the only appropriate response is here: Moon Lambo...

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It is journalistic malpractice for any story about Donald Trump to not begin with these seven facts: Dan Froomkin: Some Universal Truths About Donald Trump that Bear Repeating (Over and Over Again) – Dan Froomkin's White House Watch: "While reading this morning’s crop of news and opinion, it struck me that there are several good examples here of stories that identify universal truths about Trump that are too often left out of the daily coverage... [but] are essential context for any story about him. And not just fact-checks or think pieces! Because how can readers possibly be expected to understand what is going on otherwise? [1] He lies all the time.... [2] He has no idea what he’s talking about most of the time.... [3] He is acting out of a profound sense of personal terror–of Mueller, of Ann Coulter, of losing the Senate Republicans.... [4] He is constantly projecting. See CNN, Trump says China is ‘more honorable than Chuck and Nancy‘.... [5] There is no 'White House'.... [6] He is only playing to his base, nobody and nothing else matters anymore..... [7] He is exploiting (and exposing!) how the U.S. presidency has too much unchecked power...

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The extremely good American Economic Association Presidential Address. The takeaway: fear of government debt should be a second-order consideration in a time of low interest rates. And I would go further: because problems created by government debt can be dealt with at low societal cost via financial repression, it should be not a second- but a third- or fourth-order consideration: Olivier Blanchard: Public Debt and Low Interest Rates: "New theoretical foundations for how to think about fiscal policy and debt, which will stimulate the policy research agenda for the profession for years to come...

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Now you can watch the video: Peterson Institute: Confronting Inequality: How Societies can Choose Inclusive Growth: "The Peterson Institute for International Economics holds an event to present the book, Confronting Inequality: How Societies can Choose Inclusive Growth, on January 31, 2019. The book’s authors, Jonathan Ostry, Prakash Loungani, and Andrew Berg of the International Monetary Fund (IMF), along with PIIE Nonresident Senior Fellow Jason Furman and Heather Boushey...

10 Year Treasury Constant Maturity Minus 2 Year Treasury Constant Maturity FRED St Louis Fed

Finally, the Federal Reserve seems to have realized that its policy of driving headlong toward a yield-curve inversion was unwise. So they are "rethinking". But I am not yet confident that they are out of the woods. While the Federal Reserve may not believe that the slowing economy will relieve inflationary pressures, financial markets still believe that the economy will slow so much as to perhaps produce a recession. This strongly suggests that the Federal Reserve is right now—even with its "rethink"—getting the balance of risks wrong: Tim Duy: Fed Holding Steady For Now: "I think the Fed will on net conclude that there exists reason to believe that the economy will slow in 2019 relative to 2018 but the degree of slowing remains uncertain and not clearly sufficient to relieve inflationary pressures. As such, I doubt that the Fed will drop its internal bias toward further tightening.... That bias is clearly evident externally in the Fed’s Summary of Economic Projections. It is also evident in the statement with this sentence: 'The Committee judges that some further gradual increases in the target range for the federal funds rate will be consistent with sustained expansion of economic activity, strong labor market conditions, and inflation near the Committee’s symmetric 2 percent objective over the medium term'...

Cosma Shalizi (2007): Those Voices Again...: Hoisted from the Archives

Cosma Shalizi (2007): Those Voices Again: "Q: Do you ever get tired of beating that dead horse?

A: It's not dead yet; that horse will keep kicking until the last person who thinks there's something to The Bell Curve is hanged in the entrails of the last Durkheimian.

Q: I really did not need that image, thank you very much. So you're perfectly happy to agree that there is genetic variation in the human population which affects the facility with which various cognitive skills are learned, and so mental ability?

A: Sure. In a more cautious mood, instead of saying "there is" I'd say "there could be, for all we know at present, which seems to be squat". But, sure.

Q: And yet, miraculously, this genetic variation is somehow not under natural selection?

A: Did I say anything of the kind? I can think off the top of my head of a really obvious example of recent human evolution, and gene-culture co-evolution at that, namely the four independent evolutions of adult lactose tolerance. For that matter, over the last, oh, 515 years basically the whole human population has been put under intense selection pressure for immune systems which easily develop resistance to smallpox. My guess is that this sort of thing overwhelms any selection pressure for, say, facility of learning symbolic arithmetic (in which symbol system, by what pedagogical method?), unless there are truly weird pleiotropic genes in play....

Q: Could there be traits under selection in the present?

A: I am pretty sure that genes contributing to resistance to malaria, cholera, schistosomiasis and malnutrition continue to be positively selected.

Q: Any more interesting suspects?

A: The prospects for influenza resistance look bright.

Q: You know what I meant.

A: You're asking me to pull speculations out of the air.... People are going to think I'm advancing a genetic explanation for the Flynn Effect, when it's much too strong for it to be due to any remotely plausible degree of selection...

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It is starting to look like Theresa May is aiming at forcing Britain's House of Commons to make a late-March choice between Her Deal and No Deal. A British patriot would be going to the country to ask it to make a choice between Her Deal and No Brexit. But, alas, countries do not get the political and moral non-dwarfs that they need: Rafael Behr: May Thinks She’s Won. But the Reality of Brexit Will Soon Hit Her Again: "Inside the addict’s head the most important thing is getting to the next Brexit fix, scoring the best deal. But from the outside, to our European friends and family, it is obvious that the problem is the compulsive pursuit of a product that does us only harm.... Some MPs can see the situation spiralling out of control. Today 298 lined up to demand an intervention. They backed a cross-party bid to seize control of the Brexit agenda from the government... But the move failed...

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WCEG's Raksha Kopparam makes a very nice catch, and sends us to the enter for Financial Services Innovation's “U.S. Financial Health Pulse: 2018 Baseline Survey”: Raksha Kopparam: New Financial Health Survey Shows That Traditional Metrics of Economic Growth Don’t Apply to Most U.S. Households’ Incomes and Savings: "Single aggregate data points do not capture how economic growth is experienced by different people in very different ways.... Underscoring the importance of knowing who specifically benefits from a strong economy is a new survey by the Center for Financial Services Innovation...

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The wise Kevin O'Rourke tells me what is going on with respect to Brexit. That Theresa May's current demand from the EU is that the EU give her permission to break Britain's word in the Good Friday agreement tells us that her thinking is not something any sane statesman can follow. And what confidence can anybody have in the word of an England that would ask for such permission, anyway?:

Kevin O'Rourke: The EU Has No Incentive to Blink on the Irish Border Question: "For Ireland, no deal means a border, but that is hardly the end of the story. Sooner or later someone in the UK will decide that it is time to “sort things out”, and that will mean further negotiations. Abandon the principle that a backstop is required and any border that emerges will be permanent. Retain it and the border may only be temporary. There is still the possibility that the UK will, after all, keep its promises. And Leo Varadkar, the Irish prime minister, will be eviscerated by the opposition if he backs down. An accidental no-deal Brexit is frighteningly likely. It is made more likely by miscommunication and miscalculation. Now is the time for clarity about what will happen if it comes about...

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Things I did not expect to see. Do note that Hobsbawm does not think it necessary—or cannot be bothered to remember?—one single concrete example here: Eric Hobsbawm: In Praise of Thatcher:

The Age of Extremes A History of the World 1914 1991 Eric Hobsbawm 9780679730057 Amazon com Books The Age of Extremes A History of the World 1914 1991 Eric Hobsbawm 9780679730057 Amazon com Books

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Bernhard Mueller: The Definitive Guide to Becoming a Crypto Maximalist: "The first rule of maximalism is that there is no maximalism. You’re simply a normal person that, based on objective facts, concluded that there’s only one valid cryptocurrency.... You see the big picture. Your cryptocurrency has gifted you sunglasses of truth. Elegantly juggling monetary economics, socioeconomics, game theory and computer science, you have untangled the complex dynamics of real-world distributed multi-agent systems, paving the way to a fair and efficient new world economy. Keep in mind that others may simply lack the education, critical thinking skills or plain intelligence to achieve this comprehensive level of understanding.... Other coins have fake communities that are orchestrated by malicious groups or individuals. They won’t shy away from spending billions to purchase followers and attack your network and social media channels. Yours is the only community bound by ethical rules while the others use every trick in the book. Your coin is doing everything right...

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Equitable Growth's Heather Boushey engaged with Jonathan Ostry, Prakash Loungani, Andrew Berg, and Jason Furman at the Peterson Instute on Thursday January 31: Peterson Institute: Book discussion: Confronting Inequality: How Societies Can Choose Inclusive Growth: "Book discussion with Jonathan Ostry, @LounganiPrakash, and Andrew Berg of @IMFNews on Confronting Inequality: How Societies Can Choose Inclusive Growth with additional comments with @jasonfurman of PIIE & Heather Boushey of @equitablegrowth. January 31, 12:15 pm...

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John B. Donaldson and Rajnish Mehra: Average Crossing Time: An Alternative Characterization of Mean Aversion and Reversion: "The mean reversion/aversion distinction is largely artificial.... The ‘Average Crossing Time’... both unifies these concepts and provides an alternative characterization. Ceteris paribus, mean reverting processes have a relatively shorter average crossing time as compared to mean averting processes...

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I confess, I have never understood why so many people have been so eager to credit Charles Murray as a quantitative social scientist rather than as a latter-day James J. Kilpatrick or Murray Rothbard. Nor have I understood why Jason DeParle was so eager to... sweeten the beat... in his 1994 profile of Murray, rather than to ask even one follow-up question about the KKK and the civil rights movement in Iowa in 1960.

Here Phil Cohen pushes back: Philip N. Cohen: Charles Murray: A White Man’s Cross Burning: "There are powerful individuals representing institutional interests, such as Charles Murray, who spent decades on the dole of non-profit organizations funded by the foundations of the rich.... He and his defenders have always impugned those who assign racist motives to his work.... A biological racial hierarchy in genetic intelligence.... A coalition that includes Murray, defends itself from that charge by claiming it’s not racist if it’s true, and it has fallen to human geneticists to debunk their claims.... Shawn Fremstad reminded me that Murray and his friends burned a cross in 1960.... Here is the very cursory story, in a 1994 New York Times profile [by Jason de Parle] for the release of his book The Bell Curve...

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Should I say that I actually wanted to give a slightly more nuanced take? Or should I just accept my karma, for Twitter is not for nuance? "Essentially" does too much work here: Propane Jane: On Twitter: "Here’s why economist Brad DeLong believes libertarianism is essentially a form of White supremacy.... Cody Fenwick: Here’s Why Economist Brad Delong Believes Libertarianism Is Essentially a Form of White Supremacy: 'Libertarianism "is a Frankenstein’s monster" that got its power from resistance to the Civil Rights Movement...

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The learned and much-worth-listening-to Eric Alterman has darkened my day. I do, however, think it is time for everyone whose career was boosted by making the Faustian bargain of catering to Marty Peretz's bigotries, prejudices, and envies to exit the public sphere, quietly. Perhaps I should make an exception for Peter Beinart, who has done some atonement: Martin Peretz (2007): Tyran-a-Soros: "GEORGE SOROS LUNCHED with some reporters on Saturday at Davos. He talked about spending $600 million on civil society projects during the 1990s, then trying to cut back to $300 million, and how this year it will be between $450 and $500 million. His new projects aim, in Floyd Norris’s words, to promote a 'common European foreign policy' (read: an anti-American foreign policy) and also to study the integration (or so he thinks) of Muslims in eleven European cities...

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Note to Self: Monday, February 11, 2019 from 4:00 PM to 6:00 PM (PST). IRLE. 2521 Channing Way. Berkeley, CA 94720: Kim Clausing: Open: The Progressive Case for Free Trade, Immigration, and Global Capital https://books.google.com/books?isbn=0674919335: "With the winds of trade war blowing as they have not done in decades and Left and Right flirting with protectionism, Kimberly Clausing shows how a free, open economy is still the best way to advance the interests of working Americans. She offers strategies to train workers, improve tax policy, and establish a partnership between labor and business...

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Tom Scocca*Author*: Can a Journalist as Important as Jill Abramson Be a Plagiarist?: "Here’s one part of one set of Moynihan’s examples: 'In December 2006, Mojica and two friends traveled to Chad with a camera to explore why Darfur couldn’t be saved. The result was the 2008 documentary Christmas in Darfur' . 'In December 2006 he and two friends traveled to Chad with a camera to explore why Darfur couldn’t be saved. The result was the 2008 documentary Christmas in Darfur'. That’s a string of 29 words... and a string identically presenting 28 of the same words, published in Abramson’s book as Abramson’s writing. The one-word difference is that Abramson swapped out the subject’s name for a pronoun. Abramson’s passage was plagiarized. Jill Abramson is a plagiarist...

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Please Help Me Out Here!

The Charge of the Brexit Brigade: “Forward, the Brexit Brigade!”
Was there a man dismayed?
Not though the soldier knew
Someone had blundered.

Theirs not to make reply,
Theirs not to reason why,
Theirs but to do and die.
Into the valley of Death
Rode the six hundred.

White papers to right of them,
Pollsters to left of them,
Presslords in front of them
Volleyed and thundered...

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One problem with this from Tim Harford is that a broad, constructive, win-win deal that Theresa May can sell as a win to her coalition may not be in everybody's interest. The people of the EU have a short-run material interest in avoiding the economic pain of a disorderly Brexit. But the governance of the EU also has a short-run ideal interest that may be a long-run material, ideal, and existential interest in demonstrating that leaving the EU turns your country into a desperately dorky clown show. the governance of Ireland certainly believes that its material interest in avoiding disorderly Brexit is less important than its material interact in not endorsing and not allowing the EU to endorse border controls in Ireland.

Tim Harford—and Theresa May—may think that Britain is playing chicken with the EU. But it looks much more to me like Theresa May is reenacting the charge of the light brigade, having cast the EU as the bemused Russian cannoneers:

Tim Harford: Brexit as a Game of Chicken : "A second insight from Schelling: the difference between deterrence and what he called “compellence”. Deterrence dissuades action, but compellence means persuading or threatening someone so that they do act...

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Ed Luce: Only the UK Leads America in Its Rush to Kakistocracy: "Democrats talk[ing] about being 'socialists'... mean the kinds of things centre-right governments support in Europe... universal health coverage, tough regulation of monopolies and sharply progressive taxation. They do not mean Venezuela. That contrast alone is enough to give hope about the relative health of US democracy. But it is no reason to crow. If Britain is the only big democracy that is screwing up worse than you, it is best to keep calm and change the subject...

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It Is Saturday Morning, and Joe Weisenthal Is Trying to Start a... Symposium... on Twitter

It is Saturday morning, and Joe Weisenthal is trying to start a... symposium... on Twitter.

Make mine Professor Cornelius Ampleforth’s navy-strength bathtub gin:

Joe Weisenthal: @TheStalwart: "Should I do a tweetstorm on what I think mainstream Keynesians like @paulkrugman @Nouriel and @ObsoleteDogma get wrong about Bitcoin?... I think most Keynesian types see Bitcoin as a horribly inefficient medium of exchange, whose loudest advocates include many scammers, charlatans, misanthropes, and Austrian economics adherents. And tbh, this is basically all true. But...

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