Grasping Reality on TypePad, by Brad DeLong

1. Mark Koyama: A Nationalism Untethered to History: "The novelty of The Virtue of Nationalism is twofold. First, Hazony’s positive vision of a national state is based on the biblical account for the early Israelite kingdom.... Second... the nationalism Hazony defends is essentially an ethnic nationalism.... In the current political environment, these views should not be ignored.... A frank conversation about national loyalty, and especially the history of the nation state and its role in the advances of the modern world, are needed now more than ever. Unfortunately, The Virtue of Nationalism has very little to offer to such a conversation...

2. Equitable Growth's Heather Boushey schools our friend, smart young whippersnapper Noah Smith formerly of Stoneybrook and now of Bloomberg: "There is a lot of evidence from political scientists as to how loudly money talks in political democracies, and it is very well laid out in Elisabeth Jacobs's contribution to our After Piketty": Elisabeth Jacobs (1017): Everywhere and Nowhere: Politics in _Capital in the Twenty-First Century...

3. On this question, these days I tend to go the full MMT: the bond market will tell us when it is time to worry about the deficit and the debt, and that time is not now: Jason Furman and Larry Summers: Why Washington Should Worry Less About the Deficit: "As policymakers set budgets in the coming years, a lot will depend on what interest rates do. Financial markets do not expect the increases in interest rates that budget forecasters have priced in. If the markets prove right, that will strengthen the case against deficit reduction. If, on the other hand, interest rates start to rise well above what even the budget forecasters expect, then, as in the early 1990s, more active efforts to cut the deficit could make sense...

4. Yet more evidence that inflation builds very slowly. There appears to be no such thing as a red line that prudent economies dare not cross: Sylvain Leduc, Chitra Marti, and Daniel J. Wilson: Does Ultra-Low Unemployment Spur Rapid Wage Growth?: "The unemployment rate ended 2018 at just under 4%, substantially lower than most estimates of the natural rate. Could such an ostensibly tight labor market lead to a sharp pickup in wage growth from its recent moderate pace, such that the relationship between wage growth and unemployment is not always linear? Investigations using state-level data show no economically significant nonlinearity between wage growth and unemployment that would predict an abrupt jump in wage growth...

5. There do not appear to be many examples of governments that both increase inequality and raise the standard of living of the bottom 10%. Instead, it appears to be one or the other: Dan Davies (2015): Up and Down, Left and Right: "Inequality in the UK against the income of the poorest 10%, as a time series.... It hits you right between the eyes. It’s all up-and-down or left-and-right. The sort of thing that generates the difficult cases for liberal political philosophy–increases in inequality which nevertheless benefited the worst-off, which would have showed up as a southwest-to-northeast upward slope–never happened...

6. Big oligopolistic companies conduct research and development to produce technologies that benefit them—which typically means technologies In which capital substitutes for labor and allows them to shed jobs from their value chain. Enhancing societal well-being, however, requires the development of technologies that do not substitute for but that complement human capabilities. It is becoming increasingly clear to me that the private sector cannot get this balance right: Tim O'Reilly: Gradually, Then Suddenly: "Neural interfaces: One of my biggest 'Wow!' moments of 2018 took place in the offices of neural interface company CTRL-labs. The company's demo involves someone playing the old Asteroids computer game without touching a keyboard, using machine learning to interpret the nerve signals.... But that’s just the first stage. Essentially, users of this technology 'grow' another virtual hand, which they can move independently of their physical hands.... Humanity is already going cyborg.... Don’t fall into the trap of thinking that AI will replace humans when it can be used even more powerfully to augment them...

7. Dylan Riley (2003): Privilege and Property: The Political Foundations of Failed Class Formation in Eighteenth-Century Austrian Lombardy: "Political society is reducible neither to interests in civil society, nor to the state.... The structure of political society matters for group formation.... A political society, in which actors make claims on the state in terms of privileges attached to residence, rather than property ownership, inhibits class formation even when other factors, such as the relations of production, state pressure, and culture, promote it. Where such a political organization is not broken, class formation will not occur even in the presence of strong economic, state-centered, and cultural pressures...

8. It is far from clear to me that the risk of a U.S. recession this year is low. The risk that a recession will be called is low. The risk that a recession will start is 30%:Gavyn Davies: Alarm Bells Ring for the Goldilocks World Economy: "Markets seem willing to overlook the continuing slowdown in the advanced economies, which has taken the latest growth rate to only 0.8 per cent.... This is perversely seen as good news because it will reduce the likelihood of further interest rate increases.... The dovish turn in US monetary policy has been confirmed by an unusual volte-face in policy guidance by the Fed leadership in the space of a few weeks.... This phase of the cycle is often described as the Goldilocks zone, in which growth — like the heroine’s porridge in The Story of the Three Bears—is neither too hot nor too cold.... Meanwhile, growth is still high enough to indicate that the risk of outright recession in the next 12 months remains close to zero.... While the US is still clinging to the middle of the Goldilocks zone, the eurozone is flirting with the bottom boundary of its zone. Any further decline in the nowcast would see a large increase in the probability of a European recession this year. With the Japanese nowcast already in negative territory and Asian trade flows headed sharply downwards, the markets may not be able to ignore much further weakness in the world economy...

9. Todd N. Tucker: @toddntucker: "Trump's desperation to get a deal after the collapse of North Korea talks is probably going to mean the US will not get anything meaningful on Chinese economic reforms: Jenny Leonard: @jendeben: "NEW: U.S. officials are rushing to finalize Trump's China deal even as hawks in his administration want to push Beijing for more concessions. Trump wants a signing summit ASAP. His team has been on the phone with Chinese officials to iron out details: Jenny Leonard, Andrew Mayeda, and Saleha Mohsin: U.S. Said to Ready Final China Trade Deal as Hawks Urge Caution: "The preparations for a Trump-Xi summit come amid conflicting signals from the Trump administration.... Mnuchin... Kudlow said the countries are on the verge of an 'historic' pact.... Lighthizer told lawmakers that more work needs to be done and said the administration won’t accept a deal that doesn’t include significant 'structural' changes to China’s state-driven economy. He also stressed the need for a enforcement mechanism, allowing the U.S. to take unilateral action if China breaks the rules...

10. Sean Carroll (2009): Remembering the Past is Like Imagining the Future: "The way that the human brain goes about the task of 'remembering the past' is actually very similar to how it goes about 'imagining the future'.... That’s what Daniel Schacter at Harvard and his friends have discovered, by doing functional MRI studies of brains subjected to different kinds of cues.... Pieces of data relevant to any particular memory—times, images, sounds—are stored piecemeal in different parts of the brain. When we want to 'remember' something, another part of the brain assembles these pieces into a (hopefully) coherent picture. It’s like running a new simulation every time you need a memory, and it’s the same thing we do when we try to imagine some event in the future.... Memories can be unreliable... many of us don’t appreciate the extent to which that is true.... False memories—conjured from any number of sources, from gradual embellishment to direct suggestion by others—seem precisely as vivid and real to us as accurate memories do. For a good reason: the brain uses the same tools to construct the memory from the available raw materials. A novel and a history book look the same on the printed page...

11. I have to think about this: Yes, distributions have lower tails. but it still seems to me that the absence of clearly visible life out there is powerful evidence that there is a "Great Filter": that one of the parameters (or more than one of the parameters) in the Drake Equation is near zero. Sandberg et al. seem to me to be arguing not so much that the absence of visible life out there is likely even if none of the parameters are near zero, but that our uncertainty is so great that it is not surprising that the universe we live in has one or more parameters near zero even though the average value of each parameter across all universes we might live in is larger: Anders Sandberg, Eric Drexler and Toby Ord (): Dissolving the Fermi Paradox: "The Fermi question is not a paradox, it just looks like one if one is overconfident in how well we know the Drake equation parameters. Doing a distribution model shows that even existing literature allows for a substantial probability of very little life, and a more cautious prior gives a significant probability for rare life. The Fermi observation makes the most uncertain priors move strongly, reinforcing the 'rare life' guess and an early 'Great Filter'...

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