Grasping Reality on TypePad, by Brad DeLong

1. Kevin Drum: A Neoliberal Says It’s Time for Neoliberals to Pack It In: "My fellow neoliberal shill Brad DeLong has declared that it’s time for us to pass the baton to 'our colleagues on the left'.... There’s less here than meets the eye..... Does DeLong intend to go along in areas where his neoliberal ideas are in conflict with the AOC wing of the Democratic Party? He plainly does not.... DeLong... has simply changed the target of his coalition building...

2. Put me, for one, down as welcoming a sensible technocratic debts-and-deficits debate: Brendan Greeley: Give the Kids Permission to Fool Around: "Several weeks ago Alphaville was forwarded a panicked email from the Committee for a Responsible Federal Budget.... The subject... 'Be wary of mischaracterisations of Olivier Blanchard's debt report'.... Here's Mr Blanchard, in his own words, talking to Alphachat... 'use it for the right things. If the economy is very weak and monetary policy cannot be used, use it. If there is public investment to be done, the infrastructure is in terrible shape, use it.... It's a tool, it's not a tool you should avoid to use at any price. It's a tool you should use when you need to'.... He wants a 'richer discussion of the costs of debt and of fiscal policy than is currently the case'.... Alphaville believes that the discussion alone is what the Committee for a Responsible Federal Budget finds so alarming...

3. Put me down for "nobody has a reliable theory of politics", and make it a true Daily Double, Alex: Cosma Shalizi (2011): Harmony of Means and Ends: "If I tried to back out a theory of politics from the practice of left neo-liberals, it would something like this: what matters most to the interest of voters is the over-all growth of the economy; as it grows, they will become more prosperous, and reward the political party which implemented those policies. They will also be willing to support unobtrusive welfare-state measures, especially if they look like they are run efficiently and go to the truly deserving, because prosperous people feel generous. So the most important thing is 'the economy, stupid', and making sure the voters know who is responsible for good economic times.... It seems oddly naive.... All of this can be boiled down to... 'When you tell us that (1) the important thing is to maximize economic growth, and never mind the distributional consequences because (2) we can always redistribute through progressive taxation and welfare payments, you are assuming a miracle in step 2'.... There are I think two reasonable defenses left neoliberals could make. One is to say that creating or strengthening any forms of countervailing power under modern American conditions would itself take a miracle.... The other would be to deny that anyone has a reliable theory of politics, in this sense, certainly none which could be used as a guide to action, and no hope of developing one; whereas we do know a bit about economics...

4. Henry Farrell: The Transformation of Left Neoliberalism: "Brad, Matt Yglesias and Ezra Klein... a formal acknowledgment of a shift that has been taking place for a long time.... They have plausibly changed from being left neoliberals to neoliberal leftists.... They tacitly or explicitly realize that preferred neoliberal means of policy delivery need to be embedded in a framework that is being built up by a broader social movement.... If they are pushing for market means towards social democratic ends, that is fine and good–markets can indeed sometimes be the best way to deliver those ends.... But one key lesson of the last couple of decades is that market provision of benefits makes it harder to build and sustain coalitions–private gain and public solidarity are at best uncomfortable bedfellows...

5. Bespoke subsidies to individual firms plus lack of transparency equals kleptocracy: Nathan M. Jensen and Calvin Thrall: Who’s Afraid of Sunlight? Explaining OppositiontoTo Transparency in Economic Development: "Why do some firms oppose transparency of government programs? In this paper we explore legal challenges to public records requests for deal-specific, company-specific participation in a state economic development incentive program. By examining applications for participation in a major state economic program, the Texas Enterprise Fund, we find that a company is more likely to challenge a formal public records request if it has renegotiated the terms of the award to reduce its job-creation obligations. We interpret this as companies challenging transparency when they have avoided being penalized for non-compliance by engaging in non-public renegotiations. These results provide evidence regarding those conditions that prompt firms to challenge transparency and illustrate some of the limitations of safeguards such as clawbacks (or incentive-recapture provisions) when such reforms aren’t coupled with robust transparency mechanisms...

6. The social safety net alleviates rural poverty. It does not cause it by creating indolence. The then-Whig and now-Republican idea that the rural poor were idle buggers looking for a handout was overwhelmingly false in early nineteenth-century Britain, and is false in early twenty-first century America today James P. Ziliak: Economic Change and the Social Safety Net: Are Rural Americans Still Behind?: "The U.S. economy has been rocked by major business cycle and secular shocks that differentially affected the fortunes of urban and rural areas... coinciding with... the dramatic growth and transformation of the social safety net.... How the... changes have interacted to at times exacerbate, and other times attenuate, well being across regions and over time is little studied.... The analysis here is descriptive...

7. Let me say that I am extremely disappointed that Janet Yellen, Marty Feldstein, and Ted Halstead did not insist that this Financial Times story say that, while they believe that their proposal is much stronger than "Green New Deal" proposals, that the "Green New Deal" proposals would be a vast improvement over current policy. Extremely disappointed. Extremely: Leslie Hook: Surge in US Economists’ Support for Carbon Tax to Tackle Emissions: "The chances of passing a carbon and tax and dividend under the current administration are viewed as extremely slim.... 'I’m not expecting progress on this during this administration', said Ms Yellen. 'My hope is that under a future administration... there will be a call and a greater focus on doing something about climate change.... Businesses I think, are able to get behind this because it is preferable for most businesses to have a predictable environment in which there are a set of prices... rather than have government regulations dictating what technologies must be used', Ms Yellen said...

8. Cosma Shalizi (2011): Extended Harmony, and Tiger Repellent Drumming: "If you want capitalism, but you find a state that powerful very scary... you have a problem.... You might... decide that such power is perfectly A-OK, so long as it's used for ends you approve of and there's no danger of the people taking over. (Hence Hayek's... viewing Pinochet's reign of terror as less damaging to [what he saw as] liberal values than the British National Health Service.) Or you might try to find ways of taming or domesticating state power, of civilizing it. (I think that has a pretty good track-record, but who knows how long we can keep it up?) What you cannot do, with any intellectual honesty or even hope of getting what you want, is pretend that capitalism can work without a powerful, competent and intrusive state. As Ernest Gellner once wrote, 'Political control of economic life is not the consummation of world history, the fulfilment of destiny, or the imposition of righteousness; it is a painful necessity'...

9. An elasticity of taxable income to the after-tax share of 0.2. That seems low, but what do I know? But 85 years was a long time ago: this seems only a data point telling us a little about where the envelope of possibilities lies: Christina D. Romer and David H. Romer (2011): The Effect of Marginal Tax Rates: Evidence from the3 Interwar Era: "This paper uses the interwar period in the United States as a laboratory for investigating the incentive effects of changes in marginal income tax rates. Marginal rates changed frequently and drastically in the 1920s and 1930s, and the changes varied greatly across income groups at the top of the income distribution...

10. Paul Krugman: America the Cowardly Bully: "This is the way the trade war ends. Not with a bang but with empty bombast. According to multiple news organizations, the U.S. and China are close to a deal that would effectively end trade hostilities. Under the reported deal, America would remove most of the tariffs it imposed last year. China, for its part, would end its retaliatory tariffs, make some changes to its investment and competition policies and direct state enterprises to buy specified amounts of U.S. agricultural and energy products. The Trump administration will, of course, trumpet the deal as a triumph. In reality, however, it’s much ado about nothing much.... It will repeat what we saw on the North American Free Trade Agreement, which Trump denounced as the 'worst trade deal ever made'.” In the end, what Trump negotiated... was very similar to the previous status quo. Trade experts I know, when not referring to it as the Village People agreement, call it 'Nafta 0.8': fundamentally the same as Nafta, but a bit worse...

Noah Smith: Bangladesh and India Pursue Different Economic Models for Growth: "When a country first shifts from agrarian poverty to industrialization, it tends to start out in light manufacturing.... Later it masters more complex manufactured products, and finally it progresses to inventing its own cutting-edge technology. Thus, each country’s development tends to look a bit that of nations that already went through the process. That certainly seems to describe the experience of South Korea and Taiwan.... Recently, one of the biggest beneficiaries of this process has been Bangladesh. The garment industry accounts for more than 80 percent of the South Asian nation’s export revenue, and about a fifth of its gross domestic product...

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