Grasping Reality on TypePad, by Brad DeLong

1. John Hatcher: Unreal Wages: Long-Run Living Standards and the ‘Golden Age’ of the Fifteenth Century: "The renowned ‘Golden Age’ of the fifteenth century has been exaggerated. The surge in the prosperity of the lower orders resulting from high wages, low food prices and easier access to cheap land was undoubtedly extraordinary. But not as prodigious as has customarily been assumed. Furthermore, contrary to the common belief that the economic fortunes of the labouring classes can be taken as a proxy for the living standards of the population as a whole, the scale of improvement in their good fortune was not widely shared by the rest of society who did not derive their incomes solely from wages or their subsistence solely from the market. Argument and evidence are also provided that the criticisms made in this chapter of the compilation, interpretation and application of real wage indices have implications that stretch far beyond the fifteenth century...

2. Gavin Wright: Slavery and Anglo-American Capitalism Revisited: "Eric Williams... links the slave trade and slave-based commerce with early British industrial development. Long-distance markets were crucial supports for technological progress and for the infrastructure of financial markets and the shipping sector.... The eighteenth century Atlantic economy was dominated by sugar, and sugar was dominated by slavery. The role of the slave trade was central.... Adherents of an insurgency known as the New History of Capitalism have extended this line of analysis to nineteenth century America.... Such analyses overlook the second part of the Williams thesis, which held that industrial capitalism abandoned slavery because it was no longer needed for continued economic expansion...

3. Dylan Matthews: Child Poverty Report: Food, Housing, and Money, Not Work Requirements, Work Best - Vox: "The most important report on child poverty in years is finally out.... The result of pressure from California Democratic Representatives Barbara Lee and Lucille Roybal-Allard, the provision called for the National Academy of Sciences to convene a group of experts to produce 'a nonpartisan, evidence-based report that would provide its assessment of the most effective means for reducing child poverty by half in the next 10 years'.... A 'work-based package'.... A 'work-based and universal support package'.... A 'means-tested supports and work package'...

4. Steven Levitsky and Daniel Ziblatt: How Democracies Die https://books.google.com/books?isbn=1524762938: "Since the end of the Cold War, most democratic breakdowns have been caused not by generals and soldiers but by elected governments themselves.... Chávez in Venezuela... Georgia, Hungary, Nicaragua, Peru, the Philippines, Poland, Russia, Sri Lanka, Turkey, and Ukraine. Democratic backsliding today begins at the ballot box...

5. Alexander Hamilton (1787): The Federalist #9: The Union as a Safeguard Against Domestic Faction and Insurrection: "It is impossible to read the history of the petty republics of Greece and Italy without feeling sensations of horror and disgust at the distractions with which they were continually agitated, and at the rapid succession of revolutions by which they were kept in a state of perpetual vibration between the extremes of tyranny and anarchy. If they exhibit occasional calms, these only serve as short-lived contrast to the furious storms that are to succeed. If now and then intervals of felicity open to view, we behold them with a mixture of regret, arising from the reflection that the pleasing scenes before us are soon to be overwhelmed by the tempestuous waves of sedition and party rage...

6. Ha Ha Ha Ha Ha! We in the Clinton administration established the norm that Governors of the Federal Reserve should be people capable of going toe-to-toe in argument with the Fed Chair, on the grounds that the Fed Chair needed competent intellectual sparring partners if he or she, and the staff that did his or her bidding, was not to fall victim to groupthink. One of those who personally benefitted most from this norm was Larry Lindsey, who was chosen as and was quite an effective Fed Governor under George W. Bush. But now, for some short-term advantage or other, Larry is trying to blow up this norm and outdo others in obsequious toadying to Trump. Neither Steve Moore nor Herman Cain can make a coherent forecast. Both are for lower interest rates when Republicans and higher interest rates when Democrats are President. Neither will have the slightest impact on the thinking of the Chair or of the staff—instead, the staff will start playing the pre-Clinton administration game of, as one friend of mine who worked for the Fed called it, "Look! Here's a Governor! Let's see if we can make him say something really stupid!" I wonder what Larry Lindsey says to himself in the morning when he looks in the mirror, and the mirror looks back and says: "You benefitted from this norm of professionalism required for Fed Governors. Now you are trying to break it. What kind of a person are you?" Larry Lindsey: Defending Trump's Likely Fed Nominees: "Steve Moore has a master's in economics from George Mason..... Herman Cain was chairman of the board of the Kansas City Federal Reserve. He is obviously aware of how the Federal Reserve operates and how monetary policy is made.... I am a firm believer in having a variety of views, including those I do not necessarily agree with...

7. Martin Wolf: Xi Jinping’s China Seeks to be Rich and Communist: "President’s ambitions rely on avoiding ‘middle-income trap’ and placating a more demanding populace.... If... China... succeed[ed] in becoming rich, while its political system stayed much the same....Sustained growth of real GDP per head at 4 per cent a year over another generation.... Its economy would then be far bigger than those of the US and EU combined. This would be a new world. Yet is it a plausible one?...

8. This annoys me. Moore and Cain have given no explanation of their switch because there is no explanation fo their switch other than that they are kowtowing to their political masters. I find David Beckworth's Scott Sumner's claim that he is "in no position to judge motives" is itself disingenuous: he is in a position to judge their motives. And that he claims not to be... erodes his credibility on all issues: Scott Sumner: Who Should Serve on the Federal Reserve Board?: "Moore and Cain were both quite hawkish when a more dovish policy was needed, and have recently become more dovish when there is far less need for monetary stimulus. Why?... President Trump is the only other person I can recall whose views on monetary policy switched from hawkish when President Obama was presiding over a weak economy, to dovish when Trump is presiding over a stronger economy.... I’m in no position to judge motives.... If their change of heart was motivated by political considerations, that would be inconsistent with the Fed’s traditional independence from the rest of the government. When politics influences Fed decisions, it can destabilize the economy...

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