A Year Ago on Equitable Growth: Twenty Worthy Must- and Should-Reads from the Past Week or so: June 7, 2018
Worthy Readings at Equitable Growth:
That monetary policy is best which avoids creating needless unemployment while still maintaining confidence in the value of the unit of account. Yet surprisingly little thought has been devoted to figuring out which monetary policy jumps the highest with respect to this objective: Nick Bunker: Getting on the level with the Fed’s targeting of prices: "John Williams’s move to New York is a sign that the Federal Reserve may soon reconsider its target for monetary policy. It’s not clear whether a new target would emerge from such a process or how radical a change current members of the FOMC would consider. The current inflation targeting structure may have gotten the U.S. economy to where it is, but it took some time. A quicker recovery from the next recession would be to the benefit of everyone in the U.S. economy. So, a rethink is needed. Hopefully it’s coming soon..."
I think "top 20%" is wrong. The fact that most of percentiles 80%-97% perceive themselves as having catastrophically lost the game of relative status vis-a-vis percentiles 98% and 99%—and that most of percentiles 98% and 99% perceive themselves as having catastrophically lost the game of relative status vis-a-vis the 99.9%, and most of the 99.9% perceive themselves as having catastrophically lost the game of relative status vis-a-vis 99.99% makes arguing that they have in some sense succeeded in realizing a dream that they now hoard a hard argument to make: Richard Reeves: Equitable Growth in Conversation_: "Dream hoarders... are the people at the top... the winners of the inequality divide... the top 20 percent roughly of the income distribution. That means they earn healthy six-figure household incomes, with average incomes of about $200,000 a year..."
There was a lot of noise about how giving repatriated profits a tax break would boost investment in America. As near as I can see it, none of it was well-founded at all: Kimberly Clausing: Equitable Growth in Conversation: "We are distorting repatriation decisions by having this repatriation tax. But I don’t think we’re dramatically changing the investments found in the United States. The companies that have profits abroad can borrow against them to finance any desired investment. And some of the money isn’t really truly abroad—it’s invested in U.S. assets..."
This web page at Slate has the wrong headline. It should be: "Education Won’t Solve Inequality: Not without workers’ power too". Sigh. On the substance, blaming increasing inequality on "Skill Biased Technical Change" was always a non-sequitur. Given the way the models were set up, SBTC was a residual: anything that diminished worker bargaining power was going to be labeled "SBTC" regardless of what it really was: Kate Bahn: Study: Unions increasingly represent educated workers: "Herbst, Kuziemko, and Naidu throws a wrench in the SBTC [Skill-Biased Technical Change] explanation of rising inequality. They find that the education level of union members also followed a U-shape curve from 1936–2016..."
Looking forward to what we can learn from this BLS initiative: Kate Bahn: New data on contingent workers in the United States: "On Thursday, June 7, the U.S. Bureau of Labor Statistics will release data from its freshly collected Contingent Worker Supplement. It’s important for policymakers and economists alike to know what to look for ahead of Thursday’s data release..."
Worthy Readings Not at Equitable Growth:
To keep track of what the Federal Reserve is doing, focus on the University of Oregon's Tim Duy:
If you do not read Steve Randy Waldman regularly, you are doing your weblog scaling wrong...
You should experiment with this as a way of keeping track of information sources you find interesting: Blogtrottr
A very interesting study of what appears to be highly successful job search assistance in Nevada: Day Manoli, Marios Michaelides, and Ankur Patel: Long-Term Effects of Job-Search Assistance: Experimental Evidence Using Administrative Tax Data: "Administrative tax data... examine the long-term effects of an experimental job-search assistance program operating in Nevada in 2009...
I have never believed the critics of Whorfianism—those who claim that the language you speak does not shape what you see and how you think. Non-native speakers have a very hard time even hearing the native phonemes of a language, so how can their thoughts be unaffected? Linguistic sources of gender essentialism: Pamela Jakiela and Owen Ozier: Gendered Language: "At the cross-country level, this paper documents a robust negative relationship between the prevalence of gender languages and women’s labor force participation...
The Trumpists appear unhappy to lose, as long as they can convince themselves that others are losing more. So much "winning". May I have more of this "winning" please?: Edward Luce: The west minus one: how Donald Trump is helping China: "Europe, Canada and Japan are united against Mr Trump’s trade belligerence.... America First requires diplomatic skill. You need knowledge of those you want to divide and rule. Then you pick them off. Yet Mr Trump is doing the opposite.... Two explanations.... The first is that he is incompetent.... The second is that Mr Trump’s id is bigger than his ego.... The result is rolling confusion..."
He uses only the first half of he textbook. And I think students are the better for it: Miles Kimball: On Teaching and Learning Macroeconomics
I think the highly estimable Catherine Rampall is wrong. The trade theories of the 1680s were zero-sum theories. Trump's theory is a negative-sum theory: shoot ourselves in the foot because argle bargle bargle somehow it will hurt the more: Catherine Rampall: Trump’s trade policy is stuck in the ’80s—the 1680s: "Trump seems to have missed this lesson, however. Like an 18th-century mercantilist, Trump perceives no mutual gains from trade. In any transaction, he sees only a winner and a loser. And the winner is determined by who has the trade surplus..."
If ever you talk about the marvel of the private sector in inducing "medical innovation", think of this story: Mark Kleiman: A primer on fentanyl(s): "Kevin Drum asks about the causes of the change: 'Fentanyl has been around for a long time, and only recently has its use become widespread. Why?' Why, I thought you’d never ask. Settle back; this is a complicated story, and it’s going to take a while to tell. But Keith is right: this is a BFD. So it’s worth understanding..."
The problem is that Perry Anderson has no clue in how to be "radical... and... coherent" in a way that is not destructive: Perry Anderson: Why the system will still win: "For anti-systemic movements of the left in Europe, the lesson of recent years is clear. If they are not to go on being outpaced by movements of the right, they cannot afford to be less radical in attacking the system, and must be more coherent in their opposition to it..."
I suspect that other countries will prove much more effective at compensating the losers from a trade ar than Trump will be: Paul Krugman: Oh, What a Stupid Trade War: "My professional training wants me to dismiss the jobs question as off-base. But... we... want to know whether the Trump trade war... would add or subtract jobs holding monetary policy constant, even though we know monetary policy won’t be constant.... This trade war will actually be a job-killer.... Trump is putting tariffs on intermediate goods.... Whatever gains there are in primary metals employment will be offset by job losses in downstream industries.... Other countries will retaliate.... We’re dealing with real countries... they have pride; and their electorates really, really don’t like Trump. This means that even if their leaders might want to make concessions, their voters probably won’t allow it.... This is a remarkably stupid economic conflict to get into. And the situation in this trade war is likely to develop not necessarily to Trump’s advantage..."
Not yet lifespan. Nevertheless, this is another John Donne bell-tolling moment for the American century (and a half): Tom Miles: China overtakes U.S. for healthy lifespan: WHO data: "Chinese newborns can look forward to 68.7 years of healthy life ahead of them, compared with 68.5 years for American babies, the data-which relates to 2016-showed. American newborns can still expect to live longer overall-78.5 years compared to China’s 76.4 - but the last 10 years of American lives are not expected to be healthy..."
Truth be told, macroeconomics has been moving this direction ever since Mitchell and Burns's Business Annals and Schumpeter's Business Cycles were published: Simon Wren-Lewis: Did macroeconomics give up on explaining recent economic history?: "he New Classical Counter Revolution in macro... led to this downgrading of what we might call structural time series analysis of key macro relationships. Equally responsible was Sims... ‘Macroeconomics and Reality’... which proposed instead VAR methods. This perfect storm relegated the time series analysis that had been the bread and butter of macroeconomics to the minor journals. I do not think it is too grandiose to claim that as a consequence macroeconomics gave up on trying to explain recent macroeconomic history..."
Can we have a well-functioning public sphere?: Philip Kitcher: Science, Truth, and Democracy https://play.google.com/store/books/details?id=frrhdqnMNzsC
Wise words on how a progressive society makes use of historical memory, in this case, the historical memory of the Puritans: Teddy Roosevelt (1907: Address on the occasion of the laying of the corner stone of the Pilgrim memorial monument": "We have traveled far since his day. That liberty of conscience which he demanded for himself, we now realize must be as freely accorded to others.... We other Americans who are not of Puritan blood also claim... our heritage.... We all gather to pay homage, no matter from what country our ancestors sprang. We have gained some things that the Puritan had not..."
Zack Beauchamp: Right-wing prof Niall Ferguson plotted to get dirt on a liberal student: "A conservative professor conspiring with students, in emails that sound like they were written by comic book villains.... At Stanford University... Ferguson was one of the faculty leaders of Cardinal Conversations, a Stanford program run by the conservative Hoover Institution that aims to bring speakers to the university who would 'air contested issues on our campus'..."
Trump's attention span is so short and his knowledge base is so small: why have Wilber Ross and company been unable to corral him here?: Ed Luce: Make America 1929 again: "America’s trading partners are learning how to read Mr Trump the hard way. The US president is committed to the pursuit of a trade war of all against all.... Trump knows exactly what he is doing. The fact that it poses a threat to the global order is a feature, not a bug, of his actions..."
Superb twitter precis of what looks to be a superb book that family members have taken from me before I could read: Nicole Cliffe: On John Carreyrou on Theranos and Elizabeth Holmes: Bad Blood: "The most amazing thing about the Theranos book is how utterly and completely nothing ever worked..."
The "economic anxiety" meme is indeed strong here: worries about high unemployment, job insecurity, and stagnant wages are not convincing proximate causes of neo-fascism—not in Europe, not in the United States. Even though the thoughtful Perry Anderson thinks it is: Perry Anderson: Why the system will still win: "It is no surprise that the ever more oligarchic cast of the EU, defying popular will in successive referendums and embedding budgetary diktats in constitutional law, should have generated so many movements of protest against it.... Movements of the right predominate over those of the left because from early on they made the immigration issue their own, playing on xenophobic and racist reactions to gain widespread support among the most vulnerable sectors of the population..."
A plea for pluralism in economic method, among other things: Andrei Shleifer (2015): Matt Gentzkow
#noted #weblogs #worthyreads #hoistedfromthearchives #highighte d