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June 2019

I don't understand what's being asked here: yes, Susan is right; yes, the index-number problem rears its ugly head; yes, there are absolute numbers and there are employment shares; yes, there is manufacturing; yes, there is non-computer manufacturing; yes, there are traditional blue-collar occupations. One reading of Susan is "traditional blue-collar occupations are of special concern, and manufacturing excluding computers is important because computer manufacturing is not really a blue-collar semi-skilled easy-to-unionize source of employment". That characterization of computer manufacturing is increasingly true over time—but it also applies increasingly over time to sunbelt manufacturing as well: Noah Smith: "Research from Susan Houseman of the Upjohn Institute casts doubt on the idea that the U.S. manufacturing sector produces more output than ever before, and on @delong's argument that manufacturing job losses have been mostly due to automation:

NAFTA and other trade deals have not gutted American manufacturing period Vox

When Globalization is Public Enemy Number One No Longer Fresh at the Milken Institute Review

3 Month Treasury Bill Secondary Market Rate FRED St Louis Fed

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Federal Reserve Talking Points for Bloomberg: June 19, 2019

For ten years now, the Federal Reserve has:

  • overestimated how fast the economy will grow without exceptional support.
  • underestimated how many people the US can put to work at "full employment"—the point beyond which inflationary pressures start to build.
  • overestimated how fast an inflationary spiral could take hold.
  • underestimated the dangers of renewed recession.


And the result has been the worst economic recovery in American history. For example:


  • The unwillingness of the Federal Reserve to change its 2%-going-forward inflation target deprived the economy of the usual faster-than-trend bounce-back from the depths of a depression.

  • The Federal Reserve's decision to treat 2%-going-forward as a ceiling rather than a target left banks with little incentive to lend out the massive reserves that quantitative easing had led them to hold.

  • The Federal Reserve's mid-2010s decision to announce that the time of extraordinary support would soon end nearly brought on a recession.

  • The Federal Reserve's end-of-2016 decision to initiate a tightening cycle has left it in it current situation, with the 10-year inflation breakeven for the PCE at 1.3%/year—0.75-points below the Federal Reserve's formal target, in which it dearly wishes the interest rates it controls were lower than they are but does not quite dare take steps to reduce them yet.

3 Month Treasury Bill Secondary Market Rate FRED St Louis Fed


More generally:

  • The Trump-McConnell-Ryan tax cut has been a complete failure at boosting the American economy through increased investment in America.
    • But it has been a success in making the rich richer and thus America more unequal.
    • And it delivered a short-term demand-side Keynesian fiscal stimulus to growth that has now ebbed.
  • The past month has seen an 0.8%-point decrease in our estimate in what seasonally adjusted annual-rate production growth was comparing April-June to January March.
    • This is in part an impact of Trump's attempt to fight a trade war with China
    • Plus Trump's attempts to add a trade war with Mexico to the mix.
  • But this is mostly due to what Larry Summers calls "secular stagnation":
    • Financial markets are failing to mobilize the risk-bearing capacity of American society.
    • Thus even very low safe government-debt interest rates have not made capital affordable enough to induce the investment boom we would like to see.

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Liveblogging: The Anglo-Saxon Chronicle: The Early Church and the Roman Empire

Journey To Normandy Scene 1

The Anglo-Saxon Chronicle (J.A. Giles and J. Ingram trans.): The Early Church and the Roman Empire: "A.D. 34. This year was St. Paul converted, and St. Stephen stoned...

...A.D. 35. This year the blessed Peter the apostle settled an episcopal see in the city of Antioch.

A.D. 37. This year Pilate slew himself with his own hand.

A.D. 39. This year Caius undertook the empire.

A.D. 44. This year the blessed Peter the apostle settled an episcopal see at Rome; and James, the brother of John, was slain by Herod.

A.D. 45. This year died Herod, who slew James one year ere his own death.

A.D. 46. This year Claudius, the second of the Roman emperors who invaded Britain, took the greater part of the island into his power, and added the Orkneys to rite dominion of the Romans. This was in the fourth year of his reign. And in the same year happened the great famine in Syria which Luke mentions in the book called "The Acts of the Apostles". After Claudius Nero succeeded to the empire, who almost lost the island Britain through his incapacity.

A.D. 47. This year Mark, the evangelist in Egypt beginneth to write the gospel.

A.D. 50. This year Paul was sent bound to Rome.

A.D. 62. This year James, the brother of Christ, suffered.

A.D. 63. This year Mark the evangelist departed this life.

A.D. 69. This year Peter and Paul suffered.

A.D. 70. This year Vespasian undertook the empire.

A.D. 71. This year Titus, son of Vespasian, slew in Jerusalem eleven hundred thousand Jews...

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Adam Kotsko's mode of discourse is well outside my normal wheelhouse, but I do think that this is important. It is generally a mistake in America to think that religious arguments will persuade anyone of anything political or moral. In America, at least, religion tends to act as a righteousness multiplier rather than a set of principles and ideas that can be used for persuasion and to get peoplle to think reflectively:

Adam Kotsko: The Political Theology of Trump: "This brings us to a scriptural parallel that evangelicals themselves have drawn with Trump: Cyrus the Great, the Persian Emperor who allowed Israelite priestly elites to settle back in the Promised Land.... The Prophet Isaiah sings this pagan ruler’s praises, even calling him God’s “anointed”... “Messiah” in Hebrew or “Christ” in Greek—and promising divine assistance in his ongoing conquest.... IT’S THE BIBLICAL VERSION of 'only Nixon can go to China'. Only a pagan ruler who knows nothing of the God of Israel... can restore the righteous remnant to the Promised Land.... The use of an ignorant, pagan ruler makes the divine agency unmistakable from the Israelite perspective. How could it be more clear that God is really controlling events when his purpose is fulfilled without the involvement of any conscious human intention? My mom suggested that something similar was at play on that painful phone call the morning after the election, when she wondered aloud whether the improbable events that made Trump President against the American people’s will spoke of a divine intention.... There is not much that any of us can do to convince evangelical Trump supporters that their anointed one is an antichrist...

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Liveblogging: The Anglo-Saxon Chronicle: Life of Jesus

Journey To Normandy Scene 1

The Anglo-Saxon Chronicle (J.A. Giles and J. Ingram trans.): Life of Jesus: "A.D. 1. Octavianus reigned fifty-six winters; and in the forty-second year of his reign Christ was born. Then three astrologers from the east came to worship Christ; and the children in Bethlehem were slain by Herod in persecution of Christ...

...A.D. 3. This year died Herod, stabbed by his own hand; and Archelaus his son succeeded him. The child Christ was also this year brought back again from Egypt.

A.D. 6. From the beginning of the world to this year were agone five thousand and two hundred winters.

A.D. 11. This year Herod the son of Antipater undertook the government in Judea.

A.D. 12. This year Philip and Herod divided Judea into four kingdoms.

A.D. 16. This year Tiberius succeeded to the empire.

A.D. 26. This year Pilate began to reign over the Jews.

A.D. 30. This year was Christ baptized; and Peter and Andrew were converted, together with James, and John, and Philip, and all the twelve apostles.

A.D. 33. This year was Christ crucified; about five thousand two hundred and twenty six winters from the beginning of the world...

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The New York Times decides to mark Father's Day by misogynistic wife-slagging! As I said, moral fault attaches to those who support or work for the New York Times: Ana Mardoll: "Obviously they want rage clicks, but this is such a fascinating misuse of a common phrase. 'More than their fair share"' necessarily implies that someone else is slacking. Since marriages often have only two people in them, that leaves... the wife...

New York Times Opinion: "On Father’s Day, the honor of dads must be defended, says @DouthatNYT. Yes, fathers spend less time doing household chores. But when you add up housework, paid work and childcare, married fathers today are doing even more than their fair share...

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Eric Chyn, Samantha Gold, and Justine S. Hastings: The Returns to Early-Life Interventions for Very Low Birth Weight Children: "Administrative data from Rhode Island... regression discontinuity design... 1,500-gram threshold for Very Low Birth Weight (VLBW) status.... Threshold crossing causes more intense in-hospital care, in line with prior studies. Threshold crossing also causes a 0.34 standard deviation increase in test scores in elementary and middle school, a 17.1 percentage point increase in the probability of college enrollment, and 66,997 decrease in social program expenditures by age 14. We explore potential mechanisms driving these impacts...

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How Lenny Mendonca actually found time to teach this course while coordinating California's economic development plans is beyond me: but he is a very, very high-energy person: Lenny Mendonca: Business and Public Policy Perspectives on US Inequality: "Inequality in the United States–Definition and Facts. Inequality in the United States–Why Do Businesses and MBA Students Care? Housing and Transportation. Place-Based Policies. Race and Inequality. Opportunity and Early Education. Higher Education. Immigration (and Effects on Other American Workers). Low-wage Workers. Tax Policy–The 1%. Work in the Future and Universal Basic Income...

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Weekend Reading: History and Myth

In the minds of the monks who wrote the Anglo-Saxon Chronicle, the baptism of Ethelbert King is a historical event on a par with Cynric King having Woden, father-god of the Aesir and high drighten of Valhalla, as his great8-grandfather: The Anglo-Saxon Chronicle A: 552: "This year Cynric fought against the Britons at the place which is called Searo-byrig [Old Sarum], and he put the Britons to flight. Cerdic was Cynric's father, Cerdic was the son of Elesa, Elesa of Esla, Esla of Gewis, Gewis of Wig, Wig of Freawin, Freawin of Frithogar, Frithogar of Brond, Brond of Beldeg, Beldeg of Woden. And Ethelbert, the son of Ermenric was born; and in the thirtieth year of his reign he received baptism, the first of the kings in Britain...

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Liveblogging: The Anglo-Saxon Chronicle: Julius Caesar

Journey To Normandy Scene 1

The Anglo-Saxon Chronicle (J.A. Giles and J. Ingram trans.): Julius Caesar: "Sixty winters ere that Christ was born, Caius Julius, emperor of the Romans, with eighty ships sought Britain. There he was first beaten in a dreadful fight, and lost a great part of his army. Then he let his army abide with the Scots, and went south into Gaul. There he gathered six hundred ships, with which he went back into Britain...

...When they first rushed together, Caesar's tribune, whose name was Labienus, was slain. Then took the Welsh sharp piles, and drove them with great clubs into the water, at a certain ford of the river called Thames. When the Romans found that, they would not go over the ford. Then fled the Britons to the fastnesses of the woods; and Caesar, having after much fighting gained many of the chief towns, went back into Gaul...

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More than Two Decades of Macroeconomic History Through the Lens of Four Key Components of Aggregate Demand

It is remarkable the extent to which you can tell the story of the U.S. macroeconomy over the past twenty-five years through the reactions of four components of aggregate demand to policies and shocks:

  1. The dot-com boom unleashed by the Clinton deficit-reduction program and high-tech innovation.
  2. The dot-com bust.
  3. The housing boom.
  4. The successful rebalancing of aggregate demand—housing sits down, while exports and business investment stand up as money flows are successfully redirected.
  5. The Fed well behind the financial-stability curve: the financial crisis and the collapse.
  6. Inadequate recovery: The Geithner Treasury and the Obama White House's failure to do anything to promote a recovery of residential construction.
  7. Inadequate recovery: Republican (and Obama) fiscal austerity.
  8. Inadequate recovery: Bernanke's highly premature taper tantrum.
  9. The Trump rebound.


Dot-Com Boom:

FRED Graph FRED St Louis Fed


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Reda Cherif and Fuad Hasanov: Principles of Industrial Policy: Weekend Reading

Principles of industrial policy VOX CEPR Policy Portal

Reda Cherif and Fuad Hasanov: Principles of Industrial Policy: "The return of the policy that shall not be named: The 'Asian miracles' and their industrial policies are often considered as statistical accidents that cannot be replicated.... We can learn more about sustained growth from these miracles than from the large pool of failures.... Industrial policy is instrumental in achieving sustained growth. Successful policy uses state intervention for early entry into sophisticated sectors, strong export orientation, and fierce competition with strict accountability...

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June 14, 2019: Weekly Forecasting Update

JOLTS Day Graphs April 2019 Report Edition Equitable Growth

The right response to almost all economic data releases is: Next to nothing has changed with respect to the forecast—your view of the economic forecast today is different from what it was last week, last month, or three months ago in only minor ways. About the only news is that over the past month we have seen an 0.8%-point decrease in our estimate in what production will be over April-June, largely driven by reductions in durable goods orders, capacity utilization, net exports, and this morning employment. This might be an impact of Trump's attempt to fight a trade war with China, plus Trump's attempts to add a trade war with Mexico to the mix.

Federal Reserve Bank of New York: Jun 14, 2019: Nowcast: "1.4% for 2019:Q2 and 1.7% for 2019:Q3. News from this week's data releases increased the nowcast for both 2019:Q2 and 2019:Q3 by 0.4 percentage point. Positive surprises from retail sales, capacity utilization, and industrial production...

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That the Conservative Party appears to want a no-deal Brexit is as bad and destructive as the Republican Party wanting Donald Trump for president: Martin Wolf: No-Deal Brexit Would Be a Lunacy Wrapped Up in a Stupidity: "AThe cost to Britain’s economy and its standing in the world would be immense.... It will be disruptive. Nobody knows quite how disruptive.... EU co-operation... would be limited.... The jump from being a full EU member to this very different status is sure to be disorderly. This is why standard trade agreements have long transition periods.... The long-run costs of being without any deal with the EU would be substantial.... For such reasons, no deal could not possibly be the end of negotiations, but a shift to new ones from a far weaker position.... The EU knows that no deal would weigh more heavily on the UK.... Leaving the EU without a deal would impair the UK’s credibility as a partner for everybody...

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The Intergenerational Burden of the Debt: Nick Rowe Tempts Fate Weblogging: Hoisted from the Archives

Cursor and 30 Year Treasury Inflation Indexed Security Constant Maturity FRED St Louis Fed

Until secular stagnation ends—until the yield on U.S. government debt exceeds the growth rate of the economy—worry about reducing of even stabilizing the debt-to-GDP ratio of a country like the U.S. that has assume running room via financial repression to stabilize demand for its debt is premature. Thus the takeaway is this: It would be much more productive right now to worry about how do we maintain normal levels of net investment in a high government debt post-interest rate normalization environment than to propose sending the economy back into recession in order to reduce government debt accumulation. Recession and high unemployment in the short- and medium-run are problems. Low investment in the medium- and long-run are problems. Government debt is a tool to avoid the first and a source of risk of the second. But it is better to keep your mind focused on the things that are real problems:

Hoisted from the Archives: The Intergenerational Burden of the Debt: Nick Rowe Tempts Fate Weblogging...: Nick Rowe:

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Uncertainty—fear that Brexit will be badly handled—is "killing investment and market sentiment toward the U.K", says Marcus Ashworth. Therefore, says Marcus Ashworth, let's choose a Prime inister—Boris Johnson—guaranteed to handle Brexit as badly as possible. And Ashworth is one of the smartest, most reasonable, and most coherent of the Brexziteers. And he's an incoherent, unreasonable, and rather dim nutter:

Marcus Ashworth: Boris Johnson Is Underpriced By the Financial Markets: "Sterling could well get a lift if the former Mayor of London becomes prime minister.... The fact that several of the candidates to replace her are seemingly happy to let Britain crash out of the European Union without an agreement (with bookies’ favorite Boris Johnson foremost among them) has spooked foreign exchange traders. But plenty of people would welcome some kind of clarity.... It’s the uncertainty that’s killing investment and market sentiment toward the U.K. The flipside of this is the sense that people just want to get Brexit done...

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It is astonishing that this Brexit farce continues. It would only take 10 Tory MPs to call a halt to it:

Bloomberg: U.K. Tory Prime Minister Candidates Unprepared for Brexit Reality: "Irresponsible tax and spending promises predominated. Implausible approaches to Brexit were aired, along with nonchalant talk of defaulting on public debts. Cocaine proved unexpectedly salient. One thing nearly all the candidates had in common was a refusal to accept the precarious position the next party leader will be in.... A chaotic no-deal exit on Halloween. Alarmingly, most of the candidates have suggested that they’d be okay with that last option. In doing so, they seem to be following May’s playbook of keeping the worst-case scenario on the table for negotiating purposes. If that tactic ever made sense, it’s now doubly wrongheaded. For starters... imposing the most damaging version of a policy that about half the country already despises, and one that Parliament has already explicitly rejected.... If the Tory candidates recognize the urgency of confronting hard truths, they’re showing few signs of it...

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China Digital Space: Grass-Mud Horse: "Mascot of Chinese netizens fighting for free expression, symbolizing defiance of Internet censorship. The grass-mud horse, whose name sounds nearly the same as "f--- your mother" (cào nǐ mā 肏你妈), was originally created to skirt government censorship.... The Communist Party is often described as the 'mother' of the people, so saying 'f--- your mother' also suggests 'f--- the Party'...

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Economists Think of Most Lawyers Like Cats Think of Small Birds: Hoisted from the Archives

Hoisted from the Archives: Economists Think of Most Lawyers the Way Cats Think of Small Birds: June 13, 2002: I find that right-wingers Glenn Reynolds, Tom Maguire, and company have elevated me to the high and mighty rank of Democratic Party Hack. Alas! The real ideological partisans scorn me: I have too great a tendency to think about what I should say and then say what I think, rather than to simply jerk my knee and line up in my assigned place on some ideology- or patronage-based team.... Reynolds and company want very badly to say something critical about... Paul Krugman. Unfortunately for them, Krugman's recent column has nothing to take exception to.... So since they can't argue substance, they decide to try to argue procedure.

I can imagine what they thought: "Paul Krugman quotes Brad DeLong! And he doesn't say that DeLong was Deputy Assistant Secretary of the Treasury in the Clinton administration!! That's 'material nondisclosure'!!! Krugman has done a bad thing!!!!" Never you mind that this isn't an issue on which there is any partisan dispute, and thus that 'disclosure' of the partisan allegiance of one's sources is not relevant. To an economist like me this style of—let's be polite, and call it "lawyerlike"—discourse is sad.... Try your best to make the listener forget what the big issue is (in this case, is Krugman right?)--and, instead, argue that there is something wrong with your adversary's procedure. This is, I think, the reason that we economists regard most lawyers like cats regard small birds: Flighty things. Unable to keep their minds focused on what matters. And our lawful prey.

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That Martin Feldstein was certain that we could determine and then agree on what good public policies were was always heartening, and raised my confidence we could make a better world: Larry Summers*: The Economist Who Helped Me Find My Calling: "Working for [Feldstein], I saw what I had not seen in the classroom: that rigorous and close statistical analysis of data can provide better answers to economic questions, and possibly better lives for millions of people. A doctor can treat a patient. An economist, through research or policy advice, can improve life for a population. Marty was appointed president of the NBER in 1977—a position he held for more than 30 years. The NBER became my professional home and occasionally my literal home as I slept near its computer terminals.... Marty was a magnet for talent.... Marty cared about people’s economic analysis, not their political affiliation. That is why he mentored stars like Jeffrey Sachs and Raj Chetty, who disagreed with him on many questions...

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


  1. John Holbo: "You, for example, are being slightly rude, asking such questions of religious people!: 'But... it is not usually taken as rude in religious circles to ask of people: Will you be on the left or the right "when the Son of man shall come in his glory, and all the holy angels with him, then shall he sit upon the throne of his glory...'" Oh absolutely. Rude to challenge people about their religious beliefs. Because that's religious liberty. But it's not rude for religious people to challenge non-religious people abut their beliefs. Because that's religious liberty. Purest proof of 'liberty' = 'privilege' here!...

  2. Brian Lyman: 'Where Was the Lord?': On Jefferson Davis' Birthday, 9 Slave Testimonies

  3. When the person driving the car becomes so exercised by the derogeance inflicted upon newlyweds Lord Randolph Spencer-Churchill and Jennie Jerome by their parents' failure to give them the capital sum to purchase a Stately Home in which to entertain that she misses the turnoff to the Jacksonville airport...

  4. Duncan Black: Do You Even Have Friends: "A legitimate joke about conservatives is they occasionally stumble upon a problem that directly impacts them or their family or friends and suddenly become liberals... on only that issue. Learn to generalize...

  5. Doug Jones: Amplifier Lakes: "Paleontologists and paleoanthropologists are busy sorting out what was special about the climate and ecology of Africa, especially East Africa, that contributed to various phases of hominin evolution... particular times when lakes were flickering in and out of existence along the... East African Rift Valley... a rich (sometimes) but also a particularly challenging environment.... Lewis Dartnell’s very recent Origins: How Earth’s History Shaped Human History...

  6. When and why did the brain eater eat the brain of this guy?: Nick Confessore: "'[Does] secular liberalism ha[ve] a kind of stopping point that accepts the continued not just existence but flourishing of conservative religious traditions?' I haven’t yet encountered a liberal answer to this question in the current instance.... Anyone have a recommendation for a piece on the left engaging with that point?" Parker Molloy: "The premise is insane, Nick. There’s not a reasonable rebuttal to it. It’s honestly scary that there are people willing to view the argument as a reasonable position in the first place. We live in a world where it’s legal for a Christian business owner to fire an employee for being gay, but illegal for a gay business owner to fire someone for being Christian...

  7. Charles Jones (1994): "Economic Growth and the Relative Price of Capital," Journal of Monetary Economics 34, pp. 359-82

  8. John Amato: Donald: Federal Reserve Are 'Not His People' Even Though He Chose 4 Out Of 5: "He apparently forgot that the current Fed panel is one of his creation...

  9. George Orwell (1936): The Road to Wigan Pier

  10. Dan Nexon: Trump Change: Grift and Graft in the New Gilded Age: "Republican concern about many matters – such as the role of congress in overseeing the executive branch and best practices when it comes to securing classified information–extends only so far as partisan political considerations dictates. The same is obviously true of kleptocracy. However, just because the GOP couldn’t care less doesn’t mean that we need to normalize it...

  11. Mark Sullivan: Sign in with Apple Puts Apple’s Privacy Stance to Work: "Sign in with Apple is an impressive, privacy-friendly alternative to one of the main data-harvesting techniques used by its rivals. And Apple isn’t just offering it up as a new option for developers. It will require apps that include sign-in buttons powered by other companies to add its new button as well...

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A Year Ago on Equitable Growth: Twenty Worthy Reads from the Past Week or so: June 14, 2018

Worthy Readings from Equitable Growth:

  1. The development of the ideas that economics—labor economics especially—needs to focus more on power; David Card, Alan Krueger, and Ben Zipperer: [Equitable Growth in Conversation( Alan Krueger: "I think Orley [Ashenfelter]... set the tone for the Industrial Relations Section... used to like to tell a story, which I remember vividly, where he met with some restaurant group when he worked, I think, at the Labor Department. And they said, we’ve got a problem in our industry: The minimum wage is too low and we can’t get enough workers. And that’s inconsistent with the kind of view that the market determines the wage...Z"

  2. Take a look at global corporate tax avoidance here: Gabriel Zucman, T. Tørsløv, and L. Wier: The Missing Profits of Nations

  3. Kate Bahn: sends us to a guy who used to work here on fire in Twitter about how the Gig Economy is not (at least not yet) a big deal: John Schmitt: @nytimes: 'Maybe the Gig Economy Isn’t Reshaping Work After All': Maybe it is regular work (low pay and benefits, insufficient and unpredictable hours, lack of voice on the job, etc.) that is shaping the gig economy?...

  4. Get up to speed on the puzzle of low wage growth going with low unemployment. Much worth reading from Nick Bunker: Nick Bunker: Puzzling over U.S. wage growth: "Hiring has not been particularly strong during this recovery...

  5. Kim Clausing: How will the #TCJA Impact American Workers?: "(1) Overall, the benefits of the #taxcuts are skewed toward the wealthy. (2) When the tax cuts are eventually paid for, the vast majority of American households will be worse off..."

Worthy Readings Elsewhere:

  1. My review of the superb and extremely thought provoking: Richard Baldwin (2016): The Great Convergence: Information Technology and the New Globalization Reviewed for Nature The iron-hulled oceangoing steamships and submarine telegraph cables of the second half of the 19th century set off a first wave of economic globalization. The intercontinental transport of both staple commodities and people became extraordinarily cheap. The container of the second half of the 20th century made the transport of everything non-spoilable--and some things spoilable--essentially free. It set off a second wave of economic globalization...

  2. I am confused here: Do we have an "eastern heartland" problem? Or do we have a "prime age male joblessness" problem? Those two problems would seem to me to call for different kinds of responses. Edward L. Glaeser, Lawrence H. Summers and Ben Austin: A Rescue Plan for a Jobs Crisis in the Heartland: "In Flint, Mich., over 35 percent of prime-aged men—between 25 and 54—are not employed...

  3. How George Borjas p-hacked his way to his conclusion that immigrants have big negative effects on native-worker wages: Jennifer Hunt and Michael Clemens: Refugees have little effect on native worker wages: "Card (1990) found that a large inflow of Cubans to Miami in 1980 did not affect native wages or unemployment...

  4. Larry plumps for nominal GDP targeting: Lawrence Summers: Why the Fed needs a new monetary policy framework: "A monetary framework... should... [have] enough room to respond to a recession... nominal interest rates in the range of 5 percent in normal times...

  5. Would faster productivity growth raise wage growth? That is, would other things stay not equal but at least not become more adverse? Probably: Anna Stansbury and Lawrence H. Summer: Productivity and Pay: Is the Link Broken?: "Since 1973 median compensation in the United States has diverged starkly from average labor productivity...

  6. Joe Gagnon is right here: Listen to him: Joseph Gagnon: There Is No Inflation Puzzle: "Inflation is behaving exactly as the Phillips curve would predict...

  7. So you think you want to become an economist..." Masayuki Kudamatsu: tips4economists

  8. The parallels between the Great Recession and the Great Depression remain a very fruitful area to think about: Noah Smith: "How many parallels can we think of? Interestingly, it's the very existence of all those parallels that lets us see how differently the 21st century is unfolding, compared to the 20th. We staved off the worst of the Great Recession. But this time, unlike before, we elected a xenophobic authoritarian President. What would 20th century American history had looked like if we had gone off the gold standard early, but then elected Lindbergh instead of Roosevelt? Maybe we're about to find out!..."

  9. Opposition to Medicaid expansion was one of the cruelest deeds of reactionaries in the 2000s: Ralph Northam: "As a doctor, I believe ensuring all Virginians have access to the care they need is a moral and economic imperative. This budget expands Medicaid and will empower nearly 400,000 Virginians with access to health insurance, without crowding out other spending priorities..."

  10. Long-run changes in the nature of work and jobs happen, but they happen in the long run. In the short run in which we live, low-pressure and high-pressure economies dominate. Why do people find this surprising?: Larry Mishel: "One reporter told me there’s quite a ‘furor’ over the new BLS Contingent worker data. Not sure why that should be, except if you bought the hype about a rapidly changing nature of work and an explosion of freelancing and gig work. @EconomicPolicy..."

  11. I still have a hard time believing the U.S. is launching a trade war that no domestic interest group wants: Barry Eichengreen, Sean Randolph, and Jonathan R. Visbal: A War of Trade? Protectionist Policies Under Trump: "1,300 Chinese products... a 25% tariff... over $46 billion worth of goods. In response, China produced its own list...

  12. Yes, Europe may well be facing another crisis: Olivier Blanchard, Silvia Merler, and Jeromin Zettelmeyer: How Worried Should We Be about an Italian Debt Crisis?: "Two conditions... that rising interest rates reflected economic recovery; and... that the Italian government would be prepared to cooperate with European authorities... no longer hold...

  13. If you believe Robert Barro and his posse, we ought to be seeing annual-rate investment spending suddenly and discontinuously leaping upward by $800 billion this year. We are not: Pedro Nicolaci da Costa: Tax cuts fail to boost corporate investment plans, Fed survey shows: "Trump claimed the tax bill would lead to a huge boost in business spending—but there's no sign of it yet...

  14. 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...

  15. The Committee for a Responsible Federal Budget is only one of many organizations that took Paul Ryan at the estimation of his communications staff. We have a significantly less responsible federal budget as a consequence: Michael Grunwalde: Paul Ryan's Legacy of Red Ink: "The speaker of the House’s reputation as a budget hawk has somehow survived his actual record...


This File:

Why Charles L. Black thought Wechsler, Bickel, and company were mendacious morons: Charles L. Black (1960): The Lawfulness of the Segregation Decisions: "IF the cases outlawing segregation 1 were wrongly decided, then they ought to be overruled... [and] will be overruled, slowly or all at once, openly or silently.... The hugely consequential error cannot stand and does not stand.... There is call for action in the suggestion that the segregation cases cannot be justified... practical and not merely intellectual significance in the question whether these cases were rightly decided. I think they were rightly decided, by overwhelming weight of reason, and I intend here to say why I hold this belief. My liminal difficulty is rhetorical-or, perhaps more accurately, one of fashion. Simplicity is out of fashion, and the basic scheme of reasoning on which these cases can be justified is awkwardly simple.... The equal protection clause of the fourteenth amendment... the Negro race... is not to be significantly disadvantaged by the laws of the states.... Segregation is a massive intentional disadvantaging of the Negro race.... That is really all there is to the segregation cases. If both these propositions can be supported by the preponderance of argument, the cases were rightly decided...

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Central banks may remain independent if they manage economies in a way that produces a modicum of stability and prosperity. If they fail to do so—if their management produces instability and poverty—I can guarantee that they will not remain independent: Barry Eichengreen: Unconventional Thinking about Unconventional Monetary Policies by Barry Eichengreen: "Defenders of central-bank independence argue that quantitative easing should have been avoided last time and is best avoided in the future, because it opens the door to political interference with the conduct of monetary policy. But political interference is even likelier if central banks shun QE in the next recession...

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This is amazing: Right-wing grifters gotta grift: Jemima Kelly: The Rick Santorum-Backed Coin for Catholics: "Backing a project that combines his religious fervour with another area of modern-day fanaticism: blockchainism (thanks to Buttcoin and in particular contributor David Gerard for drawing our attention to this)... a company and soon-to-be digital coin (stablecoin, specifically) called Cathio... 'a new payment, remittance and funding platform which provides efficient, secure, and transparent movement of funds within the Catholic world', promising to provide a 'turnkey solution for Catholic organizations to bring their financial transactions into alignment with their beliefs'...

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David S. Jacks, Christopher M. Meissner, and Dennis Novy: Trade Booms, Trade Busts, and Trade Costs: "What has driven trade booms and trade busts in the past and present? We derive a micro-founded measure of trade frictions from leading trade theories and use it to gauge the importance of bilateral trade costs in determining international trade flows. We construct a new balanced sample of bilateral trade flows for 130 country pairs across the Americas, Asia, Europe, and Oceania for the period from 1870 to 2000 and demonstrate an overriding role for declining trade costs in the pre-World War I trade boom. In contrast, for the post-World War II trade boom we identify changes in output as the dominant force. Finally, the entirety of the interwar trade bust is explained by increases in trade costs...

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Hoisted from Eleven Years Ago: Poverty Traps: The High Price of Investment Goods in Poor Countries

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Hoisted from Eleven Years Ago: Poverty Traps: The High Price of Investment Goods in Poor Countries is how Larry Summers and I formulated it back in the early 1990s, and I believe that we were correct:

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Liveblogging: The Anglo-Saxon Chronicle: Introduction

Journey To Normandy Scene 1

The Anglo-Saxon Chronicle (J.A. Giles and J. Ingram trans.): Introduction: "The island Britain is 800 miles long, and 200 miles broad. And there are in the island five nations; English, Welsh (or British), Scottish, Pictish, and Latin...

...The first inhabitants were the Britons, who came from Armenia, and first peopled Britain southward.

Then happened it, that the Picts came south from Scythia, with long ships, not many; and, landing first in the northern part of Ireland, they told the Scots that they must dwell there. But they would not give them leave; for the Scots told them that they could not all dwell there together; "But," said the Scots, "we can nevertheless give you advice. We know another island here to the east. There you may dwell, if you will; and whosoever withstandeth you, we will assist you, that you may gain it." Then went the Picts and entered this land northward. (Southward the Britons possessed it, as we before said.) And the Picts obtained wives of the Scots, on condition that they chose their kings always on the female side; which they have continued to do, so long since.

And it happened, in the run of years, that some party of Scots went from Ireland into Britain, and acquired some portion of this land. Their leader was called Reoda (5), from whom they are named Dalreodi (or Dalreathians)...

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Comment of the Day: HankP: "Under Bush we had the imposition of torture as policy, now trump has added concentration camps. Republicans applauded loudly in both cases. Everyone knows where this is headed if we don't stop it...

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I wouldn't call it "crashing", but... And it is not just the south: Wisconsin and Kansas joined, and Michigan and Indiana and Ohio are teetering on the edge:

John Cole: The Decline of the South: "...Good piece in the WSJ about the crashing economy in the south":

Sharon Nunn: The South’s Economy Is Falling Behind: ‘All of a Sudden the Money Stops Flowing’: "Since 2009, the South’s convergence has turned to divergence, as the region recorded the country’s slowest growth in output and wages, the lowest labor-force participation rate and the highest unemployment rate.... Low taxes and low wages that attracted factories and blue-collar jobs—have proven inadequate in an expanding economy where the forces of globalization favor cities with concentrations of capital and educated workers. 'Those policies worked before, then they became fundamental constraints on the [South’s] long-term growth', said Richard Florida, an urbanization expert at the University of Toronto.... In part because of its legacy of racial segregation the region has, relative to others, underinvested in human capital.... Against the Northeast...the South’s per capita income peaked at 79.1% of the Northeast’s level, and has since fallen to 71.6%.... Sunbelt cities like Charlotte and Atlanta have attracted both wealthier white-collar workers and retirees....Texas, with its own unique economy... is relatively urban, with five major metro centers... a thriving tech sector and ample reserves of oil and gas....Many economists say the most effective way for the South to regain its momentum would be to invest more in education, which would over time create a more skilled workforce to attract employers. But Mississippi State University economist Alan Barefield notes that is difficult to reconcile with southern states’ historic desire to keep spending and taxes low...

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I'm with "ignorant" rather than "willfully wrong" here, Eric: Eric Rauchway: "Ross Douthat says: 'The crisis of the 1930s ended happily for liberalism because a reactionary imperialist withstood Adolf Hitler and a revolutionary Bolshevik crushed him.' This argument is at best ignorant and incomplete, and at worst willfully wrong. If you... hear any of many edited versions of Churchill's great 'never surrender' speech, you might miss its major point, because often people cut it off after the words 'never surrender'. THAT'S NOT HOW THE SPEECH ENDS. The speech is directed at the administration and the radio audience across the ocean, in the United States... 'even if, which I do not for a moment believe, this Island or a large part of it were subjugated and starving, then our Empire beyond the seas, armed and guarded by the British Fleet, would carry on the struggle, until, in God’s good time, THE NEW WORLD, with all its power and might, steps forth to the rescue and the liberation of the old'. That speech is a plea for American materiel, inasmuch as much British materiel—'the first-fruits of all that our industry had to give'—was left on the beach at Dunkirk.... The 'reactionary imperialist' needed American aid.... Certain elements didn’t want him to have it... America First... portray[ed] Roosevelt as a warmonger... the Willkie campaign in 1940 followed suit.... The Nazis financed anti-Roosevelt propaganda in the US and even tried to set up a credible left alternative to him in the 1940 election, knowing that of all US politicians, Roosevelt was the worst news for them. Roosevelt, as you know, won reelection anyway—and shortly afterward... announced... lend-lease...

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David French: President Trump & Sohrab Ahmari:The Cruelty Is the Point: "Sohrab Ahmari... made three core points: Politics is 'war and enmity', 'civility and decency are secondary values', and the right should fight the culture war 'with the aim of defeating the enemy and enjoying the spoils in the form of a public square re-ordered to the common good and ultimately the Highest Good'.... People asked, 'But what does that look like. What do you mean when you make the case for enmity and against civility?'... It looks a lot like what Sohrab did to me in his essay and what Trump’s supporters did to me in response. A man committed to 'enmity' and who believes decency is secondary repeatedly misrepresented my approach to politics and my role in critical public controversies... created a fictional version of me.... a signal flare, calling a truly enormous number of committed Trump supporters to spend day after day attacking me in the most vicious of terms, including by spreading many of the same falsehoods in the original piece.... Allow the falsehoods to issue unchallenged, and you can see your reputation... left in tatters.... Respond, and the attackers... thrill to their ability to trouble you enough to trigger an answer... [which] triggers swarms of additional personal attacks often made in steadily darker terms, culminating in zombie elements of the alt-right lurching up to take their shots.... In this brave new political world, personal attacks are indispensable. A discussion of only ideas represents exactly the kind of politics the pugilists now abhor.... But it’s all for the sake of the 'Highest Good', right?...

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Charles Sykes: Donald Trump and the New Cruelty: "The children were not collateral damage of Trump’s policy: They were the entire point. Removing them from their parents was designed to be shocking because their trauma was intended as a deterrent. Under the New Cruelty, the pitiless separation of young children from their mothers was supposed to send a chilling message to anyone foolish enough to seek asylum here... supposed to project strength, or at least the bully’s imitation of strength. Perhaps more than any other trait, it is this that motivates Trump: his need to appear strong and his fear of looking weak. Lewandowski... is a bit player... another of the menagerie of misfit toys... feed[ing] off Trump’s sundry insecurities...

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Nick Kapur: "Grover Cleveland Had One of the The Sketchiest Marriages.: "A bachelor upon entering office in 1883, in 1886 the 49-year-old president married 21-year-old Frances Folsom, who was 28 years his junior.... So far there's a massive age difference, but otherwise it sounds okay. But... It turns out that Grover had known Frances since birth. He was a very close family friend and had actually gifted her family with her first baby carriage...

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DeLong Smackdown Watch: Yield Curve: Hoisted from the Archives from 2006

Ooh boy. Was I wrong in 2006. I am not betting against the yield curve again:

From 2006: DeLong Smackdown Watch: Yield Curve: Worthwhile Canadian Initiative thinks I'm wrong when I write: Yes, we should be worrying about the US yield curve: This inversion of the yield curve, however, is generated not by domestic investors' thinking that a recession is on the way, but by foreign central banks' desires to keep buying lots of dollar-denominated bonds in order to keep their currencies from appreciating. Thus while an inverted yield curve is usually a sign that a bunch of people are trading bonds on their belief that a recession is likely, that is not what is going on in this case...

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I am not sure that it is right to say that advocate of "Mothers' Pensions" believed that "the woman’s sphere was in the home". They certainly believed that women's work was important, and beieved that the first and most dire need for social insurance was to make sure that mothers of children had the resources they needed to raise the next generation. But they—and here I am generalizing from my own family history: my great-grandmother Fonnie and my great-great-grandmother Florence—also recognized that their generations were having four pregnancies on average while their grandmothers had had eight, and that they were assisted in the home by an increasing amount of modern technology in the form of consumer durables. And my mother-in-law Barbara maintains to this day that the thing that most changed her life was the clothes-washing machine. Half the number of pregnancies plus consumer durables meant that a lot of female energy could be—and was—directed outside the home:

Alix Gould-Werth: After Mother’s Day: Changes in Mothers’ Social Programs Over Time: "As Anna Jarvis was crusading to get Mother’s Day a place on the nation’s calendar, her peers—wealthy, white women who shared her progressive, reform-minded impulses—were laying foundation for our modern social safety net. Though most of these women chose to pursue social change rather than traditional family life, as architects of Mothers’ Pensions, they sided firmly with the view that the woman’s sphere was in the home. Mothers’ Pensions—which were passed into law state by state from 1911 to 1920—were targeted at widows and provided cash payments designed to simultaneously keep children out of orphanages and mothers out of the workplace...

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In a way, America in the twenty-first century has hit a trifecta, with respect to proving to everybody else in the world that America is not a good model—that ָָָָָָAmerica now has a dysfunctional government, and behind it a dysfunctional society which appears incapable of reform. The George W. Bush administration's foreign policy demonstrated that America—or, at least, the bipartisan foreign policy establishment to whom America had given the keys—could not assess its own or the global interest in avoiding pointless war. the blocking of policies to guarantee rapid economic recovery under the Obama administration—and the Obama administration's fair to pull the levers it had—demonstrated that Republican elites, at least, had no concerns about getting to full employment and rapid growth if it might somehow redound to the benefit of their political adversaries.

And now the Trump administration has demonstrated that when the chips are down a very large proportion of America simply does not care about freedom or democracy: is very happy putting children in cages, disenfranchising legitimate voters, and appointing stunningly incompetent officials all to own the libs. Hitting this trifecta was self-inflicted.

But until we have a diagnosis and have implemented a cure, Xi Jinping can rightly say to China that we are not a superior model:

Gideon Rachman: Why Donald Trump Is Great News for Xi Jinping: "Trump... likes to create a crisis, let it run a while and then announce that he has solved it... striking an agreement that he self-certifies as 'tremendous'... [but is] superficial and the underlying issues will remain largely unaddressed. This is the model that the Trump administration has followed with North Korea, as well as with Mexico and Canada. And it is the model that is pretty clearly going to emerge in Mr Trump’s 'trade war' with China.... But calling off the trade war will not be the only gift from Mr Trump to Chinese president Xi Jinping. For Mr Trump has already disarmed America in an even more important battle—the battle of ideas.... America’s most potent weapon in its emerging contest for supremacy with China is... its ideas... 'freedom' and 'democracy' are powerful.... Sadly, that has now changed. As a candidate, Mr Trump gave a very ambiguous reply when asked about the Tiananmen massacre of 1989, stating: 'they were vicious, they were horrible, but they put it down with strength'. As president, he has made it clear that he is an admirer of authoritarian strongmen around the world...

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Duncan Black: Public Accommodation: "Once and not all that long ago I went on a trip with some friends. A lesbian couple. We were going hiking. I am a dumb person so it did not occur to me that checking into a hotel could be problem. It was not a problem! The lovely woman at the checkout desk was a trans woman and she was very happy to see us. But I am dumb and until that moment it did not occur to me that getting a hotel room in Pennsyltucky could be a problem. And the problem isn't that someone might not rent to you. It's not knowing if they will. Not knowing that when you walk into a store if you will be served. It is a concern and holy crap what a concern. Maggie Haberman once told us that Donald Trump was a friend to LGTB. This is why I tell you to cancel your New York Times subscriptions. Donald Trump has turned trans people into unpersons. I am not as dumb as I used to be...

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The Myth of Kevin Williamson: Weekend Reading

Danielle Tcholakian: The Myth of Kevin Williamson: "After a week or so of mostly women questioning The Atlantic’s hiring of Kevin Williamson, a conservative columnist who has advocated for hanging women who have had abortions, the magazine’s editor-in-chief Jeffrey Goldberg announced Williamson is no longer in his employ. Goldberg had justified hiring Williamson on the grounds that he’s a talented writer, and his assertion that women who have abortions should be hanged was an errant tweet, not to be taken seriously. But Media Matters dug up a 2014 podcast for the National Review in which Williamson talked at length about how much he likes this idea. 'I’m kind of squishy about capital punishment in general, but I’ve got a soft spot for hanging as a form of capital punishment'...

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Moral fault attaches to anybody who pays money to or works for the New York Times. You need to do better. Just saying: Jeet Heer: "They should publish two editions of the New York Times: one made up just of beat sweetener to please Trump & his staff and another that publishes just, you know, the news." Daniel Radosh: These two articles were posted to @nytimes within an hour of each other. Seems like one of them has to be incorrect, right?:

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John Holbo: Twitter Thread: "Let's start at the start. 'Liberty... as formerly understood' under pressure. That is very exact and correct. But consider:... Women's rights resisted because it felt like denial of liberty (men's former liberties). African-Americans: Civil rights, a gross affront to white liberty. Anti-slavery = vicious assault on liberty.... Saying that 'liberty... as it was formerly understood' coming under felt pressure is something that is true of the BEST fights for freedom and rights. It is not a danger sign...

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The bond market thinks a recession is likely. the NBER would now—if it still paid attention to anything but payroll—would be wondering when it should call the peak. But we seem to have decided that a recession is not a recession of economic activity in general from a previous peak but ragther a sudden, sharp, significant, and asymmetric fall in employment. The key would then be found in the hearts and minds of businesses: Are things likely to be bad enough in the future that we need to start shedding labor now? Can we use the excuse of 'hard times' to break our implicit contracts with our workers without incurring heavy costs in terms of reduced worker morale? When the answers two those two questions become 'yes', that is a recession. And we are not yet there—and we have no good models of what would push us there:

Menzie Chinn: Recession Anxieties, June 2019: "Different forward looking models show increasing likelihood of a recession. Most recent readings of key series highlighted by the NBER’s Business Cycle Dating Committee (BCDC) suggest a peak, although the critical indicator—nonfarm payroll employment—continues to rise, albeit slowly...

Recession Anxieties June 2019 Econbrowser

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