Grasping Reality on TypePad, by Brad DeLong

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...

John Holbo: Twitter Thread: "Michael Brendan Dougherty says, reasonably, that Catholics should do some institutional soul-searching, not attributing all misfortunes to rampant liberalism.... But once you notice that buried lede MBD digs out, you can't help but notice a bigger one[:]... 'Liberty... as formerly understood' under pressure... is something that is true of the BEST fights for freedom and rights. It is not a danger sign.... 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.... ײַt is weird to point out that some of these changing attitudes might be due to changes in-weaknesses in-the church-rather than symptoms of some monstrous cancer-growth of liberalism beyond its healthy bounds. But then NOT to point out...

Worthy Readings at Equitable Growth:

1. 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..."

2. 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..."

3. 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..."

4. 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..."

5. 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..."

Adam Yang: The Long Road to the Korean War Armistice: "The communists were adamant about the unconditional return of all their men.... Despite China’s drastic losses on the battlefield, Mao believed that continuing the war would be politically useful for the newly formed Communist China. During a meeting with the Joseph Stalin in August of 1952, Chinese Premier Zhou Enlai said that fighting the United States to a draw increased their global prestige, aided in unification, and provided their army with invaluable combat experience.... However, China’s continued involvement with North Korea was conditioned upon gaining financial support from the Soviet Union.... On March 5, Joseph Stalin died.... At Stalin’s funeral, the less-hawkish Malenkov... stat[ed] international disputes could be 'settled peacefully on the basis of mutual agreement between the countries concerned'.... On March 28, Zhou Enlai notified the UN that China and North Korea were ready to resume negotiations at Panmunjom. They also agreed to the U.S. desire for a neutral commission to manage POWs who did not wish to repatriate. Mao and General Peng... wanted to preserve... the narrative that describes how a newly formed Communist China was able to beat back great Western powers...

Nikolai Novikov (1946): Sources of American Conduct: "The foreign policy of the United States, which reflects the imperialist tendencies of American monopolistic capital, is characterized in the postwar period by a striving for world supremacy. This is the real meaning of the many statements by President Truman and other representatives of American ruling circles; that the United States has the right to lead the world. All the forces of American diplomacy—the army, the air force, the navy, industry, and science—are enlisted in the service of this foreign policy. For this purpose broad plans for expansion have been developed and are being implemented through diplomacy and the establishment of a system of naval and air bases stretching far beyond the boundaries of the United States, through the arms race, and through the creation of ever newer types of weapons...

John Foster Dulles: Massive Retaliation: "The Soviet Communists are planning for what they call 'an entire historical era', and we should do the same. They seek, through many types of maneuvers, gradually to divide and weaken the free nations by overextending them in efforts which, as Lenin put it, are 'beyond their strength, so that they come to practical bankruptcy'. Then, said Lenin, 'our victory is assured'. Then, said Stalin, will be 'the moment for the decisive blow'. In the face of this strategy, measures cannot be judged adequate merely because they ward off an immediate danger. It is essential to do this, but it is also essential to do so without exhausting ourselves. When the Eisenhower administration applied this test, we felt that some transformations were needed...

Alfred Lord Tennyson: Ulysses: "It little profits that an idle king,
By this still hearth, among these barren crags,
Matched with an aged wife, I mete and dole
Unequal laws unto a savage race,
That hoard, and sleep, and feed, and know not me...

Mark Thoma sends us to: Marco Tabellini: Lessons from the Age of Mass Migration | VOX, CEPR Policy Portal: "Gifts of the immigrants, woes of the natives: Recent waves of immigration in the US and Europe have triggered debate around the economic and political impact. This column uses evidence from migration of Europeans to the US in the first half of the 20th century to show that large cultural differences can incite anti-immigrant sentiment despite their positive economic impact. Therefore, policymakers should give due attention to cultural assimilation and cohesion policies...

The leaves were long, the grass was green,
The hemlock-umbels tall and fair,
And in the glade a light was seen
Of stars in shadow shimmering.
Tinúviel was dancing there
To music of a pipe unseen,
And light of stars was in her hair,
And in her raiment glimmering.

Friend of Equitable Growth Elise Gould on how minimum wage increases are having powerful positive while—so far at least—no negative impacts: Elise Gould: "Look! In states with a minimum wage increase between 2013 and 2018, the 10th percentile wage grew 50% faster than in states without any increase. On the other hand, median wage growth was similar in states that did and did not increase their minimum wage in that same period...

Hoisted from the Archives: Joseph Schumpeter on "Liquidationism": Hoisted from the Archives: "The problems presented by periods of depression may be grouped as follows: First, removal of extra economic injuries to the economic mechanism: Mostly impossible on political grounds. Second, relief: Not only imperative on moral and social grounds, but also an important means to keep up the current of economic life and to steady demand, although no cure for fundamental cases. Third, remedies: The chief difficulty of which lies in the fact that depressions are not simply evils, which we might attempt to suppress, but—perhaps undesirable—forms of something which has to be done, namely, adjustment to previous economic change. Most of what would be effective in remedying a depression would be equally effective in preventing this adjustment. This is especially true of inflation, which would, if pushed far enough, undoubtedly turn depression in to the sham prosperity so familiar from European postwar [i.e., World War I] experience, but which, if it be carried to that point, would, in the end, lead to a collapse worse than the one it was called in to remedy...

Methinks St. Paul spent a little too much time pouring over the First Book of Enoch back in the day. Let women uncover their hair in church, where thy are in the sight of the angels, and the next thing you know they are cohabiting, the angels are teaching the women the dividing of roots and trees, and the women are giving birth to very large carnivorous giants:

Paul: 1 Corinthians 11:5: "Every woman that prayeth or prophesieth with her head uncovered dishonoureth her head.... A man indeed ought not to cover his head, forasmuch as he is the image and glory of God: but the woman is the glory of the man.... For this cause ought the woman to have power on her head because of the angels...

Cf.: Pseudoenoch: 1 Enoch 7:1: "After the sons of men had multiplied... daughters were born to them, elegant and beautiful. And when the angels, the sons of heaven, beheld them, they became enamoured of them, saying to each other, Come, let us select for ourselves wives from the progeny of men, and let us beget children.... Then they swore all together, and all bound themselves by mutual execrations. Their whole number was two hundred.... Then they took wives, each choosing for himself; whom they began to approach, and with whom they cohabited; teaching them sorcery, incantations, and the dividing of roots and trees. And the women conceiving brought forth giants, whose stature was each three hundred cubits. These devoured all which the labor of men produced; until it became impossible to feed them; when they turned themselves against men, in order to devour them; and began to injure birds, beasts, reptiles, and fishes, to eat their flesh one after another, and to drink their blood...

Cognitive dissonance and societal dysfunction in dealing with the challenges of global warming: Miami real estate edition: Sarah Miller: Heaven or High Water: "Selling Miami's last 50 years: 'Sunny day flooding' is flooding where water comes right up from the ground, hence the name, and yes, it can certainly rain during sunny day flooding, and yes, that makes it worse. Sunny day flooding happens in many parts of Miami, but it is especially bad in Sunset Harbour, the low-lying area on Miami Beach’s west side. The sea level in Miami has risen ten inches since 1900... will rise in Miami Beach somewhere between 13 and 34 inches by 2050. By 2100, it is extremely likely to be closer to six feet, which means, unless you own a yacht and a helicopter, sayonara. Sunset Harbour is expected to fare slightly worse, and to do so more quickly. Thus, I felt the Sunset Harbour area was a good place to start pretending to buy a home here. Amazingly, in the face of these incontrovertible facts about the climate the business of luxury real estate is chugging along just fine, and I wanted to see the cognitive dissonance up close...

Parker Molloy: HOW THE F---!?!?!? does Jeffrey Goldberg have any job in media anymore, let alone as the editor-in-chief of one of the remaining magazines in the country? THANKS FOR THE WAR, JEFF:

The differences between Clinton's NAFTA—which Trump called the worst trade deal ever—and the Trump-Lighthizer's USMCA—of which Trump is very, very, very proud indeed: GREATEST TRADE DEAL EVER!! MAKES AMERICA GREAT!!!!—are either (a) trivial, (b) parts of the Trump-nuked Trans-Pacific Partnership, or (c) changes in auto parts rules of origin that are not on the manufacturers' wish list and are not really on the United Auto Workers' wish-list either.

How did this happen? Nobody I communicate has yet managed to figure this out.

Why are Trump and Lighthizer so proud. Nobody I communicate has yet managed to figure this out.

Go figure: Jack Caporal and William Alan Reinsch: From NAFTA to USMCA: What’s New and What’s Next?: "Automotive rules of origin: USMCA will require that 75 percent of auto content be made in North America... 40-45 percent must be made by workers that earn at least $16 an hour... essentially a U.S. or Canada content requirement.... The special arbitration mechanism contained in NAFTA that allowed investors to sue NAFTA countries for discriminatory actions will be phased out between the United States and Canada, and its coverage will be significantly trimmed for investors in Mexico.... The United States was able to win access to Canada’s heavily protected dairy, egg, and poultry markets while allowing Canada to export more dairy, peanuts, and sugar products to the United States.... USMCA contains provisions on digital trade similar to those negotiated in TPP...

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 a 1.2%-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 growth. 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 07, 2019: Nowcast: "1.0% for 2019:Q2 and 1.3% for 2019:Q3. News from this week's data releases decreased the nowcast for 2019:Q2 by 0.5 percentage point and decreased the nowcast for 2019:Q3 by 0.7 percentage point. Negative surprises from the ISM manufacturing survey, employment data, and international trade data drove most of the decrease...

A must-see: an incredibly engaging interview with Columbia's Alexander Hertel-Fernandez: Worker and Management Preferences for Specific Aspects of Labor Organization

Stacey Perman: No, Atlantic Editor Jeffrey Goldberg Was Not Misquoted: "Goldberg was... quoted.... 'It’s really, really hard to write a 10,000-word cover story. There are not a lot of journalists in America who can do it. The journalists in America who do it are almost exclusively white males.'... Twitter was not amused.... Goldberg took to Twitter to suggest that he’d been misquoted and that the magazine had asked for a correction:

...Tim Dickinson: How did these words cross your mind, much less escape your mouth?

Jeffrey Goldberg: They didn’t. I told the reporter that many women haven’t been given the chance to write the 10,000 word stories. That’s what I’m trying to change.

Christy Karras: So you are saying they completely misquoted you? Have you asked for a correction?

Jeffrey Goldberg: Yes.

Laura Hazard Owen, the Nieman Lab deputy editor who conducted the interview, fired back, saying Goldberg was not misquoted and that she had recorded the conversation. Hazard Owen told The Times that Goldberg had neither reached out to her directly nor asked for a correction. According to Hazard Owen, a press representative from The Atlantic contacted her to say that she thought Goldberg had “misspoken,” but did not ask for a correction.

Goldberg and a representative for The Atlantic declined to comment; the representative referred us to Goldberg’s tweets. Meanwhile, Twitter threads continued to fester, asking whether Goldberg had indeed been misquoted. By late afternoon, Goldberg’s position appeared to shift. On Twitter he clarified, saying,

Re: That @NiemanReports interview: I was trying to explain (and obviously failed to explain) that white males dominate cover-story writing because they’ve had all the opportunities. We’re trying to change that at @TheAtlantic...

And, yes, Dean Baquet is a horrible, horrible, horrible editor for The New York Times: Jay Rosen: Twitter Thread: "@farhio writes about a 'late-dawning recognition by mainstream news organizations, which until fairly recently shied away...' The recognition? The president is a chronic liar and does not deserve the benefit of the doubt. 'The Times’s executive editor, Dean Baquet, has said his newsroom strives to use the word [lie] "judiciously" because using it repeatedly "could feed the mistaken notion that we’re taking political sides." Alt reasoning: if Trump lies repeatedly, then you use the word repeatedly.... This was never a question of 'is it accurate to say he lies?' It was never about truthtelling at all. The entire debate was how about how to... APPEAR innocent, unbiased, unaligned.... Taking four years to wake up to his chronic lying means that recognition of this fact is dim, as well: His refusal to be briefed, the undermining of climate science, his contempt for intelligence agencies, the put down of diplomacy, attacks on the press, his lying— all one thing. That the press got hung up on intent—'how can we know his intent?'—was striking to me because in the savvy style of analysis nothing is more quotidian than journalists at the capital confidently revealing a politician's intent during some run-of-the-mill strategy discussion...

I would have thought that the honchos who run the Atlantic Monthly would have recognized that Jeffrey Goldberg was a bad choice for editor before they hired him.

I would have thought that the honchos who run the Atlantic Monthly would have recognized that Jeffrey Goldberg was a bad choice for editor when he tried to hire Kevin "let's hang women who have had abortions" Williamson as somebody whose "whose force of intellect and acuity of insight" was just what the Atlantic needed.

Let's see if they recognize that Jeffrey Goldberg was a bad choice for editor now:

Duncan Black: Twitter Thread: "Jeffrey Goldberg is a monster. tTe editors who paid him at the New Yorker are monsters and the Atlantic is horrible..." Doug J.: "Some of the stuff Conor writes there must be among the worst writing ever to appear in a commercial magazine..." Scott Gosnell: "What is it now???..." Ms. Informed: "Jeffrey Goldberg doesn't think women can write long form journalism. I think he meant he doesn't want to read writers that are women..." Jeffrey Goldberg: "It's really, really hard to write a 10,000 word cover story. There are not a lot of journalists in America who can do it. The journalists in America who do it are almost exclusively white males..." Helen Rosner: "Imagine not only saying this but actually believing it..." Scott Lemieux: "Oh, look, here's the editor of the f---ing Atlantic Monthly asserting that the people writing longform articles are 'almost exclusively white males'. Like saying it out loud.·It's just astounding that he would say that..." Karen Cox: "Doesn’t he know that there are quite a few women who have written entire books?..." Ostrich Jacket: "Obviously females don't write long form—their muscle structure and bone density means that they will konk out at 4500 words every time..."

American Conservative fusionism was always weird: anti-Communists, those who saw Israel as the spearhead of the U.S.'s Cold War panoply, plutocrats, anti-unionists, low-taxers, racists who wanted the federal government to stop interfering with white supremacy, gay-bashers, patriarchs, and those desperate to keep women in their previous place—it was always a group much, much, much, much less attractive to anyone than even, say, George Orwell's parody of the left as composed of "every fruit-juice drinker, nudist, sandal-wearer, sex-maniac, Quaker, ’Nature Cure’ quack, pacifist, and feminist in England".

But the current war that those social conservatives who want Blacks, women, and gays to get back in their place are waging against their soi-disant small-government regulatory-rollback allies is quite something. This puts it best: Forrest Chump: "Being into Christendom for the racism and the hierarchy is a heck of a take".

Read Jane Coasten to get a sense of what is going on, but be sure to recognize that most of it is a bunch of people trying to figure out how they can still support Trump 100% and still think of themselves as good people:

Jane Coasten: David French vs. Sohrab Ahmari and the Battle Dividing Conservatives, Explained: "First Things... a broadside against 'fusionism'... for... 'severing of the link between sex and gender' and... olding 'investors and "job creators" above workers and citizens'... fail[ing] to retard... the eclipse of permanent truths, family stability, communal solidarity, and much else... surrender[ing] to the pornographization of daily life, to the culture of death, to the cult of competitiveness... bow[ing] to a poisonous and censorious multiculturalism'.... What kind of moral compromises should conservatives make to win a cultural or political battle? Should conservatism aim to persuade liberals or inoculate conservatives against liberalism? Should conservatism care what private citizens do in their bedrooms or boardrooms or places of worship? The debate over libertarianism and conservatism, and over Ahmari and French, isn’t just about what conservatives believe. It’s about what conservatism is...

https://www.icloud.com/keynote/00XLwIpxn9pEFcM34iM-ggyqQ 2018-10-17

Adam Server: Conservatives Bend the Knee to Trump and Neofascism: "Ross Douthat gets political/moral problem with 'post fusionist' US conservatism: it relies upon ginning up racial resentment to win elections. But he misses this: Euro con populists accepts social democracy that US pop right can’t imagine. My problem with this is that it doesn't engage with the possibility that Trump's ethnonationalism might not be some kind of subsequent aberration that Trump stapled to his 'populism' once that won him the election, but rather the actual reason his populism helped win GOP primary... Richard Yeselson: "It was both—it was white, social democratic gerontocracy SS/Medicare) + racial/nativist/anti-feminist resentment... Greg Sargent: "Yes, I agree. There was a real economic populism buried in all of it. But that turned out to be as 'weak as straw' compared to the ethnonationalism, as Orwell put it in a somewhat different context... Adam Serwer: "The real debate here is over whether to pursue a one party illiberal 'democracy' where the state crushes its political critics and polices cultural expressions deemed “degenerate,” or whether to adhere to small-l liberal democracy. Everyone is too ashamed to say this directly)...

• Live at Project Syndicate: What to Do About China?: "It is entirely foreseeable that America’s attempt to “get tough” with China could accelerate its own relative decline, effectively handing China the semi-hegemony it is already approaching.... So, what should the US do to shore up its position vis-à-vis China?...

• Weekly Forecasting Update: May 31, 2019: No Significant Changes: "About the only news these past three weeks is an 0.7%-point decrease in our estimate in what production will be over April-June, driven by a reduction in estimated durable goods orders and capacity utilization. This might be an impact o Trump's trade war, plus Trump's attempts to add a trade war with Mexico to the mix...

• An Intake from "Slouching Towards Utopia?: An Economic History of the Long Twentieth Century 1870-2016": Refinding the Path Toward Utopia: From 1938 to 1973 growth in the G-7 jerked forward again: not at the 0.76%/year pace of 1913-1938 or even the 1.42%/year pace of 1870-1913, but at an average pace of 3.0%/year. That is a material wealth doubling time of not the 90 years or so of 1913-1938 or even the 50 years of 1870-1913, but 24 years: less than a generation. Thus the G-7 was three times as well-off in 1973 as it had been in 1938...

• An Outtake from "Slouching Towards Utopia?: An Economic History of the Long Twentieth Century 1870-2016": The Cold War: There was one other fact about post-World War II that cemented the social-democratic mixed-economy Keynesian order that drove a generation of the fastest economic growth and the greatest advance in human prosperity and liberty the world had hitherto seen: it was the Cold War...

• Note to Self: Lecture: African Retardation: https://www.icloud.com/keynote/0O8TxLOzM1gvGwSZYkWBV97rw

• Note to Self: G-7 national income per capita growth since 1800, according to Hans Rosling's http://gapminder.org: https://www.icloud.com/numbers/07Q5v0jKa1sohBHiO8l3Np9Gw...

• Hoisted from the Archives from 2017: Interview: "NAFTA Is Just Not a Big Deal for the U.S.": "In a typical year we sell exports that we could get 2 trillion for if we had to sell them here at home and get imports that would cost us 4 trillion. That makes us 2 trillion per year—25,000 per family each year—richer and more prosperous. That is a big deal...

• A Year Ago on Equitable Growth: Twenty Must- and Should-Reads from the Week of May 31, 2018...

• Weekend Reading: Belle Waring: Uses and Abuses of Tarps: : "Such creativity! And the need to give Gorky one slender reed on which to lean for his glowing reviews of the labor re-education camps! Even his choice of fiancee seemed to augur his judgments: 'The famous writer embarked from the steamer in Prosperity Gulf. Next to him was his fiancee dressed all in leather—a black leather service cap, a leather jacket, leather riding breeches, and high narrow boots—a living symbol of the OGPU shoulder to shoulder with Russian literature'...

• Weekend Reading: Henry Farrell: The American Right's Torquemada Option: "When anti-modern conservatives decide that the liberal world is depraved... cleanse it of the corruption of tolerance. Call it the Torquemada Option https://en.wikipedia.org/wiki/Nemesis_the_Warlock. And the moderate success that some modern figures-such as Orban-have enjoyed in taking over the university system and forcibly purging it of those who would pollute our youth with gender studies and the like give old time reactionaries like Kimball some hope it can be done...

• Weekend Reading: Jeremiah: 22 KJV: "'Do no wrong, do no violence to the stranger, the fatherless, nor the widow, neither shed innocent blood in this place. For if.. ye will not hear these words, I swear by myself', saith the Lord, 'that this house shall become a desolation'...

• Weekend Reading: Into the Abyss: James David Nicoll on Heinlein's "Starship Troopers": "Heinlein... convinced himself he intended 'veterans' to include people whose public service included non-military organizations but there is no textual evidence of this.... 'Youngster, do I look that silly? I’m a civilian employee'. 'Oh. Sorry, sir'. 'No offense. But military service is for ants'. The doctor clearly sees service as military service...

• Comment of the Day: As Dan Davies says, finance works with criminal penalties for material misrepresentations, and works better. Would not politics also work better with such?: Graydon: "Remember that in this case, Boris made the public lie in an official capacity, was told by the relevant governmental body that it was a lie—the statistics authority officially informed the official persona of the officeholder that no, no, that's not correct; that is not close to correct—and the official persona went right on making the lie in public in ways the court refuses to find obviously immaterial...

1. Gershem Gorenberg: "The actions of a leader desperate to hold power and stay out of jail are utterly beyond prediction...

2. Paul Krugman: Robot Geometry: "Imagine an economy that produces only one good... using two techniques, A and B, one capital-intensive, one labor-intensive.... Technical progress in A, perhaps also making A even more capital-intensive... will lead to a fall in the real wage, because 1/w must rise. GDP and hence productivity does rise, but maybe not by much if the economy was mostly using the labor-intensive technique. And what about allocation of labor between sectors?... Capital-using technical progress in A actually leads to a higher share of the work force being employed in labor-intensive B...

3. Nadiezda Kizenko (2000): A Prodigal Saint: Father John of Kronstadt and the Russian People https://books.google.com/books?isbn=027101976X: "Three introductory comments.... While I have tried to do justice to a figure as complex as Father John, this is not a hagiography.... Because I intend this book... for readers... interest[ed] in the history of Russia and... of Christianity, I have included background material.... I am well aware that Father John still sparks intense reactions...

4. Mark Thoma (May 29, 2019): Your Daily digest for Economist's View

5. Chris Patten: Unforgettable Tiananmen: "It's not surprising that the Communist Party of China has worked so hard to eradicate the 1989 Tiananmen Square massacre from public memory. History–including the horrors of Mao Zedong’s rule–is too volatile a substance for the Chinese dictatorship...

6. David Evans: New Findings in Global Education: "Want better test scores? Lower the heat....Parents make school choices based not only on test scores but also on a school's contribution to reduced crime or teen pregnancies.... Education reform ≠ education gains.... It’s hard to teach what you don’t know...

7. Erin Blakemore: The Korean War Hasn't Officially Ended. One Reason: POWs: "And then there were the POWs who were not returned at all. About 80,000 South Koreans were in North Korea when a ceasefire ended the war. Most are thought to have been put to work as laborers, 're-educated', and integrated into North Korean society. In 2010, South Korea estimated that 560 were still alive. Their ordeals in repressive North Korea were unknown until a small group of defectors told their stories...

8. Chris Duckett: AMD 3rd-Gen Ryzen Series Coming in July LedbyBy 12-Core Ryzen 9 Beast: "Range of chips beginning at 330 and topping out at 500 for the 12-core Ryzen 9... 7 nanometre technology... 12 cores, can handle 24 threads, has 2.8GHz base frequency with 4.6GHz boost, and has 70MB of cache. 'That's half the price of our competition with much, much more performance', AMD CEO Dr Lisa Su said...

9. HathiTrust Digital Library

10. Mihir Sharma: Modi's Election Win Sends a Populist Warning to the World: "From Trump to Brexit, don’t bet against voters making the same choice again...

11. Hoisted from 2010: How an Economy Can Live Beyond Its Means on Its Wits: P.J. Grigg: "I distrust utterly those economists who have with great but deplorable ingenuity taught that it is not only possible but praiseworthy for a whole country to live beyond its mens on its wits and who in Mr. Shaw's description tech that it is possible to make a community rich by calling a penny two pence, in short who have sought to make economics a vade mecum for political spivs..." Confront economists' theories of depressions... and you find yourself immediately confronted with... seven... Monetarism... Wicksellianism... Minskyism... Austrianism... Vulgar Keynsianism... Hickianism... Post-Keynesianism...

12. Hoisted from 2009: Fama's Fallacy II: Predecessors: Fama, actually, is much worse than the British Treasury economists of the 1920s. They acknowledged that monetary policy could affect the level of employment--could do more than shift resources from one use to another. Fama's argument based on his misinterpretation of the NIPA savings-investment identity has the implication that monetary policy cannot affect the unemployment rate either...

13. Paul Krugman: "Back in the USA and thinking about what it must be like for conservative economists who weren’t always total hacks but have sold their souls-eg backing crazy claims about tax cuts or declaring that Bernanke was debasing the dollar to help Obama. All that self-abatement to curry favor with the right-and then Art fricking Laffer gets a presidential medal while they get nothing. Self abasement. If I could do self abasement I probably would...

14. Neil McInnes: The Great Doomsayer: Oswald Spengler Reconsidered

15. George Kennan (1947): The Sources of Soviet Conduct

16. U.S. National Security Council (1950): NSC-68: United States Objectives and Programs for National Security

17. Live from the Republicans' Self-Made Gehenna: Irving Kristol: "This explains my own rather cavalier attitude toward the budget deficit and other monetary or fiscal problems. The task, as I saw it, was to create a new majority, which evidently would mean a conservative majority, which came to mean, in turn, a Republican majority-so political effectiveness was the priority, not the accounting deficiencies of government...

Martin Wolf: The Looming 100-year US-China Conflict: "China’s ideology is not a threat to liberal democracy in the way the Soviet Union’s was. Rightwing demagogues are far more dangerous. An effort to halt China’s economic and technological rise is almost certain to fail. Worse, it will foment deep hostility in the Chinese people. In the long run, the demands of an increasingly prosperous and well-educated people for control over their lives might still win out. But that is far less likely if China’s natural rise is threatened.... Managing China’s rise must include co-operating closely with like-minded allies and treating China with respect.... The administration is simultaneously launching a conflict between the two powers, attacking its allies and destroying the institutions of the postwar US-led order... the wrong war, fought in the wrong way, on the wrong terrain...

Oya Aktas (2015): Intellectual History of the Minimum Wage and Overtime: " This debate dates back to the early 20th century, before the minimum wage even existed in the United States and when overtime pay was unheard of.... Rapid industrialization created the Gilded Age of American wealth, and people credited the free market with their increased prosperity. But along with increasing growth, industrialization also sharpened economic inequalities.... Debates over hour and wage limits focused on which groups required labor protections and the best mechanisms for protecting these groups. Labor regulations began in the 1890s as state-level maximum hour and minimum wage protections, which the U.S. Supreme Court repeatedly struck down. Federal standards were not created until four decades later, when president Franklin Delano Roosevelt and his Secretary of Labor, Frances Perkins, guided the Federal Labor Standards Act into law.... This issue brief details the arguments that shaped hour and wage limits in the early 20th century...

So far the paid leave proposals I have seen out of the Republican side are not really "paid leave": they are "drain your 401(k) without a tax penalty" leave. But at least there is bipartisan acknowledgement that there is a problem, and there should be some congressional fix: Equitable Growth: On Twitter: "The @SenateFinance Committee has formed a bipartisan working group on #paidleave—a great chance to consider the evidence and establish a paid leave program that protects everyone. See our resources...

Live at Project Syndicate: What to Do About China?: BERKELEY–In a recent issue of The New York Review of Books, the historian Adam Tooze notes that, “across the American political spectrum, if there is agreement on anything, it is on the need for a firmer line against China.” He’s right: On this singular issue, the war hawks, liberal internationalists, and blame-somebody-else crowd all tend to agree. They have concluded that because the United States needs to protect its relative position on the world stage, China’s standing must be diminished.... But that is the wrong way to approach the challenge.... It is entirely foreseeable that America’s attempt to “get tough” with China could accelerate its own relative decline, effectively handing China the semi-hegemony it is already approaching.... So, what should the US do to shore up its position vis-à-vis China?... The US could start to become what it would have been if Al Gore had won the 2000 presidential election, if Hillary Clinton had defeated Trump, and if the Republican party had not abandoned its patriotism... Read MOAR at Project Syndicate

Five Worthy on Equitable Growth:

1. From two years ago: a minimum wage meta-analysis: Arindrajit Dube and Ben Zipperer: Pooling multiple case studies using synthetic controls: An application to minimum wage policies | Equitable Growth

2. Worth reading from last October: Darrick Hamilton: Post-racial rhetoric, racial health disparities, and health disparity consequences of stigma, stress, and racism | Equitable Growth

3. Also worth reading from last October: Papers from our co-hosted antitrust symposium: Michael Kades: Unlocking Antitrust Enforcement: New Yale symposium examines proposals to make antitrust enforcement more effective | Equitable Growth

4. Nick Bunker gathers scattered threads and sets out the issues: Nick Bunnker: Puzzling over U.S. wage growth

5. As I say, this is exactly the kind of debate we should be hosting and encouraging: Jesse Rothstein: Inequality of Educational Opportunity? Schools as Mediators of the Intergenerational Transmission of Income: "Chetty et al. (2014b) show that children from low-income families achieve higher adult incomes... in some commuting zones (CZs) than in others...

Michael Gelman, Shachar Kariv, Matthew D. Shapiro, Dan Silverman: Rational Illiquidity and Excess Sensitivity: Theory and Evidence from Income Tax Withholding and Refunds: "There is a tight relationship between having low liquidity and a high marginal propensity to consume both in theoretical models and in econometric evidence about behavior. This paper analyzes the theory and behavior surrounding income tax withholding and refunds. It develops a model where rational cash management with asymmetric cost of increasing or decreasing liquidity endogenizes the relationship between illiquidity and excess sensitivity. The analysis accounts for the finding that households tend to spend tax refunds as if they were liquidity constrained despite the fact that they could increase liquidity by reducing withholding. The model’s predictions are supported by evidence from a large panel of individuals...

Joseph Ford Cotto: J. Bradford DeLong says "NAFTA is just not a big deal for the U.S.", explains why: "Support for Bernie Sanders and the Donald did not rise out of nowhere, after all. In such turbulent waters as these, it is important to seek the guidance of a wise, seasoned captain. Insofar as the sea of dollars and cents is concerned, J. Bradford DeLong is just that fellow. He is "a professor of economics at UC Berkeley, a weblogger for the Washington Center for Equitable Growth http://equitablegrowth.org/blog, a research associate of the National Bureau of Economic Research, and former deputy assistant secretary of the U.S. Treasury in the Clinton administration .... He also writes the weblog Grasping Reality: http://bradford-delong.com," as DeLong's U.C.B. biography explains. Dr. DeLong recently spoke with me about many topics relative to our nation's economy. Some of our conversation is included below....

Judea Pearl and Dana Mackenzie: On the Meaning of the Monty Hall Problem: "Even today, many people seeing the puzzle for the first time find the result hard to believe. Why? What intuitive nerve is jangled?... Causeless correlation violates our common sense. Thus, the Monty Hall paradox is just like an optical illusion or a magic trick: it uses our own cognitive machinery to deceive us.... on the Meaning of the Monty Hall problem.... Our brains are not wired to do probability problems, but they are wired to do causal problems. And this causal wiring produces systematic probabilistic mistakes, like optical illusions. Because there is no causal connection between My Door and Location of Car... we find it utterly incomprehensible that there is a probabilistic association... [because] our brains are not prepared to accept causeless correlations, and we need special training—through examples like the Monty Hall paradox or the ones discussed in Chapter 3—to identify situations where they can arise...

Moreover, who says that workers are paid anything like their marginal products? Luck and market power seem to me to be much more important than anything that could be called net social value of the work. As I often say, a skilled worker is an unskilled worker with a strong union:

Paul Campos: Talent Is Not Scarce: "Existing social hierarchies, and especially the compensation structures that undergird them, require the constant denial of the fact that almost everyone is easily replaceable at any time.  After all, if there are 500 people standing at the ready who could do just as good or better a job than Chairman Smith or President Jones or Senior Executive Vice President for West Coast Promotion Johnson or Distinguished Professor of the Newly Endowed Chair for the Worship of Capitalism Cowan, then why do these people get treated and most of all paid as if they were as unique as unicorns, as precious as Vermeer portraits, as irreplaceable as Billy Shakespeare or Willie Mays? Because if we didn’t treat them (us) in that way, that would mean the entire structure of our society is radically unjust, root and branch.  And that can’t be true, obviously...

Note to Self: Lecture: African Retardation https://www.icloud.com/keynote/0O8TxLOzM1gvGwSZYkWBV97rw:

Note to Self: G-7 national income per capita growth since 1800, according to Hans Rosling's http://gapminder.org: https://www.icloud.com/numbers/07Q5v0jKa1sohBHiO8l3Np9Gw

Harry Brighouse: A Game-Changer in Accountability: Using Online Discussion Boards (Even in Face-to-Face Classes): "My first lecture of the week is on a Tuesday, and most of the reading is assigned for that class. Thirty-six hours before class, the students must respond to a prompt about the reading—one that is impossible to respond to coherently without having done the reading. Settings allow you to prevent them from seeing other students’ responses until after they post. Then, they have until the beginning of class to respond to a classmate. If students post, they get credit; if not, they don’t.... In smaller classes, the effect has been astonishing. Almost all my students do almost all the reading for almost every class...

Post-WWII Political Economy: Stabilization

Challengers

But what about the other factors that had fatally disrupted the pre-WWI global order? Imperialism, nationalism, militarism, fascism, and a really existing version of socialism preached and practiced by Stalin and his heirs that was, in many of its modes, hard to distinguish from the barbarism that Rosa Luxemburg feared that World War I had revealed as socialism’s only alternative? Fascism had been buried in the rubble of Berlin in 1945: thereafter its attractions had been limited to those plutocrats, authoritarians, colonels, and landlords trying to run unstable con games to try to stave off popular and global civil society demands for things like land reform and a less-unequal distribution of wealth as underpinnings for political democracy and the mixed economy.

Or so we had thought.

Recall the pre-1913 post-1800 progress of humanity in the direction of a utopia of material abundance.

The classic Industrial Revolution period—1800 to 1870—had seen material productivity and living standards rise by perhaps one-quarter worldwide, with an average growth rate of perhaps one-third of a percent per year. Growth had been faster—greater than one-half percent per year—in the countries that were to become the G-7, even though two of its future members, Italy and Japan, as of yet showed few signs of significant industrial-era growth. Then 1870-1913 the modern corporation, the industrial research lab, the manufacturing value chain, plus globalization—the land and submarine telegraph cable, the iron-hulled screw-propellered ocean-going steamship and the railroad, and global migration—pulled the world forward with a large jerk: a more than tripling of growth, with a more than doubling of growth rates in the industrial core that was to become the G-7 and substantial participation elsewhere even where factories were not build. A Mexico, for example, saw its productivity levels double between 1870 and 1913. An Argentina, for example, saw its productivity levels triple. And growth in Italy and Japan for the first time kept pace with that in their future G-7 partners.

Brahma Chellaney: China’s Tiananmen Reckoning: "In a night of carnage on June 3-4, 1989, the Chinese authorities crushed the pro-democracy protests with tanks and machine guns. In Eastern Europe, the democratization push led to the fall of the Berlin Wall just five months later, heralding the end of the Cold War. But the West recoiled from sustaining its post-Tiananmen sanctions against China.... After a long post-massacre boom, China–the world’s largest, strongest, wealthiest, and most technologically advanced autocracy–is entering a period of uncertainty.... The Tiananmen Square protests in 1989 were inspired by the watershed May 4, 1919, student demonstrations against Western colonialism at the same site. But whereas Xi recently extolled the May Fourth Movement in a speech marking the centenary of that event, he and the CPC are edgy about the Tiananmen anniversary. This year also marks the 60th anniversary of a failed uprising in Tibet against Chinese occupation. And it is ten years since a Uighur revolt killed hundreds in the Xinjiang region, where more than one million Muslims have now been incarcerated as part of a Xi-initiated effort to 'cleanse' their minds of extremist thoughts. Then, on October 1, the People’s Republic of China will celebrate its 70th birthday...

Henry Farrell: The American Right's Torquemada Option: "On the Ahmari/Kimball/Peterson/Deneen thing. When anti-modern conservatives decide that the liberal world is depraved they can either withdraw from it-the Benedict Option, or cleanse it of the corruption of tolerance. Call it the Torquemada Option https://en.wikipedia.org/wiki/Nemesis_the_Warlock. And the moderate success that some modern figures-such as Orban-have enjoyed in taking over the university system and forcibly purging it of those who would pollute our youth with gender studies and the like give old time reactionaries like Kimball some hope it can be done...

Richard Feynman: Math and Science: "How am I going to explain to you the things I don’t explain to my students until they are third-year graduate students? Let me explain it by analogy: The Maya Indians were interested in the rising and setting of Venus as a morning “star” and as an evening “star”—they were very interested in when it would appear. After some years of observation, they noted that five cycles of Venus were very nearly equal to eight of their “nominal years” of 365 days (they were aware that the true year of seasons was different and they made calculations of that also). To make calculations, the Maya had invented a system of bars and dots to represent numbers (including zero), and had rules by which to calculate and predict not only the risings and settings of Venus, but other celestial phenomena, such as lunar eclipses. In those days, only a few Maya priests could do such elaborate calculations. Now, suppose we were to ask one of them how to do just one step in the process of predicting when Venus will next rise as a morning star—subtracting two numbers. And let’s assume that, unlike today, we had not gone to school and did not know how to subtract. How would the priest explain to us what subtraction is?...

Jeremiah: 22 KJV: "Thus saith the Lord: 'Go down to the house of the king of Judah, and speak there this word, and say: "Hear the word of the Lord, O king of Judah, that sittest upon the throne of David, thou, and thy servants, and thy people that enter in by these gates. Thus saith the Lord: 'Execute ye judgment and righteousness, and deliver the spoiled out of the hand of the oppressor; and do no wrong, do no violence to the stranger, the fatherless, nor the widow, neither shed innocent blood in this place...

David G. Blanchflower: Recessions Elude Economic Forecasters: "I served on the MPC from 2006 to 2009.... From around October 2007 onward, for many months in a row I started to vote for interest rate cuts, mostly on my own.... Eight people on the MPC had the same opinion, and I had a different one, so there were only two opinions. I felt as if I had the weight of the British people on my shoulders. As the famous Liverpool football club battle cry from the Kop End that sang out loudly the other day in the 4-0 defeat of Barcelona, from the old Gerry and the Pacemakers song, 'Walk on with hope in your heart and you’ll never walk alone'. Some years later, Gordon Brown... apologized for appointing me 'to that awful job'. I still believe Gordon Brown and Ben Bernanke saved the world...

Franklin M. Fisher (1989): Games Economists Play: A Noncooperative View: "As a teacher of mine (probably Carl Kaysen) once remarked some thirty years ago, it may very well be the case that one cannot understand the history of the American rubber tire industry without knowing that Harvey Firestone was an aggressive guy who believed in cutting prices. Maybe so. But then, as someone else (probably Mordecai Kurz or Kenneth Arrow) remarked to me a few years ago, the job of theory is to discover what characteristics of the rubber tire industry made such aggressive behavior a likely successful strategy. Absolutely right. That question would be answered if we had a generalizing theory of oligopoly. As it stands, we are a long way from an answer...

There is lots that seems to me to be smart in this piece by Mervyn King, and a lot that seems to me to be not smart at all. The claim that a second referendum would not work because "it is no longer possible to confine the options, as in 2016, to a binary choice" is simply ludicrous: there was no "binary choice" on offer in 2016; there never was a "binary choice". Britain could seek a relationship like Norway's, like Switzerland's, like Ukraine's, like Turkey's, or like Korea's—or it could just confront the EU as a standard WTO member. The right path, IMHO, is to say that the first referendum result was corrupted by Boris Johnson's criminal or near-criminal misrepresentation and by the absence of a definition of "Brexit", and to rerun the referendum as a binary choice between remain on the one hand and the May plan on the other. And, indeed, Mervyn King's hope for a general election in which the "two main parties... [present] clear opposing positions on Brexit" would be that—if Labour would admit that it prefers remain, and if the Conservatives would get behind the May plan. But neither party will.

The May plan, with the backstop, deprives Britain of its voice in Brussels's decisions and in return gives Britain the power to kick Poles out of the country at will. That is what the Conservative membership wants—probably because what they really want is to kick the Pakistanis out, and gaining the theoretical power to kick Poles out has been sold to them by right-wing neo-fascist demagogues as a good substitute. But the right-wing neo-fascist demagogues objected to the May plan because it put Britain in the position of being a dependent supplicant relative to Brussels—like Canada is to the U.S. What they want is both the power to kick Poles out and the power to veto decisions being made in Brussels—and that is not on offer.

I suspect that what King really wishes—but cannot say, even to himself—is that he really wishes he and his ilk had all supported Blair and Brown rather than Cameron-Osborne-Clegg in 2010, and so had a governing party with competent technocrats who sought a better Britain rather than one populated entirely by grifters and spivs. But he ought to have checked those three dogs for fleas before he lay down with them:

Mervyn King: How Brexit Broke British Politics: "The test of any political system is how it copes with an issue that divides the nation.... There are two requirements for major change in Britain. The first is a public mandate. And the second is a working majority in the House of Commons to implement that mandate. In normal circumstances, a general election is the mechanism by which one party obtains both a public mandate and a majority of seats in the Commons.... In June 2015, the House of Commons voted for a referendum on EU membership.... Voters were told the choice was theirs, and they voted to leave. But there was no parliamentary majority to deliver Brexit, and no vision of what Brexit even meant.... The best way forward would be for the two main parties to develop clear opposing positions on Brexit, and put the disagreement to voters at another general election.... Why not a second referendum?... It is no longer possible to confine the options, as in 2016, to a binary choice on the fundamental issue—in or out...

The Quarterly Journal of Economics puts its stamp of approval on Cengiz, Dube, Linder, and Zipperer. This makes me even more surprised that the minimum-wage effects wars are till going on. At least for minimum wages near current U.S. levels, there literally is no downside to raising the minimum wage: Arindrajit Dube: On Twitter: "Pleased to announce that our paper quantifying the overall effect of US minimum wages on low-wage jobs is now forthcoming at the Quarterly Journal of Economics...

Graydon Saunders: Some Assumptions About Cars: "Honda is leaving the UK for manufacturing purposes.... Cost scales with parts count, and the drive train parts count in electric drops a couple orders of magnitude.... Honda (and everybody else making cars) is sharply aware of this.... Given current Chinese policy (fairly close to 'electric or death'), the distance from Japan to China, and the fundamental impracticality of shipping anything but Veblen-good luxury vehicles globally in an electric car world, of course Honda is pulling out of Europe. Overall, this is a good thing; that's a good hint we're getting closer to the electric transition for personal vehicles...

This has become a classic for all wishing to think clearly about progressive income taxation. Note that their conclusions in favor of a high top marginal rate do rest on strong and proper state actions to close loopholes and shut down tax havens:

Thomas Piketty, Emmanuel Saez, and Stefanie Stantcheva (2011): Optimal Taxation of Top Labor Incomes: A Tale of Three Elasticities: "A model where top incomes respond to marginal tax rates through... (1) the standard supply-side channel... the tax avoidance channel, [and] (3) the compensation-bargaining channel through efforts in influencing own-pay setting.... The first elasticity (supply side) is the sole real factor limiting optimal top tax rates. The optimal tax system should be designed to minimize the second elasticity (avoidance) through tax enforcement and tax neutrality... in which case the second elasticity becomes irrelevant. The optimal top tax rate increases with the third elasticity (bargaining) as bargaining efforts are zero-sum in aggregate..... There is a strong correlation between cuts in top tax rates and increases in top 1% income shares since 1975, implying that the overall elasticity is large. But top income share increases have not translated into higher economic growth, consistent with the zero-sum bargaining model. This suggests that the first elasticity is modest in size and that the overall effect comes mostly from the third elasticity. Consequently, socially optimal top tax rates might possibly be much higher than what is commonly assumed...

Weekend Reading: James David Nicoll: Into the Abyss: "In the spirit of Social Credit leader Camil Samson’s wonderful phrase, 'Ladies and gentlemen, the Union Nationale has brought you to the edge of the abyss. With Social Credit, you will take one step forward', follow me over the edge and into the abyss that is Heinlein’s post-Scribners work. Scribners rejected 1959’s Starship Troopers, marking the end of what had been a fruitful relationship between the touchy Heinlein and that particular publisher...