A Year Ago on Equitable Growth: Twenty Worthy Reads On and Off Equitable Growth for August 2, 2018
Worthy Reads from Equitable Growth and Its Network:
Anybody looking back at economic history cannot help but note that female physical autonomy and its absence has played an absolutely huge role. Kate Bahn and company are pulling together the evidence that this is not just history—that it still matters a lot in America today: Kate Bahn: Understanding the link between bodily autonomy and economic opportunity across the United States: "All of these connective threads are examined in a forthcoming paper of mine...
Seattle is pursuing (a version of) social democracy in one metropolitan area. In the 2010s we learned from some of our laboratories of democracy (cough, Kansas, Wisconsin) what really not to do. Will Seattle provide a model for what we should do?: Hilary Wething: Seattle: Paid Sick Leave And Workers’ Earnings Dynamics: "Utilize administrative data from Washington state to study the impact of Seattle’s paid sick time ordinance on:...
Let me welcome Will McGrew, who sends us to a very insightful study of government failure and bureaucratic blockage in the New Orleans school system. Since we economists do not have an effective grammar of government failure, there is a tendency (on my part at least) to somewhat overlook it: Will McGrew: "A timely and necessary piece from Haley Correll: quality public schools should be available to all kids in New Orleans, not just those whose parents have the time, information, and resources to navigate the complex application system..."
In my opinion, Arindrajit Dube is one of the best economists around in figuring out what we should control for and why in order to achieve real econometric identification. The contrasting pole is simply to throw in a bunch of controls until you have produced the numbers you want. In my view, we do not teach what should be controlled for and how enough, so people pick it up on the fly. Arindrajit has picked it up, and is a master: Arindrajit Dube: Minimum wages and the distribution of family incomes in the United States: "I find that a 10 percent increase in the minimum wage reduces poverty among the nonelderly population by 2.1 percent and 5.3 percent across the range of specifications in the long run...
Lyndon Johnson said: "You do not take a person who, for years, has been hobbled by chains and liberate him, bring him up to the starting line of a race and then say, 'You are free to compete with all the others,' and still justly believe that you have been completely fair. Thus it is not enough just to open the gates of opportunity. All our citizens must have the ability to walk through those gates.... It is not enough just to open the gates of opportunity. All our citizens must have the ability to walk through those gates.... Equal opportunity is essential, but not enough." However, one of our problems is that that does not seem to be working for even those African-Americans who can and do walk through all of our society's formal and status gates to opportunity: Khaing Zaw, Jhumpa Bhattacharya, Anne Price, Darrick Hamilton, and William Darity, Jr.: A College Degree and Marriage Fail to Yield Significant Wealth Gains for Black Women: "[In] the story of the American Dream... a college education is viewed as a key driver of upward mobility and the primary vehicle to eradicate racial differences...
Worthy Reads Elsewhere:
It wasn't just right-wing politicians who "reframed the crisis as the result of out-of-control fiscal policy rather than the product of an out-of-control financial sector". I keep coming back and back again to the moment in January 2010 when Barack Obama cut us technocrats who knew what needed to be done off at the knees: "families across the country are tightening their belts and making tough decisions. The federal government should do the same. So tonight, I'm proposing specific steps to pay for the $1 trillion that it took to rescue the economy last year. Starting in 2011, we are prepared to freeze government spending for three years..." Martin Wolf reviews Adam Tooz's book Crashed: Martin Wolf: What really went wrong in the 2008 financial crisis?: "'There is a striking similarity between the questions we ask about 1914 and 2008', writes Adam Tooze...
I would say, instead: "monetary and financial policy was fantastic between Lehman and the trough, grossly subpar after the trough, and—if you believe the Fed's explanation of why it did what it did with Lehman—criminally negligent before Lehman": Niccola Gennaioli and Andrei Shleifer: A Crisis of Beliefs: Investor Psychology and Financial Fragility: "Instability from Beliefs...
The extremely wise Randall Munroe on the proper visual display of geographic quantitative information: Randall Munroe: xkcd: 2016 Election Map: "I like the idea of cartograms (distorted population maps), but I feel like in practice they often end up being the worst of both worlds—not great for showing geography OR counting people. And on top of that, they have all the problems of a chloro... chorophl... chloropet... map with areas colored in...
A plea of despair for our politics and public sphere discourse from Duncan Black: Duncan Black: "Nobody Who Works Full Time Should Live In Poverty": "This, or a version of this, has become some sort of crazy left idea...
Josh Marshall: Future of TPM #1: "As a reader, here is what I would and do want: if there’s a new story from Alice Ollstein on one of the various family separation immigration court cases, it would be helpful to have the recent stories there too and perhaps a quick explanation of how they fit together...
Kaja Whitehouse: Columbia professor found liable for sexual harassment: "Economics Professor Geert Bekaert took retaliatory jabs at his junior research partner, Enrichetta Ravina, the Manhattan federal court jury found...
Vijay Govindarajan, Shivaram Rajgopal, and Anup Srivastava: Why We Need to Update Financial Reporting for the Digital Era: "The market caps of just four companies, Apple, Alphabet, Amazon, and Microsoft, now exceed $3 trillion...
Duncan Black: Remember When Bill Clinton Ended Welfare As We Know It And Took That Off The Table Forever?: "There's barely anything resembling 'welfare' (aside from rich people welfare) but that doesn't stop them: '(CNN) Republican Rep. Jason Lewis has repeatedly demeaned recipients of welfare and government assistance, calling them "parasites" and "scoundrels," and said the black community had "traded one plantation for another.' Conservative white people believe there's a secret welfare system for black people. You cannot convince them otherwise, no matter what you do...
The view that all government should do in the economic realm was to establish property rights and enforce contracts was never true. Smart governments always did much, much more. (Dumb governments did much, much more too.) Indeed, it is only with proper regulation that a market can fulfill its appropriate social role as a consumer surplus-generating mechanism: Diane Coyle: Three Cheers for Regulation: "One of the striking changes any rich-world traveler to low-income countries cannot fail to have missed during the past decade or so is the rapid spread of mobile phone use...
As we try to figure out how to create a functional rather than a dysfunctional Habermasian public sphere to support at least semi-sane policies, I find it useful to and keep looking back at how previous functional and dysfunctional public spheres emerged and maintained themselves. The general view—which may be false—is that the Eighteenth Century Enlightenment did pretty well. And it had one of its wellsprings in the development of new genres, all of which she argues were in some way created as echoes and transformations of the personal letter. Well worth reading: Rachael Scarborough King: Writing to the World: Letters and the Origins of Modern Print Genres: "Rachael Scarborough King examines the shift from manuscript to print media culture in the long eighteenth century...
I think this is a very neat way to conceptualize why our public sphere and our individual thinking ar doing so badly: Andrew Pollack: A brilliant concept—Compulsive Narrative Syndrome: "I first came across this brilliant concept in Joel Shepherd’s 23 Years on Fire.... Here are Shepherd's characters explaining CNS—tell me this doesn't ring a bell...
This is a brilliant 10 minute talk on economics as it really is—or should be: Trevon Logan: Ohio State University Masterminds: "Think of the first questions you ask someone when you meet them: 'What do you do?'...
I badly need to find a usable mental model of how employer-side monopsony in labor markets interacts with downward nominal wage rigidity and search and involuntary unemployment. Analyzing just one of these market failures at a time is just not cutting it for me as I try to understand what is going on: Heidi Shierholz and Elise Gould: Why is real wage growth anemic? It’s not because of a skills shortage: "Despite an unemployment rate at 4.1 percent or less since last October, wage growth has been anemic...
People should read very nice article from the very sharp Justin Lenhart on one of the three things the Federal Reserve is missing right now. The first thing the Fed misses is that, at least as long as the current interest rate configuration holds, they need an inflation rate of 4% per year not 2% per year, in order to have enough running room to fight next recession. The second thing the Fed misses is that the slope of the Phillips curve has changed, and so going for faster growth and higher employment right now is not risky but, rather, harvesting low-hanging fruit. The third thing the Fed misses is that a near-inverted yield curve is a danger sign—and yet the Fed is, as in 2006, finding reasons to pretend that "this time is different". I confess that fed thought—the governors, the bank presidents, and the staff—is quite opaque to me right now: I do not understand why they are making the analytical judgments that they are making: Justin Lahart: What the Fed Is Missing, Again: "The Federal Reserve isn’t worried about the yield curve, and it has reason why. The problem: It is pretty much the same reason it wasn’t worried about the yield curve before the financial crisis...
I very much want everybody to notice that it is now two and a half years after Jared Bernstein wrote this, and there is still no sign that the economy has reached "full employment", or that the pace of wage and price growth is even beginning to spiral upwards. Thus he Federal Reserve continues to work with a model of the economy in which we should have very little confidence, if any: Jared Bernstein (2016): Important new findings on inflation and unemployment from the new ERP: "The 'Phillips curve'... negative correlation between inflation and unemployment...
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