Fairly Recently: Must- and Should-Reads, and Writings... (October 11, 2019)

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  • An Outtake from "Slouching Toward Utopia?: An Economic History of the Long Twentieth Century": The Shadow https://www.bradford-delong.com/2019/10/the-shadow-an-outtake.html_: German academic Max Weber... was a German liberal... believer in one-man, one-vote rather than gerrymandered electorates and noble estates, a believer in responsible government by ministers responsible to elected legislatures rather than the whim of hereditary princes, a believer in progress and peace. Yet Max Weber was terrified of the threat to the German nation posed by barefoot hungry Poles. He said, completely seriously: "The German character of the East[ern provinces of Prussia]... should be protected... [by] the economic policy of the state…. Under the semblance of ‘peace’… German peasants and day-labourers… are getting the worst of it in the silent and dreary struggle of everyday economic existence... abandoning their homeland to a race... on a lower level... a dark future in which they will sink without trace." To Weber, the real name for “peace” was “race war”--and there could be no true peace, not ever...

  • How Damaging Is Plutocracy for Economic Policy? https://www.bradford-delong.com/2019/10/economic-policy-response.html_: Big money does not always find a way, nor does its influence necessarily increase as the top 0.01% captures a larger share of total income.... The larger issue...is an absence of alternative voices. If the 2010s had been anything like the 1930s, the National Association of Manufacturers and the Conference Board would have been aggressively calling for more investment in America, and these arguments would have commanded the attention of the press. Labor unions would have had a prominent voice as advocates for a high-pressure economy. Both would have had very powerful voices inside the political process through their support of candidates. Did the top 0.01% put something in the water to make the media freeze out such voices after 2008?...

  • Listening to Arsonists https://www.bradford-delong.com/2019/10/listening-to-arsonists-by-j-bradford-delong-project-syndicate.html_: Alan Simpson... was a noted budget arsonist when he was in the Senate.... He never met a budget-busting, deficit-increasing initiative from a Republican president that he would not lead the charge to pass. Nor did he ever meet a sober deficit-reducing initiative from a Democratic president that he did not oppose with every fiber of his being. You don’t pick an arsonist to head the fire department, I thought when Obama named him co-chair of the National Commission on Fiscal Responsibility and Reform...

  • My Job as the Economist Here Is to Do the Numbers... https://www.bradford-delong.com/2019/10/council-on-foreign-relations-_the-future-of-democracy-symposiumhttpswwwcfrorgeventfuture-democracy-symposium_-1-1.html_: That the American economy over the past forty years has not been delivering substantially rising living standards for everybody—that means that the market’s failure to deliver these other forms of nonproperty rights becomes the source of—call it economic anxiety—a big potential problem...

  • Hoisted from the Archives: Income and Wealth Distribution, or, Watching Professional Republicans Sell Their Souls Back in 1992 https://www.bradford-delong.com/2019/10/income-and-wealth-distribution-or-watching-professional-republicans-sell-their-souls-back-in-1992-hoisted-from-the-archive.html: The income distribution came on to the stage that is America's public sphere between February 14 and December 12, 1992. And the rhetoric of "X% of gains in per capita income over years Y-Z went to the top W%-iles of the income distribution" became a one in American political-economic discourse over that time period as well...


  1. Paul Krugman (2013): Is Tired of Trying to Reason with You People https://www.bradford-delong.com/2013/10/paul-krugman-is-tired-of-trying-to-reason-with-you-people-john-taylors-award-winning-paragraphs-noted.html: "John Taylor has accomplished something sort of amazing: he has managed to write the two worst paragraphs I’ve read this week. Here they are: (1) 'Federal debt held by the public has increased to 73% of GDP this year from 41% in 2008—and according to the Congressional Budget Office, it will rise to more than 250% without a change in policy. This raises uncertainty about how the debt can be brought under control...' (2) 'Despite a massive onslaught of legislation and regulation designed to foster prosperity, economic growth remains low and unemployment remains high. Rhetoric aside, many both inside and outside the government quite reasonably seek to return to the kinds of policies that worked well in the not-so-distant past. Claiming that one political party has been hijacked by extremists misses this key point, and prevents a serious discussion of the fundamental changes in economic policies in recent years, and their effects...' Start with the first paragraph, and notice the lack of a time frame.... Actually, I’m not sure where Taylor gets that number from; CBO has stopped doing ultra-long-run projections.... What it does do is 25-year projections... CBO is projecting a debt level well within historical experience for advanced nations. By conveying the impression that explosive debt growth is just around the corner, Taylor is actively and deliberately misleading his readers. But what I really found noteworthy is Taylor’s declaration that we must not say that the GOP has been taken over by extremists, because it prevents a serious discussion. Suppose we just posit the possibility that the GOP really has been taken over by extremists; are supposed to pretend otherwise, for the sake of discussion? When does it become OK to acknowledge reality? And of course the GOP really has been taken over by extremists.... Anyway, congratulations to Taylor, who wins some sort of prize this week...

  2. Raymond Chandler (1938): The Red Wind https://delong.typepad.com/files/red-wind.pdf: "There was a desert wind blowing that night. It was one of those hot dry Santa Anas that come down through the mountain passes and curl your hair and make your nerves jump and your skin itch. On nights like that every booze party ends in a fight. Meek little wives feel the edge of the carving knife and study their husbands' necks. Anything can happen. You can even get a full glass of beer at a cocktail lounge...

  3. Nathan Masters: The Devil Wind: A Brief History of the Santa Anas https://www.kcet.org/shows/lost-la/a-brief-history-of-the-santa-ana-winds: "Scholars who have looked into the name's origins generally agree that it derives from Santa Ana Canyon, the portal where the Santa Ana River—as well as a congested Riverside (CA-91) Freeway—leaves Riverside County and enters Orange County. When the Santa Anas blow, winds can reach exceptional speeds in this narrow gap between the Puente Hills and Santa Ana Mountains. The earliest-known written reference to the 'Santa Ana' winds appeared in the Nov. 15, 1880, edition of the _Los Angeles Evening Express. Winds were ferocious in Santa Ana Canyon on the night of January 6, 1847, when U.S. forces under Commodore Robert Stockton camped near the canyon during their conquest of Los Angeles. Stockton's diary describes their ordeal: 'Taking advantage of a deep ditch for one face of the camp, it was laid off in a very defensible position between the town and the river, expecting the men would have an undisturbed night's rest...In this hope we were mistaken. The wind blew a hurricane (something unusual in this part of California), and the atmosphere was filled with particles of fine dust, so that one could not see and but with difficulty breathe.' If the windstorm Stockton and his troops endured was the source of the name, little evidence exists in the historical record...

  4. David Y. Albouy (2008): The Colonial Origins of Comparative Development: An Investigation of the Settler Mortality Data https://delong.typepad.com/files/albouy.pdf_: "In a seminal contribution, Acemoglu, Johnson, and Robinson (2001) argue property-rights institutions powerfully affect national income, using estimated mortality rates of early European settlers to instrument capital expropriation risk. However 36 of the 64 countries in their sample are assigned mortality rates from other countries, typically based on mistaken or conflicting evidence. Also, incomparable mortality rates from populations of laborers, bishops, and soldiers-often on campaign-are combined in a manner favoring their hypothesis. When these data issues are controlled for, the relationship between mortality and expropriation risk lacks robustness, and instrumental-variable estimates become unreliable, often with infinite confidence intervals... https://www.nber.org/data-appendix/w14130/

  5. Daron Acemoglu, Simon Johnson, and James A. Robinson (2001): The Colonial Origins of Comparative Development: An Empirical Investigation https://delong.typepad.com/files/colonial-origins.pdf_: "Europeans adopted very different colonization policies in different colonies, with different associated institutions. In places where Europeans faced high mortality rates, they could not settle and were more likely to set up extractive institutions... [which] persisted to thepresent.... We estimate large effects of institutions on income per capita. Once the effect of institutions is controlled for, countries in Africa or those closer to the equator do not have lower incomes... https://delong.typepad.com/files/colonial_origins.zip

  6. Wikipedia: Amphidromic Point https://en.wikipedia.org/wiki/Amphidromic_point_: "An amphidromic point, also called a tidal node, is a geographical location which has zero tidal amplitude for one harmonic constituent of the tide.... The term amphidromic point derives from the Greek words amphi (around) and dromos (running), referring to the rotary tides running around them.... Amphidromic points occur because the Coriolis effect and interference within oceanic basins.... At the amphidromic points of the dominant tidal constituent, there is almost no vertical movement from tidal action. There can be tidal currents since the water levels on either side of the amphidromic point are not the same. A separate amphidromic system is created by each periodic tidal component. In most locations the 'principal lunar semi-diurnal', known as M2, is the largest tidal constituent, with an amplitude of roughly half of the full tidal range...

  7. Wikipedia: Amphidromic Point https://en.wikipedia.org/wiki/Amphidromic_point_: "An amphidromic point, also called a tidal node, is a geographical location which has zero tidal amplitude for one harmonic constituent of the tide.... The term amphidromic point derives from the Greek words amphi (around) and dromos (running), referring to the rotary tides running around them.... Amphidromic points occur because the Coriolis effect and interference within oceanic basins.... At the amphidromic points of the dominant tidal constituent, there is almost no vertical movement from tidal action. There can be tidal currents since the water levels on either side of the amphidromic point are not the same. A separate amphidromic system is created by each periodic tidal component. In most locations the 'principal lunar semi-diurnal', known as M2, is the largest tidal constituent, with an amplitude of roughly half of the full tidal range...

  8. Anton Howes: Trusting the Ancients https://antonhowes.substack.com/p/age-of-invention-trusting-the-ancients_: "How could the authority of the ancients be so potent for so long? Well, consider the context. Today, in a world of skyscrapers, indoor plumbing, and the widespread use of horse-less metal chariots, we rarely think that the ancients were in any way more advanced than us. We would, automatically, question them. In the sixteenth and seventeenth centuries, however, in a world of wooden houses, dirt floors, and carts, then the still-standing achievements of the ancients must have been mind-blowing: centuries-old pyramids, aqueducts, amphitheatres, and arenas, not to mention the written accounts of technologies long lost. Archimedes had allegedly set fire to Roman ships at the siege of Syracuse in the 3rd century BCE, using only mirrors focusing the sun’s beams. Archytas had apparently made a flying pigeon out of wood, and Daedalus had achieved human flight. Perhaps Vulcan’s legendary army of iron men might have been real automata. The writings of the ancients were thus, to the scholar of the sixteenth century, a potential goldmine of technologies to be rediscovered.... Given the context... the pining after a golden age... it is unsurprising that when the ancient sources said something, the default position would have been to trust them...

  9. ALAS! Parents appear to value not schools that teach their children but rather schools in which their children can rub elbows with the right kind of people. This could help make school choice into a recipe for disaster: Atila Abdulkadiroglu, Parag A. Pathak, Jonathan Schellenberg, and Christopher R. Walters: Do Parents Value School Effectiveness?: "School choice may lead to improvements in school productivity if parents' choices reward effective schools and punish ineffective ones. This mechanism requires parents to choose schools based on causal effectiveness rather than peer characteristics. We study relationships among parent preferences, peer quality, and causal effects on outcomes for applicants to New York City's centralized high school assignment mechanism. We use applicants' rank-ordered choice lists to measure preferences and to construct selection-corrected estimates of treatment effects on test scores and high school graduation. We also estimate impacts on college attendance and college quality. Parents prefer schools that enroll high-achieving peers, and these schools generate larger improvements in short- and long-run student outcomes. We find no relationship between preferences and school effectiveness after controlling for peer quality...

  10. Winston Churchill (1940): Eulogy for Neville Chamberlain https://www.bradford-delong.com/2011/09/quote-of-the-day-winston-churchills-eulogy-for-neville-chamberlain.html_: "Since we last met, the House has suffered a very grievous loss.... In paying a tribute of respect and of regard to an eminent man who has been taken from us, no one is obliged to alter the opinions which he has formed or expressed upon issues which have become a part of history; but at the lychgate we may all pass our own conduct and our own judgments under a searching review.... What is the worth of all this? The only guide to a man is his conscience; the only shield to his memory is the rectitude and sincerity of his actions. It is very imprudent to walk through life without this shield, because we are so often mocked by the failure of our hopes and the upsetting of our calculations; but with this shield, however the Fates may play, we march always in the ranks of honour.... Whatever else history may or may not say about these terrible, tremendous years, we can be sure that Neville Chamberlain acted with perfect sincerity according to his lights and strove to the utmost of his capacity and authority, which were powerful, to save the world from the awful, devastating struggle in which we are now engaged…

  11. It has been two years since the Ryan-McConnell-Trump tax giveaway went through the U.S. government. I planned to mark this anniversary, and so I wrote this and put it in the tickler file. Since I wrote this, however, Marty Feldstein—the second-best macroeconomics teacher I ever had, whose company I always enjoyed greatly, and who was always very nice to me—has died. I stand by this: Marty Feldstein gained a nearly infinite bank of credit for being brave, honorable, and honest with respect to our fiscal policy choices in the early 1980s. But he is running his balance down rapidly. Over the past two years, Martin Feldstein has argued sequentially that (a) there is no need to worry about Republicans' enacting law to increase the debt because they won't, (b) Republicans' enacting law to increase the debt won't matter because debt service will still fall as a share of GDP as the result of their policies, (c) debt service is about to rise rapidly because interest rates are going to go way up, and now (d) we must cut entitlements a lot in order to "avoid economic distress". The best that can be said is that this shows extreme naivety about what Republican politicians do and gross inconsistency with respect to his vision of how the economy works: Aug. 29, 2017: "The new legislation would...boost domestic corporate investment.... Although the net tax changes may widen the budget deficit in the short term, the incentive effects of lower tax rates and the increased accumulation of capital will mean faster economic growth and higher real incomes, both of which will cause rising taxable incomes and lower long-term deficits.... I am optimistic that a tax reform serving to increase capital formation and growth will be enacted, and that any resulting increase in the budget deficit will be only temporary..." Nov. 27, 2017: "The economic benefits resulting from the corporate tax changes will outweigh the adverse effects of the increased debt..." Feb. 27, 2018: "Long-term interest rates in the United States are rising, and are likely to continue heading up..." Martin Feldstein: The Debt Crisis Is Coming Soon: "The most dangerous domestic problem facing America’s federal government is the rapid growth of its budget deficit and national debt.... Federal debt will probably surpass 100% much sooner than 2028. If discretionary spending increases, debt growth will jump to 100% even quicker. When America’s creditors at home and abroad realize this, they will push up the interest rate the U.S. government pays on its debt. That will mean still more growth in debt.... To avoid economic distress, the government either has to impose higher taxes or reduce future spending. Since raising taxes weakens incentives and further slows economic growth—worsening the debt-to-GDP ratio—the better approach is to slow government spending growth.... Thus the only option is to throw the brakes on entitlements...

  12. Hilzoy: "I'm baffled by people who say this, and not just bc I wonder whether they took the same view when Obama was President: 'In His Hands: David it is God who chose and anointed President Trump for such a time as this. To judge God and His choice is a critical error. Your hatred for anyone is not God's fault. Remember hatred comes from satan and it is he whom you are joining forces with in hatred....' Obviously, if the fact that Trump is President means that God chose and anointed him, then the fact that Hitler was Chancellor of Germany means that God chose and anointed him. Ditto for every horrible ruler ever. If you believe this... and if you know ANYTHING about history, then I think you must conclude that God's ways are, indeed, unknowable to the human mind. But also: that the fact that God chose to create a world in which Trump becomes President does not mean that s/he intended us to like Trump.... NO Christian should say: it happened, so it must be part of God's plan, so let's just celebrate it. That would be sociopathic...

  13. This is very, very, very much worth watching: Research on Tap: Unbound https://twitter.com/i/moments/1175042840927330306: "Equitable Growth celebrated the release of Heather Boushey’s book, Unbound: How Inequality Constricts Our Economy and What We Can Do About It. She was joined by Sandra Black, Atif Mian, and Angela Hanks for a conversation moderated by Binyamin Appelbaum...

  14. Will McGrew: Investments in Early Childhood Education Improve Outcomes for Program Participants—and Perhaps Other Children too: "Governments that spend money on early childhood education get a lot of bang for their buck—an estimated 7 percent to 10 percent annual return for programs targeted at disadvantaged children... [plus] also long-term improvements in human capital and earnings. But do those test-score gains last?... Mariana Zerpa... finds that children in states with early childhood education programs are 30 percent less likely to repeat a grade between ages 6 and 8—and that this effect lasts at least until age 12...

  15. Extremely sharp thoughts on how we are wired at a very deep level to relate correlation and causation. This kind of identification of our heuristics and biases is essential to figuring out how to design societies in which people have a chance of making good judgments: Judea Pearl and Dana Mackenzie: Simpson's Paradox: "Any claim to resolve a paradox... should explain why people find the paradox surprising or unbelievable....When the paradox does occur, and we have to make a choice between two plausible yet contradictory statements, it should tell us which statement is correct.... A paradox... should entail a conflict between two deeply held convictions.... Suppose that the choice is... between two properties, A and B. If the Democrat wins, the businessman has a 5 percent chance of making $ 1 on Property A and an 8 percent chance of making $ 1 on Property B. So B is preferred to A. If the Republican wins, he has a 30 percent chance of making $ 1 on Property A and a 40 percent chance of making $ 1 on Property B.... If the businessman’s decision to buy can change the election’s outcome... then buying Property A may be in his best interest. The harm of electing the wrong president may outweigh whatever financial gain he might extract from the deal...

  16. I am not sure I get the very smart Wolfgang's point here. Yes, if you mortgage your intellectual integrity for insider influence, you no longer have your intellectual integrity to pledge. Where things go wrong is when others are willing to pretend that committed "experts" are independent in return for insider gossip: Wolfgang Munchau: Age of the Expert as Policymaker Is Coming To an End: "Where the conflation of the expert and the policymaker did real damage was not to policy but to expertdom itself. It compromised the experts’ most prized asset—their independence. When economics blogging started to become fashionable, I sat on a podium with an academic blogger who predicted that people like him would usurp the role of the economics newspaper columnist within a period of 10 years. That was a decade ago. His argument was that trained economists were just smarter. What he did not reckon with is that it is hard to speak truth to power when you have to beg that power to fund your think-tank or institute. Even less so once you are politically attached or appointed. Independence matters...

  17. From Noah Smith, an index of how the Republican Party has changed from "Massachusetts" to "Kentucky" nationalism over the past generation: from saying that the real Americans are those who have come here hoping to make a better life and join our community to saying that the real Americans are rural white people who fear others, and fear the future: Noah Smith: Ronald Reagan, the Diversity President https://www.bloomberg.com/opinion/articles/2019-09-05/ronald-reagan-the-diversity-president: "In a 1980 debate with primary election rival George H.W. Bush, Reagan advocated expanded legal immigration from Mexico, declaring: 'Rather than…talking about putting up a fence, why don’t we…make it possible for [Mexicans] to come here legally with a work permit.' Reagan made good on his word. In 1986 he signed the Immigration Reform and Control Act, which granted amnesty to more than 3 million immigrants living in the U.S. illegally. It was an epochal event.... Reagan also had a chance to stop the mostly nonwhite legal immigration that was bringing people from all corners of the globe. He never tried. In fact, despite holding some bigoted attitudes in private, Reagan remained passionately committed to the ideal of global immigration throughout his presidency. In his farewell address, he told a story of a U.S. Navy ship accepting a boat full of Southeast Asian refugees hoping to become Americans. And in his final speech from the Oval Office, Reagan articulated a vision of the nation that put immigration at the center of American exceptionalism: 'We lead the world because unique among nations, we draw our people, our strength, from every country and every corner of the world'.... Ronald Reagan, despite his flaws, believed in a country that was defined by ideals and institutions. Today’s Republicans should reject demographic fear and return to that powerful vision...

  18. Leonardo Pisano (1202): Book of Calculation https://delong.typepad.com/files/leonardo-pisano.pdf: "You, my Master Michael Scott, most great philosopher, wrote to my Lord [Friedrich II Hohenstaufen] about the book on numbers which some time ago I composed and transcribed to you; whence complying with your criticism, your more subtle examining circumspection, to the honor of you and many others I with advantage corrected this work. In this rectification I added certain necessities, and I deleted certain superfluities. In it I presented a full instruction on numbers close to the method of the Indians, whose outstanding method I chose for this science. And because arithmetic science and geometric science are connected, and support one another, the full knowledge of numbers cannot be presented without encountering some geometry, or without seeing that operating in this way on numbers is close to geometry; the method is full of many proofs and demonstrations which are made with geometric figures. And truly in another book that I composed on the practice of geometry I explained this and many other things pertinent to geometry, each subject to appropriate proof. To be sure, this book looks more to theory than to practice. Hence, whoever would wish to know well the practice of this science ought eagerly to busy himself with continuous use and enduring exercise in practice, for science by practice turns into habit; memory and even perception correlate with the hands and figures, which as an impulse and breath in one and the same instant, almost the same, go naturally together for all; and thus will be made a student of habit; following by degrees he will be able easily to attain this to perfection. And to reveal more easily the theory I separated this book into xv chapters, as whoever will wish to read this book can easily discover. Further, if in this work is found insufficiency or defect, I submit it to your correction...

  19. Sandra Batie, Susan B. Carter, Roger Ransom: Richard Charles Sutch, 1942-2019 https://delong.typepad.com/files/sutch-obituary.pdf: "Richard Charles Sutch, Distinguished Professor Emeritus, Economics, University of California Riverside and Research Associate of the National Bureau of Economic Research, died peacefully on September 19, 2019 at his home in Kensington, California. The cause of death was merkel cell carcinoma. He was 76 years old. Sutch will be remembered as a gregarious, exuberant, creative, hardworking, and witty person filled with love for family, colleagues, and friends...

  20. Santiago Pérez: Southern (American) Hospitality: Italians in Argentina and the US during the Age of Mass Migration: "I study the selection and economic outcomes of Italians in Argentina and the US, the two largest destinations during the age of mass migration. Prior cross-sectional work finds that Italians had faster assimilation in Argentina, but it is inconclusive on whether this was due to differences in selection or host-country conditions. I assemble data following Italians from passenger lists to censuses, enabling me to compare migrants with similar pre-migration characteristics. Italians had better economic outcomes in Argentina, and this advantage was unlikely to be due to selection. Migration path dependence can rationalize these differences in an era of open borders...


#noted #weblogs #2019-10-11

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