Previous month:
February 2020
Next month:
April 2020

March 2020

Given how our health care system is about to collapse under the weight and that we have a significantly older and hence more vulnerable population in China, the mortality number you should have in your head is, I think, 2% of cases with symptoms: Joseph T. Wu, Kathy Leung, Mary Bushman, Nishant Kishore, Rene Niehus, Pablo M. de Salazar, Benjamin J. Cowling, Marc Lipsitch, and Gabriel M. Leung: Estimating Clinical Severity of Covid-19 from the Transmission Dynamics in Wuhan, China https://www.nature.com/articles/s41591-020-0822-7.pdf: 'As of 29 February 2020 there were 79,394 confirmed cases and 2,838 deaths from COVID-19 in mainland China. Of these, 48,557 cases and 2,169 deaths occurred in the epicenter, Wuhan. A key public health priority during the emergence of a novel pathogen is estimating clinical severity, which requires properly adjusting for the case ascertainment rate and the delay between symptoms onset and death. Using public and published information, we estimate that the over-all symptomatic case fatality risk (the probability of dying after developing symptoms) of COVID-19 in Wuhan was 1.4% (0.9–2.1%), which is substantially lower than both the corresponding crude or naïve confirmed case fatality risk (2,169/48,557 = 4.5%) and the approximator1 of deaths/ deaths + recoveries (2,169/2,169 + 17,572 = 11%) as of 29 February 2020. Compared to those aged 30–59 years, those aged below 30 and above 59 years were 0.6 (0.3–1.1) and 5.1 (4.2–6.1) times more likely to die after developing symptoms. The risk of symptomatic infection increased with age (for example, at ~4% per year among adults aged 30–60 years)...

Continue reading "" »


No comment, other than that the corruption is deep here: Brooke Masters: Senators’ stock sales suggest we might not all be in this together https://www.ft.com/content/a9a295c2-6a8c-11ea-a3c9-1fe6fedcca75: 'Turns out that we might not all be in this together after all. Two Republican US senators offloaded millions of dollars in stock after they had received private briefings about the coronavirus outbreak, but before markets crashed. Stock sales for Kelly Loeffler of Georgia, and her husband Jeffrey Sprecher, who chairs the New York Stock Exchange, started on January 24, the same day her committee hosted an all-senators gathering with top health officials. By mid-February, 27 sales went through for her, worth up to $3.1m. She also acquired shares in two tech companies, Citrix and Oracle, that are expected to benefit from the increase in homeworking. Meanwhile Richard Burr, chairman of the Senate Intelligence Committee, sold 33 stocks worth up to $1.7m on February 13. The North Carolina senator was already under fire for the contrast between the Republican party’s upbeat public statements about the virus and a private speech he gave to VIPs on February 27 warning that the outbreak was “more aggressive in its transmission than anything that we have seen in recent history”. To be fair to the senators, they might have benefited from a hunch. China locked down the city of Wuhan the day before Ms Loeffler’s first sale, and her spokesman has said portfolio investment decisions are made by advisers without her or her husband’s knowledge or involvement. Non-essential manufacturing plants in the surrounding province of Hubei were shut down right before Mr Burr cashed out. But investigators should certainly be asking some questions. It has been illegal for members of Congress and other government employees to trade on secret briefings since the passage of the 2012 “Stop Trading on Congressional Knowledge Act”...

Continue reading "" »


This makes considerable sense: U.S. Private Sector Job Quality Index (JQI) Team: Over 37 Million Jobs Vulnerable To Short-Term Covid-19 Related Layoffs: 'Our finding [is] that that, amidst the COVID-19 crisis, over 37 million U.S. jobs may be vulnerable to potential layoffs in the short term. These are mostly front-line, customer-facing jobs that are predominantly low-wage/low-hours positions, but there are several higher quality job sectors included—such as air transportation—that are seeing shutdowns due to industry-specific, as opposed to generalized, consumer inactivity. These losses could be temporary if aid from the federal government is sufficient to "reset" the status quo ante and offset missed household payments for food, shelter and medical, and small/medium sized businesses’ rent, debt service and other carrying costs during the shutdown—so as to ensure their survival. If, on the other hand, the crisis is allowed to boil over into a full-on, lasting recession, it will be far more severe. Arguably worse than the Great Recession because of the depth of the demand shock. During the Great Recession, unemployment spiked to 10%, but those who remained employed continued consumption, albeit at a subdued rate. The present is a distinctly different situation: A potential unemployment spike to as much as the high teens, accompanied by an actual restriction on consumption caused by limited mobility of consumers. Akin to a severe economic slump and infrastructure-damaging hurricane/blizzard occurring at the same time....

Continue reading "" »


No. It does not seem that the Republican executive branch headed by Donald Trump is acting very competently: David Dayen: Unsanitized: The Ghost of Bailouts Past and Means Testing Presentt https://prospect.org/coronavirus/unsanitized-ghost-bailouts-past-means-testing-present/: 'Here’s a little thing that hasn’t been reported about the Treasury Department’s “term sheet” for the big coronavirus economic response package. If you take a look at the metadata of that document, you’ll see that it has the title “MEMORANDUM FOR SECRETARY PAULSON.” Hank Paulson, of course, was the Republican Treasury Secretary during the last crisis, not this one.... “This cut and paste job is evidence that they are literally working off of the 2008 baseline that led to a bipartisan bailout of the banks and left Main Street and the broader real economy behind,” says David Segal, executive director of the Demand Progress Education Fund.... The Treasury term sheet got adopted in Mitch McConnell’s bill language released yesterday afternoon. The bailouts for the airline industry ($50 billion) and everything else ($150 billion)? Yep, although McConnell added $8 billion for cargo air carriers. There are caps on executive compensation, as Treasury asked for, but also a kind of equity stake with government participation if the value rises. Small businesses get $300 billion in “interruption loans” in both Treasury and McConnell’s imagining; Treasury wanted this to go toward eight weeks of payroll, but McConnell allows rent, mortgage, utilities, or “other debt,” though there are incentives for sustaining employee compensation until the end of June. The temporary use of the Exchange Stabilization Fund to guarantee money markets is also the same. After all that (and a lot more) for businesses, the public gets—a $1,200 check. And they don’t go to everyone, phasing in at half price for those without income tax liability (as many as 75 million people, an unconscionable attack on the poor) and phasing out starting at those earning $75,000 per year, with nothing for those above $99,000. But that threshold doesn’t reflect anyone’s current, real-world status. Indeed, it’s likely to be based on 2018 tax returns.... Nobody in the leadership of either party has internalized that two year-old figures for determining means testing are completely obsolete...

Continue reading "" »


The United States Is Now Second Worst in Terms of Coronavirus Response

If we take as our metric the pattern of increase in the number of reported cases since the 100th reported case, the United States is now second worst in the world, behind only China. So that is bad. On the other hand, China now appears to have the coronavirus on the run. We think. It appears. So we could still manage this thing—with governmental competence:

2020-03-20-ft-coronavirus

Continue reading "The United States Is Now Second Worst in Terms of Coronavirus Response" »


The reported coronavirus cases, constantly updated. There were only 40% as any case worldwide back on Much 5. As of Fr Mar 20 8:41:42 am pdt: Worldometer: Coronavirus Update (Live) https://www.worldometers.info/coronavirus/: 'Coronavirus Cases: 256,798.... Deaths: 10,500. Recovered: 89,920. ACTIVE CASES: 156,378. Currently Infected Patients 148,911 (95%) in Mild Condition. 7,467 (5%). Serious or Critical...

Continue reading "" »


The best single webpage on coronavirus I have found. The only thing that annoys me is that they are tracking "confirmed" cases only. This is a major flaw—they should be, in the background and in the shadows, plotting our current "low" and "high" estimates of how far the disease has spread. And they should be plotting "optimistic" and "pessimistic" projections of what the likely spread is going to be. I understand that the public health community has been rather quiet in terms of providing such estimates. But they are what everybody is most interested in: confirmed cases across countries with very different abilities to test doe snot quite cut it: Steve Bernard, Cale Tilford and John Burn-Murdoch: Coronavirus Tracked: The Latest Figures as the Pandemic Spreads https://www.ft.com/content/a26fbf7e-48f8-11ea-aeb3-955839e06441: 'The countries affected, the number of deaths and the economic impact. Be the first to know about every new Coronavirus story. The humanitarian costs of the coronavirus outbreak continue to mount, with more than 250,000 people infected globally. The number of people confirmed to have died as a result of the virus has now surpassed 10,000.  The virus’s proliferation has been declared a pandemic by the World Health Organization, meaning it is spreading rapidly in different parts of the world. More than 150 countries have confirmed cases so far. The epicentre of the coronavirus is now Europe, with the largest number of confirmed cases in Italy, and death tolls growing more quickly in Italy and Spain than they did in China at the same stage of the outbreak. In most western countries case numbers have been increasing by about 33 per cent a day, a sign that other countries may soon be facing the same challenge as Italy...

Continue reading "" »


Bloomberg-BNN TalkIng Points on Economic Situation

  • At the moment, we have a huge negative supply shock
  • But as people lose their jobs as a result of this negative supply shock, it is going to turn into a demand shock
  • And we also have a very powerful distribution shock as well
  • We want to offset the demand shock without overdoing it
  • We want to let the prices of goods and services in high demand rise to encourage people to produce more of them
  • Hence an interesting policy problem:
    • The right inflation rate for the next 3 months is not 2%
    • The right inflation rate for the next 3 months is 2% + (share of the economy in high demand) x (how much prices need to rise to boost supply of commoditeis in high mand)/4
    • The right monetary policy is... stimulative, but uncertain...
    • The right fiscal policy is... stimulative, but uncertain...
    • The right distribution policy is... massive boost to unemployment insurance: 100% replacement for those who lose their jobs
    • The right lending policy is... lend enough on easy enough terms that businesses stay afloat, but not enough that stockholders make out like bandits—they are risk bearers, aren't they? Handsomely paid. Now is when they earn the money they earn in normal times...

  • I really wish the public health people were being louder and more forthcoming...
  • Because we do not know where we are
  • At the moment, 200 deaths in USA
    • Takes 4 weeks to die
    • At a 1% death rate, that means 20000 cases in U.S. on Feb 20
    • At a 3.33% death rate, that means 6000 cases in U.S. on Feb 20
  • If cases have been doubling every 7 days...
    • Then at least 100000 cases in the U.S. right now (and our testing is missing 6 out of 7)
  • If cases have been doubling every 4 days...
    • Then at most 2000000 cases in the U.S. right now (and our current testing is missing nearly everybody)
  • We don't know which it is, because Trump said he didn't want bad numbers
    • At the moment, 12% of those being tested are coming out as positive
    • But to get the true fraction, you need to multiply that 12% by (those who have it who got tested)/(those who have it), and then divide the result by (those who don't have it who got tested)/(those who don't have it).
      • & because are testing is messed up AF, we have no idea what those two key ratios are...
  • And the Trumpists saluted and slow-walked building up testing capacity
  • He should have been impeached and removed from office last week for this High Crime alone...

Continue reading "Bloomberg-BNN TalkIng Points on Economic Situation" »


Betty Cracker: Red State, Blue State https://www.balloon-juice.com/2020/03/19/red-state-blue-state/: 'I asked in the earlier thread if y’all thought Trump would ever be held accountable for his epic bungling. I hold out no hope that he’ll get what he deserves... but will it ever be widely acknowledged that he hideously bungled the coronavirus response, similarly to how W is commonly acknowledged to have fucked up by starting the Iraq War?I don’t know, but it’s vitally important that Trump, his elected and appointed enablers and the media sycophants who propped him up and misled people with disastrous results are held to account. It’s not just a question of having nice things. It’s life or death, as new reporting by The Times underscores...

Continue reading "" »


I disagree profoundly with the "you are [a team player], and don’t let your university exploit that". I am not separate from and being exploited by the university. I am the university. It has no hands and voices in this world without me, and people like me. It's certainly the case that other tasks can and do have higher priorities right now than being the university's hands and voice. But when those tasks are done—or, rather, when those tasks are not doable in the current moment—then working hard under unexpected conditions to fulfill as much as possible of the university's contract with its students is what I signed up to do. Otherwise, the advice is very good: Rebecca Barrett-Fox: Please Do a Bad Job of Putting Your Courses Online https://anygoodthing.com/2020/03/12/please-do-a-bad-job-of-putting-your-courses-online/: 'I’m absolutely serious.... You are NOT building an online class. You are NOT teaching students who can be expected to be ready to learn online. And, most importantly, your class is NOT the highest priority of their OR your life right now.... If you are getting sucked into the pedagogy of online learning or just now discovering that there are some pretty awesome tools out there to support students online, stop. Stop now. Ask yourself: Do I really care about this? (Probably not, or else you would have explored it earlier.) Or am I trying to prove that I’m a team player? (You are, and don’t let your university exploit that.)...

Continue reading "" »


Nicole Cliffe: I Tried Joe Manganiello's Diet and Workout Regimen https://www.elle.com/beauty/health-fitness/a38304/joe-mangianello-diet-workout-regimen/: 'Should you do this workout plan? I don't know, I'm not your mom.... Joe Manganiello.... You may know Joe as Big Dick Ritchie, or as Sofia Vergara's husband who HASN'T tried stealing her embryos, or as Alcide Herveaux, the sexiest werewolf in Shreveport. But the Joe who matters to us today is this one: Evolution: The Cutting-Edge Guide to Breaking Down Mental Walls and Building the Body You've Always Wanted has been an obsession of mine for a few years now. This is because I really like Joe Manganiello's face and body, and there are many pictures of said face and body contained within.... However, it is also very very funny. Joe Manganiello is one of the most earnest humans who has ever lived. He believes in himself and he believes in you. He probably believes in you more than you believe in yourself.... Okay, now me. I am a 33-year-old mother of two. I have brown and gray hair. One of my eyes is 30 percent smaller than the other. I work out a lot, and have for the last few years.... What Joe outlines in Evolution is, like it says on the tin, a six-week workout and diet routine. It purports to be the exact plan he followed to get in shape for "True Blood". When it occurred to me that it might be fun to do a stunt journalism piece where I followed his plan to the letter for six weeks and wrote about the results, I was in the process of shutting down my website, The Toast, which I had started and run with my friend Mallory Ortberg for the last three years. As you can imagine, I had a lot of feelings about this, and sometimes the best thing to do with too many feelings is to embark on an extremely grueling six-day-a-week workout regimen and refuse to eat any carbs that aren't sweet potatoes, a starch I personally loathe in all its forms...

Continue reading "" »


1919: Inevitability and Chance: A Teaser for "Slouching Towards Utopia?: An Economic History of the Long Twentieth Century"

stacks and stacks of books

From 1870-1914 we can see global economic history as by-and-large following a logic that was if not inevitable at least probable, or explicable after the fact. Luck and probability gave humanity an opening around 1870 in the form of a quintuple breakthrough: the ideology and policy of an open world, the transportation breakthrough, the communications breakthrough, and—most important the coming of the research laboratory plus the large corporation to to more than double the pace of invention and greatly speed the deployment of new technologies. Thereafter to 1914 the economic logic rolled forward: the idea of invention, the specialization of inventors, the deployment of technology in corporations trade, the international division of labor, and global growth (but also the creation of a low-wage periphery, and the concentration of industrialization of wealth in what is still the global north); the beginnings of the demographic transition that curbed the tendency for technological progress to be nearly entirely eaten up by greater numbers; the shift of work from farm to factory; and the coming of sufficient (if ill-distributed) prosperity. These all raised the possibility that someday, not that far away, humanity, in the rich economies of the global north at least, might attain something that previous eras would have judged to be a genuine utopia.

Continue reading "1919: Inevitability and Chance: A Teaser for "Slouching Towards Utopia?: An Economic History of the Long Twentieth Century"" »


A Note on Coronavirus

Note to Self: Is there anything wrong with this analysis?: With 14 deaths in the U.S., a 1% death rate, and 4 weeks between infection and death, that means that as of Feb 8 there were 1400 coronavirus cases in the United States. If it is doubling every seven days, then now about 22,000 people have and in the next week about 44,000 people in the U.S. will catch coronavirus. These numbers could be five times too big. These numbers could be five times too small. But with only 1 in 10,000 currently affected, it seems 4 or 5 weeks early to start imposing serious geographical quarintines...

Continue reading "A Note on Coronavirus" »


Tomas Pueyo: Coronavirus: Why You Must Act Now https://medium.com/@tomaspueyo/coronavirus-act-today-or-people-will-die-f4d3d9cd99ca: 'For the Bay Area, they were testing everybody who had traveled or was in contact with a traveler.... I looked at that ratio for South Korea... 86%.... With that number, you can calculate the number of true cases. If the Bay Area has 86 cases today, it is likely that the true number is ~600.... France claims 1,400 cases today and 30 deaths. Using the two methods above, you can have a range of cases: between 24,000 and 140,000.... Spain has very similar numbers as France.... So the coronavirus is already here. It’s hidden, and it’s growing exponentially.... The World Health Organization (WHO) quotes 3.4% as the fatality rate.... This number is out of context.... It really depends on the country and the moment: between 0.6% in South Korea and 4.4% in Iran. So what is it? We can use a trick to figure it out.... Deaths/Total Cases and Death/Closed Cases. The first one is likely to be an underestimate.... The second is an overestimate, because it’s likely that deaths are closed quicker than recoveries.... Hubei’s fatality rate will probably converge towards 4.8%. Meanwhile, for the rest of China, it will likely converge to ~0.9%.... Iran’s and Italy’s Deaths / Total Cases are both converging towards the 3%-4% range. My guess is their numbers will end up around that figure too.... The last relevant example is the Diamond Princess cruise: with 706 cases, 6 deaths and 100 recoveries, the fatality rate will be between 1% and 6.5%. Note that the age distribution in each country will also have an impact: Since mortality is much higher for older people, countries with an aging population like Japan will be harder hit...

Continue reading "" »


Duncan Black: Well, Then... https://www.eschatonblog.com/: '“The lack of testing in the United States is a debacle,” said Marc Lipsitch, professor of epidemiology at Harvard’s Chan School and director of the Center for Communicable Disease Dynamics. “We’re supposed to be the best biomedical powerhouse in the world and we’ve been unable to do something that every other country has been able to do.”...

Continue reading " " »


Max Roser and Hannah Ritchie: Coronavirus Disease (COVID-19) https://ourworldindata.org/coronavirus#what-do-we-know-about-the-mortality-risk-of-covid-19: "What we want to know is the total number of COVID-19 cases.... What we do know: the doubling time of known cases. The WHO is publishing daily Situation Reports (here) which list the number of confirmed cases.... Doubling time for the global number of cases (excluding China): 4 days...

Continue reading "" »


A Note on Coronavirus

Comment of the Day: A Note on Coronavirus https://www.bradford-delong.com/2020/03/a-note-on-coronavirus.html?cid=6a00e551f0800388340240a4f0002c200d#comment-6a00e551f0800388340240a4f0002c200d: Is there anything wrong with this analysis?... Now about 22,000 people have and in the next week about 44,000 people in the U.S. will catch coronavirus. These numbers could be five times too big. These numbers could be five times too small.... Ronald Brakels: 'It's now coming up to spring in the Northern hemisphere and warmer temperatures and higher humidity will slow the spread of the virus. People should also be taking precautions since they are forewarned, unlike the inhabitants of Wuhan. But yeah, there's plenty of potential for large scale outbreaks in the US, so your back of the envelope estimate may not be too far off. I'm more optimistic about the rate of spread, it's going to be 29 degrees Celsius in Houston on Wednesday, but what do I know?...' Mark Field: 'According to Johns Hopkins, the median time until death was about 33 days.... As for the doubling rate, 2 weeks ago Italy had 9 cases. Now it has 5800. Since Trump is deliberately suppressing the ability to diagnose cases, we have to estimate as the good prof has done here.... Ronald Brakels: 'Thinking about it, if 22,000 people have COVID-19 new centers of infection should be becoming apparent. If 11,000 people currently have it and have passed through the incubation period and developed symptoms there should be around 2,000+ severe cases coming to the attention of medical professionals. While this is nothing compared to the 490,000 US hospitalizations due to the flu last year, I presume there would be enough concentration in new centers of infection for suspicions to be raised. If there are normally 2,000 flu hospitalizations a day in the US at this time of year, an extra 200 or so a day concentrated in a few clusters should ring alarm bells. Unless of course it's more difficult to detect the signal than I think, or the United States is particularly bad at this sort of thing despite having months of warning.... I suspect the rate of doubling is slower than in Brad's back of the envelope calculation. This is not surprising, people have changed their behavior and the US is less crowded than China, South Korea, or Italy. Also, the United States may have been lucky with very few clusters forming in the wild. But in about a week we should be able to say if the United States has been fortunate or unfortunate...

Continue reading "A Note on Coronavirus" »


Erik Loomis: If Only We Could Choose Who the 2% Would Be https://www.lawyersgunsmoneyblog.com/2020/03/if-only-we-could-choose-who-the-2-would-be: 'Rick Santelli, a decade off of leading off the corporate-racist freakout against Obama that created the Tea Party, is back wishing 2% of the world would die of coronavirus so that the markets would just keep going up, no doubt to 36,000: @rationalsquad: "Rick Santelli on @CNBC just made the argument that we'd be better off if everyone got the #coronavirus right away and 2% of the world died off, so that financial markets could stabilize. Rick likes Republicans, don't be like Rick...

Continue reading "" »


Simon Balto: On Bernie, Biden, Black Voters, and Whiteness https://www.lawyersgunsmoneyblog.com/2020/03/on-bernie-biden-black-voters-and-whiteness: 'I want to discuss some things that Chris [Koski] raised in his post last night on Black voters and the Biden-Bernie matchup.... I don’t have any issues with Chris’s larger conclusion that Biden manhandled Sanders in attracting Black voters in the South. That’s clearly true and not up for debate. I also agree with the point that it’s patronizing to write off Black voters as voting against their interests, being ill-informed, etc. It’s also not borderline offensive. It is offensive. However, I think there is a lot of nuance that’s lost...

Continue reading "" »


Shelton the Charlatan: Project Syndicate

In 1994 Milton Friedman wrote about Judy Shelton: "In a recent Wall Street Journal op-ed piece (July 15)... Judy Shelton started her concluding paragraph: “Until the U.S. begins standing up once more for stable exchange rates as the starting point for free trade...” It would be hard to pack more error into so few words.... A system of pegged exchange rates, such as the original IMF system or the European Monetary System, is an enemy to free trade. It is no accident that the 1992 collapse of the EMS coincided with the agreement to remove controls on the movement of capital..." https://miltonfriedman.hoover.org/friedman_images/Collections/2016c21/NR_09_12_1994.pdf. To turn monetary policy away from internal balance toward preventing exchange rate movements that market fundamentals wanted to see occur was, in Friedman's view, the road toward disaster. It was simply wrong. And it could be held together only if economies moved from free trade back toward managed trade—and so beggared not just their neighbors but themselves.

Continue reading "Shelton the Charlatan: Project Syndicate" »


Wealth Tax: Project Syndicate

Larry Summers hates this, and, given that I lose three of four arguments I have with him, that is a sign that I may well be wrong here. Maybe it is that I spend too much time back in the eighteenth century, and do not understand modern public finance. Maybe it is just that we upper middle class urban Californians pay huge wealth taxes, and so don't see why others think it is a big deal. But it seemed and seems to me that whether one taxes wealth, income, or consumption in order to try to minimize the utility cost of taxation by placing burdens on those with a very low marginal utility of wealth is overwhelmingly a question of administrative practicality: how to identify those with a low marginal utility of wealth:

Isn't a Wealth Tax Common Sense? https://www.project-syndicate.org/commentary/wealth-tax-common-sense-by-j-bradford-delong-2020-01: I was not surprised when Gabriel Zucman and Emmanuel Saez https://www.brookings.edu/wp-content/uploads/2019/09/Saez-Zucman_conference-draft.pdf in offices down the hall and Thomas Piketty over in Paris began proposing, and Democratic presidential candidates began endorsing https://www.vox.com/policy-and-politics/2019/1/24/18196275/elizabeth-warren-wealth-tax https://www.vox.com/policy-and-politics/2019/9/24/20880941/bernie-sanders-wealth-tax-warren-2020, the idea of a “wealth tax“. What did surprise me was what seemed and still seems to be a surprising amount of unexpected pushback—pushback from people I had always thought to be on the side of a more-progressive rationalization of the tax system.

Back up: When I learned public finance, I was taught that there were three principles of taxation, all spring from Jean-Baptiste Colbert‘s observation that the point was to extract the feathers from the goose with the least amount of hissing. That meant, first, always broadening the tax base so that you could hit your revenue target with the lowest possible and hence the least annoying tax rates. That meant, second, imposing taxes on items for which demand was inelastic, so that the tech system did as little as possible destructive distortion to the pattern of economic activity. That meant, third, taxing those for whom the utility cost of their tax payments was least—that is, taxing the rich. And what is the broadest possible tax base on which to tax the wealthy? It is their wealth, of course. And for what is the demand of the wealthy least elastic—what are they least willing to sacrifice to try to reduce their tax burden? Their wealth, of course.

Continue reading "Wealth Tax: Project Syndicate" »


Friedrich Engels (1884): The Relative Autonomy of the State: Weekend Reading

Weekend Reading: Friedrich Engels (1884): The Relative Autonomy of the State https://www.marxists.org/archive/marx/works/download/pdf/origin_family.pdf: 'The state... is normally the state of the most powerful, economically ruling class, which by its means becomes also the politically ruling class, and so acquires new means of holding down and exploiting the oppressed.... The ancient state was, above all, the state of the slave-owners for holding down the slaves, just as the feudal state was the organ of the nobility for holding down the peasant serfs and bondsmen, and the modern representative state is the instrument for exploiting wage-labor by capital. Exceptional periods, however, occur when the warring classes are so nearly equal in forces that the state power, as apparent mediator, acquires for the moment a certain independence in relation to both. This applies to the absolute monarchy of the seventeenth and eighteenth centuries, which balances the nobility and the bourgeoisie against one another...

Continue reading "Friedrich Engels (1884): The Relative Autonomy of the State: Weekend Reading" »


Zeynep Tufekci: Preparing for Coronavirus to Strike the U.S. https://blogs.scientificamerican.com/observations/preparing-for-coronavirus-to-strike-the-u-s/: 'The real crisis scenarios we’re likely to encounter require cooperation and, crucially, “flattening the curve” of the crisis exactly so the more vulnerable can fare better, so that our infrastructure will be less stressed at any one time.... The infectiousness of a virus, for example, depends on how much we encounter one another; how well we quarantine individuals who are ill; how often we wash our hands; whether those treating the ill have proper protective equipment; how healthy we are to begin with—and such factors are all under our control. After active measures were implemented, the R0 for the 2003 SARS epidemic, for example, went from around three, meaning each person infected three others, to 0.04. It was our response to SARS in 2003 that made sure the disease died out from earth, with less than a thousand victims globally. Similarly, how many people die of seasonal influenza (or COVID-19) depends on the kind of health care they receive. In China, death rates are much higher in the overwhelmed Hubei province than the rest of the country exactly because of the quality of the care. Hospitals only have so many beds, especially in their intensive care units, and those who have a severe case of COVID-19 often need mechanical ventilation and other intensive care procedures. When they are out of beds, people end up languishing at home and suffering and dying in much larger numbers. All this means that if we can slow the transmission of the disease—flatten its curve—there will be many lives saved even if the same number of people eventually get sick, because everyone won’t show up at the hospital all at once.... This disease is mild to nonexistent in children.... On the other hand, for the elderly or for people who have other diseases or comorbidities, it’s very serious, with death rates reaching up to 15 percent. It’s also a great threat to health workers who handle people with the virus every day, with thousands of cases already. Overall, it appears to have a case fatality rate around 2 percent, which is certainly very serious: seasonal flu, a serious threat in and of itself, has a case fatality rate around 0.1 percent in the United States, so this coronavirus is about 20 times as deadly.... Here’s what all this means in practice: get a flu shot, if you haven’t already, and stock up supplies at home so that you can stay home for two or three weeks, going out as little as possible. The flu shot helps decrease the odds of having to go to the hospital for the flu, or worse yet, get both flu and COVID-19; comorbidities drastically worsen outcomes. Staying home without needing deliveries means that not only are you less likely to get sick, thus freeing up hospitals for more vulnerable populations, it means that you are less likely to infect others.... If you are in a position of authority, that means figuring out how to help people stay at home.... The practical steps facing households are immediate and important; for the sake of everyone else, prepare to stay home for a few weeks. You’ll reduce your own risks, but most importantly, you will reduce the burden on health care and delivery infrastructure and allow frontline workers to reach and help the most vulnerable...

Continue reading "" »


Plutarch: Life of Cleomenes III http://penelope.uchicago.edu/Thayer/E/Roman/Texts/Plutarch/Lives/Cleomenes*.html: His lack of resources forced him to stake the whole issue on a battle where, as Polybius says, he could oppose only twenty thousand men to thirty thousand. He showed himself an admirable general in the hour of peril, his fellow countrymen gave him spirited support, and even his mercenaries fought in a praiseworthy manner, but he was overwhelmed by the superior character of his enemies' armour and the weight of their heavy-armed phalanx. Phylarchus, however, says that there was treachery also.... Damoteles (who had previously been bribed, as we are told, by Antigonus) told him to have no concern about flanks and rear, for all was well there, but to give his attention to those who assailed him in front.... So Cleomenes... drove back the phalanx of the Macedonians for about five furlongs, and followed after them victoriously.... After Eucleidas and his forces had in this way been cut to pieces, and the enemy, after their victory there, were coming on against the other wing, Cleomenes, seeing that his soldiers were in disorder and no longer had courage to stand their ground, took measures for his own safety. Many of his mercenaries fell, as we are told, and all the Spartans, six thousand in number, except two hundred. When Cleomenes came to the city, he advised the citizens who met him to receive Antigonus; as for himself, he said he would do whatever promised to be best for Sparta, whether it called for his life or death.... Cleomenes... after coming into the presence of Ptolemy, at first he met with only ordinary and moderate kindness from him; but when he had given proof of his sentiments and shown himself to be a man of good sense, and when, in his daily intercourse, his Laconian simplicity retained the charm which a free spirit imparts, while he in no wise brought shame upon his noble birth or suffered the blows of Fortune to bow him down, but showed himself more winning than those whose conversation sought only to please and flatter, then Ptolemy was filled with great respect for him, and deeply repented that he had neglected such a man and abandoned him to Antigonus, who had thereby won great glory and power...

Continue reading "" »


Remembering that the Obama Administration was part of the solution to our economic problems only 60% of the time, and part of the problem 40% of the time. The deficit was not America's economic problem #1, OR EVEN #10!!!!!!, on November 29, 2010: Jack Lew: Tightening Our Belts https://obamawhitehouse.archives.gov/blog/2010/11/29/tightening-our-belts: 'NOVEMBER 29, 2010: he fiscal and economic situation we face today is very different than the projected surpluses we left behind the last time I served as OMB Director in the 1990's.... To lay the foundation for long-term economic growth and to make our nation competitive for years to come, we must put the United States back on a sustainable fiscal course. And that’s going to require some tough choices. Today, the President made one of those: proposing a two-year pay freeze for all civilian federal workers. This will save  $2 billion over the remainder of this fiscal year, $28 billion in cumulative savings over the next five years, and more than $60 billion over the next 10 years.... Make no mistake: this decision was not made lightly. Like everyone honored to serve in the White House or the Cabinet, we work with extraordinarily talented public servants every day.... This pay freeze is not a reflection on their fine work. It is a reflection of the fiscal reality that we face...

Continue reading "" »


The stakes in Virginia's gun-control debate affect much more than just those who live in Virginia: German Lopez: Virginia’s Gun Control Bills, & the Backlash Against Them, Explained https://www.vox.com/policy-and-politics/2020/1/23/21075335/virginia-gun-control-laws-mass-shootings: 'aAs Harvard Injury Control Research Center director David Hemenway previously told me, “I think hardly anything is a big deal. I’m convinced that large numbers of small things add up.” State laws like the ones Virginia is proposing.... Due to its relatively weak gun laws, the state has often acted as a crucial hub in the “Iron Pipeline” from the South to Northern states that have stricter firearm laws. In New York state, for example, almost 74 percent of guns used in crimes between 2010 and 2015 came from states with lax gun laws, based on a report from the New York State Office of the Attorney General. About 15 percent of likely trafficked crime guns came from Virginia — the most from any single state. This phenomenon, in which guns flow from places with weak laws to places with strong laws, is common across the US...

Continue reading "" »


There is progress in understanding how we learn and, more important, retain what we know. Perhaps the most important insight is that our brains are very good at deep-sixing useless information. And they immediately classify information we see once and never use or see again as useless: Gwern Branwen: Spaced Repetition for Efficient Learning https://www.gwern.net/Spaced-repetition: 'Spaced repetition is a centuries-old psychological technique for efficient memorization & practice of skills where instead of attempting to memorize by ‘cramming’, memorization can be done far more efficiently by instead spacing out each review, with increasing durations as one learns the item, with the scheduling done by software. Because of the greater efficiency of its slow but steady approach, spaced repetition can scale to memorizing hundreds of thousands of items (while crammed items are almost immediately forgotten) and is especially useful for foreign languages & medical studies. I review what this technique is useful for, some of the large research literature on it and the testing effect (up to ~2013, primarily), the available software tools and use patterns, and miscellaneous ideas & observations...

Continue reading "" »


Once again, not playing my position. But I cannot stand it. Surely the future of the New York Times hinges on its having the people who write for it being oriented toward reality and telling it straight, rather than through laziness or corruption being complaisant henchmen for sinister grifters, doesn't it? So why? What business do the Sulzburgers think they are going to be in in which this kind of idiocy has a place?: Scott Lemieux: The Greatest Tradition in American Punditry Continues http://www.lawyersgunsmoneyblog.com/2020/02/the-greatest-tradition-in-american-punditry-continues: 'David Brooks: "Instead of spending the past 3 years on Mueller and impeachment suppose Trump opponents had spent the time on an infrastructure bill or early childhood education? More good would have been done." Paul Krugman: "Since some people seem confused about this, we could have had a major infrastructure bill, with overwhelming Democratic support, at any at any point in the past 3 years; Trump and his party were the obstacle." The punchline is that, as you can see from this story in Brooks’s own newspaper, House Dems introduced a major infrastructure plan last week. But I suppose it’s unrealistic to expect someone who gets paid a six figure salary plus God knows how much in speaking fees to write about politics to actually look stuff like this up...

Continue reading "" »


The best thing I read last month: John Quiggin: Climate Change and the Strange Death of Libertarianism http://crookedtimber.org/2020/01/18/climate-change-and-the-strange-death-of-libertarianism/: 'It wasn’t that long ago that everyone was talking about the “libertarian moment” in the US. Now, libertarianism/propertarianism is pretty much dead. The support base, advocacy groups and so on have gone full Trumpists, while the intellectual energy has shifted to “liberaltarianism” or, a more recent variant, Tyler Cowen’s conversion to “state capacity libertarianism“. Most of those departing to the left have mentioned the failure of libertarianism to handle climate change. It was critical for two reasons. First, any serious propertarian response would have required support ofr the creation of new property rights (emissions permits) and the restriction of existing ones (burning carbon). That would imply an acknowledgement that property rights are not natural relations between people (owners) and things (property). They are socially constructed relationships between people, allowing some people to use things and to stop other people from doing so. Second, the effort to deny the necessary implications of climate change inevitably resulted in denial of the scientific evidence that climate change was occurring. That contributed to a situation where most former libertarians are now Trumpists, happy to deny the evidence of their own eyes if that’s what the leader requires of them...

Continue reading "" »


Stanford-Hoover's John Taylor thinks that the main threat to economic freedom is... the Business Roundtable. At least, that is the only threatener of economic freedom that he names. And the point is really weird. In all long-term win-win economic relationships the duties of managers and representatives are always diffuse: they are agents not just of their formal principals but of all those whose participation is essential to the value creation process. Recognizing this... is not a threat to freedom. And I do not understand what kind of mind thinks it is. To understand that myopic grabbing for every resource you can grab in the short run destroys the trust without which a productive economy is impossible is... a very obvious point in management, political economy, and moral philosophy, isn't it?: John Taylor: The New-Old Threat to Economic Freedom https://www.project-syndicate.org/commentary/socialist-threat-to-economic-freedom-by-john-taylor-5-2020-02: 'Achieving economic freedom is difficult: one always must watch for new obstacles.... Many such obstacles are simply arguments rejecting the ideas that underpin economic freedom.... Even the Business Roundtable is weighing in, announcing last August that US corporations share “a fundamental commitment to all of our stakeholders,” including customers, employees, suppliers, communities, and, last on the list, shareholders. That is a significant departure from the group’s 1997 statement, which held that, “the paramount duty of management and of boards of directors is to the corporation’s stockholders; the interests of other stakeholders are relevant as a derivative of the duty to stockholders.” Moreover, as that earlier statement was right to point out, the idea that a corporate board “must somehow balance the interests of stockholders against the interests of other stakeholders” is simply “unworkable.”...

Continue reading "" »


Not playing my position. I am not surprised that no Democrats voted not to remove Trump from office. I am surprised that one Republican senator—Mitt Romney—did. I thought it would be either zero or—a very slim chance indeed—25. I wonder if it would be 25 had Trump's open and braze Ukrainian corruption happened a year earlier, and had the next election been further off?: Tierney Sneed: GOP Hype For A Bipartisan Acquittal Backfires https://talkingpointsmemo.com/news/gop-hype-for-a-bipartisan-acquittal-backfires: 'Democrats fell short on their biggest goal going into President Trump’s impeachment trial: getting witnesses. But when it ended, they were able to achieve the second best thing they could have hoped for, given an acquittal was always guaranteed. The vote for conviction was bipartisan, with Sen. Mitt Romney (R-UT) breaking with his party on the abuse of power article, while only Republicans voted for acquittal. That outcome flipped on its head a talking point Trump and the GOP had embraced coming out of the House inquiry, where no Republicans supported the impeachment articles and two Democrats voted against both counts. And it injected one final dramatic, albeit not decisive, twist in a final trial vote that otherwise lacked suspense...

Continue reading "" »


Lecture Notes: Sources of Marx’s Loathing of the Market

3.3) Sources of Marx’s Loathing: In many ways, Marx simply trying to make sense of what he saw. Not Marx but British liberal establishment icon John Stuart Mill wrote, in 1873:

It is questionable if all the mechanical inventions yet made have lightened the day’s toil of any human being. They have enabled a greater population to live the same life of drudgery and imprisonment, and an increased number of manufacturers and others to make fortunes. They have increased the comforts of the middle classes…

Denser populations, more and richer plutocrats, a larger middle class, the same-old same-old of poverty and misery for the mass of humanity—those were all the fruits John Stuart Mill saw of the 1730-1870 Industrial Revolution. Whatever possibilities for a better world existed in the womb of better technology were stillborn. One word in Mill’s paragraph stands out: imprisonment. The world Mill saw was not just a world of drudgery—where humans had to work long and tiring hours at crafts and tasks that came nowhere near to being sufficiently interesting to engage the full brainpower of an East African Plains Ape. The world Mill saw was not just a world in which most people were close to the edge of being desperately hungry, and were justifiably anxious about where their 2000 calories a day were going to come from next year—or net week. The world Mill saw was not just a world of low literacy—where most could only access the collective human store of knowledge, ideas, and entertainments partially and slowly. It was a world in which humanity was imprisoned: not free. Humanity was in a dungeon, chained and fettered.

(Note that modern “libertarians” draw heavily both on John Stuart Mill as their founder and inspiration and on the Oxford inaugural lecture of Isaiah Berlin (1958): Two Concepts of Liberty, with its claim that “negative” and “positive” liberty are in “direct conflict”. They fundamentally misconstrue John Stuart Mill, fail at some fundamental level to grasp what Mill thought the libertarian project was. Berlin’s definition that “I am normally said to be free to the degree to which no man or body of men interferes with my activity… the area within which a man can act unobstructed by others…” is one in which Mill’s use of the word imprisonment makes no sense at all.)

How could this continuation of general poverty and misery be, given the enormous productivity of modern humanity resulting from the magic of the market and the magic of science and technology? 
Marx tried to find out.

Continue reading "Lecture Notes: Sources of Marx’s Loathing of the Market" »


People are telling lots of untruths about vertical mergers and antitrust. Fiona Scott Morton is on the case: Fiona Scott Morton: There are many false assertions lurking in the comments on the agency draft VMGs https://twitter.com/ProfFionasm/status/1235601064314826752. Here is one: "Despite the fact that, among law and economics scholars, it has long been an essentially settled matter that vertical integration—whether partial integration by contract or full integration by merger—is typically procompetitive (or, at the very least, competitively ambiguous, and problematic in only very limited, stylized, and theoretical circumstances)... THIS IS NOT SUPPORTED BY THEORY OR EMPIRICAL EVIDENCE. So what does the footnote say? It cites a speech asserting the same wrong thing, (See, e.g., D. Bruce Hoffman, Acting Director, Fed. Trade Comm’n, Remarks at the Credit Suisse 2018 Washington Perspectives Conference:). This person, in turn, cites a survey of papers that do NOT support the claim https://t.co/sTDwaeDv0s?amp=1...

Continue reading "" »


Young whippersnapper Carmen Sanchez Cumming joins Equitable Growth: Carmen Sanchez Cumming: What the Historically Low U.S. Unemployment Rate Means for Women Workers https://equitablegrowth.org/what-the-historically-low-u-s-unemployment-rate-means-for-women-workers/: 'Last month’s Jobs Report showed that at 3.5 percent, the share of women who are actively looking for a job but don’t have one continues to be near a 65-year low. At 3.6 percent, men’s unemployment rate is currently slightly above the rate for women. Prior to 1983, that was rarely the case. Research published in 2017 by economists Stefania Albanesi of the University of Pittsburgh and Ayşegül Şahin (at the time with the Federal Reserve Bank of New York and now at the University of Texas at Austin) shows that for most of the post-World War II period and until the early 1980s, women’s unemployment rate was rarely below 5 percent and usually more than 1.5 percentage points above that of their male counterparts. In the ensuing four decades, however, the gender unemployment gap—the difference between the female and male unemployment rates—nearly disappeared except during recessions, when men consistently experience a higher joblessness rate...

Continue reading "" »


This looks to be a major advance in our ability to track in near real time the regional evolution of the U.S. economy. If I had seen this pattern of regional growth and decline a decade ago, it would have made me less worried about the gerrymandering that the Constituion has built into the Senate. The people in declining areas are relatively poor, and they have little economcic or cultural power, so giving them more political power might have created a fairer overall balance. Yet somehow it does not seem to have worked out that way: their senators are not fighting for a fairer division of wealth, but seem focused on achieving negative sum goals for the country at large—if we can't be prosperous, you shouldn't be prosperous either. Raksha Kopparam: County-Level GDP Gives Insight into Local-Level U.S. Economic Growth https://equitablegrowth.org/new-measure-of-county-level-gdp-gives-insight-into-local-level-u-s-economic-growth/: 'The U.S. Department of Commerce’s Bureau of Economic Analysis released a new measure.... Local Area Gross Domestic Product. LAGDP is an estimate of GDP at the county level between the years of 2001—2018.... Growth since the end of the Great Recession in mid-2009... is concentrated in the West Coast states and parts of the Midwest. States such as Nevada, West Virginia, New Mexico, and Wyoming have seen a significant number of counties contract in economic output since the recession. One of the benefits of this new LAGDP measure is that it provides an industry-specific breakdown.... Trends in the manufacturing industry and how manufacturing has contributed to GDP pre- and post-Great Recession are also now more trackable.... Manufacturing... [in] clusters of counties on the East Coast and the Midwest suffered contractions. Although overall manufacturing output in North Carolina increased, many counties experienced heavy declines over the past 17 years.... 20 percent of the nation’s economic growth is concentrated in 11 counties, including the cities of Los Angeles, New York, and Harris, Texas...

Continue reading "" »


The Federal Reserve appears to be not just the first but the only instrumentality of the federal government to actually do something significant in response to the coronovirus. Since this is overwhelmingly not a monetary policy but a public health problem, this is really, really, really, really not how things should be: Claudia Sahm: U.S. Economic Policymakers Need To Fight The Coronavirus Now https://equitablegrowth.org/u-s-economic-policymakers-need-to-fight-the-coronavirus-now/: 'The Fed['s]... policy tools... are too blunt to help the people who need it most. People in our country are getting sick, and the most vulnerable workers could lose their jobs if they are too ill to show up. Monetary policy cannot address this gaping public health problem. Yes, the Fed might calm financial markets some. Yes, the Fed might help businesses and borrowers who are taking on debt. The Fed is doing its part, doing what it can. But it needs help. Chair Powell made that clear before the cameras, saying: "The virus outbreak is something that will require a multifaceted response. And that response will come in the first instance from healthcare professionals and health policy experts. It will also come from fiscal authorities, should they determine that a response is appropriate. It will come from many other public- and private-sector actors, businesses, schools, state and local governments.... This morning’s G-7 statement... reflect[s] coordination at a high level in a form of a commitment to use all available tools..." What can the federal government do? Here is my proposal, grounded in more than a decade of research and forecasting at the Fed. Act fast. It is time for the federal government—all parts of it—to move swiftly against the spread of the coronavirus and any economic distress it may cause.... Provide financial support to people who are suffering.... Plan for the worst.... Have automatic support ready for a recession...

Continue reading "" »


One of the key moments of mid-nineteenth century French politics. The moment where those who have a little—whose grandparents had gained property to their small farms in the Great French Revolution—become convinced that they have more to lose than to gain from further reform: that sinister lazy urban socialist moochers rather than plutocrats and aristocrats are the threats to their status and prosperity: Alexis de Tocqueville: The Recollections https://oll.libertyfund.org/titles/tocqueville-the-recollections-of-alexis-de-tocqueville-1896: 'In the country all the landed proprietors, whatever their origin, antecedents, education or means, had come together, and seemed to form but one class: all former political hatred and rivalry of caste or fortune had disappeared from view. There was no more jealousy or pride displayed between the peasant and the squire, the nobleman and the commoner; instead, I found mutual confidence, reciprocal friendliness, and regard. Property had become, with all those who owned it, a sort of badge of fraternity. The wealthy were the elder, the less endowed the younger brothers; but all considered themselves members of one family, having the same interest in defending the common inheritance. As the French Revolution had infinitely increased the number of land-owners, the whole population seemed to belong to that vast family. I had never seen anything like it, nor had anyone in France within the memory of man...

Continue reading "" »


Claudia Goldin: The Role of World War II in the Rise of Women's Work https://www.nber.org/papers/w3203: 'The 1940's were a turning point in married women's labor force participation, leading many to credit World War II with spurring economic and social change. This paper uses information from two retrospective surveys, one in 1944 and another in 1951, to resolve the role of World War II in the rise of women's paid work. More than 50% of all married women working in 1950 had been employed in 1940, and more than half of the decade's new entrants joined the labor force after the war. Of those women who entered the labor force during the war, almost half exited before 1950. Employment during World War II did not enhance a woman's earnings in 1950 in a manner consistent with most hypotheses about the war. Considerable persistence in the labor force and in occupations during the turbulent 1940's is displayed for women working in 1950, similar to findings for the periods both before and after. World War Il had several significant indirect impacts on women's employment, but its direct influence appears considerably more modest...

Continue reading "" »


One view is that in the world of abundance we would all act as the British upper class acted, as portrayed in the books off Jane Austen. But even there the fear of descending in the class hierarchy—of failing to marry well, or marrying a husband whose gambling and debauchery debts force one out of the leisured-aristocratic lifestyle—or that one's children might descend in the class hierarchy is a major motivating factor keeping people acting as though they are still in the kingdom of necessity. Perhaps the lesson is that we will always imagine ourselves in the kingdom of necessity. Perhaps there are no good models for what worthwhile human life would become in an age of true abundance: Robert Skidelsky: Economic Possibilities for Ourselves https://www.project-syndicate.org/onpoint/economic-possibilities-for-ourselves-by-robert-skidelsky-2019-12?barrier=accesspaylog: 'The most depressing feature of the current explosion in robot-apocalypse literature is that it rarely transcends the world of work. Almost every day, news articles appear detailing some new round of layoffs. In the broader debate, there are apparently only two camps: those who believe that automation will usher in a world of enriched jobs for all, and those who fear it will make most of the workforce redundant. This bifurcation reflects the fact that “working for a living” has been the main occupation of humankind throughout history. The thought of a cessation of work fills people with dread, for which the only antidote seems to be the promise of better work. Few have been willing to take the cheerful view of Bertrand Russell’s provocative 1932 essay In Praise of Idleness. Why is it so difficult for people to accept that the end of necessary labor could mean barely imaginable opportunities to live, in John Maynard Keynes’s words, “wisely, agreeably, and well”? The fear of labor-saving technology dates back to the start of the Industrial Revolution, but two factors in our own time have heightened it. The first is that the new generation of machines seems poised to replace not only human muscles but also human brains. Owing to advances in machine learning and artificial intelligence, we are said to be entering an era of thinking robots; and those robots will soon be able to think even better than we do. The worry is that teaching machines to perform most of the tasks previously carried out by humans will make most human labor redundant. In that scenario, what will humans do?...

Continue reading "" »


Were material incentives always a weak and blunt tool in the face of a society in which people's lives were deeply interwoven in social networks? Or is America today different from at least what America was in the past, in which moving to opportunity was a real thing? The brilliant Duflo and Banerjee have thoughts: Esther Duflo & Abhijit Banerjee: Economic Incentives Don’t Always Do What We Want Them To https://www.nytimes.com/2019/10/26/opinion/sunday/duflo-banerjee-economic-incentives.html?action=click&module=Opinion&pgtype=Homepage: 'Tax incentives do very little. For example, in famously “money-minded” Switzerland, when people got a two-year tax holiday because the tax code changed, there was absolutely no change in the labor supply. In the United States, economists have studied many temporary changes in the tax rate or in retirement incentives, and for the most part the impact of labor hours was minimal. Nor do people slack off if they are guaranteed an income: The Alaska Permanent Fund, which, since 1982, has handed out a yearly dividend of about $5,000 per household, has had no adverse impact on employment.... Evidence suggests that it has not decreased participation in the labor market. Employment has tracked that of similar states since the dividend began.... On the flip side, when jobs vanish and the local economy collapses, we cannot count on people’s desire to seek out a better life to smooth things out. The United States population is surprisingly immobile now. Seven percent of the population used to move to another county every year in the 1950s. Fewer than 4 percent did so in 2018.... The [manufacturing] decline started in 1990 and accelerated in the mid-2000s, precisely at the time when the industries in some regions were hit by competition from Chinese imports. When jobs disappeared in the counties that were producing toys, clothing or furniture, few people looked for jobs elsewhere. Nor did they demand help to move or to retrain — they stayed put and hoped things would improve. As a result, one million jobs were lost and wages and purchasing power fell in those communities, setting off a downward spiral of blight and hopelessness. Marriage rates and fertility fell, and more children were born into poverty. Despite this, the faith in incentives is widely shared. We encountered this mismatch firsthand, when, in the fall of 2018, we (along with the economist Stefanie Stantcheva) conducted a survey of 10,000 Americans. We asked half of them what they thought someone should do if he or she were unemployed and a job was available 200 miles away. Sixty-two percent said the person should move. Fifty percent also said that they expected at least some people to stop working if taxes went up, and 60 percent thought that Medicaid beneficiaries are discouraged from working by the lack of a work requirement. Forty-nine percent answered yes when asked whether “many people” would stop working if there were a universal basic income of $13,000 a year with no strings attached....

Continue reading "" »


A very nice piece from my colleague Pranab Bardhan: Pranab Bardhan: The Achilles Heel of Liberal Democracy https://www.3quarksdaily.com/3quarksdaily/2020/02/the-achilles-heel-of-liberal-democracy.html: 'If the constitution in some democratic countries incorporates liberal inclusive values and is reasonably difficult to change, it can provide the basis of some form of civic nationalism (or what Habermas called ‘constitutional patriotism’) that may resist the marauding forces of majoritarianism or exclusivist ethnic nationalism. But the ethnic nationalist leaders are so adept at whipping up our primordial or visceral evolutionary defensive-aggressive urge to fight against so-called ‘enemy’ groups, that such resistance is currently crumbling in many countries–for example, conspicuously in India under the onslaught of Hindu nationalism, even after several decades of reasonably successful civic nationalism based on values of pluralism enshrined in the constitution and undergirded by centuries of folk-syncretic tradition of tolerance and pluralism of faith among the common people.... The fundamental problem [is] in something lacking in the origin of the democratic political settlement.... It is the diversity of interest groups, regions and identities and their collective action ability that may be the main source of lingering hope in extremely diverse countries like India. The Hindu nationalists currently enjoy a great deal of advantages in their onward march: a massive cadre-based disciplined, though thoroughly bigoted, organization (RSS) attempting to forge cultural homogenization among the Hindus, a charismatic political leader not averse to spreading misleading half-truths, lies and disinformation, access to a disproportionately large amount of corporate donations for election funds, and an infernal ability to use the arms of a pre-existing over-extended state to harass and persecute dissidents and intimidate the rest (through ample use of investigative and tax-raiding agencies, and misuse of colonial-era sedition laws against critics of the government, threats of withdrawal of public advertisements from critical media outlets, allowing impunity for the partisan lynch-mobs or police against minorities, and so on). The atmosphere of fear and intimidation has immobilized many civil society groups. Labor unions as a possible center of organized opposition have been in a kind of structural decline. Sadly, even the judiciary seems to have been compromised, and often timid or erratic. Nevertheless in the long run the odds are against such drastic homogenization and cramming of the manifold diversities of Hindu society into the Procrustean bed of an invented, artificial, poisonous, religious nationalism—against which Gandhi, the father of the nation, fought all his life.... This is an uphill battle for protecting the essence of liberal democracy that liberals all over the world should keep a vigilant eye on. It is vitally important particularly at a time when the Achilles Heel of liberal democracy everywhere looks grievously exposed...

Continue reading "" »


A sophisticated look at some of the issues around the "wealth tax" that we do not (yet) have a good handle on: Josh Gans: Does Being Rich Make You Better at Allocating Capital? https://digitopoly.org/2019/10/27/does-being-rich-make-you-better-at-allocating-capital/: 'While we can all agree that the wealth tax likely deters risk-free saving, where the money actually goes otherwise is quite open. It could go to consumption which will cause actual resource use in ways that are certainly not in the direction people concerned with redistribution would like although just how much of that there can be given that the wealthy haven’t managed to do that spending previously is arguable. It could go to philanthropy which is a form of consumption (at least from the point of view of the donator) and is something that could be beneficial (but we have to consider whether the wealthy are the most productive to make those decisions—more on that another time). Or it could go to political influence which is a mixture of consumption (the naked expression of power) or investment to help them get wealthier (the well-dressed expression of power) but in actuality depends on how much other rich people are spending on these activities in terms of the potential return (a complicated game). Finally, where the money could go is to riskier investment because at the margin this is now more attractive than risk-free investment. This is not a given as the wealth tax could deter or spur this type of investment based on other margins (something Summers notes) but given the presumption above, if it does cause the wealthy to get out and find places for their money with a higher potential return, it is causing the wealthy to live their intended social purpose. So we are left with two empirically resolvable statements: Will the wealth tax increase or decrease riskier investment by the wealthy? Are the wealthy the most productive people to be making investment decisions?... We are left with either the early exit entrepreneurs (like Khosla) or the retired entrepreneurs (like Gates). But what skills did they have that they earned as a result of building a successful business that makes them likely to be presumptively socially optimal allocators of capital? I think there are things that likely do transfer so if I had to allocate capital between someone with their experience and someone with no experience, then the presumption makes sense. But note that, in terms of the impact of a wealth tax, wouldn’t it be presumptively sensible to suggest that the wealthy who have the skills are precisely those who are likely to end up investing more in riskier options than less when the risk-free capital is taxed so effectively?...

Continue reading "" »


Livetweeting the conversation about Paul Krugman's new book Arguing with Zombies: Claudia Sahm: 'Here we go!!!... https://twitter.com/Claudia_Sahm/status/1224848106333917187 Heather Boushey sets up conversation about Adam Smith’s invisible hand... Paul Krugman less of a believer in it now than earlier in his career... She shared image of Hamburger Helper, not so gentle or invisible... is that what he thinks of it when he points to market power? Paul Krugman said that that hand reminded him of very early career when he was a research assistant living on his own and eating a lot of hamburger helper :-)... More seriously, he sees power as a blind spot to economists today and throughout his career...

Continue reading "" »


You should read this book: Zephyr Teachout: Review of Steven Greenhouse: The Upheaval in the American Workplaces https://www.nytimes.com/2019/10/03/books/review/beaten-down-worked-up-steven-greenhouse.html: 'There’s an enormous upheaval in the American workplace right now.... “Beaten Down, Worked Up” [is] the engrossing, character-driven, panoramic new book on the past and present of worker organizing by the former New York Times labor reporter Steven Greenhouse. At the beginning of this decade, less than 7 percent of private-sector workers belonged to a union, and support for organized labor unions was at an all-time low. Corporations were using illegal tactics to stop unionization, tactics unheard-of in other countries, and new hires at the biggest companies were often required to watch anti-labor propaganda depicting unions as greedy and self-interested...

Continue reading "" »


Convincing Biden Victory in South Carolina: Warren's My Guy, But I Will Happily Work Very, Very Hard for Biden...

Note to Self: For the record, of those above, my rank ordering of who is likely to make the best president goes: Warren, Bennet, Klobuchar, Patrick, Biden, Booker, Buttigieg, Steyer, Delaney, Yang, Sanders, Gabbard...

Impressively done by Joe Biden and his team: kudos:

Biden-winning-sc

Continue reading "Convincing Biden Victory in South Carolina: Warren's My Guy, But I Will Happily Work Very, Very Hard for Biden..." »