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The Story of American Economic History

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Let me start this course about American economic history with a story:

This is a story about a guy born in the late 19th century, in 1879, on the prairie: his family's homestead was 17 miles from the nearest post office. In historical terms, the horse-riding nomads who had dominated the prairie had only recently been driven off by the guns of government soldiers. Agricultural settlement in one of the richest soil regions of the world was well advanced, but frontier life was still raw and uncivilized.

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A Question for People Taking Econ 113 This Fall: Amerindian Numbers

Roughly 14000 years ago rough 1000 humans made it to the Americas across the Bering Land Bridge.

A Malthusianly-unstressed preindustrial human population with reasonable access to food (whether hunter-gatherer, herder, or settled agriculture) roughly doubles in a generation of 25 years or so.

If the incipient Amerindian population had remained unstressed, how many Amerindians would there be today?

What implications does this have for how we think about the human history of the Americas between ca. 12000 BC and 1492?

A Question for People Taking Econ 113 This Fall: Amerindian Migration

Hunter-gatherers who are exploring a previously-unsettled frontier can walk a mile a week.

How long after their arrival in the new world ca. 14000 years ago do you think it took the Amerindians to spread out and essentially cover the entire two continents of the Americas?

What implications does this have for how we think about the human history of the Americas between ca. 12000 BC and 1492?

Why Oh Why Can't We Have a Better Press Corps? (CJR Daily Jumps the Shark Edition)

UPDATE: Bree Nordenson of Columbia Journalism Review says that she will explain her side of the story about why she wrote that Paul Krugman's references to median earnings of households headed by college graduates was "partisan slipperiness." But she says that she will do so "only if it's off the record."

I argued her into "Let me speak to my editor and see if he thinks if it's a good idea for me to explain myself."

And we have an email from Mark Mitchell, assistant managing editor of CJR Daily, which reads, in full: "Thank you for your comments."

Who will watch the watchdogs? I had hopes when the Columbia Journalism Review got into the real-time media watchdog business. But now I find CJR Daily committing all the standard sins--a snarky ignorance of where genuine expertise is to be found, an addiction to "he said, she said" journalism, a stubborn insistence on splitting the middle and poxing both houses driven by an uncuriosity or an inability to recognize when one side is right and the other is wrong, a laziness that keeps them from making phone calls to get the real story, et cetera, et cetera.

You get the picture.

Here we have Bree Nordenson writing:

CJR Daily: The Dogma Behind the Pay Wall: The left-wing Krugman, while not as flagrant as Brooks, coats his column with a similar sort of partisan slipperiness. While he criticizes "conservative commentators [who] tell us about wage gains for one-eyed bearded men with 2.5 years of college of whatever -- and conveniently forget to adjust for inflation" he chooses somewhat specific data himself, suggesting that there has been a decrease between 2000 and 2005 of incomes for a "typical household headed by a college graduate." This is not a widely published statistic, and Krugman doesn't tell us where he got it. He also fails to reveal the meaning of "typical," so we are left to guess who exactly these desperate college graduates might be...b

So I wrote back to its boss, Columbia Journalism Dean Nicholas Lemann:

Dear Dean Lemann:

You have a problem at CJR Daily....

"Typical" means "median"--Paul is using "typical" to try to reach that part of the audience that doesn't understand "median". No slipperiness there.

The complaint about "specific" data rips the phrase from the context in which Krugman explains why he is presenting information about this measure--only by doing so can Nordenson falsely accuse him of cherry-picking.

Krugman's full sentence is:

In fact, the data refute any suggestion that education is a guarantee of income gains: once you adjust for inflation, you find that the income of a typical household headed by a college graduate was lower in 2005 than in 2000.

The idea is to rebut the claim that the American economy is still offering rapidly increasing rewards to those in middle America who have bettered themselves by getting a college education. Paul chose it not because it was one of the few statistics that goes his way, but because it is one of the statistics that would be expected to show income gains if the principal factor at work were rising rewards to education.

With respect to where the data comes from...

The standard reference on income figures is Income, Poverty, and Health Insurance Coverage in the United States:, published by the Bureau of the Census. The latest edition was published in in August, 2006, including data collected in 2005.... The URL for the Census Bureau report is

Meanwhile, Paul Krugman writes that the exact source for his column is

Historical Income Tables - Households: Historical Income Tables - Households

Table H-13. Educational Attainment of Householder
 Households with Householder 25 Years Old and Over by
 Median and Mean Income: 1991 to 2005

 (Households as of March of the following year.  Income in
 current and 2005 CPI-U-RS adjusted dollars28/.  See Table
 H-14 for data before 1991 based on the old educational
 attainment questions.)...

                            Median income       
                 Number   Current      2005   
 year           (thous.)  dollars   dollars   

...Bachelor's Degree or More

 2005              31,153   $77,179   $77,179 
 2004 35/          30,640    74,303    76,788 
 2003              30,149    73,446    77,942 
 2002              29,484    73,600    79,895 
 2001              28,552    72,284    79,714 
 2000 30/          27,591    71,842    81,438...

And Paul Krugman writes that he does have a sources-and-methods email for his columns that he would be happy to send out to anyone who asks.

Mot surprisingly, I have received no reply from CJR--not from Dean Lemann, not from author Bree Nordenson, not from CJR Daily assistant managing editor Mark Mitchell. Not a hint that they are going to do the right thing and apologize to Paul Krugman.

Now CJR Daily was started with the best of intentions to be part of the solution, not part of the problem, for American journalism today. Yet, here at least, it cannot maintain minimum quality controls against the vices that make so much of elite American journalism nothing but inferior-quality birdcage liner.

Perhaps someone at Columbia Journalism School could study why.

And why oh why can't we have a better press corps?

Economics 113: The Omnibus Great-Depression-and-After Lecture Notes File

The Great Depression II

The New Deal as Macroeconomic Policy: Did It Do Any Good?

Parts of the New Deal that Boosted Demand:

  • Abandonment of the gold standard
  • Banking-sector reorganization
  • Abandonment of Hoover's balanced-budget rule
  • Relief expenditures
    • Which of these were most important? W. Arthur Lewis believed that banking-sector reorganization and abandonment of the gold standard--which broke deflationary expectations--were the most important...

But There Were Also Parts of the New Deal that Reduced Demand:

  • The cartelization program of the National Industrial Recovery Act (struck down as unconstitutional in 1934)
  • After fears of deflation were broken in 1933, any further attempts to boost prices (agricultural price floors, support of unionization, et cetera)
  • The Federal Reserve's disastrous decision to raise reserve requirements in 1937
    • Federal Reserve saw enormous "excess reserves" in the hands of banks
    • Raised reserve requirements to "soak them up" and regain control of the money supply
    • Found that the banks really wanted those excess reserves--really wanted them as a cushion against emergencies
    • Economy crashed as a result
    • Second-term Roosevelt recession possibly the second-worst economic catastrophe of the pre-World War II period

And There Were the Parts of the New Deal that Created the American "Mixed Economy"--America's version of social democracy:

  • Unions: the NLRA and the NLRB
    • Unionization supported at the state level as well: Michigan and the UAW
  • Social Security
  • Aid to Families with Dependent Children--now TANF
  • Finance: the SEC, the Public Utilities Holding Companies Act, other steps that strengthened management at the expense of finance
  • Unemployment insurance
  • Aggressive antitrust enforcement
  • Most important: the belief that the health of the American economy was the government's business

Still, the Great Depression had not lifted by the end of the decade: unemployment rates still 12% or so at the end of the 1930s. Roosevelt's New Deal greatly reduced the size of the Great Depression and eased the misery caused by the Great Depression. It did not cure the Great Depression. For that, we needed the surge in demand that was World War II.

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20050408: Economics 113 Final Paper Assignment

Economics 113—Spring 2005—Final Paper Assignment
Due Wednesday, May 18, Evans 601, 4 PM

2500 words (approximately 10 pages). Answer one of the following four questions, explicitly using and citing to concepts and readings covered in this course:

1. America has had only one Great Depression. Should we fear a repeat of that horrible experience? Did in the past—those living on the eve of and before the Great Depression—have any good reason to fear that such a thing would happen?

2. The United States today is still the world’s most productive and technologically dynamic economy. What, in your view, are the principle factors that have made the U.S. such an economic growth success over the past two centuries?

3. The United States has an image of itself as a land of equality of opportunity. How has the culture, the sociology, and the politics of America lived up to and not lived up to this self-image over the past two centuries?

4. If you were in charge of teaching this course next year, and had a free hand to redesign it, what would you do? What sections would you elevate and stress? What topics would you demote or eliminate? And why?

pdf version

Brad DeLong's Spring 2005 Berkeley Schedule

Brad DeLong's Spring 2005 Berkeley Schedule

Econ 211: Economic History Seminar: M 2-3:30 Evans 639

Econ 113: American Economic History: TTh 2-3:30 LeConte 4. Lecture notes page.

Econ ???: Economic Growth Lunch: W 12 Evans 597

Econ 195: Senior Thesis Seminar: F 2-3:30 Evans 5

Office Hours: THIS WEEK: 2-4:30 on Wednesday March 30. Regularly F 12-2 in Evans 601, or by appointment: email [email protected].