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The Ahistorical Federal Reserve: Live at Project Syndicate

The Ahistorical Federal Reserve by J Bradford DeLong Project Syndicate

The Ahistorical Federal Reserve: The most effective–and thus the most credible–monetary policy is one that reflects not only the lessons of history, but also a willingness to reconsider long-held assumptions. Unfortunately, neither attribute is much in evidence at today's Federal Reserve: BERKELEY–Economic developments over the past 20 years have taught–or ought to have taught–the US Federal Reserve four lessons. Yet the Fed’s current policy posture raises the question of whether it has internalized any of them... READ MOAR at Project Syndicate

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Sunday Morning Twitter: Functional Finance/A Better World Is Possible Tweeting...

Preview of Sunday Morning Twitter Functional Finance A Better World Is Possible Tweeting

A better world—a better twitter—is indeed possible...

Suresh Naidu: I will stake my fancy economics job on this: Nothing in @Ocasio2018's policy program is inconsistent with a 2018 understanding of economics.

Wojtek Kopczuk: I missed it before, by my favorite colleague to disagree with. Congratulations on tenure @snaidunl!

Suresh Naidu: Sigh you drew me out. Tell me which policy is infeasible and not addressing some market failure?

Wojtek Kopczuk: They are inconsistent with the government budget constraint. And her MMT support is definitely inconsistent with mainstream economics.

Suresh Naidu: MMT is totally consistent with lots of mainstream macro when the economy is demand constrained (and fiscal theory of the price level when its not). it is unfortunate its adherents dont see that. And budget constraints are endogenous.

Ivan Werning: What do you have in mind?

Suresh Naidu: Oh crap a real macroeconomist. I think stripped of mysticism, MMT is really boils down to "fiscal mutipliers greater than 1", which could be true in demand constrained economy.

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Some of My Less Polite Thoughts from Aspen

Farmer and the Cowman

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Aspen: Security: Reactions to the Four Ex-National Security Advisors Panel

Aspen—Maroon Bells

Aspen: Security: Nine Reactions to the Four Ex-National Security Advisors Panel: Most important:

  • Joe Nye—and the others—should not have pretended that that the Trump Administration has a strategy, and is some sort of unitary actor. It doesn't. It isn't. For the right analogies, we need to reach back to the Tudor or Stuart dynasties—a King Charles II Stuart without the work ethic, mostly concerned with his mistresses, his parties, and deference to himself; easily bribed by the King of France, &c.; plutocrats maneuvering and using access to advance their interests; other kleptocrats manuevering and using access to advance their interests; and a few technocrats—a Pepys, a Godolphin—trying to hold things together. Graham Allison's three analytical perspectives—rational actor-organizational process-bureaucratic politics—are not sufficient to understand this thing. We need a fourth perspective: weak chaos monkey king, perhaps?...

And here are eight more:

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Hoisted from the Archives: James Scott and Friedrich Hayek

Il Quarto Stato

James Scott and Friedrich Hayek: My review of James Scott (1998), Seeing Like a State: How Certain Schemes to Improve the Human Condition Have Failed (New Haven: Yale University Press: 0300070160):

 

I. Introduction

There is a lot that is excellent in James Scott's Seeing Like a State.

On one level, it is an extraordinary well-written and well-argued tour through the various forms of damage that have been done in the twentieth century by centrally-planned social-engineering projects—by what James Scott calls 'high modernism' and the attempt to use high modernist principles and practices to build utopia. As such, every economist who reads it will see it as marking the final stage in the intellectual struggle that the Austrian tradition has long waged against apostles of central planning. Heaven knows that I am no Austrian—I am a liberal Keynesian and a social democrat—but within economics even liberal Keynesian social democrats acknowledge that the Austrians won victory in their intellectual debate with the central planners long ago.

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Should We Pity the Poor Global Warming-Denier Fools?

I pity the poor global warming-denier fools who were deluded by Fox News and the Koch Brothers into ignoring—or pretending—not to notice that El Nino events temporarily boost measured global temperatures and volcanic eruptions temporarily retard it:

Global Warming

Data GISS GISS Surface Temperature Analysis Analysis Graphs and Plots

Carr fire

On second thought, I do not pity them: I pity the rest of us...

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Homer's Odyssey Blogging: "Like Little Birds... They Writhed with Their Feet... But for No Long While..."

Hanging the women in the odyssey Google Search

So let me procrastinate some more this morning...

Let me riff off of something that crossed my desk last night: Emily Wilson's reflections on her translation of the Odyssey, and on the Odyssey itself. There is one passage that always has been, to me at least, horrifyingly freaky in a very bad way. As David Drake—one of my favorite science fiction and fantasy authors—puts it:

Odysseus caps his victory by slowly strangling–the process is described in some detail–the female servants who have been sleeping with Penelope’s suitors. This is only one example (although a pretty striking one) of normal behavior in an Iron Age culture which is unacceptable in a society that I (or anybody I want as a reader) would choose to live in... a hero with the worldview of a death camp guard...

Indeed:

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Ancient Technologies of Organization and Mental Domination, Clerks, Linear B, and the Potnia of Athens

SOMETIMES I LOVE THE INTERNET SO MUCH!:

Potnia

Ancient Technologies of Organization and Mental Domination, Clerks, Linear B, and the Potnia of Athens:

@e_pe_me_ri: I still can't believe I got away with this footnote:

NewImage

Now I want to read the article this footnote is drawn from...

@e-pe-me-ri: You can! (Though I can't promise that the rest is quite so pithy): https://www.academia.edu/34570648/Creta_Capta_Late_Minoan_II_Knossos_in_Mycenaean_History …

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"Populism" or "Neo-Fascism"?: Rectification of Names Blogging: Hoisted from a Year Ago

Hoisted from a Year Ago: "Populism" or "Neo-Fascism"?: Rectification of Names Blogging: That is neither the post-WWII Latin American nor the pre-WWI North American form of "populism". I do not think we are well served by naming it such. What should we name it instead? There is an obvious candidate, after all...

Il Quarto Stato

The highlight of last week's JEF-APARC Conference at Stanford https://www.jef.or.jp for me was getting to sit next to Frank Fukuyama https://fukuyama.stanford.edu, whom I had never met before.


Frank is a former Deputy Director of Policy planning at the State Department, author of the extremely good books on political order The Origins of Political Order: From Prehuman Times to the French Revolution http://amzn.to/2sEt4AI and Political Order and Political Decay: From the Industrial Revolution to the Globalization of Democracy http://amzn.to/2sU0WZP, and a very sharp guy.

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Epistemic Sunk Costs, Political Bankruptcy, and Folding Your Tent and Slinking Away: The Approaching End of the Trump Grift?

Clowns (ICP)

I see this as a sign that it is all starting to break. Why do I think so? Because I see this as John Holbo's concept of epistemic sunk costs and debt http://crookedtimber.org/2018/06/13/epistemic-sunk-costs-and-the-extraordinary-populist-delusions-of-crowds/, as Nils Gilman's edge of political bankruptcy ...

My feeds:

  • were: "Trump is awesome!", "Trump is crude but effective!", "Trump is accidentally playing eleven-dimensional chess!".

  • but a while ago they shifted to: "At least Trump is owning the libs!" and "We are transferring two trillion dollars–roughly 1/10 of the total value of the stock market–to the superrich, raising our own taxes, poisoning ourselves, and putting Hispanic children in cages, but it is worth it because it owns Jewy people in Scarsdale and Santa Monica."

  • and now they are: "It is all the liberals' fault! Mitt Romney was a nice guy! Because liberals would not vote for Mitt Romney, we had to vote for Trump! Yes, he is awful, but it is all the liberals' fault!".

That is what this is:

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Homeopathic Bayes...

How to Be a Mad Scientist 3 Steps

The problem with debates about the philosophy of statistics is that it influences what you do: Minimize regret or minimize expected loss? Coverage or coherence? Is nature (and our own brains) our friend or our foe? There are actual real stakes here, in a way that there are not real stakes in philosophy of quantum mechanics or of economics...


Suppose we have some knowledge of the distribution of a parameter—Gaussian, with mean and variance known, because why not.

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The Meiji Restoration: A Probable In-Take for "Slouching Towards Utopia?: An Economic History of the Long 20th Century"

Tokaido road Google Search

The problem with this is that I do not think that I have the story of Japan's successfully pre-WWI development path nailed, the way I have the Chinese story of failure nailed. Oh well:


The opposite of China in the pre-World War I years was Japan.

In the early seventeenth century the Tokugawa clan of samurai decisively defeated its opponents at the battle of Sekigahara, and won effective control. Tokugawa Ieyasu petitioned the—secluded Priest-Emperor to grant him the title of Shogun, the Priest-Emperor's viceroy in all civil and military matters. His son Hidetaka and grandson Iemitsu consolidated the new régime. From its capital, Edo—renamed and now Tokyo—the Tokugawa Shogunate ruled Japan for two and a half centuries.

At its very start, early in the seventeenth century, the Tokugawa Shogunate took a look to the south, at the Philippines. Only a century before, the Philippines had been independent kingdoms. Then the Europeans landed. Merchants had been followed by missionaries. Converts had proved an effective base of popular support for European influence. Missionaries had been followed by soldiers. And by 1600 Spain ruled the Philippines.

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What Is the Best Way to Introduce Myself to Audiences These Days?

image from www.evernote.com

J. Bradford Delong is Professor of Economics and Chief Economist of the Blum Center for Developing Economies at the University of California at Berkeley. He is also a weblogger for the Washington Center for Equitable Growth and a Research Associate of the National Bureau of Economic Research. From 1993 to 1995 he was Deputy Assistant Secretary for Economic Policy at the United States Department of the Treasury. Right now he is best known for:


Is this ⬆︎⬆︎⬆︎⬆︎ it? What would be better?


Teasers for "Slouching Towards Utopia?: An Economic History of the Long 20th Century"

Il Quarto Stato

Current Versions of Chapters 1-3:

  1. DRAFT: My Grand Narrative
  2. DRAFT: Themes
  3. DRAFT: Making a Global Economy and Society, 1870-1914

Outtakes and Deleted Scenes:


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Why Was the 20th Century Not a Chinese Century?: An Outtake from "Slouching Towards Utopia?: An Economic History of the Long 20th Century"

15000px Along the River 7 119 3 jpg 15 000×463 pixels

10000 words on why the 20th Century was not a Chinese century. Very few of these belong in a 20th Century history book, alas...

https://www.icloud.com/pages/0pebTWadZO0frIs90_JSUKMnw

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The 1870 Inflection Point in Transport and Trade: An In-Take from "Slouching Towards Utopia": An Economic History of the Long 20th Century

International Trade Our World in Data

The metallurgy to cheaply make the rails and the engines of the railroad had made transport over land wherever the rails ran as cheap as travel up navigable watercourses or across the oceans had every been, and made it faster.

The mid-nineteenth century Massachusetts transcendentalist author and activist Henry David Thoreau’s response to the railroad was: “get off my lawn!”:

To make a railroad round the world.... Men have an indistinct notion that if they keep up this activity of joint stocks and spades long enough all will at length ride somewhere in next to no time and for nothing, but though a crowd rushes to the depot and the conductor shouts “All aboard!” when the smoke is blown away and the vapor condensed, it will be perceived that a few are riding, but the rest are run over—-and it will be called, and will be, “a melancholy accident”...

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Well, Our Three Bridge View from the Graduate Student Lounge Is Not at Its Best This Morning, Is It?

No subject brad delong gmail com Gmail

Well, our three bridge view from the Peixotto Graduate Student Lounge is not at its best this morning, is it?

That is a pity because the new first-year graduate students are arriving this morning...

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Tyrannies: An In-Take from "Slouching Towards Utopia?: An Economic History of the Long 20th Century"

Stalin mao hitler Google Search

The twentieth century’s tyrannies were more brutal and more barbaric than those of any previous age. And—astonishingly—they had much of their origins in economic discontents and economic ideologies. People killed each other in large numbers over, largely, questions of how the economy should be organized. Such questions had not been a major source of massacre in previous centuries.

Twentieth-Century governments and their soldiers have killed perhaps forty million people in war: either soldiers (most of them unlucky enough to have been drafted into the mass armies of the twentieth century) or civilians killed in the course of what could be called military operations.

But wars have caused only about a fifth of this century’s violent death toll.

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The Circa-1870 Disjunction Between Production and Distribution: A Possible Outtake from "Slouching Towards Utopia?: An Economic History of the Long 20th Century"

Il Quarto Stato

Do I have space for this in the ms.? Or do I need to go into kill-my-darlings mode?


3.1: The ca.-1870 Disjunction Between Production and Distribution

In the world as it stood in 1870 there was seen to be a huge disjunction between the growing effective economic power of the human race and the proper distribution of this potential wealth to create a prosperous and happy society. That science, technology, and organization could wreak miracles had become commonplaces. Best friends Karl Marx and Friedrich Engels probably put it best in 1848:

The business class, during… scarce 100 years, has created more massive and more colossal productive forces than have all preceding generations together. Subjection of Nature’s forces to [hu]man[ity], machinery, application of chemistry to industry and agriculture, steam-navigation, railways, electric telegraphs, clearing of whole continents for cultivation, canalisation of rivers, whole populations conjured out of the ground—what earlier century had even a presentiment that such productive forces slumbered in the lap of social labour?…

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The Dire Poverty of the Globe in 1870: An Outtake from "Slouching Towards Utopia?: An Economic History of the Long 20th Century"

I see no way to justify including this in the ms. But should any of it go in? Or does it just belong in some other intellectual project?


The Dire Absolute Poverty of the Globe in 1870

J. Bradford DeLong

U.C. Berkeley, NBER, and WCEG

7,137 words https://www.icloud.com/pages/0-ZwSIf-ES3dfIBtF_dW_DBmQ

 

John Ball (1381):

When Adam delved and Eve span,/
Who was then the gentleman?

From the beginning all men by nature were created alike, and our bondage or servitude came in by the unjust oppression of naughty men. For if God would have had any bondmen from the beginning, he would have appointed who should be bond, and who free.

And therefore I exhort you to consider that now the time is come, appointed to us by God, in which ye may (if ye will) cast off the yoke of bondage, and recover liberty…

You need to understand three things to grasp the state of the world economy in 1870: that the drive to make love is one of the very strongest of all human drives, that living standards were what we would regard as very low for the bulk of humanity in the long trek between the invention of agriculture and 1870, and that the rate of technological progress back before 1870 was glacial, at best.

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1870 as the Inflection Point: An In-Take from "Slouching Towards Utopia?: An Economic History of the Long Twentieth Century

Il Quarto Stato

3.0: 1870 as the Inflection Point https://www.icloud.com/pages/0qen52fK3MKE3TlUkF4ViGtFQ: As of 1870 the smart money was still placed on the bet that the British Industrial Revolution would not mark a permanent divergence of human destiny from its agricultural-age pattern. All agreed that the Industrial Revolution had produced marvels of science and technology. All agreed that it allowed the world to support a much greater population than had previously been deemed possible. All agreed that it gave the world’s rich capabilities that, along many dimensions, fell little short of those previously attributed to gods. All agreed that it had greatly multiplied the numbers of the comfortable—that there were now many more people who did not feel the immediate bite of insufficient food, insufficient clothing, and insufficient shelter.

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Cedarbrook Notes

Cedarbrook Notes

American religion, at least white Protestant and Catholic religion, is overwhelmingly a self-righteousness multiplier...

Becky Henderson to me: "You need to read moar Stiglitz on environmental degradation and nature capital...

The principal use of “neoliberalism” as a word is to erase the difference between the Mussolini-love of Ludwig von Mises and center-left technocratic economists who want to get the incidence of policies right. Why? So you can then have more freedom to propose policies that do not make technocratic sense......

We Should Not Call It "Populism": "Now is the time for the second hobbyhorse I promised myself I would ride at this conference...

Is there a good biography of George Stigler? Beatrice Cherrier says that Stigler’s autobiography is still the best......

On My Grand Counterfactuals: The most interesting question is not “do you know?” But “does Dora Costa know?”, which is very close to “is it knowable”?...

The late Rudi Dornbusch liked to say that: "German ordoliberalism was something an economist could recognize if there was a benevolent Kindlebergian hegemon stabilizing the global system.” But if not, not...

Keynes, Polanyi, Foucault, Again: Cedarbrook Notes: "... >...As a product of Harvard’s undergraduate Social Studies program, I realized around 30 that I had been perfectly prepared to understand reality and act in western Europe between, say, 1860 and 1950...

Angus Deaton: "Judea Pearl knows a lot that Jim Heckman does not. And vice versa...”

Needed: A Better Karl Polanyi: I wondered coming up here whether this conference would turn into Karl Polanyi bingo. I am now confident that it will. Indeed, it has. As someone who thinks the master social theorists for the mid-21st century are likely to be Foucault, Keynes, Polanyi, this is not unwelcome...

Convergence Weighting by People Divergence Weighting by Nations: Yes, the world as a whole has become more equal over the past generation. This is overwhelmingly because two very large countries—India and China—have harvested a great deal of the low-hanging fruit of development because of better policies...

Big Questions for Left Opposition Social Scientists: Occupy had zero impact on austerity budgets. Mont Pelerin was not important because they gathered by a lake, sang “kumbaya”, and felt a sense of solidarity. We should not pretend defeats were victories. What can we do? I think there are three levels that we ought to be operating on—all, right now, understanding the world rather than trying to change it: understanding policies, understanding mobilizations, and understanding utopia...

I, on Behalf of the Economists Thinking Correct Economic Thought, Plead Not Guilty: We—at least my fraction of economists—plead “not guilty” to the indictment: The Minsky tradition had the financial sector nailed.... Paul Krugman... spearheading the analysis of how great the risks posed by the zero lower bound were.... Economists had been tracking decreasing competition, increasing financialization, and rising income inequality.... The problem, as Simon Wren-Lewis of Oxford likes to say, is not that the economists did not know what was going on in real time, but rather that they were not listened to...

Don't Like My Neoliberal Party Card? I Have Others!: Don't like the others? I have my neoliberal party card...


Cedarbrook Notes

#cedarbrooknotes
#shouldread
#highlighted
#cedarbrook
#politicaleconomy
#polanyi

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I, on Behalf of the Economists Thinking Correct Economic Thought, Plead Not Guilty: Cedarbrook Notes

2018-03-12_Brad_DeLong_Party_Card_pages

Cedar Brook Notes: We—at least my fraction of economists—plead “not guilty” to the indictment:

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We Should Not Call It "Populism": Cedarbrook Notes

2018-03-12_Brad_DeLong_Party_Card_pages

Cedar Brook Notes: Now is the time for the second hobbyhorse I promised myself I would ride at this conference: "populism". I think in his new book, The Populist Temptation: Economic Grievance and Political Reaction in the Modern Era ((New York: Oxford University Press: 9780190866280) https://books.google.com/books?isbn=9780190866280), Barry Eichengreen gives away the arcanum imperii: “I define populism as a political movement with anti-elite, authoritarian, and nativist tendencies...” and “charismatic leaders with anti-establishment, authoritarian, and nationalist tendencies, from Benito Mussolini to Ioannis Metaxas...” The American Populists of the late 19th Century were a political movement that sought egalitarian economic policies: breakup of the trusts, regulation of railroad rates, the free coinage of silver. There is a word for a pro-plutocrat political movement fueled on ethnic and national animosity toward others, especially rootless cosmopolites. That word ain’t “populism”.

We should use “fascism” where it applies. If we do not, we will not have rectified names. If names are not rectified, thought will not be clear. If thought is not clear, governance will not be just. If governance is not just, the people will not prosper.

We should use the word "fascism". It is appropriate.

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We Know Little About the Origins of High Patriarchy and the Extinction of Most Y-Chromosome Lineages ca. 5000 Years Ago, But...

Arjuna_and_krishna_in_their_chariot_-_Google_Search

Comment of the Day: Interesting from Graydon. But I do not see textiles as the problem. Yes, in the Odyssey Penelope, Kalypso, the 50 maidservants of Alkinous, Kirke, and the nymphs who are called Naiads are all spoken of as at their looms. Yes, the mother of Nausikaa, the 50 maidservants of Alkinous (again), Penelope (again), and the maidservants of Odysseus are all spoken of as at their spindles. Yes, in the Iliad Khryseis, Helen, Andromakhe, "a woman" are all spoken of as at their looms. yes, Andromakhe (again), "the fair spinster", and Kritheis are all spoken of as at their spindles. Textile work is (or does not have to be) not drudgery—it is (or can be) a very social activity, for to an experienced seamstress or spinner of weaver the cognitive load of the task is not large enough to discourage conversation.

Instead, I blame the Yamnaya: the Aryans, the Indo-Europeans, the Masters of the sword, the wheel, and the bow, who spread fire and sword and the chariot and the steed from Gibraltar and Cape Finisterre to the Deccan and even to the upper reaches of the Yellow River: Graydon: Feminism in the Long 20th Century: An In-Take from "Slouching Towards Utopia: The Economic History of the Long 20th Century": "If you look at the DNA information and compare it to historical timelines, patriarchy comes in after a period of clan-based warfare that wipes out most Y-chromosome lineages and does nothing to the diversity of X-chromosome lineages...

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Implications of the Acceleration of the Pace of Growth of the Value of Human Knowledge: An In-Take from "Slouching Towards Utopia: The Economic History of the Long 20th Century"

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With November 8, 2016, the Long 20th Century comes to an end. It began in 1870, when the combination of the development of the industrial research lab, the screw-propellered iron-hulled steamship, the submarine telegraph network, and America's openness to (European) immigration brought the world out of the age of gunpowder empires and set it on the escalator to prosperous modernity. It ended in 2016, when the U.S. abandoned its role as Kindlebergian hegemon and as the, at least in its own mind, City Upon a Hill.

So it is time to finish my twentieth century history book, which has been hanging fire for two decades now as the 20th Century seemed to refuse to stop—as things kept happening that seemed to be the continuation of 20th Century processes.

Right now I am working on Chapter 2: Themes. I am making a hash of it. This part of it does not say what I want it to say, and I am not sure that what I want to say is what I should say. Advice, anybody?


2.3: The Advance of Technological and Organizational Knowledge

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Feminism in the Long 20th Century: An In-Take from "Slouching Towards Utopia: The Economic History of the Long 20th Century"

Pioneer_Birth_Scene_Pictures___Getty_Images

With November 8, 2016, the Long 20th Century comes to an end. It began in 1870, when the combination of the development of the industrial research lab, the screw-propellered iron-hulled steamship, the submarine telegraph network, and America's openness to (European) immigration brought the world out of the age of gunpowder empires and set it on the escalator to prosperous modernity. It ended in 2016, when the U.S. abandoned its role as Kindlebergian hegemon and as the, at least in its own mind, City Upon a Hill.

So it is time to finish my twentieth century history book, which has been hanging fire for two decades now as the 20th Century seemed to refuse to stop—as things kept happening that seemed to be the continuation of 20th Century processes.

Right now I am working on Chapter 2: Themes. I am making a hash of it. This part of it does not say what I want it to say, and I am not sure that what I want to say is what I should say. Advice, anybody?


2.2: The Arrival of Feminism

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J. Bradford DeLong (2008): Trade and Distribution: A Multisector Stolper-Samuelson Finger Exercise

Il Quarto Stato

An argument that I think is true—and important—but that I have never been able to get anybody else to pay attention to. Maybe I have just made an algebra mistake, and people are silent because they would feel embarrassed if they pointed that out. But I do not think so:

J. Bradford DeLong (2008): Trade and Distribution: A Multisector Stolper-Samuelson Finger Exercise: One of the basic building blocks of the political economy of international trade is the Stolper-Samuelson result: the shift from no trade to free trade is good for the owners of the abundant factor of production, but bad for the owners of the scarce factor of production. This accounts for why support for free trade tends to be stronger in democratic than in authoritarian regimes. The scarce factor of production tends to be, well, scarce. Hence not many potential voters own a lot of it. Hence the political support for trade protection in any system of government that gives weight to broad, as opposed to strong, preferences will tend to produce trade liberalization.

In the United States, and to some degree in western Europe, things are widely thought to be different—or so the argument goes, The relatively abundant factors of production are things like capital, organization, and technology, which have concentrated ownership. The scarce factor of production is labor. Hence free trade tends to be politically unpopular because it is not in the interest of the majority of potential voters.

This argument of an inconsistency between free trade and the well-being of the majority of potential voters rests substantially on the two-factor example of the Stolper-Samuelson result. It does not fare too well when we generalize to a situation in which there are a number of different factors—even if the ownership of the abundant factors of production is very concentrated indeed....

For λ very close to one, the critical φ* is also close to one. Trade among countries with small differences in relative proportions of the trade-relevant factors of production is good only for households that hold a greater than proportionate share of the initially abundant factor... households for which φ > 1. But as λ moves away from 1 things change. Efficiency and productivity gains grow faster than do the income redistributions from changing factor prices. Even households where the share of ownership of the initially-abundant factor is significantly less than proportionate can benefit. In the limit as N becomes large, the condition on φ for free trade to benefit the household becomes: φ* > ln(λ)/(λ−1)... Read MOAR


#delongpapers
#politicaleconomy
#globalization
#free trade

On the Negative Information Revealed by Marvin Goodfriend's "I Don't Teach IS-LM": Smackdown/Hoisted

Smackdown

So Rich Clarida's (who should be a good Fed Vice Chair) and Michelle Bowman's Federal Reserve nominations (whom I do not know) made it out of the Senate Banking Committee 20-5 and 18-7. Marvin Goodfriend—who made it out 13-12—is still hanging fire on the Senate calendar. There is no reason I see to think that Fed Governor is a job he should have: there are much more sensible and reality-based conservative and inflation-hawkish monetary economists out there. One of them would dominate Marvin along every dimension. So it is time to highlight this again:

Hoisted from the Archives: I think it is time to move Marvin Goodfriend over to the "unprofessional" and "should not have a role making monetary policy" side of the ledger. There are much better inflation hawks as far as policy judgment is concerned. And someone with a demonstrated desire to pander to the yahoos—which is the only way I can make this coherent—is not a good candidate for the Board of Governors: On the Negative Information Revealed by Marvin Goodfriend's "I Don't Teach IS-LM": The smart and snarky Sam Bell wants to taunt me into rising to his bait by twittering https://twitter.com/sam_a_bell/status/872116967070732288 a quote from likely Fed nominee Marvin Goodfriend: "I don't teach IS-LM". He succeeds. Here is the quote:

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America the Loser: Project Syndicate

Il Quarto Stato

Project Syndicate: America the Loser: The American century ended on November 8, 2016. On that day, the United States ceased to be the world’s leading superpower–the flawed but ultimately well-meaning guarantor of peace, prosperity, and human rights around the world. America’s days of Kindlebergian hegemony are now behind it. The credibility that has been lost to the Trumpists–abetted by Russia and the US Electoral College–can never be regained... Read MOAR


Women's Roles in Agrarian-Age Civilization

Slides for a lecture built around a document...

Document: Abigail Smith Adams in Braintree, MA, to her husband John Adams in Philadelphia, PA: March 31-April 5, 1776

http://www.bradford-delong.com/2018/07/womens-roles-in-agrarian-age-civilization.html https://www.icloud.com/keynote/0VjXhN1LKyr4Nk8nbra6XASag

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Not since Henry VIII Tudor Have We Seen the Like!

Clowns (ICP)

Disappointment, surprise, bluster, promises he cannot keep, illogic, threats, a promise to destroy the company...

President Donald Trump writes:

(1) Surprised that Harley-Davidson, of all companies, would be the first to wave the White Flag. I fought hard for them and ultimately they will not pay tariffs selling into the E.U., which has hurt us badly on trade, down $151 Billion. Taxes just a Harley excuse-be patient! #MAGA

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Voices from the Past: Trump vs. America's Founders: No Longer Fresh at Project Syndicate

Constitutional convention Google Search

No Longer Fresh at Project Syndicate: At the start of the American experiment, Founding Fathers Alexander Hamilton and James Madison pulled no punches: admitting that the historical record strongly suggested that a democracy, a republic—indeed, any form of government that gave substantial political voice to those outside an aristocracy of counsellors or advisors to a monarch—was a really bad idea: "It is impossible to read the history of the petty republics of Greece and Italy without feeling sensations of horror and disgust at the... state of perpetual vibration between the extremes of tyranny and anarchy.... The [unflattering] portraits... sketched of republican government were too just copies of the originals..."

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Trump May Not Be the Least Balanced Person in the Trump Administration: Kevin Hassett Monday Smackdown

Clowns (ICP)

This, from CEA Chair Kevin Hassett in 2010 has always seemed to me at if not over the edge of mental illness.

There are many tells. The reliance on a "brilliant review" by a UND law professor and on an Oxford philosopher with no particle physicists even named is one. The raising of "military action" as a response is a second. The plea for following his preferred course of action even though he does not understand the issues because "how can we know that things we do not understand will not kill us?" is a third.

Grandiosity and unmooring from rational inquiry to an extent that, it seemed and seems to me, might well clear the clinical diagnosis bar...

In its entirety:

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Imprisonment by Malthus and "Negative Liberty": Outtake from Slouching Towards Utopia: An Economic History of the Long 20th Century

Il Quarto Stato

At the start of the Long 20th Century John Stuart Mill, Britain’s leading economist, leading moral philosopher, and one of its leading imperialists and rulers of the empire as a former India Office bureaucrat, was putting the finishing touches on the final edition of the book that people then looked to to learn economics: Principles of Political Economy, with Some of Their Applications to Moral Philosophy. His book and his thought gave due attention and place to the 1730-1870 era of the British Industrial Revolution. Yet in the year 1870 he looked out on what he saw as a poor and miserable world. “Hitherto”, he wrote, looking at the world and at the Great Britain and Ireland of his day:

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...

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(Early) Monday (Self?) Smackdown: Baiae and LA as Causes of Republican Downfall? Seriously?

Roman republic orgy Google Search

The scary thing is that I do not know whether Tom Holland:

  1. did not notice that Niall Ferguson was misinterpreting his work...
  2. does not care that Niall Ferguson was misinterpreting his work on the grounds that "all publicity is good publicity", or whether...
  3. I am misinterpreting Tom Holland's work, and Holland really does agree with Ferguson—that it was the orgies of Baiae rather than, in Lucan's phrase, because "Caesar could brook no superior and Pompey could brook no rival...", and, as Plutarch put it, the right-wing decision to break the norms by which political clashes "though neither trifling nor raised for trifling objects, were settled by mutual concessions, the nobles yielding from fear of the multitude, and the people out of respect for the senate..."

A Twitter thread:

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Yes: Last Fall the Unprofessional Republican Economists Were Lying About Corporate Taxes, Investment, and Growth. Why Do You Ask?

There were "economists" last fall telling us that the Trumpublican tax cut was going to raise real wages in America substantially and soon: Robert J. Barro, Michael J. Boskin, John Cogan, Douglas Holtz-Eakin, Glenn Hubbard, Lawrence B. Lindsey, Harvey S. Rosen, George P. Shultz, John. B. Taylor; Larry Lindsey and Douglas Holtz-Eakin; James Miller, Charlie Calomiris, Jagdish Bhagwati; Kevin Hassett; Greg Mankiw; and the others. The people who last fall were telling us that the Trumpublican tax cut was going to raise wages by boosting growth by a number they decided was 0.4% per year—get us an extra 80 billion dollars of prosperity each year growing over time—all did so by pointing to the investment channel: (a) the tax cut would make investment more profitable, (b) we would then have about 800 billion a year of extra investment, (c) the added production made possible by that investment would be 80 billion a year, (d) and eventually wages would rise. (a) has happened. (b) was supposed to take effect quickly—this year. But (b) has broken down: business investment "should" be jumping from 13% to 17% of total production. It is not. So far it has jumped from 12.4% to 13.1%—one-sixth of the jump we were promised:

Gross private domestic investment Domestic business FRED St Louis Fed

This comes as no surprise: Paul Krugman: Tax Cuts and Leprechauns: "The immediate effect of cutting the corporate tax rate... a big fall in taxes collected from corporations...

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The Damnation of the Professional Republican Policy Intellectuals

Inferno

I have long known that the thoughtful and pulls-no-punches Amitabh Chandra has no tolerance for fuzzy thinking from Do-Gooder Democrats. He is one of those who holds that not even a simulacrum of utopia is open to us here, as we muck about in the Sewer of Romulus here in this Fallen Sublunary Sphere. ”There are always trade-offs“, he says. “Deal with it“, he says. But here he leans to the other side, and, well, snaps: Amitabh Chandra: "GOP thinktanks https://twitter.com/amitabhchandra2/status/1007261629547982849 are the biggest milksops. From healthcare policy to environmental policy, from national security policy to fiscal policy, they have tacitly endorsed a mountain of anti-market + anti-growth + anti-America policies so as not to not upset their political masters...

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The Last Financial Crisis of the Nineteenth Century: Hoisted from the Grasping Reality Archives from Ten Years Ago

Il Quarto Stato

The slides from my “Macroeconomic Situation and Outlook” talk as it stood ten years ago, in June 2008. The subtitle and the conceit of the talk was that what we were then going through was an eruption into the twenty-first century of the kind of financial crisis that was typical of the pre-Great Depression period.

What did I get right and what did I miss? The main thing I missed was that I misunderstood what Bernanke, Paulson, and Geithner were doing. I thought that they were following the now century and a half-old Bagehot rule from Lombard Street for how to handle a financial crisis:

  1. Lend freely
  2. On collateral that is good in normal tomes
  3. At a penalty rate

Most of the talk is therefore devoted to explaining what the Bagehot Rule is, why it is a good thing, and how it is all likely to work out.

But when Lehman hit the wall in the fall they refused to follow (2) in evaluating its collateral, and so they did not do (1). And they never showed any interest in doing (3). And so here we are...

https://www.icloud.com/keynote/0QioimVob1vnDm7_UGy4AjVxA
http://j-bradford-delong.net/2008_html/20080610_delong_situation.html

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Reviewing Richard Baldwin's _The Great Convergence...

Preview of Reviewing Richard Baldwin s The Great Convergence

My review of the superb and extremely thought provoking: Richard Baldwin (2016): The Great Convergence: Information Technology and the New Globalization http://amzn.to/2sIcr6C. Reviewed for Nature http:nature.com: The iron-hulled oceangoing steamships and submarine telegraph cables of the second half of the 19th century set off a first wave of economic globalization. The intercontinental transport of both staple commodities and people became extraordinarily cheap. The container of the second half of the 20th century made the transport of everything non-spoilable—and some things spoilable—essentially free. It set off a second wave of economic globalization.

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After the Next Nuclear Fire...: Hoisted from 2007

Nuclear explosion Google Search

Hoisted from the Archives: Rather more urgent than I thought it would be 27 months ago: After the Next Nuclear Fire...: In the early 1980s the U.S. NSA—or perhaps it was the Defense Department—loved to play games with Russian air defense. They would send probe planes in from the Pacific to fly over Siberia. And they would watch and listen: Where were the gaps in Russian sensor coverage? How far could U.S. planes penetrate before being spotted? What were Russian command-and-control procedures to intercept intruders? And so on, and so forth.

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America’s Founders vs. Trump: Now Live at Project Syndicate

Signing of the Constitution by Louis S Glanzman Teaching American History

Project Syndicate: America’s Founders vs. Trump: In the early years of the American republic, James Madison warned his fellow countrymen that their chosen system of governance would only survive if they adhered to the principles of representation and kept factionalism in check. In the era of Donald Trump, it would seem that these two conditions are no longer being met...


CFP Panel on the Transparent Society: David Brin's Book Ten Years Later: Hoisted Ten Years Later

Panopticon Google Search

It is now 20 years since David Brin wrote The Transparent Society. Book holds up very well, all things considering: CFP Panel on the Transparent Society: David Brin's Book Ten Years Later: Michael Froomkin:

The Transparent Society Ten Years Later : This year marks the 10th anniversary of the publication of David Brin's controversial book, "The Transparent Society". The book argues that in the face of the explosion of sensors, cheap storage, and cheap data processing we should adopt strategies of vision over concealment. A world in which not just transactional information, but essentially all information about us will be collected, stored, and sorted is, Brin says, inevitable. The only issue left to be decided is who will have access to this information; he argues that freedom, and even some privacy, are more likely to flourish if everybody - not just elites - has access to this flood of data. The book remains controversial and much-talked-about. The panel will explore how Brin's claims hold up ten years later and whether (or how far) we're on the road to a Transparent Society.

Here is my presentation:

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Dark Satanic Millian Liberalism from John Stuart Mill

Curvelearn com William Blake Poetry Analysis GCSE

John Holbo used to talk about “Dark Satanic Millian Liberalism“. But what he never said was that it has its origins in John Stuart Mill himself.

Here are three passages from Principles of Political Economy I find interesting:

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