#noted Feed

Tim Duy: Paving The Way To Rate Cuts: "The Fed will cut interest rates at least 25bp in September.... The manufacturing sector is weak.... Still... the slowdown in the sector has yet to match that of 2015-16 nor does it even approach something consistent with a recession. I have said this before, but it should be said again: As manufacturing becomes a smaller portion of the economy, we should expect more instances of manufacturing downturns or even manufacturing recessions being separate from the overall business cycle. In contrast, the much larger consumer sector of the economy continues to power forward. Retail sales sustained the rebound from turn-of-the-year weakness and core sales are again growing at a roughly 5% year-over-year rate.... The general continued strength in spending reflects the solid labor market. In my opinion, job losses need to mount before consumer spending will crumble. Low and steady initial unemployment claims indicate that those job losses are not yet on the horizon...

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Federal Reserve Bank of New York: Nowcasting Report: Aug 16, 2019: : "The New York Fed Staff Nowcast stands at 1.8% for 2019:Q3. News from this week's data releases increased the nowcast for 2019:Q3 by 0.2 percentage point. Positive surprises from building permits and retail sales were only partially offset by negative surprises from industrial production and capacity utilization...

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Worthy Reads at Equitable Growth and Elsewhere... August 16, 2018

Worthy Reads at Equitable Growth...

  1. An excellent piece from Marinescu, Dinan, and Hovenkamp: one of our working papers laying out how the analysis of how antitrust policy should be done given that compensated firms face their counter parties not just in the product but in labor markets. I think this is the most important thing I have seen out of our shop here at Equitable Growth this week*Ioana Marinescu, James G. Dinan, and Herbert Hovenkamp*: Anticompetitive mergers in labor markets: "Increased market concentration in labor markets threatens to facilitate coordinated interaction among employers that could lead to lower output and wage suppression in employment markets...

  2. As Michael Kades writes, “the stakes are much higher than an ideological battle or technical adjustments to a legal regime” here. We need to understand how anti-trust practice affects the degree of monopoly in the United States and Hal monopoly effects equitable growth and societal well being. We do not. I think that attempting to understand these two issues is the most important analytic issue for policy relevant economic research in the United States today: Michael Kades: Why market competition matters to equitable growth: "At first glance, competition in the U.S. economy may seem far afield of the topic of equitable growth.... What could antitrust enforcement have to do with maintaining a healthy economy?...

  3. The analysis of rising inequality and its effects in the United States and elsewhere over the past generation has suffered from a relative downplaying of the role of the family and how income gets earned and then transformed Into well-being. Central to this is the rapidly changing economic role of women in the workforce, but that is not all of it. We need more and better analyses of her public policy needs to shift in the context of changing family structure and rising inequality. Elizabeth Jacobs presents some of our thinking about how Equitable Growth is and will be trying to support this effort: Elizabeth Jacobs: Rethinking 20th century policies to support 21st century families: "...As a raft of research illustrates, economic growth is increasingly concentrating at the top...

  4. Our Kate Bahn Reminds us: Kate Bahn: "This needs to be screamed from the rooftops.... We cannot have a substantive conversation about how tight the labor market is without examining demographic disparities..." ands sends us to Equitable Growth alumnus John Schmitt quoting Janelle Jones at: Laura Maggi: Despite Drop in Black Unemployment, Significant Disparities Remain: "The African-American unemployment rate... low—compared to historic numbers. In July, it was 6.6 percent...

  5. Not to put the pressure on or anything, but I expect very good things from our Equitable Growth grant to: Matthew Staiger: Parental Resources And The Career Choices of Young Workers: "With a specific focus on the impact of parental resources on entrepreneurship and job mobility...

Continue reading "Worthy Reads at Equitable Growth and Elsewhere... August 16, 2018" »


That's a 2.5% reduction in suicides for a 10% rise in two dimensions of the safety net. That seems to me to be large effect: William H. Dow, Anna Godøy, Christopher A. Lowenstein, and Michael Reic: Can Economic Policies Reduce Deaths of Despair?: "Midlife mortality has risen... largely reflect [ing]increased mortality from alcohol poisoning, drug overdose and suicide.... We leverage state variation in policies over time to estimate difference-in-differences models of drug overdose deaths and suicides, using data on cause-specific mortality rates from 1999-2015.... Higher minimum wages and EITCs significantly reduce non-drug suicides.... Increasing both the minimum wage and the EITC by 10 percent would likely prevent a combined total of around 1230 suicides each year...

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I would say that Martin Wolf grossly understates his point here. It is not just that the case for a sane globalism remains strong. Rather, the case for a sane globalism has never been stronger and grows stronger every day. With each passing day, the world needs more and more powerful international public goods in order to remain healthy and sane, and only globalists have a chance of providing them:

Martin Wolf: The Case for Sane Globalism Remains Strong: "We are now close to eliminating extreme human destitution.... The decline in the proportion of humanity living in absolute poverty, to less than 10 per cent, is a huge achievement. I make no excuses for continuing to support policies and programmes, including trade-oriented development, that helped accomplish this. The notion that it may be necessary to thwart the economic rise of non-western countries, in order to cement western domination, is, in my view, an abomination.... The range of public goods we now need has vastly increased, with the complexity of our economies and societies. For the same reason, ever more of those public goods are global.... That is why the victors of the second world war decided to create effective international institutions. They had experienced unbridled national sovereignty. The outcome had been catastrophic. Nothing since then has rendered global co-operation less essential.... [On] the interface between the global and the national... we have gone too far in some areas and done too little in others.... The globalisation of finance has arguably gone too far.... [But] liberal trade has not been a dominant source of rising inequality within countries. Meanwhile, areas where global co-operation has not gone far enough include business taxation and the environment. The final and perhaps most important of all challenges is containing the natural human tendency to scapegoat foreigners for failures of domestic policy and cleavages among domestic interests.... Blaming ills on foreigners may be a successful diversionary tactic. It is also highly destructive. We must think and act globally. We have no alternative...

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Remember: the Trump-McConnell-Ryan tax cut did absolutely nothing to boost investment in America, and thus has no supply-side positive effects on economic growth. And it is another upward jump in inequality: Greg Leiserson: U.S. Inequality and Recent Tax Changes: "Slides from a presentation by Greg Leiserson for a panel 'U.S. Inequality and Recent Tax Changes' hosted by the Society of Government Economists on Tuesday, February 20, 2018. In the presentation, Leiserson argues that the recently enacted Tax Cuts and Jobs Act will likely increase disparities in economic well-being, after-tax income, and pre-tax income...

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Paul Krugman (2015): Artificial Unintelligence: "In the early stages of the Lesser Depression, those of us who knew a bit about the macroeconomic debates of the 1930s... felt a sense of despair...

...Everywhere you looked, people who imagined themselves sophisticated and possessed of deep understanding were resurrecting 75-year-old fallacies and presenting them as deep insights. A lot of water has passed under the bridge since then.... I feel an even deeper sense of despair.... People are still rolling out those same fallacies, even though in the interim those of us who remembered and understood Keynes/Hicks have been right about most things, and those lecturing us have been wrong about everything. So here’s William Cohan in the Times, declaring that the Fed should “show some spine” and raise rates even though there is no sign of accelerating inflation. His reasoning:

The case for raising rates is straightforward: Like any commodity, the price of borrowing money—interest rates—should be determined by supply and demand, not by manipulation by a market behemoth. Essentially, the clever Q.E. program caused a widespread mispricing of risk, deluding investors into underestimating the risk of various financial assets they were buying...

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An absolute must-read, from Leiserson, McGrew, and Kopparam. It is excellent. I would note that it does not get much into the political economy of wealth taxes—that one goal of them is to persuade the wealthy to distribute their wealth, and thus reduce the amount of control over society that they exercise:

Greg Leiserson, Will McGrew, and Raksha Kopparam: Net Worth Taxes: What They Are and How They Work: "New from @equitablegrowth: “Notably, a business does not pay tax on its assets. Instead, shareholders pay tax on the value of the business.... The revenue potential of a net worth tax in the United States is large, even if applied only to the very wealthiest families. The wealthiest 1 percent of families holds $33 trillion in wealth, and the wealthiest 5 percent holds $57 trillion. The burden of a net worth tax would be highly progressive. The wealthiest 1 percent of families holds about 40 percent of all wealth.... Taxes on wealth—including property taxes, net worth taxes, estate taxes, and capital gains taxes, among others—are ubiquitous in the developed countries that make up the... OECD.... Assets have value because of the income (implicit or explicit) they are expected to generate. As such, taxing wealth through a net worth tax and taxing income from wealth through a tax on investment income can achieve similar ends...

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The labor requirements for this kind of farming were already absurdly low. And one swallow does not make a spring. Nevertheless, the age of intelligent tools draws closer:

Ashley Robinson, Lydia Mulvany, and David Stringer: Robots Take the Wheel as Autonomous Farm Machines Hit Fields: "The first fully autonomous farm equipment is becoming commercially available.... Tractors will drive with no farmer in the cab, and specialized equipment will be able to spray, plant, plow and weed cropland. And it’s all happening well before many analysts had predicted thanks to small startups in Canada and Australia.... Saskatchewan’s Dot Technology Corp. has already sold some so-called power platforms for fully mechanized spring planting. In Australia, SwarmFarm Robotics is leasing weed-killing robots that can also do tasks like mow and spread. The companies say their machines are smaller and smarter than the gigantic machinery they aim to replace. Sam Bradford, a farm manager at Arcturus Downs in Australia’s Queensland.... 'The savings on chemicals is huge, but there’s also savings for the environment from using less chemicals and you’re also getting a better result in the end'...

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I confess I do not see how Tesla is going to survive. BYD or some others are going to dominate battery-making. And there will not be that much both valuable and scarce to an automobile besides an efficient battery in the future we are heading for: *Matthew Campbell and Ying Tian: *: BYD, World’s Biggest Electric Car Maker, Looks Nothing Like Tesla: "BYD, which built the battery in your ’90s cellphone, now produces more EVs than anyone—and it wants to sell them to you, soon: On the floor of a cavernous factory in southern China... a sledlike robot scooted into position.... The robot carried a crucial payload: a battery about the size and shape of a double mattress, wrapped in a gray plastic casing. Suddenly, an accordion lift extended upward from the sled and inserted the battery into the car’s undercarriage. Workers in blue jumpsuits and white cotton gloves moved swiftly to the battery’s edges, carrying rivet guns connected by curling red cables to a supply of compressed air. Once the battery was rattled into place, the accordion retracted, sending its robot host scurrying off in search of fresh cargo...

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We do not really know how we would collect and enforce a net-worth tax—but we did not really know how we would collect and enforce a broad income tax either until Milton Friedman came up with payroll withholding. In some ways the administrative burdens of a net-worth tax will be a lot easier since it is designed to catch only the upper tail: Greg Leiserson, Will McGrew, and Raksha Kopparam: Net worth taxes: What they are and how they work - Equitable Growth: "The wealthiest 1 percent of households owns about 40 percent of all wealth.... Taxes on wealth are a natural policy instrument to address wealth inequality and could raise substantial revenue, while shoring up structural weaknesses in the current income tax system...

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Fairly Recently: Must- and Should-Reads, and Writings... (August 15, 2019)

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  1. Wikipedia: Charlie Dent

  2. Duncan Black: Healthy Country: "I really don't see a way forward which isn't 'no deal Brexit' though no deal Brexit isn't a real thing. It just means 'we didn't bother to solve all the problems we have to start solving piece by piece now'...

  3. Appian: The Macedonian Wars: "Flamininus came into conference with Philip a second time at the Malian gulf.... The Greeks asked the Roman Senate to require Philip to remove from their country the three garrisons which he called 'the fetters of Greece': the one at Chalcis, which threatened the Boeotians, the Euboeans, and the Locrians; the one at Corinth, which closed the door of the Peloponnese; and the third at Demetrias, which lay, as it were, in ambush for the Aetolians and the Magnesians. The Senate asked Philip's ambassadors what the king's views were respecting the garrisons. When they answered that they did not know, the Senate said that Flamininus should decide the question and do what he considered just. So the ambassadors took their departure from Rome. Flamininus and Philip, being unable to come to any agreement, resumed hostilities...

  4. Simon Wren-Lewis: There Is No Mandate for No Deal

  5. Wikipedia: Ferghana horse

  6. Visit Faroe Islands

  7. Wikipedia: War of the Heavenly Horses: "The War of the Heavenly Horses or the Han–Dayuan war was a military conflict fought in 104 BC and 102 BC between the Chinese Han dynasty and Dayuan (in Central Asia, around Uzbekistan, east of Persia). The result was Han victory...

  8. Paul Krugman (1987): Adjustment in the World Economy

  9. Fred Hoyle: Ossian's Ride

  10. Wikipedia: Li Bai: "Li Bai, Li Po, Li Bo, Ri Haku have been all used in the West, but are all written with the same characters. His given name, (白), is romanized by variants such as Po, Bo, Bai, Pai. In Hanyu Pinyin, reflecting modern Mandarin Chinese, the main, colloquial equivalent for this character is Bái; Bó is the literary variant and is commonly used...

  11. Squawk Box: Business, Politics, Investors and Traders: "'Squawk Box' is the ultimate 'pre-market' morning news and talk program, where the biggest names in business and politics tell their most important stories. Anchored by Joe Kernen, Becky Quick and Andrew Ross Sorkin, the show brings Wall Street to Main Street. It's a 'must see' for everyone from the professional trader to the casual investor...

  12. Sidewalk Street Food

  13. The Art of the Lingnan School, 嶺南畫派的繪畫藝術

  14. Steve Jobs *(2007): Introducing The iPhone At MacWorld 2007

  15. Michael Pettis: Real Growth in China is Less than Half of Reported Growth

Continue reading "Fairly Recently: Must- and Should-Reads, and Writings... (August 15, 2019)" »


New York Times reporters, editors, and owners go extra-easy on Trump, Republicans in general, and other right-wingers because they agree with them and want them in power:

Duncan Black: Because We Agree With Them: "A perfect distillation of 'we must obey critics on the Right, and get VERY VERY MAD AT CRITICS ON THE LEFT.' 'In regard to the debate on how to cover race, some staffers inside The Times agreed wholeheartedly with Baquet's approach. "Using that language is a turn off to some readers," one said. "And there are a lot of people that think The Times is too liberal, and when you start throwing words like that around, people will accuse us of editorializing."'... [That] doesn't make any sense. Journalists who say these things aren't scared of conservatives. They agree with them. Left wing criticism makes them mad because they don't agree with left wing critics. It's that simple. They aren't worried that they're 'editorializing' the other way...

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Benito Cereno: The Untold Truth of the Holy Grail: "After settling into Jerusalem, the Templars protected pilgrims on their way in and out of the city. Over time, the group of knights grew to be a powerful military order for the church. Kings from all around Europe gave the knights land and lordships, so they wound up super rich and bought the island of Cyprus. Though they were valiant fighters known for their bravery, the Templars became just as well known for proto-banking skills. They invented paying by check. That may not sound as exciting as hiding messages in Da Vinci paintings, but it was a pretty big achievement. Pilgrims could give the Templars however much money they'd need in the Holy Land. It would be safer with the group of fearsome knights than a bunch of regular folks walking through the desert. So, the Templars would give the pilgrims a promissory note and make sure all the money would be waiting for them when they got there. They moved enough gold that the Templars became the most powerful bankers in the land. Again, this is probably not the kind of thing that would go in a summer blockbuster, but it's one of the few things we know for sure about the Templars...

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I really do not understand this: if it were to be optimal policy to cut by 50 bp in a month, it is certainly optimal policy to cut by 25 bp now and probably optimal policy to cut by 50 bp now: Tim Duy: Another Portion of Yield Heading Toward Inversion: "Neither of the today’s developments–'easing' trade tensions or higher inflation–should prevent the Fed from easing at next month’s meeting. I suspect though that they make it hard for the Fed to justify a 50bp cut in September. If the economy needs a more aggressive Fed response up front to prevent recession, then a lower chance of that outcome... should induce the longer end of the yield curve to flatten further and then invert...

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Another of the long-time right-wing affinity-fraud grifters, S.E. Cupp, decides that it is time to leave the good ship SS. Trump & National Rifle Association: Ed Mazza: Conservative Pundit S.E. Cupp Quits The NRA, Makes Powerful Plea For Gun Control: "The former 'NRA Mom' now says 'we must do something'.... S.E. Cupp.... 'I am so sick and tired of participating in this predictable cycle of politics, where a mass shooting happens, the left calls for new gun laws―some meaningful, some unproductive―the right yells "slippery slope" and hides behind the Constitution....' She said that in the past, she’s defended the NRA and its members and argued against stricter gun laws. But not this time: 'I am no longer an NRA member. Being right no longer feels righteous because in the wake of more mass shootings, acts of senseless violence that sent innocent people running for their lives, leaving children orphaned, loved ones dead on the ground, we must do something about guns'... universal background checks, gun violence restraining orders, raising the minimum age for gun purchases to 21, banning 100-round drums, fixing the National Instant Criminal Background Check System, and mental health programs in schools. And she said some people, including domestic abusers and those who make violent threats, 'should never have access to a gun of any kind, period'...

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Jacob L. Vigdor: Is Urban Decay Bad? Is Urban Revitalization Bad Too?: "Many observers argue that urban revitalization harms the poor, primarily by raising rents. Others argue that urban decline harms the poor by reducing job opportunities, the quality of local public services, and other neighborhood amenities. While both decay and revitalization can have negative effects if moving costs are sufficiently high, in general the impact of neighborhood change on utility depends on the strength of price responses to neighborhood quality changes. Data from the American Housing Survey are used to estimate a discrete choice model identifying households' willingness-to-pay for neighborhood quality. These willingness-to-pay estimates are then compared to the actual price changes that accompany observed changes in neighborhood quality. The results suggest that price increases associated with revitalization are smaller than most households' willingness to pay for neighborhood improvements. The results imply that, in general, neighborhood revitalization is more favorable than neighborhood decline...

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Walter Scheidel: A Comparative Perspective on the Determinants of the Scale and productivity of Maritime Trade in the Roman Mediterranean: "The scale and productivity of maritime trade is a function of environmental conditions, political processes and economic development that determine demand, and more specifically of trading costs. Trading costs are the sum of transportation costs (comprised of the cost of carriage and the cost of risk, most notably predation), transaction costs and financing costs. Comparative evidence from the medieval and early modern periods shows that the cost of predation (caused by war, privateering, piracy, and tolls) and commercial organization (which profoundly affects transaction and financing costs as well as the cost of carriage) have long been the most important determinants of overall trading costs. This suggests that conditions in the Roman period were unusually favorable for maritime trade. Technological innovation, by contrast, was primarily an endogenous function of broader political and economic developments and should not be viewed as a major factor in the expansion of commerce in this period...

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Jamie Powell: A Delirious Defence of Uber: "What’s the counterargument here? Well, we soon find out: 'In other words, this company isn't losing money. It's the opposite. It's gathering in enormous sums: Gross bookings were up 31% to nearly $16 billion. Revenue was up 14% to $3.2 billion. Riders increased 30% to 99 million. It's difficult to look at those numbers and conclude that Uber is dysfunctional.' But the Business Insider article just told us that it is losing money: 1.6bn in six months.... Revenue growth, in and of itself, is only impressive when combined with positive economics. With an ebitda margin of negative 28.6 per cent last quarter, Uber is still a long way off proving that its business model works sustainably. For completion’s sake, here are the final few paragraphs.... 'Uber did increase its various operational expenses, such as marketing, R&D, and salaries & admin costs. But those are all costs that Uber can control, and cut in the future if need be. For now, the company is investing in its own growth. In other words, this company is still behaving like an "early stage" tech start-up—albeit on a vast scale. This company has a LONG way to go before it tops out. (Think about Facebook when it reached 1 billion people and everyone thought Facebook would slow down.) Investors are idiots for selling their stock right now.' Uber is a decade old global brand whose core business—ride-sharing—is now growing at just 2 per cent. It is also betting heavily that its smaller business lines, such as food delivery and freight, will be a source of future growth. In other words, it’s acting less like a start-up, and more like a legacy tech company scrambling for new growth. Think Oracle, IBM or perhaps even the modern-day Apple. Notice the difference, however. All of these companies have 'cash cow' products which help to keep the buybacks and dividends flowing, as well as funding future bets. Uber on the other hand... Look, there’s something to be said for the hysterical way quarterly results are sometimes reported by the press. After all they often contain a lot of noise and, in isolation, are not that indicative of how a business is really doing. But let’s not pretend Uber’s financials, to date, show a company gathering in cash “'in enormous sums'...

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I still don't understand whether Scaramucci has had a genuine Road-to-Damascus moment or whether he has decided that the wind has shifted, and there is more money to be earned via affinity fraud by being anti-Trump than pro-Trump. In either case, it is information that this is happening:

Anthony Scaramucci: The Mooch Says GOP Needs Someone To Replace Trump On The Ticket: "So you and Alisyn have often asked me that and people say, okay, where's the red line where you break from your support from somebody. Because remember, loyalty is symmetrical. It's not asymmetric. What I said to you last week was, geez, this is really polarizing. this is very divisive. As a supporter of his, I would caution we not go in this. You brought up stochastic terrorism. I brought up how this charged rhetoric coming from the bully pulpit of the presidency could lead to some unintended tragic consequences. All I said was, 'I wish the president would stop doing that.' One scintilla of criticism, you get this sort of backlash. And so for me, it's one step too far with the racial charging of his rhetoric and his twitter feet. and you could say, okay, the only reason you're breaking from him now is that he went after you specifically on Twitter. And I'll accept that. I think that to me was a big turning point because I'm looking at that saying, wait a minute. I'm out here supporting him. The guy fired me two years ago. I have been super loyal to this guy, super loyal to the president's agenda. But there's something wrong with the guy as a leader if he can't take constructive criticism or advice from people that have been super loyal to him...

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

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  • Reflections 11 Years After the Crash: As long as people were confident that the 500 billion of bad mortgage debt would ultimately land on somebody who could absorb it, the only thing that would make a bad recession was if people anticipated a bad recession. And with no Lehman panic—if Bernanke, Paulson, and Geithner had not caused everybody to say quote what the fuck is going on" by allowing Lehman's bankruptcy uncontrolled and then justifying their actions by claiming that they were forbidden by law to support a too-big-to-fail institution that was insolvent and not just illiquid... Without that, no reason to fear even as bad as the S&L crisis...

  • Weekly Forecasting Update: August 9, 2019: There was essentially no news about real GDP last week: The Federal Reserve Bank of New York nowcast continues to stand at 1.6% for 2019:Q3. We did see another fifteen basis points of market easing at the long end of the yield. Curve: the 10-Year TIPS yield is now 0.09%. And that, of course, makes equity stock market investments a deal. Patrick Chovanec is worth reading...

  • Hoisted from the Archives: A Now-Extended Non-Sokratic Dialogue on Website Design

  • DeLong Smackdown: Why I Was Wrong Over 2006-2010...: Let me say what things I was "expecting," in the sense of anticipating that it was they were both likely enough and serious enough that public policymakers should be paying significant attention to guarding the risks that it would create...

  • Note to Self: We know that big data can find correlations. We thus fear people will then use those correlations to hack our brains for their profit or advantage—and for our loss.... On the other hand... Big Ad Data is not smart enough to figure out: "although this internet identity is associated with this credit card number, the person surfing the web right now is not the person who buys the bras"...

  • Note to Self: et me say that I am 100% behind Roxane Gay here. When Jonathan Weisman was covering economics and monetary policy, he was a "Paul Krugman and Donald Luskin disagree about the shape of the earth: who can tell who is right?" guy. Those of us who talked to him took the incompetence for granted—and more than that: a willful desire to not understand the issues because then he might be unable to properly suck up to the sources he wished to suck up to...

  • Note to Self: Why was Jonathan Weisman's economic policy reporting for the Washington Post so execrable back in the mid-2000s? A person who was, as they say, very, very, very, very, very familiar with the matter: "Jonathan's big problem is that he's not that deep into the issues, and he has no backup. There's nobody that he can go to in that building to tell him 'this was how X was trying to mislead you' or 'this is Y's history' or 'be very careful here: if you get this detail Z wrong, they'll come down on you extremely hard'"...

  • Note to Self: For programming and Python Jupyter Notebook νBs, who are wondering what they are getting themselves into: Programming Dos and Don'ts: A Running List...

  • Looking Backward: From This Week at 24, 20, 16, 12, 8, 4, 2, 1, 1/2, and 1/4 Years Ago (July 31-August 6, 2019): MUST OF THE MUSTS: James M. Buchanan: The "Social" Efficiency of Education: You have to be able to hold in your mind two things at once in order to understand economist James M. Buchanan: (1) He was a total loon: a strong believer in the de Maistrean trinity of Patriarchy, Orthodoxy, Autocracy as necessary for society—essential Noble Lies; a man who in 1970 wanted to shut down America's universities as teachers of evil, and regretted the failure of nerve that made that impossible; a man who saw Martin Luther King Jr. as a teacher of evil—whose response to the Civil Rights movement and its peaceful civil disobedience campaign was not Edmund Burke's "to make us love our country, our country must be lovely", but rather: how dare MLK claim that an African American should be "openly encouraged to use his own conscience"—rather than shutting up and accepting his subservient Jim Crow position in society! (2) A man who saw things that other economists did not and would not have without him...

  • A Year Ago on Equitable Growth: Fifteen Worthy Reads On and Off Equitable Growth for August 9, 2018:

  • Comment of the Day: Graydon: "You get what you reward, and the present mechanism of reward is advertising, fundamentally aligned with increasing people's insecurity so as to increase their likelihood of making a purchase to address that insecurity...

  • Comment of the Day: Cosma Shalizi: ":I have used Google as pretty much my only search engine since it became available.... Google should thus have a very complete idea of what I'm interested in.... I can, with charity, understand 'homemaking and interior decor' (because I'd been researching new window blinds), and 'pet food and supplies' (though my cat had died more than a year before). Everything else was just flat wrong, and often mystifyingly so...

  • Comment of the Day: Doctor Jay: "I'm very much not getting what I want out of social media. I very much AM getting what I want out of internet search...

  • For the Weekend: J.R.R. Tolkien (1925): Light as Leaf on Linden Tree:

  • Liveblogging: The Anglo-Saxon Chronicle: Cynegils: "A.D. 635. This year King Cynegils was baptized by Bishop Birinus at Dorchester; and Oswald, king of the Northumbrians, was his sponsor. A.D. 636. This year King Cwichelm was baptized at Dorchester, and died the same year. Bishop Felix also preached to the East-Angles the belief of Christ...

  • Liveblogging: The Anglo-Saxon Chronicle: Erkenbert: ""A.D. 639. This year Birinus baptized King Cuthred at Dorchester, and received him as his son...


  1. Brian Chappatta: Trump Risks Losing the Fed as a Recession Scapegoat: "The Federal Reserve cut interest rates to account for a 'simmering' trade war. Then the president turned up the heat and put a downturn in play himself. The market signal for a recession is blinking fast and Trump has only himself to blame. The markets have spoken. If they are to be believed, the potential for a U.S. recession has never been greater in the post-crisis era than it is right now. That’s a problem for President Donald Trump because after the events of the past few days, it should be clear that he has effectively forfeited the ability to use the Federal Reserve as a scapegoat for any economic slowdown, an angle he was clearly prepared to play...

  2. Jeremy R. Hammond: The Lies that Led to the Iraq War and the Myth of 'Intelligence Failure'

  3. Jonathan Stein and Tim Dickinson: Lie by Lie: A Timeline of How We Got Into Iraq: "Mushroom clouds, duct tape, Judy Miller, Curveball. Recalling how Americans were sold a bogus case for invasion...

  4. Hubert Horan: Uber’s Path of Destruction: "Uber has disrupted... the idea that competitive consumer and capital markets will maximize overall economic welfare by rewarding companies with superior efficiency.... Uber’s most important innovation has been to produce staggering levels of private wealth without creating any sustainable benefits for consumers, workers, the cities they serve, or anyone else...

  5. Yereth Rosen: Record-Low Sea Ice in July Sets Up Conditions For an Ultra-Low Minimum Extent This Fall: "Sea ice extent in September of 2019 is likely to be among the five lowest minimums recorded...

  6. Patrick Chovanec: U.S. Market and Economic Review—August 2019

  7. Kieran Healy: Frank Oz Muppets and the Big Five Personality Traits

Continue reading "Fairly Recently: Must- and Should-Reads, and Writings... (August 11, 2019)" »


Kara Swisher: Can anyone tame the next internet?: "which jobs will be impacted? It’s not just factory workers, burger flippers, and long-haul truckers. Highly paid lawyers, skilled doctors (don’t let your daughter be a radiologist), and, yes, even lowly journalists will need to find new lines of work. And those tectonic workplace realignments will only become more profound as the AI becomes inevitably—and exponentially—better. To thrive in this environment will require being in a profession that is creative, where analog interactions are critical—one that cannot be easily made digital. Think art, think the caring professions, think anything in which being human trumps cyborg. And since AI becomes ever smarter, it will make sense to allow it to do more and more as we become ever less so.... We’ll also soon see the effects of radical advances in robotics and automation.... The way we wage war is changing dramatically, but it’s not the killer robots we think of...

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Pascal Michaillat and Emmanuel Saez: How to design a stimulus package | VOX, CEPR Policy Portal: "the size of the stimulus does not follow the bang-for-the-buck logic.... Stimulus spending should be similarly small when multipliers are small and large. The stimulus should only be large for medium multipliers. Relatedly, the threshold value of one for the multiplier plays no role at all.... A well-designed stimulus package should also depend on the usefulness of public expenditure.... When the elasticity of substitution is higher, extra public goods are more valuable, so stimulus spending is more desirable.... We find that the output multiplier is not a robust statistic to use in stimulus discussion. Instead, we should use the ‘unemployment multiplier’...

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Olivier Blanchard and Lawrence H. Summers: Evolution or Revolution: An Afterword: "Since... we wrote... neutral... have likely declined even as the crisis has receded. The notion that low rates largely reflected the after-effects of the financial crisis and would slowly fade away has simply proven wrong.... Fiscal policy has continued to be expansionary in Japan and has turned strongly expansionary in the US and mildly expansionary in Europe.... Inflation has barely reached the Fed’s inflation target.... In the euro area and in Japan, inflation remains below target.... Output is still below potential, at least in the euro area and in Japan.... These facts lead to the inevitable conclusion that fiscal policy will have to play a much bigger role in the future than it has in the past.... For a long time, economists looking at Japan pointed to mistakes in policy and excessive reliance on deficits; it is now clear that the Japanese macroeconomic response was, on net, the right one.... We noted... that both the Depression and the Great Inflation of the 1970s led to dramatic changes in macroeconomic thinking–much more dramatic than have yet occurred in response to the events of the last decade. We think it is increasingly likely that this gap will close in the next few years...

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I agree with Larry Glickman here: Talking your book is never good. And monopsony is not freedom—not even if the monopsonist works for you: Lawrence Glickman: "I have questions about this piece by @tylercowen: https://t.co/UllO6J28my: Why must very wealthy universities 'choose between boosting their academic quality through better training, or paying them higher stipends and teaching wages to ease their immediate financial concerns'? Why is it an inherently zero sum situation? Why can't they do both? You write, 'I would merely note that many of my graduate students come from relatively well-to-do backgrounds and face favorable prospects after they graduate'. First, anecdotes about your grad students is not the best basis for policy making. Second, presumably you do not want to live in a world in which grad school is only feasible for the 'well-to-do'. Third, your students may face 'favorable' job prospects, but there is a huge jobs crisis in the humanities that you may have read about. Grad students may not be 'employees in the traditional sense', but the category of "employees in in the traditional sense" is shrinking. There are many more Whole Foods employees than coal miners. Unions work just as well for the former as the latter...

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Geoffrey Skelley: Why So Many House Republicans Are Retiring, And Why More Could Be On The Way: "Four Republicans who have criticized Trump or... opposed him.... Texas Rep. Will Hurd.... Indiana Rep. Susan Brooks.... Michigan Rep. Paul Mitchell didn't vote to condemn the president over his tweets, [but] he was openly critical of them.... Alabama Rep. Martha Roby hasn't been critical of Trump recently, and has a very pro-Trump voting record overall, she did say she wouldn't vote for him in 2016 after the release of an Access Hollywood video.... She faced [opposition from a write-in candidate][30] in 2016 and had to survive a primary runoff in 2018.... Tough reelection bids... Hurd.... Georgia Rep. Rob Woodall... only held onto his seat after a recount.... Reps. Kenny Marchant and Pete Olson... won reelection in 2018 by fewer than 5 points.... Republican conference rules... do not allow members to lead committees for more than three consecutive terms, unless they get a special waiver (which is rare).... Texas Rep. Mike Conaway and Utah Rep. Rob Bishop, as each was in his third term.... These early retirements don't necessarily signal a wave of future exits. But... don't be shocked if more Republicans decide to exit stage right...

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One very peculiar thing about America is majorities that believe that government doesn't have our back and indeed, shouldn't have our back. This is a very puzzling attitude to see in a democracy: Gillian Tett: Why Japan Isn’t Afraid of Robots: "The social safety net.... 63 per cent of people in Japan think that it is up to the government... to help the population adapt to automation.... In the US, however, only about 30 per cent of the public expect the government to help.... A recipe for anxiety: some of America’s current problems can be traced to the sense of abandonment felt by many workers in deindustrialised regions...

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Arthur Eckstein: Mediterranean Anarchy, Interstate War, and the Rise of Rome: "Tarentine ambitions and strategies... were unrealistic: their resources, large though they were for a city-state, were inadequate for dominion over southern Italy... failure to create a stable hegemonic structure. Tarentum was not powerful enough to impose a hierarchical alliance system upon the Italiotes in the manner of Athens in fifth-century Greece, yet it also failed to create a cooperative and integrative league, such as the Achaeans and Aetolians did in Hellenistic Greece. Nothing in that direction was really attempted.... Thus Tarentum differed from Rome in organizational vision and ability—but it was as militaristic and diplomatically aggressive as Rome.... The citizen army remained strong; the government adapted to the increasing pressure from the Italic highlanders with a reasonable policy of hiring mercenaries... and bringing in famous generals... [and] the last half of the fourth century witnessed the erection of the great statues of Nike and Zeus the Thunderer in the city center. The wide claims of Tarentum show that Rome was not alone in Italy in making such claims—just alone in the capacity to enforce them...

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I am not sure whether what is needed is for economics to "go digital" as for economics to finally recognize what John Maynard Keynes called "the end of laissez-faire". But since he wrote about the end of laissez-faire 94 years ago, I am not holding my breath for a better economics:

Diane Coyle: Why Economics Must Go Digital: "Drug discovery is an information industry, and information is a non-rival public good which the private sector, not surprisingly, is under-supplying.... Yet the idea of nationalizing part of the pharmaceutical industry is outlandish from the perspective of the prevailing economic-policy paradigm.... Should data collection by digital firms be further regulated?.... The standard economic framework of individual choices made independently of one another, with no externalities, and monetary exchange for the transfer of private property, offers no help...

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Back, eight short years ago, when Conor Friedersdorf embraced the racism as part of what he saw as an attractive package deal: Conor Friedersdorf (2011): Grappling With Ron Paul's Racist Newsletters: "Were it 1964, I'd never vote for Paul.... But it is not 1964. Other injustices better define our times.... I wouldn't begrudge someone who... decided... the racist newsletters are reason enough to refrain from supporting Paul. In some ways, it would be easiest for me to reach that conclusion.... Among the candidates who could win, Paul is... least likely to deprive innocent foreigners of their God given rights to life, liberty and the pursuit of happiness... most committed to civil liberties and drug legalization at home.... Bygone complicity in racist newsletters doesn't... tell us whose policies, which candidate, would do the most to square American government with the highest ideals of our polity. Support for Paul is grounded for many in the judgment that he is that candidate.... I remain sympathetic to that argument...

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There are many obstacles to the successful reintegration of ex-convicts. This—access to credit resources—now looks like a surprisingly important one: Carlos Fernando Avenancio-León: Without Access to Credit, Ex-Cons May Return to Lives of Crime: "Within the former inmate population, those experiencing sharper drops in credit availability are more likely to engage in future criminal activity: For each thousand dollars of available credit card limit lost, recidivism increases by 1.4 percentage points. Accordingly, a history of incarceration and lack of access to credit creates credit-driven crime cycles for this population.  Yet, after accounting for credit history and income, former inmates are less likely to default on loans than individuals who have never been incarcerated. Because former inmates present lower credit risks, lenders extend former inmates slightly more loans, albeit not nearly enough to overcome a lending contraction driven by low credit scores...

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Jane Waldfogel and Emma Liebman: Paid Family Care Leave: "The unmet need for leave to care for a family member with a serious illness is actually more widespread and more frequent than it is for the other types of family leave. This is why its relative neglect in research and its uneven treatment by policymakers is all the more striking. For these reasons, this paper focuses on reviewing what we know and do not know about family care leave. In particular, this paper contributes to an understanding of the need for paid leave to care for a seriously ill family member and the current state of policy and research. In doing so, we draw on the best available research on family care leave where available, but because such research is often lacking, we also draw on evidence about family and medical leave more generally when necessary...

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I confess I do not understand what is to be done here. These internet platforms are not utilities—the technology is not stable and investments are not large enough—so rate regulation would seem inappropriate. The economies of scale on the production side and the economies of scope on the consumption side are very large, and so it would seem inappropriate to sacrifice them to generate competition at the core services of each platform. Consumer surplus appears to be very large, so reducing the profits to successful innovators seems a very bad idea. And there is the question of whether these firms are giving their customers what they need instead of what they think they want—but do recall that in early generations one socialist critique of the market was that the market economy was making people unfree by failing to force them to wear identical blue overalls, drive identical utilitarian black cards, and listen to properly uplifting music:

Ben Thompson: Tech and Antitrust: "That is not to say that tech deserves no regulation: question of privacy, for example, are something else entirely. Nor, for that matter, is antitrust irrelevant in the United States generally: concentration has increased dramatically throughout the economy. What is driving that concentration matters, though: at the end of the day tech companies are powerful because consumers like them, not because they are the only option. Consumer welfare still matters, both in a court of law and in the court of public opinion...

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Our Fearless Leader at Equitable Growth on the very sad, very depressing story of Arthur Laffer. "Charlatans and cranks" was what George W. Bush's chief economist Greg Mankiw called him and his ilk. And Laffer's early promoter Irving Kristol, later half-apologized for his "rather cavalier attitude" toward whether Laffer actually knew what he was talking aboug: "The task, as I saw it, was to create a new majority, which evidently would mean a conservative majority, which came to mean, in turn, a Republican majority-so political effectiveness was the priority, not the accounting deficiencies of government":

Heather Boushey: "A few thoughts on Arthur Laffer’s legacy:: "Laffer promoted a set of ideas to policymakers that promised to deliver a more fulsome American Dream, even though they were not grounded in empirical evidence. Time and again, we’ve seen that Laffer’s hypothesis that tax cuts will lead to an amount of growth that would make up for lost revenue and improve economic well-being broadly is false.... Research undermines the contention since the 1970s that lower rates stimulate the economy. What they seem to do instead is increase inequality. Millions of families have felt the effects of stalled incomes and cutbacks in much-needed government services, including education.... Former Kansas Gov. Sam Brownback, a proponent of Laffer’s ideas, admitted that putting his supply-side tax cut plan in place would be ‘a real live experiment’, one that failed so spectacularly his Republican legislature overrode his veto...

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Izabella Kaminska: Uber Becomes Modern Art: "Back in September 2016, we cited a BCA report which questioned Uber’s 62.5bn valuation, arguing its model was neither innovative or viable. Unfortunately, the report didn’t really register with the great and the good who have money to burn. Ahead of Uber’s IPO... as much as 120bn was being thrown about by some enthusiastic bankers. Fast forward to August 8, and Uber has truly beaten even the most extravagant of money-burning expectations. Here’s the Q2 results table, possibly in need of framing.... The thing that really hit market sentiment was the slowdown in revenue growth at 14 per cent to $3.2bn. Analysts had been expecting a 20 per cent rate which would have taken the top line to $3.4bn. This is important because Uber’s investment case is based on the thesis that the continuous net losses don’t matter because it’s still a growth company, and its pathway to profitability is through market domination and, of course, revenue growth...

Uber becomes modern art FT Alphaville

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Jean-Claude Juncker: “If it comes to a hard Brexit, that is in no one’s interest, but the British would be the big losers. They are acting as though that were not the case but it is. We are fully prepared even though some in Britain say we are not well set up for a ‘no deal’. But I am not taking part in these little summer games.... We have made clear that we are not prepared to hold new negotiations on the withdrawal agreement but only to make certain clarifications in the framework of the political declarations that regulate future relations between the United Kingdom and European Union. We are well prepared (for no deal) and I hope the British are too...

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This was what Conor Friedersdorf back in 2012 was endorsing as part of an attractive package deal: Ron Paul (1992): Fundraising Letter: "I have unmasked the plot for world government, world money, and world central banking... high officials who are wholly owned subsidiaries of the Trilateral Commission and the Council on Foreign Relations.... I’ve been told not to talk, but these stooges don’t scare me. Threats or no threats, I’ve laid bare the coming race war in big cities. The federal-homosexual cover-up on AIDS.... The Israeli lobby, which plays Congress like a cheap harmonica.... The Soviet-style 'smartcard' the Justice Department has in mind for you.... Welfare riots in the big cities. Massive unemployment. The destruction of wealth. The erosion of personal liberties. Vicious economic controls. The exaltation of envy. The suppression of privacy. Authoritarian clamp-downs. Bank and S&L closings on a massive scale. A world dollar crisis as the greenback (or 'pinkback') is rejected for almost any non-paper alternative...

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Gary Forsythe: A Critical History of Early Rome: "Historians have traditionally labeled the period c. 1100–800 B.C. the Greek dark age, characterized by village societies headed by local chieftains, from which the city-state eventually arose. The unsettled conditions of the late second millennium B.C. might have extended as far west as eastern Sicily. Coastal sites exposed to sea raids were abandoned, and the inhabitants occupied defensible positions of the interior, such as Pantalica near Syracuse (Holloway 1981, 107–14). It is also noteworthy that at the close of the Bronze Age the major site in the Lipari Islands met with violent destruction and was reoccupied by people from the Apennine Culture of Italy...

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Overly cynical, IMHO: Modernization theory is correct in that the "advanced" shows the "backward" more about the "backward"'s own future than the "backward"'s own past and present show. Picking the most attractive "advanced" society and trying to replicate what it does well is always a smart development strategy, if you can go about it smartly—in an Alexander Hamiltonian vein, say:

Nils Gilman: Modernization Theory Never Dies: "Modernization theory was among the most influential historical and policy paradigms to emerge in the United States during the 1950s, but fell into steep academic disrepute from the 1970s forward. Despite this loss of intellectual credibility, however, it has for fifty years continued to exercise a major influence on the developmental imaginary both in the United States and in many other countries. This article examines how modernization theory’s leading progenitor, Walt Whitman Rostow, developed his narrative of modernization to provide a metahistorical theory of development and asserts that the enduring appeal of modernization theory, despite its intellectual flaws, rests on the optimistic historical narrative it proposes and the flattering role it provides in that narrative for policy and intellectual elites...

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A Year Ago on Equitable Growth: Fifteen Worthy Reads On and Off Equitable Growth for August 9, 2018

stacks and stacks of books

Worthy Reads from Equitable Growth and Friends:

  1. J. Bradford DeLong: The Ahistorical Federal Reserve: "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.... The proper inflation target... should be 4% per year.... The two slope[s of] the Phillips Curve... are smaller.... Yield-curve inversion... monetary policy is too tight.... Principal shocks have not been inflationary...

  2. Mark Paul, Khaing Zaw, Darrick Hamilton, and William Darity Jr.: Returns in the labor market: A nuanced view of penalties at the intersection of race and gender - Equitable Growth: "Multiple identities cannot readily be disaggregated in an additive fashion. Instead, the penalties associated with the combination of two or more socially marginalized identities interact in multiplicative or quantitatively nuanced ways...

  3. Raymond Fisman, Keith Gladstone, Ilyana Kuziemko, and Suresh Naidu: Do Americans want to tax capital? Evidence from online surveys: "Our regression results yield roughly linear desired tax rates on income of about 14 percent... positive desired wealth taxation... three percent when the source of wealth is inheritance, far higher than the 0.8 percent rate when wealth is from savings.... These tax rates are consistent with reasonable parameterizations of recent theoretical optimal wealth tax formulae...

  4. Equitable Growth: #JOLTS: "The quit rate... historically high level.... The ratio of unemployment-to-job openings trended upward slightly in June to just under 1.0.... The Beveridge Curve continues to be at levels similar to those in the expansion of the early 2000s...

  5. Bridget Ansel and Heather Boushey (2017): Modernizing U.S. Labor Standards for 21st-Century Families: "Boosting women’s economic outcomes [via] paid family leave, fair scheduling, and combatting wage discrimination...

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The China shock was not the only shock American manufacturing has experienced. yet New England politics did not turn nativist in the 1960s. What was the difference? No Fox News?: John F. Kennedy: New England Industry and the South: "The southward migration of industry from New England has too frequently taken place for causes other than normal competition and natural advantages...

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Maciej Ceglowski: Our Comrade The Electron: "I want to close with my favorite Termen anecdote, from the end of his life. Termen spent years trying to join the Communist party, and they kept making excuses to turn him away. When he was ninety years old, he applied again, but they told him that to join he had to take a five-year advanced course in Marxism-Leninism. So he did it. He went to night school and did it. In 1991, literally weeks before the fall of the Soviet Union, Termen got his party badge. The 95-year-old Bolshevik was briefly the youngest Communist in the country. Naturally people asked him, 'Lev Sergeyevich, why on Earth would you join the Communist Party now, when everyone else is leaving?' He gave them the most badass answer imaginable: 'I promised Lenin'...

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Gauti Eggertsson, Jacob A. Robbins, and Ella Getz Wold: Kaldor and Piketty’s facts: The rise of monopoly power in the United States: "The macroeconomic data of the last thirty years has overturned at least two of Kaldor’s famous stylized growth facts: constant interest rates, and a constant labor share. At the same time, the research of Piketty and others has introduced several new and surprising facts: an increase in the financial wealth-to-output ratio in the US, an increase in measured Tobin’s Q, and a divergence between the marginal and the average return on capital. In this paper, we argue that these trends can be explained by an increase in market power and pure profits in the US economy, i.e., the emergence of a non-zero-rent economy, along with forces that have led to a persistent long term decline in real interest rates. We make three parsimonious modifications to the standard neoclassical model to explain these trends. Using recent estimates of the increase in markups and the decrease in real interest rates, we show that our model can quantitatively match these new stylized macroeconomic facts...

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Market forces are voting, strongly, for green energy: Alwyn Scott: General Electric to Scrap California Power Plant 20 Years Early: "General Electric Co said on Friday it plans to demolish a large power plant it owns in California this year after only one-third of its useful life because the plant is no longer economically viable in a state where wind and solar supply a growing share of inexpensive electricity. The 750-megawatt natural-gas-fired plant, known as the Inland Empire Energy Center, uses two of GE’s H-Class turbines, developed only in the last decade, before the company’s successor gas turbine, the flagship HA model, which uses different technology. The closure illustrates stiff competition in the deregulated energy market as cheap wind and solar supply more electricity, squeezing out fossil fuels...

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Moral fault attaches to all those who in any way support or excuse the New York Times: Scott Lemieux: Today is the Day Donald Trump Most Assuredly Became President: "Nate Silver: 'Not sure "TRUMP URGES UNITY VS. RACISM" is how I would have framed the story.' In fairness, you can’t deny that Trump has his finger on the pulse of the Rust Belt in a way no coastal liberal could ever understand: Reuters: '"May God bless the memories of those who perished in Toledo", Trump said, mistakenly saying "Toledo" not Dayton, Ohio, where 10 people, including the gunman, died over the weekend'...

Moral Fault Attaches to All Those Who Associate with the New York Times

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Very interesting to see: usually—always IIRC, with the possible exception of Alan Greenspan's use by the Bush administration in 2001 to support their tax cut—Fed Chairs and ex-Fed Chairs try as hard as they can to avoid choosing a partisan side. It appears that they have, as a group, decided that that is no longer possible: Clair Jones: Former Fed chairs gang up on Trump : "Every living former US Federal Reserve chair has ganged up on US President Donald Trump in an op-ed with the Wall Street Journal.... 'When the current chair's four-year term ends, the president will have the opportunity to reappoint him or choose someone new. That nomination will have to be ratified by the Senate. We hope that when that decision is made, the choice will be based on the prospective nominee's competence and integrity, not on political allegiance or activism. It is critical to preserve the Federal Reserve's ability to make decisions based on the best interests of the nation, not the interests of a small group of politicians....' The Journal article is diplomatic, eloquent and reflective. Everything that Trump isn’t, then. The trouble is, in an era of short attention spans and pick-A-side politics where the Fed chair finds himself regularly called out on Twitter, relying on things like evidence, or a coherent argument, might not cut it.... Earlier this year, when addressing Trump’s threat to replace Powell, former Fed vice-chair Stan Fischer put it bluntly. If the US President used his re-election in 2020 to choose a Fed chair with views close to his own, there was a chance of the US becoming 'a Third World country'. Stark and not exactly politically correct. If they are to retain their independence, though, the world’s central bankers might need a bit more of Fischer’s zing...

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Ben Thompson: A Framework for Moderation: "Section 230 doesn’t shield platforms from the responsibility to moderate; it in fact makes moderation possible in the first place. Nor does Section 230 require neutrality: the entire reason it exists was because true neutrality — that is, zero moderation beyond what is illegal — was undesirable by Congress. Keep in mind that Congress is extremely limited in what it can make illegal because of the First Amendment.... This is how we have arrived at the uneasy space that Cloudflare and others occupy: it is the will of the democratically elected Congress that companies moderate content above-and-beyond what is illegal, but Congress can not tell them exactly what content should be moderated...

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