#noted Feed

What return does John Tamny get for shilling for Elizabeth Holmes, and why is he so eager to do so?: John Tamny: Elizabeth Holmes Is a Visionary, and We Need More Like Her https://www.realclearmarkets.com/articles/2019/10/14/elizabeth_holmes_is_a_visionary_and_we_need_more_like_her_103946.html: "The analysis that you’re about to read, it's mine.... No interviews were conducted.... I live in the same apartment building as Holmes’s parents, and consider them friends. I've also briefly spoken with Elizabeth Holmes a few times.... I venerate the risk takers whose intrepid ways vastly improve our living standards.... The Wright brothers owned a bike shop as opposed to college degrees from some well-regarded school of engineering, Thomas Edison had no formal education beyond the 8th grade, and then Steve Jobs was a Reed College dropout. But the arguably more important truth is that most advances are hatched by people outside the industry about to be transformed.... Holmes’s hiring of the best she could find was an explicit admission by the entrepreneur that there were limits to her knowledge that she would strive to make up for through brilliant recruitment.... A popular narrative that’s taken hold about a 'fraudulent' Theranos having made false claims about its technology. Not so fast.... She was willing to fail publicly.... Rome wasn't built in a day, and neither were cars, airplanes or internet-capable computers. Theranos, like any other corporation aiming to do something truly different, was going to have to fail a lot to get to success..... While Holmes was plainly and understandably not eager to shout the initial shortcomings of Theranos technology to all who would listen, it’s not as though she was going out of her way to bury mistakes without addressing them. Quite the opposite. Some will point to Theranos’s utilization of third party equipment, along with actual needles on occasion in order to complete blood tests, but this too was yet further evidence that accuracy of testing mattered; that Theranos would make up for the initial shortcomings of the Edison and miniLab analyzers until they could stand on their own.... So much of Bad Blood struck this reader as innuendo.... That the technology 'didn’t always work' means it sometimes did.... It’s quite simply not news that Thernanos technology was buggy.... Which brings us to Theranos not making it. Carreyrou comes to the not-terribly-novel conclusion that 'Holmes and her company had overpromised and then cut corners when they couldn’t deliver'.... Stressing average doesn’t work when raising funds for a technology company.... Some will respond that the responsible thing for Holmes et al to have done would have been to tap the brakes as it were, to moderate expectations in consideration of the company’s audacious vision, to underpromise. Much easier said than done.... One senses that some of Holmes’s biggest critics have never run a start-up, let alone a business.... Which brings us to Elizabeth Holmes.... Seemingly forgotten by the eternally smug is that per serial business founder and investor Carl Schramm, capitalistic progress is 'messy', and it’s the stuff of individuals willing to energetically pursue that which is roundly rejected by the existing order. Crucial is that these people are very necessary.... It’s time to end the witch hunts meant to quiet the minds and actions of those who want to force the change without which there is no progress...

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Very Briefly Noted 2019-10-15:

  1. Astro 3D: Not Long Ago, the Center of the Milky Way Exploded https://phys.org/news/2019-10-center-milky.html: "A titanic, expanding beam of energy sprang from close to the supermassive black hole in the centre of the Milky Way just 3.5 million years ago, sending a cone-shaped burst of radiation through both poles of the Galaxy and out into deep space.... The phenomenon, known as a Seyfert flare, created two enormous 'ionisation cones' that sliced through the Milky Way—beginning with a relatively small diameter close to the black hole, and expanding vastly as they exited the Galaxy. So powerful was the flare that it impacted on the Magellanic Stream—a long trail of gas extending from nearby dwarf galaxies called the Large and Small Magellanic Clouds...

  2. Henry Fielding (1749(: The History of Tom Jones, a Foundling http://www.gutenberg.org/files/6593/6593-h/6593-h.htm...

  3. Aaron Carroll: Five Reasons the Diet Soda Myth Won’t Die https://www.nytimes.com/2019/10/14/upshot/diet-soda-health-myths.html?te=1&nl=the-upshot&emc=edit_up_20191014?campaign_id=29&instance_id=13061&segment_id=17867&user_id=744e123caca9fa6942a2af37a0645716&regi_id=1775010: "Repeated studies on a health bogeyman help explain wider problems with food research.... It would probably be a public service if we stopped repeating a lot of this research—and stopped reporting on it breathlessly. If that’s impossible, the best people can do is stop paying so much attention...

  4. Wikipedia: Aldo Raimondi https://en.wikipedia.org/wiki/Aldo_Raimondi...

  5. Wikipedia: Castel dell'Ovo https://en.wikipedia.org/wiki/Castel_dell%27Ovo...

  6. What to see and what to do in the Gulf of Naples https://www.visitnaples.eu/en/neapolitanity/discover-naples/what-to-see-and-what-to-do-in-the-gulf-of-naples...

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Why am I hearing "very fine people on both sides!"? here: Robert Knight: Letters · LRB: Globalists: "Alexander Zevin writes that Friedrich Hayek opposed the use of sanctions against apartheid, and ‘confided to his secretary that he liked blacks no better than Jews’ (LRB, 15 August). The antisemitic antecedents of National Socialism are conspicuous by their absence in The Road to Serfdom; if we assume the manuscript was completed in 1943, it almost completely ignores a decade of antisemitic persecution and four years of Nazi war crimes and atrocities. In the Spectator in January 1947 Hayek attacked the ‘blunders’ of denazification in Austria, including the suspension of violinists from the Vienna Philharmonic Orchestra because they had been Nazi party members. It was, he wrote, ‘scarcely easier to justify the prevention of a person from fiddling because he was a Nazi than the prevention because he is a Jew’...

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Jennifer Ouellette: New research on Tunguska finds such events happen less often than we thought: "Eyewitness: 'Suddenly the sky appeared like it was split in two, high above the forest.'... scientists deduced that the Chelyabinsk object was most likely a stony asteroid the size of a five-story building that broke apart 15 miles (24km) above the ground. The resulting shock wave was as powerful as a 550 kiloton nuclear explosion—and the Tunguska object was probably much larger. Based on the Chelyabinsk models—augmented with survey records from the Tunguska region shortly after the event—the scientists concluded the Tunguska object was probably stony (rather than icy), and measured between 164 and 262 feet in diameter (about 50 to 80 meters). It whipped through the atmosphere at 34,000 miles per hour (about 54,700km/h), and produced an amount of energy equivalent to the 1980 eruption of Mount Saint Helens. Those models, plus current data on the asteroid population, also enabled researchers to calculate how frequently such impact events are likely to occur. The good news is that this research suggests mid-size rocky bodies like the one that likely caused the damage at Tunguska occur less frequently than previously thought—on the order of millennia, rather than centuries...

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Very few of those who read this weblog would be attracted to this, or, indeed, find it anything other than a very hard slog. But those who do tackle it will, I think, be very well rewarded. Adam Kotsko is a smart, honorable, very insightful person who thinks very differently from us—and that is the kind of person we can potentially learn the most from: Adam Kotsko: Neoliberalism's Demons: On the Political Theology of Late Capital https://books.google.com/books?isbn=1503607135: "Neoliberalism makes demons of us all, confronting us with forced choices that serve to redirect the blame for social problems onto the ostensible poor decision-making of individuals...

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Miles Kimball: Adding a Variable Measured with Error to a Regression Only Partially Controls for that Variable https://blog.supplysideliberal.com/post/2019/10/10/adding-a-variable-measured-with-error-to-a-regression-only-partially-controls-for-that-variable: "Compare the coefficient estimates in a large-sample, ordinary-least-squares, multiple regression with (a) an accurately measured statistical control variable, (b) instead only that statistical control variable measured with error and (c) without the statistical control variable at all. Then all coefficient estimates with the statistical control variable measured with error (b) will be a weighted average of (a) the coefficient estimates with that statistical control variable measured accurately and (c) that statistical control variable excluded. The weight showing how far inclusion of the error-ridden statistical control variable moves the results toward what they would be with an accurate measure of that variable is equal to the fraction of signal in (signal + noise), where “signal” is the variance of the accurately measured control variable that is not explained by variables that were already in the regression, and “noise” is the variance of the measurement error....

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This, from the smart Nick Rowe, is just misleading from any sensible point of view. The burden of a debt on a generation in any sensible social welfare function is proportional to the proportional reduction in that generation's consumption needed to finance the debt, and all generations are on an equal footing. When r < g, you can boost the relative well-being of a current generation at a very low cost in terms of the reduced well-being of a far-future generation. So even though debt is not a free lunch when r < g, it is a very, very cheap lunch indeed:

Nick Rowe: Hilbert's Hotel and the National Debt when r < g https://worthwhile.typepad.com/worthwhile_canadian_initi/2019/10/hilberts-hotel-and-the-national-debt-when-rg.html: "Hilbert's Hotel has infinitely many rooms. Even if every room is full, you can still make room for one more guest in room 1, by moving the guest currently in room 1 to room 2, moving the guest currently in room 2 to room 3, and so on forever. When the rate of interest r is less than the growth rate of GDP g ("r < g"), the national debt in an infinitely-lived economy is a bit like Hilbert's Hotel. The government prints some bonds, which it gives (as a freebie) to generation 1 (this is like giving generation 1 a deficit-financed transfer payment, or tax cut). When they get old, generation 1 sells those bonds to the young in generation 2, in exchange for apples. So generation 1 eats more apples when old, and generation 2 eats fewer apples when young.... If r < g, the government never needs to raise taxes to service the debt.... A national debt makes all generations better off.... But it won't work if the economy has a finite life.... The last generation is stuck with bonds it can't sell, and no compensation for consuming fewer apples when old. So they wouldn't buy the bonds... unless the government raises taxes to retire the debt before the economy ends, but then those taxes would make the generations that pay them worse off...

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Interstate 80 is the wrong way to go from San Francisco to Chicago. Vastly superior, scenery wise, is 580-205-120-6-305-93-319-50-70-55:

San Francisco CA to Chicago IL Google Maps

Kevin Drum: Friday Cat Blogging https://www.motherjones.com/kevin-drum/2019/10/friday-cat-blogging-11-october-2019/: "I’m on the road today... helping Dr. Marc drive his cats to Chicago..... Interstate 80 Isn’t Very Interesting https://www.motherjones.com/kevin-drum/2019/10/interstate-80-isnt-very-interesting/: "Our mission to get Professor M’s cats to Chicago proceeds apace. We’re basically covering one state per day, and today we drove across Wyoming...

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From 2011: Matthew Yglesias is trying to understand how there can be an ethnicism that calls itself "Christian". In the4 United States you can trace it to the emergence of the Peculiar Institution. In Britain—and among Britons and ex-Britons—I confess I am at a loss:

Matthew Yglesias (2011): John Derbyshire of National Review Wants To ‘Let Britain Burn’: "It’s one thing if you want to call 'deracinated moral universalism' a 'sick' principle. But it’s very strange to combine this with table-pounding about Christianity. I’m no Christian, personally, but deracinated moral universalism is one of Christianity’s best and most worthy contributions to human thought. I, for example, am not British nor am I descended from British people. But despite the lack of ties of blood, it seems to me that it’s sad if British people get hurt or killed or have their property damaged in rioting. You can see that as being because we’re all God’s children and equal in His eyes, or as a non-theological statement of human equality. In either case, I think it would be very sad for the country to burn...

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In addition to today's American conservatives regarding politics not as the enactment of policies but rather the identification of enemies, there is also this strange current which seems aimed at convincing people that high ideals are only for fools. Once again, our politics does not know how to deal with this. One again, our role is to play our position. But that does not make this less disturbing:

Jacob Levy: The Weight of the Words: "The power of elite speech in a democracy is only partly that of giving partisan cues to one’s supporters. It’s also the power to channel and direct the dangerous but real desire for collective national direction and aspiration. Humans are tribal animals, and our tribal psychology is a political resource.... Whether... presidents are named 'Reagan and George W. Bush' or 'JFK and Barack Obama'... all... put forward a public rhetorical face that was better than their worst acts.... They kept the public aspirations of American political culture pointed toward Reagan’s 'shining city on a hill'... a free and fair liberal democratic order, the protection of civil liberties, openness toward the world, rejection of racism at home, and defiance against tyranny abroad. And their words were part of the process of persuading each generation of Americans that those were constitutively American ideals. Trump’s apologists are now reduced to saying that his speech has been worse than his actions so far, the reverse of this usual pattern. The effect is the reverse, too.... The norm against publicly legitimizing Klan-type explicit racism was built up over a long time, calling on white Americans to be better than they were, partly by convincing them that they were better. The norm is still strong enough that Trump grudgingly kind of walked back his comments after the Charlottesville protests last year. But a norm that was built up through speech, persuasion, and belief can be undermined the same way. Trump’s own racism, his embrace of white nationalist discourse, and his encouragement of the alt-right over the past two years have, through words, made a start on that transformation...

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Aristotle: The Necessity of Slavery: "Let us first speak of master and slave, looking to the needs of practical life.... [Some] affirm that the rule of a master over slaves is contrary to nature.... Property is a part of the household... no man can live well, or indeed live at all, unless he be provided with necessaries.... [T]he workers must have their own proper instruments... of various sorts; some are living, others lifeless; in the rudder, the pilot of a ship has a lifeless, in the look-out man, a living instrument.... [I]f every instrument could accomplish its own work, obeying or anticipating the will of others, like the statues of Daedalus, or the tripods of Hephaestus... the shuttle would weave and the plectrum touch the lyre without a hand to guide them, chief workmen would not want servants, nor masters slaves.... But is there any one thus intended by nature to be a slave, and for whom such a condition is expedient and right?... There is no difficulty in answering this question... that some should rule and others be ruled is a thing not only necessary, but expedient; from the hour of their birth, some are marked out for subjection, others for rule...

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Diane Coyle: The Puzzle of Economic Progress: "Do we know how economies develop? Obviously not, it seems, or otherwise every country would be doing better than it currently is in these low-growth times.... Yet when Patrick Collison of software infrastructure company Stripe and Tyler Cowen of George Mason University recently wrote an article in The Atlantic calling for a bold new interdisciplinary 'science of progress', they stirred up a flurry of righteous indignation among academics. Many pointed to the vast amount of academic and applied research that already addresses what Collison and Cowen propose to include in a new discipline.... Gina Neff... remarked... [that] the Industrial Revolution even gave birth to sociology, or what she called 'Progress Studies 1.0'. This is all true, and yet Collison and Cowen are on to something. Academic researchers clearly find it hard to work together across disciplinary boundaries, despite repeated calls for them to do so more often. This is largely the result of incentives that encourage academics to specialize....

Researchers need to distill their findings.... Most academics are poor communicators.... Today, the role of research in changing behavior–whether that of government officials or of businesses and citizens–is part of the broader crisis of legitimacy in Western democracies.... With real incomes stagnating for many, and “deaths of despair” increasing, it is not surprising that expertise has lost its luster for much of the public...

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Very Briefly Noted 2019-10-13:

  1. Scott Waldman: POLITICS: Cato Closes Its Climate Shop; Pat Michaels Is Out https://www.eenews.net/stories/1060419123_: "The Cato Institute quietly shut down a program that for years sought to raise uncertainty about climate science, leaving the libertarian think tank co-founded by Charles Koch without an office dedicated to global warming...

  2. Li Yang, Filip Novokmet, and Branko Milanovic: Chinese Urban Elite Transformation between 1988 and 2013 https://voxeu.org/article/chinese-urban-elite-transformation-between-1988-and-2013_: "Compared to the 1980s, the elite today consists mainly of professionals, self-employed, and smaller and larger business people, they are much better educated, and they receive a much greater share of total urban income. This is reflected also in the composition of the Communist Party of China...

  3. Bloomberg: Guohui Shi and his Lesotho Wool Centre were awarded a monopoly over the wool and mohair trade in the Southern African mountain kingdom, meaning Moteane and other small brokers would have to shut down. Since then, thousands of farmers have had to wait a year or more to be paid by Shi’s brokerage; some say they’ve been underpaid, and others not paid at all. Approximately 75% of Lesotho’s population lives in rural areas and relies on wool and mohair for income. Some herders have been forced to eat their flocks to survive...

  4. Colin Marshall: Where Did Human Beings Come From? 7 Million Years of Human Evolution Visualized in Six Minutes http://www.openculture.com/2019/10/7-million-years-of-human-evolution-visualized-in-six-minutes.html...

5.Open Culture: The Best Free Cultural & Educational Media on the Web http://www.openculture.com/...

  1. Thomas J. Sargent, John Stachurski, and Brandon Kaplowit: The Cass-Koopmans Optimal Growth Model https://python.quantecon.org/cass_koopmans.html...

  2. Thomas J. Sargent and John Stachurski: Linear Regression in Python https://python.quantecon.org/ols.html...

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One quibble with the sharp Hunter Blair here: the argument that the supply of savings to fund private investment was highly elastic with respect to the after-tax interest rate has never been economically-respectable for anything other than a small open economy with a fixed exchange rate system. It was not respectable back in 2017 when it was made. The solid preponderance of evidence then was that the supply of savings was inelastic. And so it has proved:

Hunter Blair: It’s Not Trickling Down: New Data Provides No Evidence that the TCJA Is Working as Its Proponents Claimed It Would: "The strongest economically-respectable argument from proponents of the Trump administration’s Tax Cuts and Jobs Act (TCJA) was that... higher dividends incentivize households to save more, or attract more savings from abroad. The increased savings push down interest rates, so that it’s easier for corporations to borrow money to invest in new plants and equipment. And this new capital stock gives workers more and better tools to work with, boosting their productivity, and eventually that increased productivity should boost wages.... We now have 18 months of data on investment since the passage of the TCJA, plenty of time for its increased incentives for private investment to have taken hold. But the data doesn’t come close to supporting the story told by TCJA proponents...

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The "elasticity of substitution" is an emergent property. It has very little to do with "technology" if only because there is not one single technology in the economy. There are lots of different types of machines and lots of ways to use workers and machines to produce things. And "rigid organization" is not quite right either here: Suresh Naidu (2014): Notes from Capital in the 21st Century Panel: "Perhaps a useful analogy is that this is the "Free to Choose" or “Capitalism and Freedom” for our time, from the left. I can’t think of a book that emerged from economics for a mass audience with as much reception since then. And what good news this is for economics! For 50 years Milton Friedman was the public face of partisan economics, and stamped it with a conservative public face that persisted. Maybe now Piketty’s book will give my discipline another public face...

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Ever since I stopped being a wee'un, I have heard that one should not use expansionary fiscal policy to rebalance the economy because of the dangers of public debt accumulation. Somehow, there was never an analogous focus on how rebalancing the economy through monetary policy might produce greater dangers of private debt accumulation. Until now: Martin Wolf: How Our Low Inflation World Was Made: "If we are to make sense of where the world economy is today and might be tomorrow, we need a story about how we got here. By 'here', I mean today’s world of ultra-low real and nominal interest rates, populist politics and hostility to the global market economy. The best story is one about the interaction between real demand and the ups and then downs of global credit. Crucially, this story is not over...

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This is not a paper where I have ever understood what features of the data are interacting with the model to produce the conclusions. It would be nice if I could crack this: Marjorie A. Flavin: The Joint Consumption/Asset Demand Decision: A Case Study in Robust Estimation: "The Michigan Survey of Consumer Finances... whether... consumption tracks current income more closely than is consistent with the permanent income hypothesis can be attributed solely or partially to borrowing constraints.... The paper uses a robust instrumental variables estimator, and argues that achieving robustness with respect to leverage points is actually simpler, both conceptually and computationally, in an instrumental variables context than in the OLS context.... Households do use asset stocks to smooth their consumption.... There is no evidence that the excess sensitivity of consumption to current income is caused by borrowing constraints.... Robust instrumental variables estimates are more stable across different subsamples, more consistent with the theoretical specification of the model, and indicate that some of the most striking findings in the conventional results were attributable to a single, highly unusual observation...

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For the past decade Robert Gordon has written about The Rise and Fall of American Growth, praising the first in our past that was and lamenting the second in our present that is. Now comes Dietz Vollrath with a lively, accurate, and essential corrective to Gordon's pessimism: growth is slow today, he demonstrates, not because our economy is failing but because our economy has succeeded: Dietz Vollrath: Optimal Stagnation: Why Slower Economic Growth Is a Sign of Success: "In 1940 you might have spent your money installing plumbing for running water, or a toilet.... The same went for air conditioning, a TV, or a computer at other points in time during the 20th century. But once we had those goods, then what did we spend our money on?... Goods became cheaper and we filled up our houses with them.... Spending turned towards services... longer and better vacations... classes... medical specialists... physical therapy... data... Netflix and Hulu.... The flow of workers out of producing goods didn’t signal some kind of failure.... In the 21st century... these shifts became a drag on economic growth...[for] most service industries have relatively low productivity growth.... As we shifted our spending from goods to services, this pulled down aggregate productivity growth, which is just a weighted average of productivity growth across different industries.... Baumol.... Labor is necessary to produce goods, but it is not part of the product itself. The person who assembled your fuel injector doesn’t have to be there for you to drive your car. On the other hand, for services labor is part of the product... you need to interact with a doctor, or lawyer, or waiter, or personal trainer, or financial advisor, or teacher.... It isn’t some kind of failure that service productivity growth is low, it is rather an inherent feature of those kinds of activities.... Choices born of success had the unintended consequence of putting a drag on the growth rate in the 21st century...

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We have had financial crises for nearly 200 years now. Yet our handling of those of the mid-nineteenth century was certainly no worse, and arguably better, than our handling of 2007-2010. All parts of "lend freely at a penalty rate on collateral that is good in normal times" were understood. Why weren't they understood in 2008?:

Karl Marx: Neue Rheinische Zeitung Revue: "The years 1843-5 were years of industrial and commercial prosperity, a necessary sequel to the almost uninterrupted industrial depression of 1837-42. As is always the case, prosperity very rapidly encouraged speculation. Speculation regularly occurs in periods when overproduction is already in full swing. It provides overproduction with temporary market outlets, while for this very reason precipitating the outbreak of the crisis and increasing its force. The crisis itself first breaks out in the area of speculation; only later does it hit production. What appears to the superficial observer to be the cause of the crisis is not overproduction but excess speculation, but this is itself only a symptom of overproduction. The subsequent disruption of production does not appear as [what it really is,] a consequence of its own previous exuberance, but merely as a setback caused by the collapse of speculation...

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Very good advice for California now—and for future congressional majority leaders and speakers and presidents who might represent the large majorities of American voters who want these problems addressed sensibly and substantially:

Heather Boushey: Equitable Growth CEO's Written Testimony at California Future of Work Commission: "The monopoly power problem... exacerbates inequality, contributes to wage stagnation, limits entrepreneurship, increases the cost of living, and stifles innovation.... Industry concentration and declining economic dynamism reduces wages by limiting workers’ employment options and opportunities for advancement, and allows firms to use their increasing power to squeeze worker compensation in favor of greater profits. Workplace fissuring, through the rise of independent contractors, franchisors, and contingent hiring, prevents workers from accessing career ladders, matching into the jobs they are best suited for, and gaining sufficient bargaining power to unlock wage increases. Persistent historical disparities such as wage discrimination and social norms reinforce occupational segregation into jobs that don’t pay well enough and offer little room for advancement. Yet policymaking over the past several decades has been moving in the wrong direction. Specifically: Antitrust law now allows firms to accrue and abuse monopoly power, not just over consumers but also in many cases over workers. Successive rounds of tax cuts, including the Tax Cuts and Jobs Act of 2017 and several tax cuts under the George W. Bush administration, have lowered the progressivity of the tax code and greatly decreased taxes on wealth, capital, inheritances, and corporate profits. Outdated labor law provides insufficient protection of workers and has facilitated the long decline of unions, traditionally the most vocal and ardent advocates for the middle class. We have an opportunity right now to take a step back to look at the scale and scope of the problems and develop real solutions...

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Always worth reading as a window into sane thinking about national security and related international non-economic plus political-economy thinking and circumstances:

Daniel W. Drezner: Your Interesting Late-Summer Foreign Policy Reads: "Normally when I do this, I recommend books. For a change of pace, however, this time I thought I would recommend some recent articles.... Kurt Campbell and Jake Sullivan, “Competition Without Catastrophe: How America Can Both Challenge and Coexist With China”.... Henry Farrell and Abraham L. Newman, “Weaponized Interdependence: How Global Economic Networks Shape State Coercion”.... Mary Sarotte, “How to Enlarge NATO: The Debate inside the Clinton Administration, 1993—95”.... Isaac Chotiner, “A Penn Law Professor Wants to Make America White Again”.... Penn law professor Amy Wax, ostensibly one of the intellectual leaders of 'national conservatism', beclowned herself repeatedly in her conversation with Chotiner. This claim was particularly ludicrous...

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

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

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

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

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

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

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

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

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

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From Noah Smith, an index of how the Republican Party has changed from "Massachusetts" to "Kentucky" nationalism over the past generation: from saying that the real Americans are those who have come here hoping to make a better life and join our community to saying that the real Americans are rural white people who fear others, and fear the future:

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

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I am not sure I get the very smart Wolfgang's point here. Yes, if you mortgage your intellectual integrity for insider influence, you no longer have your intellectual integrity to pledge. Where things go wrong is when others are willing to pretend that committed "experts" are independent in return for insider gossip:

Wolfgang Munchau: Age of the Expert as Policymaker Is Coming To an End: "Where the conflation of the expert and the policymaker did real damage was not to policy but to expertdom itself. It compromised the experts’ most prized asset—their independence. When economics blogging started to become fashionable, I sat on a podium with an academic blogger who predicted that people like him would usurp the role of the economics newspaper columnist within a period of 10 years. That was a decade ago. His argument was that trained economists were just smarter. What he did not reckon with is that it is hard to speak truth to power when you have to beg that power to fund your think-tank or institute. Even less so once you are politically attached or appointed. Independence matters...

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Extremely sharp thoughts on how we are wired at a very deep level to relate correlation and causation. This kind of identification of our heuristics and biases is essential to figuring out how to design societies in which people have a chance of making good judgments: Judea Pearl and Dana Mackenzie: Simpson's Paradox: "Any claim to resolve a paradox... should explain why people find the paradox surprising or unbelievable....When the paradox does occur, and we have to make a choice between two plausible yet contradictory statements, it should tell us which statement is correct.... A paradox... should entail a conflict between two deeply held convictions...

...Suppose that the choice is... between two properties, A and B. If the Democrat wins, the businessman has a 5 percent chance of making $ 1 on Property A and an 8 percent chance of making $ 1 on Property B. So B is preferred to A. If the Republican wins, he has a 30 percent chance of making $ 1 on Property A and a 40 percent chance of making $ 1 on Property B.... If the businessman’s decision to buy can change the election’s outcome... then buying Property A may be in his best interest. The harm of electing the wrong president may outweigh whatever financial gain he might extract from the deal....

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Note to Self: Council on Foreign Relations: Economics, Identity, and the Democratic Recession: Session Two: It’s not clear to me thatanyone who thought they had a lot of political influence twenty years ago now thinks they have more save, possibly, for Sheldon Adelson and our strange modern analog of Richard Neville, 16th Earl of Warwick: Rupert the Kingmaker. But even Rupert...

Look: the basic business model of Fox News is there are many people in America whose view of the world was not being validated by any of the major news networks. This was a market opportunity. Rupert Murdoch pursued this market opportunity. The form in which Roger Ailes and his successors pursued it took the form of scaring the piss out of old people, so their eyeballs would stay glued to the screen so they could be sold fake diabetes cures and overpriced gold funds.

But it is not at all clear to me that Rupert the Kingmaker thinks he’s in control now. There are other people willing to play the same game. Fox News tried to go in against Trump a little bit in 2016, and yet very quickly reversed course. I would like someone to tell me why: what did they see that made them not just get in bed with Trump but tie themselves spread-eagled to the mattress? David From once said: "We thought Fox News worked for us, but then we learned we worked for Fox News." Who, now, does Fox News think it must work for—or lose its audience and its profits?

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

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Hilzoy: "I'm baffled by people who say this, and not just bc I wonder whether they took the same view when Obama was President:

In His Hands: David it is God who chose and anointed President Trump for such a time as this. To judge God and His choice is a critical error. Your hatred for anyone is not God's fault. Remember hatred comes from satan and it is he whom you are joining forces with in hatred...

Suppose God does choose political leaders, at least in the sense of knowing that this particular creation would involve this leader, and creating it anyways. If I believed in an omniscient, omnipotent creator of the universe, I think I'd have to believe that this was true: if God is omniscient, s/he foresees everything, including all political leaders; given that knowledge, s/he created this world anyways. This is true for all actions. So, for instance, an omniscient creator had to foresee each and every crime ever committed, and for some reason s/he decided to create the world anyways. Thus, in just the same sense in which God "chose and anointed" Trump, God chose each crime.

Also, obviously, if the fact that Trump is President means that God chose and anointed him, then the fact that Hitler was Chancellor of Germany means that God chose and anointed him. Ditto for every horrible ruler ever. If you believe this (as I said, I think that someone who believes in an omnipotent, omniscient creator should think that God foresaw e.g. the Holocaust and chose, for reasons best known to him- or herself, to create this world anyways), and if you know ANYTHING about history, then I think you must conclude that God's ways are, indeed, unknowable to the human mind.

But also: that the fact that God chose to create a world in which Trump becomes President does not mean that s/he intended us to like Trump. It's standard Christian theology that God created this world knowing that Adam and Eve would sin, leading to immeasurable grief, but that this is still the best possible world, since only their sin could call for Christ's redemption of humanity. ("O felix culpa" and all that.) But it doesn't follow from that that our response to sin should be to accept it. On the contrary: we should fight it in our own hearts, and work to mitigate its effects on others. That's the point! If sin is in any way worth it, it's because of the good responses it enables. And those good responses do not include saying "yippee, I guess God must have chosen and anointed SIN!"

Similarly, if God created this world even knowing that it would include the Holocaust, it does not follow that THAT is OK. His creation leaves our response completely open. For many people, the idea that anything might make it OK to create a world including the Holocaust is too much to bear. I think that any Christian who is not deeply troubled by this needs to think harder. But NO Christian should say: it happened, so it must be part of God's plan, so let's just celebrate it.

That would be sociopathic.

But so is its close relative, "to pass judgment on any of the things that are part of human history, and thus things God must have foreseen." @inhissilence wrote: "To judge God and His choice is a critical error." This is true if taken VERY literally: we do not know the considerations that led God to create this particular world, the one in which Trump is President. But @inhissilence seems to mean something different: that since God created a world in which Trump is President, we do not get to judge TRUMP. You don't get to say that unless you're willing to extend it to all leaders in history (including Hitler, Pol Pot, Stalin, etc.), and also all actions (which God also foresaw and allowed.) (Think of your own Most Awful Action Of All Time.) If we don't get to judge these, at least to the degree necessary to think: I should oppose this—then I honestly don't see what remains of Christian works.

@hilzoy: You are wise., @hilzoy, yet you seem to think that Evangelical Christianity is a system of thought, rather than a collection of verse-sized weaponize texts to be deployed to induce obedience to the wills of those who, in Max Weber's term, "live off religion"...

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

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

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From October 11, 2018: Worthy Reads

stacks and stacks of books

Worthy Reads from Equitable Growth:

  1. I remember debating Columbia is Glenn Hubbard in Houston about the inheritance tax a few years ago. He claimed that the cultural and educational transmission of wealth from him to his children was more important then inheritance, hence there should be no inheritance taxes. That argument did not seem to make sense to me. And it now looks as though his initial claim that inheritance was less important was wrong: Elisabeth Jacobs and Liz Hipple: Are Today’s Inequalities Limiting Tomorrow’s Opportunities?: “An individual’s place on the economic distribution is supposed to reflect individual effort and talent, not parental resources and privilege. Yet this perspective ignores the mounting evidence of the myriad ways that poverty and economic inequality foreclose equality of opportunity...

  2. I have never understood why the other justices on the Supreme Court do not differ to Justice Breyer on antitrust issues. They really ought to. They do not: Howard Shelanski and Michael Kades: Competitive Edge: Judge Kavanaugh-Would he increase the divide between the public and judicial debate over antitrust enforcement?: "Over the past decade, the Supreme Court has, with one exception that we discuss below, followed a path of reduced enforcement, reflected in decisions weakening prohibitions against vertical restraints...

  3. Our Gabriel Zucman Is getting a very welcome increasing share of global attention for his very important tax haven work. His is a research team very much worth supporting an expanding: Matt O’Brien: Inequality is worse than we know. The super-rich really do avoid a lot of taxes: "On the legal end of the spectrum... companies shift their profits to show up in low-tax jurisdictions.... According to Berkeley economist Gabriel Zucman and his co-researchers... as much as 40 percent of all multinational profits and 50 percent of U.S. ones...

  4. As Hal Varian of Google and Berkeley said a decade ago, the right solution to the housing finance crisis was for everybody in the United States to default on their mortgage and move one house to the right. The policies pursued by the Obama administration wound up being very effective at rescuing banks and their shareholders, option holders, and executives, keeping them from experiencing financial harm. They proved totally ineffective at helping homeowners in distress: Corey Husak: How Not To Help Distressed Mortgage Borrowers: Evidence From The Great Recession In The United States: "The federal government has been criticized by many for failing to provide adequate assistance to U.S. homeowners who were financially devastated by the housing crisis and subsequent Great Recession and its aftermath in the late 2000s. New evidence suggests that even when assistance was given, it was poorly designed...

  5. We do not have to have a society in which the most important economic decision you make in your life is your choice of parents: Lily Batchelder: The “Silver Spoon” Tax: How to Strengthen Wealth Transfer Taxation: "30 percent of the correlation between parent and child incomes—and more than 50 percent of the correlation between the wealth of parents and the wealth of their children— is attributable to financial inheritances. This is more than the impact of IQ, personality, and schooling combined...

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Very Briefly Noted 2019-10-10:

  1. Wikipedia: The Imitation Game https://en.wikipedia.org/wiki/The_Imitation_Game_...

  2. J.K. Slingerland: Quantum vs Classical Computation http://www.thphys.nuim.ie/staff/joost/TQM/QvC.html_...

  3. Richard Kogan, Chad Stone, Bryann Dasilva, and Jan Rejeski (2015): Difference Between Economic Growth Rates and Treasury Interest Rates Significantly Affects Long-Term Budget Outlook https://www.cbpp.org/research/difference-between-economic-growth-rates-and-treasury-interest-rates-significantly-affects?fa=view&id=5277_...

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

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Very Briefly Noted 2019-10-09:

  1. Ray Kluender: Lost Income Is Bigger Burden Than Medical Bills for U.S. Workers https://www.bloomberg.com/opinion/articles/2019-10-08/lost-income-is-bigger-burden-than-medical-bills-for-u-s-workers_: "Most workers lack protection against disability...

  2. Daron Acemoglu https://economics.mit.edu/faculty/acemoglu...

  3. Quantitative Economics: Linear Regression in Python https://python.quantecon.org/ols.html...

  4. Shauna: On Edge: The Santa Ana Winds in Literature http://pasadena-library.net/adult_services/2017/the-santa-ana-winds-in-literature/...

  5. TV Tropes: Raymond Chandler https://tvtropes.org/pmwiki/pmwiki.php/Creator/RaymondChandler...

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

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

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

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

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

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Clayton Yuetter (March 24, 1992): When 'Fairness' Isn't Fair https://www.nytimes.com/1992/03/24/opinion/when-fairness-isn-t-fair.html?searchResultPosition=1: "Class warfare, discredited throughout the former Communist world, seems to have found new life in American political circles. A front-page article in the March 5 New York Times described one example: an allegation that the recovery of the 1980's—and hence the conservative philosophy of the Bush Administration—helped the rich and hurt the poor. This analysis, a reprise of the so-called fairness argument, rests on a Congressional Budget Office study and an analysis by a Massachusetts Institute of Technology economist, Paul Krugman. The C.B.O. and Mr. Krugman have played prominent roles in shaping the liberal version of the fairness debate, and their allegations have become a staple in the speeches of Democratic politicians. But the analysis suffers from grievous flaws. I will cite just a few. First, the claim that the top 1 percent of taxpayers raked in 60 percent of the benefits of the Reagan-Bush boom rests on a statistical sleight of hand. The C.B.O.-Krugman analysis masks the progress of the Reagan-Bush expansion by throwing in data from the Carter era, when the poor got poorer and the rich got poorer. During the Reagan-Bush boom, by contrast, the rich paid more in taxes and the poor made more in income. Minorities enjoyed a greater leap in wealth, employment and mobility than whites. The middle class shrank because more people became 'rich'. That's the Reagan-Bush record...

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CBO (March 1992): Measuring The Distribution of Income Gains https://delong.typepad.com/cbo-income-gains.pdf: "For several years, the Congressional Budget Office (CBO) has developed estimates of the distribution of income and federal taxes in response to requests from Committees of the Congress. CBO published the original estimates, and various publications of the Committee on Ways and Means have included more recent estimates along with explanations of the methodology used to calculate them and the staffs descriptions of the patterns they reveal. Policy analysts, commentators, and the media frequently reconfigure, interpret, analyze, and criticize the estimates. In the process, the interpretations and conclusions of these secondary appraisals are sometimes-and incorrectly-attributed to CBO. A case in point: recent media stories have used CBO statistics on incomes to buttress a contention about the increasing inequality of after-tax incomes among families. For example, The New York Times reported on March 5 that 'The richest 1% of families received 60% of the after-tax income gain' between 1977 and 1989. That figure, which was attributed to both CBO and Professor Paul Krugman of the Massachusetts Institute of Technology, was actually Professor Krugman's reconfiguration of CBO data contained in a December 1991 report issued by the House Committee on Ways and Means. Many of the commentaries that resulted criticized CBO's estimates and methodology or ascribed the conclusions in the original article to CBO. This memorandum seeks to clarify some of the confusion...

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Sylvia Nasar (December 12, 1992): Tapping the Rich May Prove Tricky https://www.nytimes.com/1992/12/12/business/tapping-the-rich-may-prove-tricky.html?searchResultPosition=257: "Getting the really rich—the people who reaped an outsize share of the economic gains of the 1980's—to pay more was a major plank of the Democratic campaign.... The problem is that while higher tax rates on high incomes are likely to provide a good deal of new money, they are not likely, barring an unexpectedly buoyant economy, to generate the 92 billion over four years that the Clinton camp has claimed.... 'If there's a significant change in rates, say from 31 percent to 41 percent, people will change their behavior to take advantage of ways to defer income', Professor Poterba said. 'It would set into motion a return to pre-1986 tax shelters'.... Mr. Clinton's strategists must find roughly 100 billion a year through permanent tax increases or spending cuts to fulfill his deficit-shrinking pledge...

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