#noted Feed

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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Worthy Reads from February 27, 2019

Worthy Reads at Equitable Growth:

  1. Great conversation between Heather Boushey and Emmanuel Saez. My favorite highlight: Heather Boushey: In Conversation with Emmanuel Saez: "Kansas... illustrates beautifully from a research perspective even though it’s a disaster in terms of public policy... tax avoidance... pass-through businesses... huge incentives for high-income earners to reclassify... a big erosion of the wage income tax base in the state... a much bigger negative impact on tax revenue than would have been predicted mechanically.... When governments have actually to balance their budgets, they realize that taxes are useful, and that brings the two pieces of the debate together.... Certainly Kansas didn’t experience an economic boom...

  2. Damon Jones came to Equitable Growth and gave a paper about Alaska's Oil Dividend Fund that made me significantly more optimistic about Universal Basic Income: Damon Jones: Labor Market Impacts of Universal and Permanent Cash Transfers: "UBI-like cash transfer in Alaska: unconditional, universal, long-run, captures macro effects. The macro effects of Alaska PDF on labor supply less negative than the macro effects of an unconditional cash transfer... a very small *(0.001) and insignificant effect on employment to population...

  3. Excellent from the very sharp Elena Prager and Matt Schmitt down at UCLA and out by Lake Michigan. Hospital mergers appear to be as much about gaining market power with respect to health-care workers as about gaining market power with respect to patients and their insurers.There continues to be very little evidence that they are about efficiencies of any kind: Elena Prager and Matt Schmitt: Employer Consolidation and Wages: Evidence from Hospitals: "We find evidence of reduced wage growth in cases where both (i) the increase in concentration induced by the merger is large and (ii) workers’ skills are at least somewhat industry-specific. Following such mergers, annual wage growth is 1.1pp slower for skilled non-health professionals and 1.7pp slower for nursing and pharmacy workers than in markets without mergers.... Observed patterns are unlikely to be explained by merger-related changes aside from labor market power. Wage growth slowdowns appear to be attenuated in markets with strong labor unions, and we do not observe reduced wage growth after out-of-market mergers that leave employer concentration unchanged...

  4. I did not go to last month's Niskansen Center Conference on "Beyond Left and Right": Reviving Moderation in an Era of Crisis and Extremism. But I did watch it. And watching it did provoke a tweetstorm about what I think it needs to do that some have found interesting: Brad DeLong: I think it is fair to say that the already-broken American political public sphere has become significantly more broken since November 8, 2018...

  5. The WCEG has money to spend to support research. It is very easy and straightforward to apply: Equitable Growth: Request for Proposals: "Equitable Growth supports inquiry utilizing many different kinds of evidence, relying on a variety of methodological approaches and cutting across academic disciplines. We are especially interested in projects using data linking individuals, households, and/or firms, and those that utilize geocoded data or rigorous comparative case studies—including across places in the United States, as well as comparing the experience of different countries—that allow for insight into the role of place in shaping economic opportunities and outcomes...

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In my email stream this morning. With Trump and the Trumpists, "the cruelty is the point" is almost always the first thing you should reach for to understand their actions: [Redacted]: This story about Iranians turned back at airports https://mail.google.com/mail/u/0/#inbox/FMfcgxwGCtPhzCKpxRhgXMhNMQbHVNvh: 'Just astonishing. Even if you don't feel for these young people—and how could you not?—it just makes zero sense to have a system in which one set of government workers engage in the expensive task of vetting these students, and then some random CBP schmuck can override their decision, in the moment, on the basis of noting. I understand that "the cruelty is the point" is part of the explanation here, but we do have a preexisting government apparatus which exists for the worthy goal of making sure these talented students can come study here. There's just some real schizophrenia in the government...

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At a very basic level, there is something very wrong with the New York Times. Bloomberg the most viable challenger to Sanders when his attachment to the Democratic Party is even less than Sanders's, he has few grassroots supporters, and he does not thrive when challenged verbally? Move Warren out of the Senate, where she is very effective, and into HHS? Bernie Sanders as Treasury Secretary? This is not even phoning it in. In a way, it is the Fox News journalism strategy but for a different demographic: let's tell our audience not what they need to learn but what we think they want to hear. It is, I think, as poisoned: Scott Lemieux: Who Moved Tom Friedman's Cheese? http://www.lawyersgunsmoneyblog.com/2020/02/who-moved-tom-friedmans-cheese: 'I regret to inform you that Tom Friedman has written about electoral politics again.... "Something extraordinary... a national unity ticket.... What would this super ticket look like? Well, I suggest Sanders—and Michael Bloomberg, who seems to be his most viable long-term challenger..." It’s hard to see how a longtime Republican who is third in the national polling averages, leading in the polls in zero states despite a massive ad blitz, and coming off one of the most humiliatingly bad debate performances in the history of the contemporary primary system is Bernie’s “most viable long-term challenger,” but moving right along.... "these will be my cabinet choices—my team of rivals.... I want Mike Bloomberg (or Bernie Sanders) as my secretary of the Treasury. Our plans for addressing income inequality are actually not that far apart.... I will ask Elizabeth Warren to serve as health and human services secretary..." “Bloomberg or Bernie for Secretary of the Treasury—doesn’t matter, they’re basically the same. Oh, and let’s give Republicans an extra Senate seat for a crucial few months so that Elizabeth Warren can have a second-tier cabinet position in an area... not her main area of interest but probably torpedoed her campaign. And let’s get someone who has been very successful winning elections in a purple state out of the Senate too. Does control of that institution really matter anyway?” Hard to see any flaws in this logic!...


#noted #2020-03-03

Once again, the fact that the Republican Party applauds and that Washington journalists pretend that this emperor has clothes is deeply disturbing: John Amato: Trump Shocked The Flu Can Be Deadly https://crooksandliars.com/2020/02/trump-shocked-flu-can-be-deadly: 'Most Americans understand that the flu kills thousands of people a year-especially the elderly.... I guess Trump finally went to an actual briefing... finally listening to something other than Fox News and Lou Dobbs wax poetic about his awesomeness.... I can't explain how uneducated and myopic his words were when he said this: "I want to you understand something that shocked me when I saw it. I spoke with the doctor on this. I was really amazed and I think most people are amazed to hear it. The flu in our country kills from 25,000 people to 69,000 people a year. That was shocking to me. So far if you look at the 15 people, they're recovering. One is pretty sick. But hopefully will recover. The ruse in great shame. Think of that. 25,000 to 69,000. Over the last ten years, we've lost 360,000. These are people that have died from the flu. From what we call the flu. Hey, did you get your flu shot? And that's something..." It's not shocking or amazing to over 300 million people in the United States. It's been a known fact for decades. But to this imbecile, it was a revelation. And yes, it is called the flu. Bravo. He acted like a toddler who first learns that fire burns your hand...

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OK. I have got to stop playing my position, because this is more important for America today: Jill Lepore: The Last Time Democracy Almost Died https://www.newyorker.com/magazine/2020/02/03/the-last-time-democracy-almost-died?: 'The endless train of academics were also called upon to contribute to the nation’s growing number of periodicals. In 1937, The New Republic, arguing that “at no time since the rise of political democracy have its tenets been so seriously challenged as they are today,” ran a series on “The Future of Democracy,” featuring pieces by the likes of Bertrand Russell and John Dewey. “Do you think that political democracy is now on the wane?” the editors asked each writer. The series’ lead contributor, the Italian philosopher Benedetto Croce, took issue with the question, as philosophers, thankfully, do. “I call this kind of question ‘meteorological,’ ” he grumbled. “It is like asking, ‘Do you think that it is going to rain today? Had I better take my umbrella?’ ” The trouble, Croce explained, is that political problems are not external forces beyond our control; they are forces within our control. “We need solely to make up our own minds and to act”...

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"Populism"—in today's climate, neo-fascism would be a better phrase because the original populists actually had policies that were popular and effective (in some cases at least) in boosting the well-being of the people—is only strengthened by a small amount via the economic insecurity channel. But other factors boosting "populism" have currently made it influential enough that that small boost can be politically decisive. Excellent work from Yotam Margalit: Yotam Margalit: Economic causes of populism: Important, marginally important, or important on the margin https://voxeu.org/article/economic-causes-populism: 'A common explanation for the rise of populism is economic insecurity driven by forces such as trade, immigration, or the financial crisis. This column, part of the Vox debate on populism, argues that such view overstates the role of economic insecurity as a driver. In particular, it conflates economic insecurity being important in explaining the overall populist vote and being important by affecting election outcomes on the margin. The empirical findings indicate that the share of populist support explained by economic insecurity is modest...

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This was absolutely great great great great news for us associated with Equitable Growth: Equitable Growth: Longtime Capitol Hill Staffer Named Policy Director at Equitable Growth https://equitablegrowth.org/press/longtime-capitol-hill-staffer-named-policy-director-at-equitable-growth/: 'WASHINGTON—The Washington Center for Equitable Growth today announced that longtime congressional staffer Amanda Fischer has joined the organization as its new policy director. “As our new policy director, Amanda will lead the development of our policy priorities and help position the organization as a go-to resource for understanding the impact of rising inequality in the U.S. economy and what policymakers can do about it,” said Equitable Growth President and CEO Heather Boushey. “Amanda brings a wealth of knowledge and experience that will help advance an evidence-backed policy agenda to promote economic growth that is strong, stable, and broadly shared.” Fischer most recently served as chief of staff for Rep. Katie Porter (D-CA)...

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This was, I am told, a very good sbow: Equitable Growth: Vision 2020 Book Release Breakfast https://equitablegrowth.org/event/vision-2020-book-release-breakfast/: 'The Washington Center for Equitable Growth is proud to announce that it will be releasing its new book, Vision 2020: Evidence for a Stronger Economy, at a breakfast event on February 18, 2020. Authored by leading scholars across the country, this compilation of 21 essays highlights a range of new ideas and the research behind them. We compiled Vision 2020 so the latest research informs critical election-year economic policy debates and to inspire decisionmakers to take action to address inequality’s subversive effect on broadly shared and sustainable economic growth. Building on many of the key themes and ideas from Equitable Growth’s Vision 2020 conference, this package of policy proposals tackles many of the ways that the increasing concentration of economic resources translates into political and social power. Panelists: Heather Boushey... Robynn Cox... Susan Lambert... Fiona Scott Morton...

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Comment of the Day: Dilbert Dogbert: I am old as dirt. https://www.bradford-delong.com/2020/02/deskilling-among-manufacturing-production-workers-vox-cepr-policy-portal.html#comment-6a00e551f0800388340240a509a3d8200b I remember how all the magazines of my youth were full of do it yourself articles. Now the mags I pickup from time to time are about buying stuff. I used to know the publisher of Sunset Magazine, Bill Lane. As a young married it was full of DIY articles. Now it is full of buy it stuff. What has happened is the DIY has shifted to the internet. I worked up close and personal with engineering either as a draftsman or as an engineer. A lot of the skills I learned as a draftsman are now done by a drafting program. Same with a lot of the skills i learned as an engineer. I have built 7 boats over my lifetime. Had to learn all those old shipbuilding skills from the days of wooden boats and sails. Today's mass employment has to be deadly dull. Maybe that is why loans for education became so onerous. Keep the slaves bound to the debt as they go quietly crazy...

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Equitable Growth founder John Podesta says very wise things as he lays out the roadmap for repairing American democracy: Author: John Podesta: What House Democrats should do now - The Washington Post https://www.washingtonpost.com/opinions/2020/02/05/country-needs-houses-oversight-now-more-than-ever/: 'The House is the only governmental body with the power and will to expose Trump’s corruption. Unfortunately, the other institutions that were supposed to hold a corrupt president accountable have protected him instead. The attorney general, America’s chief law enforcement officer, has run an interference campaign to protect Trump from accountability. Lawyers at the White House and Office of Management and Budget have rendered legal opinions enabling presidential actions that the independent Government Accountability Office have found to be unlawful, and that constitutional scholars on the left and right have said are dangerous and unprecedented.... First, let the oversight committees get back to basics. During the impeachment process, a number of House committees went largely quiet. Now they should aggressively pursue unfinished business, including addressing Trump’s efforts to take away health-care protections for people with preexisting conditions and to raid the U.S. military budget to fund his useless wall at the southern border.... Second, complete the story that the Senate Republican leadership wanted to spike. The House majority should expose the Senate impeachment trial for what it was—a coverup—by subpoenaing witnesses such as Bolton, Mulvaney, Trump’s personal lawyer Rudolph W. Giuliani, and Giuliani associates Lev Parnas and Igor Fruman...

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Kim Clausing's Open is high on my list for very good policy books of the past year. Attempts to achieve social and egalitarian goals by closing off the international economy buy what they buy at an extremely heavy price, and Kim Clausing is very convincing that that price is rarely worth paying. And that leaves out all of the restrictions on openness that are not aimed at accomplishing egalitarian and social goals: Kimberly Clausing: Open: The Progressive Case for Free Trade, Immigration, and Global Capital http://irle.berkeley.edu/event/open-the-progressive-case-for-free-trade-immigration-and-global-capital: "International trade brings countries together by raising living standards, benefiting consumers, and making countries richer. Global capital mobility helps both borrowers and lenders. International business improves efficiency and fosters innovation. And immigration remains one of America’s greatest strengths, as newcomers play an essential role in economic growth, innovation, and entrepreneurship. Closing the door to the benefits of the open economy would cause untold damage for Americans. Instead, Clausing outlines a progressive agenda to manage globalization more effectively, presenting strategies to equip workers for a modern economy, to modernize tax policy for a global economy, and to establish a better partnership between society and the business community...

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Claudia Sahm is making the podcast circuit. Definitely worth listening to: Tracy Alloway and Joe Weisenthal: This Is How to Use Fiscal Stimulus to Stave Off The Next Recession https://www.bloomberg.com/news/articles/2020-02-03/this-is-how-to-use-fiscal-stimulus-to-stave-off-the-next-recession: 'There's a growing consensus that governments need to act more aggressively in using fiscal policy to stave off the next recession, and that monetary policy simply isn't powerful enough. But how do you actually go about it? What do you spend the money on, and how do you get politicians to disburse it in a timely manner? On this week's Odd Lots, we speak with Claudia Sahm, a former Fed economist who is now at the Washington Center for Equitable Growth, on ways to systematize and automate an early and aggressive fiscal response to economic weakness. Sahm has achieved fame for her so-called "Sahm Rule" which can provide policymakers with an early warning sign of when a recession might be brewing...

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Social democracy makes progress in the U.S. only when the middle class thinks it has interests in common with the working class and the poor. On a substantive level, this is always the case: there is a lot of mobility across the generations, and middle-class parents are highly likely to have some poor children who need more than just a safety net. On a rhetorical level, however...: Jorge G. Castañeda: Is America Ready for a Welfare State? https://www.project-syndicate.org/commentary/democratic-presidential-candidates-support-welfare-state-by-jorge-g-castaneda-2019-05: 'Several leading Democratic candidates in the 2020 US presidential race favor introducing elements of a modern welfare state in health care, childcare, and education. Whether a Democrat wins or loses in 2020, social democracy has re-emerged in American politics for the first time since the 1930s.... America’s middle class swelled and prospered... effectively preventing the emergence of the sort of welfare state that other rich countries began to establish from the late nineteenth century onward. True, the US introduced a federal old-age pension (Social Security) in the 1930s, and established the government-funded Medicare and Medicaid health-insurance programs in the 1960s. But as long as middle-class Americans enjoyed full employment and relatively high wages, bolder ideas, such as universal government-funded health care and proper unemployment insurance, remained off the mainstream political agenda.... Several obstacles stand in the way of bringing these welfare-state proposals to fruition after 2020.... Nonetheless, leading Democratic candidates are advocating welfare-state policies that seemed almost unthinkable in America until recently. As these ideas gain traction among the country’s squeezed middle class, they are changing the terms of US political debate. For that reason alone, the 2020 presidential campaign already seems light years away from the bromides and vacuous invective of 2016...

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Playing my position requires not playing my position once again, but sending you to Last Honest Tory Martin Wolf: Martin Wolf: Trump’s Re-Election Would Be Dangerous for the World https://www.ft.com/content/3749175a-4c17-11ea-95a0-43d18ec715f5: 'With one bound, US President Donald Trump was free. With the expected display of naked partisanship, Senate Republicans (with the exception of Mitt Romney) abandoned their constitutionally mandated role as judges of his alleged abuse of power. They have deferred the decision to the voters in November’s presidential election. Mr Trump will possess many advantages: passionate supporters; a united party; the electoral college; and a healthy economy. His re-election seems likely.... If Mr Trump wins, this victory could well be even more significant than his first. For the American people to choose a classic demagogue twice could not be dismissed as an accident. It would be a decisive moment. The most obvious implication of Mr Trump’s victory would be for liberal democracy in the US. The president believes he is above accountability to the law or to Congress for what he does in office. He holds himself accountable only to the electorate (or, rather, to his electorate). He believes, too, that appointed members of his administration, public servants and the elected officials of his party all owe their loyalty to himself, not to any higher cause. The founding fathers feared just such a man.... We are living through a hinge moment in history. The world needs exceptionally wise and co-operative global leadership. We are not getting it. It may be folly to expect it. But Mr Trump’s re-election could well mark a decisive failure. Pay attention: the year 2020 matters...

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MIT Technology Review noted Equitable Growth leader Heather Boushey's book Unbound: David Rotman: The Best Books in 2019 on the Economy We Live in https://www.technologyreview.com/s/614993/the-years-best-books-on-the-economy-we-live-in/: 'The year 2019 produced some evidence-based antidotes to the trendy political narratives of robot domination and the collapse of capitalism. I’m struck by the number of truly brilliant books on economics this year. My list of favorites is below.... Unbound: How Inequality Constricts Our Economy and What We Can Do about It by Heather Boushey: Think rising levels of inequality are just an inevitable outcome of our market-driven economy? Then you should read Boushey’s well-argued, well-documented explanation of why you’re wrong...

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From the smart people at the Center for American Progress: The gap between campaign promise and policy reality under the Trump administration appears to me at least to be... uniquely wide. And I do not think that this is motivated reasoning on my part: Center for American Progress: Trump’s Broken Promises https://trumpsbrokenpromises.org/: 'What Trump Promised: As a 2016 candidate, Donald Trump made huge promises to American families, claiming that he’d work for them rather than wealthy donors and corporate interests. He promised to lower drug prices and give people great health care. He claimed he’d increase wages. He boasted that factories would stop moving overseas. Here’s the Reality: He’s siding with insurance companies to end protections for people with pre-existing conditions. He’s siding with drug companies as drug prices soar. And he passed a tax bill that gave almost all the benefits to the wealthy and big corporations that even rewarded companies for moving jobs overseas...

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Ben Thompson: The Tragic iPad https://stratechery.com/2020/the-ipad-at-10-the-ipad-disappointment-ipads-missing-ecosystem/: 'John Gruber is disappointed in the current state of the iPad.... "I don’t think the iPad has come close to living up to its potential. By the time the Mac turned 10, it had redefined multiple industries. In 1984 almost no graphic designers or illustrators were using computers for work. By 1994 almost all graphic designers and illustrators were using computers for work. The Mac was a revolution. The iPhone was a revolution. The iPad has been a spectacular success, and to tens of millions it is a beloved part of their daily lives, but it has, to date, fallen short of revolutionary…. Software is where the iPad has gotten lost. iPadOS’s “multitasking” model is far more capable than the iPhone’s, yes, but somehow Apple has painted it into a corner in which it is far less consistent and coherent than the Mac’s, while also being far less capable. iPad multitasking: more complex, less powerful. That’s quite a combination..." I could not agree more with Gruber’s critique. In my opinion, multi-tasking on the iPad is an absolute mess, and it has ruined the entire interface; I actively dislike using the iPad now, and use it exclusively to watch video and make the drawings for Stratechery. Its saving grace is that it is hard to discover.... There are, needless to say, no companies built on the iPad that are worth anything approaching $1 billion in 2020 dollars, much less in 1994 dollars, even as the total addressable market has exploded, and one big reason is that $4.99 price point. Apple set the standard that highly complex, innovative software that was only possible on the iPad could only ever earn 5 bucks from a customer forever (updates, of course, were free). This remains one of Apple’s biggest mistakes.... Being a great platform for developers is about more than having a well-developed SDK, or an App Store: what is most important is ensuring that said developers have access to sustainable business models that justify building the sort of complicated apps that transform the iPad’s glass into something indispensable. That simply isn’t the case on iOS. Note carefully the apps that succeed on the iPhone in particular: either the apps are ad-supported (including the social networks that dominate usage) or they are a specific type of game that utilizes in-app purchasing to sell consumables to a relatively small number of digital whales. Neither type of app is appreciably better on an iPad than on an iPhone; given the former’s inferior portability they are in fact worse. A very small number of apps are better on the iPad though: Paper, the app used to create the illustrations on this blog, is a brilliantly conceived digital whiteboard that unfortunately makes no money.... Garageband and iMovie are spectacular, but neither has the burden of making money.... To be fair, would that we all could “fail” like the iPad; it was an $11 billion business last fiscal year, more than double the size of the Mac. That, though, is why I did not call it a failure: the tragedy of the iPad is not that it flopped, it is that it never did, and likely never will, reach that potential so clearly seen ten years ago...

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Josiah Ober: Melos's Prospects https://delong.typepad.com/files/ober-melos.pdf: 'Athens inherited, and, under Pericles’ leadership perfected, the Minos paradigm of naval power, colonization, hostility to non-Greek populations, and subjection of weaker states. By the time of the outbreak of the Peloponnesian War, most of Athens’ formerly free allies had been reduced to the status of tribute paying subjects. Thucydides is certainly right to suppose that this was coalition-building on a scale unequalled by earlier Greek hegemonies. Based on epigraphic evidence and population estimates, at its height, Athens’ empire encompassed some 300 communities and perhaps two and a half million persons–roughly a third of the total Greek-speaking population. But Thucydides had shown his reader that Athens followed a well-trodden path, and that the path was predicated on bargains based on mutual advantage...

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Joel Mokyr, Assaf Sarid, & Karine van der Beek: Human Capital, Millwrights, and Industrialisation in 18th-Century England https://voxeu.org/article/human-capital-millwrights-and-industrialisation-18th-century-england: 'The consensus among economic historians has been that Britain’s leadership during the Industrial Revolution owed little to the school system. But recent work on human capital suggests that we should rethink this consensus on the role of human capital. This column shows how millwrights–highly skilled carpenters who specialised in constructing and repairing watermills–had a persistent effect on the mechanisation of textile- and iron-making and on the economic expansion that was taking place on the eve of the Industrial Revolution...

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Paul Krugman (2015): The Regrettable Man https://krugman.blogs.nytimes.com/2015/02/28/the-regrettable-man/: 'Never mind the bubble denial; almost five years have passed since Greenspan declared that we were on the verge of becoming Greece, Greece I tell you, and wrote one of the most awesomely terrible passages in the history of economic policy: "Despite the surge in federal debt to the public during the past 18 months—to $8.6 trillion from $5.5 trillion—inflation and long-term interest rates, the typical symptoms of fiscal excess, have remained remarkably subdued. This is regrettable, because it is fostering a sense of complacency that can have dire consequences." Yep: he was annoyed at the markets for failing to deliver the crisis he was expecting, and considered it “regrettable” that the crisis had not arrived. Actually, though, this isn’t too different from the sentiment expressed by Paul Ryan and John Taylor, denouncing the Fed’s actions because they were preventing a fiscal crisis. Anyway, the saga of the inflation cult continues...

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A common thread these days: the enormous disconnection of so much of our elite and governing discourse from anything tart could be described as "reality". Consider Martin Wolf observing Boris Johnson's attempts to do the job of Great Britain's Head of Government: Martin Wolf: UK About to Shoot Itself in Both Feet https://www.ft.com/content/de2a1e52-4677-11ea-aee2-9ddbdc86190d: 'Britain’s demands for its negotiations with the EU are unrealistic: Boris Johnson has an autonomy fetish. The UK prime minister’s fetish is the belief that his country not only has the sovereign right to shoot itself in both feet, but also has a duty to do so if the alternative is to allow EU institutions any role in its affairs. Brexit, he insists, means autonomy. If he persists with this demand, it is likely that, early next year, the UK will suffer the complete rupture of trading relationships it has built up over 47 years.... British government... demands... are unrealistic in three respects: the first is the hope that any agreement will be between “sovereign equals”; the second is the belief that the EU would agree a Canada-style agreement; and the third is that an Australian relationship with the EU, governed by World Trade Organization rules, is a reasonable alternative.... Sovereignty is not the same thing as power. The EU has 446m people, against the UK’s 66m.... Let us be clear: this is not a relationship between equals. The difficulty for the UK in its relationship with the EU is rather that it is too small to be an equal and too big not to matter.... The EU is saying here is that your autonomy stops where it inconveniences us. If the UK insists upon it, then the deal it seeks may not be agreed. To the reasonable conclusion that no deal is likely, three replies are possible.  The first is that the EU will give in. That is quite unlikely. For the EU to back down on the issue of the “level playing field”, to take one example, would require it to trust the UK not to compete by undermining the EU’s standards. But what else—the EU will ask—is all this freedom for?... A second response is that it does not matter to the UK if no deal is reached. But it does.... A last response is that, in the end, Mr Johnson will retreat from his red lines. That is what he did last October over the Irish border issue, when he accepted the economic dismemberment of his own country, something his predecessor had refused outright, all the while denying he had done any such thing. The ability to surrender while successfully insisting that one has not is a form of genius. Maybe, the prime minister can find a description for humiliating surrenders that dress them up as great victories. I would certainly not put it past him. This, however, is hope against hope...

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A new attempt to launch a journal not so much of historical political economics, but of historical human sciences economics, from the extremely sharp and thoughtful Marc Flandreau. We wish him well: Marc Flandreau: Capitalism: A Journal of History and Economics https://cap.pennpress.org/: 'Capitalism: A Journal of History and Economics offers a trans-disciplinary forum for the examination of the history of economic phenomena broadly conceived. It features original and peer-reviewed contributions by authors from across the humanities and social sciences on the historical dimensions of markets, capitalism, political economy, and economic thought. It is also interested in how economic questions interact with those of power, knowledge, race, class, and gender, as well as the interplay between the environment and the economy, in any region of the world. The journal aims to publish canon-questioning research that challenges and denaturalizes existing categories and modes of analysis. To those ends, we welcome any methodological or theoretical approach so long as there is a historical dimension to the analysis...

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I learned from Claudia Goldin that women's acquiring the social and technological power to plan win childbearing would take place was one of the most liberating things that happened to American women in the 20th century. Still true. Rolling back that power has huge costs: Kate Bahn: _"New research demonstrates https://twitter.com/LipstickEcon/status/1222557020747857925 the costs associated with abortion restrictions. I spoke to Emily R Peck about how “it’s not just whether you have a child or not but whether you have control over those decisions.” Bodily autonomy translates to more opportunities in the economy...

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If you are in DC, definitely a thing to go to: Equitable Growth: EconCon 2020 https://econcon2020.org/: 'We are the economy: EconCon 2020 is a movement-wide convening that brings together organizers, campaign professionals, researchers, experts, communicators, and advocates from across the country and the movement. Attendees will build connections, discuss pressing issues of the day, plan for the future, and learn how to fit a wide range of policy debates into a coherent progressive economic worldview. Together, and by using every channel available, we will be able to advance an economic vision that delivers shared, sustainable growth and true prosperity for all...

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Back from nine years ago now—how technology cannot be the successful key to development because it is a force multiplier for both honesty and dishonesty, both fair-dealing and corruption, for competence and incompetence. And the problems of economic development have always been primarily problems of corruption, dishonesty, and incompetence: Kentaro Toyama: Technology Is Not the Answer: "Information technology amplified the intent and capacity of human and institutional stakeholders, but it didn't substitute for their deficiencies. If we collaborated with a self-confident community or a competent non-profit, things went well. But, if we worked with a corrupt organization or an indifferent group, no amount of well-designed technology was helpful.... We also expect too much from other technologies, institutions, policies and systems.... Something other than TIPS still demands attention—something I've so far called good 'intent and capacity', and what in future posts I'll call virtue...


#noted #2019-08-29 

Note this and note this well: The principal reason U.S. relative female labor-force participation is lagging behind OECD peer economies is that our society is markedly less friendly to women working outside the home than our peer societies are: Elisabeth Jacobs and Kate Bahn: Women’s History Month: U.S. Women’s Labor Force Participation: "A change in direction for U.S. policies related to childcare and early education, along with a strong national paid leave policy for family leave could help to reverse the downward trend of U.S. women’s labor force participation and put it back on the same path that most other developed countries are on...

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If you believe that the proper purpose of markets is to be effective societal decision-making mechanisms for choosing the path to equitable growth, then financial markets raise to special concerns. As John Maynard Keynes put it, the special object of financial markets is then "to defeat the dark forces of time and ignorance which envelop our future". But here there are two problems: First, people have a very limited ability to form reasonable expectations and make correct judgments, and so the building blocks of which financial markets are constructed are far from adequate. Second, the bandwidth of the signals that are financial market prices is not wide enough to allow for the coordination of expectations and beliefs——even supply supply balances demand in financial markets, many peoples expectations I will be brutally disappointed even if there are no surprise events in the outside world, and that disappointment of expectations is a cause of major trouble. The Clower-Leijonhufvud UCLA macro school of the 1960s worried intensively about these issues. It was ignored. Now it has only one remaining eloquent standardbearer. Listen to him: David Glasner: My Paper “Hayek, Hicks, Radner and Four Equilibrium Concepts” Is Now Available Online https://uneasymoney.com/2020/01/30/my-paper-hayek-hicks-radner-and-four-equilibrium-concepts-is-now-available-online/: 'Here is the abstract: "Hayek was among the first to realize that for intertemporal equilibrium to obtain all agents must have correct expectations of future prices. Before comparing four categories of intertemporal, the paper explains Hayek’s distinction between correct expectations and perfect foresight. The four equilibrium concepts considered are: (1) Perfect foresight equilibrium of which the Arrow-Debreu-McKenzie (ADM) model of equilibrium with complete markets is an alternative version, (2) Radner’s sequential equilibrium with incomplete markets, (3) Hicks’s temporary equilibrium, as extended by Bliss; (4) the Muth rational-expectations equilibrium as extended by Lucas into macroeconomics. While Hayek’s understanding closely resembles Radner’s sequential equilibrium, described by Radner as an equilibrium of plans, prices, and price expectations, Hicks’s temporary equilibrium seems to have been the natural extension of Hayek’s approach. The now dominant Lucas rational-expectations equilibrium misconceives intertemporal equilibrium, suppressing Hayek’s insights thereby retreating to a sterile perfect-foresight equilibrium..." And here is my concluding paragraph: "Four score and three years after Hayek explained how challenging the subtleties of the notion of intertemporal equilibrium and the elusiveness of any theoretical account of an empirical tendency toward intertemporal equilibrium, modern macroeconomics has now built a formidable theoretical apparatus founded on a methodological principle that rejects all the concerns that Hayek found so vexing denies that all those difficulties even exist. Many macroeconomists feel proud of what modern macroeconomics has achieved, but there is reason to think that the path trod by Hayek, Hicks and Radner could have led macroeconomics in a more fruitful direction than the one on which it has been led by Lucas and his associates..."

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Claudia Sahm's Sahm Rule for direct payments when unemployment rises is getting more airplay right now—and the unemployment rate is now likely to rise over the next six months. I first saw this proposal in a novel Robert Heinlein published in 1947, Beyond This Horizon about life in a future near utopia: Jeanna Smialek: ‘Now Is the Time’: A Fed Official Urges Congress to Plan for Recessions https://www.nytimes.com/2020/02/21/business/economy/fed-rate-recession-congress-stimulus.html: 'One such proposal is the so-called Sahm Rule. Created by Claudia Sahm, a former Fed economist, it would use a pronounced jump in the unemployment rate to trigger a fiscal response such as stimulus payments to households. Ms. Brainard’s colleague Mary C. Daly, president of the Federal Reserve Bank of San Francisco, has also made a case for government spending policies that kick in immediately. Central bankers “face greater uncertainty about the impact of our tools and their ability to achieve our goals,” she said in a speech this month. “Fiscal policy will need to play a larger role in smoothing through economic shocks,” and “expanding the array of automatic stabilizers that form part of the social safety net can help mitigate the depth and duration of economic downturns.”...

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Perhaps the greatest harm done by Robert Bork and Richard Posner to American well-being was their extremely aggressive push of the idea that vertical integration could never be bad: Phil Weiser: Competitive Edge: The States’ View of Vertical Merger Guidelines in U.S. Antitrust Enforcement https://equitablegrowth.org/competitive-edge-the-states-view-of-vertical-merger-guidelines-in-u-s-antitrust-enforcement/: 'Vertical integration is not always benign and indeed has the potential to create significant anticompetitive harms.... Indeed, in some cases, a vertical merger may remove the most likely potential rival to an incumbent firm. Consider, for example, the case of Live Nation Entertainment Inc.’s merger with Ticketmaster in 2010. In that case, Live Nation’s concert promotion and venue business prepared Live Nation to enter into the ticketing platform business, but the merger with Ticketmaster undermined that nascent competition. Indeed, Live Nation had already begun that entry before the merger. This is why a vertically related firm in one market (say, wholesale distribution) might be the natural entity to sponsor entry against a dominant firm in a related market (say, retail sales), and that potential sponsorship could be undermined on account of the merger between the dominant firm and the vertically related one. That is particularly true in evolving or fast-growing sectors such as technology markets. Second, it is important to recognize how vertical mergers, once completed, can be used to undermine existing rivals or raise entry barriers that make future entry materially more difficult. Colorado, like other states, has addressed such dangers...

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If we do not remember our history, we are condemned to repeat it:Robynn Cox and Dania Francis: Improved public School Teaching of Racial Oppression Could Enable U.S. society to Grasp the Roots and Effects of Racial and Economic Inequality https://equitablegrowth.org/improved-public-school-teaching-of-racial-oppression-could-enable-u-s-society-to-grasp-the-roots-and-effects-of-racial-and-economic-inequality/: 'There is a lot more to black history than what our schools showcase during the shortest month of the year. Many Americans don’t ever truly discover the depths of the African American experience in ways that fully convey the harm inflicted upon those enslaved before the Civil War and the generations of blacks who continued to suffer from blatant and pervasive racial discrimination over the next 150-odd years. Public schools tend to gloss over the details of enslavement. And most teachers are not properly equipped to handle discussions of this sordid past in their classrooms or to teach their students about the violent resubjugation of blacks in the South after the Civil War via race riots, lynchings, mass incarceration, voter disenfranchisement, and segregation—actions that spread across the nation as African Americans embarked on the Great Migration out of the South beginning in the late 19th century and continuing well into the post-WWII era...

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This is an excellent not-podcast from Kate Bahn and Adia Harvey Wingfield. Why the Equitable Growth muck-a-mucks don't make this into an explicit podcast series is beyond me: Kate Bahn**: In Conversation with Adia Harvey Wingfield https://equitablegrowth.org/in-conversation-with-adia-harvey-wingfield/: 'Director of Labor Market Policy and economist Kate Bahn talks with sociologist Adia Harvey Wingfield, Mary Tileston Hemenway Professor of Arts & Sciences and associate dean for faculty development at Washington University in St. Louis. Her research examines how and why racial and gender inequality persists in professional occupations. She is the author of several books, most recently Flatlining: Race, Work, and Health Care in the New Economy.... Bahn and Wingfield explore: Racial and gender inequality and U.S. labor market outcomes. Race, gender, and occupational status. Lack of diversity and representation in U.S. services industries. The consequences of lack of diversity for black professionals in the healthcare industry. Policies to improve racial and gender inequality in U.S. labor market outcomes. How sociologists can elevate their findings and solutions in economic policymaking. Lack of racial diversity in scholarly research. Diversity itself as a research topic...

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As of the end of February the stock market is forecasting a very sharp, sudden recession in the probability of a recession from near zero a week ago to better-than-even today: that is the only way to make sense of the S&P 500 over the past week. Thus it is not too late to plan. It is, rather, time to act to offset the likely spending contraction we now see much closer than the horizon. Here are the plans we should have made: Alyssa Fisher: Planning for the Next Recession by Reforming U.S. Automatic Stabilizers https://equitablegrowth.org/planning-for-the-next-recession-by-reforming-u-s-macroeconomic-policy-automatic-stabilizers/: 'Equitable Growth has joined forces with The Hamilton Project to advance a set of specific, evidence-based policy ideas for shortening and easing the impacts of the next recession... _Recession Ready: Fiscal Policies to Stabilize the American Economy.... Six concrete ideas... expand eligibility for Unemployment Insurance and encourage take-up of its regular benefits... reduce state budget shortfalls during recessions by... increasing the federal matching rate for Medicaid and the Children’s Health Insurance Program... eliminate work requirements for supplemental nutrition assistance during recessions... expand federal support for basic assistance during recessions... an automatic infrastructure investment program... boost consumer spending during recessions by creating a system of direct stimulus payments to individuals that would be automatically triggered when rising unemployment signaled a coming recession.... Congress should consider them now, because when the next recession appears on the horizon, it may be too late...

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A very nice broadside from the highly intelligent Dan Nexon against one of the many "Popular Front of Judaea" movements that afflict our online left today: Dan Nexon: Grifters and Useful Idiots http://www.lawyersgunsmoneyblog.com/2020/02/grifters-and-useful-idiots: 'Sanders is unusual in that he’s, in multiple senses of the term, an "old leftist" who has nonetheless updated his views in light of the significant changes in world politics since the collapse of the Soviet Union.... While American dark money supports the reactionary right abroad, Russia has become a state sponsor of anti-progressive forces; mutual empowerment among authoritarian, often kleptocratic, regimes blurs ideological lines. It is easier than ever to oppose American-sponsored regime change without actively embracing the corrupt and autocratic government in Venezuela or the corrupt, autocratic, and mass-murdering government of Syria. The pursuit of global social justice neither demands nor benefits from the idea that “the enemy of my enemy is my friend, and my enemy is American foreign policy”. Unfortunately, there are plenty of grifters and useful idiots selling that line in defense of corrupt, repressive, and mass-murdering regimes. Charles Davis has written a number of scathing assessments of these self-styled anti-imperialists. Now Joshua Collins has begun a three-part series on their major personalities.... As far as I’m concerned, this version of the “anti-imperialist” left is our alt-right, and they’ve grown in a parallel way: by bootstrapping onto the rest of the progressive left, taking positions that make them appear as credible allies, and then inserting their propaganda...

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Still not playing my position. But things like this are very important: Dan Nexon: How Many Hidden Thresholds of Soft Authoritarianism have we Already Crossed? http://www.lawyersgunsmoneyblog.com/2020/02/how-many-hidden-thresholds-of-soft-authoritarianism-have-we-already-crossed: 'For example, aspects of liberal international ordering have already substantially unravelled—but it seems like many international-affairs experts either don’t realize it or, at the other extreme, think that ongoing mutations in international order presage some kind of collapse into multipolar chaos.... Our tendency to think in “all or nothing” terms... obscures a great deal of alteration in political orders. Even the kinds of events—such as impeachment—that I once thought would change this dynamic seem to be resolving into collective anticlimax. Meanwhile, Trump has transformed, in a way unlike any other modern president, the Republican party into his own personal patrimony. And the self-abasement of Senators before the Mad Emperor now just seems like par for the course.... But it’s worth noting that many of the most vulnerable people already live in an illiberal state, and Trump’s policies have overall broadened and deepened the extent of American pocket authoritarianism. To wit: 'The strangers trying to arrest his mom’s boyfriend weren’t wearing uniforms or badges, and they didn’t have a warrant. So 26-year-old Eric Diaz did the only thing he could think of: Outside his front door, on the otherwise quiet Brooklyn street, he confronted the plainclothes officers. Then, one of them shot him in the face—just below his right eye...

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