Seems to me @biscuit_ersed and everybody else needs their first game-theory lecture to be (1) defect-defect as dominant-strategy Nash equilibrium in prisoner's dilemma, (2) the unraveling equilibrium in finite related prisoner's dilemma, and (3) this first prisoner's dilemma ever played: http://www.j-bradford-delong.net/economists/prisoners_dilemma.html https://twitter.com/biscuit_ersed/status/1084812993509105671...

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Costs and Benefits of International Capital Mobility: Reply to Bhagwati: Hoisted from 20 Years Ago

Needless to say, time has left me a lot wiser: We need to design economies so that they can operate without disaster even when deregulatory clowns like those of the George W. Bush or the Donald J. Trump administrations are in control of the levers of policy at key moments. How to do that is not so clear. What is clear is that only a fool today would think that our political economy would support a clever technocracy so that we might have our cake and eat it too. Indeed, the most likely scenario seems to be that we will be unable to eat our cake, and then the kleptocrats will steal it out from under our noses so that we will not have it either. In short: I should have listened harder to Jagdish 20 years ago...

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Hoisted from the Archives: Reply to Bhagwati: "I open my May/June [1998] issue of Foreign Affairs to discover myself pilloried in an article by Jagdish Bhagwati between Paul Krugman and Roger C. Altman (excellent company to be in, by the way: much better than I am used to) as a banner-waving proponent of international capital mobility, guilty of "assum[ing] that free capital mobility is enormously beneficial while simultaneously failing to evaluate its crisis-prone downside."

I rub my eyes in surprise. I had not thought of myself as a banner-waving proponent of international capital mobility.

Continue reading "Costs and Benefits of International Capital Mobility: Reply to Bhagwati: Hoisted from 20 Years Ago" »


Noah Smith: Unions Did Great Things for the American Working Class: "Politically and economically, unions are sort of an odd duck. They aren’t part of the apparatus of the state, yet they depend crucially on state protections in order to wield their power. They’re stakeholders in corporations, but often have adversarial relationships with management. Historically, unions are a big reason that the working class won many of the protections and rights it now enjoys...

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David Cho: The Labor Market Effects of Demand Shocks: Firm-Level Evidence from the Recovery Act: "How do firms respond to demand shocks?... Leveraging two firm-level datasets... linked employer-employee administrative records for a subset of U.S. firms from ADP, LLC with a comprehensive database of transactions from the American Recovery and Reinvestment Act (ARRA)... I compare firms that received ARRA funds to a counterfactual sample of employers that were not directly connected to the Recovery Act.... The magnitudes of these changes suggest that the labor supply to an individual firm is relatively inelastic, even in a deep recession, and provide evidence of monopsonistic wage-setting in U.S. labor markets...

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Farmers, miners, merchants, assembly-line workers—four key categories of workers that at various times in the past had to be supported and nurtured in order to create the wealth of a nation. Now none of those categories seem likely to embrace any substantial proportion of any future workforce. So how, then, we inquire, are we to understand the nature and causes of the wealth of nations in our future?: David desJardins: "It's too Late for Industrialization and Manufacturing to be a Path to Increasing Returns for Developing Countries.: "he information economy... is where the real increasing returns are today.... The key question for developing economies today is whether they can take advantage of the information economy.... China has moved pretty darn quickly up the ladder. Basically created a significant number of rather productive information workers in a single generation...

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That conservative parties' policies redistribute wealth and power upward while distracting their mass base by focusing them on internal or external enemies has long been the point of Toryism—since before try Gordon Riots, in fact. And now Tucker Carlson is surprised that there is gambling going on, and is just asking questions? Does he want us to take him seriously?: Eric Levitz: Why Tucker Carlson Plays a Critic of Capitalism On TV: "Melinda Cooper... explains:

Writing at the end of the 1970s, the Chicago school neoliberal Gary Becker remarked that the “family in the Western world has been radically altered—some claim almost destroyed—by events of the last three decades.” … Becker believed that such dramatic changes in the structure of the family had more to do with the expansion of the welfare state in the post-war era than with feminism per se... a consequence rather than an instigator of these dynamics.... Becker’s abiding concern with the destructive effects of public spending on the family represents a key element of his microeconomics... that is consistently overlooked...

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Fairly Recently: Must- and Should-Reads, and Writings... (January 10, 2019)

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  1. Note to Self: No, Apple! No Potty Mouth, Please!: Today I am disturbed that Apple voice recognition keeps hearing “slut“ when I say “slack“...

  2. Comment of the Day: BruceJ: "Honestly, when you look back at Brooks' history, where he 'just happens' to reference ideas out of the 'dark, dank silos of the far right' I see less laziness, than an ongoing subtle injection of those very ideas into so-called 'respectable' conservative commentary. If it IS all happenstance and laziness, Brooks is the luckiest damned blind squirrel in the universe...

  3. Why Economic History?: Good theory is in the end nothing but distilled and crystallized economic history. It could, after all, be nothing else. And piling more and more computer power on to the analysis of nonhistorical data could only be an intellectual optimum if the world was created ex nihilo the instant of the first date of your panel. So this is why we are here. Welcome to economic history...

  4. Comment of the Day: Private-sector entities cannot migrate labor and capital into the business of creating money, for money is liquid trust and can only be created by institutions that are trusted to be, well, good for the money. So the solution is not to move resources out of creating currently-produced goods and services but to move demand into buying currently-produced goods and services. And—as long as it is good for the money—the government's borrowing-and-spending or printing-and-dropping works just fine: JEC: Keynesian Economics vs. Regular Economics: "The funny thing here is that Barro imagines this to be a killer rhetorical question, when it is in fact a crucial and open research question...

  5. What Will Cause the Next US Recession?: Live at Project Syndicate: Needless to say, the particular nature and form of the next financial shock will be unanticipated. Investors, speculators, and financial institutions are generally hedged against the foreseeable shocks.... The death blow to the global economy in 2008-2009 came not from global imbalances or from the collapse of the mid-2000s housing bubble, but from the concentration of ownership of mortgage-backed securities...

  6. Comment of the Day: Cervantes: "I didn't know that British produce comes into season at the end of March, actually. You learn something every day...

  7. Betting That Nobody Will Check the References as an Intellectual Style: Monday Smackdown: Never mind that Himmelfarb cuts off her quote from Keynes just before Keynes writes that he approves of this Puritan fallacy—that he is not, as Himmelfarb claims, ridiculing it, but rather praising it...


  1. Paul Campos: Tucker Carlson Utters More Than Fourteen Words Evincing Skepticism About Finance Capitalism: Conservative Pundits Blanch In Pure Horror: "white ethno-nationalism, which is what both Carlson and Trump actually market to their respective, heavily overlapping audiences, is likely to become even more successful if it manages to morph into a kind of welfare=state herrenvolk democracy, in which 'real Americans' receive genuine protection from the depredations of capitalism, while a permanently disenfranchised underclass of guest workers and the like gets to live in the libertarian utopia envisioned by the Koch brothers...

  2. Ben Alpers: A Far-Right Anti-Semitic Conspiracy Theory Becomes a Mainstream Irritable Gesture: "At the heart of this largely rote piece of Brooksian pablum is a claim that deserves a closer look. 'The younger militants', writes Brooks, 'tend to have been influenced by the cultural Marxism that is now the lingua franca in the elite academy'. This is interesting both for what Brooks appears to be trying to say and, more immediately, how he has decided to say it... #orangehairedbaboons #publicsphere

  3. Alexander Zubatov: "I think YOU'RE misusing Blackford.... Remember, the whole point of my Tablet article was to respond to Sam Moyn's utterly misleading NYT article claiming cultural Marxism simply doesn't exist and is no more than anti-Semitic right-wing phantasmagoria...

  4. Ben Alper: Fun With Primary Sources: The Free Congress Foundation's "History of Political Correctness": "The notion that the Frankfurt School was responsible for creating 'Political Correctness', 'Cultural Marxism', and a related plot against Western civilization itself emerged from the circle around Lyndon LaRouche from the 1970s (when LaRouche’s attacks on the Frankfurt Institute apparently began) through the early 1990s...

  5. Dave Niewertr: Norway Terrorist Breivik Was An Ardent Subscriber To Theories Of 'Cultural Marxism': "The picture that's emerging is of an ordinary right-wing man stoked into anger by theories about "Cultural Marxism" that originated on the anti-Semitic far right but have in recent years been spreading into more mainstream venues, promoted by the likes of Andrew Breitbart, among others...

  6. Ben Alpers: The Frankfurt School, Right-Wing Conspiracy Theories, and American Conservatism: "There are obviously a lot of threads that one might pull in this story, regarding, among other things, the relationship between mainstream conservatism and the violent radical right, the strong base of antisemitism that (often silently) underwrites a lot right-wing rhetoric, the deep anti-intellectual and anti-academic tendencies in these modes of thought, and the peculiar role that Lyndon LaRouche and his minions have played in encouraging conspiracy theories of all sorts (they are also an important source for left-wing conspiracy theories about Leo Strauss and the Straussians)...

  7. Samuel Moyn: The Alt-Right’s Favorite Meme Is 100 Years Old: "‘Cultural Marxism’ might sound postmodern but it’s got a long, toxic history...

  8. Russell Blackford: Cultural Marxism and our current culture wars: Part 1: "In everyday contexts, those of us who do not accept the narrative of a grand, semi-conspiratorial movement aimed at producing moral degeneracy should probably avoid using the term 'cultural Marxism'. Unfortunate cultural tendencies, including those that manifest a left-wing style of authoritarianism, can usually be labelled in less confusing, more effective, more precise ways. By all means, let’s develop useful terminology to express whatever concerns we have about tendencies on the Left, but 'cultural Marxism' carries too much baggage...

  9. Jana Winter and Elias Groll: Here’s the Memo That Blew Up the NSC: "Fired White House staffer [Rich Higgins] argued 'deep state' attacked Trump administration because the president represents a threat to cultural Marxist memes, globalists, and bankers...

  10. Jeet Heer: Let's Talk about Anti-Semitic Ideology: "Bowers... belonged to the far right faction that sees Trump as... claim[ing] to stand for white America but actually works for 'the Jews'.... The idea that George Soros (symbol for many on right of Jewish conspiracy) is behind Caravan isn't confined to Nazis.... Congressman Matt Gaetz... popular Trumpist cartoonist Ben Garrison... House GOP Leader Kevin McCarthy.... The Soros stuff is just one of many manifestations of the the grand anti-Semitic trope.... The Soros of right-wing mythology (globalist intent on destroy cohesive nations) fit the long history of blaming internal discord on outside agitators as well as the Dolchstoßlegende. The nationalist needs a cosmopolitan nemesis...

  11. Zack Beauchamp: A Trump Voter Hurt by the Shutdown’s Incredibly Revealing Quote: "Think about that line for a second. Roll it over in your head. In essence, Minton is declaring that one aim of the Trump administration is to hurt people—the right people. Making America great again, in her mind, involves inflicting pain. This is not an accident. Trump’s political victory and continuing appeal depend on a brand of politics that marginalizes and targets groups disliked by his supporters. Trump supporters don’t so much love the Republican party as they hate Democrats...

  12. Jeet Heer: Let's Talk about Anti-Semitic Ideology: "The idea that George Soros (symbol for many on right of Jewish conspiracy) is behind Caravan isn't confined to Nazis. Here's Congressman Matt Gaetz. Here is popular Trumpist cartoonist Ben Garrison—again, someone with an audience outside the Nazi right but circulating idea that Soros is working to destroy America. House GOP Leader Kevin McCarthy...

  13. Tamara Strauss: Blum Center News Digest, Jan. 7: "A selection of articles and reports pulled from the last two/three weeks...

  14. Raj Kumar: Facing Harsh Realities, the Global Development Community Confronts Another Fraught Year: "The outlines of an established global politics on aid are beginning to come into focus, and it’s a fraught landscape. Aid is now openly and directly discussed as a tool to stem migration, achieve foreign policy objectives, and derive domestic economic benefits, particularly for major donors including the U.S., China, Germany, and the U.K...

  15. Paul Krugman: The Economics of Soaking the Rich: "Diminishing marginal utility is the common-sense notion that an extra dollar is worth a lot less in satisfaction to people with very high incomes than to those with low incomes. Give a family with an annual income of $20,000 an extra $1,000 and it will make a big difference to their lives. Give a guy who makes $1 million an extra thousand and he’ll barely notice it. What this implies for economic policy is that we shouldn’t care what a policy does to the incomes of the very rich. A policy that makes the rich a bit poorer will affect only a handful of people, and will barely affect their life satisfaction, since they will still be able to buy whatever they want... #equitablegrowth #fiscalpolicy

  16. Steve Richards: Theresa May’s Survival Has Become Dependent on Denying Political Reality: "After the long cabinet meeting on the Brexit deal, the prime minister declared outside Number 10 that ministers had backed her plans. The next day the Brexit secretary, Dominic Raab, resigned. Mrs May appointed a successor as if the words she had uttered the night before had never been spoken.... She has, in the intervening weeks, insisted that there is space for a significant negotiation with the EU before the approaching Commons’ vote on her deal, expected within the next fortnight. The EU has made clear there is no room for such revision. The disconnect between the prime minister’s public words and what is happening around her is stark. Other prime ministers sought words to make sense of chaotic situations. Alternatively, they tried to change the situation. But Mrs May does neither. She presses on. But her indifference to words and persuasion, these essential arts of leadership, is a fatal flaw...

  17. Patrick Kline, Neviana Petkova, Heidi Williams, and Owen Zidar: Who Profits from Patents? Rent-Sharing at Innovative Firms: "An initial allowance of an ex-ante valuable patent generates substantial increases in firm productivity and worker compensation. By contrast, initial allowances of lower ex-ante value patents yield no detectable effects on firm outcomes.... On average, workers capture roughly 30 cents of every dollar of patent-induced surplus in higher earnings... concentrated among men and workers in the top half of the earnings distribution, and are paired with corresponding improvements in worker retention among these groups. We interpret these earnings responses as reflecting the capture of economic rents by senior workers, who are most costly for innovative firms to replace...

  18. David Weil (2014): The Fissured Workplace: "Large corporations have shed their role as direct employers of the people responsible for their products, in favor of outsourcing work to small companies that compete fiercely with one another...

  19. Jag Bhalla: Judea Pearl's 'The Book of Why' Shakes Up Correlation vs. Causality

  20. Uncle Judea, Melanin, Genetics, and Educational Attainment...: Am I profoundly stupid, or is Uncle Judea's framework of causal confounders—colliders—mediators a huge advance, perhaps not in helping those of you who think carefully do non-stupid statistics, but in helping those of us who do not think carefully do non-stupid statistics, and in providing a royal road to teaching people how to do not-stupid statistics...

  21. This point is absolutely cognitive science-statistics-philosophy of probability gold!: Judea Pearl, Madelyn Glymour, and Nicholas P. Jewell (2016): Causal Inference in Statistics: A Primer (New York: John Wiley & Sons: 978119186847): "Inquisitive students may wonder why it is that dependencies associated with conditioning on a collider are so surprising to most people—as in, for example, the Monty Hall example. The reason is that humans tend to associate dependence with causation...

  22. Lisa R. Goldberg: Review of The Book of Why: The New Science of Cause and Effect: "The graphical approach to causal inference that Pearl favors has been influential, but it is not the only approach.... The Neyman (or Neyman–Rubin) potential outcomes model... James Heckman, whose concept of 'fixing' resembles, superficially at least, the do operator that Pearl uses. Those who enjoy scholarly disputes may look to Andrew Gelman’s blog... or to the tributes written by Pearl and Heckman to the reclusive Nobel Laureate, Trygve Haavelmo, who pioneered causal inference in economics in 1940...

  23. Ride | Austin: Frequently Asked Question: "The previous rideshare companies spent millions of dollars then chose to abandon the 'factory' (drivers & riders) they built. We believed with the backing of the community-RideAustin could quickly harness this infrastructure-build the right solution and fill the void and provide a great, safe service.... The tech community contributed technology to power the app that costs millions to develop-but it also took over $7 million in cash donations and significant in-kind services donations to make RideAustin what it is today...

  24. Counterfactuals! There is currently a mishegas at Andrew Gelman's place about Pearl and Mackenzie's Book of Why, which has a reference to this and has led me to the conclusion that I really need to find time to work my way through this entire book: Cosma Shalizi: Advanced Data Analysis from an Elementary Point of View: "The distributions we observe in the world are the outcome of complicated stochastic processes. The mechanisms which set the value of one variable inter-lock with those which set other variables. When we make a probabilistic prediction by conditioning—whether we predict􏰁 E[Y|X=x] or Pr (Y|X=x) or something more complicated—we are just filtering the output of those mechanisms, picking out the cases where they happen to have set X to the value x, and looking at what goes along with that. When we make a causal prediction, we want to know what would happen if the usual mechanisms controlling X were suspended and it was set to x. How would this change propagate to the other variables? What distribution would result for Y? This is often, perhaps even usually, what people really want to know from a data analysis, and they settle for statistical prediction either because they think it is causal prediction, or for lack of a better alternative... #reasoning

  25. Yes, lots of conservative males feel unmanned because women can now get jobs and contraceptives and so are not (a) desperate to find a man to support them while (b) terrified of getting pregnant. The best answer would be teaching young males that while their grandfathers and male their fathers could be real dicks without it ruining their lives, that is no longer tru: Josh Barro: "I think a big problem with the 'economic and social change undermined marriage and family for the working class' frame is that a main way it did this is by making women less dependent on men...

  26. Jane Coaston: Tucker Carlson Has Sparked The Most Interesting Debate In Conservative Politics: "Carlson... greed that his monologue was reminiscent of Warren, referencing her 2003 book The Two-Income Trap: Why Middle-Class Parents Are Growing Broke.... Carlson wanted to be clear: He’s just asking questions.... In this telling, white working-class Americans who once relied on a manufacturing economy that doesn’t look the way it did in 1955 are the unwilling pawns of elites. It’s not their fault that, in Carlson’s view, marriage is inaccessible to them.... Someone, or something, did this to them.... Carlson is advancing a form of victim-politics populism that takes a series of tectonic cultural changes—civil rights, women’s rights, a technological revolution as significant as the industrial revolution, the mass-scale loss of religious faith, the sexual revolution, etc.—and turns the negative or challenging aspects of those changes into an angry tale of what they are doing to you. And that was my biggest question about Carlson’s monologue, and the flurry of responses to it, and support for it: When other groups (say, black Americans) have pointed to systemic inequities within the economic system that have resulted in poverty and family dysfunction, the response from many on the right has been, shall we say, less than enthusiastic. Yet white working-class poverty receives, from Carlson and others, far more sympathy...


Yes, lots of conservative males feel unmanned because women can now get jobs and contraceptives and so are not (a) desperate to find a man to support them while (b) terrified of getting pregnant. The best answer would be teaching young males that while their grandfathers and male their fathers could be real dicks without it ruining their lives, that is no longer true. But that is really not an answer Tucker Carlson's audience wants to hear: Josh Barro: "I think a big problem with the 'economic and social change undermined marriage and family for the working class' frame is that a main way it did this is by making women less dependent on men...

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Counterfactuals! There is currently a mishegas at Andrew Gelman's place about Pearl and Mackenzie's Book of Why, which has a reference to this and has led me to the conclusion that I really need to find time to work my way through this entire book: Cosma Shalizi: Advanced Data Analysis from an Elementary Point of View: "The distributions we observe in the world are the outcome of complicated stochastic processes. The mechanisms which set the value of one variable inter-lock with those which set other variables. When we make a probabilistic prediction by conditioning—whether we predict􏰁 E[Y|X=x] or Pr (Y|X=x) or something more complicated—we are just filtering the output of those mechanisms, picking out the cases where they happen to have set X to the value x, and looking at what goes along with that. When we make a causal prediction, we want to know what would happen if the usual mechanisms controlling X were suspended and it was set to x. How would this change propagate to the other variables? What distribution would result for Y? This is often, perhaps even usually, what people really want to know from a data analysis, and they settle for statistical prediction either because they think it is causal prediction, or for lack of a better alternative...

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Note to Self: No, Apple! No Potty Mouth, Please!: A number of the biases in voice recognition systems come from the initial training dataset. Senior google employees have claimed to me–how serious they were I do not know–that Gmail autocomplete's extraordinary! love! for! exclamation! points! comes from its use of google engineers as its initial training dataset.

Today I am disturbed that Apple voice recognition keeps hearing “slut“ when I say “slack“. What training dataset produces that? From my perspective, Apple voice recognition needs to acquire much less of a potty mouth—or at least to have a potty-mouth-off switch—for it to be useful to me. Someday it is going to do something, and I am not going to catch it...

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Patrick Kline, Neviana Petkova, Heidi Williams, and Owen Zidar: Who Profits from Patents? Rent-Sharing at Innovative Firms: "An initial allowance of an ex-ante valuable patent generates substantial increases in firm productivity and worker compensation. By contrast, initial allowances of lower ex-ante value patents yield no detectable effects on firm outcomes.... On average, workers capture roughly 30 cents of every dollar of patent-induced surplus in higher earnings... concentrated among men and workers in the top half of the earnings distribution, and are paired with corresponding improvements in worker retention among these groups. We interpret these earnings responses as reflecting the capture of economic rents by senior workers, who are most costly for innovative firms to replace...

Continue reading " " »


Comment of the Day: BruceJ: "Honestly, when you look back at Brooks' history, where he 'just happens' to reference ideas out of the 'dark, dank silos of the far right' I see less laziness, than an ongoing subtle injection of those very ideas into so-called 'respectable' conservative commentary. If it IS all happenstance and laziness, Brooks is the luckiest damned blind squirrel in the universe...

Continue reading "" »


Paul Krugman: The Economics of Soaking the Rich: "Diminishing marginal utility is the common-sense notion that an extra dollar is worth a lot less in satisfaction to people with very high incomes than to those with low incomes. Give a family with an annual income of $20,000 an extra $1,000 and it will make a big difference to their lives. Give a guy who makes $1 million an extra thousand and he’ll barely notice it. What this implies for economic policy is that we shouldn’t care what a policy does to the incomes of the very rich. A policy that makes the rich a bit poorer will affect only a handful of people, and will barely affect their life satisfaction, since they will still be able to buy whatever they want...

Continue reading " " »


Jeet Heer: Let's Talk about Anti-Semitic Ideology: "The idea that George Soros (symbol for many on right of Jewish conspiracy) is behind Caravan isn't confined to Nazis. Here's Congressman Matt Gaetz. Here is popular Trumpist cartoonist Ben Garrison—again, someone with an audience outside the Nazi right but circulating idea that Soros is working to destroy America. House GOP Leader Kevin McCarthy:

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@attackerman and @chick_in_kiev have both written about how all these Soros theories replicate classic anti-Semitic tropes:

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PGL: Keynesian Economics vs. Normal Economics: "I wonder what the negative supply-side event was back in 1982 when we had a massive decline in real GDP? Was it those lower tax rates from the 1981 tax cut? Or the Republican led reductions in transfer payments? Oh wait—wrong sign. Or maybe the dollar appreciation except for the fact that in Barro's world we ignore the aggregate demand effects and focus on the increase in wages relative to the prices of imported goods. Oh dear-wrong sign again!...

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Tamara Strauss: Blum Center News Digest, Jan. 7: "A selection of articles and reports pulled from the last two/three weeks...

Raj Kumar: Facing Harsh Realities, the Global Development Community Confronts Another Fraught Year: "The outlines of an established global politics on aid are beginning to come into focus, and it’s a fraught landscape. Aid is now openly and directly discussed as a tool to stem migration, achieve foreign policy objectives, and derive domestic economic benefits, particularly for major donors including the U.S., China, Germany, and the U.K...

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The remarkable thing about Robert Barro—and all the other Lucases and Famas and Boldrins and Cochranes who, back in 2008-2012, said it was logically impossible for expansionary fiscal policy to work—and his question "Where was the market failure that allowed the government to improve things just by borrowing money and giving it to people?" is that the answer had been well-known and on the table since at least 1829. The answer was given by John Stuart Mill The market failure is that the economy is out-of-equiilibrium, in a "general glut", with an excess demand for money and an excess supply of pretty much every currently-produced good and services.

Normally the existence of excess supplies and excess demands in an economy is a good thing: The entrepreneurial profits imbalances create set in motion the migration of resources to higher-value uses. But private-sector entities cannot migrate labor and capital into the business of creating money, for money is liquid trust and can only be created by institutions that are trusted to be, well, good for the money. So the solution is not to move resources out of creating currently-produced goods and services but to move demand into buying currently-produced goods and services. And—as long as it is good for the money—the government's borrowing-and-spending or printing-and-dropping works just fine:

Comment of the Day: JEC: Keynesian Economics vs. Regular Economics: "'Unlike the trade-off in regular economics, that extra $1 billion is the ultimate free lunch. How can it be right? Where was the market failure that allowed the government to improve things just by borrowing money and giving it to people?' The funny thing here is that Barro imagines this to be a killer rhetorical question, when it is in fact a crucial and open research question (and one that Keynesian macroeconomists have done far too little to answer, in my opinion). What makes it a research question rather than a damning rhetorical one is the empirical fact that, under certain circumstances, multipliers greater than one are well-documented. (In fairness, better documented today than in 2011)...

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What Will Cause the Next US Recession?: Live at Project Syndicate

The Digital Research Library of Illinois History Journal™ The Panic of 1893 in Illinois and Chicago

Live at Project Syndicate: U.S. Recession No Longer Improbable: The next recession most likely will not be due to a sudden shift by the Fed from a growth-nurturing to an inflation-fighting policy. Given that visible inflationary pressures probably will not build up by much over the next half-decade, it is more likely that something else will trigger the next downturn.... The culprit will probably be a sudden, sharp “flight to safety” following the revelation of a fundamental weakness in financial markets. That... is the pattern that has been generating downturns since at least 1825, when England’s canal-stock boom collapsed.

Needless to say, the particular nature and form of the next financial shock will be unanticipated. Investors, speculators, and financial institutions are generally hedged against the foreseeable shocks.... The death blow to the global economy in 2008-2009 came not from global imbalances or from the collapse of the mid-2000s housing bubble, but from the concentration of ownership of mortgage-backed securities... Read MOAR at Project Syndicat

Continue reading "What Will Cause the Next US Recession?: Live at Project Syndicate" »


Ben Alper: Fun With Primary Sources: The Free Congress Foundation's "History of Political Correctness": "The notion that the Frankfurt School was responsible for creating 'Political Correctness', 'Cultural Marxism', and a related plot against Western civilization itself emerged from the circle around Lyndon LaRouche from the 1970s (when LaRouche’s attacks on the Frankfurt Institute apparently began) through the early 1990s...

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Comment of the Day: Cervantes: British Produce: "I didn't know that British produce comes into season at the end of March, actually. You learn something every day...

Phil Koop: Also, according to this tweet by Sam Coates, 63% of Tory party members say they would be "delighted/pleased/relieved by no deal", whereas 18% of the electorate says the same. Seems like a collision course with destiny, then.

Matt: “It’s not like we won’t be able to eat”. Ferinstance, there are all these useless Tories that happen to be made of meat.

JEC: I actually expected this. In the future, look for rhetoric linking Brexit with the Blitz and U-boat warfare: lots of "Britons have always been willing to endure privation if that's the price of sovereignty!"

howard: what a bleedin' cockup, and what a fantastic misreading of reality.

Graydon: It doesn't. March through May are colloquially "the hungry months" if you ask an allotment gardener or similar; stored winter produce consumed, nothing new available yet. Somebody elsenet had list of where the UK's supermarket carrots come from; in March and April, it's Spain. (then it switches to France)...

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Betting That Nobody Will Check the References as an Intellectual Style: Monday Smackdown

Juggalos Google Search

Monday Smackdown: Apropos of David Brooks's ill-sourced imaginings that "cultural Marxism... is now the lingua franca in the elite academy..." and his use of Alexander Zubatov and Russell Blackford to back him up...

I am not sure whether Brooks is simply confident that people will not check Zubatov's references or did not check them himself—he does have to write a full 1200 words a week in his job. But I have long thought that betting nobody will check the references is an intellectual style much more common on the right than on the center or the left. For example:

On Niall Ferguson: Why Did Keynes Write "In the Long Run We Are All Dead"?: In [Keynes's] extended discussion of how to use the quantity theory of money, the sentence 'In the long run we are all dead' performs an important rhetorical role. It wakes up the reader. It gets him or her to reset an attention that may well be flagging.

But it has nothing to do with attitudes toward the future, or with rates of time discount, or with a heedless pursuit of present pleasure.

So why do people think it does? Note that we are speaking not just of Ferguson here, but of Mankiw and Hayek and Schumpeter and Himmelfarb and Peter Drucker and McCraw and even Heilbroner—along with many others.

Continue reading "Betting That Nobody Will Check the References as an Intellectual Style: Monday Smackdown" »


Fairly Recently: Must- and Should-Reads, and Writings... (January 6, 2019)

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  1. Dinner in California—Sparing a Thought for the Victims of Boris Johnson and Company...: The consensus of the eaters is that the parsnips are only edible if the ratio of parsnip-to-butter is less than 2-to-1...

  2. Comment of the Day: I had always thought that the "male variability" hypothesis was really a "male skewed lower tail" hypothesis, and has nothing to say about the upper tail of males. It's the small Y-chromosome—the missing genes that make males overwhelmingly susceptible to color-blindness, hemophilia, the autism spectrum, may play a role in reduced life expectancy, and other things. But that male variability is greater because males are genetically weak says little or nothing about a possible genetic upper tail: Paul Reber: Patriarchy & Gender

  3. Comment of the Day: Pinkybum:: What Is Going on This Morning Over at "National Review"? Is It Worth Reading? No.: "He even has to attribute and invent reprehensible behavior towards them to make them unsympathetic (pushing fat kids in the way of the bullets) this is why the joke is a stretch...

  4. Debating Societies, Talking Points, and Choosing Our Governors: With Bill Clinton, or Bill Bradley, or Al Gore, or Barack Obama, or Lloyd Bentsen, or Hillary Rodham Clinton—you listen to them, or you talk to them, and you know there is a mind back there deeply knowledgeable about and wrestling with substantive issues of societal welfare and technocratic policy...

  5. We May Well Not Be at Full Employment Yet...: Taking 2007 as a benchmark for the prime-age labor-force participation rate suggests that there is an extra 1.3% of workers ought there who could be relatively easily pulled back into the labor force—if the labor share of income were high enough...

  6. For the Weekend: "Rocky" Training Montage

  7. Rand Paul: Protecting Property Holders’ Rights to Discriminate on the Basis of Race: "Is the Hard Part About Believing in Freedom...": Dismantling the New Deal and rolling back the social insurance state were not ideas that had much potential political-economy juice.... But if... one of the key liberties that libertarians were fighting to defend was the liberty to discriminate against and oppress the Negroes—than all of a sudden you could have a political movement that might get somewhere...


  1. What more would it take to get Pence to Invoke #Amendment25?: Daniel Dale: These Are Headlines About One Trump Cabinet Meeting #orangehairedbaboons

  2. Nick Rowe: Worthwhile Canadian Initiative: "Are We at Full Employment Yet?": "Set aside the other benefits of switching from an inflation target to an NGDP level path target. If switching targets meant we wouldn't need to ask "Are we at full employment yet?" in order to figure out whether monetary policy is too tight or too loose, that would be a major advantage. Because it's a question we can't answer until it's too late. Instead we would simply hope that we are not at full employment yet: we would hope that target NGDP growth would in future be composed more of real GDP growth and less of inflation. And we would be forced to concentrate instead on microeconomic policies that might improve that composition... #monetarypolicy

  3. Yes, the "LEAVE!" faction of the British Conservative and Unionist Party is bats--- insane. Any questions?: Arj Singh: 'Increasing Number' Of Tory MPs Are Considering No-Deal Brexit As A 'Viable' Plan B: "A Leave-backing former cabinet minister said... 'People aren’t going round and saying "No Deal" is going to be a cakewalk. But... people are... asking "how much will this actually impact people’s lives?" We won’t be able to get certain foods like bananas or tomatoes but it’s not like we won’t be able to eat. And we’ll be leaving at a time when British produce is beginning to come into season, so it’s the best possible time to leave with no deal'... #globalization #orangehairedbaboons

  4. M.G. Siegler: Apple’s Precarious and Pivotal 2019: The battery replacement issue suggests that many people are no longer upgrading iPhones because they’re now 'good enough' and everyone is more than happy to just pay a bit more for a better battery.... The part about 'US dollar strength-related price increases'—yes, this is Apple... acknowledging there may be a price ceiling for the iPhone.... The '$1,500 iPhone' (the most expensive variety of the iPhone XS Max) [was] to test such upper boundaries, like velociraptors testing electric fences. Consider it tested! And they’ll remember!... #economicgrowth

  5. AOC Dances To Every Song

  6. Barry Eichengreen: [The Euro at 20: An Enduring Success but a Fundamental Failure(https://theconversation.com/the-euro-at-20-an-enduring-success-but-a-fundamental-failure-108149): "The belief of... Francois Mitterrand and... Helmut Kohl that a single European currency would apply irresistible pressure for political integration. It would lead eventually to their ultimate goal.... To function smoothly, monetary union requires banking union... an integrated fiscal system.... Banking union and fiscal union will only be regarded as legitimate if those responsible for their operation can be held accountable for their decisions by citizens.... Monetary integration creates a logic and therefore irresistible pressure for political integration. Or so the euro’s architects believed... #globalization #politicaleconomy

  7. Ray [REDACTED]: Gather Round, Kids, While I Tell You About What I Call.. "The Greatest S---show in Crypto": "Many of you will be surprised to learn that there is a thriving industry of paid advice on buying and selling cryptos assets, including newsletters, telegram groups, and subscriber-only emails. Until very recently, one of the most popular paid services was something called Standpoint research, seen here on CNBC with Mr. Wonderful from SharkTank. In February of 2018, Standpoint Research recommended that its subscribers buy an unknown asset known as $DIG, because the owner of Standpoint thought there was insider trading going on. You read that right. He suspected fraud, so he issued a 'buy' recommendation. The coin then subsequently grew from a fraction of a penny to 16 cents per token, as buyers rushed in to acquire this asset. For the craziest reasons you can imagine. The coin itself claims to be backed by $15 billion (not a typo) in Gold Bullion. Their website, if you are curious, is http://arbitrade.io ... #finance #behavioral

  8. This is the word on how the government ought to analyze proposed tax regulations: Greg Leiserson and Adam Looney: A Framework for Economic Analysis of Tax Regulations: "Treasury and the IRS should conduct a formal economic analysis of regulations in two cases. First, for regulations that implement recent tax legislation, the agencies should conduct an analysis if they have substantial discretion in designing the regulation and if different ways of doing so would vary substantially in their economic effects. Second, for regulations unrelated to recent legislation, the agencies should conduct an analysis if the regulation would have large economic effects relative to current practice... #fiscalpolicy

  9. Cora Wandel: Daniel Webster In The Webster-Hayne Debate

  10. Wikipedia: aDaniel Webster Memorial: "1603 Massachusetts Avenue Northwest, beside Scott Circle at the intersection of Massachusetts Avenue and Rhode Island Avenue...

  11. Laboratories of democracy! It seems pretty clear that Brownback was in on the grift, but expected—hoped?—that his tax cuts would pull enough activity and people from Kansas City, MO to Kansas City, KS that that plus a normal rapid recovery would allow him to claim a "Kansas boom". But his henchmen still control the Kansas Republican Party: Heather Boushey: Failed Tax-Cut Experiment in Kansas Should Guide National Leaders: "Sam Brownback’s failed “red state experiment” has truly come to an end.... In 2012 and 2013, Republican Gov. Sam Brownback signed into law the largest tax cuts in Kansas history. The top state income tax rate fell by nearly one-third and passthrough taxes that affected mainly relatively wealthy individuals were eliminated. With the decline in revenues came significant spending cuts... #fiscalpolicy #orangehairedbaboons

  12. Karam Sethi: Gymkhana's Dorset Brown Crab with Butter, Garlic and Black Pepper: "A seafood special from Gymkhana, the Anglo-Indian restaurant recently voted the best in Britain, this recipe was a Trishna original.... 6 tbsp melted butter, 1 tsp vegetable oil, 2 tbsp garlic paste (crush with a little water to a paste), 1 tbsp brown crab meat, 200g white crab meat, 1 tbsp coarse black pepper, 3 tbsp finely sliced wild garlic, plus extra to serve...

  13. Lisa Cook: On invention gaps, hate-related violence, discrimination, and more: "One of the first things I do is to buy a Bic pen.... Each one was 10 dollars! Ten dollars! This completely stunned me. I knew how poor most people were. I knew students had to have these pens to write in their blue books. It just started this whole train of thought...

  14. Where did David Brooks learn to use the term "cultural Marxism"? From Alexander Zubatov and his attempt to rehabilitate it from its anti-Semitic not just connotation but denotation. How does Zubatov do this? By taking Russell Blackford out of context: Zubatov claims that Blackford's bottom line is "in other words, [cultural Marxism] has perfectly respectable uses outside the dark, dank silos of the far right". Blackford's actual bottom line is that the modern "conception of cultural Marxism is too blunt an intellectual instrument to be useful for analysing current trends. At its worst, it mixes wild conspiracy theorizing with self-righteous moralism.... Right-wing culture warriors will go on employing the expression 'cultural Marxism'... attaching it to dubious, sometimes paranoid, theories of cultural history.... Outside of historical scholarship, and discussions of the history and current state of Western Marxism, we need to be careful.... Those of us who do not accept the narrative of a grand, semi-conspiratorial movement aimed at producing moral degeneracy should probably avoid using the term 'cultural Marxism'..." Why does Zubatov misuse Blackford? In the hope that he will pick up readers like Brooks, who will take his representations of what Blackford says to be accurate. Why does Brooks take Zubatov's representations of what Blackford says as accurate? Because Brooks is too lazy to do his homework: Ben Alpers: A Far-Right Anti-Semitic Conspiracy Theory Becomes a Mainstream Irritable Gesture: "At the heart of this largely rote piece of Brooksian pablum is a claim that deserves a closer look.  'The younger militants', writes Brooks, 'tend to have been influenced by the cultural Marxism that is now the lingua franca in the elite academy'. This is interesting both for what Brooks appears to be trying to say and, more immediately, how he has decided to say it.... Norwegian far-right terrorist Anders Behring Breivik... murdered sixty-nine people... William Lind... associated with both the Free Congress Foundation and Lyndon LaRouche... Lind’s conception of Cultural Marxism was explicitly anti-Semitic.... Over the course of these years, the idea of Cultural Marxism spread across the American far right... [with] a big boost from Andrew Breitbart.... Why would a columnist like David Brooks, who is himself Jewish in background (if, perhaps, no longer in faith) and who has tried to build his brand identity by peddling in respectability and civility, adopt the term?... #publicsphere #orangehairedbaboons

  15. The Death of Stalin (2017): Quotes: Vasily Stalin: "I know the drill: Smile, shake hands and try not to call them c---s...

  16. Brian Barrett: The Silver Lining in Apple’s Very Bad iPhone News: "As recently as 2015, smartphone users on average upgraded their phone roughly every 24 months.... As of the fourth quarter of last year, that had jumped to at least 35 months.... The shift from buying phones on a two-year contract—heavily subsidized by the carriers—to installment plans in which the customer pays full freight... a sharp drop-off in carrier incentives. They turn out not to be worth it.... 'It actually costs them to get you into a new phone, to do those promotions, to run the transaction and put it on their books and finance it'. Bottom line: If your service is reliable and your iPhone still works fine, why go through the hassle?...

  17. Natasha Geiling: The Science Behind Honey’s Eternal Shelf Life: "A slew of factors—its acidity, its lack of water and the presence of hydrogen peroxide—work in perfect harmony, allowing the sticky treat to last forever...

  18. As I have said: It is a long time since NEC Chair Larry Kudlow was an economist—now he is just a guy who plays an economist on TV: Fred Imbert: White House Advisor Kudlow Says Apple Technology May Have Been 'Picked Off' by China: "'Apple technology may have been picked off by China and now China is becoming very competitive with Apple',” says Kudlow. 'There are some indications from China that they’re looking at that, but we don’t know that yet. There’s no enforcement; there’s nothing concrete', Kudlow adds... John Gruber: "What he’s saying here is that the Chinese stole Apple technology, copied it, and are now flooding the Chinese market with phones based on that stolen tech. I’m 99.8 percent certain that hasn’t happened—if there were Chinese phones built with stolen Apple technology we’d know it because we’d see it. I was going to say 'You can’t just make shit like this up', but as with most of the Trump Kakistocracy, things that you think are can’t’s are really just shouldn’t’s... #orangehairedbaboons #publicsphere

  19. Kieran Healy: Conversational Disciplines: "Being able to broadly agree on how to evaluate contributions is what allows disciplines to tolerate (and enjoy) substantial, persistent disagreement about this or that 'big question' or 'core problem'. Thus, you are unlikely to convince your fellow Psychologists of something important (something that’s important to them, I mean) without some fake data good experimental evidence. Similarly, Economists may not pay attention to you if you do not proceed according to some (to them) widely-shared rules of ritualized mathematics model-building supplemented by some nonsense about incentives empirical evidence. Professional Historians will be less likely to take you seriously if your claims are not built on an elegant prose style a demonstrated mastery of a relevant archive. Sociologists may remain unconvinced of your claims if you do not blame neoliberalism blame neoliberalism...

  20. The most remarkable thing about this piece from 2011 is that Robert Barro does not seem to feel under any pressure at all to provide an account of why it was that real GDP per capita was 52,049 dollars in the fourth quarter of 2007 and yet only 49,318 dollars in the second quarter of 2009—and did not surpass its 2007Q4 level again until 2013Q3. Other adherents than Barro to what Barro calls "normal economics" have put forward three theories: that there was a huge sudden change in American workers' utility functions that made them much less eager to work, that there was a huge sudden forgetting of a great deal of knowledge about how to manipulate nature and organize production, and that there was a great and well-founded fear that Obama was about to impose taxes to turn America into a Venezuela or that Bernanke was about to follow a monetary policy that would turn the U.S. into a Zimbabwe. They were laughed at. So Barro prefers to have no explanationa at all for why production per capita was lower than it had been in 2007Q4, and yet maintain unshaken confidence that he has a deep and correct understanding of what determines the level of production. You can't do that—hold that you have the correct theory, and yet not explain how it applies to the world in which you live: Robert Barro (2011): Keynesian Economics vs. Regular Economics - WSJ: "The overall prediction from regular economics is that an expansion of transfers, such as food stamps, decreases employment and, hence, gross domestic product (GDP). In regular economics, the central ideas involve incentives as the drivers of economic activity. Additional transfers to people with earnings below designated levels motivate less work effort by reducing the reward from working. In addition, the financing of a transfer program requires more taxes—today or in the future in the case of deficit financing. These added levies likely further reduce work effort—in this instance by taxpayers expected to finance the transfer—and also lower investment because the return after taxes is diminished... #economicsgonewrong #publicsphere #moralresponsibility

  21. Cosma Shalizi (2007): ...In Different Voices: "Q: How would you react to the idea that a psychological trait, one intimately linked to the higher mental functions, is highly heritable? A: With suspicion and unease, naturally. Q: It's strongly correlated with educational achievement, class and race. A: Worse and worse. Q: Basically nothing that happens after early adolescence makes an impact on it; before that it's also correlated with diet. A: Do you work at the Heritage Foundation? Such things cannot be. Q: What if I told you the trait was accent? A: I'm sorry? Q (in a transparently fake California accent): When you, like, say words differently than other people? who speak, like, the same language? because that's how you, you know, learned to say them from people around you?... #reasoning

  22. Josh Bivens: The Bad Economics of PAYGO Swamp Any Strategic Gain from Adopting It: "A PAYGO rule means that any tax cut or spending increase passed into law needs to be offset in the same spending cycle with tax increases or spending cuts elsewhere in the budget.... Many Washington insiders assert forcefully that committing to PAYGO rules in the House for the next Congress is good politics.... The strength of evidence supporting this political claim is debatable. What’s less debatable is that PAYGO really has hindered progressive policymaking in the not-so-recent past. For example, it was commitments to adhere to PAYGO that led to the Affordable Care Act (ACA) having underpowered subsidies for purchasing insurance and, even more importantly, having a long lag in implementation...

  23. Matthew Yglesias: "It really feels like Pelosi should cut out the middle-man and open direct negotiations with the cast of Fox & Friends to find out what kind of face-saving 'border security' fudge they’d go for...

  24. Sara Benincasa: Chrissy Teigen’s Headbands Helped Me Get Sober: "And other notes from an unexpected year...

  25. David Roberts: "70% income taxes on high-earners are both familiar (we had them not that long ago) and supported by the bulk of expert research. It is the DC establishment that's dumb on this, not AOC...

  26. Ezra Klein: "Anyway, I wouldn't predict too much off one op-ed. But I wouldn't dismiss it either. Romney knew he'd be opening himself to a lot of backlash by writing this. That suggests commitment from a prominent senator who, unlike Flake or Corker, hasn't wrecked his leverage by retiring...


Josh Bivens: The Bad Economics of PAYGO Swamp Any Strategic Gain from Adopting It: "A PAYGO rule means that any tax cut or spending increase passed into law needs to be offset in the same spending cycle with tax increases or spending cuts elsewhere in the budget.... Many Washington insiders assert forcefully that committing to PAYGO rules in the House for the next Congress is good politics.... The strength of evidence supporting this political claim is debatable. What’s less debatable is that PAYGO really has hindered progressive policymaking in the not-so-recent past. For example, it was commitments to adhere to PAYGO that led to the Affordable Care Act (ACA) having underpowered subsidies for purchasing insurance and, even more importantly, having a long lag in implementation...

Continue reading "" »


Cosma Shalizi (2007): ...In Different Voices: "Q: How would you react to the idea that a psychological trait, one intimately linked to the higher mental functions, is highly heritable? A: With suspicion and unease, naturally. Q: It's strongly correlated with educational achievement, class and race. A: Worse and worse. Q: Basically nothing that happens after early adolescence makes an impact on it; before that it's also correlated with diet. A: Do you work at the Heritage Foundation? Such things cannot be. Q: What if I told you the trait was accent? A: I'm sorry? Q (in a transparently fake California accent): When you, like, say words differently than other people? who speak, like, the same language? because that's how you, you know, learned to say them from people around you?...

Continue reading " " »


The most remarkable thing about this piece from 2011 is that Robert Barro does not seem to feel under any pressure at all to provide an account of why it was that real GDP per capita was 52,049 dollars in the fourth quarter of 2007 and yet only 49,318 dollars in the second quarter of 2009—and did not surpass its 2007Q4 level again until 2013Q3.

Other adherents than Barro to what Barro calls "normal economics" have put forward three theories:

  • that there was a huge sudden change in American workers' utility functions that made them much less eager to work,
  • that there was a huge sudden forgetting of a great deal of knowledge about how to manipulate nature and organize production, and
  • that there was a great and well-founded fear that Obama was about to impose taxes to turn America into a Venezuela or that Bernanke was about to follow a monetary policy that would turn the U.S. into a Zimbabwe.

They were laughed at.

So Barro prefers to have no explanation at all for why production per capita was lower than it had been in 2007Q4, and yet maintains unshaken confidence that he has a deep and correct understanding of what determines the level of production. You can't do that—hold that you have the correct theory, and yet not explain how it applies to the world in which you live: Robert Barro (2011): Keynesian Economics vs. Regular Economics: "The overall prediction from regular economics is that an expansion of transfers, such as food stamps, decreases employment and, hence, gross domestic product (GDP). In regular economics, the central ideas involve incentives as the drivers of economic activity. Additional transfers to people with earnings below designated levels motivate less work effort by reducing the reward from working. In addition, the financing of a transfer program requires more taxes—today or in the future in the case of deficit financing. These added levies likely further reduce work effort—in this instance by taxpayers expected to finance the transfer—and also lower investment because the return after taxes is diminished...

Continue reading " " »


Kieran Healy: Conversational Disciplines: "Being able to broadly agree on how to evaluate contributions is what allows disciplines to tolerate (and enjoy) substantial, persistent disagreement about this or that 'big question' or 'core problem'. Thus, you are unlikely to convince your fellow Psychologists of something important (something that’s important to them, I mean) without some fake data good experimental evidence. Similarly, Economists may not pay attention to you if you do not proceed according to some (to them) widely-shared rules of ritualized mathematics model-building supplemented by some nonsense about incentives empirical evidence. Professional Historians will be less likely to take you seriously if your claims are not built on an elegant prose style a demonstrated mastery of a relevant archive. Sociologists may remain unconvinced of your claims if you do not blame neoliberalism blame neoliberalism...

Continue reading "" »


0, 179, 465, 654—what's the next number in this series? Stephen Moore claims it is obvious, and gestures at it with an "and so on". Two numbers give you a line, three (that don't fall on a line) give you a parabola, and four (that don't fall along a line or a parabola) give you a cubic. We have four: What are the next numbers iin the cubic? 542, and -75, and -1401. Add up the first ten terms of this "and so on" series and we get not +6000 billion but rather -39820 billion. Economists know how to do and use math. Stephen Moore just doesn't: Stephen Moore: The Corporate Tax Cut Is Paying for Itself: "Kevin Hassett... caused a brouhaha by claiming... that the corporate tax cut... has 'about paid for itself.'... He is almost entirely right.... Even if we assume a reversion to the pre-Trump 1.9% growth path, the ratchet up in GDP this year translates into 179 billion in unexpected output this year, 465 billion next year, 654 billion in 2020, and so on. This magic of compounding yields more than $6 trillion additional GDP over the decade thanks to the faster growth already achieved...

Continue reading " " »


As I have said: It is a long time since NEC Chair Larry Kudlow was an economist—now he is just a guy who plays an economist on TV: Fred Imbert: White House Advisor Kudlow Says Apple Technology May Have Been 'Picked Off' by China: "'Apple technology may have been picked off by China and now China is becoming very competitive with Apple',” says Kudlow. 'There are some indications from China that they’re looking at that, but we don’t know that yet. There’s no enforcement; there’s nothing concrete', Kudlow adds... John Gruber: "What he’s saying here is that the Chinese stole Apple technology, copied it, and are now flooding the Chinese market with phones based on that stolen tech. I’m 99.8 percent certain that hasn’t happened—if there were Chinese phones built with stolen Apple technology we’d know it because we’d see it. I was going to say 'You can’t just make shit like this up', but as with most of the Trump Kakistocracy, things that you think are can’t’s are really just shouldn’t’s...

Continue reading " " »


Brian Barrett: The Silver Lining in Apple’s Very Bad iPhone News: "As recently as 2015, smartphone users on average upgraded their phone roughly every 24 months.... As of the fourth quarter of last year, that had jumped to at least 35 months.... The shift from buying phones on a two-year contract—heavily subsidized by the carriers—to installment plans in which the customer pays full freight... a sharp drop-off in carrier incentives. They turn out not to be worth it.... 'It actually costs them to get you into a new phone, to do those promotions, to run the transaction and put it on their books and finance it'. Bottom line: If your service is reliable and your iPhone still works fine, why go through the hassle?...

Continue reading " " »


Where did David Brooks learn to use the term "cultural Marxism"? From Alexander Zubatov and his attempt to rehabilitate it from its anti-Semitic not just connotation but denotation. How does Zubatov do this? By taking Russell Blackford out of context: Zubatov claims that Blackford's bottom line is "in other words, [cultural Marxism] has perfectly respectable uses outside the dark, dank silos of the far right". Blackford's actual bottom line is that the modern

conception of cultural Marxism is too blunt an intellectual instrument to be useful for analysing current trends. At its worst, it mixes wild conspiracy theorizing with self-righteous moralism.... Right-wing culture warriors will go on employing the expression 'cultural Marxism'... attaching it to dubious, sometimes paranoid, theories of cultural history.... Outside of historical scholarship, and discussions of the history and current state of Western Marxism, we need to be careful.... Those of us who do not accept the narrative of a grand, semi-conspiratorial movement aimed at producing moral degeneracy should probably avoid using the term 'cultural Marxism'...

Why does Zubatov misuse Blackford? In the hope that he will pick up readers like Brooks, who will take his representations of what Blackford says to be accurate. Why does Brooks take Zubatov's representations of what Blackford says as accurate? Because Brooks is too lazy to do his homework: Ben Alpers: A Far-Right Anti-Semitic Conspiracy Theory Becomes a Mainstream Irritable Gesture: "At the heart of this largely rote piece of Brooksian pablum is a claim that deserves a closer look.  'The younger militants', writes Brooks, 'tend to have been influenced by the cultural Marxism that is now the lingua franca in the elite academy'. This is interesting both for what Brooks appears to be trying to say and, more immediately, how he has decided to say it.... Norwegian far-right terrorist Anders Behring Breivik... murdered sixty-nine people... William Lind... associated with both the Free Congress Foundation and Lyndon LaRouche... Lind’s conception of Cultural Marxism was explicitly anti-Semitic.... Over the course of these years, the idea of Cultural Marxism spread across the American far right... [with] a big boost from Andrew Breitbart.... Why would a columnist like David Brooks, who is himself Jewish in background (if, perhaps, no longer in faith) and who has tried to build his brand identity by peddling in respectability and civility, adopt the term?...

Continue reading " " »


Comment of the Day: I had always thought that the "male variability" hypothesis was really a "male skewed lower tail" hypothesis, and has nothing to say about the upper tail of males. It's the small Y-chromosome—the missing genes that make males overwhelmingly susceptible to color-blindness, hemophilia, the autism spectrum, may play a role in reduced life expectancy, and other things. But that male variability is greater because males are genetically weak says little or nothing about a possible genetic upper tail: Paul Reber: Patriarchy & Gender: "On Patriarchy & Gender... it's worth noting that a consequence of the Y-chromosome bottleneck 5000 years ago is that the 'fat tails' hypothesis that Pinker and Baumeister suckered Larry Summers with is obviously wrong. That is, the hypothesis that men exhibit genetically-dependent higher IQ variability, leading to more men on the upper tail of the distribution (and lower) which leads to over-representation in highly IQ-selective subsets such as professors at Harvard/MIT/etc....

Continue reading " " »


Comment of the Day: Pinkybum:: What Is Going on This Morning Over at "National Review"? Is It Worth Reading? No.: "I feel like Louis CK's Parkland joke is not funny because fundamentally the premise is not true. What he posits is (a) the kids who are getting the media attention (b) don't deserve it because (c) why does surviving a mass shooting make you (d) an expert in gun control? But really the fundamental truth of the issue is that they are experts because it doesn't really take much intellectual brain power to see that gun regulation could be much more comprehensive and effective if possession of guns took as least as much trouble as obtaining a driver's license...

Continue reading " " »


Laboratories of democracy! It seems pretty clear that Brownback was in on the grift, but expected—hoped?—that his tax cuts would pull enough activity and people from Kansas City, MO to Kansas City, KS that that plus a normal rapid recovery would allow him to claim a "Kansas boom". But his henchmen still control the Kansas Republican Party: Heather Boushey: Failed Tax-Cut Experiment in Kansas Should Guide National Leaders: "Sam Brownback’s failed “red state experiment” has truly come to an end.... In 2012 and 2013, Republican Gov. Sam Brownback signed into law the largest tax cuts in Kansas history. The top state income tax rate fell by nearly one-third and passthrough taxes that affected mainly relatively wealthy individuals were eliminated. With the decline in revenues came significant spending cuts...

Continue reading " " »


Debating Societies, Talking Points, and Choosing Our Governors

Daniel Webster In The Webster Hayne Debate Photograph by Cora Wandel

Debating Societies, Talking Points, and Choosing Our Governors This is a piece that never came together—on Ted Cruz, Bernie Sanders's henchman Warren Gunnels, JEB!! henchman Franklin Foer, and other people who have paved our way to our current Trumpist detachment of media and political discourse from, you know actual governance.

But here it is, for what it is worth:


With Bill Clinton, or Bill Bradley, or Al Gore, or Barack Obama, or Lloyd Bentsen, or Hillary Rodham Clinton—you listen to them, or you talk to them, and you know there is a mind back there deeply knowledgeable about and wrestling with substantive issues of societal welfare and technocratic policy.

With other high politicians, not so much. I gather that New Jersey Governor Chris Christie boldly stated that Marco Rubio failed his Turing test—and large numbers of observers agreed. Or take Ted Cruz, who starts out with a quite reasonable discourse on the fundamental aims of monetary policy:

Continue reading "Debating Societies, Talking Points, and Choosing Our Governors" »


This is the word on how the government ought to analyze proposed tax regulations: Greg Leiserson and Adam Looney: A Framework for Economic Analysis of Tax Regulations: "Treasury and the IRS should conduct a formal economic analysis of regulations in two cases. First, for regulations that implement recent tax legislation, the agencies should conduct an analysis if they have substantial discretion in designing the regulation and if different ways of doing so would vary substantially in their economic effects. Second, for regulations unrelated to recent legislation, the agencies should conduct an analysis if the regulation would have large economic effects relative to current practice...

Continue reading " " »


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Ray [REDACTED]: Gather Round, Kids, While I Tell You About What I Call.. "The Greatest S---show in Crypto": "Many of you will be surprised to learn that there is a thriving industry of paid advice on buying and selling cryptos assets, including newsletters, telegram groups, and subscriber-only emails. Until very recently, one of the most popular paid services was something called Standpoint research, seen here on CNBC with Mr. Wonderful from SharkTank. In February of 2018, Standpoint Research recommended that its subscribers buy an unknown asset known as $DIG, because the owner of Standpoint thought there was insider trading going on. You read that right. He suspected fraud, so he issued a 'buy' recommendation. The coin then subsequently grew from a fraction of a penny to 16 cents per token, as buyers rushed in to acquire this asset. For the craziest reasons you can imagine. The coin itself claims to be backed by $15 billion (not a typo) in Gold Bullion. Their website, if you are curious, is http://arbitrade.io ...

Continue reading " " »


Barry Eichengreen: The Euro at 20: An Enduring Success but a Fundamental Failure: "The belief of... Francois Mitterrand and... Helmut Kohl that a single European currency would apply irresistible pressure for political integration. It would lead eventually to their ultimate goal.... To function smoothly, monetary union requires banking union... an integrated fiscal system.... Banking union and fiscal union will only be regarded as legitimate if those responsible for their operation can be held accountable for their decisions by citizens.... Monetary integration creates a logic and therefore irresistible pressure for political integration. Or so the euro’s architects believed...

Continue reading " " »


We May Well Not Be at Full Employment Yet...

FRED Graph FRED St Louis Fed

In the context of overall labor-market utilization trends, the rise in the household-survey estimate of the unemployment rate in December relative to November is worth a note:

  • First, the rise in the unemployment rate is due predominately to yet another increase in labor force participation. It's not that people found it harder to find and keep jobs—it's that people who had thought it would be hard concluding that it will be easier, and so starting to look.

Continue reading "We May Well Not Be at Full Employment Yet..." »


Rand Paul: Protecting Property Holders’ Rights to Discriminate on the Basis of Race: "Is the Hard Part About Believing in Freedom..."

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Rand Paul: Protecting Property Holders’ Rights to Discriminate on the Basis of Race: "Is the Hard Part About Believing in Freedom...": I had thought that my brilliant-but-at-times-highly-annoying coauthor @Econ_Marshall was making a more sophisticated point: that here in America "libertarianism" is a Frankenstein's monster that got its lightning-bolt juice from massive resistance to the Civil Rights Movement.

Dismantling the New Deal and rolling back the social insurance state were not ideas that had much potential political-economy juice back in the 1950s and 1960s. But if the economic libertarian cause of dismantling the New Deal could be harnessed to the cause of white supremacy—if one of the key liberties that libertarians were fighting to defend was the liberty to discriminate against and oppress the Negroes—than all of a sudden you could have a political movement that might get somewhere. And so James Buchanan and the other libertarians to the right of Milton Friedman made the freedom to discriminate—or perhaps the power to discriminate?—a key one of the liberties that they were fighting for in their fight against BIG GOVERNMENT. And this has poisoned American libertarianism ever since.

This—Marshall thinks, and I am more than half agree, is the right way to look at it.

For example, consider when Rand Paul came out of the libertarian fever swamps to Washington https://www.google.com/amp/s/thehill.com/blogs/blog-briefing-room/news/161217-paul-says-he-would-have-opposed-civil-rights-act and began saying that he would have voted against the 1964 Civil Rights Act because it infringed On property holders’ rights to discriminate:

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Yes, the "LEAVE!" faction of the British Conservative and Unionist Party is bats--- insane. Any questions?: Arj Singh: 'Increasing Number' Of Tory MPs Are Considering No-Deal Brexit As A 'Viable' Plan B: "A Leave-backing former cabinet minister said... 'People aren’t going round and saying "No Deal" is going to be a cakewalk. But... people are... asking "how much will this actually impact people’s lives?" We won’t be able to get certain foods like bananas or tomatoes but it’s not like we won’t be able to eat. And we’ll be leaving at a time when British produce is beginning to come into season, so it’s the best possible time to leave with no deal'...

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M.G. Siegler: Apple’s Precarious and Pivotal 2019: The battery replacement issue suggests that many people are no longer upgrading iPhones because they’re now 'good enough' and everyone is more than happy to just pay a bit more for a better battery.... The part about 'US dollar strength-related price increases'—yes, this is Apple... acknowledging there may be a price ceiling for the iPhone.... The '$1,500 iPhone' (the most expensive variety of the iPhone XS Max) [was] to test such upper boundaries, like velociraptors testing electric fences. Consider it tested! And they’ll remember!...

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