Grasping Reality on TypePad, by Brad DeLong

Hoisted from 2012: Brad DeLong: Why Next to No Political Reaction to the Second Gilded Age?: Oh dear, that's a really tough question. So let me make it tougher by sharpening it and give it historical context. During the Gilded Age of the 1890s and 1900s you had strong political movements saying "something is going remarkably wrong with this, this isn’t the country we thought we were going to live in". The way that the historian—I'm blanking—Ray Ginger? Harley Shaiken: Yes, Ray Ginger. Brad DeLong: Ray Ginger put it in two absolutely brilliant books—Altgeld’s America and The Age of Excess—even the Republicans thought that they wanted to live in Abe Lincoln’s America, where when you are young you split wood into fence rails and go to law school at night and when you are middle-aged you become a lawyer and get rich and when you are old you enter politics and save the Union and free the slaves. They wanted to live in that kind of world, of upward mobility, in which opportunity is wide open even to the son of a penniless and not very successful rural farmer. But by 1890 they discovered that they weren’t living in Abe Lincoln's America at all...

Of historical interest only: Hoisted from the Archives: An Unrealistic, Impractical, Utopian Plan for Dealing with the Health Care Opportunity: First, it's definitely not a plan, and it's certainly not a proposal for the current or any forseeable future policy and political environment. Think of it as a utopia—and think of it as a utopia coming from a guy who is not a real health economist but has an undeserved reputation because he was good at translating the economese spoken by real health economists like David Cutler, Sherry Glied, Ken Thorpe, Len Nichols, et cetera in a way that made it intelligible to senior Bentsen aides like Marina Weiss and Michael Levy.

So here it is:

Today: The dirty little secret is that serious legal arguments are those that lawyers pretend to take seriously. If enough Republican hacks decide to pretend that Judge Reed O'Connor is serious, he becomes serious. My forecast? The Fifth Circuit narrowly upholds O'Connor, and then it goes down 8-1 in the Supreme Court—unless one of the Democratic justices dies or retires before the decision is announced, it which case O'Connor is upheld 5-3.

Jack Balkin wants to maintain two positions at once:

1. "The lesson of Sebelius is that if you give enough very smart lawyers enough time to work on a legal problem, they can come up with creditable arguments for many (but not all) legal positions, even if, when the task started, the position seemed hopeless..."

2. "I am most certainly not saying that legal argument and legal craft are mere disguises for political ideology or that they have no independent significance. I have been trained as a lawyer and I express opinions about the quality of legal arguments all the time. It is my job to do so. Thus, whether lawyers are willing to support a given claim depends on their perception of the quality of the legal reasoning and the quality of the legal arguments that can be advanced for it..."

But the second means almost nothing if "creditable" arguments can be constructed for nearly everything, and the task of law professors is then to retrospectively justify whatever the judges pick. The first means little if the legal community does have strong standards for what is a strong argument. How to resolve this? By noting that whatever gets five votes on the Supreme Court is retrospectively turned into the strongest arguments. And Supreme Court justices are very good at convincing themselves that what upholds their ideology and partisan position is in fact the best-argued and best-crafted.

Jack Balkin: Texas v. U.S: Off the Wall and On the Wall in the Age of Trump: "The judge's arguments are not even close to being persuasive given existing legal precedents. Does that mean that the position is 'off-the-wall'?... Asking whether a legal claim is 'off-the-wall' is a question of whether it is a reasonable claim, or at least one on which reasonable minds can differ.... But the perceived quality of legal reasoning and legal arguments are not exogenous from social influence...

Attempting to pass the crown of Chief Neoliberal Shill on to me, Noah Smith has an excellent Twitter thread that cites me: Noah Smith: "Here is a thread about neoliberalism. At the beginning of this year I was elected "Chief Neoliberal Shill", but the true Chief Neoliberal Shill has always been Brad @delong. In 1999, he wrote the following neoliberal manifesto: https://t.co/QQCBFHjgYR. DeLong's case for neoliberalism is basically: It's not about YOU, rich-country person. It's about people in poor countries. Neoliberalism, he says, is the best (only?) way for the world to recover from the inequalities generated by colonialism and unequal industrialization.... Obviously, lots of people toss around the word 'neoliberalism', using it to mean anything from Obama-style centrism to Ayn Rand-style feudalist libertarianism. But I like DeLong's version best. Neoliberalism as the most expeditious antidote to colonialism.

The "neoliberalism" I was talking about then is a relatively distant cousin (but was a cousin) of what people are calling "neoliberalism" today...

And Miniver Cheevy has formatted my argument of 1999:

Miniver Cheevy: : DeLong's Principles Of Neoliberalism: "Neoliberalism is many things. It is:

• a counsel of despair with respect to the possibility of social democracy today (outside of the global economy’s industrial core).
• a counsel of hope with respect to the prospects for rapid market-generated economic development outside the global economy’s industrial core—if governments adopt market-conforming policies.
• a bet that improvements in transportation and communication—the shrinking world—“globalization”—gives us today an extraordinary opportunity to rapidly reduce global inequality by incorporating more and more people and more and more more regions into the global economy.
• the only live utopian program in the world today...

I am all but certain to never teach a course on: Reasoning—Indivdual, Social, and Societal. But if I were to teach such a course, would this be the best reading list? And if not these readings, what would be better replacements?

• William Poundstone (2011): Labyrinths of Reason: Paradox, Puzzles, and the Frailty of Knowledge https://books.google.com/books?isbn=030776379X
• Hugo Mercier and Dan Sperber (2017): The Enigma of Reason: A New Theory of Human Understanding https://books.google.com/books?isbn=0674368304
• Daniel Kahneman (2011): Thinking, Fast and Slow https://books.google.com/books?isbn=0385676522
• T. M. Scanlon (2014): Being Realistic about Reasons https://books.google.com/books?isbn=019100314X
• Joshua D. Angrist and Jörn-Steffen Pischke (2008): Mostly Harmless Econometrics: An Empiricist's Companion https://books.google.com/books?isbn=1400829828
• Judea Pearl and Dana Mackenzie (2018): The Book of Why: The New Science of Cause and Effect https://books.google.com/books?isbn=0465097618
• William Flesch (2007): Comeuppance: Costly Signaling, Altruistic Punishment, and Other Biological Components of Fiction https://books.google.com/books?isbn=0674026314
• Josiah Ober (2008): Democracy and Knowledge: Innovation and Learning in Classical Athens https://books.google.com/books?isbn=1400828805
• Henry Farrell and Cosma Shalizi (2012): "Cognitive Democracy" http://crookedtimber.org/2012/05/23/cognitive-democracy/
• Cosma Shalizi (2012): "In Soviet Union, Optimization Problem Solves You" http://crookedtimber.org/2012/05/30/in-soviet-union-optimization-problem-solves-you/
• Herbert Simon (1969): The Sciences of the Artificial https://books.google.com/books?isbn=0262264498
• Partha Dasgupta (2007): Economics: A Very Short Introduction https://books.google.com/books?isbn=0192853457
• Milton Friedman and Rose Director Friedman (1990): _Free to Choose: A Personal Statement https://books.google.com/books?isbn=0547539754
• Tom Slee (2006): No One Makes You Shop At Walmart https://books.google.com/books?isbn=1897071884
• Paul Seabright (2010): The Company of Strangers: A Natural History of Economic Life https://books.google.com/books?isbn=1400834783
• Richard Thaler (2015): Misbehaving: The Making of Behavioral Economics https://books.google.com/books?isbn=0393246779

Very welcome to see: Remember: Fool me once, shame on you; fool my twice, shame on me: Ezra Klein: Speaker Paul Ryan Retires: His Legacy Is Debt and Disappointment: "Ryan says that debt reduction is one of those things 'I wish we could have gotten done'. Ryan, the man with the single most power over the federal budget in recent years, sounds like a bystander.... To understand the irony and duplicity of that statement, you need to understand Ryan’s career. After the profligacy of the George W. Bush years and the rise of the Tea Party, Ryan rocketed to the top ranks of his party by warning that mounting deficits under President Obama threatened the 'most predictable economic crisis we have ever had in this country'. Absent the fiscal responsibility that would accompany Republican rule, we were facing nothing less than 'the end of the American dream'. Ryan’s reputation was built on the back of his budgets: draconian documents that gutted social spending, privatized Medicare, and showed the Republican Party had embraced the kinds of hard fiscal choices that Bush had sloughed off. And Ryan presented himself as the wonkish apostle of this new GOP...

Note to Self: Coffee with Brink Lindsey, co-author of The Captured Economy: How the Powerful Enrich Themselves, Slow Down Growth, and Increase Inequality https://books.google.com/books?isbn=0190627778: "Brink Lindsey and Steven M. Teles identify a common factor behind... breakdowns in democratic governance that allow wealthy special interests to capture the policymaking process for their own benefit...

Alfred lost. But a very good anti-NIMBY set of posters...

Brink Lindsey and Steve Teles: The Captured Economy: How the Powerful Enrich Themselves, Slow Down Growth, and Increase Inequality https://books.google.com/books?isbn=0190627778

#books #NIMBYism

Hoisted from 2012: Brad DeLong: Why Next to No Political Reaction to the Second Gilded Age?: Oh dear, that's a really tough question. So let me make it tougher by sharpening it and give it historical context. During the Gilded Age of the 1890s and 1900s you had strong political movements saying "something is going remarkably wrong with this, this isn’t the country we thought we were going to live in". The way that the historian—I'm blanking—Ray Ginger? Harley Shaiken: Yes, Ray Ginger. Brad DeLong: Ray Ginger put it in two absolutely brilliant books—Altgeld’s America and The Age of Excess—even the Republicans thought that they wanted to live in Abe Lincoln’s America, where when you are young you split wood into fence rails and go to law school at night and when you are middle-aged you become a lawyer and get rich and when you are old you enter politics and save the Union and free the slaves. They wanted to live in that kind of world, of upward mobility, in which opportunity is wide open even to the son of a penniless and not very successful rural farmer. But by 1890 they discovered that they weren’t living in Abe Lincoln's America at all...

Seminar: James Cloyne: Taxes and Growth: New Narrative Evidence from Interwar Britain: James Cloyne, Nicholas Dimsdale, and Natacha Postel-Vinay: Taxes and Growth: New Narrative Evidence from Interwar Britain: "The impact of fiscal policy on economic activity is still a matter of great debate. And, ever since Keynes first commented on it, interwar Britain, 1918-1939, has remained a particularly contentious case, not least because of its high debt environment and turbulent business cycle...

Fresh at Project Syndicate: Blame the Economists?: Ever since the 2008 financial crash and subsequent Great Recession, economists have been pilloried for failing to foresee the crisis, and for not convincing policymakers of what needed to be done to address it. But the upheavals of the past decade were more a product of historical contingency than technocratic failure: BERKELEY—Now that we are witnessing what looks like the historic decline of the West, it is worth asking what role economists might have played in the disasters of the past decade. From the end of World War II until 2007, Western political leaders at least acted as if they were interested in achieving full employment, price stability, an acceptably fair distribution of income and wealth, and an open international order in which all countries would benefit from trade and finance. True, these goals were always in tension, such that we sometimes put growth incentives before income equality, and openness before the interests of specific workers or industries. Nevertheless, the general thrust of policymaking was toward all four objectives. Then came 2008, when everything changed. The goal of full employment dropped off Western leaders’ radar... Read MOAR at Project Syndicate

#projectsyndicate #economicsgonewrong #economicsgoneright #monetarypolicy #finance #politicaleconomy

Note to Self: Alan Greenspan and the Bush Tax Cut: Was Alan Greenspan in 2001 playing a subtle reputation-enhancing game—anxious to give testimony that the administration and its press lapdogs would spin as a green-light endorsement, but in which economists like me and financiers like Robert Rubin would be unable to find any sentence that was truly objectionable? Perhaps... Perhaps not...

Let's give the mike to Alan Greenspan, p. 220 ff.:

Bob Rubin phoned.... With a big tax cut, said Bob, "the risk is, you lose the fiscal discipline."... "Bob, where in my testimony do you disagree?"

DeLong FAQ: Why Is Donald Trump Waging a Trade War? You ask: who are the people who would want to see this U.S.-China trade war happen? We have been unable to find any. Usually pressure to wage a trade war bubbles up from powerful economic groups that are or that believe they are being gravely injured by imports. Usually there are large advertisements in the New York Times and the Washington Post saying that it is time for the country to get behind the president, who is trying to keep other countries from taking unfair advantage of Americans.

We have not had any of that this time. There has been no mobilization of economic interests that favor a trade war.

Vijay Govindarajan, Shivaram Rajgopal, and Anup Srivastava: Why We Need to Update Financial Reporting for the Digital Era: "The market caps of just four companies, Apple, Alphabet, Amazon, and Microsoft, now exceed $3 trillion...