Grasping Reality on TypePad, by Brad DeLong

As I have said before, I think the key to understanding the moral and—I hope—political bankruptcy of the Republican Party lies in its transformation from a party of those who think they will have wealth, and so have something to gain, into a party of those who think they have had wealth of some sort, and so have something to lose. The first party is very friendly to enterprise, progress, growth, change, and creative destruction. The second is quite hostile to them: it is friendly to established property alone.

I think Paul Krugman is wrong today on international trade. For we find him in “plague on both your houses” mode. On the one hand:

Paul Krugman: Trade and Tribulation and A Protectionist Moment?: “Protectionists almost always exaggerate the adverse effects of trade liberalization…

…Globalization is only one of several factors behind rising income inequality, and trade agreements are, in turn, only one factor in globalization. Trade deficits have been an important cause of the decline in U.S. manufacturing employment since 2000, but that decline began much earlier. And even our trade deficits are mainly a result of factors other than trade policy, like a strong dollar buoyed by global capital looking for a safe haven.

At the zero lower bound on safe nominal short-term interest rates, an expansionary fiscal policy impetus of d percent of current GDP will:

1. raise current output by (μ)d,
2. raise future output by (φμ)d, and
3. raise the debt to GDP ratio by a proportional amount ΔD = (1 - μτ - μφ)d,

where μ is the Keynesian multiplier, τ is the tax rate, and φ is the hysteresis coefficient.

February 1, 2011: Deriving Their Just Powers from the Consent of the Governed...: With respect to whether Ayn Rand's receiving more in Medicare services (a lot more!) than she paid into the system was honorable, Alex Tabarrok asks:

What are the essential principles of America's political parties?

Paul Krugman seeks enlightenment. But I think he looks in the wrong place. He looks in the works of German Charlie from Trier:

Paul Krugman: Partisan Classiness: "Many people in the commentariat are utterly committed to the view that the two major parties are mirror images of each other...

...despite vast evidence to the contrary. But until Harry Enten directed me to... Grossman and Hopkins, I hadn’t really registered the extent to which the same assumption of symmetry is often made by political scientists.... Grossman and Hopkins... document the very real differences in the two parties’ structure... in terms of how they work....

The Republican Party is the agent of an ideological movement, while the Democratic Party is best understood as a coalition of social groups.

J. Bradford DeLong (1998): Robber Barons:

First draft October 13, 1997; second draft January 1, 1998.

I. Introduction

'Robber Barons': that was what U.S. political and economic commentator Matthew Josephson (1934) called the economic princes of his own day. Today we call them 'billionaires.' Our capitalist economy--any capitalist economy--throws up such enormous concentrations of wealth: those lucky enough to be in the right place at the right time, driven and smart enough to see particular economic opportunities and seize them, foresighted enough to have gathered a large share of the equity of a highly-profitable enterprise into their hands, and well-connected enough to fend off political attempts to curb their wealth (or well-connected enough to make political favors the foundation of their wealth).

I have committed a grave sin for the first time.

In revising and extending for publication the remarks I made during the discussion of Doug Elmendorf's paper for the Fall 2015 issue of the Brookings Papers on Political Economy, I have not done so.

Instead, I have rewritten and compressed. The below bears little resemblance to what I did say. But it is what I should have said:

Live from La Farine: We have been tiptoeing around the problem with Republican likely primary voters.

The problem is this: They do not understand and have not internalized America's core freedom-loving and immigrant-friendly values.

The fact that the country has failed to absorb this deviant population culturally and ideologically is, perhaps, the biggest challenge facing America today:

Kevin Drum: Republican Voters Like What Donald Trump Is Selling: "These aren't polls of tea partiers...

Storify: Inequality, Technocracy, Utility, and the Federal Reserve: A Short Twitter Dialogue on Various Matters of Moral Philosophy, or, IT'S OK FOR THE FED CHAIR TO TALK ABOUT INEQUALITY!!!!