#commentoftheday Feed

Comment of the Day: Shelly Lundberg: "Re question at the end...:

Shelly Lundberg: Can't disagree with [Matt Notowidigodo's] sentiment but, as others have noted, the first part of that screenshot from @delong deserves comment. Says that tenure committees are making decisions on the basis of whether you spend long hours in the office and have flexible schedules--so bad for moms.

Matt Notowidigdo: Professor @delong says exactly what I've been thinking about recently http://www.bradford-delong.com/2018/07/feminism-in-the-long-20th-century-an-intake-from-slouching-towards-utopia-the-economic-history-of-the-long-20th-century.html. I agree that the "economic rise of women" is one of the most important changes in the last 100 years; it has affected almost every part of modern economic life.

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Comment of the Day: Graydon: Understanding Karl Marx: "The thing -- well, a thing, and I think an important thing still generally missed -- Marx missed was the metallic cartridge. From ~1860 through 1914, the decisive aspect of your military campaign was 'how many riflemen, how well fed, and how well trained?'...

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Comment of the Day: JEC: Protecting Ourselves from Facebook: "I think it's worth mentioning that (a) 'How do I protect my privacy?'...

...and (b) "How do I protect myself from hostile psyops?" are different questions with partially overlapping answers. And "How do I protect myself from the actions of my neighbors who fail to protect themselves from hostile psyops?" is a third, and arguably more important, question...


Comment of the Day: I have never understood this belief in "snapback". Previous "snapbacks" had all taken place in the context of the Federal Reserve driving the real interest rate far below the Wicksellian neutral rate and a supportive fiscal policy. Neither of those were present. Where was snapback supposed to come from after 2009?: Charles Steindel: : "It was a belief that the recession was primarily the result of the collapse of the financial system...

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Comment of the Day: Robert Waldmann: Paul Krugman Looks Back at the Last Twenty Years of the Macroeconomic Policy Debate: "2a) I think Paul Krugman was wrong. b) I had conceded that he was right as always. c) now I'm back. It has to do with the expected inflation imp...

...Krugman discussed a central bank which could credibly promise to be irresponsible in the future when the economy is out of the liquidity trap. I don't like the use of "credibly". The question is what promises are credited by economic agents. The identification of "credible" and "credited" is part of the damage done by the rational expectations assumption. Agents' beliefs about policy are described as an aspect of the policy. It is insinuated that a central banker with resolve, character, integrity determination and a pre-commitment facility, can make people believe anything.

Krugman has never asserted that his proposed monetary definitely would work if tried. He always argues that it might work and fiscal stimulus is clearly politically impossible. But he does try to claim it would work if only central bankers followed his advice.

His problem is Kuroda, who did everything as Krugman advised and was determined to do whatever it takes to get to 2% inflation. From 2015 through 2017 Japanese consumer price inflation fluctuated rought from 0.5% to -0.5%—the only way they got CPI inflation was raising the value added tax (VAT) rate (and causing a recession). I now think the data which convinced me Krugman was right were due to Japanese realizing that Abe was really really going to raise the VAT.

Agents' expectations are not an instrument of policy. Central bankers try to use the "expectations channel" but it usually doesn't work. More here: https://angrybearblog.com/2018/03/a-comment-on-the-return-of-its-baaaack.html

Also, as noted by our Advisor, Krugman assumes that everything will return to normal in the long run. He analyses 2 periods, the present and the long run, and the long run is assumed to include full employment. He has trouble modellings secular stagnation. We must walk through the valley without the long run as our shepherd http://rjwaldmann.blogspot.it/2015/06/delong-praises-long-run.html

Also dreadful plumbing in a pdf here http://bit.ly/1cBYU0x

Comment of the Day: RW: Disrupting Education: "'Will we ever create tech (even for a few subjects) that will work as well as good one-on-one tutoring?'...

...That already has been done in a limited, skill-building way; e.g., Kahn Academy as noted in the root ms of this thread. But teaching is more complicated than that; e.g., developing the abilities of groups of students who are not your own children or even your own tribe introduces wrinkles even before you get the question of what kinds of abilities the students might consider most valuable. Tech can't be about teaching (yet) and if it is to be about tutoring at more complex levels it needs to emphasize tech's strengths rather than attempting to emulate teachers; i.e., what computers do best is exhaustive data traversal and rules-based analysis.

NB: Years ago I had a discussion with some folks developing a biochemistry program at UCLA that involved tracking each student's steps in solving a problem set and generated a report showing the path each student took. This was not constrained to achieving the correct answer or even just the number of steps it took. The program conducted a path analysis and one of the report elements was how 'splayed' the path appeared; that is, did the path reveal a tighter pattern suggestive of conceptual understanding or did it suggest the student was following leads in unprofitable directions, not intuitively sure of where the answer might lie. Not sure where that program wound up but it seemed like the right idea to me: let the computer do what it does best then let the teacher do what they do best.

"In the last analysis, we must come to the inevitable conclusion that education can be imparted only by a teacher and not wholly by a method ... Just as a water tank can be filled only with water and fire can be kindled with fire, life can be inspired with life ... However it may be, we want a human being in every sphere of our life. The mere pill of a method instead shall not bring us salvation." –Rabindranath Tagore

Comment of the Day: Ethan: Live from Global Warming Gehenna: "We used to call it 'Global Warming'. Later we called it 'Climate Change'. I have long preferred to call it 'Excess Solar Energy Trapped in the Bio-sphere'. That seems to me to explain it better. More energy = more movement. Storms, wind, melting ice, tides, whatever—the energy is going to go somewhere..."

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Comment of the Day: This is really nuts! When's the crash?: Spike: Ethereum! Blockchain! BitCoin!: "There is a nut of some interesting technology ideas involving blockchains that could potentially have applications that would be useful to explore...

...In short, by allowing for the synchronization of data structures across a multitude of systems without requiring any single one of those systems to be "in charge," the tech enables the development a unique class of applications, the properties of which we don't yet understand. The first of these applications to be developed involved a system for tracking and transferring the the ownership of digital pogs-aka, Bitcoin. This capability was latched on to by crazed Ron Paul fans who see it as a tool for overthrowing the Fed, as well as by online drug dealers.

It was the online drug dealers who found the most actual use for it, and for a time the thing actually worked as a semi-functional currency given that specific context. The Ron Paul fans, for their part, were content to just keep buy the stuff and never sell it. It's digital gold! However, it was not libertarians or drug dealers that actually created this wealth, except to the extent that many people from those groups also belong to the group that is now running the show: outright charlatans. These are the people who have basically figured out how to manipulate prices on the various cyrptocurrency exchanges, in large part by "printing money" in a way that would make the Fed ashamed.

The dirty secret that everyone knows is that a huge portion of the various cryptocurrency being traded is not being exchanged for actual money, but rather for something called "Tether," which have been created on the premise that every Tether in existence is backed by hard fiat currency in the form of a US dollar sitting in a bank account somewhere. Oddly enough, that bank account has never been audited, but the full faith and credit of the Tether Company seems good enough for teh market.

And yet, somehow a whole bunch of Tethers magically come into existence before every hike in the price of Bitcoin. So, these Tethers have been used to bid up the price of cryptocurrencies beyond all reason, and this has been magnified by a level of media hype that has brought in dumb-money "investors" out of the woodwork. This has had the infuriating effect of making Ron Paul fans very rich - at least on paper.

However, the cracks in the whole thing are showing as it becomes more and more apparent that actually extracting money from this system is very difficult. Bitcoin's usefulness as an actual currency went out the window months ago, as the price of conducting transactions has gone through the roof. And of course, the computers behind it use as much electricity as Ireland.

The whole thing is so goddamn unsustainable.

Should-Read: Chris Ellis: Bitcoin: Additional Suspicious Developments-Winklevoss Bitcoin Trust ETF (Pending:COIN): "Summary: Tethers are being issued at a pace of 13 billion per year...

  • No one knows where the money is, but no one seems to care.

  • Bitfinex halted new accounts registrations.

  • Bitfinex employee's profile suggests that he or the company is being investigated.

  • Tether Limited runs the Bitfinex playbook by imposing redemption minimums, effectively freezing customer funds.

  • This idea was discussed in more depth with members of my private investing community, Core Value Portfolio.

In my previous articles, I talked about the surprising correlation between the supply of Tether and the price of Bitcoin.... There are good reasons to believe that Tether Limited is issuing Tethers that are not backed by USD as promised in order to purchase Bitcoin through Bitfinex.... I believe that Tether's correlation to Bitcoin is no simple coincidence. It continues to baffle me why this issue is not the most talked about topic in the Bitcoin community.... At the time of writing, there were over 1.2 billion Tethers outstanding. Meanwhile, no one actually knows or seems to care about where Tether Limited is holding the USD funds. If market participants truly care about the integrity of the cryptocurrency, this should be the most pressing issue at hand....

Many readers have urged me to forward my findings to relevant authorities, and it is interesting to note that a Bitfinex employee's warrant canaries have disappeared. Warrant canaries serve as a warning mechanism that indirectly indicates to the public that the related entities have not been investigated. Their disappearance implies that he or the firm are being investigated by law enforcement...."

Comment of the Day: heebie-geebie: Awfully Specific Advice: "Always draw the unit circle before you draw the axes, on the chalkboard. It's easier to aim the axes through the middle of the circle than it is to center the circle on the axes..."

An Appeal to the Republican-Supporting Plutocrats of America

Comment of the Day: JEC: An Appeal to the Republican-Supporting Plutocrats of America: "I've written more about this in my own space, but the short version is: 'Would somebody please remind the plutocrats that they are not the kleptocrats' natural allies; they are the kleptocrats' natural prey?'...

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Comment of the Day: But, alas, I think Robert Waldmann has the completely wrong. Draw the graph, Robert! What areas on what graphs does Greg's calculation correspond to? Please tell me!: Robert Waldmann: DeLong & Krugman vs Mankiw and Mulligan III: "Just click the links...

...I finally understand that Brad too is asking a very similarly odd question. The only difference is that Brad considers a tax on capital (tau)k not on capital income (t)f'(k)k. This makes the difference...

No, I do not think that it does.

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Comment of the Day: With respect to my time as DAS at the Treasury... I would have quit before I would have done the equivalent of what Holtz-Eakin has done. And one of scariest moment of my life was Lloyd Bentsen during the NAFTA debate looking at one of our presentations, looking at me, and saying: "Do you really believe this, or are you just trying to please me? It it is the second, you are useless to me." Plus there was Laura Tyson shutting down the message people who wanted her to shade her health care reform presentation with: "Fine. If that's what you want, I will go out there and say: 'This press conference is cancelled: right now is the only time in the next six months I could get an appointment at the HMO'": Robert Waldmann: : "It isn't just laughable. I think it is possible (and uninteresting) to prove that the communicative intent of the text is not the laughable interpretation...

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Comment of the Day: Charles Steindel: This Is Your Reminder...: "James Madison was appalled that the Constitutional Convention agreed to equal state representation in the Senate. He was dragged kicking and screaming into accepting that compromise (it's a bit odd to think nowadays that New Jersey—perhaps no longer a "large" state, but certainly, in population, considerably above the median—was then the leader of the small state bloc)."

Comment of the Day: Joe B: Six Faces of Right-Wing Chain-Forging Economist James Buchanan...: "It seems to me that you need to provide some concrete examples of being "struck by the contrast". Where in the text, exactly, do Farrell and Teles bend over backward to be fair to Buchanan and unfair to MacLean?..."

Fair question...

Let's look at: Henry Farrell and Steven Teles: When Politics Drives Scholarship...

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Comment of the Day: I have evoked some rants from Robert Waldmann...: Robert Waldmann: Monday Smackdown: Oh Dear!: "It isn't exactly Robert Waldmann's critique...

...In 1982 someone told me that he thought macroeconomics had taken a wrong turn and commenced a sterile research program which would last decades and be fruitless. That's a lot more impressive than saying such a thing now.

Who was that guy? Oh yeah, his name was Brad DeLong.

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Comment of the Day: "Praise then darkness and creation unfinished"; "praise the fire and the impulse of making"; isn't there another large, very densely-written book by now?

Graydon: : ""Good" is a value judgement, subject to context and hindsight, and it's subject to hindsight forever...

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Comment of the Day: JEC argues, I think correctly, that Lawrence J. Christiano, Martin S. Eichenbaum, and Mathias Trabandt: On DSGE Models is significantly less serious and more bad than I had argued. I think he is correct: JEC: Monday Smackdown: Oh Dear!: "To understand the state of academic macroeconomics, it's worth reading the first two sentences of the paper under discussion. They go like this...

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Comment of the Day: Sir Kraab: "A Sikh, an athetist, and a trans woman walk into a bar. They all have a drink together to celebrate their electoral victories."

Comment of the Day: Kien Choong: Premature Keys to the Kingdom: "What to do if you are handed the keys of the Kingdom [of the heavens or of the proletarians] prematurely? Apply a dose of “Chinese characteristics”! (Preferably without the Cultural Revolution!) More seriously, the long-term goal is universal education, public health and social insurance, which Christians pioneered in the 1st century Roman Empire..."

Comment of the Day: Phil Koop: : "There are some not so surprising names on that list, but too many that are astonishing...

...How the hell can Dean Baker, Adam S. Posen, or Justin Wolfers be surprised that the author of Dow 36,000 is also the author of Wage Gain $9,000?..."

Comment of the Day: I would not say that Kevin Warsh is innumerate—I have never seen him claim anything like 36.5/85 = 0.20—but he does not reason coherently:

Sans Souci: : "'Bernanke['s view]... may well be true according to economic textbooks'...

...DEPARTMENT OF "HUH!?!?": QE HAS RETARDED BUSINESS INVESTMENT!? http://www.bradford-delong.com/2015/10/department-of-huh-qe-has-retarded-business-investment.html... I score this for Bernanke: 6-0, 6-0, 6-0.

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Comment of the Day: Phil Koop: (Early) Monday John Cochrane "Arithmetic Is for Losers" Resmackdown: "'And yet this was, once, an economist...' 'An economist who becomes a Fellow of the Hoover Institution does not die, but he does not grow or obtain more life.'"

I gotta add on to this quote:

‘He merely continues, until at last every minute is a weariness. And if he often uses the Bullshit to make himself active, he fades: he becomes in the end invisible permanently, and walks in the twilight under the eye of the Dark Power that rules the Bullshit. Yes, sooner or later – later, if he is strong or well-meaning to begin with, but neither strength nor good purpose will last – sooner or later the Dark Power will devour him.’

‘How terrifying!’ said Frodo. There was another long silence. The sound of Sam Gamgee cutting the lawn came in from the garden...