I see no way to justify including this in the ms. But should any of it go in? Or does it just belong in some other intellectual project?
The Dire Absolute Poverty of the Globe in 1870
J. Bradford DeLong
U.C. Berkeley, NBER, and WCEG
7,137 words https://www.icloud.com/pages/0-ZwSIf-ES3dfIBtF_dW_DBmQ
John Ball (1381):
When Adam delved and Eve span,/
Who was then the gentleman?
From the beginning all men by nature were created alike, and our bondage or servitude came in by the unjust oppression of naughty men. For if God would have had any bondmen from the beginning, he would have appointed who should be bond, and who free.
And therefore I exhort you to consider that now the time is come, appointed to us by God, in which ye may (if ye will) cast off the yoke of bondage, and recover liberty…
You need to understand three things to grasp the state of the world economy in 1870: that the drive to make love is one of the very strongest of all human drives, that living standards were what we would regard as very low for the bulk of humanity in the long trek between the invention of agriculture and 1870, and that the rate of technological progress back before 1870 was glacial, at best.
Continue reading "The Dire Poverty of the Globe in 1870: An Outtake from "Slouching Towards Utopia?: An Economic History of the Long 20th Century"" »
This is a very nice short framework-for-thinking-about-globalization-and-the-world piece by Paul Krugman: Paul Krugman (2018): Globalization: What Did We Miss?
It is excellently written. It contains a number of important insights.
I have, unusually, a number of complaints about it. I will make them stridently:
Continue reading "Globalization: What Did Paul Krugman Miss?" »
I confess that I am a great fan of Applied History. Theoretical arguments and conceptual frameworks are, ultimately, nothing but distilled, crystalized, and chemically cooked history. After all, what else could they possibly be? And it is very important to know whether the distillation, crystallization, and chemical cooking processes that underpin the theory and made the conceptual frameworks were honest ones. And that can be done only by getting good historians into the mix—in a prominent and substantial way.
But if this is what "Applied History" is to be, AY-YI-YI-YI-YI-YI-YI!!!!
Niall Ferguson: Fetch the purple toga: Emperor Trump is here: "Think of Harvey Weinstein, the predator whose behaviour was for years an 'open secret' among precisely the Hollywood types who were so shrill last year in their condemnation of Donald Trump for his boasts about 'grabbing' women by the genitals...
Continue reading "Misapplied History..." »
Does this belong in the next edition of Martha Olney's and my Macroeconomics textbook?
Box 4.4.6: Estimating the Effects of Policy Changes: An Example
In late 2017 and early 2018 the Trump administration and the Republican congressional caucuses pushed through a combined tax cut and a relaxation of spending caps to the tune of increasing the federal government budget deficit by about 1.4% of GDP. These policy changes were intended to be permanent.
Not the consensus but the center-of-gravity analysis by informed opinion in the economics profession of the effects on long-run growth of such a permanent change in fiscal policy would have made the following points:
Continue reading "Estimating the Long Run Growth Effects of Tax Cuts: An Example" »
*Milken Institute Review: When Globalization is Public Enemy Number One: The first 30 years after World War II saw the recovery and reintegration of the world economy (the “Thirty Glorious Years,” in the words of French economist Jean Fourastié). Yet after a troubled decade — one in which oil shocks, inflation, near-depression and asset bubbles temporarily left us demoralized — the subsequent 23 years (1984-2007) of perky growth and stable prices were even more impressive as far as the growth of the world's median income were concerned.
Continue reading "When Globalization is Public Enemy Number One: No Longer Fresh at the Milken Institute Review" »
Information from the very sharp Eric Toder: The House Ways and Means Tax Bill Would Raise the National Debt to 123 percent of GDP by 2037: "The Tax Policy Center estimates that the House Ways and Means Committee’s version of the Tax Cut and Jobs Act (TCJA)...
...over the first decade... increases the deficit by 1.7 trillion dollars.... Between 2028 and 2037, the TCJA would reduce net receipts by 1.6 trillion dollars and add 920 billion dollars in additional interest costs. Over the entire 20-year period, the combination of reduced revenues and higher interest payments would raise the federal debt held by the public by 4.2 trillion dollars...
Continue reading "The Page Which All Discussion of the Trumpublican Tax... "Reform"? "Cut"? "Giveway"? Should Start from..." »
I have long had a "thinking like an economist" lecture in the can. But I very rarely give it. It seems to me that it is important stuff—that people really should know it before they begin studying economics, because it would make studying economics much easier. But it also seems to me—usually—that it is pointless to give it at the start of a course to newBs: they just won't understand it. And it also seems to me—usually—that it is also pointless to give it to students at the end of their college years: they either understand it already, or it is too late.
By continuity that would seem to imply that there is an optimal point in the college curriculum to teach this stuff. But is that true?
What do you think?
Continue reading "How to Think Like an Economist (If, That Is, You Wish to...)" »
Hoisted from the Archives: Yesterday I was bitching to the team at "ParsonsTKO | A Digital Transformation Agency" http://parsonstko.com/, which is in charge of thinking about the redesign of the Equitable Growth Website http://equitablegrowth.org, about not just our failure but the general failure of the internet to bring things from the stock into the flow—to have a memory. The original hope was that Google http://google.com would be that memory, but full-text combined with word-nearness search plus pagerank does not do the job. So I was arguing that Equitable Growth should hire somebody whose job—at least part of whose job—is to ask: what is the thing that Equitable Growth has ever published that is most relevant to live concerns and issues today?; and then repost and highlight that thing. Plus we need an indexing grammar, ontology, whatever, that makes the most relevant thing easy to search for and find.
But I can do this for my own website, myself—if I find time. So here we are: what the country should be doing about ObamaCare right now, hoisted from my archives from 2004:
Reading Reihan Salam's "Why I signed up for Obamacare": The Honest Broker for the Week of May 10, 2014: So this morning I am reading the highly-intelligent Reihan Salam's bill of indictment against ObamaCare... http://delong.typepad.com/delong_long_form/2014/05/reading-reihan-salams-why-i-signed-up-for-obamacare-the-honest-broker-for-the-week-of-may-10-2014.html
Continue reading "What You Need to Read Today: Reading Reihan Salam's "Why I signed up for Obamacare": Hoisted from My Archives" »
I do not believe that the very sharp Branko Milanovic ever studied George Kennan's "Long Telegram": his 8000-word message in 1946 back from Moscow, where he was then U.S. ambassador, to the State Department in Washington.
In Kennan's view, what was required was containment. And, indeed, containment was the keystone, indeed the whole arch, of U.S. policy from 1946 all the way up to 1989. Remember that really-existing socialism—Soviet communism—is attractive only to those who do not have to live under it. Remember to keep the competition on the economic, personal freedom, and ideological levels, using force only to preserve post-WWII boundaries and limits. Remember that we have the better system—in choosing leaders, in deciding on policies, in guiding economic growth. And if, when the competition is carried out on the economic, personal freedom, and ideological levels, it turns out that we do not have the better system? Then, as Kennan wrote:
The issue of Soviet-American relations is in essence a test of the overall worth of the United States... [which] need only measure up to its own best traditions.... Surely, there was never a fairer test of national quality than this.... The thoughtful observer... will find no cause for complaint in the Kremlin's challenge to American society...
Continue reading "Perhaps Today We See Not a New Crisis of Liberal Democratic Capitalism, But an Old Condition Recurring—Like Herpes, If You Will..." »
Equitable Growth in Conversation: A recurring series where we talk with economists and other social scientists to help us better understand whether and how economic inequality affects economic growth and stability. Buy After Piketty: The Agenda for Economics and Inequality
Heather Boushey, Brad DeLong, and Marshall Steinbaum http://equitablegrowth.org/research-analysis/equitable-growth-in-conversation-brad-delong-and-marshall-steinbaum/: After Piketty: The Agenda for Economics and Inequality: Heather Boushey: I am so excited that we are here finally to discuss After Piketty. Many of the people who may be reading this column may not actually have kept a copy of Piketty on their night stand and may not remember all the ins and outs, so I want to start off our conversation by asking you, first, what are the key takeaways from Piketty about the effects of inequality on our economy and our society, and second, how does the election of Donald Trump strengthen or weaken Piketty’s analytical, political, economic case? Read MOAR at Equitable Growth
Continue reading "Heather Boushey, Brad DeLong and Marshall Steinbaum: After Piketty: The Agenda for Economics and Inequality" »
We are, historically, both too late and too early for the Barrington Moore Project to make sense: both pre-Enlightenment freedoms and post mass-politics totalitarian dangers...
Weekend Reading/Hoisted (2010): The Barrington Moore Problematic and Its Discontents: John Stuart Mill was perhaps the last who was substantially at home in and competent in all the branches of moral philosophy.
Afterwards young scholars paying their dues found it impossible to learn everything and still have time to write anything.
Continue reading "The Barrington Moore Problematic and Its Discontents: Weekend Reading/Hoisted from 2010" »
Stephen Cohen and Brad DeLong (2005): Shaken and Stirred https://www.theatlantic.com/magazine/archive/2005/01/shaken-and-stirred/303666/: The United States is about to experience economic upheaval on a scale unseen for generations. Will social harmony be a casualty?
It has become conventional wisdom that class politics has no legs in the United States today—and for good reason. Regardless of actual circumstance, an overwhelming majority of Americans view themselves as middle-class. Very few have any bone to pick with the rich, perhaps because most believe they will become rich—or at least richer—someday. To be sure, the issues of jobs and wages inevitably make their way into our political campaigns—to a greater or lesser extent depending on where we are in the business cycle. But they seldom divide us as much as simply circle in and out of our political life. Lately anxiety about the economy has been palpable, but for the most part it has not evolved into anger or found specific scapegoats.
Continue reading "Shaken and Stirred: Weekend Reading: Hoisted from the Archives: Stephen Cohen and Brad DeLong (2005)" »
No. I do not know why John Cochrane decided to turn himself into a partisan Republican clown back in 2007—willing to say whatever, at that moment, he thinks will win applause from the current crop of Republican politicians; and claiming since, among other things, that:
Continue reading "I See John Cochrane Has Tried to Make an April Fools' Day Joke of Sorts About ObamaCare" »
I find that I have much more to say (or, rather, largely, republish) relevant to the current debate between Simon Wren-Lewis and Unlearning Economics.
Let me start by saying that I think Unlearning Economics is almost entirely wrong in his proposed solutions.
Indeed, he does not seem especially knowledgeable about his cases. For example:
Continue reading "The Need for a Reformation of Authority and Hierarchy Among Economists in the Public Sphere" »
Back in 1981, Lee Atwater said:
Now you don't quote me on this. You start out in 1954 by saying 'n_gger, n_gger, n_gger'. By 1968... that hurts you.... You... get... abstract... talk... about... cutting taxes and all these things... totally economic things, and the byproduct often is Blacks get hurt worse than whites.... If it is getting that abstract and that coded, that we're doing away with the racial problem one way or the other...
Continue reading "Lee Atwater, Lyndon Johnson, Sam Rayburn, and Joseph Bailey..." »
J. Bradford DeLong: San Francisco Review of Books: Interview: J. Bradford DeLong says "NAFTA is just not a big deal for the U.S.", explains why:
Joseph Ford Cotto: Prominent economists and politicians often say that free trade will benefit America in the long run. Many Americans disagree strongly. What is your take on this situation?
Dr. J. Bradford DeLong: Well, typically and roughly, the average import we buy from other countries we get for 30% off--we use foreign currency that costs us $1.40 to purchase goods and services made abroad that would cost us $2.00 worth of time, energy, resources and cash to make at home.
Continue reading "NAFTA: A Big Deal, Plus and Minus, for Strongly Affected Individuals; Not a Big Deal for the U.S. as a Whole" »
Live at Vox.com: NAFTA and Other Trade Deals Have Not Gutted American Manufacturing—Period: Politically speaking, there was no debate on United States international trade agreements in 2016: All politicians seeking to win a national election, or even to create a party-spanning political coalition, agree that our trade agreements are bad things.... From the left... Bernie Sanders.... From the right—I do not think it’s wrong but it’s not quite correct to call it “right,” at least not as Americans have hitherto understood what “right” is—but from somewhere... now-President Donald Trump....
From the center establishment... popular vote–winning (but Electoral College–losing)... Hillary Rodham Clinton.... “I will stop any trade deal that kills jobs or holds down wages, including the Trans-Pacific Partnership. I oppose it now, I’ll oppose it after the election, and I’ll oppose it as president.…” The rhetoric of all three candidates resonates with the criticism of trade agreements that we heard way back when NAFTA was on the table as a proposal—not, as today, something to blame all our current economic woes on... Read MOAR at http://vox.com
Continue reading "NAFTA and Other Trade Deals Have Not Gutted American Manufacturing—Period: Live at Vox.com" »
Hoisted from the Archives: My Very Short Take on World War II...: From “September 1, 1939,” by W.H. Auden...
...I sit in one of the dives/On Fifty-second Street
Uncertain and afraid/As the clever hopes expire
Of a low dishonest decade:/Waves of anger and of fear
Circulate over the bright/And darkened lands of the earth,
Obsessing our private lives;/The unmentionable odor of death
Offends the September night.
Accurate scholarship can/Unearth the whole offence
From Luther until now/That has driven a culture mad,
Find what occurred at Linz,/What huge imago made
A psychopathic god:/and the public know
What all schoolchildren learn,/Those to whom evil is done
Do evil in return...
Continue reading "My Very Short Take on World War II...: Hoisted from the Archives" »
I. The Third Coming of John A. Hobson
In my view, the current debate about “secular stagnation” started by Larry Summers is best thought of as the third coming of John A. Hobson.
Continue reading "Three, Four... Many Secular Stagnations!" »
A correspondent reminds me of [a moment] almost four years ago that powerfully drove home to me how low the intellectual standards are on the American right. This will be very important to remember over the next four years--especially since the Trumpists are not the brightest of the lights on the American right as it stands today, never mind how it stood before the ascendancy of George W. Bush fifteen years ago, and never never mind how it stood before the ascendancy of Newt Gingrich twenty-five years ago.
It takes some wind-up, however. Let's start with the (usually) very sharp Thomas Nagel:
Thomas Nagel (2012): Mind and Cosmos: "If I decide, when the sun rises on my right, that I must be driving north instead of south...
[a moment: http://delong.typepad.com/sdj/2013/03/why-oh-why-cant-we-have-a-better-press-corps-andrew-ferguson-of-the-weekly-standard-edition.html
Continue reading "The Fallible Reason of Andrew Ferguson of the Weekly Standard--Do Not Succumb to the Soft Bigotry of Low Intellectual Expectations Edition (Hoisted/Smackdown)" »
Hoisted from the Archives: 470 years ago, in 1543, King Henry VIII Tudor of England married his sixth and last wife, Katherine Parr. He also:
- allied with the Holy Roman Emperor Charles V Habsburg "of Ghent";
- declared war on France;
- imposed the English administrative grid of counties, shires, boroughs, and House of Commons representatives on Wales;
- made yet another short-lived treaty with Scotland;
- burned the three Protestant Windsor Martyrs; and
- named the composer Thomas Tallis a Gentleman of the Chapel Royal.
A busy king, for one so sick and mad.
Continue reading "On a Thousand Year Timescale, the Human Race Really Is Just One Big Unhappy Family" »
Ken Rogoff: "In nine years, nobody will be talking about 'secular stagnation'. I've been debating Larry on this for a year, and I started saying 'in ten years..., and so for consistency I now say 'in nine years...".
This is a wager that the full-employment long-run in which money and its associates are a veil that does not affect or disturb the Say's Law operation of the economy will come not more than 18 years after the shock of 2017--or at least that whatever remnants of the effects of that shock on the business cycle come 2025 will be dwarfed the effects of other business cycle shocks subsequent to now.
I do know from experience that one disagrees with Ken Rogoff at one's grave intellectual peril. But is he correct here? I really cannot follow him to the conclusion he wants me to reach...
Things to reread and chew over:
Continue reading "Note to Self: I *Still* Fail to Understand Ken Rogoff's Medium-Long Term Macroeconomic Optimism..." »
Continue reading "Concrete Economics: Presentation Slides (Short Present-Focused Talk)" »
I'm going to call this debate--from six and four years ago--for me. I do think I was right then. But even were I to concede that I was not right then about what "economics" was in its essence, I believe I can convincingly make the case that I am correct now:
Continue reading "Monday Smackdown: The Ongoing Flourishing of Behavioral Economics Makes My Position Here Look Considerably Better, No?" »
It is, once again, time for me to think about Ken Rogoff's hypothesis: his claim that right now the world economy as a whole is depressed because we are in the down phase of a debt supercycle--dealing with a debt overhang.
I have never been able to make enough sense of Rogoff's perspective here to find it convincing.
I should, however, warn people that when I fail to see the point of something that Ken Rogoff has written, the odds are only one in four that I am right. The odds are three in four that he is right, and I have missed something important:
Continue reading "Note to Self: Inadequate Musings on Elements of Rogoff's Debt Supercycle Hypothesis" »
The divide between Democrats and Republicans in the United States in 2016 is best conceptualized as a divide between those who think that an America in which black, brown, yellow, red, etc. people vote is great, and a place in which they have a great deal to gain; and those who think that an America in which black, brown, yellow, red, etc. people vote is no longer great, and is a place in which they have something--maybe not a great deal if they do not have much, but something--to lose.
Let me start with the very sharp Francis Wilkinson's argument that the ressentiment driving the Republican Party today is not class-based--is not the result of the economic disappointments and difficulties suffered by the white working class over the past generation--but rather extends all the way up the income ladder:
Continue reading "Understanding the Divide Between U.S. Democrats and Republicans Today" »
Matthew Yglesias: @mattyglesias: "I think one driver of different views on the "economic anxiety" meme is how much of this stuff you get on a daily basis:
Continue reading "Henceforth, If You Say "Economic Anxiety" without Irony and without Subtle Detailed Explanation, You Will Be Permanently Muted, Blocked, or Sent to Spam. Just Saying..." »
Brown University Janus Forum Lecture: Inequality: Is America Becoming a Two-Tiered Society?
N. Gregory Mankiw and J. Bradford DeLong
Faculty Club at Brown University :: 5:30 PM - 8:00 PM :: October 17, 2016
Continue reading "Inequality: Brown University Janus Forum" »
I have long thought somebody should go through and annotate the 2012 Mitt Romney: Full Transcript of the 47% Secret Video. So I will now do it. XXXI pieces, from soup to nuts, below the fold:
Continue reading "Romney Secret 47% Video Transcript Annotated" »
Let's look again at the Asking for Advice/National Bankruptcy: Part VIII of the Romney Secret 47% Video.
The most interesting thing is how certain Mitt Romney was--and, if we can trust Mitt Romney, John Whitehead was. He was certain that the U.S. was on a path to rapidly become "Greece". Why? First, Romney says, because President Obama "would not talk about reforming Social Security or Medicare."
If you try to make sense of what Romney is saying, it is:
Continue reading "Revisiting Mitt Romney's 2012 Prediction of a Failed Treasury Auction..." »
The appearance of "Niall Ferguson" in my inbox stream as the posts from October 2012 flow across reminds me that I have a very serious point here that has not gotten sufficient attention.
To some degree this is my fault:
So let me try again. It is, I think, an important story.
It involves more than just a (flawed and failed) attempt by Niall Ferguson to feed tainted red bigotry meat to a California audience he did not understand.
It also involves bad-faith intellectual debate and intellectual history from von Hayek and Schumpeter, who thought it a good use of their time to misrepresent and slander a recently-dead man who was a greater economist than either of them could ever hope to be.
And it involves Gertrude Himmelfarb. I am not sure whether Gertrude Himmelfarb was simply misled here by trusting Schumpeter and his History of Economic Analysis as an authority on technical economic areas that she could not follow, or whether she is also a bad intellectual historian actor here. She certainly cuts off Keynes's "Puritan fallacy" quote at a very suspicious place if it is the first...
Continue reading "Why Did Keynes Write "In the Long Run We Are All Dead"?" »
Has the Longer Depression accelerated the trend of "losing" prime-age males, crowding what would have been a generation of the trend into a decade, as I suggested at the FRBB Conference and here in contradiction to what Alan Krueger and Gabriel Chodorow-Reich were saying? No. Or, rather, you could say it looked like that as of 2013 if you thought recovery was then substantially complete. You really cannot say that anymore.
The extremely sharp Gabriel Chodorow-Reich in Email:
Gabriel Chodorow-Reich: Prime age male by 5 year age bin: "Here is a figure and a table related to our back-and-forth...
Continue reading "(Early) Monday DeLong Smackdown: Labor Force Participation Trends" »
Sam Tanenhaus--who has a substantial history of whitewashing wingnuts--calls for reporters to... not do their jobs. They should not cover what Donald Trump says and does. They should not cover what Trump said and did. Why not? Out of fear of some political payback or electoral backlash:
Glenn Fleishman says: WTF?!?!
I chime on, saying Tanenhaus has confirmed one of my judgments:
And Tanenhaus zings back:
Well, that showed me! :-)
Continue reading "Monday Smackdown: Sam Tanenhaus Department" »
2011-09-24: DRAFT OPENING: Barclays Debate with Robert Barro, Moderated by David Wessel:
Question: If President Obama invited you into the Oval Office, told you that he recognized that the economic policies he has pursued to date haven't had the desired outcome, and gave you five minutes to tell him what in your opinion he should do now (setting aside whether Congress would go along)?
Continue reading "Apropos of Helicopter Money: Barclays Debate with Robert Barro, Moderated by David Wessel: Hoisted from the Archives from Fall 2011" »
J. Bradford DeLong (2000): America's Historical Experience with Low Inflation, Journal of Money, Credit and Banking 32:4, Part 2: (November), pp. 979-993 http://www.jstor.org/stable/2601154
Abstract: The inflation of the 1970's was a marked deviation from America's typical peacetime historical pattern as a hard-money country. We should expect America to continue to be a hard-money--low inflation--country in the future, at least in peacetime.
Continue reading "America's Historical Experience with Low Inflation: Hoisted from 1999" »
Riffing off of yesterday's: : "'Gunpowder Empire': Should We Generalize Mark Elvin's High-Level Equilibrium Trap?"...
A generation ago Michael Kremer wrote a superb paper: Michael Kremer (1993): "Population Growth and Technological Change: One Million B.C. to 1990", Quarterly Journal of Economics 108:3 (August), pp. 681-716 http://tinyurl.com/dl20160727a.
Kremer saw human populations as growing at an increasing rate over time. Population reached approximately 4 million by 10000 BC, 50 million by 1000 BC, and 170 million by the year 1. Population then reached 265 million by the year 1000, 425 million by 1500, and 720 million by 1750 before the subsequent explosion of the British Industrial Revolution and the subsequent spread of Modern Economic Growth.
Continue reading "Is the Semi-Permanent "Gunpowder Empire" Historical Scenario Plausible? Perhaps Not..." »
Live from Cyberspace: Welcome praise for J. Bradford DeLong (2015): The Scary Debate Over Secular Stagnation - Milken Institute Review: Hiccup ... or Endgame? Let me put a copy of the whole thing below the fold...
Paul Krugman: "Good Review by Brad DeLong: There are still real policy issues out there! 'The Scary Debate Over Secular Stagnation'" https://t.co/f5ancyOEHT
Continue reading "The Scary Debate Over Secular Stagnation--Hoisted from the Milken Review of Nine Months Ago" »
As always, when the extremely sharp Dani Rodrick stuffs a book-length argument into an 800-word op-ed column, phrases acti as gestures toward what are properly chapter-long arguments. So there is lots to talk about.
Must-Read: Dani Rodrik: The Abdication of the Left: "This backlash was predictable...
...Hyper-globalization in trade and finance, intended to create seamlessly integrated world markets, tore domestic societies apart. The bigger surprise is the decidedly right-wing tilt the political reaction has taken. In Europe, it is predominantly nationalists and nativist populists that have risen to prominence, with the left advancing only in a few places such as Greece and Spain.... As an emerging new establishment consensus grudgingly concedes, globalization accentuates class divisions between those who have the skills and resources to take advantage of global markets and those who don’t. Income and class cleavages, in contrast to identity cleavages based on race, ethnicity, or religion, have traditionally strengthened the political left. So why has the left been unable to mount a significant political challenge to globalization?
I think that this paragraph above is largely wrong.
Continue reading "A Plea for Some Sympathy for Repentant Left Neoliberals..." »
J. Bradford DeLong: The Supreme Court's RomneyCare Decision and the Future of Health Care Reform: 07/02/2012: As delivered at the U.C. Berkeley SCOTUS ACA Forum, July 2, 2012:
With respect to last Thursday: One piece of background is all-important in assessing the decision: ObamaCare is RomneyCare.
The health-care reform plan that Mitt Romney proposed when he was Governor of Massachusetts is the health-care reform plan that Barack Obama proposed.
Continue reading "The Supreme Court's RomneyCare Decision and the Future of Health Care Reform: Hoisted from Four Years Ago" »
ABSTRACT: When the Financial Times's Martin Wolf asked former U.S. Treasury Secretary Lawrence Summers what in economics had proved useful in understanding the financial crisis and the recession, Summers answered: “There is a lot about the recent financial crisis in Bagehot...”. “Bagehot” here is Walter Bagehot’s 1873 book, Lombard Street.
How is it that a book written 150 years ago is still state-of-the-art in economists’ analysis of episodes like the one that we hope is just about to end? There are three reasons:
The first is that modern academic economics has long possessed drives toward analyzing empirical issues that can be successfully treated statistically and theoretical issues that can be successfully modeled on the foundation of individual rationality. But those drives are disabilities in analyzing episodes like major financial crises that come too rarely for statistical tools to have much bite, and for which a major ex post question asked of wealth holders and their portfolios is: “just what were they thinking?”.
The second is that even though the causes of financial collapses like the one we saw in 2007-9 are diverse, the transmission mechanism in the form of the flight to liquidity and/or safety in asset holdings and the consequences for the real economy in the freezing-up of the spending flow and its implications have always been very similar since at least the first proper industrial business cycle in 1825. Thus a nineteenth-century author like Walter Bagehot is in no wise at a disadvantage in analyzing the downward financial spiral.
The third is that the proposed cures for current financial crises still bear a remarkable family resemblance to those proposed by Walter Bagehot. And so he is remarkably close to the best we can do, even today.
Continue reading "Weekend Reading: J. Bradford DeLong (2012): This Time, It Is Not Different: The Persistent Concerns of Financial Macroeconomics" »
Manu Saadia: Trekonomics: The Economics of Star Trek http://amzn.to/28ZnBiD
Live from the Gamma Quadrant: Books Inc.: Trekonomics: The Economics of Star Trek: "Manu Saadia discusses Trekonomics: The Economics of Star Trek...
...What would the world look like if everybody had everything they wanted or needed? Delving deep into the details and intricacies of 24th century society, Trekonomics explores post-scarcity and whether we, as humans, are equipped for it. What are the prospects of automation and artificial intelligence? Is there really no money in Star Trek? Is Trekonomics at all possible? Manu will be in conversation with UC Berkeley economics professor Brad DeLong.
Continue reading "Manu Saadia on Trekonomics at Books Inc. in Berkeley :: June 15, 2016" »
Continue reading "Slides for: The Confidence Fairy in Historical Perspective" »
A very nice piece here from the very-sharp Tim Duy:
Tim Duy: Five Questions for Janet Yellen
Next week's meeting of the Federal Open Market Committee (FOMC) includes a press conference with Chair Janet Yellen. These are five questions I would ask if I had the opportunity to do so in light of recent events.
Continue reading "Tim Duy's Five Questions for Janet Yellen: The Honest Broker" »
As the very sharp Jacob Levy wrote back in 2008:
There's no modern work to teach alongside Theory of Justice and Anarchy, State, and Utopia that really gets at what's interesting about Burkean or social conservatism.... Any book plucked from the past that was concerned with yelling "stop!" tends to date badly to any modern reader who does not think he's already living in hell-in-a-handbasket... talks about how everything will go to hell if the [Jim Crow] South isn't allowed to remain the South.... Oakeshott['s]... "Rationalism in Politics" end[s] up feeling faintly ridiculous by the time he's talking about women's suffrage.... I might say Schumpeter, Capitalism, Socialism, and Democracy, and Kristol, Two Cheers for Capitalism, but the former isn't really distinctively conservative enough and I'm not sure the latter is a classic.
In my view, you go with Polanyi's The Great Transformation--which gets the rational kernel inside the mystical conservative shell--or you go home.
And this is apropos today because Nick Kristof is writing more bilgewater for the New York Times:
Continue reading "Does One Improve Intellectual Diversity by Hiring or Reading "Conservative" Idiots?" »
J. Bradford DeLong(2001): Review of Robert Skidelsky, John Maynard Keynes: Hopes Betrayed and The Economist as Saviour: Robert Skidelsky (1983), John Maynard Keynes: Hopes Betrayed (London: Macmillan: 033357379x). Robert Skidelsky (1992), John Maynard Keynes: The Economist as Saviour (London: Macmillan: 0333584996). And my review of volume 3: Fighting for Britain.
A couple of months ago I wrote a less-than-totally-enthusiastic review of the third volume of Robert Skidelsky's Keynes biography--Robert Skidelsky (2000), John Maynard Keynes: Fighting for Britain (London: Macmillan: 0333604563). I wrote that I was disappointed: that:
I was expecting this to be a great book: as stunning as the first two volumes.... But it was not. Do not get me wrong: it is still a good book, well worth reading. Anyone who loved Skidelsky's first two volumes will like this one...
Now let me repair the damage by writing a totally enthusiastic, totally adulatory review of Skidelsky's first two volumes. He gives us John Maynard Keynes's life, entire. And he does so with wit, charm, control, scope, and enthusiasm. You read these books and you know Keynes--who he was, what he did, and why it was so important.
Continue reading "Hoisted from the Archives: Me Reviewing Robert Skidelsky on John Maynard Keynes" »
Updated from: Live from Over the Rocky Mountains: I see that the War on Nate Silver has broken out again, with another article less appetizing than bilgewater in The New York Times, written by Jim Rutenberg:
Still more recently--as in Tuesday--the data journalist Nate Silver... gave Hillary Clinton a 90 percent chance of beating Bernie Sanders in Indiana. Mr. Sanders won by a comfortable margin of about five percentage points.... The lesson [from Eric Cantor's defeat] in Virginia, as the Washington Post reporter Paul Farhi wrote at the time, was that nothing exceeds the value of shoe-leather reporting, given that politics is an essentially human endeavor and therefore can defy prediction and reason...
Nate has his comment: Nate Silver Being Smart and Bringing the Snark: "Do You Know What 'Polling' Is? It's Talking to Voters in a Structured Way to Reduce Bias"
And Justin Wolfers says:
Continue reading "Trying to Empiricize the Philosophy of Probability: Readings, Plus a Non-Platonic Dialogue" »
Underappreciated Moments in Economic History
Cardiff Garcia: Welcome to AlphaChat, the business and economics podcast of the Financial Times. I'm Cardiff Garcia....
First up on the show is Brad DeLong, an economist and economic historian at the University of California at Berkeley. He is also the coauthor of the New Book: Concrete Economics: The Hamilton Approach to Economic Growth and Policy. We are going to be discussing this book in a forthcoming episode of Alphachat-Terbox, our long-form sister podcast segment. But for this I have asked Brad to choose three under appreciated moments in economic history, and to give us the lessons we should learn from those events. I do not know what Brad's chosen. I will be learning along with you.
Brad: Thanks for common on AlphaChat.
Brad DeLong: Thank you very much.
Continue reading "AlphaChat: Underappreciated Moments in Economic History" »
Alphachatterbox: Podcast: Brad DeLong on Hamiltonian economics and US economic history
DeLong Garcia Alphachatterbox Transcript: Brad DeLong on Hamiltonian economics
[Cardiff Garcia] Hey everyone, welcome to Alphachatterbox, the long form business economics and tech podcast of the Financial Times.
I'm Cardiff Garcia, and our guest today is Brad DeLong, an economist and economic historian at the University of California Berkeley. He also writes a popular blog, and he’s the co-author, along with Steven Cohen, of a new book called Concrete Economics: The Hamilton Approach to Economic Growth and Policy, and that is the topic of this edition of Alphachatterbox.
Brad DeLong, welcome back.
[Brad DeLong] Yes, yes. Thank you very much. Very glad to be "here", wherever "here" is, in some metaphysical kind of sense.
Continue reading "Hamilton! (And Jefferson, and Madison and Jackson and Lincoln, and All the Grey Post-Civil War Republicans, That Triangulating Bastard Grover Cleveland, Teddy and Franklin Roosevelt, and Ike!)" »
Let me pick up on some threads we’ve already heard this afternoon.
Let me provide a complementary, but I think supportive, perspective on what was going on with Morgenthau versus Marshall in Washington DC in the three or four years after World War II. Possibly my story will have some lessons for the present and the future. But possibly it will not.
Perhaps the most fruitful way to look at the debate between Morgenthau and Marshall that was carried on--largely below the surface, largely without explicit confrontation--at the end of WWII is that it was an attempt to figure out how to resolve call it two historical problems: the problem of European military culture, and the problem of modern industrial war.
Continue reading "The Morgenthau Plan and the Marshall Plan: Hoisted from 2012" »