This is J. Bradford DeLong's Typepad Profile.
Join Typepad and start following J. Bradford DeLong's activity
Join Now!
Already a member? Sign In
J. Bradford DeLong
Berkeley, CA
J. Bradford DeLong is an economist teaching at the University of California at Berkeley.
Interests: history, economic history, information age, political economy, grand strategy, international relations, material culture., information technology, economics
Recent Activity
**Should-Read**: This is not an economist's forecast. This is affinity fraud. Directed against Trump? Against Kudlow's Fox News viewers? Against some group of right-wing investors? In all cases, the hope is that the marks have short memories—or that something else will turn up. **Paul Bedard**: [Larry Kudlow predicts 4%-5% growth, 'investment boom']( "Larry Kudlow, picked to be President Trump’s new economic adviser... >...has privately told the White House that the nation’s economy is on the verge of 4 percent to 5 percent growth, or more than double the last decade. In a recent gathering with Trump, he said that many firms held back investing until the tax reform package passed and “some of that is already showing up.” What’s more, he told the president, “We’re on the front end of the biggest investment boom in probably 30 to 40 years.” The president responded, “Well, I couldn’t have said it any better”... The rule-of-thumb is that each 1% point rise in investment as a share of national product adds 0.1% point to the annual growth rate. To get from a growth rate of 2.5% up to 4.5% would thus require a 20% point jump in the investment share of national product—if... Continue reading
**Live from the Orange-Haired Baboon Cage**: **Emptywheel**: ["Shorter Donald Trump:]( I'm suing you for $20M for telling people I'm David Dennison which I've just confirmed by suing you for $20M... >>Confused: Why isn't Donald violating the NDA by admitting he's David Dennison here? >>Where does he pay the $1M? Continue reading
**Live from Inside Your Brain**: **Peter Cooper**: [Cafe Wall Optical Illusion]( "The most mind-boggling optical illusion I've seen in a while. Those horizontal bars really are parallel:" Continue reading
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... >...“Women should never be talked about in that way,” declared the actor Ben Affleck a year ago, after the release of Trump’s “locker room” exchange with Access Hollywood host Billy Bush in 2005. However, Affleck became “angry and saddened” about his mentor Weinstein’s record of assaulting and harassing women only after it was splashed all over The New Yorker. This... Continue reading
**Should-Read**: **Jonathan Chait**: [New Trump Economist Kudlow Has Been Wrong About Everything]( "The Republican Party... supply-side economics... not merely a generalized preference for small government with low taxes... >...but a commitment to the cause of low taxes, particularly for high earners, that borders on theological. In the time that has passed since then, that grip has not weakened.... The appointment of Lawrence Kudlow as head of the National Economic Council indicates how firmly supply-siders control Republican economic policy, and how little impact years of failed analysis have had.... They likewise believe tax cuts are the necessary tonic for every economic circumstance. The purest supply-siders, like Kudlow, go further and deeper in their commitment. Kudlow attributes every positive economic indicator to lower taxes, and every piece of negative news to higher taxes. While that sounds absurd, it is the consistent theme he has maintained throughout his career as a prognosticator. It’s not even a complex form of kookery, if you recognize the pattern. It’s a very simple and blunt kind of kookery... Continue reading
There has long been discussion of whether Larry Kudlow believes what he says. (1) Is he one of the professional Republican commentators like Stephen Moore, James Glassman, and Kevin Hassett who knows that what he says is wrong, but says it because it is just a game—that feeding one's readers and viewers something that is not bullshit is simply not a goal, and telling the truth will serve when it does not conflict with one's goals? Or (2) is he just not aware of the world outside him, in the sense in which people are usually oriented toward reality? Well, why not both? Being unaware both that FICA is not a household-level but an earner-level tax and of the approximate size of the federal workforce when there is no upside to the falsehood seems to me conclusive evidence that there is a good deal of (2) going on. And maybe that gives him the freedom to be a more effective version of (1) than people who are more often clued in to how what they are saying is simply not true. I do see a sharp contrast between the Kudlow of the 1980s and the Kudlow I have run across... Continue reading
Touche... Sincerely yours, Brad DeLong J. Bradford DeLong Department of Economics, U.C. Berkeley 5th Floor, Evans Hall, Mining Circle #3880 Berkeley, CA 94720-3880 925 708 0467 @delong
1 reply
**Note to Self**: Lars Peter Hansen: “What rational expectations as a modeling strategy did was it took off the table policies based on systematically fooling people. That is a positive achievement...” Continue reading
From Adam Tooze: *The Deluge:* >The climax of Lenin’s campaign came at the All Russian Congress of Soviets. Having abandoned Petrograd, the Congress met in Moscow – the 1,232 delegates, 795 Bolsheviks, 283 Left Socialist Revolutionaries, 25 Socialist Revolutionaries of the Centre and no more than 32 Mensheviks. On 14 March, Lenin delivered an impassioned oration in which he called upon Russia to: >>size up in full, to the very bottom, the abyss of defeat, partition, enslavement, and humiliation into which we have been thrown’, all the better to steel the will for ‘liberation... >He promised that if they could only gain time for reconstruction the Soviet regime would: ‘arise anew from enslavement to independence…’. The motion for ratification was carried by the huge Bolshevik majority. But the Left Socialist Revolutionaries voted solidly against it and then resigned from the Council of People’s Commissars in which they had shared power since the November revolution. Of the Left Communists, 115 abstained and refused any further participation in internal party business. The Brest-Litovsk Treaty, the negotiations for which had begun under the sign of the Petrograd Soviet’s democratic peace formula, had become the driving force behind Lenin’s one-party dictatorship... Continue reading
**Should-Read**: A finding that robots are becoming important. And I would question whether increased disability is cause or effect here. They say "cause": I am not sure why: **Katharine G. Abraham and Melissa S. Kearney**: [Explaining the Decline in the U.S. Employment-to-Population Ratio: A Review of the Evidence]( "Within-age-group declines in employment among young and prime age adults have been at least as important... >...Labor demand factors, in particular trade and the penetration of robots into the labor market, are the most important drivers of observed within-group declines in employment. >Labor supply factors, most notably increased participation in disability insurance programs, have played a less important but not inconsequential role. Increases in the real value of the minimum wage and in the share of individuals with prison records also have contributed modestly to the decline in the aggregate employment rate. >In addition to these factors, whose effects we roughly quantify, we also identify a set of potentially important factors about which the evidence is too preliminary to draw any clear conclusion. These include improvements in leisure technology, changing social norms, increased drug use, growth in occupational licensing, and the costs and challenges associated with child care. Our evidence-driven ranking of... Continue reading
**Should-Read**: Lousy title. Good op-ed: **Belle Sawhill**: [Inflation? Bring It On. Workers Could Actually Benefit]( "Even if inflation does creep up above 2 percent, we shouldn’t be too worried... >...Having operated below it for many years, the economy may not be harmed if it runs for a few years above that target.... We are in the midst of a big fiscal and monetary experiment. And as with any experiment, the consequences are unknown. What we do know is that the costs of the Great Recession were enormous—at least $4 trillion in lost income.... The biggest losses were experienced by those in the bottom and middle portions of the income distribution who lost jobs and saw much of the equity in their homes destroyed. They are the ones who stand to gain the most if unemployment continues to fall and wages keep rising. Businesses, desperate for workers, reach deeper into the ranks of those who are still jobless, do more training to get those workers up to speed, and pay higher wages as they compete to hire or retain their work force. Discouraged workers — the millions who’ve left the labor force — might actually re-enter it, and workers could find... Continue reading
**Should-Read**: **Ed Kilgore**: [What the Christian Right Sowed, Trump Reaped]( "Gerson is especially insightful [in saying]: Conservative Evangelicals didn’t back Trump despite his unsavory personality... >...but in some respects because of it: >>Trump consistently depicts evangelicals as they depict themselves: a mistreated minority, in need of a defender who plays by worldly rules. Christianity is “under siege,” Trump told a Liberty University audience. “Relish the opportunity to be an outsider,” he added at a later date: “Embrace the label.” Protecting Christianity, Trump essentially argues, is a job for a bully. >That is an intuitively more convincing explanation of the affection that the Christian right has for Trump than the idea that he’s a god-chosen infidel like Cyrus the Great, or a sort of Evangelical-by-osmosis.... But like Russell Moore’s accusation that the conservative Evangelical “marriage” to the GOP and the Christian nationalism that is the marriage’s fruit are inherently wicked, Gerson is asking Christian-right leaders and followers to retrace too many steps for comfort. Besides, he’s tainted by his association with the onetime Evangelical darling George W. Bush and his globalist outlook... Continue reading
**Should-Read**: **Dean Baker**: [Doesn't Anyone Care If the Trump Tax Cuts Are Working?]( "Capital goods orders for January... >...a hugely important early measure of the success of the Trump tax cuts. The ostensible rationale for the big cut in the corporate tax rate that was at the center of the tax cut is that it will lead to a flood of new investment.... If lower rates really produce a flood of investment we should at least begin to see some sign in new orders once the tax cut was certain to pass. The January report showed orders actually fell modestly for the second consecutive month.... Remarkably, these new data have gotten almost no attention from the media... ---- **Dean Baker**: [Small Businesses Still Aren't Impressed by the Republican Tax Cut]( "The National Federation of Independent Businesses... 29 percent of businesses expect to make a capital expenditure in the next 3 to 6 months... >...somewhat higher than the 26 percent reported for February of 2017, but below the 32 percent reported for August of last year. It's also the same as the 29 percent reading reported back in August of 2014 when a Kenyan socialist was in the White House.... There... Continue reading
**Should-Read**: **Dylan Matthews**: [Larry Summers on the Midwest and South: the case for a government bailout of the heartland]( "In 2016, only 5 percent of men ages 25 to 54 in Alexandria, Virginia (a rich DC suburb), were not working... >...In Flint, Michigan, the share was 51 percent. That staggering fact frames a new paper by three Harvard economists—Benjamin Austin, Ed Glaeser, and former Treasury secretary/chief Obama economic adviser Larry Summers.... it’s notable that Glaeser and Summers are now embracing an active government role in revitalizing struggling parts of the country, and trying to work through the best way to do it. >While the idea that Youngstown, Ohio, needs more help than San Francisco might seem intuitive to a non-economist, the economic case for policies targeting certain areas, rather than certain kinds of individuals, is somewhat shakier.... Most variation in incomes is within regions, not between them.... Why implement policies to boost specific geographic areas when you could just direct money to poor individuals instead?... Austin, Glaeser, and Summers argue that place-based policies are necessary because different regions respond to various public policies differently.... The authors roughly estimate how responsive workers in different areas are to employment subsidies that boost... Continue reading
**Should-Read**: **Josh Barro and Isaac Chotiner**: [Policy without politics, immigration, and Trump’s self-awareness]( **Isaac Chotiner**: "Are you enjoying this moment? By 'this moment', I mean the last 14 to 15 months of being a political commentator?... >...**Josh Barro**: No, I’m not. I worked in public policy think tanks for a few years before I did [political commentary], and I wrote specifically on state and local government finance. So the reason I got into writing about politics was to be able to write about some of those issues, where I felt like I was able to explain things more clearly than people might otherwise hear them explained, help them understand relatively complicated areas of policy and what’s a good idea or a bad idea. And our politics are just not very much about policy right now.... The news that we’ve had on the tariffs over the last week or so, if the president actually goes through with this policy, will have important economic effects, but there’s been a lot of time spent on, frankly, bullshit.... I go crazy when people debate the ins and outs of what Trump said about DACA policy. It just seems irrelevant to understanding how Washington, over... Continue reading
**Should-Read**: **A. J. Liebling**: [The Earl of Louisiana]( "In the summer of 1959, A. J. Liebling, veteran writer for the New Yorker, came to Louisiana to cover a series of bizarre events... >...which began when Governor Earl K. Long was committed to a mental institution. Captivated by his subject, Liebling remained to write the fascinating yet tragic story of Uncle Earl's final year in politics. First published in 1961, The Earl of Louisiana recreates a stormy era of Louisiana politics and captures the style and personality of one of the most colorful and paradoxical figures in the state's history... Continue reading
**Should-Read**: **Ernest Liu** (2016): [INDUSTRIAL POLICIES IN PRODUCTION NETWORKS]( "Many developing countries adopt industrial policies that push resources towards selected economic sectors... >...How should countries choose which sectors to promote? I answer this question by characterizing optimal industrial policy in production networks embedded with market imperfections. My key finding is that effects of market imperfections accumulate through backward demand linkages, thereby generating aggregate sales distortions that are largest in the most upstream sectors. The distortion in sectoral sales is a sufficient statistic for the ratio between social and private marginal product of sectoral inputs; therefore, there is an incentive for a well-meaning government to subsidize upstream sectors. My sufficient statistic predicts the sectors targeted by government interventions in South Korea in the 1970s and in modern day China... Continue reading
**Should-Read**: **Dani Rodrik**: [Trump’s Trade Gimmickry]( "The imbalances and inequities generated by the global economy cannot be tackled by protecting a few politically well-connected industries, using manifestly ridiculous national security considerations as an excuse... >...Trump’s trade measures to date amount to small potatoes. In particular, they pale in comparison to the scale and scope of the protectionist policies of President Ronald Reagan’s administration in the 1980s. Reagan raised tariffs and tightened restrictions on a wide range of industries, including textiles, automobiles, motorcycles, steel, lumber, sugar, and electronics. He famously pressured Japan to accept “voluntary” restraints on car exports. He imposed 100% tariffs on selected Japanese electronics products when Japan allegedly failed to keep exported microchip prices high.... >Trump’s protectionism may well have very different consequences; history need not repeat itself. For one thing, even though their overall impact remains limited, Trump’s trade restrictions have more of a unilateral, in-your-face quality.... The voluntary export restraints (VERs) of the 1980s in autos and steel, for example, were administered by the exporting countries. This allowed Japanese and European companies to collude in raising their export prices for the US market.... Another contrast with the Reagan-era measures is that we are living in a... Continue reading
**Should-Read**: **Bill McBride**: [Larry Kudlow is usually wrong...]( "...and frequently absurd, as an example, in June 2005 Kudlow wrote... >..."The Housing Bears are Wrong Again" (link has been replaced) and called me (or people like me) "bubbleheads": >>Homebuilders led the stock parade this week with a fantastic 11 percent gain. This is a group that hedge funds and bubbleheads love to hate. All the bond bears have been dead wrong in predicting sky-high mortgage rates. So have all the bubbleheads who expect housing-price crashes in Las Vegas or Naples, Florida, to bring down the consumer, the rest of the economy, and the entire stock market. >I guess I was one of those "bubbleheads"! In December 2007, he wrote: Bush Boom Continues: >>There’s no recession coming. The pessimistas were wrong. It’s not going to happen. At a bare minimum, we are looking at Goldilocks 2.0. (And that’s a minimum). Goldilocks is alive and well. The Bush boom is alive and well. It’s finishing up its sixth consecutive year with more to come. Yes, it’s still the greatest story never told.... >In 2014, Kudlow claimed: "I've always believed the 1990s were Ronald Reagan's third term." In that piece, Kudlow was rewriting his... Continue reading
**Should-Read**: **Noah Smith**: [California Affordable Housing Is No Mystery: Just Build More]( "Urban California should emulate Tokyo, which ensured the supply of dwellings stayed ahead of population growth. By Noah Smith... >...After years of dithering and hoping the problem would go away, California is finally taking steps to address its housing crisis.... Californians have only to gaze across the Pacific, to the city of Tokyo.... As of 2015, the average residential rent in Tokyo was about $2.53 a square foot at current exchange rates. That’s about half the level for San Francisco.... Why is Tokyo housing so affordable? It’s not because Japan’s population is shrinking. More people crowd into the capital city every year.... Tokyo rent is cheaper because it builds lots of housing... building more and building up.... >The national government revised regulations to allow more density. Combined with Japan’s famously simple zoning regulations, this resulted in a nation full of dense yet pleasant cities that offer decent, affordable living space. A key part of the equation, of course, is Japan’s efficient, convenient networks of public transportation.... >California... is on the right track. The idea of building dense housing around transit hubs—a very Japan-like development pattern—is an especially good... Continue reading
Larry Kudlow has not been an economist in at least a generation. Rather, he plays an economist on TV. Whatever ability he once had to make or analyze or present coherent and data-based economic arguments is long gone—with a number of his old friends blaming long-term consequences of severe and prolonged drug addiction. The right way to view this appointment is, I think, as if Donald Trump were to name William Shatner to command the Navy's 7th Fleet. That said, _probably_ little damage will be done. The major day-to-day job of the NEC Chair is to coordinate the presentation of economic policy options to the President, and to try to keep the agencies and departments on the same page as they implement policy. Kudlow has negative talents in either organizing and presenting alternative points of view or in controlling bureaucracies. Therefore the agencies will each continue marching to its different drummer, and there will be no coherent presentation of policy options to the President. But that will not be new. Continue reading
**Franklin Delano Roosevelt** (March 4, 1933): I am certain that my fellow Americans expect that on my induction into the Presidency I will address them with a candor and a decision which the present situation of our Nation impels... >...This is preeminently the time to speak the truth, the whole truth, frankly and boldly. Nor need we shrink from honestly facing conditions in our country today. This great Nation will endure as it has endured, will revive and will prosper. >So, first of all, let me assert my firm belief that the only thing we have to fear is fear itself—nameless, unreasoning, unjustified terror which paralyzes needed efforts to convert retreat into advance. In every dark hour of our national life a leadership of frankness and vigor has met with that understanding and support of the people themselves which is essential to victory. I am convinced that you will again give that support to leadership in these critical days. >In such a spirit on my part and on yours we face our common difficulties. They concern, thank God, only material things. Values have shrunken to fantastic levels; taxes have risen; our ability to pay has fallen; government of all kinds... Continue reading
**Should-Read**: **Chris Ladd**: [The article removed from Forbes, “Why White Evangelicalism Is So Cruel”]( "Modern, white evangelicalism emerged from the interplay between race and religion in the slave states... >...Many Christian movements take the title “evangelical,” including many African-American denominations. However, evangelicalism today has been coopted as a preferred description for... an older, largely discredited title: Fundamentalist.... And among those evangelical churches, one denomination remains by far the leader in membership, theological pull, and political influence. There is still today a Southern Baptist Church. More than a century and a half after the Civil War, and decades after the Methodists and Presbyterians reunited with their Yankee neighbors, America’s most powerful evangelical denomination remains defined, right down to the name over the door, by an 1845 split over slavery... Continue reading
**Should-Read**: So is it now time to shift to the prime-age employment rate as our principal thumbnail shorthand gauge for the state of the labor market?: **Nick Bunker**: [Just how tight is the U.S. labor market?]( "Spoiler: There’s room for the job market to improve... >...If the current unemployment rate is indicative of a very tight labor market, then why does wage growth continue to be so tepid? If the supply of potentially employable workers is tapped out, then the price of labor—wages—should grow at an increasingly faster pace. Yet as the unemployment rate declined and hit levels many associate with “full employment,” wage growth has yet to break out of the range of 2 percent to 2.5 percent per year. One simple explanation of this anomaly of a tight labor market with weak wage growth is that the labor market is not actually that tight. Indeed, the unemployment rate currently does not do a good job of predicting wage growth. What the data show is that a given unemployment rate can be associated with a wide range of wage-growth levels.... >The unemployment rate is still a useful measure of the health of the labor market. But it should be... Continue reading
**Should-Read**: **Michael Kremer** (1993): [The O-Ring Theory of Economic Development]( "This paper proposes a production function describing processes subject to mistakes in any of several tasks... >...It shows that high-skill workers-those who make few mistakes-will be matched together in equilibrium, and that wages and output will rise steeply in skill. The model is consistent with large income differences between countries, the predominance of small firms in poor countries, and the positive correlation between the wages of workers in different occupations within enterprises. Imperfect observability of skill leads to imperfect matching and thus to spillovers, strategic complementarity, and multiple equilibria in education.... >Quantity cannot be substituted for quality... workers of similar skill will be matched together... schedule of wages as a function of worker skill. Under this production function, small differences in worker skill lead to large differences in wages and output, so wage and productivity differentials between countries with different skill levels are enormous.... Firms will offer jobs to only some workers rather than paying all workers their estimated marginal product. If tasks are performed sequentially, high-skill workers will be allocated to later stages of production.... If firms can choose among technologies with different numbers of tasks, the highest skill... Continue reading