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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
**Worth Highlighting**: The puzzle about just how and why the brain eater ate Clive Crook's brain—how it was that, starting about a decade ago, one of the most interesting (and intelligent) of the Tories simply lost his grip on reality—remains, to me at least, a mystery. Here is my reaction to one of the first signs of the brain-eating: * Clive Crook vs. The Populist Democratic Politicians ---- **The Full List:** * Twenty-Three Links for 2007-07-22 : Hilzoy: **Media Morons On Parade**: "This has been a particularly loopy day for the media. I learned, to my amazement, that Hillary Clinton has breasts the _Washington Post has the journalistic standards of a dung beetle_..." * Andrew Sullivan Is Trying to Give Me Nightmares... * Jim Fallows Recommends Chuck Ferguson's Movie, "No End in Sight: The American Occupation of Iraq" * Ezra Klein on Video, and Health Care too * Take Me to the River... * Sources of Lifetime Inequality * General Petraeus Has to Decide Who He Works For * Mitt Romney Jumps the Shark * Oliver Willis Cannot Believe that the Washington Post Exists * We Have Succumbed to the iPhone! * Will Severus Snape Die Well? Or Die Badly?... Continue reading
The puzzle about just how and why the brain eater ate Clive Crook's brain—how it was that, starting about a decade ago, one of the most interesting (and intelligent) of the Tories simply lost his grip on reality—remains, to me at least, a mystery. Here I am hoisting from one of the first full-blown signs of it in 2007. A little background: By 2008 the brain-eating was overwhelming. For example we had Clive Crook on the "huge success" of the nomination of Sarah Palin—meaning, that is, that she was highly qualified to be Vice President and would attract lots of new votes to the McCain-Palin ticket: **Clive Crook** (2008): Democrats must learn some respect: "The problem in my view is less Mr Obama and more the attitudes of the claque of official and unofficial supporters that surrounds him... >...If only the Democrats could contain their sense of entitlement to govern in a rational world, and their consequent distaste for wide swathes of the US electorate, they might gain the unshakeable grip on power they feel they deserve.... But the fathomless cultural complacency of the metropolitan liberal rules this out. The attitude that expressed itself in response to the Palin nomination... Continue reading
**John Maynard Keynes**: John Maynard Keynes was brought up a classical liberal and a classical economist. He believed in free trade, economic progress, cultural uplift, and political reason. He then found himself working for the British Treasury during World War I, unable to stop what he thought were disastrous post-World War I political decisions. He then found himself watching as the classical economic mechanisms he had been taught to admire all fell apart. He then picked himself up. After World War I Keynes used what power he had to—don't laugh—try to restore civilization. He had, all things considered, amazing success and an amazing impact. In Skidelsky's—powerful and I believe correct--interpretation, Keynes before 1914: >believed (against much evidence, to be sure) that a new age of reason had dawned. The brutality of the closure applied in 1914 helps explain Keynes’s reading of the interwar years, and the nature of his mature efforts... to restore the expectation of stability and progress in a world cut adrift from its nineteenth-century moorings... (ES, page xv) Thus he then spent the rest of his life arguing that, if only statesmen would be farsighted and clever enough, they could put Humpty-Dumpty back together again: the world... Continue reading
**Joshua Micah Marshall** (2002): "I really, really, really want to recommend a book to you. It's called Strange Victory: Hitler's Conquest of France and it's by Ernest R. May, a highly respected diplomatic historian... >...There are two reasons why this book is so good. The first is that it is just a marvelously engrossing narrative of one of the most pivotal moments of the 20th Century: the lead-up to the Second World War and particularly Hitler's lightning victory over France in May and June of 1940. It's just a very polished, compelling World War Two book and a very good read. But it's much more than that. >May begins with a question that most of us would probably not imagine really was a question. That is, why did France lose? >From the newsreels, many histories, and the mythology of appeasement you'd get the impression that this was just a given, that Germany was strong and armed-to-the-teeth and France was unprepared and weak. But this just wasn't the case. May makes very clear that France (and especially France and Britain together) were both quantitatively and qualitatively stronger and better prepared for war. Simply put, on balance, they had more stuff and... Continue reading
**2000**: Review of Gerhard Weinberg, A World at Arms, and Others : * Gerhard Weinberg (1994), A World at Arms: A Global History of World War II (Cambridge: Cambridge University Press: 0521558794). * Gerhard Weinberg (1995), Germany, Hitler, and World War II (Cambridge: Cambridge University Press: 0521566266). * Donald Cameron Watt (1989), How War Came (New York: Pantheon Books). * Ernest May (2000), Strange Victory: Hitler's Conquest of France (New York: Hill and Wang: 0809089068). * William L. Shirer (1959), The Rise and Fall of the Third Reich (New York: Fawcett Books: 0449219771). For some years now I have been looking for a good global history of World War II, both to serve as a reference for myself and to give to others who wish to know about that particular axis on which so much of twentieth century history turned. Until now I have always recommended William L. Shirer's The Rise and Fall of the Third Reich. Shirer's book has many excellences-- . But it has some flaws. And now I have found a proper replacement, in Gerhard Weinberg's A World at Arms. Chief advantage is that he takes the characteristics of Hitler's regime seriously. Many historians (headed by A.J.P.... Continue reading
Will the "Dunkirk" movie be any good? I cannot say that I am optimistic. But if you want to understand the bigger picture, here is my take on it: ---- **From**: My Very Short Take on World War II... : How are we to understand World War II? One way is to take a look at the first three major campaigns—the Polish campaign of September 1939, the French campaign of May-June 1940, and the first six months of the Russian campaign from June 22 to the end of 1941. In the 1939 Polish campaign, the Nazis lost 40,000 soldiers killed and wounded. The Poles lost 200,000 killed and wounded. The Poles also lost about 1,000,000 taken prisoner. In the 1940 French campaign, the Nazis lost 160,000 soldiers killed and wounded. The allies lost 360,000 soldiers killed and wounded. And the allies also lost 2,000,000 soldiers taken prisoner. In the first six months of the 1941 Russian campaign, the Nazis lost 1,000,000 soldiers killed and wounded. The Russians lost 4,000,000 soldiers killed and wounded. And the Russians lost 4,000,000 soldiers taken prisoner. The Nazis were simply better, tactically, at the business of war then any of their enemies. They understood dive... Continue reading
**Must-Read: Nick Bunker**: Recessions, recoveries, and racial employment gaps in the United States: "The unemployment gap between black and white workers... can’t be explained by black Americans having lower levels of education or differences in demographics... >...The unexplained portion—in this case almost all of the gap—is likely due to either direct discrimination and bias in the labor market or unequal access to resources such as education.... The job-separation rate—moving from employment to unemployment—is the biggest driver of the racial differences in the unemployment rate and accounts for the increases in the gap during recessions. The importance of the job-separation rate would mean that a strong labor market reduces the racial unemployment gap not because it’s boosting hiring rates disproportionately more for black workers but rather because it’s preventing the disproportionate firing that black workers experience during recessions... Continue reading
**Should-Read: Nick Bunker**: Is declining competition causing slow U.S. business investment growth?: "Germán Gutiérrez and Thomas Philippon... the divergence between investment and profits... employ a so-called natural experiment where the entrance of competition from China changed investment decisions... >...find a causal link between competition and investment. The increase in competition resulting from increased Chinese manufacturing imports led to increased investment among leading firms facing this overseas competition. Industries that saw more “excess entry” also were the industries that showed rising investment.... The case that declining competition is causing, at least in part, the reduction in investment growth seems quite strong... Continue reading
**Must-Read**: To leave their successors half a cable off of a lee shore in hurricane season may well turn out to have been the biggest failure of the Bernanke-Yellen Federal Reserve: **Mark Thoma**: Here’s Why We’re Not Prepared for the Next Recession: "When will the next recession hit?... >...Will monetary and fiscal policymakers have the ability to respond effectively?... This is not a prediction that a recession is just around the corner.... It’s a warning that we need to be ready in case a recession does hit relatively soon, as it well could. The problem is, we aren’t ready. Even a year or so from now, the Fed’s target interest rate won’t be high enough to leave much room for cuts in response to an economic downturn.... >Criticism from the right over the Fed’s quantitative easing policies... related to fears of inflation that never materialized, was loud and widespread on the political right. Without much room to cut interest rates, and without support from the Trump Fed for other stimulative measures, there’s little the Fed will be willing and able to do in response to economic problems. As for fiscal policy, when the recession does hit the economy keep your... Continue reading
**Should-Read: Christina Romer and David Romer** (2009): Do Tax Cuts Starve the Beast? The Effect of Tax Changes on Government Spending: "The hypothesis that decreases in taxes reduce future government spending is often cited as a reason for cutting taxes... >...This paper examines the behavior of government expenditure following legislated tax changes that narrative sources suggest are largely uncorrelated with other factors affecting spending. The results provide no support for the hypothesis that tax cuts restrain government spending; indeed, the point estimates suggest that tax cuts increase spending. The results also indicate that the main effect of tax cuts on the government budget is to induce subsequent legislated tax increases. Examination of four episodes of major tax cuts reinforces these conclusions... Continue reading
**Must-Read**: A propos of Nancy MacLean's _Democracy in Chains_ : My view is that Brown v. Board of Education was not the major cause of James Buchanan's decision to try too build and U VA President Colgate Darden's decision to fund the "Virginia School of Political Economy"—Public Choice as a discipline that had only one wing, a right one, and that would, as the late Mancur Olson liked to say, "never be healthy until its left wing was as strong as its right, and it was no longer an ideological movement masquerading as an academic sub discipline". But it was certainly a trigger, and support was always very welcome from those whose concerns about appropriate governmental decentralization, limited powers, and checks and balances started and ended with preserving white supremacy. Noah Smith was on the case back in 2011: **Noah Smith** (2011): Noahpinion: The liberty of local bullies: "I have not been surprised by any of the quotes that have recently come to light from Ron Paul's racist newsletters. I grew up in Texas, remember... >...If you talk to a hardcore Paul supporter for a reasonable length of time, these sorts of ideas are more likely than not to come... Continue reading
**Clueless DeLong Was Clueless**: Hoisted from February 2007: The Domestic Macroeconomic Outlook: February 28, 2007 : It looks like I'm not going to get to give my short talk on the domestic macroeconomic outlook up at Lake Tahoe this weekend: That's too bad, because such talks quickly grow stale. One of the major points of my schtick is that the macroeconomic outlook rarely changes suddenly, so that 90% of the time it is perfectly OK to say, "things are like they were, only three months ago." Nevertheless such talks have a very short half life: people like to know how the most recent news affects things, even if the usual answer is "not much"--except, of course, for those turning points where things do change a great deal, and which we usually see clearly only in retrospect. I was going to hit three big points: **The Great Moderation**: * The business cycle is smaller than it used to be * Fewer recessions in industrial production * Largely good luck * But are there structural causes--better financial intermediation, et cetera? * We don't really know: * Why shallower recessions in industrial production? * Is the Federal Reserve is doing a much better... Continue reading
**Clueless DeLong Still Clueless—Albeit Slightly Less So**: High-Grade Structured Credit, and Time for the Fed to Start Cutting Interest Rates: Hoisted from Ten Years Ago : BondDad writes: >Daily Kos: $10 Billion Hedge Fund Now WORTHLESS: $10 Billion Hedge Fund Now WORTHLESS: From CBS Marketwatch: >>A Bear Stearns Cos. hedge fund that made leveraged bets in the subprime mortgage market is worth nearly nothing, according to two people briefed by the investment bank. Investors have been waiting for Bear to update them on the High-Grade Structured Credit Enhanced Leveraged Fund and a larger, less leveraged fund called the High-Grade Structured Credit Fund. The Wall Street Journal reported on Tuesday that the larger High-Grade Structured Credit Fund is worth roughly 9% of its value at the end of April. >bonddad's diary :: For those of you catching up on this story, here's the short version. About 2-3 weeks ago, Bear Stearns announced that two hedge funds invested primarily in the structured finance area (Collateralized Debt Obligations and Collateralized Loan Obligations) were experiencing record redemption requests. The problem with these requests is the fund was heavily leveraged -- meaning they had borrowed a ton of money. Reports have the leverage ratio at... Continue reading
**Worth Highlighting**: * High-Grade Structured Credit, and Time for the Fed to Start Cutting Interest Rates : I have been an optimist about the subprime market.... Now I am not so sure. It no longer looks like things are as contained as I had thought... * Those Poor People! Mark Kleiman Needs to Learn Theology from "Galaxy Quest" : I suggest that Mark Kleiman turn on his cable TV channels, and watch... * The Buried Past of the Democratic Party : It is certainly true that up until some moment not all that long ago--1933? 1948? 1960?--the Democratic Party was the party of racism... * DeLong Smackdown Watch: Dani Rodrik Strikes Back ---- **The Full List:** * Eighteen Links for 2007-07-19 * Recent Delinquency Rates by Mortgage Type : The composition of mortgages has, however, shifted: there are a lot more subprime adjustable than there used to be. Subprime-variable mortgages are now up to 9% of the outstanding mortgage stock, according to the Fed. This is a series to watch as ARM resets kick in over the next year... * Felix Salmon Says that the New York Times Shrinks Its Economics Coverage * How Costco Became the Anti-Wal-Mart * High-Grade... Continue reading
...Thanks, Paul Gigot! Thanks, Kevin Hassett! **Hoisted from 2007**: Most Dishonest Wall Street Journal Editorial Ever : Yes, it's the Wall Street Journal editorial page reporting more American Enterprise Institute-quality research from Kevin Hassett. This is the most mendacious ever. Mark Thoma is on the case. Here's the graph: Here is the accompanying text: [We're Number One, Alas][]: "The nearby chart shows the Laffer Curve effect from business taxation. Tax receipts tend to fall below their optimum potential when corporate tax rates are so high that they lead to the creation of loopholes and the incentive to move income to countries with a lower tax rate. Ireland is the classic case of a nation on the "correct side" of this curve. It has a 12.5% corporate rate, nearly the lowest in the world, and yet collects 3.6% of GDP in corporate revenues, well above the international average. The U.S., by contrast, with its near 40% rate has been averaging less than 2.5% of GDP in corporate receipts. Kevin Hassett, an economist at the American Enterprise Institute who has studied the impact of corporate taxes, says the U.S. 'appears to be a nation on the wrong side of the Laffer Curve:... Continue reading
**Must-Read: Maarten de Ridder and Coen Teulings**: Endogenous growth and lack of recovery from the Global Crisis: "The crisis [is] a quasi-natural experiment to test the endogenous growth hypothesis... >...suggests that output has not recovered because the crisis affected the rate of technological progress. Firms that preferred a bank that was more severely affected by the crisis experienced a large fall in R&D investment and a persistent fall in output in subsequent years. This suggests a direct link between R&D and future productivity, as predicted by endogenous growth models... Continue reading
**Should-Read: Christian Odendahl**: The Hartz Myth: "Germany’s labour market and welfare reforms of the early 2000s have gained an outsized importance over time... >...For some, these reforms put an end to Germany’s social market economy and pushed millions into insecure, low wage jobs. For others, notably many international observers, these ‘Hartz reforms’ are one if not the main reason why Germany–formerly known as the ‘sick man of Europe’–is now Europe’s export powerhouse and strongest economy.... A sober look at the German reforms shows that their economic impact was modest. They targeted weaknesses in Germany’s labour market and benefits system... combined unemployment and social assistance into a single system, to help more people find jobs or retrain; curbed incentives to ‘retire early’ by preventing people from claiming generous unemployment benefits... made job search, training and job centres more efficient, which helped to reduce unemployment... and provided more incentives to take up work, which increased temporary and marginal employment. There were fewer negative side effects than are commonly attributed to the reforms.... But the number of people in insecure jobs and at risk of poverty increased after the reforms. The effect on income inequality is ambiguous... Continue reading
**Should-Read: Ann Marie Marciarille**: Those Pesky Pre-Dispute Arbitration Agreements for Skilled Nursing Facilities: "Assisting a parent or loved one in seeking skilled nursing facility admission is no joke... >...which is part of the reason it may be so liberating to laugh about what the snf admissions process may ask of adult sons and daughters of potential patients. Oh, the machinations for admission in an industry where admittance is not guaranteed and where trying to put your best foot forward (easy family to deal with; uncomplicated patient; commercially insured and so on) can bear some resemblance to a fraternity or sorority rush-with all the frantic pleas to "please like me!" I have never seen this depicted more accurately and more achingly than in the 2007 movie "The Savages." Laugh-out-loud funny scenes where the adult brother and sister, played by Philip Seymour Hoffman and Laura Linney, try to work the system to get their Dad admitted.... >In light of all of this... why be taken back that many if not most snfs include a clause in their nursing home admission agreements requiring the signing party (capacitant older individual or responsible family member) to waive the right to a jury trial on many... Continue reading
**Hoisted from Ten Years Ago**: Europe's Post-World War I Crisis Through the Lens of the Life of John Maynard Keynes : World War I makes it impossible to be a liberal believer in progress, peace, rationality, equilibrium, the benevolence of the market, the triumph of reasoned discussion, et cetera. So what do you do? The answer is "managerialism." Muddling through. Trying desperately to somehow cobble together something like pre-WWI liberalism—to make it true in practice even though it isn't true in theory, and to do so somehow. Hence Keynes. And here I have little to say that I haven't stolen from Robert Skidelsky's magnificent three-volume biography of Keynes: Skidelsky's first two volumes give us John Maynard Keynes's life up to 1937 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. Who was this guy? Keynes was an academic, but also a popular author. His books were read much more widely outside of academia than within it. Keynes was a politician—trying to advance the chances of Britain's Liberal Party between the wars—but also a bureaucrat: at times a key... Continue reading
**Live from the Orange-Haired Baboon Cage: Duncan Black**: Well Then: Jackie Alemany @JaxAlemany: "Trump WH still struggles w conference calls. V weird OH comment from unmuted caller during Iran briefing: "My inflatable doll is a lesbian." Continue reading
**Must-Read: Adam Jentleson**: @AJentleson on Twitter: "Having spent countless hours listening to McConnell & years working with his office, I'd like to offer a few thoughts on tonight's news... >First & foremost, what we're witnessing is an unprecedented, full-blown rebellion by Republican senators against their leader, McConnell. I worked for Reid for years. Democratic senators criticized him occasionally, although they'd usually joke about it. Reid's status as leader was based on a mixture of love & respect from the caucus. McConnell's, only on respect - very little love. >McConnell's political victories have come at a steep price for the institution. He has taken power & influence away from other senators. His fellow Rs did not like losing their individual power, but they were willing to abide it as long as McConnell delivered victories. The ? has always been, what happen to McConnell when he hits a dry spell - especially one that his scorched-Earth tactics precipitated. We're seeing indications of that tonight. >This sounds like trolling but I'm honestly shocked at how nasty Repuicans are being towards him. Accusing your leader of a "significant breach of trust" is about as harsh as it gets in Senate-speak.. Senators want to get... Continue reading
**Should-Read**: The problem with the current crop of Republican politicians is that I cannot decode their map between what they say, what they would vote for, and what they could be induced to vote for relatively cheaply. That makes decoding what this—or, indeed, anything they do or say—really means for the future every difficult: **Jonathan Cohn, Paige Lavender, and Chris D’Angelo**: Senate Republicans Just Killed Their Health Care Bill Again: "**But it could come back in another form. Like a zombie**... ...WASHINGTON — Two conservative senators on Monday evening announced their opposition to the Senate Republican health care bill, dealing a serious and possibly crippling blow to the GOP’s effort to repeal the Affordable Care Act... Sens. Jerry Moran (R-Kan.) and Mike Lee (R-Utah).... >>There are serious problems with Obamacare, and my goal remains what it has been for a long time: to repeal and replace it. This closed-door process has yielded the [Better Care Reconciliation Act], which fails to repeal the Affordable Care Act or address healthcare’s rising costs. For the same reasons I could not support the previous version of this bill, I cannot support this one. We should not put our stamp of approval on bad policy...... Continue reading
**Should-Read: Nancy Folbre**: Why current definitions of family income are misleading, and why this matters for measures of inequality: "Researchers studying income distribution in the United States seem reluctant to acknowledge the family as an important unit of production and distribution... >...Incomplete definitions of both family and income either obscure or render invisible transfers between and within households, including the value of housework and family care. Evidence from specialized surveys—such as the Health and Retirement Survey, the Panel Survey of Income Dynamics, the Survey of Income and Program Participation, and the American Time Use Survey—clearly demonstrate the quantitative relevance of these omissions.... >Overall, such transfers may have an equalizing effect because they generally flow from those with more market income to those with less. But young white adults are more likely to receive transfers from relatively affluent parents, while young black adults are more likely to transfer income to those closer to the bottom of distribution.... >Changes in the family economy of the United States have probably had only small effects on the relative income of the top 1 percent or the top 5 percent. They have larger implications for both the reality and the perception of relative income among... Continue reading
**Over at [Equitable Growth]( Must- and Should-Reads:** * **Nick Bunker**: Weekend reading: “Let’s make this post more democratically accountable” edition: "The newest set of releases in the Equitable Growth Working Paper series... * **John Maynard Keynes** (1924): Obituary for Alfred Marshall: "The study of economics does not seem to require any specialised gifts of an unusually high order... * **Robert Caro**: Means of Ascent: Carpetbaggers and Scalawags: [Richard Coke] a Confederate veteran who in 1873 wrested the government of Texas from the Carpetbaggeres and freed the state from the injustices of Reconstruction..." * **John Maynard Keynes** (1938): On Tinbergen. To Harrod : "My dear Roy... * **Paul Krugman**: Formerly True Theories (Wonkish and Self-Indulgent): "Are there other examples? The self-correcting economy... * **Robert Solow**: Improving the measurement and understanding of economic inequality in the United States: "There has long been interest in extending and improving the National Income and Product Accounts... * **Ann Marie Marciarille**: Let's Make a Deal and the Better Care Reconciliation Act of 2017: A Car or A Goat?: "I am as mesmerized as anyone else by the repeated iterations of the Better Care Reconciliation Act of 2017... * **Helene Rey**: The Global Financial System, the Real... Continue reading
**Should-Read: Nick Bunker**: Weekend reading: “Let’s make this post more democratically accountable” edition: "The newest set of releases in the Equitable Growth Working Paper series... >...contains new research on housing insecurity, labor force attachment on tribal reservations, the impact of credit supply shocks, and state and local government balance sheets. Earlier this week the U.S. Bureau of Labor Statistics released the new data on hiring, firing, and other labor market flows in the U.S. labor market. Check out three key graphs from the new release of the Job Openings and Labor Turnover Survey... Continue reading