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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
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**Over at [Equitable Growth](http://EquitableGrowth.org): Must- and Should-Reads:** * **A Low-Pressure Economy Is Not Only Dark But Invisible in the Horserace Noah Smith is Running… | Equitable Growth** * **Bridget Ansel**: _Weekend reading: “This post is tax-ing” edition | Equitable Growth_ * **Matthew Yglesias**: _If you really respect Trump voters, tell them the truth_: "A wave of recent columns argue that what Trump superfans... * **Ezra Klein**: _The GOP’s biggest health care achievement has been making Obamacare more popular_: "It is bizarre watching House Republicans persuade themselves that the problem they face on health care... * **Fatih Guvenen and Greg Kaplan**: _Top Income Inequality in the 21st Century: Some Cautionary Notes_: "IRS and SSA data reveal diverging patterns in top income shares... * **Kevin Drum**: _We're Now In the Second Biggest Housing Boom of All Time_: "The most remarkable feature of this chart... * **Òscar Jordà, Moritz Schularick, and Alan M. Taylor**: _Monetary Policy Medicine: Large Effects from Small Doses?_: "How do we know that higher interest rates will bring prices under control?... * **Chris Hayes**: _On escaping the “doom loop” of Trump's presidency_: "I tend to think of it in terms of my own behavior... * **Hyun Song Shin**: _Accounting... Continue reading
**Must-Read: Matthew Yglesias**: _If you really respect Trump voters, tell them the truth_: "A wave of recent columns argue that what Trump superfans... >...or at least some hazily imagined, hard-pressed Northern working-class version of them—really want is respect. By all appearances, though, the opposite is the case. Those voters want what most voters want from politicians: to be disrespected, via shameless pandering and the occasional blatant lie. This was true of the men I spoke to in Bucksport, Maine, in the summer of 2016.... They seemed most of all to want to be told that reopening the [paper] mill was a realistic dream, even though it almost certainly is not. That doesn’t make Trump fans unique. It makes them normal.... >But if you really respect people and really want to help them, you need to level with them.... When my grandparents were growing up in Brooklyn, it was a great hub of American manufacturing. Those jobs vanished, hard times ensued, and between 1950 and 1980 the borough lost nearly 20 percent of its population. Things have turned around over the course of my lifetime. But the specific lost jobs never came back.... Seattle, San Francisco, and other prosperous metropolitan areas,... Continue reading
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I think the estimable Noah Smith gets this one wrong. He writes: **Noah Smith**: _Cracking the Mystery of Labor's Falling Share of GDP_: "Economists are very worried about the decline in labor’s share of U.S. national income... >...For decades, macroeconomic models assumed that labor and capital took home roughly constant portions of output—labor got just a bit less than two-thirds of the pie, capital slightly more than one-third. Nowadays it’s more like 60-40. Economists are therefore scrambling to explain the change. There are, by my count, now four main potential explanations for the mysterious slide in labor's share. These are: 1) China, 2) robots, 3) monopolies and 4) landlords..." There is, in my view, a fifth—and a much more likely—possibility: the low-pressure economy. The first misstep Noah takes is in saying that 100% of national income is divided between "labor" and "capital". It is not. Entrepreneurship, risk-bearing, innovation, monopoly rents, and other factors are rolled into the non-labor share as well. It's not the labor share and the capital share. It's the labor share and everything else. Suppose that you were not attached to sophisticated economic theory but just believed in the basic Adam Smith supply-and-demand: when something is in... Continue reading
**Weekend Reading: Henry Farrell**: _Fourteen Years of Krauthammer Days_: "Today is the fourteenth anniversary of the day when Charles Krauthammer announced to the world... >>...Hans Blix had five months to find weapons. He found nothing. We’ve had five weeks. Come back to me in five months. If we haven’t found any, we will have a credibility problem. >It’s now been 168 months since that confident pronouncement–or, put differently, we’ve seen 33.6 Krauthammer Credibility Intervals come, and then go, without any sign of self-assessment, let alone personal acceptance of responsibility for his prominent cheerleading for a war that led to hundreds of thousands of deaths. Still out there opining. Continue reading
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**Hoisted from Mike Konczal's Archives:Mike Konczal** (2013): [Reinhart-Rogoff A Week Later: Why Does This Matter?](http://seekingalpha.com/article/1368661-reinhart-rogoff-a-week-later-why-does-this-matter): "Well this is progress... >...We are seeing subtle distancing by conservative writers on the Reinhart/Rogoff thesis. In Feburary, Douglas Holtz-Eakin wrote: >>The debt hurts the economy already. The canonical work of Carmen Reinhart and Kenneth Rogoff and its successors carry a clear message: countries that have gross government debt in excess of 90% of Gross Domestic Product (GDP) are in the debt danger zone. Entering the zone means slower economic growth. Granted, the research is not yet robust enough to say exactly when and how a crisis will engulf the US, but there is no reason to believe that America is somehow immune.' (h/t QZ.) >Today, Holtz-Eakin writes about Reinhart and Rogoff in _National Review_, but drops the 'canonical' status. >Now they are just two random people with some common sense the left is beating up: >>In order to distract from the dismal state of analytic and actual economic affairs, the latest tactic is to blame... two researchers, Carmen Reinhardt and Kenneth Rogoff, who made the reasonable observation that ever-larger amounts of debt must eventually be associated with bad economic news. >That's not actually what... Continue reading
**Must-Read: Ezra Klein**: _The GOP’s biggest health care achievement has been making Obamacare more popular_: "It is bizarre watching House Republicans persuade themselves that the problem they face on health care... >...is cutting a deal between the Freedom Caucus and the Tuesday Group rather than crafting legislation that people actually like, and that will actually make some part of the health care system noticeably better. But the GOP’s refusal to take public opinion even mildly into account has put them in a disastrous position. >I’m not sure Republicans realize how deep a hole they’re in on this issue. But here’s a way to make it clear. Obamacare is now significantly more popular than Donald Trump, Mike Pence, Paul Ryan, the Republican Party, or the American Health Care Act... Continue reading
**Must-Reads:** 1. **Kevin Drum**: _We're Now In the Second Biggest Housing Boom of All Time_: "The most remarkable feature of this chart... 2. **Òscar Jordà, Moritz Schularick, and Alan M. Taylor**: _Monetary Policy Medicine: Large Effects from Small Doses?_: "How do we know that higher interest rates will bring prices under control?... 3. **Rick Perlstein**: _I Thought I Understood the American Right. Trump Proved Me Wrongs_: "Direct-mail pioneers like Richard Viguerie created hair-on-fire campaign-fund-raising letters... 4. **Financial Times**: _Donald Trump Beats a Retreat_: "Another week, another series of flip-flops by America’s president... 5. **Ezra Klein**: _The GOP’s problem on health reform is they’ve spent years hiding their real position_: "The most interesting policy argument... is the debate between conservatives’ real position on health care and their fake position... ---- ---- **Should-Reads:** * **Fatih Guvenen and Greg Kaplan**: _Top Income Inequality in the 21st Century: Some Cautionary Notes_: "IRS and SSA data reveal diverging patterns in top income shares... * **Chris Hayes**: _On escaping the “doom loop” of Trump's presidency_: "I tend to think of it in terms of my own behavior... * **Hyun Song Shin**: _Accounting for global liquidity: reloading the matrix_: "In emerging market economies especially, a weakening of... Continue reading
**Live from the Central Asian-Mediterrean Cultural Interface: Shrimp Saganaki:** * 15 ounce can cannellini beans * 3/4 pound shrimp (add near end) * 1 pint grape or cherry tomatoes, halved * 6 ounces feta cheese, crumbled (add at end) * ½ cup vegetable stock * ½ cup pitted kalamata olives * ½ cup chopped fresh flat-leaf parsley * 1 small onion (add near beginning) * wine * 1/4 cup chopped fresh dill * 2 tablespoons olive oil (add at beginning) * 2 garlic cloves, thinly sliced (add at beginning) * 2 tablespoons chopped fresh oregano * black pepper * ½ teaspoon red pepper flakes * ¼ teaspoon salt Cf.: [Odeum](http://odeumrestaurant.com) Continue reading
**Live from the Orange-Haired Baboon Cage: Josh Barro**: _Trump makes GOP pretend health reform is on table_: "The Republican healthcare bill is supposedly coming back from the dead... >...pass the House within President Donald Trump's first 100 days in office. And yet, as a senior GOP aide told Business Insider's Bob Bryan: "The question is whether it can get 216 votes in the House and the answer isn't clear at this time. There is no legislative text and therefore no agreement to do a whip count on." >I think it is best to understand the periodic reemergence of the American Health Care Act as similar to the periodic searches for evidence that President Barack Obama really did "tapp" Trump's phones. Trump says he was wiretapped, so he sets off a frenzy as Republicans seek to substantiate that claim, even though they will never be able to. Trump says Republicans are still making great progress on a healthcare deal, so he also sets off frenzies among Republicans to substantiate that claim, even though they'll never be able to. Trump forces his staff and Republicans in Congress to spend energy trying to construct in the real world the alternate reality that exists... Continue reading
**Live from the Orange-Haired Baboon Cage: Josh Barro**: _'Art of the Deal' quote explains Trump's presidency_: "One quote from the book that keeps haunting me during Trump's presidency... >>...What the bulldozers and dump trucks did wasn’t important, I said, so long as they did a lot of it. >Trump was talking about... 1982, when he... wanted Holiday Inn to partner with him.... Trump aims to generate the appearance of activity, to do noisy things that demonstrate that he is a do-something president. Trump believes this strategy served him well in business. Indeed, Holiday Inn agreed to partner with him.... But less than 18 months after the Trump Plaza opened, the partnership with Holiday Inn had deteriorated to the point that Holiday Inn was suing him. In 1992, the Trump Plaza went bankrupt. In the long run, it matters what the bulldozers and the dump trucks do... Continue reading
**Should-Read: Fatih Guvenen and Greg Kaplan**: _Top Income Inequality in the 21st Century: Some Cautionary Notes_: "IRS and SSA data reveal diverging patterns in top income shares... >...due to the increasing importance of income accruing to pass-through entities (partnerships and S-corporations)... included in the IRS measure of total income but not in either the IRS or SSA measure of labor income.... The bulk of this growth... was concentrated at the very top... above the 99.99th percentile, a group that contains only about 12,000 households. The share of incomes above the 99th percentile (around $372,000 in 2012) but below the 99.99th percentile (around $7.2 million in 2012) has barely changed in the last two decades... Continue reading
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**Must-Read:** There were three good reasons in the mid-2000s to believe that housing prices should jump substantially. The coming of secular stagnation—then called the "global savings glut"—greatly boosted demand by boosting how much households could afford to pay for America. The filling-up of America restricted supply: first cars and superhighways had meant that for nearly three generations there were greenfield potential housing sites within thirty minutes of everywhere, but that ended with the twentieth century. At some point the anti-global warming carbon tax will come, and when it does auto transportation will become much more expensive and that will tilt the location price gradient. How much were these worth? Not enough to boost housing prices to their 2005 values. But plausibly enough to boost housing prices to their values today. IMHO, the best way to view the graph is as a positive "displacement" boom caused by true fundamentals, a bubble upward overshoot, a crash downward undershoot, and now (we hope) equilibrium: **Kevin Drum**: _We're Now In the Second Biggest Housing Boom of All Time_: "The most remarkable feature of this chart... **Must-Read: Kevin Drum**: _We're Now In the Second Biggest Housing Boom of All Time_: "The most remarkable feature of... Continue reading
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**Must-Read: Òscar Jordà, Moritz Schularick, and Alan M. Taylor**: _Monetary Policy Medicine: Large Effects from Small Doses?_: "How do we know that higher interest rates will bring prices under control?... >...And how do we know how much of the monetary “medicine” to administer?... The long history of international finance turns out to be an excellent laboratory to conduct monetary experiments.... Interest rates have sizable effects.... >Economies that fix their exchange rate but allow capital to move freely across borders effectively relinquish control of domestic monetary policy. In such situations, monetary policy may not respond to domestic conditions and hence may produce quasi-random variation in interest rates that is less sensitive to unobserved factors. We take advantage of this.... Figure 1 shows the response of inflation-adjusted GDP per capita in response to a 1 percentage point increase in short-term interest rates in year 0 calculated two different ways... controlled variation... peg variation.... In the first case, interest rates barely cause a ripple, whereas in the second, real GDP per capita is about 2% lower in year 4 than it was at the start.... The measured response of prices using controlled variation in interest rates is muted—prices are about 0.5% lower by... Continue reading
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**Should-Read: Bridget Ansel**: _Weekend reading: “This post is tax-ing” edition_: "The increase in income inequality since 2000 is largely driven by higher capital income among the top .01 percent of earners... >...Kavya Vaghul compiles a roundup of graphics showing interesting trends in U.S. tax policies over the years.... In the past 10 years, student loan debt in the United States has grown by a whopping 170 percent, to $1.4 trillion.... Investments in childcare pay off for mothers and kids alike, especially for boys, and returned $7.30 for every dollar spent.... Vanessa Williamson debunks the myth that Americans hate paying taxes... Continue reading
**Should-Read: Chris Hayes**: _On escaping the “doom loop” of Trump's presidency_: "I tend to think of it in terms of my own behavior... >...Like, what am I going to do? How am I going to avoid the doom loop? My whole approach to the Trump era is to act as if reality matters, facts matter, the basic political gravity of whether you make people's lives better or worse matters, rigorous thinking, nonconspiratorial thinking, logical skepticism — all of these things, these principles I hold as a journalist, as a thinker, as a writer, as a citizen, they all matter. Act as if that's the case, even with the knowledge they may not. >I don't know if in the end they will matter, but I can't figure out how to conduct myself in my life or in my work if they don't... Continue reading
**Should-Read: Hyun Song Shin**: _Accounting for global liquidity: reloading the matrix_: "In emerging market economies especially, a weakening of the domestic currency against the dollar saps both cross-border bank lending and investment... >..Such effects flow through the dense interconnections of dollar lending in the global financial system. In devising policy for financial stability, a tight focus on underlying causes (excess leverage and funding risk) rather than on the symptoms (capital flows) stands a better chance of being more effective in addressing the vulnerabilities as they emerge... Continue reading
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**Over at [Equitable Growth](http://EquitableGrowth.org): Must- and Should-Reads:** * **Against Alasdair Macintyre’s “After Virtue” | Equitable Growth** : "That is a very powerful statement that what is sought after is successful managerialism–a successful managerialism with a preferential option for the poor..." * **Nick Bunker**: _What would rules-based monetary policy look like?_: "All of this isn’t to say that the reaction functions of central banks or individual central bankers aren’t important ..." * **Mark Thoma**: _The Fed’s Inflation Goal: What Does the Public Know?_: "'Lately, various Committee members... and Chair Yellen... * **Jamelle Bouie**: _The Muted Response to the Retail Apocalypse Shows Which Workers Count in Trump’s America_: **Fake Working Class**: "The retail industry’s recent decline... * **Rick Perlstein**: _I Thought I Understood the American Right. Trump Proved Me Wrongs_: "Direct-mail pioneers like Richard Viguerie created hair-on-fire campaign-fund-raising letters... * **Tim Carmody**: _Pour some out for the sites that aren’t here: Google Reader_: "Some of the best things ever seen or used on the web can’t be saved... ---- **Interesting Reads:** * **Tim Carmody**: _Jay Smooth’s Ill Doctrine is still the best_ * **Tim Carmody**: _The web’s most useful tools and sites_ * _FutureMe.org: Write a Letter to the Future_ * **Kevin... Continue reading
**Should-Read: Nick Bunker**: _What would rules-based monetary policy look like?_: "All of this isn’t to say that the reaction functions of central banks or individual central bankers aren’t important... >...Understanding how central bankers view the workings of the economy and how they balance inflation and unemployment are important for not only communicating policy, but for accountability as well. If the benefits of a Taylor Rule or similar rules come from creating consistency or predictability in how central bankers react, then the benefits of an inflation or output growth target come from creating predictability in those economic variables. >A mandate from elected officials to target inflation, for example, is creating a rule for the central bank. But this rule is about the target or goal of monetary policy and gives some discretion to the central bank about how to meet that goal. Predictability is the goal, but at a different level. Politicians setting a target for the Federal Reserve and then giving it some room to maneuver is also a form of rules-based monetary policy—there’s just a difference in what is being governed by the rule... Continue reading
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Alasdair Macintyre, at least in his [_After Virtue_] mode, believes that good civilizations are ones with moral consensus led by prophets, rather than ones with moral confusion managed by managers. It is Macintyre’s belief that we should hope for a civilization led by Trotskys (less preferred) or St. Benedicts (more preferred), but in either event it is to be preferred to managerial Keyneses. [_After Virtue_]: http://amzn.to/2ovRJEb If you step back, however, and inquire into the content of the this-world secular ideologies of the Trotskys, it then becomes very difficult to prefer the prophetic Trotskys to the managerial Keyneses. Trotsky’s gospel, it turns out, is in reality little more than a managerialist gospel. Trotsky says that History speaking through Marx and him knows how to build a Communist utopia. What is a Communist utopia? It is a society in which humans pull together and coordinate their activities. It is a society in which people are free to do what they want, within reason of what is not destructive for the community. It is a society in which people are prosperous: well-fed, well-clothed, well-housed, and well-entertained. Trotsky’s gospel is that Keynes’s market economy is incapable of even approaching such a utopia, while... Continue reading
**Should-Read: Tim Carmody**: _Pour some out for the sites that aren’t here: Google Reader_: "Some of the best things ever seen or used on the web can’t be saved... >...They’re already gone. These are some of them, nominated by Kottke readers: **Google Reader**: On the one hand, Google kind of ruined RSS, up until then the best distribution method for serial content, by turning it into a product. At the end, some of the best RSS readers weren’t even RSS readers, just frontends for Google Reader, which handled all the resource-intensive work. >On the other hand, Google Reader was a really wonderful community. It had a lightweight social graph component, but it was really oriented around news and stories and blog updates that people shared. Everything that people wanted online comments to be, Google Reader was. And when it ended, it took all of that away, leaving social media networks — which were really never designed to do content distribution — as the only game in town. I honestly don’t know if we’ve ever recovered... Continue reading
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**[Over at Project Syndicate][1]**: Former U.S. Treasury Secretary [Larry Summers][] is fencing with current U.S. Treasury Secretary [Steve Mnuchin][] about "artificial intelligence"--AI--and related topics. [Larry Summers]: https://www.ft.com/content/a6299223-93c3-3e24-8477-59f69f1295dd [Steve Mnuchin]: http://www.cnbc.com/2017/03/24/mnuchin-treasury-secretary-ai-automation-comments.html Most of their differences are differences of emphasis. Mnuchin is drawing the issue narrowly: the particular technologies called "Artificial Intelligence taking over American jobs". And he is, at least as I read him, is elliptically criticizing high stock market values for "unicorns": companies with valuations above a billion dollars and yet no past record or clear future path to producing revenues to justify such valuations. [1]: https://www.project-syndicate.org/commentary/mnuchin-automation-low-skill-workers-by-j--bradford-delong-2017-04 Summers is drawing the issue broadly: "the... impact of technology on jobs". And he points to valuations for the proven and highly profitable tech giants Google and Apple that seem no more than fair. I think that Summers is right on the rhetoric--a Treasury Secretary cannot answer questions narrowly, for even his most careful and narrowest answers will be heard to have broad implications. How to handle the coming of information technology is a major issue. Discouraging investment in high tech is not wise from society's point of view. Yet I have great sympathy for what Mnuchin is trying to do as well.... Continue reading
I think the basic problem is that you expect—in some sense—that the market economy should be "fair". It isn't. In fact, it cannot be. The market economy rewards those who happen to: 1. own particular things 2. that are useful in making things 3. that rich people really want 4. if it is also hard to reproduce or make more of those particular things. A market economy can be very useful. It provides people who want to get rich or even comfortable with powerful incentives to focus like laser beams on figuring out how to make and then making more of those particular things that are hard to make and are useful in making things rich people really want. Since non-rich people tend to want a lot of the same things, this makes the economy more productive, and makes more stuff available for everybody. And provided that it is not divided up in an even-more-unequal way, pretty much everybody becomes better off as a result of this process. But "fair" or "just"? It is not. It cannot be. As economist Friedrich von Hayek said, the economy rewards those people who are and own things that are useful to the rich... Continue reading
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* **Should-Read: Jamelle Bouie**: _The Muted Response to the Retail Apocalypse Shows Which Workers Count in Trump’s America_: **Fake Working Class**: "The retail industry’s recent decline... >...may have reached a “tipping point.”... Once-bustling shopping malls and department stores are now empty as millions of Americans do their shopping online through businesses that have warehouses but don’t operate storefronts.... “More workers in general merchandise stores have been laid off since October, about 89,000 Americans... than all the people employed in the coal industry.”... Despite this ongoing challenge and threat to millions of ordinary Americans, Washington is silent. What makes this even more striking is it comes at a time when politicians—and a multitude of voices in national media—are preoccupied with the prospects of blue-collar whites and the future of the Rust Belt. That contrast exists for several reasons, not the least of which is a simple one: Who does retail work in this country versus who does manufacturing work.... >For all of the impersonal economic reasons for the decline of retail, for all the understandable reasons motivating political attention to manufacturing, it’s also the case that this is a story of race and gender. A story of who matters in our... Continue reading
**Must-Read: Rick Perlstein**: _I Thought I Understood the American Right. Trump Proved Me Wrongs_: "Direct-mail pioneers like Richard Viguerie created hair-on-fire campaign-fund-raising letters... >...about civilization on the verge of collapse... “federal and state legislatures are literally flooded with proposed laws that are aimed at total confiscation of firearms from law-abiding citizens”... “babies are being harvested and sold on the black market by Planned Parenthood clinics.” Recipients of these alarming missives sent checks to battle phony crises, and what they got in return was very real tax cuts for the rich.... Republican politics and “multilevel marketing” operations like Amway (Trump’s education secretary, Betsy DeVos, is the wife of Amway’s former president and the daughter-in-law of its co-founder); and how easily some of these marketing schemes shade into the promotion of dubious miracle cures (Ben Carson, secretary of housing and urban development, with “glyconutrients”; Mike Huckabee shilling for a “solution kit” to “reverse” diabetes; Trump himself taking on a short-lived nutritional-supplements multilevel marketing scheme in 2009). >The dubious grifting of Donald Trump, in short, is a part of the structure of conservative history. >Future historians won’t find all that much of a foundation for Trumpism in the grim essays of William F.... Continue reading