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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
From the Good Germany--the one that has more to offer the world than austerity and general depression. Bonus: the most expensive special effects for a music video ever: Continue reading
Posted 10 hours ago at Brad DeLong's Grasping Reality
**Comment of the Day: Charles Steinel**: [Runup to Hiroshima](http://www.bradford-delong.com/2015/07/liveblogging-world-war-ii-july-26-1945-potsdam-declaration.html#comment-6a00e551f08003883401b7c7b4be75970b): "The [Potsdam Ultimatum] document makes a reference to the 'self-willed militaristic advisors'... >...and in the same sentence refers to Japan as an 'Empire.' Later on the demand is made for the elimination of the authority of 'those who have misled and deceived the people of Japan.' It's clearly directed at the people in power at that time, which could include the Emperor, but there's nothing here that demands the complete dismantling of the imperial institution. 'Unconditional surrender' is specifically directed to apply to the Japanese armed forces. Also, the term 'utter devastation' is a strong indication of what might be coming. Continue reading
Posted 10 hours ago at Brad DeLong's Grasping Reality
**Must-Read: Noah Smith**: [Growth Fantasy of Tax Cuts and Small Government](http://equitablegrowth.org/?p=12687): "Jeb Bush says that if he's elected president he wants to get us to sustained gross domestic product growth of 4 percent a year... >...I'm highly skeptical, and I'm far from the only one. But there are some true believers... John Cochrane, for example, has a long list of structural reforms that he thinks will do the trick. Now some of these are probably good ideas, and some are probably bad. But... belief that we can reform our way to sustained higher growth... boils down to faith and hope. There are many cases where that faith and hope has turned out not to be justified. For example, there is the case of the... American Legislative Exchange Council, a think tank comprised of state senators and representatives from a number of large corporations... Arthur Laffer.... Every year, ALEC produces a report called 'Rich States, Poor States,' in which it ranks states according to how business-friendly their policies are.... Alec lists 15 factors that it claims boost state growth rates. These boil down to low taxes, low levels of government spending and light regulation... the ideas John Cochrane describes, and that... Continue reading
Posted 10 hours ago at Brad DeLong's Grasping Reality
**Must-Read: Paul Krugman**: [Fire Phasers](http://equitablegrowth.org/?p=12685): "Jeb Bush doesn’t just want Americans to work more hours; he also wants to ‘phase out’ Medicare.... >...Fact-checking organizations please note, by the way. The next time Democrats say that Republicans want to destroy Medicare, and Republicans start screaming that this is a lie, remember that when talking to their own people like Jeb themselves call what they’re proposing a plan to, yes, end Medicare.... The original idea... was that Medicare... a single-payer system of government insurance... could not act to control costs.... There was much sneering and scoffing at the... Affordable Care Ac['s] cost-saving measures.... But we’re now five years into... a spectacular slowdown in the growth of health costs, with the historical upward trend in Medicare costs.... How much credit should go to the ACA? Nobody really knows. But... the case that universal health insurance is affordable has never looked better. It’s amazing, isn’t it? Who could have imagined that conservatives would keep proposing the exact same policy despite strong evidence that they were wrong about the facts? Oh, wait. > Continue reading
Posted 10 hours ago at Brad DeLong's Grasping Reality
**Live from Bullwinkle Plaza: Ezra Klein**: [On Paul Krugman's theory of hipsters](http://equitablegrowth.org/?p=12661): "Krugman suggests that hipsters are signaling a rejection of the workaday bourgeois world by flouting conventional dress codes... >...I think the truth is closer to the opposite: They're signaling a mastery of the workaday bourgeois world by flouting conventional dress codes. You can find a gentler version of this in Silicon Valley, where hackers proved their skills so valuable that they won the right to dress however they wanted. Eventually, shorts and sandals became something weirdly close to a uniform. To wear a tie to work came to signal that you weren't good enough at coding, and thus didn't have the market power and independence to not wear a tie.... >I suspect something similar is going on with topknots and tattoos. The trappings of the urban hipster don't signal the absence of a job but rather the presence of the right kind of job — the kind of job that values your individual, creative talents enough that you can be covered in ink and a lumberjack's beard and still pull down a comfortable wage. That's particularly true when you spy the aesthetic in the hipper parts of Brooklyn,... Continue reading
Posted 10 hours ago at Brad DeLong's Grasping Reality
**Must-Read:** Richard Fisher became President of the Federal Reserve Bank of Dallas in April 2005. He spent ten years as a regional bank President. I cannot think of a single case in which he was pulling the Federal Reserve Open Market Committee toward a more correct assessment of the current economic situation and of the major risks to it. And I cannot think of an episode in which, after events had proved his views of major risks erroneous, he ever marked his beliefs to market in any substantive ways. Surely that is worth mentioning at least once in an article about the Dallas Fed? Can anybody make a case to me that _Wall Street Journal_ reporter Michael Derby's failure to even whisper this in his article is any way professional? **Michael Derby**: [Dallas Fed Struggles to Fill Fisher’s Big Shoes](http://equitablegrowth.org/?p=12683): "The Federal Reserve Bank of Dallas is taking its time picking a new president.... >...Former president Richard Fisher stepped down March 19.... His exit was long anticipated.... ‘It’s beyond bizarre’ a new president hasn’t been named yet, said Danielle DiMartino Booth, who served as a close adviser to Mr. Fisher when they were both at the bank.... ‘Richard Fisher rose... Continue reading
Posted 10 hours ago at Brad DeLong's Grasping Reality
**Must-Read:** The process of creating a market--especially as delicate and complicated a market as a market for debt and equity investments in relatively large-scale enterprises--is not a straightforward process. Here Venture and Voth argue that the spillovers from the creation of the "technology" of a debt marketplace were enormous, as only after the government had dug the channels through which debt would flow for its own war-fighting purposes could first canal companies, then manufacturing companies, and then railroad companies take advantage of them. **Jaume Ventura and Hans-Joachim Voth**: [Debt miracle: Why the country that borrowed the most industrialised first](http://equitablegrowth.org/?p=12681): "Is debt really that bad?... >...This column looks at the towering debts, rapid tax hikes, and constant state of war that led to Britain’s Industrial Revolution, showing that the devil is in the detail when assessing sovereign debt.... Towering debts, rapidly rising taxes, constant and expensive wars, a debt burden surpassing 200% of GDP. What are the chances that a country with such characteristics would grow rapidly? Almost anyone would probably say ‘none’. And yet, these are exactly the conditions under which the Industrial Revolution took place in Britain.... >Until now, scholars mostly thought of the effect of government borrowing on... Continue reading
Posted 10 hours ago at Brad DeLong's Grasping Reality
**History.com**: [Fugitive Vichy leader surrenders in Austria](http://www.history.com/this-day-in-history/fugitive-vichy-leader-surrenders-in-austria): >Pierre Laval, the puppet leader of Nazi-occupied Vichy France, surrenders to American authorities in Austria, who extradite him to France to stand trial. >Laval, originally a deputy and senator of pacifist tendencies, shifted to the right in the 1930s while serving as minister of foreign affairs and twice as the French premier. A staunch anti-communist, he delayed the Soviet-Franco pact of 1935 and sought to align France with Fascist Italy. Hostile to the declaration of war against Germany in 1939, Laval encouraged the antiwar faction in the French government, and with the German invasion in 1940 he used his political influence to force an armistice with Germany. Henri Petain took over the new Vichy state, and Laval served as minister of state. Laval was dismissed by Petain in December 1940 for negotiating privately with Germany. >By 1942, Laval had won the trust of Nazi leader Adolf Hitler, and the elderly Petain became merely a figurehead in the Vichy regime. As the premier of Vichy France, Laval collaborated with the Nazi programs of oppression and genocide and increasingly became a puppet of Hitler. After the Allied liberation of France, he was forced to flee... Continue reading
Posted 11 hours ago at Brad DeLong's Grasping Reality
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**Must-Watch:** Really, really bad news for the American economy. Alan Krueger concludes that we are now near "full employment" in a monetary policy-Federal Reserve-inflation sense. The implications? The implications are: 1. that the failure of the government and the Federal Reserve to more aggressively boost recovery has turned what was excess cyclical non-employment into structural non-employment, 2. that essentially none of the drop in production relative to the pre-2008 trend can or will be recouped without noticeably higher inflation. **Alan Krueger**: [Labor Force Participation](http://equitablegrowth.org/?p=12679): <(https://vimeo.com/134932856)>: Via [Mark Thoma](http://economistsview.typepad.com/economistsview/2015/07/video-nber-feldstein-lecture-by-alan-krueger-on-labor-force-participation.html?utm_source=feedburner&utm_medium=feed&utm_campaign=Feed%3A+EconomistsView+%28Economist%27s+View%29). * * ---- Continue reading
Posted 11 hours ago at Brad DeLong's Grasping Reality
**Live from Bullwinkle Plaza:** I misheard. Philz Coffee does not in fact serve a drink called "Silicon Splendor"... Continue reading
Posted 12 hours ago at Brad DeLong's Grasping Reality
**Must-Read: Steven Greenhouse**: [Jeb Bush 'Should Be Embarrassed' by His Overtime Pay Claims](http://equitablegrowth.org/?p=12670): "Jeb Bush... said Barack Obama’s proposal to expand overtime pay... >...would result in “less overtime pay” and “less wages earned”.... Daniel Hamermesh, a University of Texas labor economist, said: “He’s just 100% wrong,” adding that “there will be more overtime pay and more total earnings” and “there’s a huge amount of evidence employers will use more workers”.... Indeed, a Goldman Sachs study estimated that employers would hire 120,000 more workers in response to Obama’s overtime changes. And a similar study commissioned by the National Retail Federation--a fierce opponent of the proposed overtime rules--estimated that as a result of the new salary threshold, employers in the restaurant and retail industries would hire 117,500 new part-time workers... cost the increased US retail and restaurant industries $9.5bn a year, unless those industries made money-saving changes in response.... Jared Bernstein, former chief economist for vice-president Joe Biden and a senior economist with the liberal Center for Budget and Policy Priorities, said... “If employers want to avoid overtime pay, they hire more workers on straight time and that creates new jobs,” Bernstein said. “Even staunch opponents agree with that and disagree with... Continue reading
Posted yesterday at Brad DeLong's Grasping Reality
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**Live from Bullwinkle Plaza:** Where oh where are Nate Silver and Sam Wang on this?: **PredictWise**: [2016 President--Republican Nomination](http://www.predictwise.com/politics/2016RepNomination): The only four things truly on-point are: **Nate Silver**: [Donald Trump Is The World’s Greatest Troll](http://fivethirtyeight.com/features/donald-trump-is-the-worlds-greatest-troll/): Candidates who are perceived as having a credible chance to win the nomination... >...receive proportionally more media attention than public attention. The reverse is true for candidates who are seen by the press as long shots, such as Rand Paul and Ben Carson.... Press attention both leads and lags public attention to the candidates.... The public can take cues from the media about which candidates to pay attention to. But the media also gets a lot of feedback from the public.... If Trump-related stories are piling up lots of pageviews and Trump-related TV segments get good ratings, then guess what? You’re probably going to see more of them. This creates the possibility of a feedback loop.... It may help to explain why we’ve repeatedly seen the so-called ‘discovery, scrutiny and decline’ cycle in the past two primary campaigns for candidates like Trump, Newt Gingrich and Herman Cain--bursts of attention that coincide with spikes in the polls but then fade or even burst after several weeks....... Continue reading
Posted yesterday at Brad DeLong's Grasping Reality
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**Worth Attending If in Town: Bernie Sanders**: [Conference on the Greek Debt Crisis](http://equitablegrowth.org/?p=12668): Rm 902 Hart Senate Office Building. 2:30 PM, Thursday July 30th... >...Participants: U.S. Sen. Bernie Sanders. Joseph Stiglitz, Senior fellow and chief economist at Roosevelt Institute. James Galbraith, University of Texas. Jacob Funk Kirkegaard, Peterson Institute for International Economics. Stephanie Kelton, University of Missouri – Kansas City > Continue reading
Posted yesterday at Brad DeLong's Grasping Reality
**Live from Bullwinkle PlazaHarry Reid**: [On Twitter: "Been carrying this in my wallet a long time..."](https://twitter.com/SenatorReid/status/626771482732032000) Been carrying this in my wallet a long time. It shows you how long Republicans have been wrong about health care. pic.twitter.com/ZoiqsoVwdk— Senator Harry Reid (@SenatorReid) July 30, 2015 Continue reading
Posted yesterday at Brad DeLong's Grasping Reality
**Must-Read: Paul Krugman**: [The Euroskeptic Vindication](http://mobile.nytimes.com/blogs/krugman/2015/07/19/the-euroskeptic-vindication/?_r=0&referrer=): "Conventional Hicks/Keynes macroeconomics--whether or not you dress it up in New Keynesian algebra--has performed very well... >...Anti-Keynesians keep making more or less desperate efforts to refute this proposition, usually by taking something I said out of context and pretending that something that happened for one year somewhere or other is contrary to what the Evil One claimed. But the overall shape of events has been very Keynesian, and very much at odds with alternative stories. >And at this point I think we need to chalk up another success.... American economists warned about exactly the flaws in the euro that are now the source of so much suffering. Beckworth reminds us of a January 2010 article by Jonung and Drea that has become an accidental classic.... They provided an impressive bibliography and literature review of academic euroskepticism--and in so doing provided us with a sort of honor roll, because all the dire warnings from those ugly Americans came to pass within months of their article’s publication. >So why were the ugly Americans right? Because the theory of optimum currency areas turns out to be basically right. And that theory is best seen, I’d argue, as... Continue reading
Posted yesterday at Brad DeLong's Grasping Reality
**Must-Read:** I had always thought that we had a mixed economy and the social safety net in large part to counter and correct the market's judgment as to who deserved to have resources used for their benefit. And I had always thought that this was an obvious and well-understood part of benefit-cost analysis. Have I in fact been wrong? Is this not well-understood? Do the younger economists--the kids these days!--Really think that the rights function for assessing societal well-being roughly multiplies each person's utility by their individual income? **Harold Pollack, Bill Gardner, and Timothy Jost**: [Valuing Medicaid](http://prospect.org/article/valuing-medicaid): "Finkelstein and her colleagues placed a very low value... >...$25,000--on a year of additional life for Medicaid beneficiaries. The typical threshold used in health services research is much larger, in recent studies far above $100,000....This assumption powerfully frames... analysis.... If you start out by assuming that Medicaid beneficiaries’ lives are worth very little, you will find that it is not worth spending much money to prolong them. These authors... defined this threshold based on reasonable assumptions about what low-income recipients themselves would have been willing to pay, had they been spending their own money for their Medicaid benefits. Poor people aren’t willing to... Continue reading
Posted yesterday at Brad DeLong's Grasping Reality
**Live from Bullwinkle Plaza: Michael Cohen**: ["The congressional debate on the Iran deal](http://www.worldpoliticsreview.com/articles/16340/kabuki-theater-of-iran-deal-debate-comes-with-costs)... will be high-volume Kabuki theater... >...For most Democrats, there is little interest in undercutting a president of their own party.... Republicans... have little to gain from its demise... the political benefit lies in the easy rhetoric of attacking the deal, not the laborious task of crafting a better one.... [And] if anything, the Israelis have the most to gain by the deal being approved... Continue reading
Posted yesterday at Brad DeLong's Grasping Reality
Alfred Marshall and Mary Marshall (1885), *Economics of Industry*, Book III: Market Value: Chapter 1: Changes in the Purchasing Power of Money : >(4) After every crisis, in every period of commercial depression, it is said that supply is in excess of demand. Of course there may easily be an excessive supply of some particular commodities.... But something more than this is meant.... The warehouses are overstocked... in almost every important trade; scarcely any trade can continue undiminished production so as to afford a good rate of profits.... >And it is thought that this state of things is one of general over-production.... But it really is nothing but... commercial disorganization... the remedy... is a revival of confidence. To begin with...as [John Stuart] Mill says: >>What constitutes the means of payment for commodities is simply commodities.... Could we suddenly double the productive powers of the country, we should double the supply... but... by the same stroke, double the purchasing power.... >But though men have the power to purchase they may not choose to use it. For when confidence has been shaken by failures, capital cannot be got to start new companies or extend old ones.... There is but little occupation in... Continue reading
Posted yesterday at Brad DeLong's Grasping Reality
**History.com**: [Battle of Hooge](http://www.history.com/this-day-in-history/battle-of-hooge): >In Flanders, Belgium, on July 30, 1915, the Germans put their new weapon, the flammenwerfer, or flamethrower, to devastating use against the Allies at the Battle of Hooge. >The Battle of Hooge represented one of the first major employments of the flamethrower, one of the most feared weapons introduced during World War I. Eleven days before the battle, British infantry had captured the German-occupied village of Hooge, located near Ypres in Belgium, by detonating a large mine. Using the flamethrowers to great effect, along with machine guns, trench mortars and hand grenades, the Germans reclaimed their positions on July 30, 1915, penetrating enemy front lines with ease and pushing the British forces back to their second trench. Though few men were lost to actual burns, a British officer reported later, the weapons had a great demoralizing effect, and when added to the assault of the other powerful weapons, they proved mercilessly efficient at Hooge. >German troops had started with stationary flamethrowers, which allowed them to take large gains of land at Verdun in February 1915. Through the efforts of Bernhard Reddemann, a reserve captain, and Richard Fiedler, a Berlin engineer, the Germans progressed to smaller, lighter... Continue reading
Posted yesterday at Brad DeLong's Grasping Reality
**Must-Read: Jérémie Cohen-Setton, Joshua K. Hausman, and Johannes F. Wieland**: [Supply-Side Policies in the Depression: Evidence from France](http://equitablegrowth.org/?p=12659): "The effects of supply-side policies in depressed economies... evidence from France in the 1930s... >...In 1936, France departed from the gold standard and implemented large-scale mandatory wage increases and hours restrictions. This quickly ended deflation, but output stagnated. We present time-series and cross-sectional evidence that the supply-side policies, in particular the 40-hour law, contributed to French stagflation. These results are inconsistent both with the standard one- sector new Keynesian model and with a two-sector model calibrated to match our cross-sectional estimates. We propose an alternative, disequilibrium model consistent with expansionary effects of lower real interest rates and contractionary effects of higher real wages. This model and our empirical evidence suggest that without supply-side problems, France would have recovered rapidly after leaving the gold standard. > Continue reading
Posted 2 days ago at Brad DeLong's Grasping Reality
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**Must- and Should-Reads:** * **Martin Feldstein**: [The U.S. Underestimates Growth](http://www.wsj.com/articles/the-u-s-underestimates-growth-1431989720) * **William Gale**: [State income tax cuts: Still a bad idea](http://www.brookings.edu/research/opinions/2015/07/28-state-income-tax-cuts-bad-idea-gale#.Vbj7N6dEldI.twitter) * **Jody Shenn**: ["Thanks to a push by President Barack Obama's administration, more and more student-loan borrowers are signing up for income-driven repayment programs, allowing them to pay a fraction of what they would otherwise owe..."](http://www.bloomberg.com/news/articles/2015-07-29/we-just-got-some-new-data-on-america-s-student-loan-burden) * **Must-Read: Kevin Hjortshøj O'Rourke**: [Moving on From the Euro](http://www.project-syndicate.org/commentary/eurozone-failed-experiment-by-kevin-o-rourke-2015-07) * **Must-Read: Mark Thoma**: [The Politics of Economics and ‘Very Serious People’](http://equitablegrowth.org/?p=12649) * **Simon Wren-Lewis**: [The F story about the Great Inflation](http://mainlymacro.blogspot.com/2015/07/the-f-story-about-great-inflation.html) * **Must-Read: Cathy O'Neil**: [Greek Debt and German Banks](http://equitablegrowth.org/?p=12619) * **Must-Read: Daniel Davies**: [The Verjus Manifesto](http://equitablegrowth.org/?p=12621) * **Must-Read: Mark Thoma**: [12 Good and Bad Parts of Online Education](http://equitablegrowth.org/?p=12625) * **Must-Read: Matthew Yglesias**: [The Amazing Persistence of Reagan Derp](http://equitablegrowth.org/?p=12629) * **Paul Krugman**: [Annoying Euro Apologetics](http://krugman.blogs.nytimes.com/2015/07/22/annoying-euro-apologetics/) * **Nick Bunker**: [Beware of simple U.S. tax reform plans](http://equitablegrowth.org/news/beware-simple-u-s-tax-reform-plans/) * **Luigi Zingales**: [Why Zingales is so “soft” on Greece](http://europaono.com/2015/07/21/why-zingales-is-so-soft-on-greece/) * **Lars Jonung and Eoin Drea**: [The euro: It can’t happen, It’s a bad idea, It won’t last. US economists on the EMU, 1989-2002](http://ec.europa.eu/economy_finance/publications/publication_summary16343_en.htm) * **Nick Bunker**: [Is technological change key in the decline of U.S. labor share of income? - Washington Center for Equitable Growth](http://equitablegrowth.org/news/technological-change-key-decline-u-s-labor-share-income/) *... Continue reading
Posted 2 days ago at Brad DeLong's Grasping Reality
[**Over at Equitable Growth**][1]: Last month the sharp and hard-working Jeff Spross wrote: **Jeff Spross**: [Why Americans Are so nostalgic About the Manufacturing Industry](http://theweek.com/articles/555969/why-americans-are-nostalgic-about-manufacturing-industry): "The U.S. still manufactures a lot of stuff, but most of it isn't stuff average American consumers buy... >...These days, we mostly make heavy industrial equipment, circuitry, aircraft, and other big and expensive goods and high-end products.... A lot of manufacturing went overseas... so we get imports for a lower cost, which improves our standard of living. People in other, less developed nations get new jobs, which... improves theirs. A win-win, theoretically speaking. Same goes for rising automation.... But the 1950s economy was also a delicately balanced ecosystem... where wages were good, health and pension benefits... plentiful... job security was high.... >Globalization gave certain interests and centers of power in our society the wedge and hammer.... Unions became far weaker, business owners and management got much freer hands, and worker bargaining power collapsed. The economic benefits... weren't broadly shared.... Other Western countries also endured globalization, but managed to keep their levels of inequality lower.... If we'd found some sort of alternative economic strategy for producing those same results, it's unlikely voters or politicians would be nostalgically... Continue reading
Posted 2 days ago at Brad DeLong's Grasping Reality
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**Live from Evans Hall (Must-Read If You Could):** Jeremie Cohen-Setton**: How Binding Is the Trilemma in a Currency Union?: Evidence from the Fed: The semi-autonomy of the regional reserve banks and... >...in particular, the non-uniformity of discount rates across districts in the early years of the Federal Reserve system, has often been treated as a curiosity. To shed light on this period and the possibility of different regional monetary policies in a currency union, I document with daily data that periods of non-uniformities in discount rates did not disappear after the New Deal reform of the Fed, although their size and duration substantially diminished. Using a monthly panel VAR for the period where member bank borrowing was a preponderant means of reserve provision, I show that regional deviations in discount rates were associated with regional deviations in member bank borrowings and local market interest rates. Rather than resulting from imperfect financial integration between districts or from a banker’s tradition against borrowing, I argue that differing regional monetary policies were made possible by the use of qualitative controls, which although ineffective at directing credit to a specific use, put a upper bound on inter-district arbitrage. (NO PUBLICLY-DISTRIBUTABLE PAPER YET, ALAS...) Continue reading
Posted 2 days ago at Brad DeLong's Grasping Reality
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**Wikipedia**: [USS Indianapolis (CA-35)](https://en.wikipedia.org/wiki/USS_Indianapolis_(CA-35)#1945): >After major repairs and an overhaul, Indianapolis received orders to proceed to Tinian island, carrying parts and the enriched uranium (about half of the world's supply of Uranium-235 at the time) for the atomic bomb Little Boy, which would later be dropped on Hiroshima.[10] Indianapolis departed San Francisco on 16 July 1945, within hours of the Trinity test. Arriving at Pearl Harbor on 19 July, she raced on unaccompanied, delivering the atomic weapon components to Tinian on 26 July. >Indianapolis was then sent to Guam where a number of the crew who had completed their tours of duty were replaced by other sailors. Leaving Guam on 28 July, she began sailing toward Leyte where her crew was to receive training before continuing on to Okinawa to join Vice Admiral Jesse B. Oldendorf's Task Force 95. >At 00:14 on 30 July, she was struck on her starboard bow by two Type 95 torpedoes from the Japanese submarine I-58, under the command of Mochitsura Hashimoto. The explosions caused massive damage. The Indianapolis took on a heavy list, and settled by the bow. Twelve minutes later, she rolled completely over, then her stern rose into the air, and she... Continue reading
Posted 2 days ago at Brad DeLong's Grasping Reality
**Must-Read:** The very sharp Kevin O'Rourke concludes that it is time to throw in the towel on the eurozone. I think it is worth one more throw of the dice: perhaps European macroeconomic stabilization regulation can be moved out of the hands of the Eurocracy in Brussels and Frankfurt and into a more general North Atlantic macroeconomic stabilization regulatory apparatus in Washington. A utopian project? Yes, but worth attempting. If that does not work--or if that is not attempted--I cannot find any holes in Kevin's logic: **Kevin Hjortshøj O'Rourke**: [Moving on From the Euro](http://www.project-syndicate.org/commentary/eurozone-failed-experiment-by-kevin-o-rourke-2015-07): "European Monetary Union was never a good idea... >...I remember my surprise when, as a young assistant professor, I realized that I was opposed to the Maastricht Treaty.... European integration is a very good thing. But the textbook economics I was teaching showed how damaging EMU could be in the absence of European fiscal and political union. Nothing that has happened since has convinced me that the textbook was excessively pessimistic. On the contrary: it was far too optimistic.... It has been obvious for some years that the “actually existing EMU” has been a costly failure, both economically and politically. Trust in European institutions has collapsed,... Continue reading
Posted 2 days ago at Brad DeLong's Grasping Reality