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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
**Andrew Gordon**: [The Rules of the Game: Jutland and British Naval Command]( >There is said to have been an increase in tension in naval circles in the early months of 1916: a sense of calm before the storm. The German Commander-in-Chief, Admiral Hugo von Pohl (an advocate of U-boat warfare against commerce), was known to have been superseded, for reasons of illness, by Vice-Admiral Reinhard Scheer, who was thought likely to use the High Seas Fleet more offensively than his predecessor; and with the Army deadlocked on the Western Front, it was possible that the German high command might cast about for other ways to take the initiative and vary the daily diet of depressing news from the trenches. >>To what extent this is hindsight, is difficult to say; but there were other, more tangible, signs of possible change. The British, by virtue of the Admiralty’s ‘Room 40’, were far ahead of the Germans in signals intelligence. This was substantially, but by no means entirely, a matter of luck. Accounts vary, but there appear to have been two gifts which fell into the Admiralty’s lap early in the war. In August 1914 the Russians salvaged a Signal Book from the... Continue reading
**Must-Read: Josh Bivens**: [Larry Summers, the Congressional Progressive Caucus Budget, and the Abandonment of Fiscal Policy]( "Federal budget season came and went this year without any budget proposal hitting the floor of the U.S. House of Representatives... >...This was an odd (and ironic) bit of incompetence by the GOP leadership, who couldn’t even wrangle a majority to support their own budget proposal. But it was especially damaging to U.S. economic policy debates because it limited attention paid to the budget of the Congressional Progressive Caucus (CPC).... The need to resuscitate fiscal policy was usefully underscored in a widely-discussed speech by former Treasury Secretary and National Economic Council Chair Larry Summers earlier this week.... >>I am here to tell you that the most important determinant of our long term fiscal picture is how successful we are at accelerating the economy’s growth rate in the next three to five years, not the austerity measures that we implement.... What are the crucial elements of changing the fiscal monetary mix I would highlight? >>One, the only one I have a slide on, is a substantial increase in public investment. It is insane that [net] federal and infrastructure [investment] is now negative at a moment... Continue reading
**Live from Over the Canadian Rockies:** Janelle Bouie puts his trust in the wisdom of the American people... **Janelle Bouie**: [Donald Trump’s cable news-baiting strategy is backfiring]( "If the media didn’t make Trump popular—if it’s actually done the reverse—then how did he win the Republican primary?... >...One answer is that Trump has broken the rules of politics—he’s killed the dungeon master, changed the character sheets, rewritten American politics into a game of his own making. This isn’t just wrong, it buys into the myth of Trump as a force of will and power who can reshape reality to his liking. >The better explanation, the one that treats Trump like an important force but not a dispositive one, is that Donald Trump won the Republican primary because the Republican Party is broken. Years of disdain—for moderation, for compromise, for governance, expertise, and conventional qualifications—have merged with long-exploited currents of bigotry to produce an electorate primed for a man like Donald Trump. Republicans put a Trump-like figure on the 2008 presidential ticket, backed Trump-like figures in the 2012 primaries, and even solicited Trump himself for an endorsement that same year. It was only a matter of time before Republican voters clamored for... Continue reading
**Doros**: [The Eternal Council]( Continue reading
For economies at the the zero lower bound on safe nominal short-term interest rates, in the presence of a Keynesian fiscal multiplier of magnitude μ--now thought, for large industrial economies or for coordinated expansions to be roughly 2 and certainly greater than one--an extra dollar or pound or euro of fiscal expansion will boost real GDP by μ dollars or pounds or euros. And as long as the interest rates at which the governments borrow are less than the sum of the inflation plus the labor-force growth plus the labor-productivity growth rate--which they are--the properly-measured amortization cost of the extra government liabilities is negative: because of the creation of the extra debt, long-term budget balance allows more rather than less spending on government programs, even with constant tax revenue. Production and employment benefits, no debt-amortization costs as long as economies stay near the zero lower-bound on interest rates. Fiscal stimulus is thus a no-brainer, right? Perhaps you point to a political-economy risk that should economies, for some reason, move rapidly away from the zero lower bound their governments will not dare make the optimal fiscal-policy adjustments then appropriate. But future governments that wish to pursue bad policies no matter what... Continue reading
**Must-Read:** Wilhelmine China: a rapidly-industrializing country ruled by a social caste that has lost its role... **Andrew J. Nathan**: [Who Is Xi Jinping?]( "Xi Jinping’s respect for Mao is not a personal eccentricity... >...It is shared by many of the hereditary Communist aristocrats who... form most of China’s top leadership today as well as a large section of its business elite..... Contrary to the Western consensus that Deng saved the system after Mao nearly wrecked it, Xi and many other red aristocrats feel that it was Deng who came close to destroying Mao’s legacy.... The children of the founding elite see themselves as the inheritors of... a vast world that their fathers conquered under Mao’s leadership. Their parents came from poor rural villages and rose to rule an empire. The second generation... do not propose to be the generation that ‘loses the empire.’... They see no irony in cheering Xi Jinping’s attack on corrupt bureaucrats although Mao purged their own fathers as ‘capitalist roaders in power.’ Mao’s purges they excuse as a mistake. But they see today’s bureaucrats as flocking to serve the Party because it is in power and not because they inherited a spirit of revolutionary sacrifice from... Continue reading
**Must-Read:** Suppose you put someone in cryogenic sleep a decade ago, woke them up today, showed them this graph: and said: "The U.S. Federal Reserve still has the same 2%/year inflation target it had in the early 2000s. Do you think it should raise or lower interest rates in June?" I cannot think of a single reason why such a person would say "raise interest rates" (unless, of course, their compensation was an increasing function of the interest rate). **Nick Bunker**: [What’s the deal with U.S. wage growth?]( "The U.S. unemployment rate has been at or under 5 percent for more than six months... >...But... neither inflation nor wage growth has picked up considerably, despite expectations that they would.... First... the unemployment rate may be slightly overstating the health of the country’s labor market. Measured by the employed share of workers ages 25 to 54, the labor market has a long way to go before it hits a level usually associated with strong wage growth.... Adam Ozimek... points out that... low inflation has an impact on wage growth, because employers will be less willing to pass along wage hikes to prices, and employees will need less of a wage increase....... Continue reading
**Cardiff Garcia: **: [Podcast: our long chat with Paul Volcker (plus transcript and highlights)]( >**Paul Volcker:** I would never interpret it as you have to have [inflation] exactly zero. Prices tend to go up or down a little bit depending upon whether the economy’s booming or not booming. And I can’t understand making a fetish of a particular number, frankly. What you do want to create is a situation where people don’t worry about prices going up and they don’t make judgments based upon fears of inflation instead of straightforward analysis of what the real economy is doing. And I must confess, I think it’s something of a moral issue.... You shouldn’t be kind of fooling people all the time by having inflation they didn’t expect. Now, they answer, well, if they expect it, it’s okay. But if they expect it, it’s not doing you any good anyway. Those arguments you set forward don’t hold water if you’re expecting it... >**Paul Volcker:** I went off to London to write the thesis. But I got lazy and found other things to do than writing a thesis in 1952, or whenever it was. So I didn’t get around to writing it. I... Continue reading
**Live from the Self-Made Gehenna That Is Twitter: Terry Teachout**: [Twitter, in Four Sentences]( >1. How dare you talk about A when B is infinitely more important! >2. If I disagree with you, you’re almost certainly arguing in bad faith and probably evil as well. >3. You are personally responsible, in toto and in perpetuity, for everything that your friends, colleagues, and/or ancestors have ever said, done, or thought. >4. Sentences #2 and #3 do not apply to me. Continue reading
**Must-Read: Laura Tyson and James Manyika**: [Putting Profits in Perspective]( "Corporate profits may be near all-time highs... >...but their variance among firms and industries has also increased significantly. The most profitable firms in the US are... in sectors that capitalize on research and development, brands, software, and algorithms. Companies in sectors like pharmaceuticals, media, finance, information technology, and business services have the highest profit margins... excluding finance, these sectors’ share of US corporate profits has increased significantly, from 25% in 1999 to 35% in 2013.... In the most digitally advanced sectors of the economy, margins have grown 2-3 times faster than average. And even within these sectors, there are enormous spreads between the top-performing companies and the rest of the pack. The ‘winner-take-most’ dynamic of the digital economy is not only producing record profits for leading firms; it may be accelerating the pace of innovation and broadening the areas in which companies can enter and quickly establish market power... > Continue reading
**Must-Read: Branko Milanovic**: [How Unequal Is India?]( "In the 1990s... the survey numbers began to diverge more and more from National Accounts statistics... >...NSS kept on producing a fairly stable consumption Gini... with only a small increase in inequality after India’s sharp turn toward capitalism in the early 1990s... made India inequality look about the same as in developed countries. But until recently we had no other reliable and nationally-representative survey to confront NSS with. Now... we have... the first income based surveys of Indian population for 2004 and, just released by LIS, another same survey for 2011.... First, Indian Gini is... 51... the level of Latin American countries and is some 15 points... higher than... NSS.... >Now, if we replace NSS with the new income survey as I have done for the global inequality calculation for the year 2011 (unpublished), you may expect that the greater inequality revealed by IHDS would push global inequality up, especially since India is such a populous country. Right? Wrong.... Global inequality goes down by approximately 1 Gini point since the higher income levels implied by IHDS push Indians toward the middle of the global income distribution and more than offset the contribution to... Continue reading
**Must-Read: Noah Smith**: [Finding Better Ideas to Rebuild America]( "‘Concrete Economics,’ by University of California-Berkeley professors Brad DeLong and Stephen S. Cohen, needs an expanded sequel... >...900 pages long, with charts, data, theory and an exhaustive list of historical case studies. That book would become the Bible of the New Industrialist movement that is just beginning to grope its way out of the ashes of the neoliberal free-market consensus. Perhaps that tome will get written. But DeLong and Cohen couldn’t wait to write it, because we need new ideas now, and they decided they had to put a sketch of those new ideas into people’s heads very quickly. And I agree with their decision. If you're at all concerned about economic policy, this is a book you need to read. It will take you only a couple of hours, and the time will be well-spent.... >The peril of this sort of historical analysis is that it’s always easy to make the past fit some pattern after the fact. Sometimes policy causes big economic shifts, and sometimes it’s just along for the ride. A cautionary tale is provided by Japan’s experience, which DeLong and Cohen extol. Although Japan’s government certainly did... Continue reading
**Live from Bernie Sanders's Self-Made Gehenna: Jonathan Saker**: [On Twitter:]( >Bernie Sanders: ‘You are asking me questions about Latin America... but right now I’m running for president of the U.S.' Continue reading
**Over at [Equitable Growth]( Must-Reads:** * **Nick Bunker**: [Why public assistance for children should address what happens before birth - Equitable Growth]( * **Ann Johnson**: [Environmental regulation and technological development in the U.S. auto industry - Equitable Growth]( * **Michael Gorman**: [Emerging technologies, education, and the income gap - Equitable Growth]( * **Kostadis J. Papaioannou**: [“Hunger Makes a Thief of Any Man”: Poverty and Crime in British Colonial Asia]( * **Josh Bivens**: [Larry Summers, the Congressional Progressive Caucus Budget, and the Abandonment of Fiscal Policy]( * **Pedro Bordalo, Nicola Gennaioli, and Andrei Shleifer**: [Diagnostic Expectations and Credit Cycles]( * **Eric Loomis**: [Jobs for Those Who Lack College Degrees]( ---- **Should Reads:** * **Peter Edelman** (1997): [The Worst Thing Bill Clinton Has Done]( A Clinton appointee who resigned in protest over the new welfare law explains why it is so bad and suggests how its worst effects could be mitigated. * **Richard Mayhew**: [Exchange Strategery thoughts]( * **Miles Kimball**: [Against Anticompetitive Regulation]( * **Noah Smith**: [John Cochrane's 101ism, Overtime Pay Edition]( * **Nick Rowe**: [Accounting for Central Bank Profits]( ---- **And Over Here:** * [Live from the Republicans' Self-Made Gehenna: David Roberts:]( Trump promises 'complete American energy independence -- COMPLETE.' That... Continue reading
**Live from the Republicans' Self-Made Gehenna: David Roberts**: [Trump promises "complete American energy independence -- COMPLETE." That is utter nonsense]( "Trump energy speech about to begin... >...I might be live tweeting it. Mute as necessary. >Hm, this livestream is going in and out already. Just me? >Here's where you can stare in frustration at the malfunctioning live feed of Trump's energy speech: >The YouTube comments scrolling past the live feed are ... quite something. >Make America Late Again, amirite? >BREAKING: there is now an unexplained crowd of white people on the stage where Trump is soon to speak. >He's here! It's all happening. >This is ... not an energy speech. >Trump now arguing that coal mining is a delightful job that people love to do. >Trump now claiming his 'many Muslim friends' thanked him for proposing a ban on Muslims. >'To me, a market force is a beautiful force.' >Trump wants the Keystone pipeline, but he wants a better deal -- 'a piece of the profits for Americans.' >Facepalm forever. >'We're the highest taxed nation, by far.' That is flatly false, not that anyone cares. >75% of federal regulations are 'terrible for the country.' Sigh. >Elizabeth Warren has clearly gotten... Continue reading
**Live from the Republicans' Self-Made Gehenna: [A Republican Salute to Hillary Clinton]( Continue reading
**Hoisted from 2006:** [Main Currents of Marxism]( Back in the early 1970s, Leszek Kolakowski tells English historian E.P. Thompson what he thinks of him: >[Socialist Register]( (1974): Your letter contains some personal grievances and some arguments on general questions. I will start with a minor personal grievance. Oddly enough, you seem to feel offended by not having been invited to the Reading conference and you state that if you had been invited you would have refused to attend anyway, on serious moral grounds. I presume, consequently, that if you had been invited, you would have felt offended as well and so, no way out of hurting you was open to the organizers. >Now, the moral ground you cite is the fact that in the organizing Committee you found the name of Robert Cecil. And what is sinister about Robert Cecil is that he once worked in the British diplomatic service. And so, your integrity does not allow you to sit at the same table with someone who used to work in British diplomacy. >O, Blessed Innocence! >You and I, we were both active in our respective Communist Parties in the 40s and 50s which means that, whatever our noble intentions... Continue reading
**Must-Read: Kostadis J. Papaioannou**: [“Hunger Makes a Thief of Any Man”: Poverty and Crime in British Colonial Asia]( "Extreme rainfall, both droughts and floods, lead to a large increase in property crimes (such as robbery, petty theft and cattle raiding)... >...but not to an increase in interpersonal violent crimes (such as murder, homicides and assault).... We offer evidence that loss of agricultural income is one of the main causal channels leading to property crime. Additional historical information on food shortages, poverty and crime is used to explore the connection in greater detail... > Continue reading
**Live from the Republicans' Self-Made Gehenna: Jonathan Bernstein**: [The Republican Party Got the Voters It Deserved]( "Megan McArdle thinks people are exaggerating the Republican Party's responsibility for Donald Trump... >...'like blaming the weatherman because it’s raining, or an economist for a recession.’... Republicans had encouraged, or at least tolerated, schoolyard taunts and far-fetched conspiracy talk long before Trump's campaign... accusing the president of not being a U.S citizen [is] a slur that had been bandied about by many highly visible Republicans.... [Trump is] now recycling conspiracy theories from 20 years ago about Hillary Clinton... promoted at the time by talk-show hosts and Republican[s].... By giving a megaphone to people like Pat Robertson, Herman Cain, Ben Carson and Carly Fiorina, Republicans showed their voters... [that] a 'normal' Republican presidential candidate... isn't all that different from Donald Trump. Republican voters... had been taught by their party to ignore normal qualifications, and they did so. That same observation can be made about how Republicans have tolerated and promoted bigotry.... McArdle is wrong to say that the Republicans' ‘Southern strategy’... was only incidentally pitched to bigots.... Nixon was clearly and deliberately going after pro-segregation voters... a strategy continued (for example) by Lee Atwater... George... Continue reading
**Live from the Republicans' Self-Made Gehenna: kstreet607**: [WATCH: This 10 Minute Elizabeth Warren Speech Needs To Be Played On Repeat Through November]( Continue reading
**Must-Read:** Very clever indeed... **Pedro Bordalo, Nicola Gennaioli, and Andrei Shleifer**: [Diagnostic Expectations and Credit Cycles]( "We present a model of credit cycles arising from diagnostic expectations... >...a belief formation mechanism based on Kahneman and Tversky’s (1972) representativeness heuristic. In this formulation, when forming their beliefs agents overweight future outcomes that have become more likely in light of incoming data. The model reconciles extrapolation and neglect of risk in a unified framework. Diagnostic expectations are forward looking, and as such are immune to the Lucas critique and nest rational expectations as a special case. In our model of credit cycles, credit spreads are excessively volatile, over-react to news, and are subject to predictable reversals. These dynamics can account for several features of credit cycles and macroeconomic volatility. > Continue reading
**Must-Read:** Perhaps I have fallen down on the job. Perhaps I have not EconomistSplained enough to the very sharp Eric Loomis that the Education Fraction does not believe that everybody ought to get a college education. The Education Fraction, rather, believes that the demand for college-educated workers is relatively inelastic, so that small increases in the relative numbers of college-educated workers will produce large decreases in the college wage premium and large increases in the wages of high school-educated workers. They--we--may be right and we may be wrong. But it's not that we completely ignores the fact that some people are simply not cut out for a college education. Rather, we believe in supply and inelastic labor demand... **Eric Loomis**: [Jobs for Those Who Lack College Degrees]( "As I have stated many times here... >...the United States has to create dignified work for people who can’t or haven’t earned a college degree. It’s simply terrible policy to blithely claim that education will solve our problems because it completely ignores the fact that some people are simply not cut out for a college education. And that needs to be OK... > And here's a picture of a cat: Continue reading
**Over at [Equitable Growth]( Must-Reads:** * **Eric Loomis**: [Jobs for Those Who Lack College Degrees]( * **Branko Milanovic, Janet Gornick, and Paul Krugman**: [Talking Global Inequality]( * **Brad DeLong et al.**: [Paul Volcker and the Human League]( "Monetary Superneutrality"--Claiming That Real Variables Are Invariant to Changes in the Average Inflation Rate--Is No Longer a Thing... ---- **Should Reads:** * **Jeffry Frieden**: [Lessons for the Euro from Early American Monetary and Financial History]( * **David Lipton**: [Can Globalization Still Deliver?]( * **Brad Setser**: [Follow the Money » China Is Pivoting Away From Imports, Not Just Rebalancing Away From Exports]( * **Justin Fox**: [Urban Living Becomes a Luxury Good]( ---- **And Over Here:** * [Liveblogging World War I: May 27, 1916: Jutland]( * [Liveblogging World War I: May 26, 1916: Jutland]( * [Zeynep Tufekci: Underrated? No, But...: Promiscuous LInk Sluttage for Late May 2016]( * [Must-Watch: Branko Milanovic, Janet Gornick, and Paul Krugman:]( Talking Global Inequality * [Comment of the Day: Lee Arnold:]( Why is it that Tocqueville, Keynes, and Polanyi are still 'it' as far as policy-relevant useful social theory is concerned? * [Must-Read: Brad DeLong et al.:]( Paul Volcker and the Human League ---- **Might Like to Read:** * **Tom... Continue reading
**Live from the Self-Made Gehenna which is Twitter:** Verb. sap.: **Anderson**: [ThusTweeted]( I have created this beautiful thing for you all.— Phillip Bastien (@PABastien) May 25, 2016 Continue reading
**Winston S. Churchill**: [The World Crisis]( >In the tense naval controversy upon Jutland the keenest minds in the Navy have sifted every scrap of evidence. Every minute has been measured. The speed, the course, the position of every ship great or small, at every period in the operation, have been scrutinized. The information in the possession of every Admiral in each phase has been examined, weighed, canvassed. The dominant school of naval thought and policy are severe critics of Sir John Jellicoe. They disclaim all personal grounds or motives; they affirm that the tradition and future of the British Navy join in demanding that a different doctrine, other methods and above all another spirit must animate our captains at sea, if ever and whenever the Navy is once again at war. They declare that such an affirmation is more important to the public than the feelings of individuals, the decorous maintenance of appearances, the preservation of a superficial harmony, or the respect which may rightly be claimed by a Commander-in-Chief who, over the major portion of the war, discharged an immense and indeed inestimable responsibility. >Sir John Jellicoe was in experience and administrative capacity unquestionably superior to any British Admiral.... Continue reading