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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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[First World War.com: Primary Documents: Paul von Hindenburg's Army Order Following the German Attack on Warsaw, 27 November 1914](http://www.firstworldwar.com/source/warsaw1914_hindenburgorder.htm): >In the course of severe fighting lasting several days my troops have brought to a standstill the offensive of a numerically superior Russian army. >[Note: The Army Order reproduces a telegram from the Kaiser, in which the latter, after congratulating the commander on his new success and that of his troops, thanks him for protecting the eastern frontier. The Kaiser adds that he cannot better express his thanks than by promoting the General to the rank of Field Marshal.] >I am proud at having reached the highest military rank at the head of such troops. Your fighting spirit and perseverance have in a marvellous manner inflicted the greatest losses on the enemy. >Over 60,000 prisoners, 150 guns and about 200 machine guns have fallen into our hands, but the enemy is not yet annihilated. >Therefore, forward with God, for King and Fatherland, till the last Russian lies beaten at our feet. Hurrah!" Continue reading
Posted yesterday at Brad DeLong's Grasping Reality...
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**Over at [Equitable Growth](http://EquitableGrowth.org)--[The Equitablog](http://equitablegrowth.org/blog)** * [Mark Thoma: Good News for the Unemployed](http://equitablegrowth.org/2014/11/27/morning-must-read-mark-thoma-good-news-unemployed/) * [Martin Wolf: Radical Cures for Unusual Economic Ills](http://equitablegrowth.org/2014/11/26/afternoon-must-read-martin-wolf-radical-cures-unusual-economic-ills/) * [Paul Krugman: Keynes Is Slowly Winning](http://equitablegrowth.org/2014/11/26/afternoon-must-read-paul-krugman-keynes-slowly-winning/) * [Anne Laurie: Monday While-We’re-Waiting](http://equitablegrowth.org/2014/11/26/afternoon-must-read-anne-laurie-monday-waiting/) * **Nick Bunker**: [Thanksgiving weekend reading](http://equitablegrowth.org/news/thanksgiving-weekend-reading/) **Plus:** * [Things to Read on the Morning of November 27, 2014](http://equitablegrowth.org/2014/11/27/things-read-morning-november-27-2014/) **Must- and Shall-Reads:** * **Chuck Marr and Robert Greenstein**: [Tax Extenders Package Is Fundamentally Flawed](http://www.cbpp.org/cms/index.cfm?fa=view&id=4240) * [2014 PKConference](http://www.pkconference.com/2014-2/videos-2014/) * **Mark Thoma**: [Some good job news for a hard-hit group ](http://www.cbsnews.com/news/some-hopeful-job-news-for-a-hard-hit-group/) **Martin Wolf**: [Radical cures for unusual economic ills](http://www.ft.com/intl/cms/s/0/62f9f198-73ce-11e4-92bc-00144feabdc0.html?ftcamp=published_links/rss/comment_columnists_martin-wolf/feed//product&siteedition=intl#axzz3K6evIFHi) * **Anne Laurie**: [Monday While-We’re-Waiting Open Thread » Balloon Juice](http://www.balloon-juice.com/2014/11/24/monday-while-were-waiting-open-thread/) * **Paul Krugman**: [Keynes Is Slowly Winning](http://krugman.blogs.nytimes.com/2014/11/26/keynes-is-slowly-winning/) * **Marcel Fratzscher**: [Germany’s Four Neins](http://www.project-syndicate.org/commentary/germany-wrong-on-european-policy-by-marcel-fratzscher-2014-11) * [Ello: On Jeet Heer on Neocons and Neolibs](https://ello.co/braddelong/post/WK_EEGL62TQvIOa2cvp5aw) * [Ello: On David Roberts on the Noise Machine](https://ello.co/braddelong/post/YsSCuyXgcpJhgrM7B7HSZg) * [Ello: On Sleeping Beauty and "Halvers"](https://ello.co/braddelong/post/gdpXhxa0-m43kJ2gzlWNZA) **And Over Here:** * [For the (Super-Long) Weekend: the Ultimate Thanksgiving Movie Is: Addams Family Values (Brad DeLong's Grasping Reality...)](http://delong.typepad.com/sdj/2014/11/for-the-super-long-weekend-the-ultimate-thanksgiving-movie-is-addams-family-values.html) * [Wednesday Cognitive Science Blogging: What Are the Odds Princeton's David Lewis Understands Probability Properly? (Brad DeLong's Grasping Reality...)](http://delong.typepad.com/sdj/2014/11/wednesday-cognitive-science-blogging-what-are-the-odds-princetons-david-lewis-understands-probability-properly.html) * [Liveblogging World War II: November 26, 1944: Eleanor Roosevelt (Brad DeLong's Grasping Reality...)](http://delong.typepad.com/sdj/2014/11/liveblogging-world-war-ii-november-26-1944-eleanor-roosevelt.html) ---- 1. **Mark Thoma**: [Some good job news for... Continue reading
Posted yesterday at Brad DeLong's Grasping Reality...
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I know this is fairly dense. But please bear with me: **David Lewis**: [Sleeping Beauty: Reply to Elga](http://fitelson.org/probability/lewis_sb.pdf): "Researchers at the Experimental Philosophy Laboratory... Sleeping Beauty... >...On Sunday evening they will put her to sleep [P-]. On Monday they will awaken her briefly. At first they will not tell her what day it is [P], but later they will tell her that it is Monday [P+]. Then they will subject her to memory erasure. Perhaps they will again awaken her briefly on Tuesday... depend[ing] on the toss of a fair coin: if heads they will awaken her only on Monday, if tails they will awaken her on Tuesday as well.... We shall need to consider her credence functions at three different times. >Let P be her credence function just after she is awakened on Monday. Let P+ be her credence function just after she’s told that it’s Monday. Let P- be her credence function just before she’s put to sleep on Sunday.... Elga (2000) argues that P(HEADS) = 1/3.... I disagree, and argue that P(HEADS) =... 1/2.... Elga’s argument applies in the first instance to the case that it is tossed after; but he thinks, and I agree, that the... Continue reading
Posted 2 days ago at Brad DeLong's Grasping Reality...
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**Eleanor Roosevelt**: [My Day](http://www.gwu.edu/~erpapers/myday/displaydoc.cfm?_y=1944&_f=md056958): >Today is a peaceful day in the country. The usual occupations, a walk in the woods, much writing and reading, are all that I can report. >As we read our newspapers today, I pray that the valor of our men in their determined attacks will finally discourage the enemy. These attacks are costing much in the way of ammunition, planes, guns, tanks, etc., as well as our boys' lives. It is for that reason that General Eisenhower begs the people at home not to let up in their production. Those of us who have sons on the fighting fronts realize what the work of the people at home means to them. They are grateful for what the people at home have done in the past and hope that they will find the strength to continue to the end. >It is hard to think of another Christmas approaching with hate and bloodshed intensified all over the world. If only the teachings of Christ were accepted as the actual code by which we lived, how different our world would be! There would be no labor-management problems in industry, no racial or religious hatreds, no wars to bring sorrow... Continue reading
Posted 2 days ago at Brad DeLong's Grasping Reality...
**Richard Milne**: [Central banks: Stockholm Syndrome](http://www.ft.com/intl/cms/s/0/638e830a-6e68-11e4-bffb-00144feabdc0.html?siteedition=intl#axzz3JinEX4JU): "When the global financial crisis broke in 2008... >...Sweden’s central bank seemed to be one of the best-equipped to fight it. The Riksbank was led by Stefan Ingves, a former senior official at the International Monetary Fund whose expertise lay in financial crises and how to avoid them. One of its deputy governors was Lars Svensson, an expert on Japan’s long battle against deflation and a top thinker on monetary policy. With these credentials, the two men seemed ideally suited to guide the Riksbank’s policy through the turmoil.... At first, they found common ground as the Riksbank cut interest rates in 2009 to 0.25 per cent, their lowest level since its founding in 1668. But for the next two years, the duo clashed bitterly.... The Riksbank’s decision in 2010 to start raising rates--an idea Mr Svensson firmly opposed – has transformed the Swedish central bank from a small but respected institution to a cautionary tale for central banks worldwide. 'Sweden has done an experiment the whole world is interested in', Mr Odendahl says. 'What should we do when monetary policy should be accommodative but there are financial risks? The Swedish lesson is that tightening... Continue reading
Posted 3 days ago at Brad DeLong's Grasping Reality...
**Matthew Yglesias**: [The GOP's political strategy against Obama keeps leading to policies conservatives hate](http://www.vox.com/2014/11/20/7254849/congressional-underreach): "Republicans' strategy has been savvy politics, but it's forced them... >...repeatedly — to accept worse policy outcomes than they otherwise could have obtained. Alleged presidential overreach is largely a mirror-image of systematic congressional underreach... deliberately choos[ing] to leave obtainable policy concessions on the cutting room floor.... The clearest example of obstructionism leading to policy costs is probably the Affordable Care Act. Democrats had the votes to get this done, but the party was plainly desperate for bipartisan cover. In exchange for votes, Republican members of congress could have gotten tort reform or other policy priorities. But they preferred to keep their fingerprints off the bill, even if that meant a policy outcome they liked less. On climate change, Republican behavior was even more counterproductive.... A similar preference for worse policy outcomes has manifested itself through inaction.... Obama, in other words, was offering a real policy concession (entitlement cuts) in exchange for political cover for tax hikes that were going to happen anyway. But Republicans preferred to keep their fingerprints off any kind of action, even if that meant a policy outcome they liked less. These triple-breakdowns... Continue reading
Posted 3 days ago at Brad DeLong's Grasping Reality...
**Lawrence Summers**: [Companies on Trial](http://www.ft.com/intl/cms/s/0/e3bf9954-7009-11e4-90af-00144feabdc0.html?siteedition=intl#axzz3JpLboIxT): "Lord Chancellor Edward Thurlow... >corporations have 'no soul to be damned, no body to kick'.... Garrett’s data and his narrative provide a textured understanding of these trade-offs and many others in dealing with corporate crime.... The current trend towards large fines as the response to corporate wrongdoing seems to promote a somewhat unattractive combination of individual incentives. Managers do not find it personally costly to part with even billions of dollars of their shareholders’ money, especially when fines represent only a small fraction of total market value. Paying with shareholders’ money as the price of protecting themselves is a very attractive trade-off. Enforcement authorities like to either collect large fines or be seen as delivering compensation for those who have been victimised by corporate wrongdoing. So they are all too happy to go along. In the process, punishment of individuals who do wrong or who fail in their managerial duty to monitor the behaviour of their subordinates is short-changed. And deterrence is undermined. There is a broader cultural phenomenon here as well. Relative to other countries such as the UK or Japan, the principle that leaders should resign to take responsibility for failure on their... Continue reading
Posted 3 days ago at Brad DeLong's Grasping Reality...
**Ed Luce**: [Washington’s two foreign policies](http://www.ft.com/intl/cms/s/0/534ff3fa-70bd-11e4-8113-00144feabdc0.html?ftcamp=published_links/rss/comment/feed//product&siteedition=intl#axzz3JpLboIxT): "It goes without saying that almost any deal... >...would be unacceptable to Benyamin Netanyahu’s Israel. The same applies to Saudi Arabia and other US Gulf allies. The Saudis have been putting it about that Riyadh would start its own nuclear programme if the US struck a deal that fell short of fully dismantling Iran’s.... Not only, it seems, will there be two US foreign policies. But most of America’s Middle East allies will be backing Capitol Hill’s. Can Mr Obama thread a path through this? >The most dramatic example of clashing US foreign policies was after the first world war. President Woodrow Wilson put his authority on the line in Paris to create a League of Nations that the US would lead. His enemies in Congress, led by the patrician Henry Cabot Lodge, had different ideas. They sunk the treaty and with it America’s engagement on the world stage for the next 20 years. An Iran deal would also be faced with Congressional hostility. The big difference is that Mr Wilson pulled out all stops to sell his treaty. It still foundered. >In the words of Vali Nasr, a former Obama official, this president... Continue reading
Posted 3 days ago at Brad DeLong's Grasping Reality...
**Wolfgang Münchau**: [Radical left is right about Europe’s debt](http://www.ft.com/intl/cms/s/0/48e6fa76-70bd-11e4-8113-00144feabdc0.html?ftcamp=published_links/rss/comment/feed//product&siteedition=intl#axzz3JpLboIxT): "Assume that you share the global consensus view... >...on what the eurozone should do right now. Specifically, you want to see more public-sector investment and debt restructuring. Now ask yourself the following question: if you were a citizen of a eurozone country, which political party would you support for that to happen? You may be surprised to see that there is not much choice. In Germany, the only one that comes close to such an agenda is Die Linke, the former Communists. In Greece, it would be Syriza; and in Spain, it would be Podemos.... You may not consider yourself a supporter of the radical left. But if you lived in the eurozone and supported those policies, that would be your only choice. What about Europe’s centre-left parties, the social democrats and socialists? Do they not support such an agenda? They may do so when they are in opposition. But once in government they feel the need to become respectable, at which point they discover their supply-side genes.... >Of the radical parties that have emerged recently, the one to watch is Podemos.... Nacho Alvarez, a senior member of the party’s economics... Continue reading
Posted 3 days ago at Brad DeLong's Grasping Reality...
###Monetary policy tradeoffs in CESEE### Lars E.O. Svensson Department of Economics, Stockholm School of Economics, P.O. Box 6501, SE-113 83 Stockholm, Sweden, www.sse.edu Conference on European Economic Integration (CEEI) 2014 Vienna, November 24, 2014 **Monetary policy's best contribution to financial stability?** * Inflation on target and resource utilization at long-run sustainable rate * Suppose 2% inflation and 3% real growth, nominal growth 5% of asset prices and disposable income, doubling every 14 years * For any given nominal debt, LTV and DTI ratios halved in 14 years. Pretty good for repair of balance sheets. * Monetary policy should only be the very last line of defense of financial stability, normally not to be used ---- **Outline** * What can monetary policy achieve? * Do not ask to much from monetary policy * What is the relation between monetary policy and financial stability? * Monetary policy and financial-stability policy are very different * In normal times: Best conducted separately, also when conducted by the same institution * But each policy should be fully informed about and take into account the conduct of the other policy * In crisis times: Full cooperation between the relevant authorities * Monetary policy should be the... Continue reading
Posted 3 days ago at Brad DeLong's Grasping Reality...
**Jonathan Cohn**: [Obama's Immigration Order: A Vote for American Exceptionalism](http://www.theatlantic.com/politics/archive/2014/11/obamas-immigration-order-a-vote-for-american-exceptionalism/383126/): "American exceptionalism, you’ll remember... >is something Obama’s critics claim he doesn’t believe in. ‘Our president doesn’t have the same feelings about American exceptionalism that we do,’ Mitt Romney said during the 2012 presidential campaign. In a 2010 cover story in National Review, Rich Lowry and Ramesh Ponnuru declared, ‘At the heart of the debate over Obama’s program is the survival of American exceptionalism.’... One consistent feature of exceptionalist discourse has been the idea that America permits greater upward mobility than does the Old World.... In recent decades, sadly, the reality of American mobility has diverged sharply from the myth.... America, Marco Rubio said a few years back, ‘is the only economy in the world where poor people with a better idea and a strong work ethic can compete and succeed against rich people in the marketplace.’ That’s not actually true. But it’s truer today than it was last week because the president who supposedly wants to make America more like Europe has instead made America more like its best vision of itself. Continue reading
Posted 3 days ago at Brad DeLong's Grasping Reality...
**Nicholas Bagley**: [Three Words and the Future of the Affordable Care Act](http://jhppl.dukejournals.org/content/early/2014/11/21/03616878-2867881.full.pdf+html): "To help people like my kids’ piano teacher... >...the ACA extends tax credits to anyone earning between one and four times the poverty level who buys a qualified health plan so long as the individual is ineligible for Medicaid and doesn’t have access to employer-sponsored coverage.... As Michael Cannon and Jonathan Adler read the ACA, however, my kids’ piano teacher can’t get tax credits at all. Nor should roughly 9.5 million other people... Yet... the government’s alternative reading makes much better sense of the statute as a whole and avoids assigning a meaning to the ACA that is blatantly at odds with what the statute aims to accomplish.... To make out their case, however, it’s not enough for Adler and Cannon to show that it’s possible to read the ACA to withdraw tax credits from refusal states. If the statute is ambiguous on that point, it’s black-letter law that the courts must defer to the IRS’s authoritative interpretation (Chevron U.S.A. v. Natural Res. Def. Council, 467 U.S. 837 [1984]). Adler and Cannon... have to demonstrate that the statute unambiguously withdraws tax credits.... They haven’t come close to making... Continue reading
Posted 3 days ago at Brad DeLong's Grasping Reality...
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With respect to: **Zumb**: [I've been thinking about what](https://ello.co/zumb/post/XAhm0Spa_rqrlqikaZbcnQ): "I don't doubt Shane's encounter with her former colleagues... >...but I still found the story a little bit off from what I've personally experienced.... Shane mentions that she thinks the pendulum is about to swing the other direction and she envisions talking to people at legacy organizations in a few years and saying 'You're still there? Really?!?!' I'd say 'You're still there? Really?!?!' has already probably been the single most common question anyone at a legacy news organization has gotten over the previous decade. The past decade has been a relentless drumbeat of departures.... >It's not a pendulum. It's a wrecking ball and it's been swinging ferociously into legacy media and carrying away the rubble for more than a decade. I frankly know nobody in the rank-and-file who isn't taking it seriously. Even within the walls of legacy organizations, the legacy skills of reporting have lost their value compared to internet skills. Maybe it comes across as dismissive--that's one way humans cope with a wide range of existential threats--but make no mistake: the emotion is fear. The question I have is: just what are these "legacy skills of reporting" that have... Continue reading
Posted 3 days ago at Brad DeLong's Grasping Reality...
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**Over at [Equitable Growth](http://EquitableGrowth.org)--[The Equitablog](http://equitablegrowth.org/blog)** * [European Economic Integration: The Rebalancing Challenge in Europe: Monday Focus](http://equitablegrowth.org/2014/11/23/european-economic-integration-rebalancing-challenge-europe-monday-focus/) * [A Question for Richard Koo: Daily Focus](http://equitablegrowth.org/2014/11/24/question-richard-koo-daily-focus/) * [Over at Project Syndicate: Economic Growth and the Information Age: Daily Focus](http://equitablegrowth.org/2014/11/25/project-syndicate-economic-growth-information-age-daily-focus/) * [Lars E. O. Svensson: Monetary Policy and Financial Stability](http://equitablegrowth.org/2014/11/25/afternoon-must-read-lars-e-o-svensson-monetary-policy-financial-stability/) * [Jonathan Cohn: Obama's Immigration Order: A Vote for American Exceptionalism](http://equitablegrowth.org/2014/11/25/afternoon-must-read-jonathan-cohn-obamas-immigration-order-vote-american-exceptionalism/) * [Nicholas Bagley: Three Words and the Future of the Affordable Care Act](http://equitablegrowth.org/2014/11/25/evening-must-read-nicholas-bagley-three-words-future-affordable-care-act/) * **Nick Bunker**: [Are big businesses slowing wage growth?](http://equitablegrowth.org/news/big-businesses-slowing-wage-growth/) * **Nick Bunker**: [An appreciation of Robert Solow](http://equitablegrowth.org/research/appreciation-robert-solow/) * **Carter Price**: [What’s the link between corporate profits, investments, and economic growth?](http://equitablegrowth.org/news/whats-link-corporate-profits-investments-economic-growth/) **Plus:** * [Things to Read on the Evening of November 25, 2014* ](http://equitablegrowth.org/2014/11/25/things-read-evening-november-25-2014/) **Must- and Shall-Reads:** * **Lars Svensson**: [Monetary policy tradeoffs in CESEE](http://www.oenb.at/en/Calendar/Archive/2014/conference-24-11-2014.html) * **Grégory Claeys et al.**: [Measuring Europe’s investment problem](http://www.bruegel.org/nc/blog/detail/article/1486-measuring-europes-investment-problem/) * **Izabella Kaminska**: [Lies, damned lies, and liquidity expectations](http://ftalphaville.ft.com/2014/11/24/2050942/lies-damned-lies-and-liquidity-expectations/?ftcamp=published_links/rss/ftfm_etfs/feed//product) * **Simon Wren-Lewis**: [Left, Right and Macroeconomic Competence](http://mainlymacro.blogspot.co.at/2014/11/left-right-and-macroeconomic-competence.html) * **Nicholas Bagley**: [Three Words and the Future of the Affordable Care Act](http://jhppl.dukejournals.org/content/early/2014/11/21/03616878-2867881.full.pdf+html) * **Jonathan Cohn**: [Obama's Immigration Order: A Vote for American Exceptionalism](http://www.theatlantic.com/politics/archive/2014/11/obamas-immigration-order-a-vote-for-american-exceptionalism/383126/) * **Lars E.O. Svensson** : Monetary policy's best contribution to financial stability? * **Barry Eichengreen**: [The bond market’s dance over European debt will not last... Continue reading
Posted 3 days ago at Brad DeLong's Grasping Reality...
It comes from Scott Winship of the Manhattan Institute: **Scott Winship**: [What's Worse than Being Wrong? Being Uncivil. An Apology](http://popist.com/s/710191a/): "People who know me... >...even those who regularly disagree with me and who don’t like me, I think–know that I value integrity above nearly all else... It is remarkable because of the context, which includes things like: **Miles Corak**: [How to Think About “Think” Tanks](http://milescorak.com/2014/11/25/how-to-think-about-think-tanks/): "Here’s one example... >It deals with the descriptive relationship across countries between inequality and the degree to which individual adult income is related to parental income during childhood, the so-called Great Gatsby Curve about which I, among others, have written. Scott Winship of the Manhattan Institute has been a persistent critic of this relationship. I bring this up, in part, because I also want to go on the record and note that when he says my: >>most recent paper highlights serious problems [with the Great Gatsby Curve and my] previous research... >it should be clear that this is Mr. Winship’s interpretation of my research, and not my understanding of my own research. >Grateful as I am to have a reader, I don’t feel my more recent work involving a three country comparison contradicts previous papers... Continue reading
Posted 3 days ago at Brad DeLong's Grasping Reality...
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[**Over at Project Syndicate**][1]: Last month in this space we reviewed the pulling-apart of America as it has become a vastly more unequal place since 1979: * top 1% incomes grew at 3.6%/year, * rest of the top fifth grew at 1.6%/year, * middle three-fifths grew at 0.9%/year, * bottom fifth at 0.5%/year-—with the proviso that improved access to medical care was worth a good deal more than its market cost. But the past generation has seen a third industrial revolution, a worthy information-age successor to the first of steam, iron, cotton, and machines and to the second of internal combustion, electricity, steel, and chemicals. Not everyone, but almost everyone in the North Atlantic and many and soon most in the world, can now if they wish have a smartphone--and so gain cheap access to the universe of human knowledge and entertainment to a degree that was far beyond the reach of all but the richest of a generation ago. [1]: http://www.project-syndicate.org/commentary/internet-access-helps-inequality-by-j--bradford-delong-2014-11 How much does this matter? How much does this mean that conventional measures of real income and real standard of living understate how much we, even the relatively poor of we, have progressed toward utopia? The conventional economic... Continue reading
Posted 3 days ago at Brad DeLong's Grasping Reality...
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**Tony Rollins**: [World War II Today: at Woolworths, in New Cross, South London](http://ww2today.com/): >I used to buy Airfix model aeroplane assembly kits and put them together.Since there were few toys around I was able to sell these to a shop in New Cross Gate. The shop was situated next to the railway bridge, which is part of the main road, at New Cross Gate in a row of shops opposite Woolworths. >It was Saturday and I visited the shop to deliver some models and earn some pocket money. I boarded a tram heading down towards Deptford Broadway. I got off at my stop and started to walk the few hundred yards to my home in Friendly St when there was a huge explosion. >The V2s always exploded with two ‘crumps’ one quickly followed by a second. I knew immediately it was a V2 and as I looked back in the direction of the noise I saw a huge tower of smoke with all sorts of pieces turning and twisting and glinting heading skyward. >I turned and ran back to the scene.It took me about 10 minutes. >I shall never forget what I witnessed.The front of the shop I had sold... Continue reading
Posted 4 days ago at Brad DeLong's Grasping Reality...
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Re: **Richard Koo** [**Over at Equitable Growth**][1]: [Conference on European Economic Integration (CEEI)](http://www.oenb.at/en/Calendar/Archive/2014/conference-24-11-2014.html) I am not sure that I can ask this question coherently. So if I do not, please feel free to just say "that was not coherent" and move on to answering the coherent questions... The conventional arguments of those whom Martin Wolf calls the Austerians runs more-or-less like this: someday QE will succeed in shifting beliefs from an expectation of permanent depression to an expectation of rapid normalization. Savers then look at their holdings of maturing government bonds and roll them over only if they are offered a normal and positive real interest rate. And then the price level will rise very rapidly to a value at which--as John Maynard Keynes said of France during its inflation of the 1920s--real future government primary surpluses discounted at the normal real interest rate are equal to the nominal debt divided by the price level. In your framework, that would be a sudden very large shift in private-sector net savings behavior from surplus to deficit. And in your framework such a shift is almost inconceivable. But in their framework such a shift seems almost inevitable. Can you tell me why... Continue reading
Posted 4 days ago at Brad DeLong's Grasping Reality...
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[Conference on European Economic Integration (CEEI)](http://www.oenb.at/en/Calendar/Archive/2014/conference-24-11-2014.html) * **Nowotny**: calls attention to the relative success of manufacturing- and cross-border heavy economies--the Visegrad Group--in doing relatively well, with a stress on "relatively"... * **Chakrabarti**: Remarkable divergence east of Germany: Poland vs. Croatia. Structural reform especially necessary in post-transition economies. Overhangs: non-performing loans, distressed overleveraged corporations, investment shortage, mobilizing public debt capacity. * **DeLong**: * **Kuodis, Svensson, Nowotny, Singer, Fabris, Daianu**: "For more than two decades economies lived in the dream of the Great Moderation..." Lars Svensson goes there: "Monetary policies best contribution to financial stability? --Inflation on target and resource utilization at long-run sustainable rate. --Suppose 2% inflation and 3% real growth, nominal growth 5% of asset prices and disposable income, doubling every 14 years. --For any given nominal debt, LTV and DTI ratios halved in 14 years. Pretty good for repair of balance sheets..." * **In T'Veld, Schuberth, Pribil, Koo**: Why do I think that Richard Koo would have more influence if he would write papers with titles like: "Financial Overleverage, Balance Sheets, and the Steepening of the LM Curve"? For Koo: The conventional arguments of those whom Martin Wolf calls the Austerians runs more-or-less like this: someday QE will succeed... Continue reading
Posted 5 days ago at Brad DeLong's Grasping Reality...
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[**Over at Equitable Growth**][1]: [**READ MOAR**][1] [1]: http://equitablegrowth.ms.techprogress.org/?p=7790 ---- * .pptx * .pdf * .key * Continue reading
Posted 5 days ago at Brad DeLong's Grasping Reality...
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**Over at [Equitable Growth](http://EquitableGrowth.org)--[The Equitablog](http://equitablegrowth.org/blog)** * [Over at Grasping Reality: Barry Eichengreen's "Hall of Mirrors"](http://equitablegrowth.org/2014/11/23/grasping-reality-barry-eichengreens-hall-mirrors/) * [Wolfgang Münchau: Radical Left Is Right About Europe’s Debt](http://equitablegrowth.org/2014/11/23/evening-must-read-wolfgang-munchau-radical-left-right-europes-debt/) * [Ed Luce: Washington’s Two Foreign Policies](http://equitablegrowth.org/2014/11/23/afternoon-must-read-ed-luce-washingtons-two-foreign-policies/) * [Hobson's Choice: (Late) Friday Focus](http://equitablegrowth.org/2014/11/22/hobsons-choice-late-friday-focus/) * [Lawrence Summers: Companies on Trial](http://equitablegrowth.org/2014/11/22/afternoon-must-read-lawrence-summers-companies-trial/) * [Matthew Yglesias: The GOP's Counterproductive Policy Strategy](http://equitablegrowth.org/2014/11/22/lunchtime-must-read-matthew-yglesias-gops-counterproductive-policy-strategy/) * [Richard Milne: Central Banks: Stockholm Syndrome](http://equitablegrowth.org/2014/11/22/lunchtime-must-read-richard-milne-central-banks-stockholm-syndrome/) **Plus:** * [Things to Read at Night on November 23, 2014](http://equitablegrowth.org/2014/11/23/things-read-night-november-23-2014/) **Must- and Shall-Reads:** * **Toby N.**: [The wrongest thing ever? My defence of multi-billionaire hegde fund inflation truthers](http://principlesandinterest.wordpress.com/2014/11/22/the-wrongest-thing-ever-my-defence-of-multi-billionaire-hegde-fund-inflation-truthers/) * **Ryan Avent**: [Free exchange: No country for young people](http://www.economist.com/news/finance-and-economics/21633860-demography-may-explain-secular-stagnation-no-country-young-people) * **Wolfgang Münchau**: [Radical left is right about Europe’s debt](http://www.ft.com/intl/cms/s/0/48e6fa76-70bd-11e4-8113-00144feabdc0.html?ftcamp=published_links/rss/comment/feed//product&siteedition=intl#axzz3JpLboIxT)** * Ed Luce**: [Washington’s two foreign policies](http://www.ft.com/intl/cms/s/0/534ff3fa-70bd-11e4-8113-00144feabdc0.html?ftcamp=published_links/rss/comment/feed//product&siteedition=intl#axzz3JpLboIxT) * **Lawrence Summers**: [Companies on Trial](http://www.ft.com/intl/cms/s/0/e3bf9954-7009-11e4-90af-00144feabdc0.html?siteedition=intl#axzz3JpLboIxT) * **Matthew Yglesias**: [The GOP's political strategy against Obama keeps leading to policies conservatives hate](http://www.vox.com/2014/11/20/7254849/congressional-underreach) * **Richard Milne**: [Central banks: Stockholm Syndrome](http://www.ft.com/intl/cms/s/0/638e830a-6e68-11e4-bffb-00144feabdc0.html?siteedition=intl#axzz3JinEX4JU) * **Ann Marie Marciarille**: [Missouri State of Mind: The Hidden Co-Pay in Community Based Long Term Care](http://delong.typepad.com/annmariemarciarille/2014/11/the-hidden-co-pay-in-community-based-long-term-care.html) **And Over Here:** * [Liveblogging World War II: November 24, 1944: U.S. B-29s Raid Tokyo](http://delong.typepad.com/sdj/2014/11/liveblogging-world-war-ii-november-24-1944-us-b-29s-raid-tokyo.html) * [Why Am I Not Surprised?: Barry Eichengreen's Superb "Hall of Mirrors: Live from Over Greenland](http://delong.typepad.com/sdj/2014/11/why-am-i-not-surprised-barry-eichengreens-superb-hall-of-mirrors-the-great-depression-the-great-recession-and-the-uses.html) * [Monday Smackdown: Danny Vinik Makes Us Aware That... Continue reading
Posted 5 days ago at Brad DeLong's Grasping Reality...
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**History.com**: [U.S. B-29s Raid Tokyo](http://www.history.com/this-day-in-history/us-b-29s-raid-tokyo): >On this day in 1944, 111 U.S. B-29 Superfortress bombers raid Tokyo for the first time since Capt. Jimmy Doolittle's raid in 1942. Their target: the Nakajima aircraft engine works. >Fall 1944 saw the sustained strategic bombing of Japan. It began with a reconnaissance flight over Tokyo by Tokyo Rose, a Superfortress B-29 bomber piloted by Capt. Ralph D. Steakley, who grabbed over 700 photographs of the bomb sites in 35 minutes. Next, starting the first week of November, came a string of B-29 raids, dropping hundreds of tons of high explosives on Iwo Jima, in order to keep the Japanese fighters stationed there on the ground and useless for a counteroffensive. Then came Tokyo. >The awesome raid, composed of 111 Superfortress four-engine bombers, was led by Gen. Emmett 'Rosie' O'Donnell, piloting Dauntless Dotty. Press cameramen on site captured the takeoffs of the first mass raid on the Japanese capital ever for posterity. Unfortunately, even with the use of radar, overcast skies and bad weather proved an insurmountable obstacle at 30,000 feet: Despite the barrage of bombs that were dropped, fewer than 50 hit the main target, the Nakajima Aircraft Works, doing little damage. The... Continue reading
Posted 5 days ago at Brad DeLong's Grasping Reality...
What is best in life? What is best in life is to spend the 11 hours of a Northern Hemisphere polar winter's night one spends in the belly of an A340-300 in transit from SFX to ZRH (a) eating Swiss chocolate, and (b) reading Barry Eichengreen's (2015) brilliant and superb Hall of Mirrors: The Great Depression, The Great Recession, and the Uses-and Misuses-of History (Oxford: Oxford University Press: 0199392005). More--hopefully much more--to follow... Continue reading
Posted 5 days ago at Brad DeLong's Grasping Reality...
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Another Monday, and still a shortage of high-quality DeLong Smackdowns on the Internet that I can justify bringing to your attention. But I can't face reading another Kindle screen from chapter 11 of David Graber's *Debt* right now. So I am going to chicken out, and direct you to Danny Vinik on how *Reason* coors gasoline on its intellectual credibility and then sets it on fire. *Reason*: as a magazine you have a choice: 1. You can give your megaphone to people like Peter Schiff in the hopes that money may drop from the pockets of the wingnuts he attracts, and you can then scoop it up. 2. You can participate in twenty-first century civil and political society. You cannot do both. **Peter Schiff**: [Where Is the Inflation?](http://reason.com/archives/2014/12/01/where-is-the-inflation): "Back in 2009, when the federal government began running trillion-dollar-plus annual deficits... >...and the Federal Reserve started printing trillions of dollars to buy Treasury debt and subÂÂÂ prime mortgages, economists debated whether much higher inflation was inevitable. Mainstream economists (who hold sway in government, the corporate world, and academia) argued that as long as the labor market remained slack, inflation would not catch fire. My fellow Austrian economists and I loudly voiced... Continue reading
Posted 5 days ago at Brad DeLong's Grasping Reality...