**Weekend Reading: Chris Cook**: _[Defeated by Brexit: Forgetting Our History](https://members.tortoisemedia.com/2019/05/18/brexit-part-one/content.html)_: "The Brexit negotiations are not really about the UK and 27 other countries. They are about Britain’s long and troubled relationship with Ireland. And while Dublin was prepared for that, it took London completely by surprise.... During the 2016 referendum campaign, John Major and Tony Blair, the former British prime ministers, tried to alert voters to inherent tensions between leaving the EU and preserving the UK’s relationship with Ireland. Their warnings were dismissed as fear-mongering. Ireland attracted almost no attention, but it would be the central pivot on which Brexit would turn. None of this was clear on the morning after the referendum. But nothing was. The prime minister, David Cameron, was preparing to announce his resignation. The people had voted against EU membership, but not for anything to replace it. For new leadership the government would have to wait for the Conservatives to choose a new leader... >...Whitehall has a clear ethos: it works for the government of the day, whoever that is. It does work ministers want, and ministers did not want to prepare for a Leave vote. “The instruction was clear,” one official said. “Don’t do any... Continue reading

And at this I really am crying. There have been _a lot_ of economists behaving very badly indeed in the twenty-six years since I first went to Washington as an adult to start doing economic policy in a serious way. But the late Alan Krueger always behaved well—in communicating with the public, with his colleagues, and with himself. Arindrajit Dube puts it best: **Arindrajit Dube**: _[ "More than any other work,](https://twitter.com/arindube/status/1107744432609218562)_: "More than any other work, Myth and Measurement helped shape my view of building an economics that is open, evidence-driven, and where the core theories can be rejected. Alan Krueger kept reminding us of this, and I won't ever forget it." **Alan B. Krueger** (May 10, 2018): "Wait. Don’t concede anything. The idea of turning economics into a true empirical science, where core theories can be rejected, is a BIG, revolutionary idea." **Arindrajit Dube** (May 10, 2018): "In an empirical science based model of economics, there are fewer 'big thinkers' who dream up of big ideas and more 'plumbers'" Doesn't mean vision and synthesis aren't important, but means knowledge & progress are more emergent than in political economy of 19th/20th century... ---- #noted Continue reading

The Gap asked researchers to quantify the benefits from offering its employees more regular schedules. The benefits are substantial: **Alix Gould-Wirth**: _[Retail workers' Unpredictable Schedules Affect Sleep Quality:](https://equitablegrowth.org/retail-workers-unpredictable-schedules-affect-sleep-quality-evidence-from-the-gap/)_: "Retail outlets of The Gap, Inc.... surprising connections between retail workers’ schedules and their sleep patterns.... Joan C. Williams... Susan Lambert... and Saravanan Kesavan.... A novel, multicomponent intervention.... Randomly assigned 19 stores to a treatment group to implement the intervention and nine stores to a control group that did not implement the intervention... >...The Gap was so committed to increasing the amount of notice workers had of its scheduled shifts that the company extended two components that were originally planned to be part of the intervention—two-weeks advance notice and the elimination of on-call shifts—to all of its workers in North America prior to the beginning of the experiment. So, this experiment tells policymakers and businesses alike how the multicomponent intervention affects workers’ lives beyond advance notice alone..... The intervention made a substantively (and statistically) significant impact on the sleep quality of workers... ---- #noted Continue reading

**Weekend Reading**: Adam Tooze is correct when he writes that "across the American political spectrum, if there is agreement on anything, it is on the need for a firmer line against China". The bombs-and-bullets people, the geopolitics people, and the blame-somebody-else people are all agreed. The U.S. needs to do something to strengthen its relative position, and that means it needs to start doing something to China. But that would be going about it the wrong way. Thinking that the right way to do something is to do something to China is a very bad way to think. The U.S. could still forge a 21st century condominium with China. But all those necessary and needed pieces of action require that the U.S. look and act inwardly, not outwardly: **Adam Tooze**: _[Democracy and Its Discontents: Runciman](https://www.nybooks.com/articles/2019/06/06/democracy-and-its-discontents/)_: "Rather than raging against the dying of the light, Runciman['s _How Democracy Ends_], like Spengler and Kojève, invites us to adopt a stance of disillusioned realism. If we can see the decline of democratic polities all around us and can diagnose the multiple causes of their eventual demise, that does not excuse us from the responsibility to make them work until the bitter end... >...Democracy... Continue reading

**Weekend Reading**: **Adam Tooze**: _[Democracy and Its Discontent: Levitsky and Ziblatt](https://www.nybooks.com/articles/2019/06/06/democracy-and-its-discontents/)_: "Levitsky and Ziblatt['s _How Democracies Die_ has]... a sobering message: 'American democracy is not as exceptional as we sometimes believe. There’s nothing in our Constitution or our culture to immunize us against democratic breakdown'.... The restoration of democratic norms requires building a new consensus. Levitsky and Ziblatt cite the example of Chile.... Augusto Pinochet... was overcome by a new culture of bipartisan cooperation in the so-called Democratic Concertation. In the US today, the problem lies first and foremost with the GOP. It has repeatedly behaved like an anti-systemic party that does not consider itself bound by common democratic norms... Levitsky and Ziblatt point to... Konrad Adenauer’s CDU.... But what relevance does it have to American politics? Can one seriously imagine anyone in the GOP taking lessons from Angela Merkel and her counterparts?... Levitsky and Ziblatt are strikingly naive when it comes to power... >...The overthrow of Chilean democracy in 1973 was not merely a deterioration into extreme partisanship. It was a violent clash over fundamental social and economic reforms... In Germany... it took the absolute defeat of Hitler’s regime.... Their limited, case-by-case comparative approach and their focus on national... Continue reading

* _[May 17, 2019: Weekly Forecasting Update](https://www.bradford-delong.com/2019/05/may-3-2019-weekly-forecasting-update-tickler.html)_ * _[The U.S. Economic Outlook as of May 16, 2019](https://www.bradford-delong.com/2019/05/the-us-economic-outlook-as-of-may-16-2019.html)_ * **Hoisted From the Archives**: _["Attempts to Make Sense Out of Right Wing Austrian Economics Can Never Amount to Anything"—rootless_e](https://www.bradford-delong.com/2019/05/attempts-to-make-sense-out-of-right-wing-austrian-economics-can-never-amount-to-anythingrootless_e-hoisted-from-the-arc.html)_ * **For the Weekend**: _[Caro Emerald: Tangled Up](https://www.bradford-delong.com/2019/05/for-the-weekend-caro-emerald-tangled-up.html)_ * **Weekend Reading**: _[John Maynard Keynes (1926): The End of His ""The End of Laissez-Faire": ](https://www.bradford-delong.com/2019/05/john-maynard-keynes-1926-the-end-of-his-the-end-of-laissez-faire-weekend-reading.html)_ * **Weekend Reading**: _[The Downfall of Mother Bank](https://www.bradford-delong.com/2019/05/weekend-reading-the-downfall-of-mother-bank.html)_ * **Comment of the Day**: _[Howard](https://www.bradford-delong.com/2019/05/comment-of-the-day-5.html)_: "I must be missing something: I don't see this as a 'reach for yield' phenomena. I see this as a reach for 10x returns, and I don't think low interest rates have much to do with the willingness of people (well, high net-worth individuals and their VC and hedge fund managers) to take a shot at a 10x return. I continue to see low interest rates as the market's way of telling us we need public investment, badly... * **Comment of the Day**: _[JEC](https://www.bradford-delong.com/2019/05/comment-of-the-day-4.html)_: "I'd just add a note to lament the five decades of empirical research into the actual formation and behavioral consequences of expectations that didn't happen, thanks to the Rational Expectations Revolution in macro. We'll never get those squandered years back... *... Continue reading

**Weekend Reading**: **John Maynard Keynes** (1926): _[The end of his "The End of Laissez-Faire"](https://www.panarchy.org/keynes/laissezfaire.1926.html)_: "These reflections have been directed towards possible improvements in the technique of modern capitalism.... There is nothing in them which is seriously incompatible with... the essential characteristic... the dependence upon an intense appeal to... money-making and money-loving instincts.... I may do well to remind you... that the fiercest contests and the most deeply felt divisions of opinion are likely to be waged in the coming years... round... questions... psychological or, perhaps, moral... >...In Europe... there is a latent reaction... against basing society to the extent that we do upon fostering, encouraging, and protecting the money-motives.... Different persons... ind the money-motive playing a large or a small part... historians can tell us about other phases of social organisation in which this motive has played a much smaller part.... Most religions and most philosophies deprecate, to say the least of it, a way of life mainly influenced by considerations of personal money profit. On the other hand, most men today reject ascetic notions and do not doubt the real advantages of wealth... [and] it seems obvious to them that one cannot do without the money-motive, and that, apart... Continue reading

## [The Downfall of Mother Bank](https://courses.lumenlearning.com/suny-ushistory1ay/chapter/the-bank-war/) ### Draw'd off from Natur by Zek Downing, Neffu to Major Jack Downing #### Printed & Publd by H.R. Robinson, 52 Courtlandt St., N. York **President Andrew Jackson**: Major Jack Downing. I must act in this case with energy and decision. You see the downfall of the party engine and corrupt monopoly!! Order for the Removal of the **Public Money** Deposited in the UNITED STATES BANK **Jack Downing**: Hurrah! Feneral! If this don't beat skunkin I'm a nigger; only see that varmint Nick how spry he is. He runs along like Weatherfield Hog with an onion in his mouth. No more fees to be obtained here! I move we adjourn, _sine die_! Fees **Daniel Webster**: There is a tide in the affairs of men, as Shakespeare says, and so my dear Clay, look out for yourself. **Henry Clay**: Help me up! Webster! Or I shall lose my stakes! Kentucky Burrow under the Mammoths here, Sila! Boston Courier, ALbany Gazette Evening Star, Columbian Sentinel, Journal of Commerce, Commercial Advertiser, New York American, Pennsylvanian, United States Gazette, National Gazette **Nichols Biddle**: It is time for me to resign my presidency Salary 6000, Preointing expenses 80000, Courier... Continue reading

I concur with Duncan Black here: **Duncan Black**: _[Jeffrey Goldberg](https://www.eschatonblog.com/2019/05/jeffrey-goldberg.html)_: "The post-9/11 era was... really it's impossible to explain it to people who didn't live through it. And it was about a 5 year period, not a few weeks. It also made the careers of people who are still with us now. The wronger they were the more successful they have been! Such is The Discourse. The Atlantic is a bad magazine run by a bad person who occasionally runs good things by good people in order to cover for the fact that it is a bad magazine. My "favorite" post-9/11 nonsense was in the greatest of magazines, the New Yorker, which is known for its attention to detail and truth and its fact checking and the amount of shrooms someone must have eaten to have written this... ---- #noted Continue reading

The right response to almost all economic data releases is: Nothing has changed—your view of the economic forecast today is different from what it was last week, last month, or three months ago in only minor ways. **Federal Reserve Bank of New York**: _[Nowcasting Report: May 17, 2019](https://www.newyorkfed.org/research/policy/nowcast)_: "The New York Fed Staff Nowcast stands at 1.8% for 2019:Q2. News from this week's data releases decreased the nowcast for 2019:Q2 by 0.4 percentage point. Negative surprises from industrial production and capacity utilization data largely offset positive surprises from housing and regional survey data... ### Key Points: Specifically, it is still the case that: * The Trump-McConnell-Ryan tax cut: * To the extent that it was supposed to boost the American economy by boosting the supply side through increased investment in America, has been a complete failure. * To the extent that it was supposed to make America more unequal, has succeeded. * Delivered a substantial short-term demand-side fiscal stimulus to growth that has now ebbed. * (A 3.2%/year rate of growth of final sales to domestic purchasers over the seven quarters starting in January 2017, * pushing the level of Gross National Income up from 2.0%/yera from this demand-side stimulus.)... Continue reading

**Comment of the Day**: _[Howard](https://www.bradford-delong.com/2019/05/eg-gmos-montier-on-the-rise-of-the-dual-economy-ft-alphaville.html#more)_: "I must be missing something: I don't see this as a 'reach for yield' phenomena. I see this as a reach for 10x returns, and I don't think low interest rates have much to do with the willingness of people (well, high net-worth individuals and their VC and hedge fund managers) to take a shot at a 10x return. I continue to see low interest rates as the market's way of telling us we need public investment, badly... ---- #commentoftheday Continue reading

**Wikipedia**: _[Alexei Kosygin](https://en.wikipedia.org/wiki/Alexei_Kosygin#cite_note-Pravdafour-10)_: "Kosygin told his son-in-law Mikhail Gvishiani, an NKVD officer, of the accusations leveled against his co-worker Nikolai Voznesensky, then Chairman of the State Planning Committee (in office 1942-1949) and a First Deputy Premier (in office 1941-1946), because of his possession of firearms. Gvishiani and Kosygin threw all their weapons into a lake and searched both their own houses for any listening devices. They found one at Kosygin's house, but it might have been installed to spy on Marshal Georgy Zhukov, who had lived there before him. According to his memoirs, Kosygin never left his home without reminding his wife what to do if he did not return from work. After living two years in constant fear, the family reached the conclusion[when?] that Stalin would not harm them... ---- #noted Continue reading

**Caro Emerald**: _[Tangled Up](https://www.youtube.com/watch?time_continue=17&v=Yjl890_qwf4)_: ---- #fortheweekend Continue reading

**Thomas Blanchet, Lucas Chancel, and Amory Gethin**: _[Forty Years of Inequality in Europe](https://voxeu.org/article/forty-years-inequality-europe)_: "Despite the growing importance of inequalities in policy debates, it is still difficult to compare inequality levels across European countries and to tell how European growth has been shared across income groups. This column draws on new evidence combining surveys, tax data, and national accounts to document a rise in income inequality in most European countries between 1980 and 2017. It finds that income disparities on the old continent have increased less than in the US and shows that this is essentially due to ‘predistribution’ policies... ---- #noted Continue reading

**Martin Wolf**: _[‘Global Britain’ is an Illusion Because Distance Has Not Died](https://www.ft.com/content/eb666f8a-770b-11e9-be7d-6d846537acab)_: "Why has distance not died and the world not become flat?... The nature of trade has changed and, in particular, it has become more control-intensive and time-dependent.... Regional trade arrangements also matter... because procedures tend to be far more reliable and efficient.... Regulatory and procedural harmonisation... was the price of integration.... There are only two possible explanations for the immense bias towards trade with the EU: either the preferential advantages of being within the EU are very large or the vital fact is that these are neighbours. Either way, the idea that there is a global alternative... is a delusion. It is the biggest of the many Brexit delusions... ---- #noted Continue reading

**Lemin Wu** (2015): _[If Not Malthusian, Then Why?: A Darwinian Explanation of the Malthusian Trap](http://wulemin.weebly.com/uploads/1/4/6/2/14620598/jmp1110.pdf)_: "the Malthusian mechanism alone cannot explain the pre-industrial stagnation.... Improvement in luxury technology... would have kept living standards growing... >...The Malthusian trap is essentially a puzzle of balanced growth between the luxury sector and the subsistence sector. The author argues that balanced growth is caused by group selection in the form of biased migration. It is proven that a tiny bit of bias in migration can suppress a strong growth tendency. The theory re-explains the Malthusian trap and the prosperity of ancient market economies such as Rome and Sung. It also suggests a new set of factors triggering modern economic growth... ---- #noted Continue reading

I have been waiting for this for a while: it's very good. **David R. Howell and Arne L. Kalleberg**: _[Declining Job Quality in the United States: Explanations and Evidence](https://equitablegrowth.org/working-papers/declining-job-quality-in-the-united-states-explanations-and-evidence/)_: "We group... explanations... into three broad visions... the competitive market model, in which supply and demand for worker skills in competitive external labor markets generates a single market wage by skill group... contested market models, in which... firms typically have substantial bargaining (monopsony) power; and social-institutional models, which... place greater emphasis on the public policies, formal and informal institutions, and the dynamics of workplace cultures and conflict.... The supply-demand explanation, which has focused on evidence of occupational employment polarization (driven by skill-biased production technologies) and the rise in the college-wage premium.... We conclude by summarizing policy recommendations that follow from each of these visions... ---- #noted Continue reading

Picking winners—seeing which are the industries in which subsidizing efficient producers will produce large externalities via the creation of communities of engineering practice—has never been that difficult. It has been actually winning that is difficult: creating the institutional and political-economic discipline so that the subsidies flow where they should, rather than where the politically powerful wish them to flow. What is nice about Cherif and Hasanov is that they show where and have some good suggestions as to how to make this more general than it has been: **Andrew Batson**: _[Rediscovering the Importance of Export Discipline](https://andrewbatson.com/2019/04/09/rediscovering-the-importance-of-export-discipline/)_: "The new IMF working paper on industrial policy, by Reda Cherif and Fuad Hasanov, has gotten a lot of notice, and indeed it is very clear, comprehensive, and useful. But for anyone who has already done some reading on the history of successful Asian economies, particularly Taiwan and South Korea, it is not exactly surprising.... Brad DeLong’s 2010 book with Stephen Cohen, _The End of Influence_: 'Americans like to say scornfully that industrial policy is about “governments picking winners.” Picking winner industries is not that hard—even for governments... >>Most countries trying to climb the ladder of quality and industrial sophistication through selective promotion compiled... Continue reading

I second this: The modern internet offers so much free ice cream that it is hard to justify paying for it. But IMHO Tressie Mcmillan Cottom is definitely worth it. For example, lead her on Lower Ed—on the predatory for-profit college grift: **Juliane Stockman**: _[@JulianeStockman](https://twitter.com/JulianeStockman/status/1106645293645348864)_: "If you haven't subscribed to @tressiemcphd , you need to.... I'm gonna have to journal about this months' essay. Hell, I'm probably gonna take it into therapy to process it. It packs a wallop... ---- #noted Continue reading

---- #macro #forecasting #highlighted Continue reading

**David H. Autor**: _[Work of the Past, Work of the Future](https://economics.mit.edu/files/16724)_: "Urban non-college workers currently perform substantially _less_ skilled work than in prior decades..... Automation and international trade... have eliminated the bulk of non-college production, administrative support, and clerical jobs, yielding a disproportionate polarization of urban labor markets... by: (1) shunting non-college workers out of specialized middle-skill occupations into low-wage occupations that require only generic skills; (2) diminishing the set of non-college workers that hold middle-skill jobs in high-wage cities; and (3) attenuating, to a startling degree, the steep urban wage premium for non-college workers that prevailed in earlier decades. Changes in the nature of work—many of which are technological in origin—have been more disruptive and less beneficial for non-college than college workers... ---- #noted Continue reading

**Comment of the Day**: _[JEC](https://www.bradford-delong.com/2019/05/comment-of-the-day-1.html?cid=6a00e551f0800388340240a45db3c8200c#comment-6a00e551f0800388340240a45db3c8200c)_: "I'd just add a note to lament the five decades of empirical research into the actual formation and behavioral consequences of expectations that didn't happen, thanks to the Rational Expectations Revolution in macro. We'll never get those squandered years back... ---- #commentoftheday Continue reading

Macroeconomic policy management and nowcasting according to Robert A. Heinlein: **Robert A. Heinlein** (1948): _[Beyond This Horizon](https://books.google.com/books?isbn=1625793146)_ : "'Not "about time"—it is time. I had just completed the first inclusive run when you arrived. Want to see it?' He stepped to the machine, pressed a stud. A photostat popped out. Monroe-Alpha undipped it and handed it to Hamilton without looking at it.... Hamilton examined the photostat. The reinvestment of accumulated capital called for an increase in the subsidy on retail transfers of consumption goods of three point one percent and an increase in monthly citizens’ allowance of twelve credits—unless the Council of Policy decided on another means of distributing the social increment. ‘"Day by day, in every way, I’m getting richer and richer,"’ Hamilton said. 'Say, Cliff, this money machine of yours is a wonderful little gadget. It’s the goose that lays the golden egg... >..."What I want to know is this. If nobody computed the amount of new credit necessary to make the production-consumption cycle come out even—what would happen?” >“Your hypothetical question is too far-fetched to be very meaningful,” Monroe-Alpha stated, “but it would result in a series of panics and booms of the post-nineteenth century type. Carried... Continue reading

**Comment of the Day**: _[JEC](https://www.bradford-delong.com/2019/04/us-economic-policies-that-are-pro-work-and-pro-worker-equitable-growth.html?cid=6a00e551f0800388340240a4a19ce0200b#comment-6a00e551f0800388340240a4a19ce0200b)_: "Against my better judgment, I find that I must demand, in the strongest possible terms, that you kids withdraw forthwith from my lawn. More specifically, this is correct: 'The concept was developed by the economist Joan Robinson in her 1933 book _The Economics of Imperfect Competition_ to describe the labor market equivalent of a monopoly, where workers only have the option to work at one employer, so their wages will be set less than the value they create+ since they have no outside options'... >...But this is bollocks: "But work pioneered by economist Alan Manning at the _London School of Economics_ in his book Monopsony in Motion broadens the definition of monopsony to include labor market dynamics where workers do not respond to changes in wages as would be predicted by a competitive model." Why in the world would anyone think it was a good idea to take a technical term denoting a specific market failure and turn it into a generic label for any and all market failures? O tempora o mores! >+Errr… correct-ish. "The value they create" is not an accurate rendering of "the marginal product of labor." But that's a separate rant...... Continue reading

A nice instantiation of our WCEG's monthly summary of JOLTS. I would, however, quibble with the authors' claim that workers are now "confident". Yes, they are quitting at a much higher rate than they dared to do in the early years of this decade. But I remember 1998-2000: That was a confident labor market! How old were these authors in 1999, anyway? :-): **Kate Bahn and Will McGrew**: _[JOLTS Day Graphs: March 2019 Report Edition - Equitable Growth](https://equitablegrowth.org/jolts-day-graphs-march-2019-report-edition/)_: "The quits rate held steady at 2.3% for the 10th month in a row, reflecting a steady labor market where workers are confident leaving their jobs to find new opportunities... ---- #noted #worthyreads Continue reading