Brad DeLong's Grasping Reality...

Noted for Your Morning Procrastination for June 5, 2014

Over at Equitable Growth--The Equitablog

Afternoon Must-Read: Michael Albertus and Victor Menaldo: Gaming Democracy: Elite Dominance during Transition and the Prospects for Redistribution | Washington Center for Equitable Growth * Afternoon Must-Read: Martin Wolf: Legitimate Business Unlocks Growth | Washington Center for Equitable Growth * Carter Price: Marriage promotion isn’t the only solution to America’s mobility problem | Washington Center for Equitable Growth *

Plus:

• Things to Read on the Morning of June 5, 2014 | Washington Center for Equitable Growth

And:

May I Say That to Choose William Patterson to Write Biographies About People Who Lived in Twentieth-Century America Was a Horrible Mistake?

I want my money back!

William Patterson: Robert A. Heinlein, Vol 2: In Dialogue with His Century Volume 2: The Man Who Learned Better: "Lyndon Johnson’s Civil Rights Act of 1964...

...had come to a vote just before the nominating conventions, and Goldwater had voted against it. Heinlein understood Goldwater was not voting against civil rights: He was voting against federal enforcement of civil rights... a matter for each state to do, individually, for itself... more importantly...a matter of the attitude of individuals, which could not be legislated....

Goldwater’s opinion was Constitutionally “correct.” The U.S. Constitution had not specifically delegated this kind of power to Congress or the Executive, and it did reserve to the states any powers not specifically delegated. Lyndon Johnson... used federal forces for the pragmatic reason that some states—George Wallace’s Alabama, for example—would not cede the rights of U.S. citizens unless coerced.... But it was an honorable disagreement over tactics, not over basic goals...

Afternoon Must-Read: Michael Albertus and Victor Menaldo: Gaming Democracy: Elite Dominance during Transition and the Prospects for Redistribution

Michael Albertus and Victor Menaldo: Gaming Democracy: Elite Dominance during Transition and the Prospects for Redistribution: "Inequality and democracy are far more compatible empirically than social conflict theory predicts....

There is a relationship between democracy and redistribution only if elites are politically weak during a transition; for example, when there is revolutionary pressure. Redistribution is also greater if a democratic regime can avoid adopting and operating under a constitution written by outgoing elites and instead create a new constitution that redefines the political game. This finding holds across three different measures of redistribution and instrumental variables estimation. This article also documents the ways in which elites ‘bias’ democratic institutions...

Thursday Idiocy on Wednesday: Are Any of the Hierarchs Past and Present in the Catholic Church in Ireland Not Damned?

You gotta think that the only live questions are: How low do they go? In which of Dante's circles do they belong?

Emer O'Toole: Tell us the truth about the children dumped in Galway's mass graves: "Only full disclosure by Ireland's Catholic church...

...can begin to atone for the children who died in its care. Share 12406. The bodies of 796 children, between the ages of two days and nine years old, have been found in a disused sewage tank in Tuam, County Galway. They died between 1925 and 1961 in a mother and baby home under the care of the Bon Secours nuns. Locals have known about the grave since 1975, when two little boys, playing, broke apart the concrete slab covering it and discovered a tomb filled with small skeletons. A parish priest said prayers at the site, and it was sealed once more, the number of bodies below unknown, their names forgotten.

Over at Equitable Growth: The Nowcast for U.S. Real GDP Growth in the First Half of 2014 Is Now 1.2%/Year...

That is all... READ MOAR

Noted for Your Morning Procrastination for June 4, 2014

Over at Equitable Growth--The Equitablog

• Morning Must-Watch: EPI: Raising America’s Pay Launch | Washington Center for Equitable Growth
• Wednesday Focus: June 4, 1989 | Washington Center for Equitable Growth
• Afternoon Must-Read: Max Auffhammer: Why I Think Not Building Keystone XL Leaves a Billion Barrels of Bitumen in the Ground | Washington Center for Equitable Growth
• Afternoon Must-Read: Larry Ball: Long-Term Damage from the Great Recession in OECD Countries | Washington Center for Equitable Growth

Plus:

• Things to Read on the Morning of June 4, 2014 | Washington Center for Equitable Growth

And:

And We (Temporarily) Lose Another Economics Professor to the Obama Administration: Live from La Farine CXXXIX: June 4, 2014

Obama to name Berkeley economist to White House council: "WASHINGTON (Reuters) - President Barack Obama will nominate Maurice Obstfeld...

...an economist at the University of California, Berkeley, to serve on the White House Council of Economic Advisers, the White House said on Tuesday. Obstfeld has built a reputation as an international economist. He will replace James Stock, who is returning to a post at Harvard University.

As one of the country’s leading international macroeconomists and an all-around versatile economic thinker, Maury will make a critical contribution to the president’s continued efforts to increase growth and expand opportunity...

CEA Chairman Jason Furman said in an email.

Liveblogging World War II: June 4, 1944: FDR on the Liberation of Rome

http://media.nara.gov/mopix/audio/ww2/200-224.mp3

June 4, 1989: Wednesday Focus

Noted for Your Afternoon Procrastination for June 3, 2014

Over at Equitable Growth--The Equitablog

• Afternoon Must-Read: Robert Hall: Quantifying the Lasting Harm to the U.S. Economy from the Financial Crisis | Washington Center for Equitable Growth
• Missing the Point on Income Inequality in the 1920s and Today | Washington Center for Equitable Growth
• Reviewing Lawrence H. Summers's Review of Piketty V: Secular Stagnation and the High-Pressure Economy: Tuesday Focus: June 32014 | Washington Center for Equitable Growth
• Morning Must-Read: Peter Orszag: Toward a Progressive Tax Policy | Washington Center for Equitable Growth
• Morning Must-Read: Isabel Gorsk: Belarus Plans Serfdom | Washington Center for Equitable Growth
• Morning Must-Read: Ben Adler: Nine Things About Obama’s New Climate Rules | Washington Center for Equitable Growth
• The Daily Piketty: June 2, 2014 | Washington Center for Equitable Growth

Plus:

• Things to Read on the Afternoon of June 3, 2014 | Washington Center for Equitable Growth

And:

Liveblogging World War II: June 3, 1944: Waterproofing Vehicles

Tuesday Hoisted from the Archives: This 1989 Deng Xiaoping is One of the Most Important in China's History--And Only Eight People Have Heard It

From Vox.com: Deng Xiaoping: "Comrade Xiannian is correct.:

The causes of this incident have to do with the global context. The Western world, especially the United States, has thrown its entire propaganda machine into agitation work and has given a lot of encouragement and assistance to the so-called democrats or opposition in China — people who are in fact are the scum of the Chinese nation. This is the root of the chaotic situation we face today.

Over at Equitable Growth: Reviewing Lawrence H. Summers's Review of Piketty V: Secular Stagnation and the High-Pressure Economy: Tuesday Focus: June 32014

Over at Equitable Growth: Mark Thoma sends us to Larry Summers at Michael Tomasky's Democracy Journal:

Lawrence H. Summers: The Inequality Puzzle: "His policy recommendations are unworldly....

Success in combating inequality will require addressing the myriad devices that enable those with great wealth to avoid paying income and estate taxes.... If, as I believe, envy is a much less important reason for concern than lost opportunity, great emphasis should shift to policies that promote bottom-up growth. At a moment when secular stagnation is a real risk, such policies may include substantially increased public investment and better training for young people and retraining for displaced workers, as well as measures to reduce barriers to private investment in spheres like energy production, where substantial job creation is possible. Look at Kennedy airport... if a moment when the United States can borrow at lower than 3 percent in a currency we print ourselves, and when the unemployment rate for construction workers hovers above 10 percent, is not the right moment to do it, when will that moment come? READ MOAR

California Democrati Primary Candidate Matt Miller's Disclosure: Live from La Farine CXXXVIII: June 3, 2014

Matt Miller: Which Hat Is He Wearing?: "I have always kept my editors and producers at my various outlets informed...

...about my business activities, and have routinely made disclosures on air or in print where a reader or audience member should know of such work to avoid any conflict.... I advised on strategy, policy and communications, and helped lead work on two reports issued by McKinsey’s education practice on the achievement gap and on elevating the teaching profession in the US. At Burson, I advised clients on external communications and reputation matters, and helped with client development...

Alas!

I like Matt Miller a lot.

I would trust him in congress to do the right thing. I would agree with 80% of his votes--both when he supported the Democratic leadership and when he dissented from them. I would not agree with everything: I would furiously argue to him that we need to wait until interest rates are above the economy's growth rate before we start to worry about reducing the national debt relative to GDP, and he would listen (but probably not agree). I would furiously argue that the collapse of retirement savings as defined-benefit pensions have been replaced with 401(k)s means that we need not a smaller but a larger Social Security system, and he would listen (but probably not agree). If I lived in CA-33, I would be very happy voting for Matt Miller in the general election. I would be unlikely to vote for him in the primary however--but that is because I think that Ted Lieu's chances in the general election are sufficiently greater as to make him worth the primary vote even though I think Ted Lieu would make a marginally worse legislator.

But I have 218 saved emails from info@mattmillerforcongress.com. None of them mention "McKinsey" or "Burson" or "General Electric".

Indeed, until I read Lee Fang, I had (somehow) been under the impression that the bulk of Matt Miller's earnings these days came as a "journalist and author"--his columns for the Washington Post Syndicate, his Los Angeles KCRW radio show, and so forth, with speeches to corporate audiences and other stuff adding perhaps a quarter to the total--an annual sum in the five figures as part of an income in the six figures, near the top-1% boundary of $400K/year or so.

I did not know that he was pulling down seven figures, with $300K/year from McKinsey, $450K/year from Burson-Marsteller, and more

Matt: this is a problem. Call yourself a business consultant. Say that your principal occupation is not being a journalist, but rather what you do to add value to what your clients do. I think that being part of McKinsey's education-improvement practice is (or can be) an honorable calling--but if you describe yourself as a journalist, people will not believe that you think it is.

The Daily Piketty: June 2, 2014

• Thomas Piketty and Ryan Grim
• Ajay Kumar and Myles Udland
• Doug Henwood

Start with Ryan Grim:

Ryan Grim: Thomas Piketty On The Financial Times: 'This Particular Debate Is Over': "Thomas Piketty has no plans to respond further to Financial Times editor Chris Giles...

...despite the paper's insistence that it is engaged with the French economist and author in a "fascinating and important debate." Quite the opposite, Piketty, the author of Capital in the Twenty-First Century, told The Huffington Post.... "This particular debate is over".... The British paper had accused Piketty of getting his "sums" wrong, and "cherry-picking" data sources to fit a preconceived notion about wealth inequality... Observers of the debate were nearly unanimous in declaring it conclusively over, with the FT's various critiques fully satisfied. But Giles insisted in a follow-up post that questions about Piketty's ethics and reliability remained. "Further debate on many of these items is difficult because Prof Piketty accepts he makes still undocumented adjustments to his data from his original sources, but says they are appropriate because any alternative would not be plausible. The sources he has appear to be secondary to Prof Piketty’s prior expectations of what the data needs to show," Giles wrote...

I score this for Piketty, 6-0, 6-0, 6-0. I have my own doubts about and disagreements with Piketty, but as far as I can see Giles is completely off base.

Noted for Your Lunchtime Procrastination for June 2, 2014

Over at Equitable Growth--The Equitablog

• Things to Read at Lunchtime on June 2, 2014 | Washington Center for Equitable Growth
• Morning Must-Watch: Amir Sufi Presents "House of Debt" at the Washington Center for Equitable Growth | Washington Center for Equitable Growth
• Morning Must-Read: Ezra Klein: Obama’s Climate Change regulations Less Ambitious than Republicans in 2008 | Washington Center for Equitable Growth
• As I Repeatedly Say: All That the Money the Coal Barons of Eastern Kentucky Gave and That Mitch McConnell Took... | Washington Center for Equitable Growth
• Department of "Huh?!"--I Don't Understand More and More of Piketty's Critics: Per Krusall and Tony Smith | Washington Center for Equitable Growth

Plus:

• Things to Read at Lunchtime on June 2, 2014 | Washington Center for Equitable Growth

And:

• Monday Smackdown Watch: Naughty, Naughty Salim Furth: How Can We Have a Dialogue with These People?: Growth and Debt Yet Again (Brad DeLong's Grasping Reality...)
• Liveblogging World War II: June 2, 1944: Ammunition Explosion (Brad DeLong's Grasping Reality...)
• Kansas Tax Revenues Plunge Again: Live from the Roasterie CXXXVII: June 2, 2014 (Brad DeLong's Grasping Reality...)

Monday Smackdown Watch: Naughty, Naughty Salim Furth: How Can We Have a Dialogue with These People?: Growth and Debt Yet Again

I regret that I really have run out of DeLong Smackdowns--run out of people making what I think are good, or even arguable, criticisms of me that show that I do or perhaps might need to mark my beliefs to market...

Come on, people! Step up your game!

Oh well, we do what we can...

And today we pick on Salim Furth of the truly execrable Heritage Foundation

Things to Read at Lunchtime on June 2, 2014

Should-Reads:

1. Paul Krugman: For Bonds, This Time is Different: "Bloomberg has an interesting piece on how high bond prices and low yields have been shocking investors who relied on old models. Some of this... is because many people still... haven’t wrapped their minds around... a zero-lower-bound economy and... a low-inflation trap. But... structural change is happening fast... the demographic transition... Europe very quickly turning Japanese... the US, although growing faster, also turning down sharply. Add to this the fact that what we thought was normal actually depended on ever-growing household debt, and it becomes clear that historical expectations about normal [safe] interest rates are likely to be way off..."

2. Brad Plumer: A guide to Obama's new rules to cut carbon emissions from power plants: "Why is the EPA regulating carbon-dioxide?... The agency is required... to regulate carbon-dioxide under the existing Clean Air Act so long as there was evidence that the gas endangered public health. Most scientists agree that it does — and, in 2009, the EPA issued an 'endangerment finding' to that effect.... Now the EPA must turn its attention to existing power plants, using section 111(d) of the Clean Air Act. This is a relatively untested section of the Clean Air Act, and the agency has a fair bit of leeway in how to apply this section to carbon-dioxide.... The EPA will propose a 'performance standard' requiring a certain level of emissions cuts from power plants. Each state will then have to come up with a plan to implement those standards.... Coal power plants could adopt more efficient technology. Or perhaps electric utilities could switch from coal to natural gas.... Or perhaps utilities could boost their supply of wind or solar or nuclear power. Or promote energy efficiency in homes. Or power plants could join some sort of cap-and-trade program.... This time, however, the agency seems poised to allow power plants to meet the emissions limits through changes 'beyond the fenceline' — that is, power companies can use wind generation or efficiency programs elsewhere (say) to meet the standard.... That baseline is important. Emissions from US power plants have already fallen roughly 13 percent between 2005 and 2013.... So this rule would effectively require power plants to cut their emissions 13.5 percent between now and 2020, or 19 percent between now and 2030. That's somewhat less than environmentalists were pushing for.... How much will these new rules cost the economy?... The Natural Resources Defence Council previously estimated that a more ambitious plan would cost electric utilities as much as $14.6 billion by 2020... lower than the benefits... which run from $28 billion to $63 billion..."

3. Chris Blattman: This is my teaching nightmare: "Professor Christensen did something 'truly disruptive' in 2011, when he found himself in a room with a panoramic view of Boston Harbor. About to begin his lecture, he noticed something about the students before him. They were beautiful, he later recalled. Really beautiful. 'Oh, we’re not students', one of them explained. 'We’re models.' They were there to look as if they were learning: to appear slightly puzzled when Professor Christensen introduced a complex concept, to nod when he clarified it, or to look fascinated if he grew a tad boring. The cameras in the classroom--actually, a rented space downtown--would capture it all for the real audience: roughly 130,000 business students at the University of Phoenix, which hired Professor Christensen to deliver lectures online."

Should Be Aware of:

• Michael Aneiro: Barclays Downgrades Electric Utility Bonds, Sees Viable Solar Competition
• The Roches (cover): Acadian Driftwood
• Andrei Piontkovsky: "Putin has simplified the task of those who seek to understand the country... his actions are guided by a single goal... ruling Russia for as long as he lives..."
• Peter Viney on The Band: "The Weight" | The Night They Drove Old Dixie Down | Acadian Driftwood
• Adrinna Macintyre: Obamacare might benefit college grads more than less-educated young adults
• Amy Lynn Smith: Pharmacy technician sees Obamacare working every day
• Ben White: Why Geithner drives liberals nuts
• Tim Noah
• Robert Skidelsky: The Programmed Prospect Before Us
• Michael Bloomberg: Obama Finally Keeps His Promise on Climate Change
• Scott Kaufman: Recap: ‘Game of Thrones,’ Season Four, Episode Eight: ‘The Mountain and the Viper’
• Austin Frakt: Obesity may need a policy prescription, not a medical one
• Austin Frakt: Microeconomics Made Simple
• Muhammad Idrees Ahmad: A Dangerous Method: Syria, Sy Hersh, and the Art of Mass-crime Revisionism

And:

Morning Must-Watch: Amir Sufi Presents "House of Debt" at the Washington Center for Equitable Growth

VIDEO: Amir Sufi presents House of Debt:

Broadcast live streaming video on Ustream

Morning Must-Read: Ezra Klein: Obama’s Climate Change regulations Less Ambitious than Republicans in 2008

Ezra Klein: Obama’s climate change regulations are less ambitious than what Republicans were proposing in 2008: "In May 2008, Sen. John McCain traveled to Portland, Oregon...

...and delivered a speech that no Republican presidential candidate would consider giving today. It doesn't matter "whether we call it 'climate change' or 'global warming,'" McCain warned. "Among environmental dangers it is surely the most serious of all." McCain went on to propose a cap-and-trade plan far more aggressive than the power-plant rules the Obama administration is announcing today....

In 2008, it still looked plausible that with American leadership, the world could limit the rise in temperatures to about two degrees Celsius. Today, that goal looks laughable. We're on track to see temperatures rise by about four degrees Celsius.... The power plant regulations the Obama administration will announce today are far less ambitious than the proposal McCain offered in Oregon in 2008. They're less ambitious than the proposals Newt Gingrich championed through the Aughts. They're far less than what's required to keep the rise in temperatures to two degrees Celsius. But they're probably at the outer limit of what can be done so long as the Republican Party refuses to even believe in climate change, much less work with the Obama administration on a bill....

"We have many advantages in the fight against global warming, but time is not one of them," McCain said in 2008. "Instead of idly debating the precise extent of global warming, or the precise timeline of global warming, we need to deal with the central facts of rising temperatures, rising waters, and all the endless troubles that global warming will bring. We stand warned by serious and credible scientists across the world that time is short and the dangers are great. The most relevant question now is whether our own government is equal to the challenge."

We're about to find out.

As I Repeatedly Say: All That the Money the Coal Barons of Eastern Kentucky Gave and That Mitch McConnell Took...

...in exchange for blocking Obama's attempt to get John McCain's cap-and-trade environmental plan through congress actually did was to change Barack Obama's negotiating partner.

Instead of, on global-warming policy, negotiating with Mitch McConnell, he is now negotiating with Anthony Kennedy.

What was the point? Certainly the coal barons would rather have had a sensible cap-and-trade policy that gave them tradeable permits as valuable assets than be under the EPA's command-and-control regulatory hammer. Yet this was predictable from the Supreme Court's 2008 (and earlier!) line of thinking...

Yet more things I simply do not understand...

Liveblogging World War II: June 2, 1944: Ammunition Explosion

World War II Today: Two G.C.’s after Soham Railway Disaster:

Given the huge quantities of explosives that were brought across the Atlantic and then transported around Britain, it seems remarkable that there were not more accidents during the war.

Kansas Tax Revenues Plunge Again: Live from the Roasterie CXXXVII: June 2, 2014

Brad Cooper: Kansas tax revenues plunge again: "Kansas revenues plunged again in May, leaving the state more than $300 million below estimates for the current year... revenues fell $217 million below estimates in May... leav[ing] the state about $310 million short for the entire current fiscal year, which ends June 30....

And Brownback's people seem to have no reluctance whatsoever to simply tell lies about why it happened:

“Unfortunately, we underestimated, as did other states, the impact of the federal fiscal cliff,” Revenue Secretary Nick Jordan said in a statement. Critics have blamed Brownback’s income tax cuts, which were cited recently when Moody’s Investors Service downgraded the state’s credit rating at the end of last month. Moody’s warned that the income tax cuts--without offsetting measures such as spending cuts--would drain the states reserves. That, the ratings firm said, would pose a “significant credit weakness.” The rating agency cautioned that spending cuts won’t be easy because of court-ordered spending on schools, keeping up with Medicaid demands and funding the state’s pension system...

Department of "Huh?!"--I Don't Understand More and More of Piketty's Critics: Per Krusell and Tony Smith

As time passes, it seems to me that a larger and larger fraction of Piketty's critics are making arguments that really make no sense at all--that I really do not understand how people can believe them, or why anybody would think that anybody else would believe them. Today we have Per Krusell and Tony Smith assuming that the economy-wide capital depreciation rate δ is not 0.03 or 0.05 but 0.1--and it does make a huge difference...

Noted for Your Morning Procrastination for June 1, 2014

Over at Equitable Growth--The Equitablog

• Over at Project Syndicate: What Do We "Deserve" Anyway?: Monday Focus: June 2, 2014 | Washington Center for Equitable Growth
• Afternoon Must-Read: Suresh Naidu: Eight Theses on Thomas Piketty from His Jacobin Review, "Capital Eats the World" | Washington Center for Equitable Growth
• Afternoon Must-Read: Jason Furman and James Stock: On Energy, ‘All of the Above’ Is Working | Washington Center for Equitable Growth

Plus:

• Things to Read on the Morning of June 1, 2014 | Washington Center for Equitable Growth

And:

• Liveblogging World War II: June 1, 1944: Chanson d'automne (Brad DeLong's Grasping Reality...)
• Over at Project Syndicate/Equitable Growth: What Do We "Deserve" Anyway?: Monday Focus: June 2, 2014 (Brad DeLong's Grasping Reality...)