Costs and Benefits of International Capital Mobility: Reply to Bhagwati: Hoisted from 20 Years Ago

Needless to say, time has left me a lot wiser: We need to design economies so that they can operate without disaster even when deregulatory clowns like those of the George W. Bush or the Donald J. Trump administrations are in control of the levers of policy at key moments. How to do that is not so clear. What is clear is that only a fool today would think that our political economy would support a clever technocracy so that we might have our cake and eat it too. Indeed, the most likely scenario seems to be that we will be unable to eat our cake, and then the kleptocrats will steal it out from under our noses so that we will not have it either. In short: I should have listened harder to Jagdish 20 years ago…

2000s_financial_deregulation_republican_congressmen_-_Google_Search.png


Hoisted from the Archives: Reply to Bhagwati: “I open my May/June [1998] issue of Foreign Affairs to discover myself pilloried in an article by Jagdish Bhagwati between Paul Krugman and Roger C. Altman (excellent company to be in, by the way: much better than I am used to) as a banner-waving proponent of international capital mobility, guilty of “assum[ing] that free capital mobility is enormously beneficial while simultaneously failing to evaluate its crisis-prone downside.”

I rub my eyes in surprise. I had not thought of myself as a banner-waving proponent of international capital mobility.

I wish that Jagdish Bhagwati’s research assistants had shown him the sentence from my January 28 Los Angeles Times op-ed after the two he quotes (it reads: “But the free flow of financial capital is also giving us one major international financial crisis every two years”); or shown him my evaluation of the causes of the crisis a paragraph but one above where he quotes (it reads: “the sudden change in [market] opinion [toward East Asia] reflects not a cool judgment of changing fundamentals [of East Asian growth] but instead a sudden psychological victory of fear over greed”).

If I am the the point man waving the banner, all I can say is that the ranks of the army of international capital mobility must be thin indeed.

But since I have apparently been elected, let me pick up the banner and wave it around a few times, for on this issue I am what Jagdish Bhagwati calls a “[neo-]liberal”—someone who believes that we should neither encourage governments to choke off international flows of saving and investment (as Bhagwati thinks), nor look with schadenfreude on and discourse on the long-run salutary effects of the great depressions caused by international financial panics, but instead try to have our cake and eat it too: to reap the benefits of international capital mobility, and to minimize the human costs of recurrent crises through appropriate and well-funded international central banking institutions and practices.

We should try to have our cake because the benefits of international capital mobility truly are mammoth. Between 1994 and 1996 some $200 billion of international capital flowed into Malaysia, the Philippines, South Korea, and Thailand. In all of these countries the private return on investment is high—higher than in the industrial core. In all of these countries the social return on investment is higher still: if the economic history of the past two centuries teaches us anything, it teaches us that investments in modern machine technologies are a very good if not the best way to upgrade the skills of the labor force and gain the organizational expertise necessary for high total factor productivity.

This inflow of capital to these four countries was worth at least $15 billion a year and perhaps as much as $40 billion a year in higher GDP to the receiving countries even after taking account of the interest, dividends, and capital gains owed to investors from abroad. Just as the flow of finance from the British core to the periphery in the late nineteenth century played an important role in producing the Australian and North American economies that have had the world’s highest standard of living in the twentieth century, so the flow of finance from today’s industrial core to the NIC periphery has every prospect of cutting a generation or so off of the time needed for East Asian workers and consumers to achieve industrial core levels of productivity and economic welfare.

Calculations of the effect of international capital mobility on economic welfare are considerably more complicated and uncertain than calculations of the effect on growth, but they carry the same message: the ability to attract international capital to boost development or cushion the costs of macroeconomic policy mistakes can be very, very valuable.

We should try to eat our cake too because the costs of unmanaged international financial crises are horrific. Because of the Latin American debt crisis of 1982 the decade of the 1980s was lost to Latin American development—leaving the typical Latin American country between five and ten percent poorer at the beginning of the 1990s than it would have been in a counterfactual world in which borrowing from abroad had not financed oil imports and elite consumption in the late 1970s. The financial crisis of 1873 saw the share of the U.S. non-agricultural labor force employed in building railroads fall from perhaps eight to perhaps two percent. And international financial crises turned the global recession of 1929-1931 into the Great Depression, generating not only a decade of relative poverty but the rise of the Nazi regime and the fifty million dead from World War II in Europe.

If there were no reasonable prospect of successfully managing international financial crises, then I would agree with Professor Bhagwati: the risks of an 1873 or a 1982 or—worst of all—a 1933 would then significantly outweigh the benefits of capital mobility. But there is every reasonable prospect of successfully managing international financial crises. The much-larger-than-anyone-anticipated Mexican crisis of 1994-1995—successfully handled—saw Mexican economic growth resume after a single year of recession. The East Asian crisis of 1997 may not even generate an absolute recession: as of this writing it looks as though East Asian GDPs will not decline, but instead that growth will pause in 1998 and resume in 1999.

But successful handling of international financial crises requires political and economic skill. It requires rejecting the arguments of the Wall Street Journal’s editorial page that East Asia “needs” a deep, prolonged recession with mass unemployment to punish entrepreneurs and banks in NICs who overborrowed. It requires rejecting the arguments of Ralph Nader that East Asia “needs” a deep, prolonged recession with mass unemployment to punish New York financiers who overlent. And it requires rejecting the arguments of Jagdish Bhagwati that international capital mobility—good enough to finance the industrialization of the NICs of Australia, Canada, and the U.S. a century ago—is too risky for the NICs of today…



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Supply and Demand Shocks, and Seasonal Adjustment

Think that there are no such things as aggregate fluctuations generated by shifts in tastes and technologies? Think again. Look at the pattern of monthly payroll employment changes:

All Employees Total Nonfarm Payrolls FRED St Louis Fed

We are more used to looking at the seasonally-adjusted pattern, which looks very, very different indeed:

All Employees Total Nonfarm Payrolls FRED St Louis Fed


As big a deal as the Great Recession does not stand out that strongly when we look at the raw seasonally-unadjusted monthly changes:

All Employees Total Nonfarm Payrolls FRED St Louis Fed

It only becomes the biggest deal in generations when we seasonally adjust the changes series:

All Employees Total Nonfarm Payrolls FRED St Louis Fed

And here is the seasonal adjustment filter as the BLS has applied it:

All Employees Total Nonfarm Payrolls FRED St Louis Fed

A lot of serially-correlated month-by-month shortfalls of employment growth relative to the standard very short-run month-to-month patterns and relative to long-run trend growth cumulate and integrate to something truly important and distressing.

Note that, important as shifts in tastes and technologies are in being effectively the sole driver of the seasonal cycle, there is no credible theory that shifts in tastes and technologies are in any part responsible for anything even vaguely like the Great Recession. What is it supposed to be: a great vacation, a great forgetting of productive technology, a great rusting-out of capital, a great increase in the speed with which the marginal utility of wealth diminishes, a great loss of ability to monitor firms and investment projects?

To those who claim that one of these is the cause, at this stage the right thing to do is to recognize that ars longa, vita brevis, and remember the words of Robert M. Solow:

Suppose someone sits down where you are sitting right now and announces to me that he is Napoleon Bonaparte. The last thing I want to do with him is to get involved in a technical discussion of cavalry tactics at the battle of Austerlitz. If I do that, I’m getting tacitly drawn into the game that he is Napoleon. Now, Bob Lucas and Tom Sargent like nothing better than to get drawn into technical discussions, because then you have tacitly gone along with their fundamental assumptions; your attention is attracted away from the basic weakness of the whole story. Since I find that fundamental framework ludicrous, I respond by treating it as ludicrous–that is, by laughing at it–so as not to fall into the trap of taking it seriously and passing on to matters of technique.

There is the demand side—fluctuations in real spending relative to what a first-best non-monetary economy would produce (although, as Arin Dube points out, it would be better to call it the “cpordination successes and failures side” and there is the supply side—the technologies and resources and tastes for work goods, and leisure side. That the supply side is not the important thing for business cycles does not mean that it is not there. And the supply side is the most important thing for the seasonal cycle, and for the long-run trend.

Talk cavalry tactics at the Battle of Austerlitz all you want—it’s fun! Or at least I find it fun. But it is much better to confine your talking about cavalry tactics at the Battle of Austerlitz when your interlocutor is in fact Napoleon, and when Austerlitz is relevant to the problem at hand…


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Fairly Recently: Must- and Should-Reads, and Writings… (January 10, 2019)

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  1. Note to Self: No, Apple! No Potty Mouth, Please!: Today I am disturbed that Apple voice recognition keeps hearing “slut“ when I say “slack“…

  2. Comment of the Day: BruceJ: “Honestly, when you look back at Brooks’ history, where he ‘just happens’ to reference ideas out of the ‘dark, dank silos of the far right’ I see less laziness, than an ongoing subtle injection of those very ideas into so-called ‘respectable’ conservative commentary. If it IS all happenstance and laziness, Brooks is the luckiest damned blind squirrel in the universe…

  3. Why Economic History?: Good theory is in the end nothing but distilled and crystallized economic history. It could, after all, be nothing else. And piling more and more computer power on to the analysis of nonhistorical data could only be an intellectual optimum if the world was created ex nihilo the instant of the first date of your panel. So this is why we are here. Welcome to economic history…

  4. Comment of the Day: Private-sector entities cannot migrate labor and capital into the business of creating money, for money is liquid trust and can only be created by institutions that are trusted to be, well, good for the money. So the solution is not to move resources out of creating currently-produced goods and services but to move demand into buying currently-produced goods and services. And—as long as it is good for the money—the government’s borrowing-and-spending or printing-and-dropping works just fine: JEC: Keynesian Economics vs. Regular Economics: “The funny thing here is that Barro imagines this to be a killer rhetorical question, when it is in fact a crucial and open research question…

  5. What Will Cause the Next US Recession?: Live at Project Syndicate: Needless to say, the particular nature and form of the next financial shock will be unanticipated. Investors, speculators, and financial institutions are generally hedged against the foreseeable shocks…. The death blow to the global economy in 2008-2009 came not from global imbalances or from the collapse of the mid-2000s housing bubble, but from the concentration of ownership of mortgage-backed securities…

  6. Comment of the Day: Cervantes: “I didn’t know that British produce comes into season at the end of March, actually. You learn something every day…

  7. Betting That Nobody Will Check the References as an Intellectual Style: Monday Smackdown: Never mind that Himmelfarb cuts off her quote from Keynes just before Keynes writes that he approves of this Puritan fallacy—that he is not, as Himmelfarb claims, ridiculing it, but rather praising it…


  1. Paul Campos: Tucker Carlson Utters More Than Fourteen Words Evincing Skepticism About Finance Capitalism: Conservative Pundits Blanch In Pure Horror: “white ethno-nationalism, which is what both Carlson and Trump actually market to their respective, heavily overlapping audiences, is likely to become even more successful if it manages to morph into a kind of welfare=state herrenvolk democracy, in which ‘real Americans’ receive genuine protection from the depredations of capitalism, while a permanently disenfranchised underclass of guest workers and the like gets to live in the libertarian utopia envisioned by the Koch brothers…

  2. Ben Alpers: A Far-Right Anti-Semitic Conspiracy Theory Becomes a Mainstream Irritable Gesture: “At the heart of this largely rote piece of Brooksian pablum is a claim that deserves a closer look. ‘The younger militants’, writes Brooks, ‘tend to have been influenced by the cultural Marxism that is now the lingua franca in the elite academy’. This is interesting both for what Brooks appears to be trying to say and, more immediately, how he has decided to say it… #orangehairedbaboons #publicsphere

  3. Alexander Zubatov: “I think YOU’RE misusing Blackford…. Remember, the whole point of my Tablet article was to respond to Sam Moyn’s utterly misleading NYT article claiming cultural Marxism simply doesn’t exist and is no more than anti-Semitic right-wing phantasmagoria…

  4. Ben Alper: Fun With Primary Sources: The Free Congress Foundation’s “History of Political Correctness”: “The notion that the Frankfurt School was responsible for creating ‘Political Correctness’, ‘Cultural Marxism’, and a related plot against Western civilization itself emerged from the circle around Lyndon LaRouche from the 1970s (when LaRouche’s attacks on the Frankfurt Institute apparently began) through the early 1990s…

  5. Dave Niewertr: Norway Terrorist Breivik Was An Ardent Subscriber To Theories Of ‘Cultural Marxism’: “The picture that’s emerging is of an ordinary right-wing man stoked into anger by theories about “Cultural Marxism” that originated on the anti-Semitic far right but have in recent years been spreading into more mainstream venues, promoted by the likes of Andrew Breitbart, among others…

  6. Ben Alpers: The Frankfurt School, Right-Wing Conspiracy Theories, and American Conservatism: “There are obviously a lot of threads that one might pull in this story, regarding, among other things, the relationship between mainstream conservatism and the violent radical right, the strong base of antisemitism that (often silently) underwrites a lot right-wing rhetoric, the deep anti-intellectual and anti-academic tendencies in these modes of thought, and the peculiar role that Lyndon LaRouche and his minions have played in encouraging conspiracy theories of all sorts (they are also an important source for left-wing conspiracy theories about Leo Strauss and the Straussians)…

  7. Samuel Moyn: The Alt-Right’s Favorite Meme Is 100 Years Old: “‘Cultural Marxism’ might sound postmodern but it’s got a long, toxic history…

  8. Russell Blackford: Cultural Marxism and our current culture wars: Part 1: “In everyday contexts, those of us who do not accept the narrative of a grand, semi-conspiratorial movement aimed at producing moral degeneracy should probably avoid using the term ‘cultural Marxism’. Unfortunate cultural tendencies, including those that manifest a left-wing style of authoritarianism, can usually be labelled in less confusing, more effective, more precise ways. By all means, let’s develop useful terminology to express whatever concerns we have about tendencies on the Left, but ‘cultural Marxism’ carries too much baggage…

  9. Jana Winter and Elias Groll: Here’s the Memo That Blew Up the NSC: “Fired White House staffer [Rich Higgins] argued ‘deep state’ attacked Trump administration because the president represents a threat to cultural Marxist memes, globalists, and bankers…

  10. Jeet Heer: Let’s Talk about Anti-Semitic Ideology: “Bowers… belonged to the far right faction that sees Trump as… claim[ing] to stand for white America but actually works for ‘the Jews’…. The idea that George Soros (symbol for many on right of Jewish conspiracy) is behind Caravan isn’t confined to Nazis…. Congressman Matt Gaetz… popular Trumpist cartoonist Ben Garrison… House GOP Leader Kevin McCarthy…. The Soros stuff is just one of many manifestations of the the grand anti-Semitic trope…. The Soros of right-wing mythology (globalist intent on destroy cohesive nations) fit the long history of blaming internal discord on outside agitators as well as the Dolchstoßlegende. The nationalist needs a cosmopolitan nemesis…

  11. Zack Beauchamp: A Trump Voter Hurt by the Shutdown’s Incredibly Revealing Quote: “Think about that line for a second. Roll it over in your head. In essence, Minton is declaring that one aim of the Trump administration is to hurt people—the right people. Making America great again, in her mind, involves inflicting pain. This is not an accident. Trump’s political victory and continuing appeal depend on a brand of politics that marginalizes and targets groups disliked by his supporters. Trump supporters don’t so much love the Republican party as they hate Democrats…

  12. Jeet Heer: Let’s Talk about Anti-Semitic Ideology: “The idea that George Soros (symbol for many on right of Jewish conspiracy) is behind Caravan isn’t confined to Nazis. Here’s Congressman Matt Gaetz. Here is popular Trumpist cartoonist Ben Garrison—again, someone with an audience outside the Nazi right but circulating idea that Soros is working to destroy America. House GOP Leader Kevin McCarthy…

  13. Tamara Strauss: Blum Center News Digest, Jan. 7: “A selection of articles and reports pulled from the last two/three weeks…

  14. Raj Kumar: Facing Harsh Realities, the Global Development Community Confronts Another Fraught Year: “The outlines of an established global politics on aid are beginning to come into focus, and it’s a fraught landscape. Aid is now openly and directly discussed as a tool to stem migration, achieve foreign policy objectives, and derive domestic economic benefits, particularly for major donors including the U.S., China, Germany, and the U.K…

  15. Paul Krugman: The Economics of Soaking the Rich: “Diminishing marginal utility is the common-sense notion that an extra dollar is worth a lot less in satisfaction to people with very high incomes than to those with low incomes. Give a family with an annual income of $20,000 an extra $1,000 and it will make a big difference to their lives. Give a guy who makes $1 million an extra thousand and he’ll barely notice it. What this implies for economic policy is that we shouldn’t care what a policy does to the incomes of the very rich. A policy that makes the rich a bit poorer will affect only a handful of people, and will barely affect their life satisfaction, since they will still be able to buy whatever they want… #equitablegrowth #fiscalpolicy

  16. Steve Richards: Theresa May’s Survival Has Become Dependent on Denying Political Reality: “After the long cabinet meeting on the Brexit deal, the prime minister declared outside Number 10 that ministers had backed her plans. The next day the Brexit secretary, Dominic Raab, resigned. Mrs May appointed a successor as if the words she had uttered the night before had never been spoken…. She has, in the intervening weeks, insisted that there is space for a significant negotiation with the EU before the approaching Commons’ vote on her deal, expected within the next fortnight. The EU has made clear there is no room for such revision. The disconnect between the prime minister’s public words and what is happening around her is stark. Other prime ministers sought words to make sense of chaotic situations. Alternatively, they tried to change the situation. But Mrs May does neither. She presses on. But her indifference to words and persuasion, these essential arts of leadership, is a fatal flaw…

  17. Patrick Kline, Neviana Petkova, Heidi Williams, and Owen Zidar: Who Profits from Patents? Rent-Sharing at Innovative Firms: “An initial allowance of an ex-ante valuable patent generates substantial increases in firm productivity and worker compensation. By contrast, initial allowances of lower ex-ante value patents yield no detectable effects on firm outcomes…. On average, workers capture roughly 30 cents of every dollar of patent-induced surplus in higher earnings… concentrated among men and workers in the top half of the earnings distribution, and are paired with corresponding improvements in worker retention among these groups. We interpret these earnings responses as reflecting the capture of economic rents by senior workers, who are most costly for innovative firms to replace…

  18. David Weil (2014): The Fissured Workplace: “Large corporations have shed their role as direct employers of the people responsible for their products, in favor of outsourcing work to small companies that compete fiercely with one another…

  19. Jag Bhalla: Judea Pearl’s ‘The Book of Why’ Shakes Up Correlation vs. Causality

  20. Uncle Judea, Melanin, Genetics, and Educational Attainment…: Am I profoundly stupid, or is Uncle Judea’s framework of causal confounders—colliders—mediators a huge advance, perhaps not in helping those of you who think carefully do non-stupid statistics, but in helping those of us who do not think carefully do non-stupid statistics, and in providing a royal road to teaching people how to do not-stupid statistics…

  21. This point is absolutely cognitive science-statistics-philosophy of probability gold!: Judea Pearl, Madelyn Glymour, and Nicholas P. Jewell (2016): Causal Inference in Statistics: A Primer (New York: John Wiley & Sons: 978119186847): “Inquisitive students may wonder why it is that dependencies associated with conditioning on a collider are so surprising to most people—as in, for example, the Monty Hall example. The reason is that humans tend to associate dependence with causation…

  22. Lisa R. Goldberg: Review of The Book of Why: The New Science of Cause and Effect: “The graphical approach to causal inference that Pearl favors has been influential, but it is not the only approach…. The Neyman (or Neyman–Rubin) potential outcomes model… James Heckman, whose concept of ‘fixing’ resembles, superficially at least, the do operator that Pearl uses. Those who enjoy scholarly disputes may look to Andrew Gelman’s blog… or to the tributes written by Pearl and Heckman to the reclusive Nobel Laureate, Trygve Haavelmo, who pioneered causal inference in economics in 1940…

  23. Ride | Austin: Frequently Asked Question: “The previous rideshare companies spent millions of dollars then chose to abandon the ‘factory’ (drivers & riders) they built. We believed with the backing of the community-RideAustin could quickly harness this infrastructure-build the right solution and fill the void and provide a great, safe service…. The tech community contributed technology to power the app that costs millions to develop-but it also took over $7 million in cash donations and significant in-kind services donations to make RideAustin what it is today…

  24. Counterfactuals! There is currently a mishegas at Andrew Gelman’s place about Pearl and Mackenzie’s Book of Why, which has a reference to this and has led me to the conclusion that I really need to find time to work my way through this entire book: Cosma Shalizi: Advanced Data Analysis from an Elementary Point of View: “The distributions we observe in the world are the outcome of complicated stochastic processes. The mechanisms which set the value of one variable inter-lock with those which set other variables. When we make a probabilistic prediction by conditioning—whether we predict􏰁 E[Y|X=x] or Pr (Y|X=x) or something more complicated—we are just filtering the output of those mechanisms, picking out the cases where they happen to have set X to the value x, and looking at what goes along with that. When we make a causal prediction, we want to know what would happen if the usual mechanisms controlling X were suspended and it was set to x. How would this change propagate to the other variables? What distribution would result for Y? This is often, perhaps even usually, what people really want to know from a data analysis, and they settle for statistical prediction either because they think it is causal prediction, or for lack of a better alternative… #reasoning

  25. Yes, lots of conservative males feel unmanned because women can now get jobs and contraceptives and so are not (a) desperate to find a man to support them while (b) terrified of getting pregnant. The best answer would be teaching young males that while their grandfathers and male their fathers could be real dicks without it ruining their lives, that is no longer tru: Josh Barro: “I think a big problem with the ‘economic and social change undermined marriage and family for the working class’ frame is that a main way it did this is by making women less dependent on men…

  26. Jane Coaston: Tucker Carlson Has Sparked The Most Interesting Debate In Conservative Politics: “Carlson… greed that his monologue was reminiscent of Warren, referencing her 2003 book The Two-Income Trap: Why Middle-Class Parents Are Growing Broke…. Carlson wanted to be clear: He’s just asking questions…. In this telling, white working-class Americans who once relied on a manufacturing economy that doesn’t look the way it did in 1955 are the unwilling pawns of elites. It’s not their fault that, in Carlson’s view, marriage is inaccessible to them…. Someone, or something, did this to them…. Carlson is advancing a form of victim-politics populism that takes a series of tectonic cultural changes—civil rights, women’s rights, a technological revolution as significant as the industrial revolution, the mass-scale loss of religious faith, the sexual revolution, etc.—and turns the negative or challenging aspects of those changes into an angry tale of what they are doing to you. And that was my biggest question about Carlson’s monologue, and the flurry of responses to it, and support for it: When other groups (say, black Americans) have pointed to systemic inequities within the economic system that have resulted in poverty and family dysfunction, the response from many on the right has been, shall we say, less than enthusiastic. Yet white working-class poverty receives, from Carlson and others, far more sympathy…

Why Economic History?

Economic history Google Search

We economists have gotten too good at making theories. In fact, the set of plausible and admissible economic theories is now dense in the space of possible conclusions: For every desired conclusion X, for every ε, there is a degree of theoretical complexity nδ and a chain of theories of increasing complexity T such that:

for all n > nδ -> | T(n) – X | < ε

We have also gotten not too good at but too proficient at econometrics: RCT, regression discontinuity, diff-in-diff, IV, aggressively and preemptively seizing the high ground of the null hypothesis, unconscious and conscious, deliberate and accidental specification searches, plus file-drawer problems. My first econometrics teacher Zvi Griliches said that the CLT was the second most important thing he had to teach. The most important?:

If someone tortures the data enough, they will confess…

Is a theoretical result an interesting constraint on reality or a demonstration of the ingenuity of the researcher? Is an econometric-empirical result a robust finding about the world out there or a demonstration that research assistants desperate to please jet-setting tenured bosses can do amazing things?

This is not to say that things were not worse in the old days. The pasts of many sub-literatures in economics are better understood as careerists on the make taking the line of theoretical least resistance rather than trying to understand the world. The lack of computer power that made it next to impossible to robustly summarize the data meant that arresting anecdotes could not be checked for representativeness and typicality.

But good theory is in the end nothing but distilled and crystallized economic history. It could, after all, be nothing else. And piling more and more computer power on to the analysis of nonhistorical data could only be an intellectual optimum if the world was created ex nihilo the instant of the first date of your panel.

So this is why we are here. Welcome to economic history.


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What Will Cause the Next US Recession?: Live at Project Syndicate

The Digital Research Library of Illinois History Journal™ The Panic of 1893 in Illinois and Chicago

Live at Project Syndicate: U.S. Recession No Longer Improbable: The next recession most likely will not be due to a sudden shift by the Fed from a growth-nurturing to an inflation-fighting policy. Given that visible inflationary pressures probably will not build up by much over the next half-decade, it is more likely that something else will trigger the next downturn…. The culprit will probably be a sudden, sharp “flight to safety” following the revelation of a fundamental weakness in financial markets. That… is the pattern that has been generating downturns since at least 1825, when England’s canal-stock boom collapsed.

Needless to say, the particular nature and form of the next financial shock will be unanticipated. Investors, speculators, and financial institutions are generally hedged against the foreseeable shocks…. The death blow to the global economy in 2008-2009 came not from global imbalances or from the collapse of the mid-2000s housing bubble, but from the concentration of ownership of mortgage-backed securities… Read MOAR at Project Syndicat


#projectsyndicate #monetarypolicy #recessionwarning #macro #highlighted 

Betting That Nobody Will Check the References as an Intellectual Style: Monday Smackdown

Juggalos Google Search

Monday Smackdown: Apropos of David Brooks’s ill-sourced imaginings that “cultural Marxism… is now the lingua franca in the elite academy…” and his use of Alexander Zubatov and Russell Blackford to back him up…

I am not sure whether Brooks is simply confident that people will not check Zubatov’s references or did not check them himself—he does have to write a full 1200 words a week in his job. But I have long thought that betting nobody will check the references is an intellectual style much more common on the right than on the center or the left. For example:

On Niall Ferguson: Why Did Keynes Write “In the Long Run We Are All Dead”?: In [Keynes’s] extended discussion of how to use the quantity theory of money, the sentence ‘In the long run we are all dead’ performs an important rhetorical role. It wakes up the reader. It gets him or her to reset an attention that may well be flagging.

But it has nothing to do with attitudes toward the future, or with rates of time discount, or with a heedless pursuit of present pleasure.

So why do people think it does? Note that we are speaking not just of Ferguson here, but of Mankiw and Hayek and Schumpeter and Himmelfarb and Peter Drucker and McCraw and even Heilbroner—along with many others.

I blame it on Hayek and Schumpeter. They appear to be the wellsprings.

Hayek is simply a bad actor—knowingly dishonest. In what Nicholas Wapshott delicately calls “misappropriation”, Hayek does not just quote “In the long run we are all dead” out of context but gives it a false context he makes up:

Are we not even told that, since ‘in the long run we are all dead’, policy should be guided entirely by short run considerations? I fear that these believers in the principle of apres nous le déluge may get what they have bargained for sooner than they wish.

And Hayek’s bad-faith writing yielded a lot of fruit: cf. Himmelfarb:

Something of the “soul” of Bloomsbury penetrated even into Keynes’s economic theories. There is a discernible affinity between the Bloomsbury ethos, which put a premium on immediate and present satisfactions, and Keynesian economics, which is based entirely on the short run and precludes any long-term judgments. (Keynes’s famous remark. “In the long run we are all dead,” also has an obvious connection with his homosexuality-what Schumpeter delicately referred to as his “childless vision.”) The same ethos is reflected in the Keynesian doctrine that consumption rather than saving is the source of economic growth-indeed, that thrift is economically and socially harmful. In The Economic Consequences of the Peace, written long before The General Theory, Keynes ridiculed the “virtue” of saving. The capitalists, he said, deluded the working classes into thinking that their interests were best served by saving rather than consuming. This delusion was part of the age-old Puritan fallacy:

The duty of “saving” became nine-tenths of virtue and the growth of the cake the object of true religion. There grew round the non-consumption of the cake all those instincts of puritanism which in other ages has withdrawn itself from the world and has neglected the arts of production as well as those of enjoyment. And so the cake increased; but to what end was not clearly contemplated. Individuals would be exhorted not so much to abstain as to defer, and to cultivate the pleasures of security and anticipation. Saving was for old age or for your children; but this was only in theory – the virtue of the cake was that it was never to be consumed, neither by you nor by your children after you.

Never mind that Himmelfarb cuts off her quote from Keynes just before Keynes writes that he approves of this Puritan fallacy—that he is not, as Himmelfarb claims, ridiculing it, but rather praising it:

In the unconscious recesses of its being Society knew what it was about. The cake was really very small in proportion to the appetites of consumption, and no one, if it were shared all round, would be much the better off by the cutting of it. Society was working not for the small pleasures of today but for the future security and improvement of the race,—in fact for “progress.” If only the cake were not cut but was allowed to grow in the geometrical proportion predicted by Malthus of population, but not less true of compound interest, perhaps a day might come when there would at last be enough to go round, and when posterity could enter into the enjoyment of our labors…

——

#noted #economicsgonewrong #moralresponsibility #publicsphere #smackdown #highlighted 

Fairly Recently: Must- and Should-Reads, and Writings… (January 6, 2019)

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  1. Dinner in California—Sparing a Thought for the Victims of Boris Johnson and Company…: The consensus of the eaters is that the parsnips are only edible if the ratio of parsnip-to-butter is less than 2-to-1…

  2. Comment of the Day: I had always thought that the “male variability” hypothesis was really a “male skewed lower tail” hypothesis, and has nothing to say about the upper tail of males. It’s the small Y-chromosome—the missing genes that make males overwhelmingly susceptible to color-blindness, hemophilia, the autism spectrum, may play a role in reduced life expectancy, and other things. But that male variability is greater because males are genetically weak says little or nothing about a possible genetic upper tail: Paul Reber: Patriarchy & Gender

  3. Comment of the Day: Pinkybum:: What Is Going on This Morning Over at “National Review”? Is It Worth Reading? No.: “He even has to attribute and invent reprehensible behavior towards them to make them unsympathetic (pushing fat kids in the way of the bullets) this is why the joke is a stretch…

  4. Debating Societies, Talking Points, and Choosing Our Governors: With Bill Clinton, or Bill Bradley, or Al Gore, or Barack Obama, or Lloyd Bentsen, or Hillary Rodham Clinton—you listen to them, or you talk to them, and you know there is a mind back there deeply knowledgeable about and wrestling with substantive issues of societal welfare and technocratic policy…

  5. We May Well Not Be at Full Employment Yet…: Taking 2007 as a benchmark for the prime-age labor-force participation rate suggests that there is an extra 1.3% of workers ought there who could be relatively easily pulled back into the labor force—if the labor share of income were high enough…

  6. For the Weekend: “Rocky” Training Montage

  7. Rand Paul: Protecting Property Holders’ Rights to Discriminate on the Basis of Race: “Is the Hard Part About Believing in Freedom…”: Dismantling the New Deal and rolling back the social insurance state were not ideas that had much potential political-economy juice…. But if… one of the key liberties that libertarians were fighting to defend was the liberty to discriminate against and oppress the Negroes—than all of a sudden you could have a political movement that might get somewhere…


  1. What more would it take to get Pence to Invoke #Amendment25?: Daniel Dale: These Are Headlines About One Trump Cabinet Meeting #orangehairedbaboons

  2. Nick Rowe: Worthwhile Canadian Initiative: “Are We at Full Employment Yet?”: “Set aside the other benefits of switching from an inflation target to an NGDP level path target. If switching targets meant we wouldn’t need to ask “Are we at full employment yet?” in order to figure out whether monetary policy is too tight or too loose, that would be a major advantage. Because it’s a question we can’t answer until it’s too late. Instead we would simply hope that we are not at full employment yet: we would hope that target NGDP growth would in future be composed more of real GDP growth and less of inflation. And we would be forced to concentrate instead on microeconomic policies that might improve that composition… #monetarypolicy

  3. Yes, the “LEAVE!” faction of the British Conservative and Unionist Party is bats— insane. Any questions?: Arj Singh: ‘Increasing Number’ Of Tory MPs Are Considering No-Deal Brexit As A ‘Viable’ Plan B: “A Leave-backing former cabinet minister said… ‘People aren’t going round and saying “No Deal” is going to be a cakewalk. But… people are… asking “how much will this actually impact people’s lives?” We won’t be able to get certain foods like bananas or tomatoes but it’s not like we won’t be able to eat. And we’ll be leaving at a time when British produce is beginning to come into season, so it’s the best possible time to leave with no deal’… #globalization #orangehairedbaboons

  4. M.G. Siegler: Apple’s Precarious and Pivotal 2019: The battery replacement issue suggests that many people are no longer upgrading iPhones because they’re now ‘good enough’ and everyone is more than happy to just pay a bit more for a better battery…. The part about ‘US dollar strength-related price increases’—yes, this is Apple… acknowledging there may be a price ceiling for the iPhone…. The ‘$1,500 iPhone’ (the most expensive variety of the iPhone XS Max) [was] to test such upper boundaries, like velociraptors testing electric fences. Consider it tested! And they’ll remember!… #economicgrowth

  5. AOC Dances To Every Song

  6. Barry Eichengreen: [The Euro at 20: An Enduring Success but a Fundamental Failure(https://theconversation.com/the-euro-at-20-an-enduring-success-but-a-fundamental-failure-108149): “The belief of… Francois Mitterrand and… Helmut Kohl that a single European currency would apply irresistible pressure for political integration. It would lead eventually to their ultimate goal…. To function smoothly, monetary union requires banking union… an integrated fiscal system…. Banking union and fiscal union will only be regarded as legitimate if those responsible for their operation can be held accountable for their decisions by citizens…. Monetary integration creates a logic and therefore irresistible pressure for political integration. Or so the euro’s architects believed… #globalization #politicaleconomy

  7. Ray [REDACTED]: Gather Round, Kids, While I Tell You About What I Call.. “The Greatest S—show in Crypto”: “Many of you will be surprised to learn that there is a thriving industry of paid advice on buying and selling cryptos assets, including newsletters, telegram groups, and subscriber-only emails. Until very recently, one of the most popular paid services was something called Standpoint research, seen here on CNBC with Mr. Wonderful from SharkTank. In February of 2018, Standpoint Research recommended that its subscribers buy an unknown asset known as $DIG, because the owner of Standpoint thought there was insider trading going on. You read that right. He suspected fraud, so he issued a ‘buy’ recommendation. The coin then subsequently grew from a fraction of a penny to 16 cents per token, as buyers rushed in to acquire this asset. For the craziest reasons you can imagine. The coin itself claims to be backed by $15 billion (not a typo) in Gold Bullion. Their website, if you are curious, is http://arbitrade.io … #finance #behavioral

  8. This is the word on how the government ought to analyze proposed tax regulations: Greg Leiserson and Adam Looney: A Framework for Economic Analysis of Tax Regulations: “Treasury and the IRS should conduct a formal economic analysis of regulations in two cases. First, for regulations that implement recent tax legislation, the agencies should conduct an analysis if they have substantial discretion in designing the regulation and if different ways of doing so would vary substantially in their economic effects. Second, for regulations unrelated to recent legislation, the agencies should conduct an analysis if the regulation would have large economic effects relative to current practice… #fiscalpolicy

  9. Cora Wandel: Daniel Webster In The Webster-Hayne Debate

  10. Wikipedia: aDaniel Webster Memorial: “1603 Massachusetts Avenue Northwest, beside Scott Circle at the intersection of Massachusetts Avenue and Rhode Island Avenue…

  11. Laboratories of democracy! It seems pretty clear that Brownback was in on the grift, but expected—hoped?—that his tax cuts would pull enough activity and people from Kansas City, MO to Kansas City, KS that that plus a normal rapid recovery would allow him to claim a “Kansas boom”. But his henchmen still control the Kansas Republican Party: Heather Boushey: Failed Tax-Cut Experiment in Kansas Should Guide National Leaders: “Sam Brownback’s failed “red state experiment” has truly come to an end…. In 2012 and 2013, Republican Gov. Sam Brownback signed into law the largest tax cuts in Kansas history. The top state income tax rate fell by nearly one-third and passthrough taxes that affected mainly relatively wealthy individuals were eliminated. With the decline in revenues came significant spending cuts… #fiscalpolicy #orangehairedbaboons

  12. Karam Sethi: Gymkhana’s Dorset Brown Crab with Butter, Garlic and Black Pepper: “A seafood special from Gymkhana, the Anglo-Indian restaurant recently voted the best in Britain, this recipe was a Trishna original…. 6 tbsp melted butter, 1 tsp vegetable oil, 2 tbsp garlic paste (crush with a little water to a paste), 1 tbsp brown crab meat, 200g white crab meat, 1 tbsp coarse black pepper, 3 tbsp finely sliced wild garlic, plus extra to serve…

  13. Lisa Cook: On invention gaps, hate-related violence, discrimination, and more: “One of the first things I do is to buy a Bic pen…. Each one was 10 dollars! Ten dollars! This completely stunned me. I knew how poor most people were. I knew students had to have these pens to write in their blue books. It just started this whole train of thought…

  14. Where did David Brooks learn to use the term “cultural Marxism”? From Alexander Zubatov and his attempt to rehabilitate it from its anti-Semitic not just connotation but denotation. How does Zubatov do this? By taking Russell Blackford out of context: Zubatov claims that Blackford’s bottom line is “in other words, [cultural Marxism] has perfectly respectable uses outside the dark, dank silos of the far right”. Blackford’s actual bottom line is that the modern “conception of cultural Marxism is too blunt an intellectual instrument to be useful for analysing current trends. At its worst, it mixes wild conspiracy theorizing with self-righteous moralism…. Right-wing culture warriors will go on employing the expression ‘cultural Marxism’… attaching it to dubious, sometimes paranoid, theories of cultural history…. Outside of historical scholarship, and discussions of the history and current state of Western Marxism, we need to be careful…. Those of us who do not accept the narrative of a grand, semi-conspiratorial movement aimed at producing moral degeneracy should probably avoid using the term ‘cultural Marxism’…” Why does Zubatov misuse Blackford? In the hope that he will pick up readers like Brooks, who will take his representations of what Blackford says to be accurate. Why does Brooks take Zubatov’s representations of what Blackford says as accurate? Because Brooks is too lazy to do his homework: Ben Alpers: A Far-Right Anti-Semitic Conspiracy Theory Becomes a Mainstream Irritable Gesture: “At the heart of this largely rote piece of Brooksian pablum is a claim that deserves a closer look.  ‘The younger militants’, writes Brooks, ‘tend to have been influenced by the cultural Marxism that is now the lingua franca in the elite academy’. This is interesting both for what Brooks appears to be trying to say and, more immediately, how he has decided to say it…. Norwegian far-right terrorist Anders Behring Breivik… murdered sixty-nine people… William Lind… associated with both the Free Congress Foundation and Lyndon LaRouche… Lind’s conception of Cultural Marxism was explicitly anti-Semitic…. Over the course of these years, the idea of Cultural Marxism spread across the American far right… [with] a big boost from Andrew Breitbart…. Why would a columnist like David Brooks, who is himself Jewish in background (if, perhaps, no longer in faith) and who has tried to build his brand identity by peddling in respectability and civility, adopt the term?… #publicsphere #orangehairedbaboons

  15. The Death of Stalin (2017): Quotes: Vasily Stalin: “I know the drill: Smile, shake hands and try not to call them c—s…

  16. Brian Barrett: The Silver Lining in Apple’s Very Bad iPhone News: “As recently as 2015, smartphone users on average upgraded their phone roughly every 24 months…. As of the fourth quarter of last year, that had jumped to at least 35 months…. The shift from buying phones on a two-year contract—heavily subsidized by the carriers—to installment plans in which the customer pays full freight… a sharp drop-off in carrier incentives. They turn out not to be worth it…. ‘It actually costs them to get you into a new phone, to do those promotions, to run the transaction and put it on their books and finance it’. Bottom line: If your service is reliable and your iPhone still works fine, why go through the hassle?…

  17. Natasha Geiling: The Science Behind Honey’s Eternal Shelf Life: “A slew of factors—its acidity, its lack of water and the presence of hydrogen peroxide—work in perfect harmony, allowing the sticky treat to last forever…

  18. As I have said: It is a long time since NEC Chair Larry Kudlow was an economist—now he is just a guy who plays an economist on TV: Fred Imbert: White House Advisor Kudlow Says Apple Technology May Have Been ‘Picked Off’ by China: “‘Apple technology may have been picked off by China and now China is becoming very competitive with Apple’,” says Kudlow. ‘There are some indications from China that they’re looking at that, but we don’t know that yet. There’s no enforcement; there’s nothing concrete’, Kudlow adds… John Gruber: “What he’s saying here is that the Chinese stole Apple technology, copied it, and are now flooding the Chinese market with phones based on that stolen tech. I’m 99.8 percent certain that hasn’t happened—if there were Chinese phones built with stolen Apple technology we’d know it because we’d see it. I was going to say ‘You can’t just make shit like this up’, but as with most of the Trump Kakistocracy, things that you think are can’t’s are really just shouldn’t’s… #orangehairedbaboons #publicsphere

  19. Kieran Healy: Conversational Disciplines: “Being able to broadly agree on how to evaluate contributions is what allows disciplines to tolerate (and enjoy) substantial, persistent disagreement about this or that ‘big question’ or ‘core problem’. Thus, you are unlikely to convince your fellow Psychologists of something important (something that’s important to them, I mean) without some fake data good experimental evidence. Similarly, Economists may not pay attention to you if you do not proceed according to some (to them) widely-shared rules of ritualized mathematics model-building supplemented by some nonsense about incentives empirical evidence. Professional Historians will be less likely to take you seriously if your claims are not built on an elegant prose style a demonstrated mastery of a relevant archive. Sociologists may remain unconvinced of your claims if you do not blame neoliberalism blame neoliberalism

  20. The most remarkable thing about this piece from 2011 is that Robert Barro does not seem to feel under any pressure at all to provide an account of why it was that real GDP per capita was 52,049 dollars in the fourth quarter of 2007 and yet only 49,318 dollars in the second quarter of 2009—and did not surpass its 2007Q4 level again until 2013Q3. Other adherents than Barro to what Barro calls “normal economics” have put forward three theories: that there was a huge sudden change in American workers’ utility functions that made them much less eager to work, that there was a huge sudden forgetting of a great deal of knowledge about how to manipulate nature and organize production, and that there was a great and well-founded fear that Obama was about to impose taxes to turn America into a Venezuela or that Bernanke was about to follow a monetary policy that would turn the U.S. into a Zimbabwe. They were laughed at. So Barro prefers to have no explanationa at all for why production per capita was lower than it had been in 2007Q4, and yet maintain unshaken confidence that he has a deep and correct understanding of what determines the level of production. You can’t do that—hold that you have the correct theory, and yet not explain how it applies to the world in which you live: Robert Barro (2011): Keynesian Economics vs. Regular Economics – WSJ: “The overall prediction from regular economics is that an expansion of transfers, such as food stamps, decreases employment and, hence, gross domestic product (GDP). In regular economics, the central ideas involve incentives as the drivers of economic activity. Additional transfers to people with earnings below designated levels motivate less work effort by reducing the reward from working. In addition, the financing of a transfer program requires more taxes—today or in the future in the case of deficit financing. These added levies likely further reduce work effort—in this instance by taxpayers expected to finance the transfer—and also lower investment because the return after taxes is diminished… #economicsgonewrong #publicsphere #moralresponsibility

  21. Cosma Shalizi (2007): …In Different Voices: “Q: How would you react to the idea that a psychological trait, one intimately linked to the higher mental functions, is highly heritable? A: With suspicion and unease, naturally. Q: It’s strongly correlated with educational achievement, class and race. A: Worse and worse. Q: Basically nothing that happens after early adolescence makes an impact on it; before that it’s also correlated with diet. A: Do you work at the Heritage Foundation? Such things cannot be. Q: What if I told you the trait was accent? A: I’m sorry? Q (in a transparently fake California accent): When you, like, say words differently than other people? who speak, like, the same language? because that’s how you, you know, learned to say them from people around you?… #reasoning

  22. Josh Bivens: The Bad Economics of PAYGO Swamp Any Strategic Gain from Adopting It: “A PAYGO rule means that any tax cut or spending increase passed into law needs to be offset in the same spending cycle with tax increases or spending cuts elsewhere in the budget…. Many Washington insiders assert forcefully that committing to PAYGO rules in the House for the next Congress is good politics…. The strength of evidence supporting this political claim is debatable. What’s less debatable is that PAYGO really has hindered progressive policymaking in the not-so-recent past. For example, it was commitments to adhere to PAYGO that led to the Affordable Care Act (ACA) having underpowered subsidies for purchasing insurance and, even more importantly, having a long lag in implementation…

  23. Matthew Yglesias: “It really feels like Pelosi should cut out the middle-man and open direct negotiations with the cast of Fox & Friends to find out what kind of face-saving ‘border security’ fudge they’d go for…

  24. Sara Benincasa: Chrissy Teigen’s Headbands Helped Me Get Sober: “And other notes from an unexpected year…

  25. David Roberts: “70% income taxes on high-earners are both familiar (we had them not that long ago) and supported by the bulk of expert research. It is the DC establishment that’s dumb on this, not AOC…

  26. Ezra Klein: “Anyway, I wouldn’t predict too much off one op-ed. But I wouldn’t dismiss it either. Romney knew he’d be opening himself to a lot of backlash by writing this. That suggests commitment from a prominent senator who, unlike Flake or Corker, hasn’t wrecked his leverage by retiring…

We May Well Not Be at Full Employment Yet…

FRED Graph FRED St Louis Fed

In the context of overall labor-market utilization trends, the rise in the household-survey estimate of the unemployment rate in December relative to November is worth a note:

  • First, the rise in the unemployment rate is due predominately to yet another increase in labor force participation. It’s not that people found it harder to find and keep jobs—it’s that people who had thought it would be hard concluding that it will be easier, and so starting to look.
  • Second, once again the flow of workers from out of the labor force directly into employment without even a month in which they say they are searching for a job continues to be an important feature. This, as has been the case since this recovery started in late 2009, means that the estimated labor force is not the real labor force, and since that is what goes in the denominator of the unemployment rate the estimated unemployment rate is not the measure of the labor market tightness that you should be using.

  • Third, taking 2007 as a benchmark for the prime-age labor-force participation rate suggests that there is an extra 1.3% of workers ought there who could be relatively easily pulled back into the labor force—if the labor share of income were high enough.

  • Fourth, do not overestimate the importance of this month’s data point. Our seasonal adjustment factors are not precise and are not well escalated. The coming of Christmas is a big deal who’s labor market, and subtracting its effects from the monthly change in order to try to get a read on business cycle trends around the cusp of the year is always a hazardous enterprise.

  • Second,

Civilian Labor Force Participation Rate 25 to 54 years FRED St Louis Fed

FRED Graph FRED St Louis Fed


Employment Rate Aged 25 54 All Persons for the United States FRED St Louis Fed

https://beta.bls.gov/dataViewer/view/timeseries/LNS12300060

Employment Rate Aged 25 54 All Persons for the United States FRED St Louis Fed


Employment Rate Aged 25 54 Males for the United States FRED St Louis Fed

Employment Rate Aged 25 54 Females for the United States FRED St Louis Fed


#labormarket #equitablegowth #highlighted #monetarypolicy 

What Is Going on This Morning Over at “National Review”? Is It Worth Reading? No.

Preview of What Is Going on This Morning Over at National Review Is It Worth Reading No

What is going on this morning over at National Review? Is it worth reading? I read 10 articles, and graded each ops 0-to-10 scale. Total score (out of 100); -45. Beam me up, Scotty. There is no intelligent life there at all:

  1. Kyle Smith: They’re Lying about Louis C.K.: “‘Transgressive’ is good, except when the Left gets offended…. A bit C.K. had performed at a Long Island night club on December 16, with no intention that a national audience hear it, and that leaked online without his permission…. ‘You’re not interesting because you went to a high school where kids got shot’, C.K. said. ‘Why does that mean I have to listen to you? Why does that make you interesting? You didn’t get shot. You pushed some fat kid in the way and now I’ve got to listen to you talking?’ C.K. also made fun of hypersensitive, scoldy, uptight young people and their pronoun posturing…” Mocking the Parkland kids is taboo. And taboo-busting was a great compliment. Still is. C.K. was being transgressive. And transgressive was a great compliment. Still is. One almost begins to entertain a rumor of a hint of a suspicion that the culture cops don’t approve of transgression per se, but only of the transgression of boundaries cherished by people they don’t like…. The premise of his Parkland bit is that surviving a school shooting doesn’t make you an expert on any public-policy question. This is not only true, it’s obvious. C.K. is doing the same kinds of bits he has always done.” Score (on a 0-to-10 scale): -10. Why did I think reading National Review was a good thing to do, again? Louis C.K.’s natural fan base is supposed to be people like me—he’s supposed to figure out what I would find funny. And at the moment Parkland jokes are funny only if they are metaled the way that Johnny Carson did to Lincoln-at-Ford’s-Theater jokes: “See? Too soon!”

  2. Ben Shapiro: Mitt Romney’s Anti-Trump Op-Ed Is Counterproductive: “By forcing a ‘Love Trump or Leave Trump’ choice on Republicans, he’s actually doing the work of both the most ardent Trumpists and the most viciously antagonistic members of the Democratic party and the media.” Score (on a 0-to-10 scale): -10. Why did I think reading National Review was a good thing to do, again? Romney can’t be both doing the work of Trump and doing the work of Trump’s most vicious antagonists. There’s this principle—it dates back to the Stagirite, and his Peri Hermeneias.

  3. Kevin Williamson: Free Speech: Why Global Technology Companies Cave to China & Saudi Arabia: “I am generally in favor of an open, liberal cosmopolitanism. But the virtue of that cosmopolitanism is that it enables the free movement of people and capital—and, most important, ideas. A repressive cosmopolitanism that defers to the judgment of Riyadh or Beijing is of no intellectual value at all. In that instance, call me a nationalist: I am happy for Netflix to export the work of Hasan Minhaj, but I would be more happy to see it flex some of its considerable corporate muscle to export the First Amendment, too. Of course Netflix is only doing what’s best for its business. So was IG Farben, and its directors were tried—and 13 of them convicted—at Nuremberg.” Score (on a 0-to-10 scale): 0. There are now a bunch of right-wing people out there who either think that I.G. Farben’s crime was suppressing radio programs critical of Adolf Hitler or that Netflix supplies nerve gas to extermination camps. Nice work, Kevin. But we grade on a curve: and at least today you aren’t calling for the hanging of one in five American women.

  4. Michael Strain: Expected Wage Growth 2019: “Rich argues that President Trump should talk more about wage growth and less about the stock market. The good news for workers is that this advice will likely be as correct in 2019 as it has been in 2018. Wages are growing. The most recent data on wages (more specifically, average hourly earnings) finds that they are up over 3 percent relative to one year prior. And the pace of wage growth accelerated throughout 2018. The early months of 2018 saw wages growing at about 2.6 percent, noticeably slower than the 3+ percent growth workers have recently enjoyed…” Score (on a 0-to-10 scale): 0. WTF, Michael? “Wages”, unqualified, will be understood by well over half your readers to mean “inflation-adjusted real wages”. You shouldn’t be reporting nominal wages unqualified. You are better than this—or I thought you were.

  5. Michael Strain: Working Class in America: “There is a growing consensus that the working class is in crisis following years of difficult economic change and due in part to their being ignored by Washington. This view has been considerably strengthened in the conservative movement and within the Republican party by the election of President Trump…. This view of the working class has created some sympathy for class-based politics, and for a narrative of victimhood about this group…. I am struggling to find empirical support for this narrative when the working class is compared to lower-income Americans…” Score (on a 0-to-10 scale): 0. What is the “working class”? I find that it is “adults between the ages of 25 and 64, who have graduated from high school but who have not completed a four-year college degree, and whose annual household income is greater than that of the bottom 20 percent of the population, but less than the median”. I know that you are trying to do the LORD’s work her, Michael—but sampling on the dependent variable never works.

  6. Conrad Black: Trump’s Mueller & Political Victory Is Already Assured: “The attacks on him are piffle. As the year ends, the Trump legal drama winds down towards its tawdry end. The immense fraudulent fantasy of a Benedict Arnold on steroids collaborating with a foreign enemy, a Manchurian Candidate ‘groomed for the presidency by his Russian controllers’, has come down to a squalid dispute between the president, his crooked former lawyer, and the publisher of the National Enquirer over the nature of incentivizing the pre-electoral silence of a porn star and a former Playboy bunny. The slab-faced, trim and grim Robert Mueller, closing in like a heat-seeking missile on the start of the third year of the most ineffective and redundant investigation in history, could be a brilliant straight man, desperately serious and purposeful as he silently marches across our television screens every night in reruns of the same old news film in the elaborate pretense that he is doing something useful and important…” Score (on a 0-to-10 scale): -10. I don’t think even Conrad Black believes this. And why is NR publishing it? Does he own the magazine?

  7. Victor Davis Hanson: Wealth, Poverty, and Flight: The State of California: “The Crime Whose Name Must Not Be Spoken: Both legal and illegal immigration have also radically changed the demography of the state…. 40 percent of the nation’s 11–20 million immigrants live in California…. Two or three generations of mass influxes of impoverished residents who on average arrive without a high-school diploma, English proficiency, capital, or often legality. California now hosts one of three Americans who are on some sort of federal, state, or local welfare supplement. About a fifth of the state lives below the poverty level. Half of all births in California were paid for by the state-run Medi-Cal program, and 30 percent of Medi-Cal births were to mothers of undocumented immigration status…. The presence of millions without English and without diplomas helps explain much of the alarming poverty in California…. So why is California a blue state?… Its conservative base fled, a future blue-state constituency arrived, and both the very wealthy and the very poor, albeit for quite different reasons, preferred a high-tax, big-government redistributionist state government…. One population has wealth and privilege enough to create a garden of Eden, with the proviso that it need not experience firsthand any downsides of its envisioned utopia. The second population… immigrants… poor and dependent on generous state entitlements and the non-enforcement of myriads of rules, and regulations…. The third zombie population: those who want to, or in fact are preparing to, follow the millions who left… lack the connections and clout… [to] navigate around the new regulatory morass… pay[ing] more in taxes than they receive in state services… lack[ing] the romance of the distant poor and the panache of the coastal affluent.’ Score (on a 0-to-10 scale): -10. MOAR CALIFORNIA DYSTOPIA PORN!

  8. Jonah Goldberg: Conservative Facts: Many Toss Facts & Embrace Meanness: “General Mattis’s resignation, the border-funding fooferall… Trump’s capitulation to both Ann Coulter and the president of Turkey, and whatever happened in the last few minutes since I checked Twitter has people across Washington lamenting that they picked the wrong week to stop sniffing glue. All of this came after a federal judge floated the idea that Michael Flynn was a traitor… James Comey admitted he broke FBI protocol to get a government official, the stock market continued to slide into the worst December since the Great Depression, and the Trump Foundation announced it would close down, leaving Palm Beach residents to wonder who will pay for Donald Trump’s portraits of Donald Trump now. Also this week, reports that The Weekly Standard would be shut down and harvested for subscribers were confirmed…. I want to address what its shuttering brought to light: the bizarre need of some of Trump’s biggest fans to be dumb or dishonest in his defense….
     
    There was always a yin-yang thing to conservatism. Its hard-headedness and philosophical realism about human nature and the limits it imposes on utopian schemes appealed to some and repulsed others…. The problem conservatism faces these days is that many of the loudest voices have decided to embrace the meanness while throwing away the facts. This has been a trend for a long time now. But Donald Trump has accelerated the problem to critical mass, yielding an explosion of stupid and a radioactive cloud of meanness. It’s as if people have decided they should live down to Hillary Clinton’s “deplorable” epithet…. The larger point, however, is.. Trump’s sense of persecution is as contagious as his debating style. Facts are being subordinated to feelings, and the dominant feelings among many Trumpists are simply ugly. And even those who have not turned ugly see no problem working hand in hand with those who have. And how could they, given who they herald as their Moses.” Score (on a 0-to-10 scale): +5. There is no action plan—not even a hint at a guide for the perplexed on the conservative side as to what they should do. But at least he is worrying about something real.

  9. John O’Sullivan: Donald Trump & Theresa May: Leaders Bring Knives to Brexit and Shutdown Gunfights: “When May framed the choice as one between her deal and no deal, she was relying on the conventional assumption, grounded less in facts than in establishment groupthink, that a no-deal Brexit was unthinkable. She did her best to drive home that assumption with Project Fear. But the more that no deal looks better than her bad deal, the more likely she is to lose—and the more likely a sharper and more independent Brexit (maybe a managed no deal leading to a Canada Plus deal) will emerge from the ruins of her policy. May’s mistake was a simple one: She assumed her opponent had no real weapon when he turned out to be well-armed. She has probably lost as a result…” Score (on a 0-to-10 scale): 0. I do not believe John O’Sullivan knows what a Canada-Plus Deal is—other than that it is being recommended by this week’s Boris Johnson.

  10. Armond White: ‘Mary Poppins Returns,’ with Socialist Subtext: “Who is this white British twit with a cinched overcoat and bumbershoot who goes about ordering around her betters and consorting with working-class inferiors?… Unmistakable is the nasty political undercurrent that prevents this reboot from being escapist fun. Take the new politically instructive songs in Mary Poppins Returns… that lack the memorable delight of Richard and Robert Sherman’s songs for the original Mary Poppins in 1964…. Shaiman assimilates the #Resistance mood that has overtaken Broadway and Hollywood. Though pretending to be innocuous family entertainment, the knock-off tunes have a faintly repressive, pedantic note, especially in Shaiman’s balloon-song finale ‘Nowhere to Go but Up’. To careful listeners, it sounds like showbiz Stalinism: ‘The past is the past / It lives on as history / Let the past take a bow / Forever is now’. Why should a family-movie ditty recall the essence of Soviet erasure of history?” Score (on a 0-to-10 scale): -10. White never saw Walt Disney’s original Mary Poppins with its depiction of the financial sector, did he?


#journamalism #moralresponsibility #smackdown