"Hexapodia" Is the Key Insight: by Noah Smith & Brad DeLong

Back after a year on hiatus! Noah Smith & Brad DeLong Record the Podcast They, at Least, Would Like to Listen to!; Aspirationally Bi-Weekly (Meaning Every Other Week); Aspirationally an hour...Sokrates: The people find some protector, whom they nurse into greatness… but then changes, as indicated in the old fable of the Temple of Zeus of the Wolf, of how he who tastes human flesh mixed up with the flesh of other sacrificial victims will turn into a wolf. Even so, the protector, once metaphorically tasting human blood, slaying some and exiling others, within or without the law, hinting at the cancellation of debts and the fair redistribution of lands, must then either perish or become a werewolf—that is, a tyrant…Key Insights:* We are back! After a year-long hiatus.* Hexapodia is a metaphor: a small, strange insight (like alien shrubs riding on six-wheeled carts as involuntary agents of the Great Evil) can provide key insight into useful and valuable Truth.* The Democratic Party is run by 27-year-old staffers, not geriatric figurehead politicians–this shapes messaging and internal dynamics.* The American progressive movement did not possess enough assibayah to keep from fracturing over Gaza War, especially among younger Democratic staffers influenced by social media discourse.* The left's adoption of “indigeneity” rhetoric undermined its ability to be a coalition in the face of tensions generated by the Hamas-Israel terrorism campaigns.* Trump's election with more popular votes than Harris destroyed Democratic belief that they had a right to oppose root-and-branch.* The belief that Democrats are the “natural majority” of the U.S. electorate is now false: nonvoters lean Trump, not so much Republican, and definitely not Democratic.* Trump's populism is not economic redistribution, but a claim to provide a redistribution of status and respect to those who feel culturally disrespected.* The Supreme Court's response to Trumpian overreach is likely to be very cautious—Barrett and Roberts are desperately eager to avoid any confrontation with Trump they might wind up losing, and Alito, Kavanaugh, Gorsuch, and Thomas will go the extra mile—they are Republicans who are judges, not judges who are Republicans, except in some extremis that may not even exist.* Trump's administration pursues selective repression through the state, rather than stochastic terrorism.* The economic consequence of the second Trump presidency look akin to another Brexit costing the U.S. ~10% of its prosperity, or more.* Social media, especially Twitter a status warfare machine–amplifying trolls and extremists, suppressing nuance.* People addicted to toxic media diets but lack the tools or education to curate better information environments.* SubStack and newsletters may become part of a healthier information ecosystem, a partial antidote to the toxic amplification of the Shouting Class on social media.* Human history is marked by information revolutions (e.g., printing press), each producing destructive upheaval before stabilization: destruction, that may or may not be creative.* As in the 1930s, we are entering a period where institutions–not mobs–become the threat, even as social unrest diminishes.* The dangers are real,and recognizing and adapting to new communication realities is key to preserving democracy.* Plato's Republic warned of democracy decaying into tyranny, especially when mob-like populism finds a strongman champion who then, having (metaphorically) fed on human flesh, becomes a (metaphorical) werewolf.* Enlightenment values relied more than we knew on print-based gatekeeping and slow communication; digital communication bypasses these safeguards.* The cycle of crisis and recovery is consistent through history: societies fall into holes they later dig out of, usually at great cost—or they don't.* &, as always, HEXAPODIA!References:* Brown, Chad P. 2025. “Trump's trade war timeline 2.0: An up-to-date guide”. PIIE. .* Center for Humane Technology. 2020. “The Social Dilemma”. .* Hamilton, Alexander, James Madison, & John Jay. 1788. The Federalist Papers. .* Nowinski, Wally. 2024. “Democrats benefit from low turnout now”. Noahpinion. July 20. .* Platon of the Athenai. -375 [1871]. Politeia. .* Rorty, Richard. 1998. Achieving Our Country. Cambridge: Harvard University Press. * Rothpletz, Peter. 2024. “Economics 101 tells us there's no going back from Trumpism”. The Hill. September 24. .* Smith, Noah. 2021. “Wokeness as Respect Redistribution”. Noahpinion..* Smith, Noah. 2016. “How to actually redistribute respect”. Noahpinion. March 23. .* Smith, Noah. 2013. “Redistribute wealth? No, redistribute respect”. Noahpinion. December 27. .* SubStack. 2025. “Building a New Economic Engine for Culture”. .&* Vinge, Vernor. 1999. A Deepness in the Sky. New York: Tor Books. .If reading this gets you Value Above Replacement, then become a free subscriber to this newsletter. And forward it! And if your VAR from this newsletter is in the three digits or more each year, please become a paid subscriber! I am trying to make you readers—and myself—smarter. Please tell me if I succeed, or how I fail… Get full access to Brad DeLong's Grasping Reality at braddelong.substack.com/subscribe

Noah Smith & Brad DeLong Record the Podcast We, at Least, Would Like to Listen to!; Aspirationally Bi-Weekly (Meaning Every Other Week); Aspirationally an hour...Key Insights:* Brad DeLong says: You say economics and economists in decline—I see bad economists in decline.* Brad DeLong says: You see missile defense as remarkably effective—I see it as marginally effective, at best.* Brad DeLong says: You say China Shock II—I say China Shock I required the GWB administration as witting and unwitting co-conspirator.* Noah Smith says: These are self-refuting prophecies: my defense of missile defense was to say that it can be remarkably effective in a few possible instances, but those plausible ones for the next two decades; my title “the decade of the second China shock” and my subhead “brace yourselves” were intended to spur action to keep there from being a second China shock.* Noah Smith says: Economists advising badly had a lot of influence in 2008 and after, and still have a substantial amount today—so the total influence of economists has decreased since 2008, and this is not necessarily a bad thing.* The only real way to get nuance is to write a whole book and then have people deeply engage with it, which requires that they be on a trans-oceanic flight with dodgy Wi-Fi, and be otherwise bored.* The internet makes us less nuanced than we should be.* &, as always, HEXAPODIA!References:* Smith, Noah. 2024. “Why so many of us were wrong about missile defense”. Noahpinion. April 15. . * Smith, Noah. 2024. “Twilight of the economists?” Noahpinion. April 12. .* Smith, Noah. 2024. “The decade of the Second China Shock”. March 23. .&* Vinge, Vernor. 1999. A Deepness in the Sky. New York: Tor Books. . Get full access to Brad DeLong's Grasping Reality at braddelong.substack.com/subscribe

Noah Smith & Brad DeLong Record the Podcast We, at Least, Would Like to Listen to!; Aspirationally Bi-Weekly (Meaning Every Other Week); Aspirationally an hour...Key Insights:* A number of years ago, Brad DeLong said that it was time to “pass the baton” to “The Left”. How's that working out for us? #actually, he had said that we had passed the baton—that the absence since January 21, 2009 (or possibly January 21, 1993) of Republican negotiating partners meant that sensible centrism produced nothing—that Barack Obama had proposed John McCain's climate policy, Mitt Romney's health care policy, George H.W. Bush's entitlement-and-budget policy, Ronald Reagan's tax policy, and Gerald Ford's foreign policy, and had gotten precisely zero Republican votes for any of those. Therefore the only choice we had was to pass the baton to the Left in the hopes that they could energize the base and the disaffected to win majorities, and then offer strong support where there policies were better than the status quo.* But my major initial take was that the major task was to resurrect a sensible center-right, in which I wished the Niskanen Center good luck, but was not optimistic.* But everyone heard “Brad DeLong says neoliberals should ‘bend the knee'” to THE LEFT…* That is interesting…* Should neoliberals bend the knee?* How has the left been doing with its baton? Not well at all, for anyone who defines “THE LEFT” to consist of former Bernie staffers who regard Elizabeth Warren as a neoliberal sellout.* It has, once again, never missed an opportunity to miss an opportunity. * But the conditions that required passing the baton to the left—High Mitch McConnellism, Republican unity saying “NO!” to everything by every Republican to make the Black president look like a weak failure—no longer hold.* And the principal adversaries to good governance and a bright American future are reactionary theocrats, neofascist grifters, and true-believer right-neoliberals to the right and cost-disease socialists to the left.* But in the middle, made up of ex-left-neoliberals and nearly all other right-thinking Americans, are we supply-side progressives.* Instead, there is a governing coalition, in the Senate, composed of 70 senators, 50 Democrats and 20 Republicans, from Bernie Sanders through J.D. Vance—a supply-side progressive or supply-side Americanist coalition.* It is therefore time to snatch the baton back, and give it to the supply-side progressivist policy-politics core, and then grab as many people to run alongside that core in the race as we possibly can.* The Niskanen Center cannot be at the heart of the supply-side progressivist agenda because they are incrementalists and critics by nature.* The principal business of “Leftist” activists over the past five years really has been and continues to be to try to grease the skids for the return of neofascism—just as the principal business of Ralph Nader and Naderites in 2000 was to grease the skids for upper-class tax cuts, catastrophic financial deregulation, and forever wars.* &, as always, HEXAPODIA!References:* Beauchamp, Zack. 2019. "A Clinton-Era Centrist Democrat Explains Why It's Time to Give Democratic Socialists a Chance." Vox. March 4, 2019. .* Black, Bill. 2019. "Brad DeLong's Stunning Concession: Neoliberals Should Pass the Baton & Let the Left Lead." Naked Capitalism. March 5. .* DeLong, J. Bradford. 2019. “David Walsh went to the Niskanen Center conference. He got hives…” Twitter. February 25. .* DeLong, J. Bradford. 2019. "Carville & Hunt: Two Old White Guys Podcast." Brad DeLong's Grasping Reality. March 11. .* DeLong, J. Bradford. 2019. "I Said 'Pass the Baton' to Those Further Left Than I, Not 'Bend the Knee.'" Brad DeLong's Grasping Reality. March 27. .* Elmaazi, Mohamed. 2019. "Famous Neoliberal Economist Says Centrism Has Failed." The Canary. March 15, 2019. .* O'Reilly, Timothy. 2019. "This Interview with Brad DeLong is Very Compelling." LinkedIn. .* Douthat, Ross. 2019. "What's Left of the Center-Left?" New York Times. March 5. .* Drum, Kevin. 2019. "A Neoliberal Says It's Time for Neoliberals to Pack It In." Mother Jones. March 5. .* Hundt, Reed, Brad DeLong, & Joshua Cohen. 2019."Neoliberalism and Its Discontents." Commonwealth Club. March 5. .* Konczal, Mike. 2019. "The Failures of Neoliberalism Are Bigger Than Politics." Roosevelt Institute. March 5. .&* Vinge, Vernor. 1999. A Deepness in the Sky. New York: Tor Books. . Get full access to Brad DeLong's Grasping Reality at braddelong.substack.com/subscribe

Noah Smith & Brad DeLong Record the Podcast We, at Least, Would Like to Listen to!; Aspirationally Bi-Weekly (Meaning Every Other Week); Aspirationally an hour...Key Insights:* Someone is wrong on the internet! Specifically Brad… He needs to shape up and scrub his brain… * Back in the 2000s, Brad argued that the U.S. should over the next few generations try to pass the baton of world leadership to a prosperous, democratic, liberal China…* Back in the 2000s, Noah thought that Brad was wrong—he looked at the Chinese Communist Party, and he thought: communist parties do not do “coëxistence”…* Noah understands people with a limitless authoritarian desire for power—people like Trump, Xi, Putin, and in the reverse Abe—and the systems that nurture and promote them…* Why did Brad go wrong? Excessive reliance in the deep structures of his brain on the now 60-year-old Social Origins of Dictatorship and Democracy: Lord and Peasant in the Making of the Modern World.* Why did Brad go wrong? A failure to understand Lenin's party of a new type as a bureaucratic-cultural organization…* Suggestions for what Brad DeLong should earn during his forthcoming stint in the reëducation camp are welcome…* &, as always, Hexapodia…References:* Bear, Greg. 1985. Blood Music. New York: Arbor House. .* Brown, Kerry. 2022. Xi: A Study in Power. London: Icon Books..* Cai, Xia. 2022. "The Weakness of Xi Jinping: How Hubris and Paranoia Threaten China's Future." Foreign Affairs. September/October. https://www.foreignaffairs.com/china/xi-jinping-china-weakness-hubris-paranoia-threaten-future.* DeLong, J. Bradford. 2019. "What to Do About China?" Project Syndicate, June 5. .* DeLong, J. Bradford. 2019. "America's Superpower Panic". Project Syndicate, August 14. .* DeLong, J. Bradford. 2023. "Theses on China, the US, Political-Economic Systems, Global Value Chains, & the Relationship". Grasping Reality. Accessed June 19. .* Lampton, David M. 2019. Following the Leader: Ruling China, from Deng Xiaoping to Xi Jinping. Berkeley: University of California Press..* Moore, Barrington, Jr. 1966. Social Origins of Dictatorship and Democracy: Lord & Peasant in the Making of the Modern World. Boston: Beacon Press. .* Pronin, Ivan, & Mikhail Stepichev. 1969. Leninist Standards of Party Life. Moscow: Progress Publishers. .* Sandbu, Martin. 2022. “Brad DeLong: ‘The US is now an anti-globalisation outlier'”. Financial Times. November 23. .* Sasaki, Norihiko. 2023. "Functions and Significance of the Central Leading Group for Comprehensively Deepening Reforms and the Central Comprehensively Deepening Reforms Commission." Chinese Journal of Political Science 28 (3): 1-15. Accessed May 14, 2024. https://www.tandfonline.com/doi/full/10.1080/24761028.2023.2185394.* Shambaugh, David, ed. 2020. China and the World. New York: Oxford University Press. .&* Vinge, Vernor. 1999. A Deepness in the Sky. New York: Tor Books. . Get full access to Brad DeLong's Grasping Reality at braddelong.substack.com/subscribe

Noah Smith & Brad DeLong Record the Podcast We, at Least, Would Like to Listen to!; Aspirationally Bi-Weekly (Meaning Every Other Week); Aspirationally an hour... Key Insights:* Vernor Vinge was one of the GOAT scifi authors—and he is also one of the most underrated…* That a squishy social-democratic leftie like Brad DeLong can derive so much insight and pleasure from the work of a hard-right libertarian like Vernor Vinge—for whom the New Deal Order is very close to being the Big Bad, and who sees FDR as a cousin of Sauron—creates great hope that there is a deeper layer of thought to which we all can contribute. The fact that Brad DeLong and Vernor Vinge get excited in similar ways is a universal force around which we can unite, and add to them H.G. Wells and Jules Verne…* The five things written by Vernor Vinge that Brad and Noah find most interesting are: * “The Coming Technological Singularity: How to Survive in the Post-Human Era”,* A Fire Upon the Deep,* A Deepness in the Sky, * “True Names”, & * Rainbows End…* We do not buy the Supermind Singularity: The world is not a game of chess in which the entity that can think 40 moves ahead will always easily trounce the entity that can only think 10 moves ahead, for time and chance happeneth to us all…* We do not buy the Supermind Singularity: Almost all human intelligence is not in individual brains, but is in the network. We are very smart as an anthology intelligence. Whatever true A.I.s we create will be much smarter when they are tied into the network as useful and cooperative parts of it—rather than sinister gods out on their own plotting plots…* We do not buy the Supermind Singularity: mind and technology amplification is as likely to be logistic as exponential or super-exponential…* The ultimate innovation in a society of abundance is the ability to control human personality and desire—and now we are back to the Buddha, and to Zeno, Kleanthes, Khrisippus, and Marcus Aurelius…* With the unfortunate asterisk that mind-hacking via messages and chemicals mean that such an ultimate innovation can be used for evil as well as good…* Addiction effects from gambling are not, in fact, a good analogy for destructive effects of social media as a malevolent attention-hacker…* Cyberspace is not what William Gibson and Neil Stephenson predicted.But it rhymed. And mechanized warfare was not what H.G. Wells predicted.But it rhymed. A lot of the stuff about AI that we see in science fiction will rhyme with whatever things are going to happen…* The Blight of A Fire Upon the Deep is a not-unreasonable metaphor for social media as propaganda intensifier…* We want the future of the Whole Earth Catalog and the early Wired, not of crypto grifts and ad-supported social media platforms…* Vernor Vinge's ideas will be remembered—if only as important pieces of a historical discussion about why the Superintelligence Singularity road was not (or was) taken—as long as the Thrones of the Valar endure…* Noah Smith continues to spend too much time picking fights on Twitter…* &, as always, Hexapodia…References:* DeLong, J. Bradford. 2022. Slouching Towards Utopia: The Economic History of the 20th Century. New York: Basic Books. .* Bursztyn, Leonardo, Benjamin Handel, Rafael Jiménez-Durán, & Christopher Roth. 2023. “When Product Markets Become Collective Traps: The Case of Social Media”. Becker-Friedman Institute. October 12. .* Patel, Nilay, Alex Cranz, & David Pierce. 2024. “Rabbit, Humane, & the iPad”. Vergecast. May 3. .* MacIntyre, Alasdair. 1966. A Short History of Ethics: : A History of Moral Philosophy from the Homeric Age to the Twentieth Century. New York: Macmillan. .* Ober, Josiah. 2008. Democracy & Knowledge: Innovation & Learning in Classical Athens. Princeton: Princeton University Press. .* Petpuls. 2024. “The World's First Dog Emotion Translator”. Accessed May 7, 2024. .* Rao, Venkatesh. 2022. “Beyond Hyperanthropomorphism”. Ribbonfarm Studio. Auguts 21. .* Taintor, Joseph. 1990. The Collapse of Complex Societies. Cambridge: Cambridge University Press. .* Vinge, Vernor. 1984. “True Names”. True Names & Other Dangers. New York: Bluejay Books. .* Vinge, Vernor. 1992. A Fire Upon the Deep. New York: Tor Books. .* Vinge, Vernor. 1993. "The Coming Technological Singularity: How to Survive in the Post-Human Era". .* Vinge, Vernor. 1999. A Deepness in the Sky. New York: Tor Books. .* Vinge, Vernor. 2006. Rainbows End. New York: Tor Books. .* Williams, Walter Jon. 1992. Aristoi. New York: Tor Books. * Wikipedia. “Vernor Vinge”. Accessed May 7, 2024. . Get full access to Brad DeLong's Grasping Reality at braddelong.substack.com/subscribe

In which Noah Smith & Brad DeLong wish Daron Acemoglu & Simon Johnson had written a very different book than their "Power & Progress" is...Key Insights:* Acemoglu & Johnson should have written a very different book—one about how some technologies complement and others substitute for labor, and it is very important to maximize the first.* Neither Noah Smith nor Brad DeLong is at all comfortable with “power” as a category in economics other than as the ability to credibly threaten to commit violence or theft.* Acemoglu & Robinson's Why Nations Fail is a truly great book. Power & Progress is not.* We should not confuse James Robinson with Simon Johnson* Billionaires running oligopolistic tech firms are not trustworthy stewards of the future of our economy.* The IBM 701 Defense Calculator of 1953 is rather cool. * The lurkers agree with Noah Smith in the DMs.* The power loom caused technological unemployment because the rest of the value chain—cotton growing, spinning, and garment-making—was rigid, hence the elasticity of demand for the transformation thread → cloth was low.* We need more examples of bad technologies than the cotton gin and the Roman Empire.References: * Acemoglu, Daron, & Simon Johnson. 2023. Power and Progress: Our Thousand-Year Struggle Over Technology and Prosperity. New York; Hachette Book Group. * Acemoglu, Daron, & James A. Robinson. 2012. Why Nations Fail: The Origins of Power, Prosperity, and Poverty. New York: Crown Publishers. * Besi. 2023. “Join us Tues. Oct. 10 at 4pm Pacific for a talk by @MITSloan's Simon Johnson…” Twitter. October 9. .* DeLong, J. Bradford. 2024. “What To Do About the Dependence of the Form Progress Takes on Power?: Quick Takes on Acemoglu & Johnson's "Power & Progress”. Grasping Reality. February 29.* DeLong, J. Bradford; & Noah Smith. 2023. “We Cannot Tell in Advance Which Technologies Are Labor-Augmenting & Which Are Labor-Replacing”. Hexapodia. XLIX, July 7. * Gruber, Jonathan, & Simon Johnson. 2019. Jump-Starting America: How Breakthrough Science Can Revive Economic Growth and the American Dream.The book is available on the Internet Archive: .* Johnson, Simon, & James Kwak. 2011. 13 Bankers: The Wall Street Takeover and the Next Financial Meltdown. New York: Vintage Books. .* Smith, Noah. 2024. “Book Review: Power & Progress”. Noahpinion. February 21. * Walton, Jo. 1998. “The Lurkers Support Me in Email”. May 16. .+, of course:* Vinge, Vernor. 1992. A Fire Upon the Deep. New York: TOR. . Get full access to Brad DeLong's Grasping Reality at braddelong.substack.com/subscribe

Producer Confidence & Consumer Confidence (in the Economy), & Our Confidence (in Our Analyses): Noah Smith & Brad DeLong Record the Podcast We, at Least, Would Like to Listen to!; Aspirationally Bi-Weekly (Meaning Every Other Week); Aspirationally an hour...Key Insights:* The disjunction between all the economic data having been very good and very strong for the past year and tons of reports and commentary about how people “weren't feeling it” is mostly the result of the fact that things work with lags.* There are other factors: partisan politics, and the insistence of Republicans that they must not only vote but also at least say that they agree with their tribe.* There are other factors: the old journalistic adage that “what bleeds, leads”, exponentiated by the effects of our current short attention-span clickbait culture.* There are other factors: journalists, commentators, and the rest of the shouting class are depressed as their industries collapse around them, and somewhat of their situation leaks through.* There are other factors: while people think they personally are doing well, they do remember stories of others not doing wellm and are concerned.* But mostly it was just that things operate with lags: that was the major source of the “vibecession” gloom-and-doom which was at sharp variance with the actual economic dataflow.* We are not the modelers: we are, rather, the agents in the model.* The metanarrative is always harder than the narrative: trying to answer “why don't people say they think the economy is good?” is very hard to answer in a non-stupid way, and most of us are much better off just saying: “hey, guys, the economy is really good!”* It is good to be long reality—as long as you are not so leveraged that your position gets sold out from under you before the market marks itself to reality,.* Lags gotta lag.* And, finally, hexapodia!References:* Burn-Murdoch, John. 2023. “Should we believe Americans when they say the economy is bad?” Financial Times, December 1 .* Cummings, Ryan, & Neale Mahoney. 2023. “Asymmetric amplification and the consumer sentiment gap”. Briefing Book, November 13. .* El-Erian, Mohamed. 2024. “A warning shot over the last mile in the inflation battle'. Financial Times, January 15. .* Faroohar, Rana. 2024. “Is Bidenomics dead on arrival? The time is ripe for the administration to rethink its messaging”. Financial Times, December 18. .* Fedor, Lauren, & Colby Smith. 2023, “Will US voters believe they are better off with Biden? Under pressure after a string of damning polls, the US president is resting his hopes for re-election on his personal economic blueprint”. Financial Times, November 6. .* Financial Times Editorial Board. 2024. “Why Biden gets little credit for a strong US economy: The president's team needs to show more energy in addressing voters' concerns”. Financial Times, January 11. .* Ghosh, Bobby. 2022. “Biden's a Better Economic Manager Than You Think:On more than a dozen measures of relative prosperity, he's outperformed the last six of his seven predecessors. On reducing the budget deficit, he has no peers”. Bloomberg, November 8. * Greenberg, Stanley. 2024. “The Political Perils of Democrats' Rose-Colored Glasses: Paul Krugman's (and many Democrats') beliefs about the economy and crime miss the reality that Americans still experience”. American Prospect, February 5. .* Hsu, Joanne. 2024. “Surveys of Consumers: Final Results for January 2024”. February 2. .* Krugman, Paul. 2024. “Is the Vibecession Finally Coming to an End?” New York Times, January 22. .* Lowenkron, Hadriana. 2023. “Biden's Approval Rating Hits New Low on Economic Worries, Poll Shows”. Bloomberg, December 18. ,* Millard, Blake. 2024. “Consumer confidence highest in 2 years, still below pre-pandemic levels”. Sandbox Daily, February 6. .* Omeokwe, Amara, & Chip Cutter. 2024. “Job Gains Picked Up in December, Capping Year of Healthy Hiring”. Wall Street Journal, January 5. .* Rubin, Gabriel. 2024. “What Recession? Growth Ended Up Accelerating in 2023”. Wall Street Journal, January 25. .* Scanlon, Kyla. 2022. “The Vibecession: The Self-Fulfilling Prophecy”. Kyla's Newsletter, June 30. .* Sen, Conor. 2023. “Unhappy American Consumers Will Welcome a Slower Economy”. Bloomberg, November 29. * Scanlon, Kyla. 2023. “It's More than Just Vibes”. Kyla's Newsletter, December 7. .* Torry, Harriet, & Anthony DeBarros. 2023. “Economists in WSJ Survey Still See Recession This Year Despite Easing Inflation”. Wall Street Journal, January 15. .* Winkler, Matthew A. 2023. “The Truth About the Biden Economy: As the president launches his reelection campaign, his biggest challenge may be getting voters to ignore perception and focus on reality”. Bloomberg, April 25. .* Wingrove, Josh. 2024. “Biden Refines Economic Pitch for 2024 in Bet Worst Is Behind Him”. Bloomberg, January 13. .+, of course:* Vinge, Vernor. 1992. A Fire Upon the Deep. New York: TOR. . Get full access to Brad DeLong's Grasping Reality at braddelong.substack.com/subscribe

& a start-of-the-semester academic-email-addresses-only paid-subscription sale:Key Insights:* Young whippersnappers Oks and Williams are to be commended for being young, and whippersnapperish—but we disagree with them.* Contrary to what Brad thought, the fertility transition in Africa really has resumed.* The problem of how you provide mass employment for people is different than the problem of how you increase your economy's productivity by building knowledge capital, infrastructure, and other forms of human capital. * It is important to keep those straight and distinguished in your mind.* Commodity exporting should be viewed as a distinct development strategy from industrialization, and indeed from everything else. * Sometime during the plague, Brad DeLong really did turn into a grumpy old man yelling at clouds. It's time that he should own that. * People should take another look at the pace of South and Southeast Asian economic development. It is a very different world than it was 25 years ago.* Thus if you are basing your view on memories of or on books written based on memories of how things were 25 years ago, you are going to get it wrong. BIGTIME wrong.* Only the Federal Reserve can get away with saying “it's context dependent”. All the rest of us have to put forward Grand Narratives—false as they all are—if we want to actually be useful.* HexapodiaReferences:* Bongaarts, John. 2020. "Trends in fertility and fertility preferences in sub-Saharan Africa: the roles of education and family planning programs." Genus 76: 32. * Kremer, Michael, Jack Willis, & Yang You. 2021. "Converging to Convergence." National Bureau of Economic Research, Working Paper 29484, November 2021. * Oks, David, & Henry Williams. 2022. "The Long, Slow Death of Global Development." American Affairs 6:4 (November). .* Patel, Dev, Justin Sandefur, & Arvind Subramanian. 2021. "The new era of unconditional convergence." Journal of Development Economics 152. .* Perkins, Dwight. 2021. "Understanding political influences on Southeast Asia's development experience." Fulbright Review of Economics and Policy 1, no. 1: 4-20. .* Rodrik, Dani, & Joseph E. Stiglitz. 2024. "A New Growth Strategy for Developing Nations." .* World Bank. 2023. "South Asia Development Update October 2023: Economic Outlook." .+, of course:* Vinge, Vernor. 1992. A Fire Upon the Deep. New York: TOR. . Get full access to Brad DeLong's Grasping Reality at braddelong.substack.com/subscribe

Key Insights:* Finally, at long last, over the next two generations the tide is likely to be flowing strongly toward near-universal global development...* The fear was that dehyperglobalization would rob poorer countries of their ability to develop the export comparative advantages to support the manufacturing engineering clusters they need for learning by doing, establishing a good educational system, and converging to global North standards of living...* This fear appears to have been very overblown...* Optimism about future income growth and globalization is warranted because India has more people in it than Africa: the Asia Circle from Japan to Pakistan and down to Indonesia and up to Mongolia is and always has been half the human race. And South Asia and Southeast Asia are now in gear...* As long as dealing with global warming does not absorb too many of the resources that could otherwise be devoted to income growth...* This is true even though the great wave of increasing international trade intensity and integration that began in 1945 came to an end in 2008...* Even so, since 2008 there has still been increasing global integration in the flow of ideas and the growing interdependence of value chains...* A substantial part of the post-2008 reversal of globalization was partially due to China onshoring its supply chains—the pre-2008 situation in which China's manufacturing knowledge was vastly behind its manufacturing intensity was highly unstable...* This, however, hinges sufficient state capacity—which is not just the ability to do infrastructure and reorganize your economy, but also have people's stuff not get stolen from them either by local thieves or by government functionaries...* Distributional issues are another potential key blockage—the benefits of technological change flow to the global north, or to a small predatory internal élite, or the market economy's distribution goes spontaneously awry...* But there is the question of how much distribution matters in a rich world where few are starving—matters for social power, yes, and for whatever happinesses flow from that, but does distribution matter otherwise?* Countries in the Middle East, Africa, and Latin America may be stubborn development problems for generations, however...* That beside, the basic mission of industrialization to uplift the human world out of poverty is likely to be complete by 2050 if we are lucky, by 2100 if we are not...* There is good reason to think that the next generation will be for the world better and more impressive than the last generation. And the last generation was, on a world scale, you know, better and more impressive than was the post-WWII Thirty Glorious Years in the North Atlantic...* Future guests, possibly?: Dietz Vollrath, Arvind Subramanian, Charlie Stross...References:* Fourastié, Jean. 1979. Les Trente Glorieuses, ou la révolution invisible de 1946 à 1975. Paris: Fayard. .* Subramanian, Arvind, Martin Kessler, & Emanuele Properzi. 2023. "Trade Hyperglobalization is Dead. Long Live...?" Peterson Institute for International Economics Working Paper, No. 23-11. .* Stross, Charles. 2005. Accelerando. New York: Ace Books. * Vollrath, Dietrich. 2020. Fully Grown: Why a Stagnant Economy Is a Sign of Success. Chicago: University of Chicago Press. .+, of course:* Vinge, Vernor. 1992. A Fire Upon the Deep. New York: TOR. . Get full access to Brad DeLong's Grasping Reality at braddelong.substack.com/subscribe

The SubStackLand community gains another valuable member. We welcome him to the NFL SubStackLand:Key Insights:* Bing-AI says “Brian Beutler” is pronounced “Bryan Bootler”—that is, rhymes with “lion shooter”, which shows how far political incorrectness has penetrated Silicon Valley…* Noah has figured out a solution to his problem of losing the screws to his microphone stand: duct tape…* This started with Brad poking Brian on his belief there was a golden age of comity, common purpose, and energy in the left-of-center political sphere back in 2005 to 2008—saying that this misconceived as all mourning for a lost golden age is misconceived…* Noah and Brad today welcome Brian to SubStackLand, he having just created a substack and done 16 substantive posts in two weeks, which is a trult amazing rate of production…* Brian's key insight is that since the start of 2019 Democrats have been amazingly, alarmingly, disappointingly timid in not aggressively going after every corner of TrumpWorld for its corruption, and doing so again and again and again…* Brian is, in a sense, the quantum-mechanical antiparticle to some combination of Matt Yglesias and David Schor…* Brian believes he coined the term “popularism”…* Back in 2005-2008 nobody said that Nancy Pelosi and Harry Reid were sabotaging their own party by encouraging Barack Obama to run in the primaries…* Judging by results, the current strategy of the Democratic Establishment is doing rather well: a plus three standard-deviation outcome in the 2022 midterms, for example…* That midterm result may be because, by our count no fewer than seven of the nine justices had assured senators that Roe v. Wade was “settled law”. And four of those seven then voted to overturn it in Dobbs…* Biden really cares about safeguarding democracy, and his actions should all be viewed with that in mind…* Hexapodia!References:* Brian Beutler: Off Message SubStack * Scattered Thoughts On Israel, Hamas, Gaza, And Related Matters: A possibly ill-advised post* VIDEO: How Trump Normalization Really Works: Why the political media slept on Trump's call for Mark Milley's death and other baffling decisions* Charts To A Gun Fight: How the Fighting Democrats of 2007 became the timid, focus-grouped party of today.* Trump Reaches A Fateful Crossroads: We should welcome it, but acknowledge the peril* Thursday Thread And AMA: Kind of a lot's happened since the last one* "The Most Important Issue In Our Politics": A Q&A with John Harwood on his interview with Joe Biden about threats to democracy* Five Thoughts On Karmic McCarthy: For now, we schadenfreude* VIDEO: How Profit Motive Distorts The News: And why liberals and Democrats should talk about it* The Era Of Hostage Taking And Small Ransoms: Republicans made Ukraine aid the price of avoiding a shutdown. Where does it end?* The Democrats' Lost September: You guys awake?* Breaking Down The GOP Debate: Reaction chats with Matthew Yglesias and Crooked Media's What A Day podcast* Wednesday Debate Thread: Let's watch Republicans be weird and scary together!* Baggage Check: Life disclosures, so readers can know me, and where I come from, a little better* VIDEO: Why The News Struggles To Say Republicans Are Responsible For The Government Shutdown: And why the public is likely to catch on anyhow* Biden Should Work The Media Refs On Impeachment: Everyone knows the impeachment is b.s., so he should say that* Welcome to Off Message: Refuge from a world gone mad* Thomas Babington Macaulay: Horatius at the Bridge * Plutarch: Life of Tiberius Gracchus +, of course:* Vernor Vinge: A Fire Upon the Deep Lost Past Golden Ages:Thomas Babington Macaulay: Horatius at the Bridge: ‘[Then] Romans in Rome's quarrel Spared neither land nor gold, Nor son nor wife, nor limb nor life, In the brave days of old.Then none was for a party; Then all were for the state;Then the great man helped the poor, And the poor man loved the great:Then lands were fairly portioned; Then spoils were fairly sold:The Romans were like brothers In the brave days of old.Now Roman is to Roman More hateful than a foe,And the Tribunes beard the high, And the Fathers grind the low.As we wax hot in faction, In battle we wax cold:Wherefore men fight not as they fought In the brave days of old…Plutarch: Life of Tiberius Gracchus: ‘Formerly the senate itself, out of goodwill, conceded many things to the people, and referred many things to them for deliberation; and the magistrates themselves, even when they had no need of the people, summoned them to assemblies, and communicated with them on public affairs, not wishing them to feel that they were excluded from anything or insulted. But after the people had made the authority of the tribunes too great, and through them had tasted arbitrary power, then indeed there was no longer any room for deference or concession on the part of the senate; but they were forced to fight for everything as for a prize... Get full access to Brad DeLong's Grasping Reality at braddelong.substack.com/subscribe

Liberals vs. leftists once again, with the principal conclusion being that trying to find and join your tribe by shouting online—Schmittian picking-an-enemy as the core of your identity—is no way to go through life, son. Nor is artfully screenshotting in order to make sure your readers do not see the sentence just below the ones you quote.In which we discuss the positions of “Brianna”, Matt”, and “Ezra”—who are SubTuring concepts in our minds with whom we have parasocial relationships, and are not real persons named Brianna Wu, Matt Yglesias, and Ezra Klein—on where the boundary is between the decent, realistic, progress left on the one hand, and people who need to get a clue and stop making own-goals on the other.Background:Key Insights:* No Schmittposting— trying to find and join your tribe by shouting online—Schmittian picking-an-enemy as the core of your identity—is no way to go through life, son. * Nor is artfully screenshotting in order to make sure your readers do not see the sentence just below the ones you quote.* Don't pick bad and stupid ends to advocate for—anarcho-pastoralism, the elimination of the United States or America, abolishing police, abolishing prisons, degrowth, destroying statues of Ulysses S. Grant, calling for the cancellation of Abraham Lincoln.* Do think, always: will this post advance humanity's collective smartness as an anthology intelligence?* Don't call for throwing public money at nonprofits in urban America.* Advocate for a political focus on social issues only when they are ripe—when the pro-freedom and pro-flourishing position is genuinely popular.* But the Democratic Party and the left can and should focus on both economic and social issues—and should be smart about doing so.* Blue-state politicians should be willing to press the envelope on social issues—witness Gavin Newsom as mayor of San Francisco on gay marriage.* Purple-state politicians should stress that this is a free country for free people, which means:* economic opportunity…* social freedom—you should be able to live your life without the government harassing you, and without neighbors and merchants harassing you by refusing service when their job is to serve the public…* collective wealth…* collective concern—global warming may not be so bad for you in the medium-run, but it is a serious medium-run problem for those SOBs in Florida and Louisiana, and for rural communities at the wildfire edge…* Red-state politicians need our thoughts and prayers.* Policy analysts and legislative tacticians should design and implement policies that are:* successes…* visible, perceived successes…* that build coalitions by the wide of visible distribution of their benefits…* but that do not allow individual coalition partners to become veto point owners: seats at the table, yes; dogs in the manger, no…* Left-wing think-tanks should not take money from “leftists” who want to use procedural obstacles to block green investments in their backyards.* Hexapodia!References:* Preliminary Food for Thought for Þe “Hexapodia” Taping:* Brianna Wu: ‘There's a huge schism… Policy Leftists and Infinite Leftists…* Matt Yglesias: The two kinds of progressives: ‘Moralists vs. pragmatists…* Ezra Klein: The Problem With Everything-Bagel Liberalism: ‘Cost, not just productivity, is a core problem for the U.S. semiconductor manufacturing industry…* Brad DeLong: Pass the Baton…* Noah Smith: Our climate change debates are out of date…* Noah Smith: Degrowth: We can't let it happen here!…* Noah Smith: ‘Once you realize that the animating drive of all NIMBYism on both the left and the right is to be able to live in perpetually-appreciating single-family homes with no poor people nearby, everything they say becomes instantly comprehensible and intensely boring.* Rocket Podcast +, of course:* Vernor Vinge: A Fire Upon the Deep  Get full access to Brad DeLong's Grasping Reality at braddelong.substack.com/subscribe

Key Insights:* The Chinese Communist Party is very like an aristocracy—or maybe it isn't…* If it is, it will in the long run have the same strong growth-retarding effects on the economy that aristocracies traditionally have…* Or maybe it won't: China today is not Europe in the 1600s…* We probably will not be able to get Noah to read Franklin Ford: Robe & Sword: The Regrouping of the French Nobility After Louis XIV to dive more deeply into analogies & contrasts…* Southeast Asia's future is very bright because of friendshoring…* India's future is likely to be rather bright too—it looks like a much better economic partner for the rest of the world over the next two generations than does China…* You can get pretty far by just massively forcing your society to build lots and lots and lots of capital…* Especially if you have an outside country you can point to and say “give me one—or five—of those!”…* But quantity of investment has a quality of its own only so far…* We think of technology as the hard stuff…* But actually the hard stuff is institutions, property rights, government—people actually doing what they said they would do, rather than exerting their social power to welsh on their commitments…* We are surprised and amazed at China's technological excellence in electric vehicles, in battery and solar technology, in high-speed rail, and so forth…* But those are relatively small slices of what a truly prosperous economy needs…* For everything else, we have reason to fear that the logics of soft budget constraints and authoritarian systems are not things China will be able to evade indefinitely…* Is that a middle-income trap? It certainly functions like one…* Hexapodia!References:* Brad DeLong: DRAFT: What Is Going on wiþ China's Economy?:* Daniel W. Drezner: The End of the Rise of China? * Daniel W. Drezner: The Rising Dangers of a Falling China* Daniel W. Drezner: Can U.S. Domestic Politics Cope With a Falling China?* Arpit Gupta: What's Going on with China's Stagnation? * János Kornai, Eric Maskin, & Gérard Roland: Understanding the Soft Budget Constraint * Adam S. Posen: The End of China's Economic Miracle * Kenneth Rogoff: The Debt Supercycle Comes to China * Noah Smith: Real estate is China's economic Achilles heel* Noah Smith: Why is China smashing its tech industry? * Adam Tooze: Whither China? Part I - Authoritarian impasse? * Adam Tooze: Whither China? Part II - Posen v. Pettis or "authoritarian impasse" v. "structural dead-end” * Adam Tooze: Whither China? Part III: Policy hubris and the end of infallibility * Lingling Wei & Stella Yifan Xie: China's 40-Year Boom Is Over. What Comes Next? +, of course:* Vernor Vinge: A Fire Upon the Deep  Get full access to Brad DeLong's Grasping Reality at braddelong.substack.com/subscribe

Key Insights:* Critics: Cato-style libertarians, including AEI's Michael Strain. The last die-hard classic Milton Friedman-style economic libertarians—and starting in 1975, Milton Friedman would say, every three years, that the Swedish social democratic model was going to collapse in the next three years.* Critics: Progressives—Biden is a tool of the neoliberals, and secretly Robert Rubin in disguise. People like David Dayen. They seem to be going through the motions—half-heartedly making their arguments to try to shift the Overton Window, but knowing deep down that Biden is about as good as they are going to get* Critics: Ezra Klein and the other supply-side progressives, worried that Bidenomics in danger of supporting too much procedural obstacles through “community engagement” and “consensus building”, and will wind up pissing its money away without boosting America's productive capacity.* Critics: The Economist magazine and some of the people at the Financial Times, writing about how the Biden administration's policies are “mismanaging the China relationship” and raising “troubling questions”—that decoupling will never work, that Chinese manufactured products are too good and too cheap to pass up; that you can't correct for for externalities; & c.* Critics: Macro policy was unwise, inflationary, and pissed away on income support resources that ought to have been used to boost industrial development. But Biden may skate through because he was undeservedly lucky.* The real critique: Implementation—the U.S. government does not have the state capacity to pick or subsidize “winners” in the sense of companies whose activities have large positive externalities.* To deal with (6), supporters of Bidenomics need to (a) figure out what the limits of U.S. state capacity are, and (b) shape CHIPS and IRA spending to stay within them; meanwhile, critics need to (c) come up with evidence of overreach on attempts to use state capacity to do things.* What is valid in the criticisms of Bidenomics is part of a more general critique—that we have a society in which there are limited sources of social power, namely, primarily money, secondarily a somewhat threadbare rule of law, tertiarily a somewhat shredded state administrative staff. We need other sources of social power—like unions, civic organizations, and so forth that aren't just politicians and NGOs that use direct-to-donor advertising to terrorize and guilt-trip their funders, and that take government money and use it to do nothing constructive at all.* Friendshoring rather than onshoring.* Japan is potentially an enormous productive asset for the U.S. to draw on.* And, of course: Hexapodia!References:* Libby Cantrill & al.: CHIPS & Science Act ‘The Closest We've Had to Industrial Policy' in Decades…* Economist: The lessons from America's astonishing economic record: ‘The more that Americans think their economy is a problem in need of fixing, the more likely their politicians are to mess up…. Subsidies… risk dulling market incentives to innovate… [and] will also entrench wasteful and distorting lobbying …* Economist: The world is in the grip of a manufacturing delusion: ‘How to waste trillions of dollars…. Governments… view… factories as a cure for the ills of the age—including climate change, the loss of middle-class jobs, geopolitical strife and weak economic growth—with an enthusiasm and munificence surpassing anything seen in decades…* Henry Farrell: Industrial policy and the new knowledge problem: ‘Modern industrial policy… [requires] investment and innovation decisions [that] involve tradeoffs that market actors are poorly equipped to resolve…. [Yet] we lack the kinds of expertise that we need…. This lack of knowledge is in large part a perverse by-product of the success of Chicago economists' rhetoric…. Elite US policy schools… have by and large converged on a framework derived from a watered down version of neoclassical economics…. New skills, including but not limited to network science, material science and engineering, and use of machine learning would be one useful contribution towards solving the new knowledge problem…* Rana Foroohar: New rules for business in a post-neoliberal world: ‘“Reimagining the Economy”… by economists Dani Rodrik and Gordon Hanson…. The Roosevelt Institute… progressive politicos (many from within the administration) gathered to discuss the details of America's industrial policy… the opposite of trickle-down…* Andy Haldane: The global industrial arms race is just what we need: ‘Manufacturing is undergoing a revival around the world…. An arms race to invest in decarbonising technologies is in fact exactly what the world needs to tackle two global externalities—the climate crisis and the investment drought…* Greg Ip: This Part of Bidenomics Needs More Economics: Massive sums are being spent on industrial policy with little guidance from economic theory or research…* Réka Juhász & al.: The Who, What, When, and How of Industrial Policy: A Text-Based Approach: ‘We create an automated classification algorithm and categorize policies from a global database…* Ezra Klein & Robinson Meyer: Biden's Anti-Global Warming Industrial Policy After One Year…* Anne O. Krueger: Why Is America Undercutting Japan?: ‘United States… wasteful, inefficient industrial policies…. The Inflation Reduction Act (IRA) and the CHIPS and Science Act… directly threaten the Japanese economy (and many other US “friends”)…* Paul Krugman: ‘I guess I shouldn't be surprised that there's pushback against the observation of a Biden manufacturing boom…. The usual suspects claimed that a green energy transition would require huge economic sacrifice. Seeing this much investment in response to subsidies that are still only a fraction of 1% of GDP suggests otherwise…* Nathaniel Lane & Rék Juhász: Economics Must Catch Up on Industrial Policy: ‘Industrial policy… is back in a big way…. Governments are trying to improve the performance of key business sectors. Can they manage to do so without subverting competition and subsidizing special interests?…* Dani Rodrik: An Industrial Policy for Good Jobs: ‘A modern approach to industrial policy must… target “good-jobs externalities,” in addition to the traditional learning, technological, and national security considerations…* Noah Smith: ‘David Dayen and Marshall Steinbaum completely misrepresented Ezra Klein's "supply-side liberal" position. This is not good faith debate at all…* Noah Smith: ‘Oh, and notice that this framing [from David Dayen]—“The claim made here is that the dumb U.S. workforce fell behind, and now TSMC has to make up for it with Taiwanese workers…”—treats job skills as a test of inborn IQ, rather than something that has to be learned and taught. Wild…* Noah Smith: ‘Neoliberalism: a thread…. Markets as the fundamental generators of prosperity, and government as the way to distribute that prosperity more equitably…. Government can't shoulder the entire burden…. We need additional, quasi-independent institutions, like unions…. Industrial policy is underrated, both at the national and the local level. Neoliberalism under-emphasizes science policy, for example. I want a Big Push for science-driven growth…. Can the government "pick winners"? Yes. The government *must* pick winners. Green energy and other zero-carbon technologies being chief among the things we must pick…* Michael Spence: In Defense of Industrial Policy: ‘The real question is not whether industrial policy is worth pursuing, but how to do it well…+, of course:* Vernor Vinge: A Fire Upon the Deep  Get full access to Brad DeLong's Grasping Reality at braddelong.substack.com/subscribe

Key Insights:* Brad has a new microphone!* Noah has jet lag: he is just back from Japan.* Brad has jet lag: he is just back from Australia.* Perhaps inflation's ebbing has not yet made its way into the minds of people when they answer pollsters.* We reject the hypothesis that it is because of lagging real incomes.* More difficult mortgage borrowing and positive interest payments on car loans are a thing, but really unlikely to be a big thing.* It seems likely that 2024 will be, if not “morning in America” from a consumer confidence in America, a crepuscular pre-dawn lightening in America.* Rick Perlstein's theory: we are replaying the 1970s:* Even in the 1970s, it was not inflation but “social upheaval”* Half “Blacks and women are forgetting their place”* Half “things are very insecure and unsafe”. * The 1970s saw right-wing revolts* The 1970s saw left-wing disillusionment* And then along came inflation!* Is this cycle repeating itself.* Our guess is that “vibecession” has peaked—but we worry that Kyla Scanlon may be right in thinking it has deeper roots. This is a much more unequal society for white guys than we had in the 1970s.* Brad DeLong trusts center-left economists, and they say: (4), (5), (6), and (7).* Noah Smith summarizes: Normie Libs keep winning…* Noah Smith summarizes: Normie Libs keep winning because they mark their beliefs to market and trust empirical data…* Hexapodia!References:* Barry Eichengreen: The US Economy Is Up, so Why Is Biden Down? : ‘The outcome of the US presidential election next year, like most before it, will almost certainly turn on domestic economic conditions, or, more precisely, on perceptions of economic conditions. And recent polling suggests that the disconnect between perception and reality may be President Joe Biden's biggest problem…. Now that personal consumption expenditure inflation is back at roughly 3%, down by nearly two-thirds from its peak, will Biden get more credit for his economic achievements? The answer will turn, first, on whether there is widespread public recognition that inflation has receded. Any such realization will not be immediate…. This slowness of beliefs to adapt to actual economic conditions is likely to be even more pronounced in an era of fake news…* Darren Grant: When it comes to the economy, everything's great and no one's happy : ‘Why a supposedly good economy is making so many people miserable…. Pollsters regularly ask Americans how they think the economy is doing, and whether it is getting better or worse. Both measures have drifted downward since late 2020 and cratered this past year. Everything's amazing, almost—and nobody's happy. This is new. Public opinion had historically followed the business cycle, declining in recessions and improving in expansions like the one we're experiencing now. For observers of the economy, this divergence was akin to being lost in the woods. They trotted out all sorts of explanations for our unexpected pessimism…. What's going on isn't vibes…. People's pay hasn't been keeping pace with inflation…* Mike Konczal: ‘It's tough to judge noise from signal in monthly analysis…. A way to get around monthly myopia: look at longer periods and past used cars and shelter prices. How does 3/6-month ‘supercore' measure look? That's what the Fed is doing, and it looks fantastic. We've seen dips since 2021, but not like this. 3-month lower than prepandemic!…* Paul Krugman: ‘Lots of number-crunching out there , but this was another very good inflation report. The debate over whether disinflation requires a large bulge in unemployment is essentially over. No, it doesn't. But there's still a debate about how we did this, which matters. One story is that disinflation reflects economic normalization—recombobulation after the disruptions of the pandemic. The other is that we've been sliding down a highly nonlinear Phillips curve, which is nearly vertical in a tight labor market. Why this matters: the economy is looking very strong. Atlanta GDPnow at 4.1%! If the Phillips curve is very steep, this could mean reaccelerating inflation. If we're mostly seeing an end to pandemic disruptions, that risk is lower. Not the risks we thought we'd be facing!…* Project Syndicate: The Long Life of Inflation : ‘Michael R. Strain… [says] “underlying inflation is still double the Fed's target” and “financial conditions aren't tightening as much as people assume.”… [The Fed] should continue to raise rates until “there is clear evidence that core inflation is on a path to its 2% target,” even if that makes recession more likely. Mario I. Blejer… and Piroska Nagy Mohácsi… also see serious risks… “distorted incentives and massive inherited imbalances”—fueled partly by populist governance and central-bank interventionism—“any celebration of progress in combating inflation must be cautious indeed.”… Jeffrey Frankel… [says] “inflation need not reach 2% immediately.” By “stabilizing inflation at 3–4%, with 2% as a longer-term goal,” the Fed can avoid “the social costs of a serious contraction.”… “There is no way, under any theory or precedent, that rate hikes beginning in January 2022 could have knocked back inflation by July of the same year,” argues James K. Galbraith…. Current macroeconomic conditions warrant the opposite response: not just “cutting interest rates,” but also “strengthening fiscal support for household incomes and well-paying jobs”…* Kyla Scanlon: Why Do People Think the Economy is Bad?: ‘ 'Genuine answer to a genuine question.... It's all convoluted and loud... and therefore, overwhelming, which creates a sort of mental-checking-out.... I don't want to be all frothy mouth "mainstream media bad" but... there is some stuff to say about coverage.... Lack of safety... stems from general fears over the future that haunt pretty much every generation. The plans are eroding.... Uncertainty around mortgage rates. It's the building blocks of inequality, lack of ownership either of land or a home, lack of community, etc etc.... Soft and hard data has diverged wildly...+, of course:* Vernor Vinge: A Fire Upon the Deep  Get full access to Brad DeLong's Grasping Reality at braddelong.substack.com/subscribe

Key Insights:* Brad's microphone is dying, and a new one is on order.* However, 75% of the talking on this episode is Noah: he came loaded for bear.* Although Noah has not yet read Acemoglu & Johnson's Power & Progress, he nevertheless has OPINIONS!* Friedrich von Hayek was right when he pointed out that we could not know the shape of future technologies* Particularly, we cannot know where, as new technologies develop, they will settle in the balance between tacit-local and formal-generalizable-centralizable knowledge with respect to what is needed to make them actually work.* Thus the ex ante error rate in figuring out in advance whether a branch of knowledge is labor-augmenting or labor-replacing is high.* Better not to try to channel R&D in labor-augmenting directions: we have powerful, well-known, useful, and reliable tools for improving equity: use them rather than trying to guide future technologies in a labor-augmenting equality-promoting direction.* Noah will read Power & Progress before mid-August.* Brad will try to come up with examples of technologies other than the power loom that we wish had been adopted more slowly.* Hexapodia!References:* Daron Acemoglu & Simon Johnson: Power & Progress: Our Thousand-Year Struggle Over Technology & Prosperity * Daron Acemoglu & Pascual Restrepo: “The Race Between Machine & Man: Implications of Technology for Growth, Factor Shares & Employment” * Daisuke Adachi, Daiji Kawaguchi, & Yukiko Saito: Robots and Employment: Evidence from Japan, 1978-2017 * Jay Dixon, Bryan Hong, & Lynn Wu: The Robot Revolution: Managerial and Employment Consequences for Firms * Karen Eggleston, Yong Suk Lee, & Toshiaki Iizuka: Robots and Labor in the Service Sector: Evidence from Nursing Homes* Katja Mann & Lukas Püttmann: Benign Effects of Automation: New Evidence from Patent Texts * Lawrence Mishel and Josh Bivens: The zombie robot argument lurches on: There is no evidence that automation leads to joblessness or inequality * Arjun Ramani & Zhengdong Wang: “Why transformative artificial intelligence is really, really hard to achieve” * Noah Smith: American workers need lots and lots of robots: With the power of automation, our workers can win. Without it, they're in trouble* Melline Somers, Angelos Theodorakopoulos, & Kerstin Hötte: The fear of technology-driven unemployment and its empirical base * Melline Somers, Angelos Theodorakopoulos, & Kerstin Hötte: Technology and jobs: A systematic literature review +, of course:* Vernor Vinge: A Fire Upon the Deep  Get full access to Brad DeLong's Grasping Reality at braddelong.substack.com/subscribe

Key Insights:* Rome did fall. It did not merely “transform”.* Across Eurasia, from 150 to 800 or so there was a pronounced “Late-Antiquity Pause” in terms of technological progress and even the maintenance of large-scale social organization.* There was a proper “Dark Age” only in Britain, Germany, the Low Countries, and France—with Spain, Italy, Switzerland, Austria, and Slovenia being edge cases.* There was no Dark Age at all in what had been the Roman East—what became what we call the Byzantine Empire and what called itself the βασιλεία Ῥωμαίων—Basileia Rhōmaiōn—but the Byzantine Empire was definitely caught up in the “Late-Antiquity Pause”.* The Roman Empire starts to decline in the 165-180 reign of the Emperor Marcus Aurelius Antoninus. Population, levels of production, trade, construction, the sophistication of the division of labor, political order, the ability of the army to protect the people from barbarian and Persian raids and armies—all of these begin a pronounced downward trend.* After 450 there was no real thing called the Roman Empire in what had been its western provinces—no Roman tax-collecting bureaucracy, no administrative bureaucracy to try to make decrees of Roman governors facts on the ground at other than sword's point, no army large enough to keep any barbarian tribe from going wherever it wanted whenever it wanted.* After 476, there was nobody even claiming to be Roman Emperor in Italy—not even in the swamp-protected Adriatic coastal fortress of Ravenna, to which Emperor Honorius had fled from the Visigoths in 402.* The city of Rome itself was never a capital after 476, and was only garrisoned by Byzantine soldiers from 536 to 774.* After the Fall of Rome, in what had been the western provinces of the Roman Empire trade, the division of labor, urbanization, production of conveniences and luxuries, population, and total production were at a much lower level indeed—it truly was a “Dark Age”.* But thighbones tell us that the adults who lived in the Dark Age were taller and better-fed than their predecessors under the Roman Empire.* Perhaps this was because the end of the Roman Empire had seen the end of a cruel and oppressive aristocracy, and was a liberation of the people—there were many fewer slaves, and many many fewer plantation slaves worked to near-death.* But it is more likely that life became nastier and brutish and more dangerous, but that depopulation did increase farm and pasture size and so produce better nutrition even though the collapse of the Roman Empire's economic network meant lower overall average living standards—the average farmholder was distressed enough by the collapse of the Pax Romana that he was willing to give up his and his family's free status and become a bound serf of the local landlord,* Brad believes that Gregory of Tours was much worse as a prose stylist than Cicero or Tacitus—or great-great uncle Ernest, for that matter. Noah is neutral.* King Roger the Scylding at his hall of Heorot in the early 500s had no books, and was really happy whenever a bard would come around.* “After a while I went out and left the hospital and walked back to the hotel in the rain” is perhaps the best sentence of English prose ever written.* People should not overclaim with respect to the depth and spread of the post-Western Roman “Dark Age”.* People should not pretend that the Roman Empire in the west did not fall, and that there was no “Dark Age”.* Non-economic historians need to do the reading—to consider what we know and can learn about population levels, and about the productivity levels, trade patterns, and commodity types that were the fabric of the lives of the people who actually lived. People count, so you need to count people.* Economic progress is real progress.* Literacy is a good thing, not a neutral thing.* People who claim that valuing literacy is “frankly, kind of racist” should delete their accounts and go away.* Hexapodia!!References:* Erich Auerbach: Mimesis* Cicero: In Catalinam I* Brad DeLong: Þe Late-Antiquity Pause, & þe “Bright Ages!”* Brad DeLong: Yes. Rome Did Fall* Matthew Gabriele & David M. Perry: You Gotta Do the Reading, Man* Gregory of Tours: History of the Franks* Ernest Hemingway: A Farewell to Arms* Willem Jongman: Gibbon Was Right* Willem Jongman: The new economic history of the Roman Empire* Willem Jongman & al..: Health and wealth in the Roman Empire* Noah Smith: Was there such a thing as a “Dark Age” in Europe?* Noah Smith: Why didn't they write anything down?* Ronald Syme: Tacitus* Tacitus: Annals of Imperial Rome+, of course:* Vernor Vinge: A Fire Upon the Deep  Get full access to Brad DeLong's Grasping Reality at braddelong.substack.com/subscribe

Key Insights:* The global trade network is immensely valuable…* Friendshoring is not deglobalization, but raher shift-globlization…* Brad was stupid in 2005 in thinking “passing the baton of hegemony” constructively and progressively was a possibility…* Countries have no gratitude, and only remember what is convenient…* William James sought for “the moral equivalent of war” to mobilize civilizational energies for good and progress; and a Cold War certainly counts…* As Zhou Enlai said on similar issues: “it is too soon to tell”…* We both hope that America and China will soon be friends again—but the balloon freakout makes us pessimistic…* Hexapodia!!References:* Sophia Ankel: China flew spy balloons over the US while Trump was president, but nobody realized until after he left office, reports say…* Steve Clemons:

Key Insights:* Yes, it is possible to talk about everything in an hour…* We are not very far apart on what the Fed is doing and should be doing—there is only a 100 basis-point disagreement…* Miles would be 100% right about the proper stance of monetary policy if he were in control of the Fed…* Miles is not in control of the Fed…* Thus Brad thinks that asymmetric risks strongly militate for pausing for six months, and then moving rapidly…* Smart people need to think much more about how to increase love…* Remember Robot Tarktil!* Noah Smith's mother is a good friend of “Murderbot” author Martha Wells…* Hexapodia!!References:* Robert Barsky, Christopher House, & Miles Kimball: Sticky-Price Models and Durable Goods * Daron Acemoglu & James Robinson: The Narrow Corridor * Mancur Olson: The Rise & Decline of Nations * Thomas Hobbes: Leviathan * John Locke: Second Treatise of Government * Edward Bellamy: Looking Backward * Robin Hanson: The Age of Em * Ruchir Agarwal & Miles Kimball: The Future of Inflation”: in Finance & Development ; IMF Podcasts * Miles Kimball: Bibliographic Post on Negative Interest Rate Policy: "How and Why to Eliminate the Zero Lower Bound: A Reader's Guide” * Miles Kimball: How a Toolkit Lacking a Full Strength Negative Interest Rate Option Led to the Current Inflationary Surge ; * Miles Kimball: How Having Negative Interest Rate Policy in Its Toolkit Would Make the Fed Braver in Confronting Inflation with Needed Rate Hikes—A Tweetstorm” * Miles Kimball: Brad DeLong Confirms that Not Having Negative Interest Rate Policy in the Monetary Policy Toolkit Makes People Afraid of Vigorous Rate Hikes to Control Inflation” ; * Miles Kimball: Serious silliness: * Miles Kimball: On the Fed's 3/4% hikes:* Miles Kimball: ”Next Generation Monetary Policy” * Miles Kimball: Tweetstorm of Favorite Passages from Noah Smith's Review of Brad DeLong's book Slouching Towards Utopia * Miles Kimball: On the Age of Em * Miles Kimball: On Consciousness * Miles Kimball: The Decline of Drudgery and the Paradox of Hard Work * Miles Kimball: The Potential of a National Well-Being Index * Miles Kimball: My Experiences with Gary Becker * Miles Kimball: Benjamin Franklin's Strategy to Make the US a Superpower Worked Once, Why Not Try It Again? * Miles Kimball: Life Coaching * Miles Kimball: Odious Wealth * Miles Kimball: Oren Cass on the Value of Work * Miles Kimball: Janet Yellen is Hardly a Dove—She Knows the US Economy Needs Some Unemployment * Miles Kimball: How and Why to Expand the Nonprofit Sector: A Reader's Guide * Miles Kimball: On John Locke's Second Treatise +, of course:* Vernor Vinge: A Fire Upon the Deep Start writing today. Use the button below to create your Substack and connect your publication with Brad DeLong's Grasping Reality Get full access to Brad DeLong's Grasping Reality at braddelong.substack.com/subscribe

Key Insights:* Information really wants to be free—if it is not free, if it is “charged for” by advertising, or otherwise, you will get into a world of hurt.* In the information age the capitalist mode of production has become a fetter on economic development and human flourishing: Friedrich Engels was right.* We need free public-funded Mastodon < servers for everyone.* No! We don't!* We need John back in the future, to talk about: (a) the euthanasia of the rentier, what is misnamed “secular stagnation” and the coming of a capital-slack economy.* BitCoin, meme stocks, and so forth are a reflection of this capital-slack economy.* We need John back in the future, to talk about how Elon Musk is a walking, talking, ranting, tweeting meme stock in human form.* We need multiple measures of economic activity: never draw strong conclusions from only one.* Xi Jinping's plan to shut down social media and have more people building semiconductors to put inside missiles and killer robots does not appear, so far, a great success.* The ratio of Google's user value to its real factor cost is on the order of 20-to-1.* Google's huge market power and profit rate powers the greatest AI-innovation engine in teh world today.* Hexapodia!References:* Ralph Bakshi: Wizards…* Sean Carroll & John Quiggin: Interest Rates and the Information Economy…* Friedrich Engels: Socialism: Utopian & Scientific…* Google: Sankey Diagram for Google…* John Quiggin: Capitalism without capital doesn't work: The future of the information (non) economy…* John Quiggin: The Not‐So‐Strange Death of Multifactor Productivity Growth…* Chad Syverson: Challenges to Mismeasurement Explanations for the US Productivity Slowdown…* Wall Street Journal: GOOG | Alphabet Inc. Financial Statements…* Wikipedia: Mastodon…* Wikipedia: Hermetic Order of the Golden Dawn…+, of course:* Vernor Vinge: A Fire Upon the Deep  Get full access to Brad DeLong's Grasping Reality at braddelong.substack.com/subscribe

Pre-Note:Here in the U.S., at the leading edge of the world economy, measured producivity growth fell off a cliff in the late 1960s, recovreed somewhat in the 1980s, resumed what had been its “normal” pre-1970 pace in the 1990s with the dot-com boom—and then fell off a cliff again in the mid-2000s.Did the neoliberal swing toward “short-termism”, viewing corporations as cash-flow engines and nothing else—plus the great reduction in public R&D and infrastructure spending—play a role in this? Perhaps. Maybe even probably.Could and should we rebuild the corporate industrial research labs that atrophied, at least somewhat, during the neoliberal era? Perhaps. Maybe even probably.Key Insights:* Sometimes the best things in history come from accidents and stupidity.* Collective stupidity enabling individual intelligence enables us to do unexpected things—sometimes very good things (and sometimes very bad things).* Because every institution has its own particular biases and limitations (as well as strengths), you need a diversity of institutions if you are going to achieve big goals.* The market ain't going to provide enough and the right kind of R&D—no single institution or set of institutions will.* The best we can do is to very amply fund as many kinds of R&D institutions as possible.* Hexapodia!References:* Ashish Arora & al.: The Changing Structure of American Innovation: Some Cautionary Remarks for Economic Growth…* John Gertner: The Idea Factory: Bell Labs and the Great Age of American Innovation…* Iulia Georgescu: Bringing back the golden days of Bell Labs…* Ilan Gur: ‘Interested in bringing back Bell Labs? Some thoughts on why it's not possible, and what we should do instead…* Lawrence Lessig: Code 2.0…* Noah Smith: The dream of bringing back Bell Labs: Was America's most famous corporate lab a product of its time, or something that can be reproduced?…+, of course:* Vernor Vinge: A Fire Upon the Deep  Get full access to Brad DeLong's Grasping Reality at braddelong.substack.com/subscribe

Pre-Note:One thing we did not get into was the relationship between the claps of FTX and the associated fraud and “Effective Altruism”—Effective Altruism not so much as a philosophy, but rather as a doctrine preached by a life-coach.If you want to have the highest chance of becoming rich, you make your bets as if you had a logarithmic utility function: if the downside to a bet cuts your wealth in half, you will not accept the bet unless the upside more than doubles your wealth. Accepting bets more risky than those that satisfy this Kelly Criterion, even though the gain exceeds the loss, will ultimately make you bankrupt and out of the game with very high probability and absolutely, filthy rich with very low probability.Effective Altruism tells you not only that you can but that you are under the strongest moral obligation to make such riskier-than-Kelly positive expected-value bets. The question, then, is what you do when the overwhelmingly likely bankruptcy takes place. And then the answer is often: the customers money was just sitting there, so we can borrow it to successfully gamble for resurrection, and then pay it back soon.Noah, however, is more cynical than I. He thinks there is a moderate chance that SBF, CE, and company are still very rich dudes indeed…Key Insights:* Future hypothetical Web3 good, perhaps, if there ever is a use case…* Web3 as currently existing not good—a fraud opportunity and a strongly negative-sum arena for grifters and loosely-wrapped gamblers…* Being a greater fool and buying crypto—not good…* SBF & CE & company may well still be very rich dudes…* Trust Vitalik Buterin, probably—but perhaps Noah is himself subject to affinity fraud…* Hexapodia!References:(Best to read these in order!)* Tracy Alloway & al.: Transcript: Sam Bankman-Fried and Matt Levine on How to Make Money in Crypto…* Sam Trabucco (from April 2021): ‘Two years ago, Alameda maintained pretty strict delta neutrality…* Adam Fisher: Sam Bankman-Fried Has a Savior Complex—And Maybe You Should Too* Adam Cochrane: This was a crime plain and simple…* Tyler Cowen: A simple point about existential risk* Matt Levine: FTX's Balance Sheet Was Bad...* Byrne Hobart: Money, Credit, Trust, and FTX…* @0xfbifemboy: What Happened at Alameda Research…* Patrick Wyman: The Verge: Renaissance, Reformation, & 40 Years That Shook the World…+, of course:* Vernor Vinge: A Fire Upon the Deep  Get full access to Brad DeLong's Grasping Reality at braddelong.substack.com/subscribe

Key Insights:Since 1870, we humans have done amazingly astonishingly uniquely and unprecedentedly well at baking a sufficiently large economic pie.But the problems of slicing and tasting the pie—of equitably distributing it, and then using our technological powers to live lives wisely and well—continue to flummox us. The big reason we have been unable to build social institutions for equitably slicing and then properly tasting our now more-than-sufficiently-large economic pie is the sheer pace of economic transformation.Since 1870 humanity's technological competence has doubled every generationHence Schumpeterian creative destruction has taken hold.Our immensely increasing wealth has come at the price of the repeated destruction of industries, occupations, livelihoods, and communities.And we have been frantically trying to rewrite the sociological code running on top of our rapidly changing forces-of-production hardwareThe attempts to cobble together a sorta-running sociological software code have been a scorched-earth war between two factions.Faction 1: followers of Friedrich von Hayek, who say: "the market giveth, the market taketh away: blessed be the name of the market"Faction 2: followers of Karl Polanyi, who say: "the market was made for man; not man for the market"Let the market start destroying "society", and society will react by trying to destroy the market orderThus the task of governance and politics is to try to manage and perhaps one day supersede this dilemma. &, of course, HEXAPODIA!!Thank you for reading Brad DeLong's Grasping Reality. This post is public so feel free to share it.References:J. Bradford DeLong: Slouching Towards Utopia: An Economic History of the 20th Century Robert Gordon: The Rise and Fall of American Growth Gary Gerstle: The Rise and Fall of the Neoliberal Order: America and the World in the Free Market Era Vaclav Smil: Creating the 20th Century: Technical Innovations of 1867-1914 and Their Lasting Impact Vaclav Smil: Transforming the 20th Century: Technical Innovations and Their Consequences Friedrich von Hayek: The Road to Serfdom Karl Polanyi: The Great Transfomation: The Political and Economic Origins of Our Time John Maynard Keynes: The General Theory of Employment, Interest and Money +, of course:Vernor Vinge: A Fire Upon the Deep  Get full access to Brad DeLong's Grasping Reality at braddelong.substack.com/subscribe

Key Insights:The only way to buy insurance against the fiscal theory of the price level’s becoming relevant for the inflation outlook is to keep Trump and Trumpists out of officeWe have one political party that could well, someday, turn us inflation-wise into “Argentina”: the Republicans.But thankfully we have only one such political party.Democrats need to develop a policy framework for a time of inflation: capacity-building progressivism.We do not yet know whether what the Fed has done is sufficient to return inflation to its 2%/year Core PCE target.If the Fed overdoes inflation fighting, we might well find ourselves back at the zero lower bound on interest rates—and that would be a hell of a mess, much worse than having Core PCE inflation at 5%/year for an extra year or so.Hexapodia!References:Olivier Blanchard: Inflation and unemployment. Where is the US economy heading? (August 8, 2022 1:30 PM)Olivier Blanchard, Alex Domash, and Lawrence H. Summers: The Fed is wrong: Lower inflation is unlikely without raising unemployment (August 1, 23022 11:15 AM)Olivier Blanchard, Alex Domash, and Lawrence H. Summers: Bad news for the Fed from the Beveridge space (July 2022)Olivier Blanchard, Romain Duval, Pierre-Olivier Gourinchas, Anna Stansbury, and Betsey Stevenson: Labor Market Tightness in Advanced Economies (March 31, 2022 1:00 PMOlivier Blanchard: Why I worry about inflation, interest rates, and unemployment (March 14, 2022 1:45 PM)+, of course:Vernor Vinge: A Fire Upon the Deep  Get full access to Brad DeLong's Grasping Reality at braddelong.substack.com/subscribe

Key Insights:We should avoid the tendency to paint the past, nostalgically, as a golden age.If we take the long view there is an overwhelming continuity in the immigrant experience.The immigrant experience is a very positive story—both then and now.There is great hope for positive change in our immigration system: comprehensive immigration reform is not a third rail in American politics.Remember George Washington’s take on immigration: “The bosom of America is open to receive not only the Opulent and respected Stranger, but the oppressed and persecuted of all Nations and Religions; whom we shall welcome to a participation of all our rights and privileges, if by decency and propriety of conduct they appear to merit the enjoyment…” There is a great deal right with America, but if we want to focus on what is wrong with America, look to intersectionality: what is happening to the sons of 1st-generation Caribbean-American immigrants?Hexapodia!References:Ran Abramitzky & Leah Platt Boustan: Streets of Gold: America's Untold Story of Immigrant Success Leah Platt Boustan: Competition in the Promised Land: Black Migrants in Northern Cities and Labor Markets +, of course:Vernor Vinge: A Fire Upon the Deep Notes & Questions:Americans vastly overestimate how many immigrants are in the country today. Americans guess 36% of the country is born abroad, whereas the real number is 14%.The second biggest misconception is that immigrants nowadays are faring more poorly in the economy and are less likely to become American than immigrants 100 years ago. That is simply not trueImmigrants take steps to 'fit in' just as much today as they did in the past.The children of Mexican parents do pretty well today! Even though they were raised at the 25th percentile in childhood, they reach the 50th percentile in adulthood on average. Compare that to the children of US-born white parents raised at the same point, who only reach the 46th percentile.One of the main changes for Mexican immigrants in the 1980s and 1990s is that they settled in larger numbers away from "gateway" communities.The children of poor Irish or Italian immigrant parents outperformed the children of poor US-born parents in the early 20th century; the same is true of the children of immigrants today—with the exception of the sons of 1st generation Caribbean-Americans.Immigrants tended to settle in dynamic cities that provided opportunities both for themselves and for their kids. This makes sense: immigrants have already left home, often in pursuit of economic opportunity, so once they move to the US they are more willing to go where the opportunities are. We suspect that educational differences between groups matter today. Immigrant families can pass along educational advantages to their children.For kids in 1910 observed working in 1940, immigrants have lower levels of education than otherwise similar children of US-born parents, but yet they earn more. Why? Geography. Immigrants and their children lived in more dynamic locations (for example: in cities, and outside of the South).Immigrants that people (somewhat disparagingly) call "low-skilled" are actually pretty selected: It takes a lot of bravery, motivation, and resourcefulness to pick up and move to a new country, especially without much money or connections or language skills. What role did the Cold War and the Red Scare play in discouraging social movements and progressive legislation?What were the effects of the early “computerized factory” on the labor market and on productivity? Get full access to Brad DeLong's Grasping Reality at braddelong.substack.com/subscribe

Key Insights:Be pragmatic! Do what works! Reinforce success! Abandon failure!CHIPS & IRA are only, at most, 1/4 of what we should be doing.These are both very good things to do, as far as running a successful industrial policy is concerned.Maybe there was something to Biden’s claims that he could lead congress after all.Hexapodia!References:Matt Alt: Pure Invention: How Japan Made the Modern World Stephen S. Cohen & J. Bradford DeLong (2016): Concrete Economics: The Hamiltonian Approach to Economic Policy (Cambridge: HBS Press, 978-1422189818) J. Bradford DeLong (2022): Slouching Towards Utopia: An Economic History of the 20th Century (New York: Basic Books, 978-0465019595) Chalmers Johnson (1982): MITI and the Japanese Miracle: The Growth of Industrial Policy, 1925-1975 (Stanford: Stanford University Press, 978-0804712064) W. David Marx (): Ametora: How Japan Saved American Style +, of course:Vernor Vinge: A Fire Upon the Deep  Get full access to Brad DeLong's Grasping Reality at braddelong.substack.com/subscribe

Key Insights:The most recent round of Tech elephants, rhinoceroses, unicorns, and spiny lizards—Netflix, Shopify, etc.—are very unlikely to payoff for those investors who stay on the ride to the very end.That said, they were very much worth doing even if they never make their shareholders any money. The growth of communities of engineering, entrepreneurial, and organizational practice is a huge benefit for innovation and growth—and the overwhelming bulk of that becomes non-rival public knowledge, that nobody can make scarce and hence charge people through the nose for.Having your rich and your superrich fund R&D for little return is not the worst thing to have happen.The ideas behind “Web3”—an end to the walled-garden Web2 internet, with the useful parts of the social graph trustable and publicly accessible to anyone who wants to communicate—are great ones.The ideas behind “Web2”—the clickbait-ad walled-gardens—are horrible. And it is not just Facebook and Twitter. Google and Amazon are manifestly less useful than they were a decade and a half ago. Why? Because using pixels to inform is less profitable than using them for selling ads, and the companies have decided to be evil.Code is fundamental: a tech-finance drought is no reason not to learn to code. It is a reason to get a job working for a company that already has a real product, and, you know, profits.At bottom, all of “crypto” is very familiar. It is taking out a map, drawing property lots boundaries on them, and then trying to sell those lots to people by telling them that the railroad is coming through. And in the end everyone will be very happy If the railroad does come through, and does not decide to build its river-crossing bridge ten miles north.Hexapodia!References:Scott Chipolina & George Steer: The Terra/Luna Hall of Shame Brad DeLong: Tesla’s Valuation(s) Brad DeLong: Wonders of þe Invisible Crypto WorldAdam Ozimek: Think Bigger About Remote WorkNoah Smith: Meme Stocks & Bitcoin Will Not Redistribute Wealth: Financio-Populism Is Built on Dreams & SmokeNoah Smith: Suddenly Startups Are Having Trouble Raising Money. Why?: ‘A Few Reasons for the Big VC Funding CrunchNoah Smith: What Kind of Financial Asset Is Bitcoin?: Is It Money? Digital Gold? A Tech Stock? Recent Events Shed Some Light on The Question Nicholas Weaver: Blockchains & Cryptocurrencies: Burn It With Fire +, of course:Vernor Vinge: A Fire Upon the Deep  Get full access to Brad DeLong's Grasping Reality at braddelong.substack.com/subscribe

Key Insights:Not so much key insights, as key questions: (a) What are the teams? (b) 1920, 1948, 1951, 1974, or 1980? (c) Are there any true members of Team Transitory left? (d) Who is on Team The-Fed-Has-Got-This? (e) Who is on Team Hit-the-Economy-on-the-Head-with-a-Brick? (f) What inflation rate do we want to support economic reopening? (g) What inflation rate do we want to support the sectoral rebalancing—towards goods production, & towards the deliverator economy? (h) How would expected inflation get embedded in the labor market without strong unions and multi-year contracts? (i) How would expected inflation get embedded in the labor market without it first showing up in out-year bond market breakevens?With Putin’s invasion-of-Ukraine supply shock, Summers’s position looks a lot strongerNear the zero-lower-bound, there is a high option value to waiting to raiseThat optionality still seems to us, for the moment, to be the major considerationThus it is too early to hit the economy on the head with a brick—even the small 5%-interest-rates brickBut it is not too early for Jay Powell to furrow his brow and say that the Fed is considering Larry Summers’s arguments very carefully.Noah Smith finds that he is much more in accord with Larry Summers than he thought he would be.Larry and Ezra like Brad’s forthcoming Slouching Towards UtopiaElon Musk should take over TwitterHexapodia!Charts:References:J. Bradford DeLong (2022): Slouching Towards Utopia: An Economic History of the 20th Century (New York: Basic Books, 978-0465019595) J. Bradford DeLong: America’s Macroeconomic Outlook Ezra Klein & Larry Summers: I Keep Hoping Larry Summers Is Wrong: What If He Isn’t?: The Ezra Klein Show Paul Krugman: High Inflation in the United States: Newsletter 2022-03-29 John Scalzi: The Kaiju Preservation Society Noah Smith: When Will the Fed Drop the Hammer? Neal Stephenson: Snow Crash +, of course:Vernor Vinge: A Fire Upon the Deep  Get full access to Brad DeLong's Grasping Reality at braddelong.substack.com/subscribe

Key Insights:There is a perspective from which “today” means “post-Ordovician”Catul-Huyuk as 900 families living cheek-by-jowl, and after 1500 years… people leave…Angkor’s uniquely vulnerable water reservoirs… and eventually… people leave…Cahokia’s sophisticated organization of labor… but eventually… people leave…Pompeii… well, we know why people flee all-of-a-sudden…Cities are magical places, but not always, and not forever…Cities suffer from abandonment when an overdetermined disaster hits a sclerotic system: you can deal with politics, you can deal with climate change by themselves, but…Question: Will Detroit or Miami or Houston be the next “lost city” in the U.S.?Hexapodia!References:Annalee Newitz: Four Lost Cities: A Secret History of the Urban Age (New York: W.W. Norton, 2021) Joseph Tainter: The Collapse of Complex Societies (Cambridge: Cambridge University Press, 1988) +, of course:Vernor Vinge: A Fire Upon the Deep (New York: Tor, 1992) Get full access to Brad DeLong's Grasping Reality at braddelong.substack.com/subscribe

We Truly Did Not Have History Rhyming to the Spanish Civil War on Our 2022 Bingo Card!…Subscribe to get this in your email inbox. Become a paid subscriber if… I will not say that this ‘Stack will cease to exist without paying subscribers. I will say that the frequency of this ‘Stack depends on enough people being paying subscribers for me to feel under a sense of obligation to prioritize this, rather than something else. And I will say that the survival of our civilization may well depend on our reattaining a functional, rational public sphere—and that subscribing to ‘Stacks that you find useful may well be the most productive thing you can do to help make that happenThank you for reading Brad. Please share this with anyone who you think will find it useful.Key Insights:Putin’s decision to invade came as a great surprise to everyone.The information flow to Putin is very bad, very low quality.Muscovy, St. Petersburg, Novgorod, Minsk, Kyiv are all ‘Rus.But the cultural, political, and linguistic differences between Kyivan and Muscovite ‘Rus are surprisingly deep, historically speaking.Economic sanctions can do a lot to degrade Russia’s war-fighting machine, and should be used to do so.Bounties and rewards for defectors and for the neutralization of equipment might be very effective, and should be promoted.Countries and régimes run on myth, and military defeat is the most effective way that a pernicious myth gets destroyed.Be afraid, be very afraid: Putin’s survival—his personal political, the causes he has invested his life in, and perhaps his mortal—depend on his “winning” in some sense.If appeasement of Putin could be made to work, it might well be worth trying.But it is highly unlikely that appeasement of Putin could be made to work.Really-existing Putinite petro-kleptocracy looks worse than really-existing Brezhnevite socialism.References:ChinaTalk: Russia's Pivot to Asia From Czars to Putin Kamil Galeev: Why Russia Will Lose Kamil Galeev: Twitter Wilson Center: Kamil Galeev +, of course:Vernor Vinge: A Fire Upon the Deep  You can now read Brad DeLong's Grasping Reality in the new ‘Stack app for iPhone—but not (YET) Android.The ‘Stack Communications Apparat says: “With the app, you’ll have a dedicated Inbox for my ‘Stack and any others you subscribe to. New posts will never get lost in your email filters, or stuck in spam. Longer posts will never cut-off by your email app. Comments and rich media will all work seamlessly. Overall, it’s a big upgrade to the reading experience. If you do not have an “Apple device”, you can join the Android waitlist here.”I have been a beta tester for the iPhone ‘Stack app. The use case I have found for it is as a podcast player— using Apple's text-to-speech feature for ‘Stacks that do not have attached audio podcasts. It has, so far, been a very very good experience. Get full access to Brad DeLong's Grasping Reality at braddelong.substack.com/subscribe

Become a free subscriber to receive this ‘Stack in your email. Do note that this Grasping Reality newsletter is a reader-supported publication—I really would like to collect enough from it to hire an RA. So consider becoming a paid subscriber, please, if you find this project worthwhile and think it worth continuing:Thanks for reading this. And please share it far and wide, if you think it worth reading…Key Insights:The Federal Reserve Act directly speaks of the importance of representation—that Governors come from different economic communities with different economic interests, and not be limited to monetary economists, financiers and bankers, and rich asset-heavy worthies. The African-American community—and, indeed, the gloal warming-worrying community—are fine communities to be represented by a Governor.A former senior advisor to the Secretary of the T reasury for development and finance, a former senior economist at the Council of Economic Advisors who served as the point person on the European side of the Great Recession’s financial crisis, a tenured economics professor from a major state university in the Midwest and a former National Fellow at the Hoover Institution—there would be no Republican senatorial opposition to her from other than the ten wingnuttiest wingnuts were Lisa Cook not Black.We—at least Brad—is thus more scared than he was about the Republican-conservative white racial panic that this backlash reveals: 400 years of guilt from the enforcement of white supremacy have led at least the people who speak for the Republican Party to fear a former Hoover Institution National Fellow as a mortal threat by reason of what they presume is her hyper-wokeness.If Lisa Cook does not satisfy that Republican community, I cannot think of a single African-American who could.We are in an era of unrest, in which people are stupid and very stupid things happen. This white backlash against Lisa Cook is just one of the many very, very stupid things happening at the moment.This moment will pass: 10 years ago Lisa Cook’s nomination would not have generated a backlash; 10 years from now it would not generate a backlash.At this moment in America our competence as a nation to do even the very simple things is heavily compromised by the racialized hyper-politicization of nearly every single thing.Hexapodia!References:Lisa Cook: Statement Before the Committee on Banking, Housing, & Urban Affairs, United States Senate Lisa Cook: Website Lisa Cook: Biography Lisa Cook: C.V. Lisa Cook: Violence and Economic Growth: Evidence from African American Patents, 1870- 1940 Amanda Terkel: Biden’s Federal Reserve Nominee Lisa Cook Is Facing A Racist Smear Campaign Olivier Blanchard: ‘I like Lisa Cook and believe she will be a very useful addition to the Board… Nina Banks & al.: NEA Supports the Nominations of Drs. Cook and Jefferson to the Federal Reserve Board Brad DeLong: Lisa Cook Has Not Been Playing the Game of Life on Easy Mode…Craig Torres & Daniel Flatley: Fed’s First Black Female Nominee Brings New Focus, Stirs GOP Ire Paul Romer: Theories, Facts, and Lisa Cook George F. Will: Biden Proposes Saddling an Already Struggling Federal Reserve with Two Political Activists John Cochrane: Fed Nominees Chris Brunet: Biden’s Fed Nominee Lisa Cook Criticized For Being Unqualified, Embellishing Resume +, of course:Vernor Vinge: A Fire Upon the Deep Become a free subscriber to receive this ‘Stack in your email. Do note that this Grasping Reality newsletter is a reader-supported publication—I really would like to collect enough from it to hire an RA. So consider becoming a paid subscriber, please, if you find this project worthwhile and think it worth continuing: Get full access to Brad DeLong's Grasping Reality at braddelong.substack.com/subscribe

Become a free subscriber to receive this ‘Stack in your email. Do note that this Grasping Reality newsletter is a reader-supported publication—I really would like to collect enough from it to hire an RA. So consider becoming a paid subscriber, please, if you find this project worthwhile and think it worth continuing:Thanks for reading this. And please share it far and wide, if you think it worth reading!Key Insights:Macro Policy Guiding Principle: prioritize full employment—make Say’s Law true in practice even though it is false in theory…Macro Policy Guiding Principle: move the economy as fast as possible to what its long-term optimal structural configuration should beMacro Policy Guiding Principle: Guiding principles (1) and (2) overrides desirability of immediate price stability…We still have lots of room to run before we can say that the post-Volcker Fed has failed to meet its inflation target in an average-outcomes sense…Time to panic about inflation will be when the bond market gets worried about it—but right now the bond market is very much “Fed has got this”…Yet the political economy of the thing is overwhelmingly relevant: inflation that gets Biden booted from office would be very bad…Even prolonged inflation may help—in that there is a lot of structural reform we need to do, and this may help us get it done…Hexapodia!John Maynard Keynes (1919): The Economic Consequences of the Peace :Lenin is said to have declared that the best way to destroy the Capitalist System was to debauch the currency. By a continuing process of inflation, governments can confiscate, secretly and unobserved, an important part of the wealth of their citizens. By this method they not only confiscate, but they confiscate arbitrarily; and, while the process impoverishes many, it actually enriches some. The sight of this arbitrary rearrangement of riches strikes not only at security, but at confidence in the equity of the existing distribution of wealth. Those to whom the system brings windfalls, beyond their deserts and even beyond their expectations or desires, become "profiteers,", who are the object of the hatred of the bourgeoisie, whom the inflationism has impoverished, not less than of the proletariat. As the inflation proceeds and the real value of the currency fluctuates wildly from month to month, all permanent relations between debtors and creditors, which form the ultimate foundation of capitalism, become so utterly disordered as to be almost meaningless; and the process of wealth-getting degenerates into a gamble and a lottery.Lenin was certainly right. There is no subtler, no surer means of overturning the existing basis of society than to debauch the currency. The process engages all the hidden forces of economic law on the side of destruction, and does it in a manner which not one man in a million is able to diagnose.In the latter stages of the war all the belligerent governments practised, from necessity or incompetence, what a Bolshevist might have done from design. Even now, when the war is over, most of them continue out of weakness the same malpractices. But further, the Governments of Europe, being many of them at this moment reckless in their methods as well as weak, seek to direct on to a class known as "profiteers" the popular indignation against the more obvious consequences of their vicious methods. These "profiteers" are, broadly speaking, the entrepreneur class of capitalists, that is to say, the active and constructive element in the whole capitalist society, who in a period of rapidly rising prices cannot help but get rich quick whether they wish it or desire it or not. If prices are continually rising, every trader who has purchased for stock or owns property and plant inevitably makes profits.By directing hatred against this class, therefore, the European Governments are carrying a step further the fatal process which the subtle mind of Lenin had consciously conceived. The profiteers are a consequence and not a cause of rising prices. By combining a popular hatred of the class of entrepreneurs with the blow already given to social security by the violent and arbitrary disturbance of contract and of the established equilibrium of wealth which is the inevitable result of inflation, these Governments are fast rendering impossible a continuance of the social and economic order of the nineteenth century. But they have no plan for replacing it…References:William J. Baumol (1999): Retrospectives: Say’s Law John Maynard Keynes (1919): The Economic Consequences of the Peace Paul Krugman (1998): It’s Baaack!: Japan's Slump & the Return of the LiquidityTrap Paul Krugman (2018): It’s Baaack, Twenty Years Later +, of course:Vernor Vinge: A Fire Upon the Deep Become a free subscriber to receive this ‘Stack in your email. Do note that this Grasping Reality newsletter is a reader-supported publication—I really would like to collect enough from it to hire an RA. So consider becoming a paid subscriber, please, if you find this project worthwhile and think it worth continuing: Get full access to Brad DeLong's Grasping Reality at braddelong.substack.com/subscribe

Key Insights:We may well face a generation of right-wing culture war-fueled minority rule in this country.American Progressives have proven bad at making alliances with moderate conservatives—and at giving conservative voters reasons to vote for moderates.Worry most about American national decline—which is happening anyway.American exceptionalism and America as a “city upon a hill” for the world—that is gone. We are no longer a model to emulate, but a horrible warning of a society gone wrong.The things that are real to progressives are fake: democracy is not going to be destroyed by the failure to pass the John Lewis voting rights act, but by state legislature-level nullificationThe thngs that are real to Republicans are fake: what is being taught to students is not “critical race theory” but simply “history”, vaccines are not a plot to control us, and the 2020 election was not stolen.The Republican b******t is more egregious, but progressive b******t is still b******t. The saying both sides have b******t does not mean they are equivalent.The best we can hope for is simple exhaustion on both sides.But every time we try to get out, they pull us back in.Hexapodia!References:Geoffrey Kabaservice: Rule & Ruin: the Downfall of Moderation & the destruction of the Republican Party, from Eisenhower to the Tea Party Geoffrey Kabaservice: The Forever Grievance Geoffrey Kabaservice: Vital Center Podcast Steve Levitzky & Dan Ziblatt: How Democracies Die: What History Reveals About Our Future William F. Buckley: God & Man at Yale: The Superstitions of Academic Freedom William F. Buckley & L. Brent Bozell: McCarthy & His Enemies: The Record & Its Meaning Rick Perlstein: Before the Storm: Barry Goldwater & the Unmaking of the American Consensus Dwight D. Eisenhower: 1954 Letter to Edgar N. Eisenhower +, of course:Vernor Vinge: A Fire Upon the Deep  Get full access to Brad DeLong's Grasping Reality at braddelong.substack.com/subscribe

Key Insights:Nearly all successful political movements over the past 150 years have been strongly nationalisticA successful cosmopolitanism must therefore be a nationalistic cosmopolitanism—one that says your country is great because it learns from and has important things to teach other nations.We—somewhat surprisingly—find ourselves endorsing and agreeing with Matthew Desmond’s claim that an important root of some facets of American capitalism is found on the plantation.We endorse Sandy Darity and Darrick Hamilton’s calls for reparations,We enthusiastically and positively give a shout-out to the highly patriotic Nikole Hannah Jones and her contention that the 1619 founding makes African-Americans the most quintessential representatives of the good side of American nationalismYou cannot be a real patriot if you do not care about dealing with your country’s flaws—Carl Shurz: “My country, right or wrong; if right, to be kept right; and if wrong, to be set right!”Wokeness is 21st century Puritan Protestantism—to build a City Upon a Hill and become a Light Unto the Nations, with a key part of that building composed of our confession that we are the unworthy who must place our hearts on the altar of and tremble before the Almighty .It is important to mean it: to repent, to take responsibility, to not just say that America owes reparations, but to work to make America pay what it owes.This podcast appears to be our version of: Three strongly patriotic white guys stand up for ‘Murka!Hexapodia!References:Ed Baptist: The Half Has Never Been Told: Slavery & the Making of American Capitalism Trevor Burnard: Edward Baptist, Slavery and Capitalism Matthew Desmond: In Order to Understand the Brutality of American Capitalism, You Have to Start on the Plantation John J. Clegg: Capitalism and Slavery Nikole Hannah Jones: Our Democracy’s Founding Ideals Were False When They Were Written. Black Americans Have Fought to Make Them True P.R. Lockhart & Ed Baptist: How Slavery Became America’s First Big Business Alan L. Olmstead & Paul W. Rhode: Cotton, Slavery, & the New History of Capitalism Ernst Renan: What Is a Nation? +, of course:Vernor Vinge: A Fire Upon the Deep  Get full access to Brad DeLong's Grasping Reality at braddelong.substack.com/subscribe

Key Insights:Matt Suandi—forced off of his India RCT development-economics project by the COVID plague—has taken the plague year to write a brilliant paper: Matthew Suandi: Promoting to Opportunity: Evidence and Implications from the U.S. Submarine Service In the early stages of the Pacific War, whether a US submarine-launched torpedo exploded was a matter of luck.If a submarine captain had an enlisted man marked out for promotion, those promotions happened much more often if the submarine returned from its cruise having succeeded in sinking ships.Those promoted because they happened to be on lucky submarines with torpedoes that exploded lived 2.4 years longer than their counterparts who happened to be on unlucky submarines and were not promoted.Those promoted because they happened to be on lucky submarines with torpedoes that exploded are recorded as having a last known address in a zip code with housing prices higher by 7 percentiles than their counterparts who happened to be on unlucky submarines and were not promoted.Early promotion to a job with more responsibility and scope—at least in the WWII-era USN—shapes your life to a remarkable degree by giving you scope to develop and exercise your talents.If the WWII-era USN is typical, we waste huge amounts of human potential by not giving people workplace opportunities to show what they can learn to do.Equality isn’t just about money: it is about scope for action, about developing and exercising talents, and about receiving external validation.A good society would give people much more opportunity to discover how big a deal they are and can become, and remind them of this at every opportunity.It is very, very important to conduct realistic live-fire tests under realistic conditionsHexapodia!References:Matthew Suandi: Promoting to Opportunity: Evidence and Implications from the U.S. Submarine Service Dud Torpedoes of World War II Ian Toll: Pacific Crucible: War at Sea in the Pacific, 1941-1942, The Conquering Tide: War in the Pacific Islands, 1942-1944, Twilight of the Gods: War in the Western Pacific, 1944-1945Herman Wouk: The Winds of War , War & Remembrance Anthony Newpower: Iron Men and Tin Fish: The Race to Build a Better Torpedo during World War II +, of course:Vernor Vinge: A Fire Upon the Deep  Get full access to Brad DeLong's Grasping Reality at braddelong.substack.com/subscribe

Key Insights:Paul Feyerabend was right—science is whatever scientists do: anything goes. But what healthy sciences that survive and flourish and good scientists do is put first and foremost discovering what actually is and making theories to understand reality. So Kuhn and Popper are also right.Economics has not been much of a science. But this Card, Angrist, Imbens—and Krueger—Nobel Prize marks a very big possible improvement in this respect.Keep at it! Keep doing your work no matter the brickbats, and you may, someday, look back and recognize that you have changed the world.Pets are good: they drive you to “become the person your dog thinks you already are”.Hexapodia!References:The London Economist has an excellent interview with two of our three Nobel Prize winners this year—David Card and Josh Angrist. If you want to know why we economists respect them so much and are cheering their Nobel Prizes so loudly, follow the link: Joshua Angrist, Ryan Avent, David Card, & Rachana Shanbhogue : A Real-World Revolution in Economics: ‘THIS YEAR’s Nobel prize celebrates the “credibility revolution” that has transformed economics since the 1990s. Today most notable new work is not theoretical but based on analysis of real-world data.... How their work has brought economics closer to real life…This is, I think, the best single thing to read about the Card, Angrist, Imbens Economics Nobel Prize: Noah Smith: The Econ Nobel We Were All Waiting for: ‘To predict who will win the Econ Nobel... list the most influential people in the field who haven’t won it yet.... Assume... micro theorists won’t win... two years in a row.... The ones whose influence is the oldest are the most likely to win.... For years, this method led lots of people—including me—to predict a Nobel for David Card. His 1994 paper with Alan Krueger on the minimum wage was a thunderbolt.... Since then, Card has been at the forefront of empirical labor.... Angrist and Imbens’ impact... though also high... came later.... I wouldn’t have been surprised had they won the prize in later years. But Card was clearly overdue. Perhaps the reason it took this long was that Card’s conclusions in his famous minimum wage paper were so hard for many in the field to swallow.… At the time, Card and Krueger’s finding seemed revolutionary and heretical. In fact, other researchers had probably been finding the same thing, but were afraid to publish their results, simply because of their terror of offending the orthodoxy... Tim Noah: Tragedy Kept Alan Krueger From Claiming a Nobel Prize, but He’s Not Forgotten: ‘Paying tribute to the late economist who, with David Card, changed America’s mind about the minimum wage… Get full access to Brad DeLong's Grasping Reality at braddelong.substack.com/subscribe

Key Insights:Yes, Americans are now in a selfish defensive crouch, but just wait 8 years—if we get a high-pressure economy for those years…We are finally getting back to normal politics, in which we slag each other because some claim we can afford to spend $3.5 and others that we can only afford to spend $1.5 trillion. And that is a very good sign…Hexapodia!References:Zach Carter: Why Are Moderates Trying to Blow Up Biden’s Centrist Economic Plan? Jonathan Cohn: Why Manchin & Democratic Leaders Might Not Be Quite So Far Apart: Todd Gitlin: Look What’s Inside The Bill, Please: the Details of the $3.5 Trillion Package Robert Greenstein: Budget Rconciliation: Calling It a ‘$3.5 Trillion Spending Bill’ Isn’t Quite Right Steven M. Teles, Samuel Hammond, & Daniel Takash: Cost-Disease Socialism David Cay Johnston: How $3 a Day Can Buy America a Rich Future Robert Kuttner: How the Budget Deal Could Make the Child Tax Credit Permanent Adam Jentleson: ‘Sinema’s approval rating has tanked, going from net +13 to 0 since the beginning of the year. But surely someone will be along soon to explain how actually this is brilliant politics…Jeet Heer: Dune Bugs +, of course:Vernor Vinge: A Fire Upon the Deep  Get full access to Brad DeLong's Grasping Reality at braddelong.substack.com/subscribe

Key Insights:I do not understand how the Chinese economy works.The Chinese economy is an odd combination of market and party in which the party has enormous reach and control, but somehow that has not triggered the “soft budget constraint” problems of the Soviet model.Financial constraints are not real—a government that wants to can evade them in its management of the economy.Real resource constraints are, however real: finance does not bind because it is true that what we can do, we can afford; but it is also true that what we cannot do, we cannot afford.You can hide for a while from real resource constraints by bubble-overvaluing the low-value infrastructure and real-estate investments that you are making, but you cannot run.There is lots to read that is good; consult these show notes.HEXAPODIA!!References:Robert Armstrong: The Real Risks from Evergrande: Òscar Jordà, Moritz Schularick & Alan M. Taylor: The Great Mortgaging: Housing Finance, Crises, & Business Cycles Michael Pettis: What Does Evergrande Meltdown Mean for China? Margaret Sutherlin: ‘Cash-strapped Chinese developer Evergrande missed payments… on Monday… Girolamo Pandolfi da Casio ditto Carlo Dossi Erba: Evergrande Ming Zhao: Evergrande’s Backstory +, of course:Vernor Vinge: A Fire Upon the Deep  Get full access to Brad DeLong's Grasping Reality at braddelong.substack.com/subscribe

Key Insights:Today’s meaning of “neoliberalism” is the result of the collision of two different applications of the term—to Margaret Thatcher, and to the Washington Monthly…Intermediary institutions are very suspicious to liberalism, at least in its pure form…Liberalism has a bias toward atomizing solutions to social problems…YIMBY vs. NIMBY is the fundamental political debate in America today…Sometimes the answer will be command-and-control, sometimes the answer will be deregulation…Yuval Levin is good…Detach liberalism from centrism or moderation…Liberals are thinking about things that are important and visionary about productivity, and Biden is listening…Hexapodia!References:Sam Hammond: The Free-Market Welfare State: Preserving Dynamism in a Volatile World Brink Lindsey: The Center Can Hold: Public Policy for an Age of Extremes Brink Lindsey & Steve Teles: The Captured Economy: How the Powerful Enrich Themselves, Slow Down Growth, & Increase Inequality Niskanen Center: Faster Growth, Fairer Growth: Policies for a High Road, High Performance Economy Steve Teles, Samuel Hammond, & Daniel Takash: Cost Disease Socialism: How Subsidizing Costs While Restricting Supply Drives America’s Fiscal Imbalance +, of course:Vernor Vinge: A Fire Upon the Deep  Get full access to Brad DeLong's Grasping Reality at braddelong.substack.com/subscribe

Key Insights:The Taliban should go to the World Bank and say: “For 42 years now, mechanized, airborne, and infantry armies and air and drone forces have been driving, walking, and flying over our country, killing us. that has done enormous amounts of damage. We are absolutely dirt poor. We will try as hard as we can: please give us money so that we can start call centers, start simple labor-intensive textile factories, and also beef up our handmade rug businesses so that we can export to pay for what we so desperately need. This is our only chance to make the lives of Afghans in the villages and even in Kabul better. This government would rather rule on the basis of honest, good government and prosperity. But if we cannot do that, others in our coalition will grow in power and rule on the basis of jihad.”Economics is important for governments, because it allows them to change the kind of government they are—change the relationship of the government to the people, change crazy bad governments into governments that are still bad, but much more oriented towards prosperity and stability.Things are not yet at their worst. It’s like when Bart says to Homer, “this is the worst day of my life!” and Homer says, “no, this is the worst day of your life so far.”Hexapodia!References:Daron Acemoglu: Why Nation-Building Failed in Afghanistan: ‘The tragedy playing out this month has been 20 years in the making… a top-down state-building strategy that was always destined to fail… Costs of War in Afghanistan Ryan Crocker (2016): Lessons Learned Interview  Graham Greene (1955): The Quiet American (New York: Penguin Books)Josh Marshall: The Fall of Kabul, Washington and the Guys at the Fancy Magazines: ‘What we see in so many reactions, claims of disgrace and betrayal are no more than people who have been deeply bought into these endeavors suddenly forced to confront how much of it was simply an illusion… Josh Marshall: You Wouldn’t Know It From the US News Coverage, But…: ’Something that seems to be getting very, very little above-the-fold coverage in the American press coverage: the key leaders of the US backed government over the last two decades are relaxedly meeting with the political leadership of the Taliban in Kabul about the formation of the new government… Martin Sandbu: The West Has Paid the Price For Neglecting The Afghan Economy: ‘Per capita incomes flatlined over the past decade and corruption is endemic… Jordan Michael Smith: Twenty Years After 9/11, Are We Any Smarter?: ‘Our foreign policy wise people responded to the Sept. 11 terrorist attacks by embracing belligerence. What, if anything, have they learned?… Juggalos For Responsible Flushing: ‘Explains a lot about our current situation that Leon Panetta knows so little about Afghanistan that he thinks the Taliban and ISIS are allies… Atif Mian: ‘The big injection of foreign money did not translate into sustainable growth. Why?…+, of course:Vernor Vinge: A Fire Upon the Deep (Remember: You can subscribe to this… weblog-like newsletter… here: There’s a free email list. There’s a paid-subscription list with (at the moment, only a few) extras too.) Get full access to Brad DeLong's Grasping Reality at braddelong.substack.com/subscribe

“I have seen the future, and it works”. That was what Lincoln Steffens wrote in a letter to Maria Howe in 1919 with respect to Vladimir Lenin’s Soviet Union. Which societies are thought to “work”, and how does that influence the power and authority such societies have, and the global leadership they can exercise? Key Insights:We need to have another podcast on emerging great-power competition in a time of increasing global authoritarianismGreat powers remain great powers not just through economic and military strength, but by projecting an image that they are the wave of the future that others find attractive, or at least irresistibleIf Europe is a great power over the next two generations, it will be because of the great power status of fear—because fear of what unstable and inconsistent America, China, India, and perhaps Russia might try to bully it to do if it does not present a united front.The rise and fall of great powers is much more bizarre and contingent and subtle than historians see it in retrospectHexapodia!References:David Abernethy: The Dynamics of Global Dominance: European Overseas Empires, 1415-1980 Peter Falk & al.(1971): Columbo Justin Kaplan: Lincoln Steffens: A Biography Jacob T. Levy: Who’s Afraid of Judith Shklar? William Powell, Myrna Loy, W.S. Van Dyke, Hunt Stromberg, & al. (1934): The Thin Man Judith Shklar: The Liberalism of Fear Noah Smith: What Kind of Economy Leads to National Power? C.V. Wedgewood: William the Silent +, of course:Vernor Vinge: A Fire Upon the Deep (Remember: You can subscribe to this… weblog-like newsletter… here: There’s a free email list. There’s a paid-subscription list with (at the moment, only a few) extras too.) Get full access to Brad DeLong's Grasping Reality at braddelong.substack.com/subscribe

Key Insights:There are a great many reasons to fear that the rise of industrial and post-industrial economic concentration is doing serious harm to the market economy’s (limited) ability to function as an efficiency-promoting societal calculating mechanism.None of these have yet been nailed down.But the neo-Brandeisians will have their chance because of the striking misbehavior of the tech platforms, which have thought too much about how to glue their users’ eyeballs to the screen so they can be sold ads and too little about how to make users and others happy and comfortable with their business models.That is, the neo-Brandeisians will have their chance to the extent that they are not blocked by justices who know little of the law and less of economics.Hexapodia!References:Autor, Dorn, Katz, Patterson, & Van Reenen (2017): Concentrating on the Fall of the Labor Share Autor, Dorn, Katz, Patterson, & Van Reenen (2017): The Fall of the Labor Share & the Rise of Superstar Firms Azar, Marinescu & Steinbaum (2017): Labor Market Concentration Berger, Herkenhoff, & Mongey (2019): Labor Market Power Blonigen & Pierce (2016): Evidence for the Effects of Mergers on Market Power & Efficiency De Loecker, Eeckhout, and Mongey (2021): Quantifying Market Power & Business Dynamism in the Macroeconomy De Loecker, Eeckhout, & Unger  (2019): The Rise of Market Power & the Macroeconomic Implications Gutierrez & Philippon (2016): Investment-less Growth: An Empirical Investigation Noah Smith (2021): The Economists' Revolt &, of course:Vernor Vinge: A Fire Upon the Deep (Remember: You can subscribe to this… weblog-like newsletter… here: There’s a free email list. There’s a paid-subscription list with (at the moment, only a few) extras too.) Get full access to Brad DeLong's Grasping Reality at braddelong.substack.com/subscribe

Key Insights!:Hexapodia!Drop the embargo now!There is nothing that enables an authoritarian régime—or, indeed, pretty much any type of régime—hang together other than an implacable external enemy.For the Cuban military-bureaucratic junta-oligarchy, that implacable external enemy consists of the Cuban exiles in Miami and their descendantsReferences:Alexa van Sickle (2014): Viva la Revolución: Cuban Farmers Re-Gain Control Over Land: ‘As the state loosens its grip on food product… Damian Cave: Raúl Castro Thanks U.S., but Reaffirms Communist Rule in Cuba Marianne Ward and John Devereux (2010): The Road Not Taken: Pre-Revolutionary Cuban Living Standards in Comparative Perspective Brian Latell (2005): After Fidel: The Inside Story of Castro’s Régime and Cuba’s Next Leader New York: St. Martin’s Press, 2005 Carmelo Mesa-Lago (2019): There’s Only One Way Out for Cuba’s Dismal Economy Carlos Eire: Raúl Castro Leaving Power Won’t Bring Change to Cuba Anytime Soon Noah Smith: Why Cuba Is Having an Economic Crisis &, of course:Vernor Vinge: A Fire Upon the Deep Notes:Post-Fidel Timeline:2008 February - Raul Castro takes over as president, days after Fidel announces his retirement.2008 May - Bans on private ownership of mobile phones and computers lifted.2008 June - Plans are announced to abandon salary equality. The move is seen as a radical departure from the orthodox Marxist economic principles observed since the 1959 revolution. EU lifts diplomatic sanctions imposed on Cuba in 2003 over crackdown on dissidents.2008 July - In an effort to boost Cuba's lagging food production and reduce dependence on food imports, the government relaxes restrictions on the amount of land available to private farmers.2008 September - Hurricanes Gustav and Ike inflict worst storm damage in Cuba's recorded history, with 200,000 left homeless and their crops destroyed.2008 October - State oil company says estimated 20bn barrels in offshore fields, being double previous estimates.2008 November - Russian President Dmitry Medvedev visits. Two countries conclude new trade and economic accords in sign of strengthening relations. Raul Castro pays reciprocal visit to Russia in January 2009. Chinese President Hu Jintao visits to sign trade and investment accords, including agreements to continue buying Cuban nickel and sugar.2008 December - Russian warships visit Havana for first time since end of Cold War. Government says 2008 most difficult year for economy since collapse of Soviet Union. Growth nearly halved to 4.3%.2009 March - Two leading figures from Fidel era, Cabinet Secretary Carlos Lage and Foreign Minister Felipe Perez Roque, resign after admitting "errors". First government reshuffle since resignation of Fidel Castro. US Congress votes to lift Bush Administration restrictions on Cuban-Americans visiting Havana and sending back money.2009 April - US President Barack Obama says he wants a new beginning with Cuba.2009 May - Government unveils austerity programme to try to cut energy use and offset impact of global financial crisis.2009 June - Organisation of American States (OAS) votes to lift ban on Cuban membership imposed in 1962. Cuba welcomes decision, but says it has no plans to rejoin.2009 July - Cuba signs agreement with Russia allowing oil exploration in Cuban waters of Gulf of Mexico.2010 February - Political prisoner Orlando Zapata Tamayo dies after 85 days on hunger strike.2010 May - Wives and mothers of political prisoners are allowed to hold demonstration after archbishop of Havana, Jaime Ortega, intervenes on their behalf.2010 July - President Castro agrees to free 52 dissidents under a deal brokered by the Church and Spain. Several go into exile.2010 September - Radical plans for massive government job cuts to revive the economy. Analysts see proposals as biggest private sector shift since the 1959 revolution.2011 January - US President Barack Obama relaxes restrictions on travel to Cuba. Havana says the measures don't go far enough.2011 March - Last two political prisoners detained during 2003 crackdown are released.2011 April - Communist Party Congress says it will look into possibility of allowing Cuban citizens to travel abroad as tourists.2011 August - National Assembly approves economic reforms aimed at encouraging private enterprise and reducing state bureaucracy.2011 November - Cuba passes law allowing individuals to buy and sell private property for first time in 50 years.2011 December - The authorities release 2,500 prisoners, including some convicted of political crimes, as part of an amnesty ahead of a papal visit.2012 March - Pope Benedict visits, criticising the US trade embargo on Cuba and calling for greater rights on the island.2012 April - Cuba marks Good Friday with a public holiday for the first time since recognition of religious holidays stopped in 1959.2012 June - Cuba re-imposes customs duty on all food imports in effort to curb selling of food aid sent by Cubans abroad on the commercial market. Import duties had been liberalised in 2008 after series of hurricanes caused severe shortages.2012 October - Spanish politician Angel Carromero is jailed for manslaughter over the death of high-profile Catholic dissident Oswaldo Paya. Mr Carromero was driving the car when, according to the authorities, it crashed into a tree. Mr Paya's family say the car was rammed off the road after he had received death threats. The government abolishes the requirement for citizens to buy expensive exit permits when seeking to travel abroad. Highly-qualified professionals such as doctors, engineers and scientists will still require permission to travel, in order to prevent a brain drain.2012 November - President Raul Castro says the eastern province of Santiago was hard hit by Hurricane Sandy, with 11 people dead and more than 188,000 homes damaged. A United Nations report says Sandy destroyed almost 100,000 hectares of crops.2013 February - The National Assembly re-elects Raul Castro as president. He says he will stand down at the end of his second term in 2018, by which time he will be 86.2013 July - Five prominent veteran politicians, including Fidel Castro ally and former parliament leader Ricardo Alarcon, are removed from the Communist Party's Central Committee in what President Raul Castro calls a routine change of personnel.2014 January - First phase of a deepwater sea port is inaugurated by Brazil and Cuba at Mariel, a rare large foreign investment project on the island.2014 March - Cuba agrees to a European Union invitation to begin talks to restore relations and boost economic ties, on condition of progress on human rights. The EU suspended ties in 1996.2014 July - Russian President Vladimir Putin visits during a tour of Latin America, says Moscow will cancel billions of dollars of Cuban debt from Soviet times. Chinese President Xi Jinping visits, signs bilateral accords.2014 September/October - Cuba sends hundreds of frontline medical staff to West African countries hit by the Ebola epidemic.2014 December - In a surprise development, US President Barack Obama and Cuba's President Raul Castro announce moves to normalise diplomatic relations between the two countries, severed for more than 50 years.2015 January - Washington eases some travel and trade restrictions on Cuba.Two days of historic talks between the US and Cuba take place in Havana, with both sides agreeing to meet again. The discussions focus on restoring diplomatic relations but no date is set for the reopening of embassies in both countries. President Raul Castro calls on President Obama to use his executive powers to bypass Congress and lift the US economic embargo on Cuba.2015 February - Cuban and US diplomats say they have made progress in talks in Washington to restore full relations.2015 May - Cuba establishes banking ties with US, which drops country from list of states that sponsor terrorism.2015 July - Cuba and US reopen embassies and exchange charges d’affaires.2015 December - Cuban and US officials hold preliminary talks on mutual compensation.2016 January - US eases a number of trade restrictions with Cuba.2016 March - Cuba and the European Union agree to normalise relations. US President Barack Obama visits Cuba in the first US presidential visit there in 88 years.2016 May - Cuba takes steps to legalise small and medium-sized businesses as part of economic reforms.2016 November - Fidel Castro, former president and leader of the Cuban revolution, dies at the age of 90. Cuba declares nine days of national mourning.2017 January - Washington ends a long-standing policy which grants Cuban immigrants the right to remain in the US without a visa.2017 June - US President Donald Trump overturns some aspects of predecessor Barack Obama's policy on Cuba which brought about a thaw in relations between the two countries.2017 October - Diplomatic row over mysterious sonic attacks which are said to have affected the health of US and Canadian embassy staff in Havana.2018 April - Senior Communist Party stalwart Miguel Diaz-Canel becomes president, ending six decades of rule by the Castro family.2019 May - Cuba introduces food rationing.2020 March - Cuba closes its borders in an attempt to keep out the COVID-19 plague.2021 April - Raul Castro steps down as General Secretary of the Cuban Communist PartyAlexa van Sickle (2014): Viva la Revolución: Cuban Farmers Re-Gain Control Over Land: ‘As the state loosens its grip on food production, Cuban farmers and independent co-operatives will need support to help solve the country’s agriculture crisis: Last year, Cuba spent over $1.6bn (£1bn) on food imports… 60% of its domestic food requirement…. Since 2007, President Raul Castro, noting its connection with national security, has made food security a priority. State farms hold over 70% of Cuba’s agricultural land; about 6.7m hectares. In 2007, 45% of this land was sitting idle. In 2008 Castro allowed private farmers and co-operatives to lease unused land with decentralised decision-making, and loosened regulations on farmers selling directly to consumers. Since 2010, Cubans with small garden plots, and small farmers, have been allowed to sell produce directly to consumers. However, agriculture in Cuba remains in crisis. A government report issued in July 2013 showed that productivity had not increased…LINK: Marianne Ward and John Devereux (2010): The Road Not Taken: Pre-Revolutionary Cuban Living Standards in Comparative Perspective: ‘All indications are that Cuba was once a prosperous middle-income economy. On the eve of the revolution, we find that incomes were fifty to sixty percent of European levels. They were among the highest in Latin America at about thirty percent of the US. In relative terms, however, Cuba was richer earlier on. The crude income comparisons that are possible suggest that income per capita during the 1920’s was in striking distance of Western Europe and the Southern States of the US. After the revolution, Cuba has slipped down the world income distribution. As best we can tell, current levels of income per capita are below their pre-revolutionary peaks…LINK: Carlos Eire: Raúl Castro Leaving Power Won’t Bring Change to Cuba Anytime Soon: ‘Raúl Castro is relinquishing all power on the eve of his 90th birthday. It would be a mistake to think that this piece of kabuki theater will bring change to Cuba any time soon…. The Communist Party in Cuba, which has had total control of the island for over 60 years, is not about to relax its grip. And since this party is controlled by the Revolutionary Armed Forces, Cuba is really governed by an old-fashioned Latin American military junta. It is an unusual junta, full of former rebels, but it is a junta…. Raúl Castro is stepping down from the throne, so to speak, but he will keep casting a long shadow as long as he can. Moreover, plenty of generals and colonels remain, ranging in age from their 50s to 80s. A top member of that exclusive circle is Raúl’s son, Col. Alejandro Castro Espín, who is only 55 and runs the country’s dreaded secret police. Official posts outside of the armed forces have a cosmetic sheen to them. The prime example is President Miguel Díaz-Canel…. Raw power resides in men such as Alejandro Castro Espín and 60-year-old Gen. Luis Alberto Rodríguez López-Callejas, ex-husband of Raul’s daughter Deborah. A member of the Castro dynasty by marriage, he is one of the most powerful men in Cuba, totally in charge of the branch of the Revolutionary Armed Forces that runs most of Cuba’s tourist industry. Since tourism is the country’s main source of income, his clout is considerable. The two brothers-in-law are purported to be engaged in a fierce struggle behind the scenes for the throne vacated by Raúl…..A new constitution in 2019…. Many articles outlaw dissent, such as No. 4: “The socialist system that this Constitution supports is irrevocable. Citizens have the right to combat through any means, including armed combat… against any that intends to topple the political, social, and economic order established by this Constitution.”… Article 229 seeks to drive a nail in the coffin of hope: “In no case will the pronouncements be reformed regarding the irrevocability of the socialism system established in Article 4.”…What will happen next? Is it possible that among the younger Cuban communists a Gorbachev lurks?… Is it possible that the junta could be overthrown, somehow, in traditional Latin fashion? Theoretically, one must suppose, anything is possible…. Theoretical possibilities fall into the realm of faith rather than reason…LINK: Carmelo Mesa-Lago (2019): There’s Only One Way Out for Cuba’s Dismal Economy: ‘The island’s economy is neither efficient nor competitive. To move forward it must deepen and accelerate reforms. The market socialism model could provide a way….. For the past 60 years, Cuba has been unable to finance its imports with its own exports and generate appropriate, sustainable growth without substantial aid and subsidies from a foreign nation. This is the longstanding legacy of Cuba’s socialist economy…. Between 1960 and 1990, the Soviet Union gave Cuba $65 billion (triple the total amount of aid that President John Kennedy’s Alliance for Progress gave Latin America). At its peak in 2012, Venezuelan aid, subsidies and investment amounted to $14 billion, or close to 12 percent of the gross domestic product. And yet, despite the staggering foreign aid subsidies it has received, the economy’s performance has been dismal…. Industrial, mining and sugar production are well below 1989 levels, and the production of 11 out of 13 key agricultural and fishing products has declined. Cuba is now facing its worst economic crisis since the 1990s.Tourism has been a bright spot for Cuba. From 2007 to 2017, visitors to the island doubled, largely thanks to the arrival of more Americans, whose numbers grew considerably after President Barack Obama eased diplomatic relations in 2015. But Hurricane Irma and the tightening of travel restrictions by President Trump (like barring American tourists from using hotels and restaurants run by Cuba’s military) and the alert declared by the administration after the sonic attacks on United States diplomats in Havana led to a drop in tourism during the end of 2017 and the first half of 2018. Tourism rebounded in September, driven by a cruise industry that offers customers lodging, meals and tours. Those visitors spend about 14 percent of what those arriving by air spend….Cuba’s woes are a result of the inefficient economic model of centralized planning, state enterprises and agricultural collectivization its leaders have pursued despite the failure of these models worldwide. In his decade in power, President Raúl Castro tried to face his brother Fidel’s legacy of economic disaster head on by enacting a series of market-oriented economic structural reforms. He also opened the door to foreign investment, but so far, the amount materialized has been one-fifth of the goal set by the leadership for sustainable development…. The pace of reforms has been slow and subject to many restrictions, disincentives and taxes that have impeded the advance of the private economy and desperately needed growth. It is time to abandon this failed model and shift to a more successful one as in China and Vietnam….Poor agricultural production, the result of collectivized agriculture, causes the island to spend $1.5 billion a year on food imports. As part of his agrarian reform, Mr. Castro began leasing fallow state-owned land to farmers through 10-year contracts—now increased to 20 years—that may be canceled or renewed depending on the farms performance. Farmers must sell most of their crops to the government at prices set by the state, which are below market prices…. If reform is carried out and foreign investors are allowed to hire and pay a full salary directly to their employees, there will be a significant improvement in the economy and the government can undertake the desperately needed monetary unification that will attract more investment and eliminate the economic distortions that plague the economy.LINK: Cuba Employment Shares: Agriculture 25%, Industry 10%, Services 65%(Remember: You can subscribe to this… weblog-like newsletter… here: There’s a free email list. There’s a paid-subscription list with (at the moment, only a few) extras too.) Get full access to Brad DeLong's Grasping Reality at braddelong.substack.com/subscribe

Key Insights: “This time, for sure!…” Are the Democrats Bullwinkle Moose or Rocket J. Squirrel “that trick never works!” in hoping that they can get a high-investment high-productivity growth full-employment high-wage growth economy, and then the political life for true equality of opportunity will be doable?…Milton Friedman is of powerful historical importance as one of the principal creators of our still-neoliberal world, but his ideas now—whether monetarism, or his assumption that all political organizations and policies everywhere and always are inescably rent-seeking grifters—are now of historical interests only…There will be many future missteps in our search for the road to utopia…The old world is dying, and the new world struggles to be born, so now is a time of monsters…Noah should really listen to and read Jeet Heer…It would be silly not to recognize the political peril of this moment, but also not to recognize its democratic potential: pessimism of the intellect, yes; but also optimism with the internet…We are coquetting with the modes of expression of Antonio Gramsci today, aren’t we?Hexapodia!ReferencesDavid Beckworth (2010): Case Closed: Milton Friedman Would Have Supported QE2 Zach Carter:The Price of Peace: Money, Democracy, & the Life of John Maynard Keynes Zach Carter:The End of Friedmanomics Brad DeLong (1999): The Triumph? of Monetarism Brad DeLong (2001): The Monetarist Counterrevolution Brad DeLong (2015): The Monetarist Mistake Brad DeLong (2019): “Passing the Baton”: The Twitter Rant Brad DeLong & Zack Beauchamp (2019): “Passing the Baton”: The Interview Brad DeLong (2019): “Passing the Baton”: The Interview: CommentBrad DeLong (2007): Right from the Start?: What Milton Friedman Can Teach Progressives Brad DeLong (2017): Helicopter Money: When Zero Just Isn’t Low Enough Milton Friedman (2000): Canada & Flexible Exchange Rates Milton Friedman & Rose Director Friedman: Free to Choose: A Personal StatementJohn Maynard Keynes (1919): The Economic Consequences of the PeaceJohn Maynard Keynes (1926): The End of Laissez-FaireJohn Maynard Keynes (1926): A Short View of RussiaJohn Maynard Keynes (1936): The General Theory of Employment, Interest & MoneyJohn Maynard Keynes (1931): An Economic Analysis of Unemployment Jay Ward & co.: The Rocky & Bullwinkle Show &, of course:Vernor Vinge: A Fire Upon the Deep Zach Carter:The End of Friedmanomics :When he arrived in South Africa on March 20, 1976, Milton Friedman was a bona fide celebrity…. Friedman was a bestselling author and no stranger to fine living. But he was astonished by both “the extraordinary affluence of the White community” and the “extraordinary inequality of wealth” in South Africa. Friedman was not a man to scold opulence, and yet he found the tension permeating apartheid South Africa palpable in both taxicabs and hotel ballrooms. The “hardboiled attitudes” of Mobil chairman Bill Beck and his friends were difficult for him to endure….All of which makes a contemporary reading of Friedman’s Cape Town lectures… harrowing.… His first speech was an unremitting diatribe against political democracy.… Voting, Friedman declared, was inescapably corrupt, a distorted “market” in which “special interests” inevitably dictated the course of public life. Most voters were “ill-informed.” Voting was a “highly weighted” process that created the illusion of social cooperation that whitewashed a reality of “coercion and force.” True democracy, Friedman insisted, was to be found not through the franchise, but the free market, where consumers could express their preferences with their unencumbered wallets. South Africa, he warned, should avoid the example of the United States, which since 1929 had allowed political democracy to steadily encroach on the domain of the “economic market,” resulting in “a drastic restriction in economic, personal, and political freedom.”…Friedman did not subscribe to biological theories of racial inferiority.… The program Friedman prescribed for apartheid South Africa in 1976 was essentially the same agenda he called for in America over his entire career as a public intellectual—unrestrained commerce as a cure-all for inequality and unrest.That this prescription found political purchase with the American right in the 1960s is not a surprise. Friedman’s opposition to state power during an era of liberal reform offered conservatives an intellectual justification to defend the old order. What remains remarkable is the extent to which the Democratic Party—Friedman’s lifelong political adversary—came to embrace core tenets of Friedmanism. When Friedman passed away in 2006, Larry Summers, who had advised Bill Clinton and would soon do the same for Barack Obama, acknowledged the success of Friedman’s attack on the very legitimacy of public power within his own party. “Any honest Democrat will admit that we are now all Friedmanites,” he declared in The New York Times.No longer. In the early months of his presidency, Joe Biden has pursued policy ambitions unseen from American leaders since the 1960s. If implemented, the agenda he described in an April 28 address to Congress would transform the country—slashing poverty, assuaging inequality, reviving the infrastructure that supports daily economic life, and relieving the financial strains that childcare and medical care put on families everywhere. It will cost a lot of money, and so far at least, Biden isn’t letting the price tag intimidate him. “I want to change the paradigm,” he repeated three times at a press conference in March…Zach Carter:The Price of Peace: Money, Democracy, & the Life of John Maynard Keynes :The school of thought that has come to be associated with the name of Keynes no longer has much to do with the moral and political ideals Keynes himself prized. Keynesianism in this broader sense was for a time synonymous with liberal internationalism—the idea that shrewd, humane economic management could protect democracies from the siren songs of authoritarian demagogues and spread peace and prosperity around the globe….The key to realizing that international vision was domestic economic policy making. International political stability would be achieved—or at least encouraged—by alleviating domestic economic inequality. State spending on public works and public health could be combined with redistributive taxation to boost consumer demand, while establishing an environment in which great art could thrive. In his maturity, Keynes offered radicals a deal: They could realize the cultural and moral aims of liberationist revolution—a more equal society and a democratically accountable political leadership—while avoiding the risks and tragedies inherent to violent conflict. He claimed that the social order established by nineteenth-century imperialism and nineteenth-century capitalism was not so rigid that it could not be reformed rather than overthrown.After nearly a century on trial, this Keynesianism has not embarrassed itself, but neither has it been vindicated. The New Deal, the Beveridge Plan, and the Great Society fundamentally reordered British and American life, making both societies more equal, more democratic, and more prosperous. In the 1930s, black poverty in the United States was so high that nobody bothered to measure it. By the 1950s, it was over 50 percent. Today it is about 20 percent. This is progress. But it is decidedly not the world promised by the Communist Party in the 1930s, when it denounced Franklin Delano Roosevelt as a tool of the business elite. It cannot compete with the dreams of liberation presented by Black Power revolutionaries of the 1960s….Keynesians can persuasively argue that today’s tragedies are the product of a failure to fully implement Keynesian ideas rather than a failure of Keynesian policies…. For the past thirty-five years, the United States and Great Britain have mixed Keynesian disaster management—bailouts and stimulus programs—with the aristocratic deregulatory agenda of Hayekian neoliberalism.It is appropriate for neoliberalism to take most of the blame for the political upheavals of the twenty-first century. The neoliberal faith in the power of financial markets bequeathed us the financial crisis of 2008, and the fallout from that disaster has fueled dozens of hateful movements around the world. While the American commitment to Keynesian stimulus after the crash was inconstant, Keynesian ideas were simply abandoned throughout most of Europe…. The economic ruin… has energized neofascist political parties, which now threaten the political establishment…. But pointing the finger at neoliberalism raises uncomfortable questions for Keynes and his defenders. Why has Keynesianism proven to be so politically weak, even among ostensibly liberal political parties and nations? The Keynesian bargain of peace, equality, and prosperity ought to be irresistible in a democracy. It has instead been fleeting and fragile. Keynes believed that democracies slipped into tyranny when they were denied economic sustenance. Why, then, have so many democracies elected to deny themselves economic sustenance?…This is a dark time for democracy—a statement that would have been unthinkable to U.S. and European leaders only a few short years ago. It took decades of mismanagement and unlearning to manufacture this global crisis, and it cannot be undone with a few new laws or elections.Mainstream economists now speak openly of moving “beyond neoliberalism”…. Keynesianism in this purest, simplest form is not so much a school of economic thought as a spirit of radical optimism, unjustified by most of human history and extremely difficult to conjure up precisely when it is most needed: during the depths of a depression or amid the fevers of war. Yet such optimism is a vital and necessary element of everyday life…. A better future was not beyond our control if the different peoples of the world worked together.… “Were the Seven Wonders of the world built by Thrift?” he asked readers of A Treatise on Money. “I deem it doubtful.”… In the long run, almost anything is possible.(Remember: You can subscribe to this… weblog-like newsletter… here: There’s a free email list. There’s a paid-subscription list with (at the moment, only a few) extras too.) Get full access to Brad DeLong's Grasping Reality at braddelong.substack.com/subscribe

Zach Carter, who was supposed to be our guest this week, has a cold. So we have a grab-bag: vaccination & votes, NIMBYism & California growth, aversion to continuing UI, Google’s quality as a search engine, & Wilhelmine Germany & Contemporary ChinaKey Insights:Red states will see a lot of COVID-hurt this summer fall and winter for… reasons we still find incomprehensible…NIMBYism has not killed California growth because monkey-smarts are becoming, relatively, less important as a factor of production…The right response to those who advocate cutting off UI now is Ezra Klein’s: “My God! Let people have a minute!”…Google can be a useful search engine, if only for your own backlist, if you can remember eight unusual words you used to write down your thoughts the last time you thought seriously about something…There are too many parallels between Wilhelmine Germany back before World War I and China today for us to sleep easy; the best we can hope is that Marx was right when he said that, when history repeats, the first time it is tragedy, the second time farce…Hexapodia!References:Geoffrey Fowler: Google’s Search Results Have Gotten Worse: Michael Hiltzik: Is California Really Anti-Business? Don’t Tell Our Economy Ezra Klein & Betsey Stevenson: Transcript  Seth Masket: Correlation of Biden vote share & adult Covid vaccination rate [state-by-state] is now at .847. (CDC data)… Chad Stone: May Job Growth Strong But Unemployment Insurance Reform Still Needed Matthew Winkler: California Defies Doom With No. 1 U.S. Economy &, of course:Vernor Vinge: A Fire Upon the Deep (Remember: You can subscribe to this… weblog-like newsletter… here:  There’s a free email list. There’s a paid-subscription list with (at the moment, only a few) extras too.) Get full access to Brad DeLong's Grasping Reality at braddelong.substack.com/subscribe

Key Insights:Hexapodia!Periodically, America has had “the frontier has closed, now scarcity rules!” panics—& they have been bad, but so far they have all been false alarms.The “new frontier” to alleviate scarcity in America is intensive growth, right here, but more: economic poldering.References:John F. Kennedy (1960): “The New Frontier”: Liberal Party Nomination Acceptance Speech William H. Kilpatrick & al. (1933): The Educational Frontier Perry Miller (1956): Errand into the Wilderness Mancur Olson (1982): The Rise & Decline of Nations: Economic Growth, Stagflation, & Social Rigidities Rick Perlstein (2001): Before the Storm: Barry Goldwater & the Unmaking of the American Consensus Rick Perlstein (2008): Nixonland: The Rise of a President & the Fracturing of America Noah Smith: America's Scarcity Mindset: Is Our Society Turning into a Zero-Sum Competition for Survival? Lester Thurow (1980): The Zero-Sum Society: Distribution & the Possibilities for Change Frederick Jackson Turner (1893): The Significance of the Frontier in American History (Remember: You can subscribe to this… weblog-like newsletter… here:  There’s a free email list. There’s a paid-subscription list with (at the moment, only a few) extras too.) Get full access to Brad DeLong's Grasping Reality at braddelong.substack.com/subscribe

Key Insights:There is a four-day creative-destruction festschrift for Philippe Aghion & Peter Howitt starting June 9: The Economics of Creative Destruction When industrial policy in America has been successful, it has always had a profound political driving motive: maintaining independence, manifest destiny, Sputnik, and so on. The only such driver today—and it is urgent—is green energy to fight global warming…The U.S. used to be excellent not just on the “novelty” prong of Breznitz’s prosperity-in-an-unforgiving-world quadent, but also on the “engineering design”, “second-generation innovation”, and “production-assembly” prongs as well. We threw that away in the era Reagan began—the era of neoliberalism, financialization-driven short-termism, and tax cut-driven exchange overvaluation. We need to get those other three prongs back, lest we become a country of technoprinces and dopamine-loop brain-hacked technoserfs…When you do industrial policy, you need to think very carefully about what kind of economy you want to create…A better retranslation of the Arkhilokhos-Isaiah Berlin “Fox & Hedgehog” tag line is: “The fox knows many tricks; the hedgehog knows one good one…”Hexapodia!ReferencesBill Janeway: The Ecology of Innovation : reviewing:Philippe Aghion, Céline Antonin, & Simon Bunel: The Power of Creative Destruction: Economic Upheaval and the Wealth of Nations Dan Breznitz: Innovation in Real Places: Strategies for Prosperity in an Unforgiving World Stephen S. Cohen & J. Bradford DeLong: Concrete Economics: A Hamiltonian Approach to Economic Policy Andrew DelBanco: The War Before the War: Fugitive Slaves and the Struggle for America's Soul from the Revolution to the Civil War John Helverston & Jonas Nahm: China’s Key Role in Scaling Low-Carbon Energy Technologies Elizabeth Janeway: Man’s World, Women’s Place: A Study in Social Mythology Òscar Jordà, Moritz Schularick, & Alan M. Taylor: The Great Mortgaging: Housing Finance, Crises, and Business Cycles Sill Family: Vineyard  Wikipedia: Applied Materials Wikipedia: ASML Holdings Wikipedia: Kate Mulgrew Wikipedia: Orange Is the New Black Wikipedia: TSMC Wikipedia: Sematech Wikipedia: Star Trek: Voyager &, of course:Vernor Vinge: A Fire Upon the Deep (Remember: You can subscribe to this… weblog-like newsletter… here: There’s a free email list. There’s a paid-subscription list with (at the moment, only a few) extras too.) Get full access to Brad DeLong's Grasping Reality at braddelong.substack.com/subscribe

Key Insights:Brad cannot, in fact, reliably and accurately multiply two-digit numbers in his head…When people comment on twitter that we are a nerdy podcast, we respond by going nerdier..If we get an relatively egalitarian income distribution, the care-centered service economy will give us at least as many interesting jobs to do in the future as we could possibly want—at least for “future” meaning “next two hundred years”…Who controls the consumption spending decisions is key to answering the question of what the future of work will be like: it really matters whether it is a few rich people, a broad base of humanity, or the robots…The market economy is very efficient at crowdsourcing solutions to and then organizing the implementation of the problems that it sets itself. But the major problem the market economy sets itself is how to maximize the amount of necessities, conveniences, and luxuries delivered to the people who control valuable property rights who think they need stuff.Hexapodia!References: David Autor: Work of the Past; Work of the Future Kevin Kelly: Vernor Vinge: A Deepness in the Sky &, of course:Vernor Vinge: A Fire Upon the Deep (Remember: You can subscribe to this… weblog-like newsletter… here: There’s a free email list. There’s a paid-subscription list with (at the moment, only a few) extras too.) Get full access to Brad DeLong's Grasping Reality at braddelong.substack.com/subscribe

Key Insights:Josef Schumpeter’s “depressions are… forms of something which has to be done, namely, adjustment to previous economic change. Most of what would be effective in remedying a depression would be equally effective in preventing this adjustment…” is perhaps the most zombie of zombie economic ideas. Schumpeter’s zombie leads to episodes of dorkish zombie economic derp like John Cochrane’s claim in November 2008 that we needed a recession because we were then—in November 2008—building too many houses and employing too many people in construction: Another destructive zombie idea is the idea that the Phillips Curve and adaptive expectations guarantee that you only need to worry about inflation—the unemployment will take care of itself, and that if policy errs and pushes unemployment up too high above the natural this year, you will get it back because unemployment will then necessarily be an equal amount below the natural rate in some future year—as long as inflation is stabilized.The PCAE zombie leads to episodes like today, when a surprisingly large number of people who should know better are worrying not about unemployment but only about inflationTo mix metaphors, when we go hunting for zombie economic ideas, there are lots of fish in barrels for us to shoot. We do not have to try to shoot them all. Indeed, we should not.We should, instead, listen to Markus Brunnermeier at 12:30/09:30 EDT/PDT every Thursday at Hexapodia!!References:Markus Brunnermeier & Friends: Markus’ Academy Paul Krugman (2020): Arguing with Zombies: Economics, Politics, & the Fight for a Better Future John Stuart Mill (1844): Review of Thomas Tooke, “An Inquiry into the Currency Principle” & Robert Torrens, “An Inquiry into the Practical Working of the Proposed Arrangements for the Renewal of the Charter of the Bank of England, and the Regulation of the Currency” John Quiggin (2012): Zombie Economics: How Dead Ideas Still Walk Among Us &, of course:Vernor Vinge: A Fire Upon the Deep (Remember: You can subscribe to this… weblog-like newsletter… here: There’s a free email list. There’s a paid-subscription list with (at the moment, only a few) extras too.) Get full access to Brad DeLong's Grasping Reality at braddelong.substack.com/subscribe

Key Insights:Henry: We need to be critical of other people in the public sphere, but we need to be critical in an extraordinarily humble way—to recognize that we, all of us, are incredibly biased as individuals. We see the moats in our brothers' eyes very well. We do not see the beams and our own. We have a duty to others to try to help them to remove the beams in a polite, quiet, sometimes insistent way... think very carefully about the ways in which we can genuinely be constructive in criticism...Brad: We are in huge trouble: organizing our 7.8 billion person anthology intelligence to actually get done what we need to get done in the next century appears beyond our capabilities. It may be time to go back to the trees, or even to devolve completely and let some other more mature species more capable of collective action and organization come up—the raccoons, or something. Nobody has a gospel. So the next move has to be, somehow. with the head...Noah: Perhaps this is just the optimism of relative youth but I think that we're going to break out of our local maximum and find a better way. If you were in the 1930s, and you looked at the state of both America and the world, you would see even more cause for despair. Yet we got our way out of that without having to leave the planet to the raccoons. I think we will this time as well. The key insight is that we are still in the process of learning about what democracy means and about how, you know, humans can participate in their own government without turning it into an unwieldy shout fest.All: Hexapodia!P.S.: Marko Kloos's Paladium Wars series is excellent.References:Jason Brennan: Against Democracy Bryan Caplan: The Myth of the Rational Voter: Why Democracies Choose Bad Policies John Dewey: The Political Writings John Dewey: The Public and Its Problems: An Essay in Political Inquiry Henry Farrell: In Praise of Negativity Henry Farrell & Jack Knight: Reconstructing International Political Economy: A Deweyan ApproachHenry Farrell, Hugo Mercier, & Melissa Schwartzberg: No-B******t Democracy Alexander Hamilton: Federalist 9 Daniel Kahneman, Olivier Sibony, & Cass Sunstein: Noise Philip Kitcher: Science in a Democratic Society Hugo Mercier & Dan Sperber: The Enigma of Reason Michael Neblo, Kevin Esterling, & David Lazar: Politics with the People: Building a Directly Representative Democracy Josiah Ober: Democracy and Knowledge: Innovation and Learning in Classical Athens Melissa Schwartzberg: Epistemic Democracy and Its Challenges Ilya Somin: Democracy and Political Ignorance: Why Smaller Government Is Smarter Richard Thaler & Cass Sunstein: Nudges: Improving Decisions about Health, Wealth and Happiness &, of course:Vernor Vinge: A Fire Upon the Deep Alexander Hamilton: ‘It is impossible to read the history of the petty republics of Greece and Italy without feeling sensations of horror and disgust at the distractions with which they were continually agitated, and at the rapid succession of revolutions by which they were kept in a state of perpetual vibration between the extremes of tyranny and anarchy. If they exhibit occasional calms, these only serve as short-lived contrast to the furious storms that are to succeed. If now and then intervals of felicity open to view, we behold them with a mixture of regret, arising from the reflection that the pleasing scenes before us are soon to be overwhelmed by the tempestuous waves of sedition and party rage. If momentary rays of glory break forth from the gloom, while they dazzle us with a transient and fleeting brilliancy, they at the same time admonish us to lament that the vices of government should pervert the direction and tarnish the lustre of those bright talents and exalted endowments for which the favored soils that produced them have been so justly celebrated. From the disorders that disfigure the annals of those republics the advocates of despotism have drawn arguments, not only against the forms of republican government, but against the very principles of civil liberty. They have decried all free government as inconsistent with the order of society, and have indulged themselves in malicious exultation over its friends and partisans…. It is not to be denied that the portraits they have sketched of republican government were too just copies of the originals from which they were taken. If it had been found impracticable to have devised models of a more perfect structure, the enlightened friends to liberty would have been obliged to abandon the cause of that species of government as indefensible. The science of politics, however, like most other sciences, has received great improvement. The efficacy of various principles is now well understood, which were either not known at all, or imperfectly known to the ancients. The regular distribution of power into distinct departments; the introduction of legislative balances and checks; the institution of courts composed of judges holding their offices during good behavior; the representation of the people in the legislature by deputies of their own election: these are wholly new discoveries, or have made their principal progress towards perfection in modern times. They are means, and powerful means, by which the excellences of republican government may be retained and its imperfections lessened or avoided…Henry Farrell, Hugo Mercier, & Melissa Schwartzberg: No-B******t Democracy: ‘Over the last decade a prominent academic literature tied to libertarian thought has argued that democracy is generally inferior to other forms of collective problem-solving such as markets and the rule of cognitive elites (Caplan 2007, Somin 2016, Brennan 2016). These skeptics appeal to findings in cognitive and social psychology, and political behavior, to claim that decision-making by ordinary citizens is unlikely to be rational or well-grounded in evidence.  Their arguments have received prominent media coverage (Crain 2016), and have been repeated in conservative critiques of democratic voting (Mathis-Lilley 2021), while provoking rejoinders from political theorists whose “epistemic” account of the benefits of democracy invokes mechanisms such as deliberation, the Condorcet Jury Theorem, and the “Diversity Trumps Ability” theorem (Landemore 2013; Schwartzberg 2015). This debate has been largely unproductive…. We set out a different approach. We show that democratic skeptics’ claims tend to rest on partial, inaccurate, and outdated understandings of human cognition. However, we do not retort with a general defense of democracy on cognitive or epistemological grounds. Instead, we advocate a scientific program investigating the conditions under which specific democratic institutions do better or worse in discovering solutions to collective problems, building in particular on results in experimental psychology… (Remember: You can subscribe to this… weblog-like newsletter… here: There’s a free email list. There’s a paid-subscription list with (at the moment, only a few) extras too.) Get full access to Brad DeLong's Grasping Reality at braddelong.substack.com/subscribe

Brad DeLong: INTERVIEW: Inflation Concerns in the US Following Secretary Treasury Janet: ‘Apple Podcasts: tbs eFM This Morning: 0514 IN FOCUS… Get full access to Brad DeLong's Grasping Reality at braddelong.substack.com/subscribe

Key Insights:Economic arguments against higher taxes that may have been somewhat plausible back in the days of 70% or so maximum individual and 40% or so maximum capital gains tax rates simply do not apply now. Right-wing parties that don't think they can credibly make the argument that cosseting their core constituencies is necessary for rapid economic growth search for some non-economic cleavage in which the rich and the right-thinking poor, or the right-colored poor, can be on one side and the people who seek a fairer and more equal distribution of income and higher taxes on the rich can be put on the other—let's all yell about critical race theory, and maybe they won't pay attention to the fact that we just, you know, take everybody's money.Capital to fund investment is really not a big constraint right now—incentivizing savings in financial assets really is just pushing on a string.Companies with investments that have high societal value in expansion need to be properly incentivized—either by the smell of more profits next year from serving a larger market with lower costs of production through larger scale, or through the government paying and so getting prices righter than the free market gets them.“Doge coin” is pronounced with a soft “g” sound.No, Doge coin is not named after the title of the head of state of the Venetian RepublicDoge coin’s name comes from the Homestar Runner line: “I want a doge”…Hexapodia!References:Len Burman (2021): Biden Would Close Giant Capital Gains Loopholes—At Least For The Rich Peter Diamond & James Mirrlees (1971): Optimal Taxation and Public Production I: Production Efficiency Peter Diamond & James Mirrlees (1971): Optimal Taxation and Public Production II: Tax Rules Ken Judd (1999): Optimal Taxation and Spending in General Competitive Growth Models Paul Krugman (2021): Why Doesn’t Cutting Taxes on the Wealthy Work? Jacob Lundberg & Johannes Nathell (2021): Tax Burden on Capital Income: International Comparison Robert McClelland (2021): Avoiding Biden’s Proposed Capital Gains Tax Hikes Won’t Be So Easy. Or Will It? Alicia Munnell (2021): Biden’s Plan to Fully Tax Capital Gains Is Good PolicyGarrett Watson & Erica York (2021): Capital Gain Rates Under Biden Tax PlanThomas Piketty & Emmanuel Saez (2012): A Theory of Optimal Capital Taxation Ludwig Straub & Ivan Werning (2020): Positive Long-Run Capital Taxation: Chamley-Judd Revisited Tax Foundation (2017): Preliminary Details and Analysis of the Tax Cuts and Jobs Act &, of course:Vernor Vinge: A Fire Upon the Deep (Remember: You can subscribe to this… weblog-like newsletter… here: There’s a free email list. There’s a paid-subscription list with (at the moment, only a few) extras too.) Get full access to Brad DeLong's Grasping Reality at braddelong.substack.com/subscribe