"Words ought to be a little wild, for they are the assault of thoughts on the unthinking" - JMK
- Dani Rodrik debunks the myth of rapid economic growth under authoritarianism. For every authoritarian that does well there are many that don't. This is really something of a no-brainer, but still always important to highlight. For all the disagreements that go on here, two sorts of freedom are always identified as essential for beneficial economic outcomes: the freedom to produce and exchange and the freedom to collectively self-govern in instances where the market might not work as well. Neither of these freedoms are fully available in an authoritarian regime.
- Brad DeLong scratches his head over the policy uncertainty argument. Wasn't there policy uncertainty in 2001 and 2003? And extreme policy uncertainty in 1994? He fails to mention 1996 but that seems like a major instance of policy uncertainty too. To a certain extent policy uncertainty is important, of course. Nobody denies that. But if you look into it, the story very quickly unravels as a major deciding factors. All of the surveys of business owners point to concerns about consumer demand, not policy, as the primary obstacle to hiring. Since survey evidence isn't on their side, guys like Jerry O'Driscoll have to cite anecdote. Anecdotes are fine and what the people are going through is quite real - but what are you going to do with that when mountains of survey evidence (i.e. - lots and lots of anecdotes) dispute the one case you choose to highlight. The concern a year ago was that since we didn't know what was happening with health care, that was the source of the uncertainty. Now we know what's going to happen - and yet the uncertainty argument is still being made. It's all more than a little disingenuous. Look - major policy changes are happening. Policy uncertainty isn't non-existent. But it's getting harder and harder to take the people that highlight it seriously.
- Brad DeLong links to Phil Greenspun and Greg Clark on technological unemployment. This has been an interest of mine for a while now, but it's picked up recently in my work on Lovecraft's economic ideas. He, like many Americans in the interwar period, associated a lot of the country's problems with technological unemployment. It's an interesting and slippery argument because it juxtaposes the long-run with the short-run. I think people disparage it more than they should, simply because it's such a ridiculous idea in the long-run. It takes time for labor to adjust, particularly if the technological change is biased towards certain skills or if it makes other skills obsolete. It's also worth noting on this that I'll be writing the entry for "technological unemployment" for the forthcoming Encyclopedia of American Populism. I might write a few entries on some late nineteenth century monetary issues as well. Sort of a neat little gig - I'm trying to pick up writing projects wherever I can now.
- The Center on Budget and Policy Priorities is writing a lot on a House vote on aid to the states. Obviously state level spending is something I'm really concerned about, but I can't help having mixed feelings about this. States governments are never going to function as economic policymakers if the federal government bails them out. That having been said, we're in for trouble if they don't continue to fill the hole that the states are digging. Not a good situation.
Demand, Supply, and Macroeconomic Models
21 hours ago