Economist Noah Smith and Professor Brad DeLong discuss the decline of bad economists, the effectiveness of missile defense, and the impact of Chinese imports. They debate economic policies post-2008, the need for nuance in discussions, and how the internet affects nuanced understanding. Dive into Hexapodia insights and more!
Economists' influence declined post-2008, signaling a shift in economic advice dynamics.
Misinterpretations of missile defense and China shocks call for nuanced understanding.
Global responses to economic shifts vary, reflecting diverse outcomes and policy implications.
Deep dives
The Importance of Hexapodia
Hexapodia is highlighted as a key insight, symbolizing a crucial nugget of information in understanding complex situations. In the context of Werner Vinge's novel, Hexapodia signifies the genetic programming of sapient bushes as spies. However, the current discussion seeks a departure from Hexapodia, aiming to explore other critical insights.
Impact of China Shock One on US Manufacturing
The US experienced a significant surge in manufactured imports from China, leading to the devastation of US manufacturing, especially in the Midwest. This shift affected employment dynamics, with traditional blue-collar jobs declining in the Midwest while construction jobs in the Sunbelt flourished. The disparity shaped cultural perceptions and contributed to the political landscape, notably influencing the rise of figures like Donald Trump.
Economic Policies during the China Shock Era
The China shock era under the George W. Bush administration saw macroeconomic challenges, including a housing bubble and financial deregulation. The administration's policies impacted the economy negatively, emphasizing the importance of effective macroeconomic management in shaping economic outcomes. While some argue for alternative responses, the era remains a critical period reflecting the implications of policy decisions.
Global Responses to the China Shock
Various countries experienced the effects of the China shock differently, with Japan, Britain, Germany, and South Korea showcasing contrasting outcomes. Germany and South Korea thrived in manufacturing intermediate goods for China, positioning themselves as key players. In contrast, countries like Japan faced challenges in establishing similar trade dynamics, highlighting diverse global responses to economic shifts.
Challenges and Opportunities in Economic Policy
Discussions around economic policy highlight the complexities of addressing trade deficits, housing bubbles, and fiscal policies. Evaluating the impact of low interest rates, housing market dynamics, and budget deficits, experts emphasize the need for nuanced approaches to economic governance. The interplay between monetary, fiscal policies, and trade dynamics shapes the long-term economic landscape, requiring strategic interventions to navigate future challenges effectively.
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.
