Inflection Point

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 <https://economics.mit.edu/files/12544>* Autor, Dorn, Katz, Patterson, & Van Reenen (2017): The Fall of the Labor Share & the Rise of Superstar Firms <https://economics.mit.edu/files/12979>* Azar, Marinescu & Steinbaum (2017): Labor Market Concentration <https://www.nber.org/papers/w24147>* Berger, Herkenhoff, & Mongey (2019): Labor Market Power <https://www.nber.org/system/files/working_papers/w25719/w25719.pdf>* Blonigen & Pierce (2016): Evidence for the Effects of Mergers on Market Power & Efficiency <https://www.federalreserve.gov/econresdata/feds/2016/files/2016082pap.pdf>* De Loecker, Eeckhout, and Mongey (2021): Quantifying Market Power & Business Dynamism in the Macroeconomy <https://www.nber.org/papers/w28761>* De Loecker, Eeckhout, & Unger  (2019): The Rise of Market Power & the Macroeconomic Implications <https://www.federalreserve.gov/econresdata/feds/2016/files/2016082pap.pdf>* Gutierrez & Philippon (2016): Investment-less Growth: An Empirical Investigation <http://pages.stern.nyu.edu/~tphilipp/papers/QNIK.pdf>* Noah Smith (2021): The Economists' Revolt <https://noahpinion.substack.com/p/the-economists-revolt>&, of course:* Vernor Vinge: A Fire Upon the Deep <https://books.google.com/books?id=fCCWWgZ7d6UC>(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… <https://www.theguardian.com/global-development-professionals-network/2014/mar/11/cuba-agricultural-revolution-farmers>* Damian Cave: Raúl Castro Thanks U.S., but Reaffirms Communist Rule in Cuba <https://www.nytimes.com/2014/12/21/world/americas/castro-thanks-us-but-affirms-cubas-communist-rule.html>* Marianne Ward and John Devereux (2010): The Road Not Taken: Pre-Revolutionary Cuban Living Standards in Comparative Perspective <https://web.archive.org/web/20121217122436/http://econweb.umd.edu/~davis/eventpapers/CUBA.pdf>* Brian Latell (2005): After Fidel: The Inside Story of Castro’s Régime and Cuba’s Next Leader New York: St. Martin’s Press, 2005 <https://books.google.com/books?id=GESwBAAAQBAJ>* Carmelo Mesa-Lago (2019): There’s Only One Way Out for Cuba’s Dismal Economy <https://www.nytimes.com/2019/03/28/opinion/cuba-economy.html>* Carlos Eire: Raúl Castro Leaving Power Won’t Bring Change to Cuba Anytime Soon <https://www.washingtonpost.com/opinions/2021/04/20/raul-castro-leave-power-cuba-wont-bring-change/>* Noah Smith: Why Cuba Is Having an Economic Crisis <https://noahpinion.substack.com/p/why-cuba-is-having-an-economic-crisis>&, of course:* Vernor Vinge: A Fire Upon the Deep <https://books.google.com/books?id=fCCWWgZ7d6UC>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: <https://www.theguardian.com/global-development-professionals-network/2014/mar/11/cuba-agricultural-revolution-farmers>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: <https://web.archive.org/web/20121217122436/http://econweb.umd.edu/~davis/eventpapers/CUBA.pdf>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: <https://www.washingtonpost.com/opinions/2021/04/20/raul-castro-leave-power-cuba-wont-bring-change/>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: <https://www.nytimes.com/2019/03/28/opinion/cuba-economy.html>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!References* David Beckworth (2010): Case Closed: Milton Friedman Would Have Supported QE2 <https://macromarketmusings.blogspot.com/2010/11/case-closed-milton-friedman-would-have.html>* Zach Carter:The Price of Peace: Money, Democracy, & the Life of John Maynard Keynes <https://www.zacharydcarter.com>* Zach Carter:The End of Friedmanomics <https://newrepublic.com/article/162623/milton-friedman-legacy-biden-government-spending>* Brad DeLong (1999): The Triumph? of Monetarism <https://delong.typepad.com/delong_long_form/1999/10/j-bradford-delong-the-triumph-of-monetarism.html>* Brad DeLong (2001): The Monetarist Counterrevolution <https://web.archive.org/web/20010517134105/http://www.j-bradford-delong.net/TotW/counterrev.html>* Brad DeLong (2015): The Monetarist Mistake <https://www.project-syndicate.org/commentary/friedman-ideas-great-recession-by-j--bradford-delong-2015-03>* Brad DeLong (2019): “Passing the Baton”: The Twitter Rant <https://twitter.com/delong/status/1100166150845939712>* Brad DeLong & Zack Beauchamp (2019): “Passing the Baton”: The Interview <https://www.vox.com/policy-and-politics/2019/3/4/18246381/democrats-clinton-sanders-left-brad-delong>* Brad DeLong (2019): “Passing the Baton”: The Interview: Comment<https://www.bradford-delong.com/2019/03/passing-the-baton-the-interview.html>* Brad DeLong (2007): Right from the Start?: What Milton Friedman Can Teach Progressives <https://web.archive.org/web/20070513134239/http://democracyjournal.org/article.php?ID=6514>* Brad DeLong (2017): Helicopter Money: When Zero Just Isn’t Low Enough <https://www.milkenreview.org/articles/helicopter-money-when-zero-just-isnt-low-enough>* Milton Friedman (2000): Canada & Flexible Exchange Rates <https://www.bankofcanada.ca/wp-content/uploads/2010/08/keynote.pdf>* Milton Friedman & Rose Director Friedman: Free to Choose: A Personal Statement* John Maynard Keynes (1919): The Economic Consequences of the Peace* John Maynard Keynes (1926): The End of Laissez-Faire* John Maynard Keynes (1926): A Short View of Russia* John Maynard Keynes (1936): The General Theory of Employment, Interest & Money* John Maynard Keynes (1931): An Economic Analysis of Unemployment <https://www.bradford-delong.com/2004/07/the-mammon-of-unrighteousness.html>* Jay Ward & co.: The Rocky & Bullwinkle Show <https://www.youtube.com/results?search_query=rocky+and+bullwinkle+show>&, of course:* Vernor Vinge: A Fire Upon the Deep <https://books.google.com/books?id=fCCWWgZ7d6UC>Zach Carter:The End of Friedmanomics <https://newrepublic.com/article/162623/milton-friedman-legacy-biden-government-spending>: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 <https://www.zacharydcarter.com>: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: <https://www.washingtonpost.com/technology/2020/10/19/google-search-results-monopoly/>* Michael Hiltzik: Is California Really Anti-Business? Don’t Tell Our Economy <https://www.latimes.com/business/story/2021-05-10/ceos-california-business>* Ezra Klein & Betsey Stevenson: Transcript <https://www.nytimes.com/2021/06/18/podcasts/transcript-ezra-klein-interviews-betsey-stevenson.html> * Seth Masket: Correlation of Biden vote share & adult Covid vaccination rate [state-by-state] is now at .847. (CDC data)… <https://twitter.com/smotus/status/1404483957647831046>* Chad Stone: May Job Growth Strong But Unemployment Insurance Reform Still Needed <https://www.cbpp.org/blog/may-job-growth-strong-but-unemployment-insurance-reform-still-needed>* Matthew Winkler: California Defies Doom With No. 1 U.S. Economy <https://www.bloomberg.com/opinion/articles/2021-06-14/california-defies-doom-with-no-1-u-s-economy>&, of course:* Vernor Vinge: A Fire Upon the Deep <https://books.google.com/books?id=fCCWWgZ7d6UC>(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 <https://www.jfklibrary.org/archives/other-resources/john-f-kennedy-speeches/liberal-party-nomination-nyc-19600914>* William H. Kilpatrick & al. (1933): The Educational Frontier <https://www.journals.uchicago.edu/doi/abs/10.1086/705648?journalCode=schools>* Perry Miller (1956): Errand into the Wilderness <https://www.google.com/books/edition/Errand_Into_the_Wilderness/oKfCbW3B1xkC>* Mancur Olson (1982): The Rise & Decline of Nations: Economic Growth, Stagflation, & Social Rigidities <https://www.google.com/books/edition/The_Rise_and_Decline_of_Nations/vKxxtjJz--wC>* Rick Perlstein (2001): Before the Storm: Barry Goldwater & the Unmaking of the American Consensus <https://www.google.com/books/edition/Before_the_Storm/6jb9AgAAQBAJ>* Rick Perlstein (2008): Nixonland: The Rise of a President & the Fracturing of America <https://www.google.com/books/edition/Nixonland/dM_enWzoghoC>* Noah Smith: America's Scarcity Mindset: Is Our Society Turning into a Zero-Sum Competition for Survival? <https://noahpinion.substack.com/p/americas-scarcity-mindset>* Lester Thurow (1980): The Zero-Sum Society: Distribution & the Possibilities for Change <https://www.google.com/books/edition/The_Zero_Sum_Society/V5uBbTOzYOAC>* Frederick Jackson Turner (1893): The Significance of the Frontier in American History <https://www.historians.org/about-aha-and-membership/aha-history-and-archives/historical-archives/the-significance-of-the-frontier-in-american-history-(1893)>(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 <https://zoom.us/j/98595732585>* 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!References* Bill Janeway: The Ecology of Innovation <https://www.project-syndicate.org/onpoint/innovation-according-to-philippe-aghion-and-dan-breznitz-by-william-janeway-2021-05>: reviewing:* Philippe Aghion, Céline Antonin, & Simon Bunel: The Power of Creative Destruction: Economic Upheaval and the Wealth of Nations <https://www.google.com/books/edition/The_Power_of_Creative_Destruction/7SAZEAAAQBAJ>* Dan Breznitz: Innovation in Real Places: Strategies for Prosperity in an Unforgiving World <https://www.google.com/books/edition/Innovation_in_Real_Places/wr0cEAAAQBAJ>* Stephen S. Cohen & J. Bradford DeLong: Concrete Economics: A Hamiltonian Approach to Economic Policy <https://www.google.com/books/edition/Concrete_Economics/BXoyBgAAQBAJ>* Andrew DelBanco: The War Before the War: Fugitive Slaves and the Struggle for America's Soul from the Revolution to the Civil War <https://www.google.com/books/edition/The_War_Before_the_War/FPq0DwAAQBAJ>* John Helverston & Jonas Nahm: China’s Key Role in Scaling Low-Carbon Energy Technologies <https://pubmed.ncbi.nlm.nih.gov/31727813/>* Elizabeth Janeway: Man’s World, Women’s Place: A Study in Social Mythology <https://www.google.com/books/edition/Man_s_World_Woman_s_Place/vRYpAAAAYAAJ>* Òscar Jordà, Moritz Schularick, & Alan M. Taylor: The Great Mortgaging: Housing Finance, Crises, and Business Cycles <https://www.nber.org/papers/w20501>* Sill Family: Vineyard <https://sillfamilyvineyards.com> * Wikipedia: Applied Materials <https://en.wikipedia.org/wiki/Applied_Materials>* Wikipedia: ASML Holdings <https://en.wikipedia.org/wiki/ASML_Holding>* Wikipedia: Kate Mulgrew <https://en.wikipedia.org/wiki/Kate_Mulgrew>* Wikipedia: Orange Is the New Black <https://en.wikipedia.org/wiki/Orange_Is_the_New_Black>* Wikipedia: TSMC <https://en.wikipedia.org/wiki/TSMC>* Wikipedia: Sematech <https://en.wikipedia.org/wiki/SEMATECH>* Wikipedia: Star Trek: Voyager &, of course:* Vernor Vinge: A Fire Upon the Deep <https://books.google.com/books?id=fCCWWgZ7d6UC>(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 <https://economics.mit.edu/files/16724> <https://www.aeaweb.org/webcasts/2019/aea-distinguished-lecture-work-of-the-past-work-of-the-future>Kevin Kelly: <http://kk.org>Vernor Vinge: A Deepness in the Sky &, of course:Vernor Vinge: A Fire Upon the Deep <https://books.google.com/books?id=fCCWWgZ7d6UC>(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 inflation* To 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 <https://bcf.princeton.edu/markus-academy/>* Hexapodia!!References:Markus Brunnermeier & Friends: Markus’ Academy <https://bcf.princeton.edu/markus-academy/>Paul Krugman (2020): Arguing with Zombies: Economics, Politics, & the Fight for a Better Future <https://books.google.com/books?id=iyefDwAAQBAJ>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” <https://www.marxists.org/reference/archive/mill-john-stuart/1844/currency.htm>John Quiggin (2012): Zombie Economics: How Dead Ideas Still Walk Among Us <https://books.google.com/books?id=DOn09O3ncy4C>&, of course:Vernor Vinge: A Fire Upon the Deep <https://books.google.com/books?id=fCCWWgZ7d6UC>(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 <https://www.amazon.com/The-Palladium-Wars/dp/B086CYB6VS> series is excellent.References:Jason Brennan: Against Democracy <https://www.google.com/books/edition/Against_Democracy/ND_BDgAAQBAJ>Bryan Caplan: The Myth of the Rational Voter: Why Democracies Choose Bad Policies <https://www.google.com/books/edition/The_Myth_of_the_Rational_Voter/8_S6cOkHK3MC>John Dewey: The Political Writings <https://www.google.com/search?tbm=bks&hl=en&q=HEw6VKOPzpwC>John Dewey: The Public and Its Problems: An Essay in Political Inquiry <https://www.google.com/search?tbm=bks&hl=en&q=M16E5ORLJqIC>Henry Farrell: In Praise of Negativity <https://crookedtimber.org/2020/07/24/in-praise-of-negativity/>Henry Farrell & Jack Knight: Reconstructing International Political Economy: A Deweyan Approach<https://www.dropbox.com/s/vdzojnt3mfj6d6p/%20John%20Dewey%20and%20International%20Interdependence.docx?dl=0>Henry Farrell, Hugo Mercier, & Melissa Schwartzberg: No-B******t Democracy <https://twitter.com/henryfarrell/status/1059185019246338050?lang=en>Alexander Hamilton: Federalist 9 <https://avalon.law.yale.edu/18th_century/fed09.asp>Daniel Kahneman, Olivier Sibony, & Cass Sunstein: Noise <https://www.google.com/books/edition/Noise/vCZMzQEACAAJ?hl=en>Philip Kitcher: Science in a Democratic Society <https://www.google.com/search?tbm=bks&hl=en&q=RtFDxx0sbTIC>Hugo Mercier & Dan Sperber: The Enigma of Reason <https://www.google.com/books/edition/The_Enigma_of_Reason/hjtYDgAAQBAJ>Michael Neblo, Kevin Esterling, & David Lazar: Politics with the People: Building a Directly Representative Democracy <https://www.amazon.com/Politics-People-Representative-Democracy-Psychology-ebook-dp-B07GNM4SM6/>Josiah Ober: Democracy and Knowledge: Innovation and Learning in Classical Athens <https://www.google.com/books/edition/Democracy_and_Knowledge/Jge0MlZTKhQC>Melissa Schwartzberg: Epistemic Democracy and Its Challenges <https://doi.org/10.1146/annurev-polisci-110113-121908>Ilya Somin: Democracy and Political Ignorance: Why Smaller Government Is Smarter <https://www.google.com/books/edition/Democracy_and_Political_Ignorance/7cQ6AAAAQBAJ>Richard Thaler & Cass Sunstein: Nudges: Improving Decisions about Health, Wealth and Happiness <https://www.google.com/books/edition/Nudge/lgFLOAAACAAJ?hl=en>&, of course:Vernor Vinge: A Fire Upon the Deep <https://books.google.com/books?id=fCCWWgZ7d6UC>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… <https://podcasts.apple.com/kr/podcast/0514-in-focus-2-inflation-concerns-in-us-following/id1038822609?i=1000521665790&l=en> Get full access to Brad DeLong's Grasping Reality at braddelong.substack.com/subscribe