Assorted links

by on June 24, 2011 at 12:47 am in Uncategorized | Permalink

1. The last few times Brad DeLong has criticized me, he has simply imagined I hold positions which I do not.  Again.  And here is the time before that.  Perhaps he too quickly slots my views into debates he has with other people, when he sees some overlapping of claims.  On the first link, my point was to raise a certain “tension” in when market prices are considered sufficient statistics for “trouble” or not; I did not claim the two borrowing situations were the same or that currency denomination of debt is irrelevant.  On the second link, I’ve long argued we are seeing a mix of interacting AD and structural problems; Brad tries to refute me by showing — correctly — that there must be an AD problem in the mix.  It might be a valid criticism to note that in both cases I was not explicit enough, but a) that is not a “simple error,” and b) I’ve been plenty explicit in past posts and I don’t feel like repeating myself all the time.  I feel no guilt in putting some burden on the reader.

There is nothing wrong with the economics in Brad’s two posts, but in both cases he has failed The Tyler Cowen Turing Test.  Admittedly, it may be a difficult test to pass, but actually I should hope that is the case.

2. Retail politics, Argentina style.

3. Pizza discipline.

4. The economics of payroll tax relief.

5. Former GMU econ Ph.d. student now is Prime Minister of Somalia.

6. Here is one of my old attempts at an ideological Turing test.

1 Sebastian June 24, 2011 at 1:44 am

I dunno – I’m all for charitable reading, but there is absolutely nothing in your Turkey post that would signal to a reader that you “did not claim the two borrowing situations were the same or that currency denomination of debt is irrelevant.” It sounds like you’re poking fun at economists who do make a strong distinction between those two situations. If that wasn’t what you meant (and it seems like you don’t) I would say that’s – in this case – the failure of your writing.

2 Rahul June 24, 2011 at 1:51 am

Ok, so I think Tyler’s himself to blame when he has to say “simply imagined I hold positions which I do not.”

Oftentimes your posts are great but you hedge on a position. Even the language seems purposefully arcane at times. That’s fine if the intention is not letting someone push you in a corner on an issue. But on the other hand it does make it easier for people to confuse where you stand on an issue.

Hell, oftentimes I’ll read a post and go: “Well is he admiring that or is he ridiculing that”

3 Tyler Cowen June 24, 2011 at 2:04 am

The rational conclusion is then not “He has made an elementary error.”

4 Rahul June 24, 2011 at 2:43 am


5 ralph June 24, 2011 at 4:57 am

Agreed. Tyler, I am a faithful and interested reader and can say that often you leave off specific qualifiers in a way that leads me to read you as more “axe-to-grindish” than you may see yourself. That said, I learn tons from you, so the benefit to me remains quite large, and I thank you.

Brad also teaches much; but he is extremely reactive and when poked, clearly does not stop to self-examine his words. This is true whether you say something mildly critical in the policy realm, as in this case; whether you mention the Labor Theory of Value (!); or whether (and this is a specialty) you have noticed that despite complete criminality and/or dictatorship there are interesting areas of relative good in totalitarian societies (education in communist states comes to mind). Then? Off the rails.

Still, on balance, I’d be worse off if not for the both of you. Personally, I’d advise an “Oh, please!!” stance, and be done with it.

Cheers, ralph

6 JasonL June 24, 2011 at 10:49 am

Agree that Brad was unfair, as is often his wont, but I’d also submit that any response with sufficient specificity could be deemed to fail the TC Turing Test. If I were designing a protocol for such a thing, the first thing I’d do is hire someone more erudite than I, but the second thing I would do is mandate a kind of maddening vagueness to the responses.

7 Andrew' June 24, 2011 at 12:25 pm

“Only if the recognition that there is less support for symphony orchestras induces wealth-holders to conclude that the world is riskier than they thought it was and they need to hold larger cash balances will there be an excess supply of violinists not offset by another excess demand for some other kind of labor. This Say and Mill had straight by 1829…”

Let’s say rich guy accumulates at $100k per month from rich guy activities. He simply stops his monthly donation. Yes, cash is accumulating, but he is not “hoarding cash.” Let’s say he ups his allocation to commodities. Little labor is required for this shift, and as far as operating costs of firms using commodities goes up, they may reduce labor. All this because the new realm of potential realities revealed to him shows that theater doesn’t grow in a recession, no matter why the recession happened.

8 DK June 24, 2011 at 2:24 am

#5. How fitting. But will he manage to make Somali even more libertarian? 🙂

9 Henry June 24, 2011 at 9:58 am

You beat me to it..

10 Veridical Driver June 24, 2011 at 3:30 pm

Yes, because years of imperialist oppression by European governments plunging into desperate poverty and ecological disaster, followed by cold-war proxy civil war funded by U.S./U.S.S.R., followed by a disastrous invasion by the U.S. and the U.N., followed by Saudi-government-funded Islamism, isn’t what caused the chaos in Somalia. Yeah, sure, clearly the chaos in Somalia is caused by an obscure western political ideology that no-one in Somalia is even aware of.

Why don’t you make the argument that the Soviet Union collapsed because of the inherent Libertarian tendencies of Communism? It wouldn’t be any more moronic than that the “Somalia = Libertarian Paradise” meme.

11 J Thomas June 24, 2011 at 9:04 pm

Veridical, if Libertarians will generally agree that there is no relationship between a society’s Libertarian tendencies and its wealth, economic opportunity, justice, or liberty, then probably people will eventually stop talking about Llibertarian Somalia.

12 TallDave June 27, 2011 at 4:44 pm

People tend to stop talking about Libertarian Somalia when they grasp the simple notion that libertarianism is about the soundness of property rights, which Somalia quite emphatically does not have.

13 Casey June 24, 2011 at 2:24 am

There’s an old principle in philosophy called “the principle of charity,” that I think applies here.

14 Paul Johnson June 24, 2011 at 2:24 am

What exactly is the “elementary error”?

“Rather than being a destabilizing shock, a flow of capital out of U.S. Treasuries and out of the U.S. would set in motion economic forces that would not amplify but would damp its impact.” And the “economic forces” would be?

And anyway, there is nothing “elementary” in international economics, since there are multiple channels of effects and to reach a conclusion about the non-destabilizing effects of a flight from US securities one must be making specific and presumably disputable assumptions about their relative strengths.

15 Wes June 24, 2011 at 7:49 am

That price Argentina wants to sell its citizens 32″ LCD TVs is really not a very good deal at all. At about 4 pesos to the dollar, that’s almost a $700 TV, which is far too high; and with 15% interest the total payments come out to almost twice that!

I’m not an economist or a politician. But it seems like if Cristina Fernandez Kirchner wants to bribe the voters, wouldn’t they be better with cash?

16 Justin Bassett June 24, 2011 at 9:24 am

Yes, but with Argentina’s inflation hovering around 25%, the real cost to the consumer who finances his TV is something lie $475

17 E. Barandiaran June 24, 2011 at 8:10 am

On # 2. Before criticizing my fraudulent clown, look at what your own clown is doing

18 FYI June 24, 2011 at 9:11 am

Is it just me or is Brad DeLong going through a ‘krugmanization’ since the financial crisis began? Way too much focus on other people (instead of policy), belligerent tone, and a variety of self-congratulatory posts.

19 Veridical Driver June 24, 2011 at 3:33 pm

The government, and its apologists, are getting desperate.

20 Paul Johnson June 24, 2011 at 4:26 pm

“Krugmanization” – that’s a new one. Maybe one day it will qualify for inclusion in the OED.

21 Popeye June 25, 2011 at 4:44 pm

Wait, does Krugmanization refer to excessive belligerent self-congratulatory focus on other people such as Paul Krugman, or does it refer to Krugman’s actual writing style? My irony meter is broken.

22 Floccina June 24, 2011 at 10:29 am

What is new, however, is that we are now at a point where the notion that Social Security benefits are fully backed by payroll-tax contributions is a fiction that rests entirely on bookkeeping gimmicks.

I think that it is a very good thing that we move away from the fiction that SS is some kind of retirement program. That is, that you pay into it and then draw from based on the amount that you paid in. For one thing almost nobody pays into SS voluntarily. SS is a welfare program that you are taxed to pay for. Payroll tax holidays erode the thinking that, I paid y into the into the program so I deserve X cash. I would like for us to move a system were the payroll tax is eliminated and income taxes raised to replace the revenue and where everyone get the same amount in retirement.

If people want a secure government retirement program above SS they can buy I-bonds.
If people want a Government insurance program above SS a voluntary one can be built as an inflation protected annuity fully funded and with individual accounts.

23 Gabe June 24, 2011 at 11:32 am

I propose getting rid of SS altogether…replace it with “The Old Parasite Welfare Program” or “Domesticateed Human Sub-Species Support Program”.

If only we stopped lying to ourselves, some of the problems in society would be more solvable.

24 A Berman June 24, 2011 at 11:45 am

Personalizing the Turing Test and using it to smack someone down — I love it!

Of course, you really need a third party to judge whom can imitate the other, which means the third-party must be able to pass the Turing Test for both of you.

I can see someone creating whole hierarchies of whom understands the other.

25 A Berman June 24, 2011 at 11:45 am

Feh, who understands the other.

26 Cyrus June 24, 2011 at 11:48 am

The interesting thing about (3) is that Burt’s doesn’t have the best pizza in the area. This is of course subjective, but of the dozen-odd people I’ve toured Chicagoland’s deep-dish pizza parlors with, top honors invariably go to either The Art of Pizza or Lou Malnito’s. Burt’s pizza is decent, but his target market must have a streak of dining masochism to abide by the rules.

27 Benny Lava June 24, 2011 at 11:54 am

I’ll second Lou Malnati’s for best Chicagoland deep dish.

28 Rahul June 24, 2011 at 12:48 pm

The description reminded me of the Soup Nazi from Seinfeld

29 Rahul June 24, 2011 at 11:54 am

Are these two successive Somalian prime ministers American citizens? Asides from Somalia being ok with it, I remember there was an American citizenship clause that said if you took up a diplomatic position of power in another country it might be a cause to cancel American citizenship. Is that true?

Or maybe it is just relevant to mercenary military service or in a country not aligned with American interests?

30 Veridical Driver June 24, 2011 at 3:44 pm

You can lose U.S. citizenship via foreign government service in theory… however, given that the U.S. claims global jurisdiction on taxation, it isn’t in a rush to strip U.S. citizenship.

In fact, the problem people have in real life is that that their parents travel to the U.S. for a few weeks for their baby to be born in a U.S. hospital, go to their home country and 30 years later the baby become a successful businessman… and then the U.S. government contacts them and says “Surprise, we just realized that you where born in the U.S. and so are actually a U.S. citizen! You haven’t paid your U.S. taxes for 30 years, so please surrender all your wealth and prepare to go to prison!”. Since it is fairly common for upper class foreigners to travel to the U.S. for medical care, the I.R.S. and Obama administration have been using a very generous interpretation of “citizenship” to steal the wealth of foreigners. They aren’t going to give up that money-making gig any time soon.

31 Rahul June 24, 2011 at 4:41 pm

Suppose I’m an American citizen (with no other passport) and go and do something unpalatable against US interests. Technically, now even if the US strips of my citizenship what exactly happens? If I am already in territorial US they can’t exactly eject me? To where?

I realize this is a freak scenario; but just wondering…..

32 Rahul June 24, 2011 at 4:43 pm

Also, does being born in the US immediately confer American citizenship? Or just the right to claim American citizenship if one so desires? I think it is an important distinction.

33 Paul Johnson June 24, 2011 at 4:24 pm

According to the Department of State (referencing Section 349 of the Immigration and Nationality Act (8 U.S.C. 1481)) they also must intend to relinquish U.S. citizenship. So, oddly, you could become President of a foreign country and stay a US citizen as long as you don’t intend to relinquish US citizenship.

34 Alex K. June 24, 2011 at 5:48 pm

I have not read your blog in several months now — but I still remember you saying the we have a mix of AD and structural effects.

I have not read Brad Delong’s blog in months — but he still engages in the same dishonest framing of the argument of the opponent’s view as if he makes elementary errors already pointed out in some undergraduate manual.

I guess I didn’t miss much.

35 Eric H June 24, 2011 at 8:37 pm

Does Tyler’s model of DeLong’s model of Tyler really understand DeLong?

And Tyrone should post more often.

36 Careless June 25, 2011 at 12:35 am

This kind of thing makes me wonder if you literally pointed a gun at DeLong’s head and seriously threatened to kill him if he didn’t do a pathetic job if he could do a decent redo on the turing test. I just can’t get if he’s both smart and insane, or smart and just such a partisan hack even something like this makes him turn it into an attack on his enemies.

37 Sid F June 25, 2011 at 8:47 am

The idea of a payroll tax reduction on employers seems to be a totally ineffective way to stimulate employment.

The demand for labor is not like the demand for automobiles, or the demand for any other final good. Why is this so difficult for people to understand.

38 TallDave June 27, 2011 at 4:41 pm

Eh, BDL has the same problem as Krugman — some good econ tends to get washed away in a flood of awful polemicism.

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