The Best Post-Election Piece So Far

From Joshua Mitchell.

“Globalization” and “identity politics” are a remarkable configuration of ideas, which have sustained America, and much of the rest of the world, since 1989. With a historical eye—dating back to the formal acceptance of the state-system with the treaty of Westphalia in 1648—we see what is so remarkable about this configuration: It presumes that sovereignty rests not with the state, but with supra-national organizations—NAFTA, WTO, the U.N., the EU, the IMF, etc.—and with subnational sovereign sites that we name with the term “identity.”

…When you start thinking in terms of management by global elites at the trans-state level and homeless selves at the substate level that seek, but never really find, comfort in their “identities,” the consequences are significant: Slow growth rates (propped up by debt-financing) and isolated citizens who lose interest in building a world together. Then of course, there’s the rampant crony-capitalism that arises when, in the name of eliminating “global risk” and providing various forms of “security,” the collusion between ever-growing state bureaucracies and behemoth global corporations creates a permanent class of winners and losers.

Pointer from Tyler Cowen.

Read Mitchell’s whole piece, as well as the earlier essay to which he links. I find his thoughts congenial, because I agree that the election pitted cosmopolitan vs. anti-cosmopolitan.

However, this is far from the last word. In fact, I would say that the longer you take to react to news, the better off you are. In general, I like to schedule my posts several days in advance. (This one is being drafted 3 days before it is scheduled to appear.) That gives me time to revise or delete a post before it appears. You may have noticed that when stock futures plummeted the night of the election, Paul Krugman predicted that the plunge would be permanent. I bet he wishes he had scheduled that post for a few days later, in which case he could have deleted it before it became public. In fact, I rarely have to revise or delete, because scheduling a post in advance forces me to be less reactive and to think ahead.

A lot of social media lacks the “schedule in advance” feature. I don’t think Twitter has it (I only use Twitter automatically, to announce blog posts, so I do not know how Twitter actually works.) Facebook does not have it. Software for posting comments does not have it. (If you like to comment on this blog, feel free to hold back for a few days. Old comments on old posts show up for me to read just as well as fresh comments on fresh posts.)

Thus, for the most part, social media leads people to be reactive and trigger-happy, as opposed to reflective and sober. It is something that one has to be aware of and push back against.

The Case for Manners

Henry Hazlitt wrote,

Too often moral codes, especially those still largely attached to religious roots, are ascetic and grim. Codes of manners, on the other hand, usually require us to be at least outwardly cheerful, agreeable, gracious, convivial—in short, a contagious source of cheer to others.

Pointer from Don Boudreaux.

I think that codes of manners also can be used to convey respect for others. You are telling people, including strangers, that you conduct yourself with them in mind.

I believe that restraint in the use of four-letter words used to serve this purpose, and it could once again serve this purpose. This puts me at odds with my fellow Baby Boomers and those who came after.

Ideology and Keynesian Economics

Scott Sumner posts on the controversy, which was recently re-ignited by what I thought was a reasonable post by Russ Roberts. My thoughts.

1. There is a correlation between belief in Keynesian economics and preference for a larger government. Economists who advocate for higher government spending to fight recessions also tend to argue at other times either to increase or not reduce every non-military component of government spending.

2. Nonetheless, those economists who believe in Keynesian economics and generally support higher government spending usually will insist that they are not ideological. In their view, they are merely scientists, who are free from confirmation bias.

3. Any online discussion that employs the term “Keynesian economics,” “macroeconomic facts,” or “Paul Krugman” will, with probability one, be un-constructive and uncharitable.

I am becoming increasingly convinced that the Internet is making us stupid politically. On the Internet, there is an impulse to react immediately to political comments, which means engaging your emotions rather than any self-critical reasoning. There is an impulse to be uncharitable to those with whom you disagree. Some of my responses:

1. I try to schedule blog posts at least a day in advance. My goal is to react less to the “threat” posed by political disagreement.

2. I look for opportunities to challenge the views of other libertarians, although not as often as Tyler does.

3. Recently, I made a determination to avoid commenting on political issues on Facebook. In fact, I would love an app that filters out all political posts on Facebook. I prefer even the pointless cute animal posts. But I mostly just like pictures and personal status updates of friends’ weddings, travel, anniversaries, etc. At some point I may have to sort through and unfriend the folks who only post on politics.

Reset Your Clock to 2003

The WSJ reports,

Federal Reserve Bank of Minneapolis President Narayana Kocherlakota said Tuesday rock-bottom borrowing costs in the bond market are not a positive vote on the economic outlook.

My reaction:

1. This is another echo of 2003-2004, when Fed officials were equally puzzled by low long-term rates. I was even more puzzled than they were back then, and I am even more puzzled than they are now.

2. The conventional wisdom is that the bond markets watch the Fed, because the Fed has magical control over everything. To me, it seems more realistic to have the Fed watching the bond markets for clues about the economy. The Fed is actually powerless to alter the consensual hallucination.

3. I remember when Tyler Cowen described blog readers as like followers of a TV show or comic strip. They have cumulative knowledge of your blog, so that you can refer implicitly to what you have written previously, and they enjoy little inside jokes. Twitter has changed that. Now I have a lot of one-off readers, who leave comments that show that they know absolutely nothing of my previous writing. They have no context for my thinking on macroeconomics, and so they just decide that I am an ignoramus. I have gotten advice from people to make my blog post headlines more Twitter-friendly. In fact, I am reconsidering whether I want to get any traffic at all from Twitter. In the long run, I think I will like what I write more if I ignore the one-off reader population.

QE and Fiscal Offset

Tony Yates writes,

As Summers reportedly put it, while the Fed was engaged in quantitative easing, the Treasury was doing ‘quantitative contraction’. And surely the two arms of government should be better coordinated than that.

Pointer from Mark Thoma. My remarks.

1. Read the rest of his post.

2. Larry Summers is quite late to the party. Some of us have been talking about this issue for years. For example, almost four years ago, James Hamilton wrote,

since 2008, the Treasury has been issuing more long-term debt faster than the Fed has been buying it… What we find in the latest data is that this trend has continued over the last 3 months, even with QE2.

3. Wikipedia defines superstition as

the belief in supernatural causality—that one event causes another without any natural process linking the two events—such as astrology, religion, omens, witchcraft, prophecies, etc

I think that belief in the macroeconomic impact of the Fed can be properly regarded as a superstition. The Fed’s rules and regulations affect the allocation of credit, and it can aid particular banks when they get in trouble. However, its ability to control interest rates and nominal GDP is far less than most economists and investors believe.

Note that, as with the vast majority of my posts, this was written a few days ago and scheduled to be posted at this time. I find that staying away from immediate publication encourages me to evaluate the wisdom of a post using my “future self.”

Being Charitable to those who Disagree

Maria Popova quotes D.C. Dennett on how to argue:

1. You should attempt to re-express your target’s position so clearly, vividly, and fairly that your target says, “Thanks, I wish I’d thought of putting it that way.

2. You should list any points of agreement (especially if they are not matters of general or widespread agreement).

3. You should mention anything you have learned from your target.

4. Only then are you permitted to say so much as a word of rebuttal or criticism.

Intellectually, I think only the first step is important. It is analogous to Bryan Caplan’s ideological Turing test.

New EconTalk Feature

I only recently noticed that an experimental Continuing Conversation feature on EconTalk. It is like a comments section, but with the comments guided by questions from Amy Willis.

My reading of the first two continuing conversations is that they went well. When I started my economics blog, it was called Great Questions of Economics, and I ended every post with a discussion question. I stopped doing that, more out of laziness than anything else.

It would be amusing/humbling to have Willis-style questions after I wrote a blog post. “What was Kling saying when he wrote ____?” It would be even more amusing/humbling to read the answers.

About This Blog

About two months ago, I quit blogging at EconLog. The main reason was that I was right in the middle of trying a start-up that combined two big trends/fads: online education and mobile computing.

The result,, is something that I am using in teaching two high school courses, one on statistics and one on economics. My original vision was to build something that other teachers could use, also. I might very well have had a good idea. Just as computer programming these days relies a great deal today on shared code libraries, with “reinventing the wheel” an awful sin (and I have a hard time giving up sinning), what I was trying to do was create a platform for creating shared libraries for highly interactive simple quizzes. From the beginning, I had doubts about my ability to execute the full concept, and ultimately the doubts won out. I am glad I tried it, because (a) I can use it in my classes and (b) I learned about how computer programming has changed in the past dozen years.

I want to get back to blogging for two reasons. One is to record links and book reviews for my own benefit. A second is to rejoin the blog conversation–I found that I missed participating.

I decided to go with my own blog, rather than return to EconLog, because I want to have total control over the blog content. I want to model a very particular style of discourse, as indicated by the tag line “taking the most charitable view of those who disagree.” In June, I wrote

Suppose we look at writing on issues where people tend to hold strong opinions that fit with their ideology. Such writing can

(a) attempt to open the minds of people on the opposite side as the author
(b) attempt to open minds of people on the same side as the author
(c) attempt to close minds of people on the same side as the author

So, think about it. Wouldn’t you classify most op-eds and blog posts as (c)? Isn’t that sort of pathetic?

My goal is to avoid (c). I will try to keep the posts here free of put-downs, snark, cheap shots, straw-man arguments, and taking the least charitable interpretation of what others say. So, if what you most enjoyed about my past blogging efforts were the put-downs, be prepared for disappointment with this incarnation.