BIWEEKLY BRIEFLY NOTED: For 2024-12-14 Sa

My biweekly read-around...

My biweekly read-around...

G-5 growth stumbling in the 1970s and again after the Great Recession; ObamaCare solved the Entitlement-Spending Crisis, a rapid 10% swing in relative wages for non-managers & against managers, & much MOAR…

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ONE IMAGE: Growth since WWII Among the G-5:

When I look at this graph, I see American growth slowed by (a) the 1970s, (b) the Reagan deficits and the consequent starving of private and public investment, (c) the failure of the Clinton administration to restore public investment, and (d) the Great Recession and following Anæmic Recovery. These do not seem to me to be at all “structural”, but rather policy. And it was policy choices that have led to European and Japanese growth retardation vis-à-vis America.

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ANOTHER IMAGE: ObamaCare Really Worked at Cost Control, Didn't It?

Yet nobody I can find will say that they are certain as to what the mechanisms are. But one thing is clear: Obama solved the Entitlement-Spending Crisis. Today there is a new Fund Tax Cuts for the Rich Crisis. But it is not the old Entitlement-Spending Crisis.

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YET A THIRD IMAGE: The Anti-Manager Recovery:

Arin Dube points out a big fact. Non-managerial workers gaining 2.5% vis-à-vis all workers, and managerial workers claiming 25% of the wage bill—that tells us that relative to the average non-managerial workers are up +2.5% and managerial workers are down -7.5% for a 10% swing that happened very quckly—much too quickly to be a technological fact—and is thus some kind of social fact. But what kind?

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ONE VIDEO: Biden Warns Trump Not to Screw Up the Economy:

A very nice speech saying what is what about Biden economic stewardship. My view, increasingly, is that inflation was transitory—and thus that Biden and Powell had gotten the balance of risks right—until things were upset by the Muscovite attack on Ukraine. Larry Summers worries that now that we have had one inflation, the start of another one will have a much easier time destabilizing expectations, hence the Fed needs to get us and keep us below 2%/year for a while. And I wish I did not think he has a large enough chance of being right to make an end to the rate cut path the optimal policy.

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ANOTHER VIDEO: Life in the Agrarian Age Nasty, Brutish, & Short:

Pathologists looking at bones as an area in which human history is not speaking to us loudly…

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Very Briefly Noted:

1. Economics: To say that the 2004 Subaru wagon is long in the tooth is a massive understatement, and while there is joy to be found in the gamification of keeping it on the road, perhaps there are other kinds of more joy to be found in a new car. But the COVID plague, and the auto-company cartel of how if nobody is willing to pay extra for a better place in the chip-supply line they can all massively raise their prices. And it seemed that what may well be our last vehicle should be both (a) large and (b) electric. So is it finally time?:

   Conner Golden: 2025 Volkswagen ID. Buzz Review: This Sparks Joy: ‘The verdict: The all-new Volkswagen ID. Buzz is one of the most characterful, interesting and fun-to-operate new vehicles on the market regardless of its status as an electric minivan. Groovy, baby! Versus the competition: Well, ah, there isn’t any competition. At the time of its release, the ID. Buzz is the sole all-electric minivan on the market, with the closest competitor being the Kia EV9 three-row SUV. Compared with that, the Buzz is comprehensibly better for frequently shuttling a full house, though its modest driving range and power might turn some shoppers off of it. The 2025 Volkswagen ID. Buzz? Oh, that’s a neat vehicle. Drives sweet, looks fantastic, is cleverly packaged. I can see why someone would plunk down the heavy side of $60,000 for one of their own. I’m surprised, to be honest. Prior to driving the ID. Buzz, I was fairly convinced VW’s very expensive electric minivan was set to be D.O.A. in the USA. Its $61,545 base price (including destination) and EPA-rated range <fueleconomy.gov/feg/Pow…> of 231-234 miles looked to be the double tap keeping consumers out of seats, particularly during a period of slowing EV sales… <cars.com/articles/2025-…> <https://substack.com/@delongonsubstack/note/c-81487490>
   

2. Economics: Barry here calls for the German Establishment to recognize that the Neoliberal Order has fallen as the globalized value-chain mode of production is replaced by the attention info-bio tech mode of production. He calls for all of the Draghi things. But would they, even if they could be implemented, be sufficient? I do not think we understand the coming attention info-bio tech mode of production societal hardware well enough to understand what software superstructure of political economy and socio-cultural patterns will optimally suit it:

   Barry Eichengreen: The Crisis that Germany Needs: ‘There is a profound mismatch between Germany’s current economy and its institutional inheritance…. If the current crisis prompts a wholesale rethink of that inheritance, the logjam… could finally be broken…. West Germany developed a set of economic and political institutions ideally suited to the conditions of the time…. Quality manufacturing… successful vocational training and apprenticeship…. Growing world trade… production of motor vehicles and capital goods… comparative advantage…. A bank-based financial system to channel funds to dominant firms…. Harmony… and limit[ed] workplace disruptions… [from] management codetermination <https://en.dgb.de/fields-of-work/german-codetermination>…. The happy result of this alignment of institutions and opportunities was the Wirtschaftswunder…. Unfortunately, these same institutions and arrangements proved exceedingly difficult to modify when circumstances changed…. Solutions… are obvious: Invest more in higher education…. Develop a venture capital industry…. Use macroeconomic policies to stimulate spending…. Rethink codetermination and a mixed-member proportional electoral system <https://aceproject.org/ace-en/topics/es/esd/esd03/esd03a/default> that has outlived its usefulness…. Release the “debt brake”…. Invest more in research and development and in infrastructure…. Imagining such changes may be easy, but implementing them is not… <https://www.project-syndicate.org/commentary/german-economic-crisis-could-break-institutional-logjam-by-barry-eichengreen-2024-12> <https://substack.com/profile/16879-brad-delong/note/c-81486605>
   

3. War & Rumors of War: 10,000 (perhaps) of Hamas’s cadres and more than 50,000 civilians killed out of the 2 million Gaza population and the entire population of the strip turned into refugees by now in Israel’s now more than one year old assault on Gaza. From our perspective this is, but frlm the IDF’s perspective, this is not a disproportionate ratio of terrorist to civilian casualties fighting an urban guerrilla movement with little tactical doctrine other than to shield behind civilians. Those IDF habits of mind and that view—combined with the fact that by now 40% of the Israeli Jewish population is descended from people who saw nearly all of their relatives die at the hands of the Nazis because they had no place to run, 60% of the Israeli Jewish population is descended from people who survived when the post-1947 ethnic cleansing of Jews from the rest of the Middle East began because they did have someplace to run, and all think that Palestinians are owed something not by them but by those currently living in the former Jewish Quarters of Damascus and Cairo—is why we are now on a trajectory along which it is more likely than not that some acting in the name of Palestine will destroy Tel Aviv by nuclear fire sometime in the next half-century. They—we—need to stop. And also, along our current trajectory, it is more likely than not that some acting in the name of Israel will Damascus and more by nuclear fire sometime in the next half-century. They—we—need to stop. But the habits of mind and views why that second is so are well-exemplified by Rashid Khalidi here—trumpeting the military “destruction” of Israel’s Gaza Division by Hamas, and how Israel is doomed if it loses the “complete support” of the West. I do think we are damned:

   Rashid Khalidi & Mark O’Connell: Interview: ‘O’Connell: “At what point do we stop talking about America’s ‘complicity’ in this slaughter, and begin to talk of America as an antagonist, of America being at war with Palestine?…” Khalidi: “The United States is actually directly at war [with Palestine]…. O’Connell: “It seems to me to be very difficult to make sense of what [Israel is] doing if you don’t believe… [the] ethnic cleansing [of Gaza]… is underway….” Khalidi: “There is an almost unquenchable desire for revenge for what happened on October 7 of last year: the destruction not just of the Gaza division of the Israeli army… of a large number of settlements.… the killing of the largest number of Israeli civilians since 1948; the abduction of over a hundred civilians and perhaps a hundred soldiers; the destruction of a sense of security…. The thirst for revenge… unquenchable…. The shifts in public opinion we’ve seen in the West…. Israel cannot go on without the complete support of the West. It’s not possible. The project doesn’t work. We’re in a different world than the world we’ve been in for over a century. And that might be a source of optimism…” <https://www.nybooks.com/articles/2024/12/19/israels-revenge-an-interview-with-rashid-khalidi-mark-oconnell/>
   

4. Public Reason: Yes, “liberalism” is very much a plural noun: it is large, it contains multitudes. And yet it does have boundaries: Classical Athens does remain pre-liberal, and utopian socialists are non-liberal. I think much becomes clear if you start with Judith Shklar and the Liberalism of Fear and with Alain and Tolerance Is a Treaty, and pick up all of the threads that pass through those two nexuses:

   Amicus: Liberalism is a Plural Noun: ‘Liberalism, like any syncretic faith, has more than one true origin. Liberalism, like any state cult, has but a single lawful present…. Received Liberalism takes an expansive view of its ancestry… Hamilton and Paine, Mill and Bastiat, Voltaire and Montesquieu….[But] consider Rights…. For Bentham… legal constructs with a practical aim…. For… Paine… written into the laws of nature…. And for William Lloyd Garrison…rights… [were] written in the hearts of men. These are not the same concept…. In virtue of what, then, are these thinkers part of a single liberal tradition, while Athens remains pre- and the utopian socialists non-?… Market society… is the distinctly liberal political economy, and yet we find no shortage of liberal giants recoiling from it in well-justified horror…. Pluralism…. Robespierre…? Rousseau? Roosevelt?… There is no pluralism to be found in disposing of reactionaries, and not much more to be found in welcoming their hatred. And yet these are liberals, or else liberalism is… sad and small…. You can call it “liberalism”… [but] it’s just modernity. Marx… as much as Mill… Proudhon, and Owen too…. There is no such thing as liberalism: only liberalisms, or else the Enlightenment, of which the Left is the best and truest heir. But that story, too, will have to wait… <https://homosum.substack.com/p/liberalism-is-a-plural-noun> <https://substack.com/profile/16879-brad-delong/note/c-81485513>
   

5. Public Reason: No: to say that the “Vanguardist Gambit” of removing “unacceptable constraints [on freedom]… [via] the imposition of additional constraints” had “mixed effects” in the twentieth century is to descend into self-parody. As is the claim that positive liberty claims are simply “traffic laws writ large”. Amicus would get further, I think, if he would acknowledge two things: First, that the Left-Neoliberal Order bet was that (a) a not too unequal distribution of income plus (b) market coördination of the human division of labor (c) supported by a properly developmental state would get us as close to utopia as humanly possible. And, second, that that bet has led to bankruptcy: An Invisible Hand playing a losing card. And we do not know what other human organizational instrumentalities besides the market we need for freedom and community plus human coördination at planetary scale:

   Amicus: Too Few Concepts of Liberty: ‘Against Isaiah Berlin…. Freedom is an ancient cluster-concept, carried down through two thousand years…. Its severed brambled branches have been put to use in anger in a hundred different ways. To say what freedom really means is to brandish one again. Presently it’s a certain sort of liberal who… would cut the left out of their family tree, if they could only find a way…. In a tribal-signal sense: the left begins when the applause light of “equality” floods the center stage. More sophisticated accounts employ those same key words, but in a very different way…. Liberal freedom is; it is private and it is personal, outside the public sphere… politics only insofar as the political intrudes: freedom was there first, they would like to say…. Isaiah Berlin… frames those of us who advocate for concrete visions of the good as incipient totalitarians, to be ignored if not repressed…. Berlin, notoriously, found the roots of Stalinism in Rousseau…. [But] Rousseau is… a classical republican: his ideal state is not just a guarantor of natural liberties, but plays an active role in constituting them…. The distinction Berlin draws in Two Concepts of Liberty, between the “negative liberty” of non-interference and the “positive liberty” of being “one’s own master”, is meant, in essence, to cast suspicion on all substantive aims…. Two Concepts is a very clever bit of rhetoric…. Good rhetoric, however, does not imply good faith…. Marx[‘s]… aim is not, as Berlin supposes, to supplant individual irrationality with a collective rational will—it is to do away with the irrational collective will of Capital. Collective reason is the means; the end remains the freedom of the individual, which must be collectively maintained…. Where Berlin sees free choice among alternatives in the liberal present, Marx sees fixed choices handed down from on high—not by human reason, but by the blind inhuman will of all our choices summed…. There are certain laws and institutions which genuinely make us more free… traffic laws writ large. There are others which impose unacceptable constraints, and must be actively removed…. We are particularly unlucky… [that removal is] not… open to us without the imposition of additional constraints…. These claims can stretch further than they ought to; this sort of vanguardist gambit has had mixed effects <homosum.substack.com/p/…> <https://substack.com/@delongonsubstack/note/c-81489706>
   

6. Economics & Journamalism: One of the many, many things to damn the editorial management of the New York Times for is their continued inability to figure out that stuffing anybody into 600 words twice a week is a recipe for knee-jerk prejudice and bias mongering, rather than for bringing information, knowledge, and analysis to the table in order to help your readers understand and act in the world. Krugman coped with these hobbles orders of magnitude better than his peers. Looking back from today, what share of Tom Friedman columns have a true and useful insight? True, Paul had an absolute advantage turning out 600-word fishwrap: hence his repeated and successful accomplishments, over and over again, as an intellectual P. Horatius Cocles. But his massive comparative advantage is and he would have been far more useful at the 2000-word sweet spot: some facts, a relevant economic model, and analysis that teaches you something new, important, and true about the world. Now that we have Prometheus Unbound himself on SubStack, I expect great—or, perhaps I should say—greater things":

   Paul Krugman: The Fraudulence of “Waste, Fraud and Abuse”: ‘History repeats itself, the first time as farce, the second as clown show…. Now that I have written my last column <nytimes.com/2024/12/09/…> for the New York Times, this newsletter is coming out of dormancy. It will be mostly economics-related, and I’ll try to stay away from pure political punditry, although everything — including this post — is political these days. This newsletter will be a lot wonkier than my Times column, and usually wonkier than my old Times newsletter. Definitely snarkier than either…. Short form thoughts will be appearing here <bsky.app/profile/pkrugm…>. And with that, let’s get going… <paulkrugman.substack.co…> (ref.: Macaulay, Thomas Babington. 1842. Lays of Ancient Rome. London: Longman, Brown, Green, & Longmans. <gutenberg.org/files/847…>). <https://substack.com/@delongonsubstack/note/c-81287772>
   

7. Sundowning in America: Chaos-monkey economic policy begins! The question is: who will be in charge of cleaning up the mess in the monkey cage, and what cleaning products will they have to work with?

   Brad Setser: ‘Curious how former President elect Trump ever became convinced that the nowhere close to happening BRICs currency was a threat to the dollar... It isn't a good look, as it indirectly elevates the stature of a non-threat and suggests a lack of confidence in the dollar: “The idea that the BRICS countries are trying to move away from the Dollar while we stand by and watch is OVER…. We require a commitment… that they will neither create a new BRICS Currency, nor back any other… or, they will face 100% Tariffs, and say goodbye to selling into the wonderful U.S. economy…”. It isn't in my view a credible threat to do 100% tariffs (the impact on the US would be huge) and it is in response to chatter about a BRICs currency that is going nowhere and simply isn't currently a real risk.… So I really don't get it…. I certainly hope Mr. Bessant isn't egging President elect Trump on here… <x.com/Brad_Setser/statu…> <https://substack.com/@delongonsubstack/note/c-81092651>
   

8. Tech: If your neck can cope with having an iPad on your face, and if your brain can cope with your binocular vision telling you that things are five feet away while your eye muscles are focusing on two inches—if that does not make your brain conclude that you have been poisoned and need to throw up—then the not-evenly-distributed future is here, as long as you are at your desk doing your desk computer thing. If I were Apple, I would focus on updating the processor to M5Pro and getting the software to run Mac apps so that they are not confined in a big box. And then they would have a product that ought to be a success for high-end customers:

   Wes Davis: The Vision Pro’s ultrawide Mac display is very close to being a killer app: ‘Apple gives the Mac Virtual Display feature an upgrade that’s literally huge…. My normal three-monitor setup lets me see the most important stuff with slight movements, but that just hasn’t been possible [with the VisionPro] before now…. In visionOS 2.2… it seems sharper…. Once your Mac is updated to macOS 15.2… it take[s] over foveated rendering from the Vision Pro…. Extra modes instantly made the virtual display viable for me, giving me the space I’m accustomed to in my three-monitor life. You can crank the resolution in Ultrawide all the way up to 10240 x 2880 if you’d like, but the sweet spot for me has been the Wide display’s maximum 6720 x 2880…. I’d absolutely bring it on a work trip…. My Vision Pro is now more than a personal movie theater. Now, it’s a gigantic, high-res curved display with perfect viewing angles, too. That makes the price feel a little closer to right… <theverge.com/2024/12/11…> <https://substack.com/@delongonsubstack/note/c-81090197>

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