Angus Bylsma reviewing "Slouching Towards Utopia'; Dario Perkins reminds us that this is not a normal business cycle; the Apollo spacecraft’s computer from 1965; global warming proceeds; very...
Isn't it amazing how much effort the gubment went into to fake the moon landing? Not just build fake rockets for decades from Mercury to Gemini to Apollo, pay fake astronauts and fake NASA employees and give fake gubment contracts that employed thousands of people who kept hush about it, or film fake moon landings in the Nevada desert ... sheesh, they even got MIT to invent fake math, build a fake computer, and give fake interviews explaining how it all works. The D33P St8 is just soooooo deep.
Smith: We possess the technologies to "get the job done." What the global temperature will be by the time we employ them and what the world pc GDP will be by then are very much TBD. Taxing net emissions of CO2 has such a low deadweight loss that every untaxed combustion of a carbon atom is a tragedy!
“The principal lessons going forward from the COVID depression and subsequent reopening is that there are no principal lessons going forward from such a one-off episode.“
I think this statement is completely wrong. The COVID “lockdown”/recovery shocks (and to a lesser extent Putin’s invasion of Ukraine shock) display with unusual clarity the essence of the challenges of monetary policy. It must use one blunt instrument (technically, a vector of instruments), to manage aggregate demand in such a way as to facilitate changes in relative prices that are “needed” to clear markets that are reacting to shocks when some absolute prices are quite sticky downward.
That the shock was large and heterogeneous across sectors highlights the inadequacy of the traditional one-good, one-input (labor), one relative price (the real wage) models. [They remain IS-LM even when they have hundreds of equations.]
Team Transitory by implicitly using a multi-market, multi-relative price model was able to see that some over-target inflation was good and to avoid a “Phillips Curve” prediction that a long deep recession would be needed to get inflation down to target.
To suggest an analogy, the “Phillips Curve response” was like a LLM predicting text based on its training data. The Team Transitory response, which “build better than they knew,” is based on a model of how the macro economy actually works.
The risk we now face is that the Fed seems to have reverted to one-good thinking.
See
(100) Supply and Demand in Disinflation (substack.com)
That MIT movie was astounding. All that stuff being done by the private company Raytheon was for NASA, and the whole lot of it was paid for with our tax dollars. Those clunky computers being built by hand have ended up in our pockets with kazillions more power to do kazillions more things...all of which came from....get ready for it...the Deep State.
Computer for Apollo: After watching that video, and the eventual Moon landing, I couldn't help thinking that our methods for achieving an economic Soft Landing are more or less medieval.
The Slouching review: I may have mentioned this earlier, but it is worth repeating -- critiques that rely on what was left out of the book, or what was not given enough space, are besides the point. Critics have a point only if they can: (1) find something that was left out; (2) and make the case that what was left out also undermines the main thesis of Slouching.
Going on and on about what was/is Marxian, Hayekian, Polanyi, and other issues like demography, climate change and so on , is not illuminating.
Isn't it amazing how much effort the gubment went into to fake the moon landing? Not just build fake rockets for decades from Mercury to Gemini to Apollo, pay fake astronauts and fake NASA employees and give fake gubment contracts that employed thousands of people who kept hush about it, or film fake moon landings in the Nevada desert ... sheesh, they even got MIT to invent fake math, build a fake computer, and give fake interviews explaining how it all works. The D33P St8 is just soooooo deep.
Smith: We possess the technologies to "get the job done." What the global temperature will be by the time we employ them and what the world pc GDP will be by then are very much TBD. Taxing net emissions of CO2 has such a low deadweight loss that every untaxed combustion of a carbon atom is a tragedy!
“The principal lessons going forward from the COVID depression and subsequent reopening is that there are no principal lessons going forward from such a one-off episode.“
I think this statement is completely wrong. The COVID “lockdown”/recovery shocks (and to a lesser extent Putin’s invasion of Ukraine shock) display with unusual clarity the essence of the challenges of monetary policy. It must use one blunt instrument (technically, a vector of instruments), to manage aggregate demand in such a way as to facilitate changes in relative prices that are “needed” to clear markets that are reacting to shocks when some absolute prices are quite sticky downward.
That the shock was large and heterogeneous across sectors highlights the inadequacy of the traditional one-good, one-input (labor), one relative price (the real wage) models. [They remain IS-LM even when they have hundreds of equations.]
Team Transitory by implicitly using a multi-market, multi-relative price model was able to see that some over-target inflation was good and to avoid a “Phillips Curve” prediction that a long deep recession would be needed to get inflation down to target.
To suggest an analogy, the “Phillips Curve response” was like a LLM predicting text based on its training data. The Team Transitory response, which “build better than they knew,” is based on a model of how the macro economy actually works.
The risk we now face is that the Fed seems to have reverted to one-good thinking.
See
(100) Supply and Demand in Disinflation (substack.com)
(100) Why No Recession? (substack.com)
(100) The Lessons of Pandemic Inflation (substack.com)
That MIT movie was astounding. All that stuff being done by the private company Raytheon was for NASA, and the whole lot of it was paid for with our tax dollars. Those clunky computers being built by hand have ended up in our pockets with kazillions more power to do kazillions more things...all of which came from....get ready for it...the Deep State.
Computer for Apollo: After watching that video, and the eventual Moon landing, I couldn't help thinking that our methods for achieving an economic Soft Landing are more or less medieval.
The Slouching review: I may have mentioned this earlier, but it is worth repeating -- critiques that rely on what was left out of the book, or what was not given enough space, are besides the point. Critics have a point only if they can: (1) find something that was left out; (2) and make the case that what was left out also undermines the main thesis of Slouching.
Going on and on about what was/is Marxian, Hayekian, Polanyi, and other issues like demography, climate change and so on , is not illuminating.
Noah Smith (not the Onion):
" The future of the human race looks OK — at least, as far as climate change is concerned."
Noted.