tag:blogger.com,1999:blog-4290163255778893789.post8237520508758195924..comments2024-03-16T05:19:07.061-04:00Comments on Retirement Blues: Money Illusion DelusionJazzbumpahttp://www.blogger.com/profile/07337490817307473659noreply@blogger.comBlogger10125tag:blogger.com,1999:blog-4290163255778893789.post-48110747616398400382011-04-15T10:44:59.828-04:002011-04-15T10:44:59.828-04:00When talking about Keynes, I think the focus on de...When talking about Keynes, I think the focus on debt, per se, is misplaced.<br /><br />Keynes realized what conservative economists seem to deny, and that is that capitalism depends on spending. If the private sector doesn't provide the necessary spending, then the government comes in to take up the slack. <br /><br />If private sector sending is adequate, the government can scale back spending. The resulting surpluses and deficits are outcomes, not goals. I guess the Keynesian budget goal was average balance - in the long run.<br /><br />Cheers!<br />JzBJazzbumpahttps://www.blogger.com/profile/07337490817307473659noreply@blogger.comtag:blogger.com,1999:blog-4290163255778893789.post-80919343878637518632011-04-15T02:56:30.142-04:002011-04-15T02:56:30.142-04:00"Keynes was abandoned in the U.S. The failure..."Keynes was abandoned in the U.S. The failure period came with the all-deficits-all-the-time approach."<br /><br />So Keynes was saying we should REDUCE debt? That is what I am saying also.The Arthurianhttps://www.blogger.com/profile/16501331051089400601noreply@blogger.comtag:blogger.com,1999:blog-4290163255778893789.post-88888839187996647452011-04-12T18:46:29.230-04:002011-04-12T18:46:29.230-04:00This comment has been removed by the author.The Arthurianhttps://www.blogger.com/profile/16501331051089400601noreply@blogger.comtag:blogger.com,1999:blog-4290163255778893789.post-28928589638795049422011-04-12T17:07:26.456-04:002011-04-12T17:07:26.456-04:00Art -
It did get hung up in spam, mysteriously. ...Art -<br /><br />It did get hung up in spam, mysteriously. First time that has ever happened.<br /><br />I have to disagree on the failure of Keynesianism. As you can see <a href="http://jazzbumpa.blogspot.com/2011/02/accidental-keynesians.html" rel="nofollow">here</a>, after about 1968, Keynes was abandoned in the U.S. The failure period came with the all-deficits-all-the-time approach.<br /><br />Cheers!<br />JzBJazzbumpahttps://www.blogger.com/profile/07337490817307473659noreply@blogger.comtag:blogger.com,1999:blog-4290163255778893789.post-28958441392095196002011-04-12T12:22:30.377-04:002011-04-12T12:22:30.377-04:00Oh, I left a comment here on the 10th but I don...Oh, I left a comment here on the 10th but I don't see it. Maybe it got stuck in your spam filter. Anyhow, below is the afterthought I want to add:<br /><br />Another thought. Your post concludes by noting that "growth in US living standards slowed after 1973," an important point that I think of as the failure of Keynesianism.<br /><br />One might say that '73 was the end of a golden age, and that our economy never did really recover. If that is true, then the whole of Sumner's study is the study of a failed economy.<br /><br />Intuition says more could be learned by comparing a failed economy to a golden one, then by what Sumner has done. His work is the ultimate in cherry-picking!<br /><br />ArtThe Arthurianhttps://www.blogger.com/profile/16501331051089400601noreply@blogger.comtag:blogger.com,1999:blog-4290163255778893789.post-37072076042324324012011-04-10T18:19:45.295-04:002011-04-10T18:19:45.295-04:00Wow. Sumner strikes me as a smart guy, but your cr...Wow. Sumner strikes me as a smart guy, but your criticisms seem strong to me. I recall reading a couple of Krugman's posts on this, where he mentioned Sumner. I never read Sumner on this.<br /><br />I liked the post. Your attention to ratios and the denominator problem is satisfying. The "GDP/cap isn't just a fraction" discussion was great. This may be the best line of all: "Most importantly, I believe in data-driven conclusions, not conclusion-driven data mining."<br /><br />I think your "neo-liberal" link is all wrong about Adam Smith. I think Smith is misrepresented, as Keynes almost always is.<br /><br />One big item: your "touchstone." You make much of declines in other nations during the Clinton years. For example, in the conclusion you write: "Fourth, nobody made a big gain vs Clinton..."<br /><br />Also from your conclusion: "The point is that countries that did more reforms ... their biggest gains came against U.S. recessions..." I think that analysis is correct. Changes in U.S. economic performance appear on the graphs inverted, as changes in the economic performance of other nations.<br /><br />I don't know about other nations but it seems likely that they all show declines in the Clinton years not because (by magic or coincidence) they all declined at the same time, but because the U.S. did exceptionally well in those years. And in fact the U.S. did exceptionally well in those years. (See <a href="http://www.cepr.net/index.php/op-eds-&-columns/op-eds-&-columns/the-real-economic-crisis/" rel="nofollow">The Real Economic Crisis</a>. They refer to 1995-2004 as "reminiscent of the golden age.") So the declines the other countries show in the Clinton years simply reflect good years of the U.S. economy. It's the denominator problem.<br /><br />Regarding the reasons for improved economic performance in the Clinton years, I had some thoughts on that in <a href="http://newarthurianeconomics.blogspot.com/2010/07/another-piece-of-puzzle.html" rel="nofollow">Another Piece of the Puzzle</a>.<br /><br />I have no thought on whether my comments support your position or Sumner's.<br /><br />In response to TGGP's comment, Singapore also has increasing inequality -- according to <a href="http://singaporemind.blogspot.com/" rel="nofollow">Diary of A Singaporean Mind</a>. (I can't find the particular post, though.)<br /><br />I am agreeing that growth in US living standards slowed after 1973, and I am arguing that a great deal of this slow down occurred because of accumulating debt.The Arthurianhttps://www.blogger.com/profile/16501331051089400601noreply@blogger.comtag:blogger.com,1999:blog-4290163255778893789.post-21724354821166563882010-07-03T10:11:54.303-04:002010-07-03T10:11:54.303-04:00TGGP -
I appreciate your looking at an old post a...TGGP -<br /><br />I appreciate your looking at an old post and commenting so thoroughly.<br /><br />Well, if you are correct -especially about Clinton and Delong - then I totally misread Sumner. I'll take some blame for that. But - perhaps his use of the word <b>neoliberal</b> to mean something other than the general definition I was able to track down has something to do with it. <br /><br />I will still say, though, that focusing on 3 data points from a series of 29 - even if you have beginning , middle, and end - is a particularly obtuse way of looking at a data series. <br /><br />Nor do I agree with your first item, that a data series represents a point. None of Sumner's countries have a monotonic GDP over time relationship, and exogenous and endogenous factors influence the results. One data point per year seems exactly right to me. Every data point is significant, and I think the shapes of the curves over time confirms that.<br /><br />My point about ratios is that people commonly ignore the importance of the denominator. GDP/cap is a valid number, but one needs to be cautious when using it.<br /><br />Thanks for your comments. I'll have another look at Sumner's posts.<br /><br />Cheers!<br />JzBJazzbumpahttps://www.blogger.com/profile/07337490817307473659noreply@blogger.comtag:blogger.com,1999:blog-4290163255778893789.post-21045092915719739022010-07-03T00:50:11.319-04:002010-07-03T00:50:11.319-04:00"but no neoliberal"
What? He's the a..."but no neoliberal"<br />What? He's the archetypal neoliberal pol in the United States. Self-described neoliberal Brad Delong worked under him, and Mickey Kaus likes to cite him as a great example of neoliberalism. Sumner is not equating "neoliberal" with right-wing, most of his shining examples are center-left governments (and I would add that Jimmy Carter deserves a lot of the credit normally assigned to Reagan for deregulation as well).<br /><br />"Reagan, in particular had at least some actual policies that are conceptually inconsistent with neoliberalism"<br />I don't think Sumner included debt as an indicator of GDP, and he has argued against including size of government in economic freedom indices.<br /><br />"Sumner's weak conceptual framework is further undermined his assumption that GDP growth is solely or primarily a function of the native degree of neoliberal policy implementation"<br />NO NO NO NO! That was the view he was arguing against! Krugman was suggesting that the higher growth rates before neoliberalism are a mark against it, Sumner responds that other factors (technology, I think) caused the change over time. So Sumner suggests that we compare countries because some of them had more neoliberal reforms than others, but all of them experiences the same change in time (they all "hit the wall" in the 70s).<br /><br />"Let's agree on something"<br />Sumner most certainly does not agree, he is treating the whole period as neoliberal (though we did not reform as much as other countries did).<br /><br />"Switzerland looks like the big loser here, Argentina holds its own after 1994, other changes are not particularly dramatic."<br />This is an area where catch-up growth is relevant: Switzerland was already rich, so (all else equal) we should expect poorer countries to grow faster.<br /><br /><br />Your conclusion places a lot of emphasis on the difference between post 1980 U.S presidents, but Sumner was never arguing about that.TGGPhttps://www.blogger.com/profile/11017651009634767649noreply@blogger.comtag:blogger.com,1999:blog-4290163255778893789.post-76170979425247513642010-07-03T00:49:22.115-04:002010-07-03T00:49:22.115-04:00Sorry for commenting on an old post, but one lengt...Sorry for commenting on an old post, but one lengthy critique deserves another.<br /><br />"Here, Sumner calls two time series, "two data points," when each series is - how else can you say it - a series."<br />True, but since we're just talking about one exogenous shock (nobody is referring to specific neoliberal reforms in each particular year), there's no additional statistical power from having additional points in a series. So I'd actually say Sumner is wrong in the opposite direction: the change in growth for one country should be thought of as one datapoint. Similarly, Sumner's three datapoints per country should also be thought of as just one (the difference between 2008 and 1980).<br /><br />"It smacks of cherry picking"<br />Perhaps in his choice of countries, but not years. 2008 is of course the last year available, so he couldn't cherry-pick it. 1980 is conventionally used to date neoliberalism (that's how Krugman does it). 1994 is simply the midpoint and (I suggest above) irrelevant at any rate.<br /><br />"He reasons that if a country's GDP/Cap is increasing or decreasing relative to the U.S. - as indicated by how the ratio changes over time - that indicates how much better or worse their economic policies are compared to ours and other countries under consideration."<br />That would be an incorrect conclusion, due to catch-up growth. But now I'm criticizing Sumner instead of you!<br /><br />"Neoliberal. in this context means the low tax, low regulation, free-market, pro-business, anti-union policies of Reagan and Thatcher."<br />That's not quite how Sumner uses the term. He gives a definition in his "Great Danes" paper, where he says neoliberalism includes a large welfare state but little "statism". By that criteria, Denmark is the most neoliberal. So it does not imply the replacing Social Security with the "ownership society".<br /><br />"GDP/cap relates to the mean income of a nation, and tells you nothing about how the income is distributed."<br />Krugman started by arguing about growth with reference to GDP, so Sumner was responding in kind. Sumner did have an update discussing distribution though.<br /><br />"I suspect the same might true in Sumner's favored countries."<br />I don't know about the other countries, but Worthwhile Canadian Intiative has said Canada also has increasing inequality.<br /><br />"GDP/cap isn't just a fraction, like cutting a pie into 8 equal slices. It is a ratio of two values that are not independent of each other."<br />Their dependence is precisely why people normally divide the former by the latter.<br /><br />"over time, country B will outperform it in GDP/Cap because of relative population decline"<br />This might be an issue if there were an increasing fraction of non-working age population (children), but otherwise it would seem country A is getting poorer. If that's because low-wage immigrants are coming to get better jobs (which are still lower paying than average), it's no mark on country A, but if it's unable to provide as productive jobs for its own children that does indicate decline. So this would understate the policy benefits in countries with lots of low-skill immigration, such as the United States, and overstate that of a country like Japan.TGGPhttps://www.blogger.com/profile/11017651009634767649noreply@blogger.comtag:blogger.com,1999:blog-4290163255778893789.post-1323353422136313102010-06-04T00:09:48.186-04:002010-06-04T00:09:48.186-04:00Hi there jazzbumpa. Lots to read through several ...Hi there jazzbumpa. Lots to read through several time. Thanks.<br /><br />DanDan Crawford https://www.blogger.com/profile/04177057507788121432noreply@blogger.com