Pragmatism Wins: Cohen and DeLong's "Concrete Economics"

Brad DeLong easily has the most interesting mind in modern economics. Before this book, I was unfamiliar with his co-author. But when I saw that DeLong was writing a book, no matter what the subject, I was ready to pounce on it. Thankfully the people at the Harvard Business School Press gave me and advance review copy, and then I was inconsiderate enough to not read review it in any form until now.

What Concrete Economics calls for is an economic plan on pragmatism. The realization is that both parties may have strayed too far into an ideology that doesn’t work (neoliberalism in the vein of Thatcher and Reagan and continued to this day) in the light of the crisis that was almost ten years ago now. What we need, according to the authors, is to look at the administration of Hamilton’s Treasury Department on doing what is needed to help the country grow and prosper. It reminds me of the dictum attributed to FDR in the Depression – Try something, and if that doesn’t work, try something else.

The prescription is timely, since growing inequality and stagnating wages at the middle of the distribution have given rise to the voices of populism and xenophobia.  These current developments are scary to people who have tried to make the economic system work for everyone, and though I am to the left of the authors politically, I would much prefer a politics and economics of pragmatism much more than one based on fear of the other. Thankfully and hopefully, DeLong is a creature on the edge of the establishment, so maybe his voice will be heard in the next administration. (As long as the vox populi doesn’t make some sort of fatal mistake.)

Chernow's Hamilton: Very Little Singing and Dancing

Reading Chernow’s biography of Washington several years ago, it was clear that the author had a special warm place in his heart for Hamilton. The biography shows Chernow’s affection for his subject in a greater detail, as he goes from Hamilton’s life on the islands to his death on the New Jersey shore. It even covers a bit of the afterlife with his killer and his family.

Though Chernow obviously has admiration and affection for the man, he is still able to show the flaws in Hamilton’s character, from the fact he had an affair and was essentially blackmailed to his falling out with the Federalists in charge of the party (and the country until the assention of Jefferson). If you are interested in learning about the founding of the country and the ideas behind it, this is a very strong secondary text to explore in your own education. 

A side note – there is little, if any, rapping in the text. That was all made up in the mind of the writer of the smash Broadway musical taking this book as its source material.

How Do You Like Kuznets?: On Milanovic's "Global Inequality"

I have a completely irrelevant critique on Milanovic’s new book.

I’ll get to it, but first I have to praise him. I read the book based on his blog, which Thoma links to often enough that when I saw that he was talking about a new book to be released, I knew O had to buy it. He’s smart and credentialed and has the resume, but most importantly, he is an engaging writer. It was when I went to preorder this one that I saw that he had an previous book, so I went and got that one to give me more background. And let me tell you, that other book is a super fun read if you like short vignettes about economics that build towards a larger point  - there he was looking at three sorts of inequalities: 1) between countries; 2) between people in countries; and 3) between people globally. 

Here he does the same thing, and I thinks that since its post Piketty he thought he had to take some of the fun out of it and be more empirical or rigorous or something.

Therefore, here’s the non-substantive critique: It was not as fun to read as his earlier book. Which is a horrible thing to say since here I should be looking at his ideas and assessing how he presents the Kuznets Wave he theories and the wealth inequality charts. And that’s there and good and if this were the first book, I read by him I just might be more engaged but it was not and I am apparently not Milanovic’s ideal reader. I read too much in economic history when the economist were telling stories and not having all these clever graphs and charts.  

Indexing is Common Sese: On Boogle's Little Book

I have read the most recent version of Malkiel’s “A Random Walk Down Mainstreet,” and it made me thankful for those people who actually go out and try to make a return for themselves on the market. It provides a service that current leftist critiques of finance capitalism forget – they provide liquidity and aid price discovery. Now, that is just a small part of what they do, and the bulk of their profits are actual rents, and half of the people will end up losers whatever system they try – because there are some patterns in the market, but I am a believer that the market will stay irrational longer than I can stay liquid. I guess at heart I am pretty conservative about what I do with my money because people like Malkiel and Bogle speak to me so much.

"The Little Book of Common Sense Investing" is like a cover version of Malkiel’s classic, coming in with a shorter page count and being less of a sales document – though where the recent “Random Walk” made me curious about Wealthfront and reading this made me go to the Vanguard website, I still am paying more in fees than I should to the company-administered 403(b) even in their so-called Index Fund.  This is a pretty well-written book, but it does have a bit of an odd structure,  with short chapters closed by asides referencing the current point made with an outside source instead of integrating it in the main chapter. Overall, though, it is a strong case for indexing your funds and taking advantage of the work the active traders do. When you are buying the market, you are giving up the chance of some great stock or sector that goes parabolic, but it also prevents you from thinking you are clever and taking a short position in that same sector just before it goes parabolic. Buy and hold and buy again seems to be the best way to ensure that the money you do invest will be there when you need it at the end of your life. I’m not trying to get rich by any means, but I’m also not looking to degrade the quality of my life at the end.

One Brief Thought on Seven Brief Lessons on Physics

Though I liked this book, the thing is  that if you have had some formal training on the subject –

Or if you have kept up on the state of the current discourse through popularizers of science –

There’s nothing real new here.

But what I liked was how spare and elegantly Rovelli got the concepts across, and tied into the mediated state of how we see the material world, not just as the things themselves existing without any observation, but with us as observers. It is worthwhile for both those trained and novices in the craft and art of the science.

Brad Noticed Me!

Should have linked http://www.bradford-delong.com/2016/06/procrastinating-on-june-8-2016.html earlier.

Delong picked up my post on Trekonomics and it is now my third most visited post. Thanks for the traffic, Brad.

Qucik Thought on the US Election

Liberal animus towards the left is a relic of the cold war. The left had to draw a bright line between its policies and those that could be painted in any way as "communist". This is why Sanders is so appealing to the younger generations. Capitalism in its neoliberal suits since 80s Reaganomics, Thatcherism and TINA, and the IMF / World Bank "Washington Consensus" has failed so many people several times the youth are looking for answers that are not available to Boomers still snake bitten by reflexive anti-communism.

But the cold war's over. We won. We can stop with the rhetoric and instead look for answers that solve the problems for everyone. Sanders may have lost (or is still walking the precipice) but hopefully this is not a flash in the pan, but a coming to consciousness for many.

Edgar 2020.