Things to Read on the Afternoon of March 16, 2014

Must-Reads:

1. Robert Skidelsky: The Programmed Prospect Before Us: “Head’s indictments are impressive, but at heart his book is a lament for a vanished world, that of the 1950s and 1960s, when gentlemen were still gentlemen, when digital controls were still in their infancy, when manufacturing was the main occupation of Western workforces, when services were still personalized, and when academics were paid to think, and not to produce useless papers to meet Key Performance Indicators. Of course, in Britain (at least) the gentlemen were grossly incompetent, the cars often broke down, the services were often grumpy (expressing something of the British attitude to such things), shops opened late and closed early and stayed closed over the weekends, the food was mostly dreadful, consumer goods shoddy, consumer durables clunky, and the unions rampaged. Still, there was something undeniably ‘human’ about those years that gives them an elegiac charm. In his effort to recreate a worthwhile world of work, Head never faces the possibility that the machines may be destroying jobs permanently…”

2. Annie Lowrey: Income Gap, Meet the Longevity Gap: “Fairfax County, Va., and McDowell County, W.Va., are separated by 350 miles, about a half-day’s drive. Traveling west from Fairfax County, the gated communities and bland architecture of military contractors give way to exurbs, then to farmland and eventually to McDowell’s coal mines and the forested slopes of the Appalachians. Perhaps the greatest distance between the two counties is this: Fairfax is a place of the haves, and McDowell of the have-nots. Just outside of Washington, fat government contracts and a growing technology sector buoy the median household income in Fairfax County up to $107,000, one of the highest in the nation. McDowell, with the decline of coal, has little in the way of industry. Unemployment is high. Drug abuse is rampant. Median household income is about one-fifth that of Fairfax. One of the starkest consequences of that divide is seen in the life expectancies of the people there. Residents of Fairfax County are among the longest-lived in the country: Men have an average life expectancy of 82 years and women, 85, about the same as in Sweden. In McDowell, the averages are 64 and 73, about the same as in Iraq…”

3. Nate Silver Interview: The New FiveThirtyEight: “JC: So if you all are the foxes, who’s a hedgehog? NS: Uhhhh, you know… the op-ed columnists at the New York Times, Washington Post, and Wall Street Journal are probably the most hedgehoglike people. They don’t permit a lot of complexity in their thinking. They pull threads together from very weak evidence and draw grand conclusions based on them. They’re ironically very predictable from week to week. If you know the subject that Thomas Friedman or whatever is writing about, you don’t have to read the column…. It’s people who have very strong ideological priors, is the fancy way to put it, that are governing their thinking. They’re not really evaluating the data as it comes in, not doing a lot of [original] thinking. They’re just spitting out the same column every week and using a different subject matter to do the same thing over and over. It’s ridiculous to me that they undermine every value that these organizations have in their newsrooms. It’s strange. I know it’s cheaper to fund an op-ed columnist than a team of reporters, but I think it confuses the mission of what these great journalistic brands are about…”

4. MOAR on the “slack” debate: Ryan Avent: Monetary policy: A few points on slack: “A DEBATE has broken out over just how close America is to full employment. I recommend comments on the subject from Tim Duy and Cardiff Garcia. I’ll make a few points…. 1) The labour market is tightening, as it has for at least the last two years, but it is objectively not tight…. 2) Having said that, we are approaching the point in the business cycle at which the Fed would historically begin tightening…. 3) There is some concern that there is less slack in the American economy than we would normally expect at an unemployment rate of 6.7%…. 4) The question is, should the Fed begin tightening at this point in the slack cycle?5) Wait, that’s not the right question at all! 6) The real question is, why, nearly five years into a recovery from the worst recession of the postwar period, with labour markets looking as bad as in the worst moments of most recent recessions, with full employment another year or two away, with inflation well below the official target, and with interest rates at the zero lower bound: why is the Fed not figuring how to accelerate the recovery? 7) And then, actually, the real question is why the real question, at least where most pundits are concerned, is… (4) rather than… (6). Answer that and you have a pretty good idea why the labour-market recovery has been so awful.”

Should-Reads:

• Q&A: Thomas Piketty on the Wealth Divide
• Eric Rosengren: Labor Market Slack and Monetary Policy
• Marc J Melitz and Stephen J. Redding: Missing Gains from Trade?
• Anton Cheremukhin et al.: Was Stalin Necessary for Russia’s Economic Development?
• Office of the Inspector General: Audit of the Department of Justice’s Efforts to Address Mortgage Fraud
• Gavyn Davies, Maurice Obstfeld, Alan M. Taylor and Dominic Wilson: Will Emerging Market Jitters Morph into a Crisis?: A Debate on Recent EM Turbulence

• David Lipton: “Fiscal Policy and Income Inequality

• Andrew Sullivan: Is Obama A Phony On Torture?: “I’m dismayed…. This is a president who was propelled to two victories in part by those of us who saw the Cheney torture program as an indelible stain on this country that had to be exposed and expunged. And many of us were sympathetic to the difficulty a newly-elected president would be in – if he truly attempted to do right by history. To launch a gut-wrenching investigation into a government agency that remains responsible for our collective security is not something a president should do lightly…. But it’s now 2014. The one sliver of hope we have that the war crimes of the past can be accounted for and recovered from is the Senate Intelligence Committee’s thorough investigation of the matter. And yet the very possibility of the report being made public is now in jeopardy, as a result of the CIA’s stonewalling, harassment and obstruction of the Senate’s vital work. And yet the president still sits there, like a potted plant, refusing to put any serious pressure on the CIA to stop its stonewalling and get the report out…. The Senate Committee completed the report fifteen fricking months ago! The only reason it has not been declassified and published is because the CIA has been engaged in aggressive stonewalling and obstruction – to the point at which Diane Feinstein was forced to denounce her beloved spies on the Senate floor this week. The president should not be telling the Senate Committee to finish their report (which they did over a year ago), but the CIA to quit the harassment of a committee’s vital work.”

• Surgei Guriev: The Economic Costs of Russia’s Intervention in Ukraine: “What is not clear is whether Russia can bear the costs…. First, there are the direct costs of military operations and of supporting the Crimean regime and its woefully inefficient economy… several billion dollars per year….Then there are the costs related to the impact of sanctions on trade and investment…. Annual inward foreign direct investment is estimated to have reached $80 billion in 2013. A significant decline in FDI… would hit Russia’s long-term economic growth hard. And denying Russian banks and firms access to the US (and possibly European) banking system–the harshest sanction applied to Iran–would have a devastating impact.”

• Paul Krugman: The Wages of Men – NYTimes.com: “For reference: Here are changes in hourly real wages of men, 1973-2012, at different percentiles of the wage distribution, calculated from Census data by the Economic Policy Institute. As you can see, wages have fallen for 60 percent of men. I was curious to see how the House Budget Committee report on poverty deals with this fact, which surely plays some role in the persistence of poverty despite government efforts. The answer is, it never so much as mentions falling real wages.”

Digby: Q and A between Michael Winship and Edward Snowden’s attorney Ben Wizner | Jonathan Chait: The Imaginary Epidemic of Envy in America | Maximillian Auffhammer: Why the cool kids are flocking to energy and not water economics | Chris Welch: Tesla sales will be banned in New Jersey starting April 1st |

Should Be Aware of:

1. Molly Osberg: Inside The Barista Class: “When I did finally try to quit being a barista, it took about a year to make the transition into something else. The stratification starts early; once this is your resume, you don’t get many chances to revise it. It was only because of a death in the family and some unexpected cash that I was able to take an internship—a paid one! Thanks, Ross Perlin—and endure the requisite uncertainty taking temporary work entails. I have no illusions that my jump into the creative class was anything but pure, unearned luck. At one point in what felt like an endless job search, I walked into an editor’s office to find, to my absolute horror, that I’d served him coffee for years. Nervously I answered his barrage of questions about my background and qualifications. Right before the interview ended he made the connection (‘I knew you looked familiar’) and complimented me on my superior espresso skills. I thanked him. As I walked out of the glass-walled office and into the massive open-layout loft, full of the hip-and-cool and their glowing laptops, the editor turned to me and asked me if I really, you know, wanted to do the job I’d applied for. ‘I would feel bad taking you away from them’, he said. ‘You know, you’re, like, really good at making coffee’…”

2. Patrick Iber: How the CIA Bought Juan Rulfo Some Land in the Country: “After the 1960s, when the Mexican government and private corporations supplied most of the budget, they wanted the Center to produce great writers that would redound to the glory of Mexico. But this too was a failure: it was the years of most compromised foreign funding that produced the best graduates. It seems to me that the CME was a remarkable failure as an instrument of cultural diplomacy, but was, all the same, one of the most important and successful writing centers in the world during its best years. It closed in 2005, and looks to me like a noble monument to success through failure. What is striking, then, given the parallels to Iowa—where many of the same features were present—is not the influence of the CIA over culture, but the ability of cultural producers to use the politics of the Cold War to further their own endeavors. ‘[Iowa’s Paul] Engle constantly invoked the need to bring foreign writers to Iowa so they could learn to love America’, writes Bennett. ‘That was the key to raising money. If intellectuals from Seoul and Manila and Bangladesh could write and be read and live well-housed with full stomachs amid beautiful cornfields and unrivaled civil liberties, they would return home fighting for our side. This was what Engle told Midwestern businessmen, and Midwestern businessmen wrote big checks’. Yes, Paul Engle at Iowa was a Cold Warrior. He accepted money from the CIA, and used the language of the Cold War to earn sponsorship from both local businesses and the state bureaucracy. Just as in Mexico, creative writing in the United States depended on shining the boots of the capitalist class and the state bureaucracy that defended it. But if the effects of this on what was written were minimal, then who, exactly, was using whom?”

And:

• Peter Kolchin: Unfree Labor: American Slavery and Russian Serfdom
• Rink Hoekstra et al.: Robust misinterpretation of confidence intervals

Sy Mukherjee: Paul Ryan Admits The GOP Won’t Rally Around A Single Obamacare Replacement Plan | Carola Binder: Female Econ Majors: It’s Not About Grade Grubbing | Joe Lawlor: Medicaid expansion vote has real-life impact for low-income Mainers | Justin Fox: Why Is Ukraine’s Economy Such a Mess? | Mark Roe: The Regulatory Confidence Cycle |