Now that I've finally finished Athreya, I'm onto Piketty's polarizing book on Capital.
http://www.amazon.com/dp/067443000X/?tag=googhydr-
20&hvadid=53469570449&hvpos=1t1&hvexid=&hvnetw=g&hvrand=1728566802279134514&hvpone=&hvptwo=&hvqmt=b&hvdev=c&ref=pd_sl_8nmfwo58ig_b
Obviously his book has hit a nerve with conservative economists.
http://diaryofarepublicanhater.blogspot.com/2014_05_01_archive.html
They are determined to discredit him and want to make him 'this years Reinhart and Rogoff.' Still, while I'm just in the introductory phase of the book, I can already see that this is a very impressive work. You can quibble with what he's done but you have to admit he's doing something that hasn't been done since Simon Kuznets-give us hard data on inequality.
His point of departure is that Kuznets while deservedly celebrated, gave too much optimism on inequality-basically that an amelioration in inequality is more or less automatic in the development of a capitalist economy. In some ways this was somewhat welcome at the time compared with the overly pessimistic theories of Malthus and Marx in the 19th century, but no doubt he went too far the opposite direction.
According to Piketty, the main force for increasing inequality is for the rate of return on capital to exceed the growth rate which he sees as unfolding over the last 30 years across the globe. On the other hand the main compressionary effect for incomes-for inequality to lessen-he explains is the diffusion of skill and knowledge. A classic example of this is what we saw in the 90s and especially the early 2000s, with so many previous white collar jobs being outsourced to Asia and Latin America.
This lead to the compression of economic inequality between first world nations-or at least the middle class of first world nations vs. the middle class of second world nations but it also led to increasing inequality within the first world nations themselves. Sumner when he discusses inequality tries to basically confound these issues by accusing liberals of not caring about inequality between nations because they are concerned about inequality within nations-very clever as always! You have to choose-one or the other, which one is it going to be? So Sumner thinks he can confound liberals.
I see that Piketty suggests some policy solutions-he touches on the in the intro. He recommends immigration reform in the U.S. This is why I think this part of Yglesias' analysis of the two parties is wrong. He is right that the Dems are united but suggests that because of increased partisanship we are going to have divided government for a long time to come.
"As a recent Pew report on polarization showed, completely apart from substantive policy issues both Democrats and Republicans are increasingly alarmed by the other party's agenda. This alarmism in fact stronger on the GOP side, but it's quite strong — and growing — on the Democratic side as well.
http://www.amazon.com/dp/067443000X/?tag=googhydr-
20&hvadid=53469570449&hvpos=1t1&hvexid=&hvnetw=g&hvrand=1728566802279134514&hvpone=&hvptwo=&hvqmt=b&hvdev=c&ref=pd_sl_8nmfwo58ig_b
Obviously his book has hit a nerve with conservative economists.
http://diaryofarepublicanhater.blogspot.com/2014_05_01_archive.html
They are determined to discredit him and want to make him 'this years Reinhart and Rogoff.' Still, while I'm just in the introductory phase of the book, I can already see that this is a very impressive work. You can quibble with what he's done but you have to admit he's doing something that hasn't been done since Simon Kuznets-give us hard data on inequality.
His point of departure is that Kuznets while deservedly celebrated, gave too much optimism on inequality-basically that an amelioration in inequality is more or less automatic in the development of a capitalist economy. In some ways this was somewhat welcome at the time compared with the overly pessimistic theories of Malthus and Marx in the 19th century, but no doubt he went too far the opposite direction.
According to Piketty, the main force for increasing inequality is for the rate of return on capital to exceed the growth rate which he sees as unfolding over the last 30 years across the globe. On the other hand the main compressionary effect for incomes-for inequality to lessen-he explains is the diffusion of skill and knowledge. A classic example of this is what we saw in the 90s and especially the early 2000s, with so many previous white collar jobs being outsourced to Asia and Latin America.
This lead to the compression of economic inequality between first world nations-or at least the middle class of first world nations vs. the middle class of second world nations but it also led to increasing inequality within the first world nations themselves. Sumner when he discusses inequality tries to basically confound these issues by accusing liberals of not caring about inequality between nations because they are concerned about inequality within nations-very clever as always! You have to choose-one or the other, which one is it going to be? So Sumner thinks he can confound liberals.
I see that Piketty suggests some policy solutions-he touches on the in the intro. He recommends immigration reform in the U.S. This is why I think this part of Yglesias' analysis of the two parties is wrong. He is right that the Dems are united but suggests that because of increased partisanship we are going to have divided government for a long time to come.
"As a recent Pew report on polarization showed, completely apart from substantive policy issues both Democrats and Republicans are increasingly alarmed by the other party's agenda. This alarmism in fact stronger on the GOP side, but it's quite strong — and growing — on the Democratic side as well.
This seems like an unhealthy trend for the country, but it's excellent news for party cohesion. Splits require not just internal disagreement, but a relatively blasé attitude toward the opposition."
"None of this means that victory is somehow assured for Democrats in 2016 — far from it. But it does mean that the coalition is at no risk of collapse. The kind of electoral mega-landslides that happened in 1964 or 1980 where one party's candidate gets utterly blown away simply can't happen under modern conditions.
http://www.vox.com/2014/6/14/5802564/democrats-are-more-unified-than-ever
He's right about the Dems but I don't know about no more blowouts. I mean the GOP has just one electoral college win in the last 22 years. Piketty's advocacy of immigration reform just reinforces how it's just a no-brainer and everyone-most of the electorate outside of a couple of rabid conservative pockets-as well as the whole Democratic party and much of the thinking conservative intelligentsia understand that this is something that just needs to get done. As the GOP has made it clear that it will never get done with them having any power in the government at all, the natural solution is not make sure they have no power. I think the party in the next 20 years is going to be decimated-they were able to manipulate the last Census and have managed to gerrymander themselves into power in the House but this won't last forever.
I think that the victory of people like Dave Brat simply sound their death knell.
http://diaryofarepublicanhater.blogspot.com/2014/06/stunning-tea-party-victory-for-tea.html
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