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J. Bradford DeLong



Articles by J. Bradford DeLong

The Siren Song of Austerity

14 days ago

Among the many lessons of the 2008 financial crisis and its aftermath in the United States is that there is no good reason to start worrying about debt when unemployment remains high and interest rates low. The hasty embrace of austerity derailed the last recovery, and it must not be allowed to do so again.

BERKELEY – Ten years and ten months ago, US President Barack Obama announced in his 2010 State of the Union address that it was time for austerity. “Families across the country are tightening their belts and making tough decisions,” he explained. “The federal government should do the same.” Signaling his willingness to freeze government spending for three years, Obama argued that, “Like any cash-strapped family,

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The Economic Incompetence of Republican Presidents

October 29, 2020

In a United States rife with disinformation, one of the most persistent myths is that Republicans are better than Democrats for business and economic growth. In fact, Republicans have consistently under-performed on the economy for almost a century.

BERKELEY – One hears many strange things nowadays, not least because “they” (a complicated term) are flooding the zone with misinformation. Without a shared set of facts upon which to base ethical and policy debates, democracy inevitably breaks down. The system’s virtue lies in its unique ability to elevate and consider a broad range of ideas emanating from society. Ideally, through a good-faith exchange of arguments and a weighing of the alternatives, a majority of

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The Limits of American Recovery

October 1, 2020

While most of the Global North has reached a state of cautious optimism after confronting COVID-19 head on, the United States continues to stand out for its persistently high rates of death and infection. This public-health failure, and the political dysfunction underpinning it, will remain a drag on economic performance.

BERKELEY – The United States is home to 4% of the world’s population but 21% of confirmed COVID-19 deaths; it accounts for 25% of the Global North’s population but 50% of its excess mortalities (deaths from all causes above the usual rate) registered during the pandemic.

The Way We Could Live Now

PS OnPoint

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Morgue Testing the US Economy

August 6, 2020

Owing to the lack of testing capacity, there is no way to know for sure just how bad the COVID-19 epidemic in the United States has become as a result of this summer’s "Sunbelt second wave." But judging by the latest data on morbidity and unemployment-insurance claims, no one should bet on economic recovery in the third quarter.

BERKELEY – US national income and output in the first quarter of 2020 was 1.25% below what it had been in the fourth quarter of 2019, but still 9.5% above would it would be by the second quarter of this year. Now that US national income has plunged 12% below what it was at the start of the year, what should we expect for the third quarter?

How to Prevent the Looming

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American Exceptionalism Strikes Out

July 6, 2020

Following a massive surge in new COVID-19 cases across the South and Southwest, the United States increasingly stands out for its utter failure to manage the pandemic responsibly. Far from serving as a global source of inspiration, the "city on a hill" has now become a tragic cautionary tale.

BERKELEY – Once again, the United States is standing out as a world leader, but not for any reason anyone would want to emulate. In most of the Global North, the daily COVID-19 infection rate is down to around one per 5,000 people. When new cases do emerge, the bulk of them are caught quickly by testing, and then contained through contact tracing and quarantines. Thanks to these protocols, many countries have driven the COVID-19

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What the Democrats Must Do

June 2, 2020

Although the United States has entered a period of deepening social strife and economic depression, the Republicans who are in charge have neither the ideas nor the competence to do anything about it. The Democrats must start planning to lead, starting with a commitment to full employment.

BERKELEY – Like almost all other countries, the United States has become poorer since the COVID-19 pandemic began, because Americans can no longer engage in valuable activities that require close human contact. Millions of workers now need to find other productive things to do, and many of these new tasks will not be as valuable as the ones they replaced.

America’s Mis-Police State

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American Carnage

April 29, 2020

Throughout Donald Trump’s presidency, it has been obvious that the American political system and public sphere are broken. But only with the federal government’s embarrassingly incompetent response to the COVID-19 pandemic has that breakdown translated into a significant loss of life.

BERKELEY – On April 23, 2020, the United States crossed the threshold of 50,000 confirmed COVID-19 deaths, making it the world’s worst-hit region. The US has half the population of continental Europe, but three-quarters as many daily deaths.

How Will the Great Cessation End?

PS OnPoint

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The Trump Administration’s Epic COVID-19 Failure

March 26, 2020

Whereas many other countries afflicted by the COVID-19 pandemic have pursued mass testing, quarantines, and other measures to reduce community transmission, the Trump administration has simply dithered. Although America could still shut down for a month to overcome the crisis, the sad truth is that it won’t.

BERKELEY – Even to US President Donald Trump’s most ardent critics, his administration’s disastrous response to the COVID-19 pandemic has come as a surprise. Who would have guessed that Trump and his cronies would be so incompetent that merely testing for the disease would become a major bottleneck?
Insuring the Survival of Post-Pandemic Economies

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Shelton the Charlatan

February 19, 2020

Like most of US President Donald Trump’s earlier picks for the US Federal Reserve Board, Judy Shelton has no business even being considered for the job, let alone winning the support of self-respecting conservatives. But in the Trump era, up is down, and quackery is the new expertise.

BERKELEY – Back in September 1994, the Nobel laureate economist Milton Friedman actually wrote about one of US President Donald Trump’s current nominees to serve on the Federal Reserve’s seven-member Board of Governors. “In a recent Wall Street Journal op-ed piece,” Friedman observed, “Judy Shelton started her concluding paragraph: ‘Until the US begins standing up once more for stable exchange rates as the starting point for free trade …’” Stopping

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Isn’t a Wealth Tax Common Sense?

January 7, 2020

The wealth-tax proposals being advanced by Democratic US presidential primary contenders clearly meets the public-finance standard for an ideal form of revenue generation. So why have these plans drawn such vehement criticism from so many who should be supporting them?

BERKELEY – I was not surprised when leading Democratic primary contenders began endorsing a “wealth tax” along the lines of what has been proposed by my University of California, Berkeley, colleagues Gabriel Zucman and Emmanuel Saez. What has surprised me is the level of pushback these candidates have received, particularly from those who should be in favor of anything that moves the United States toward a more progressive tax system. 
The

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How Trolls Overran the Public Square

December 9, 2019

Since the invention of writing, human innovation has transformed how we formulate new ideas, organize our societies, and communicate with one another. But in an age of rapid-fire social media and nonstop algorithm-generated outrage, technology is no longer helping to expand or enrich the public sphere.

BERKELEY – Since 1900, human technology and organization have been evolving at a blistering pace. The degree of change that occurs in just one year would have taken 50 years or more before 1500. War and politics used to be the meat of human history, with advances in technology and organization unfolding very slowly – if at all – in the background. Now, the inverse is true.
Is Growth Passé?

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Stop Inflating the Inflation Threat

October 29, 2019

Given the scale and severity of inflation in America in the 1970s, it is understandable that US monetary policymakers developed a deep-seated fear of it. But, nearly a half-century later, the conditions that justified such worries no longer apply, and it is past time that we stopped denying what the data are telling us.

BERKELEY – In light of current macroeconomic conditions in the United States, I’ve found myself thinking back to September 2014. That month, the US unemployment rate dropped below 6%, and a broad range of commentators assured us that inflation would soon be on the rise, as predicted by the Phillips curve. The corollary of this argument, of course, was that the US Federal Reserve should begin rapidly

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No, We Don’t “Need” a Recession

October 1, 2019

Business cycles can end with a rolling readjustment in which asset values are marked back down to reflect underlying fundamentals, or they can end in depression and mass unemployment. There is never any good reason why the second option should prevail.

BERKELEY – I recently received an email from my friend Mark Thoma of the University of Oregon, asking if I had noticed an increase in commentaries suggesting that a recession would be a good and healthy purge for the economy (or something along those lines). In fact, I, too, have noticed more commentators expressing the view that “recessions, painful as they are, are a necessary growth input.” I am rather surprised by it.
The Impeachment Trap

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America’s Superpower Panic

August 12, 2019

History suggests that a global superpower in relative decline should aim for a soft landing, so that it still has a comfortable place in the world once its dominance fades. By contrast, US President Donald Trump’s incoherent, confrontational approach toward China could seriously damage America’s long-term interests.

BERKELEY – Global superpowers have always found it painful to acknowledge their relative decline and deal with fast-rising challengers. Today, the United States finds itself in this situation with regard to China. A century and a half ago, imperial Britain faced a similar competitive threat from America. And in the seventeenth century, the Dutch Republic was the superpower and England the

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Is Plutocracy Really the Problem?

July 9, 2019

After the 2008 financial crisis, economic policymakers in the United States did enough to avert another Great Depression, but fell far short of what was needed to ensure a strong recovery. Attributing that failure to the malign influence of the plutocracy is tempting, but it misses the root of the problem.

BERKELEY – Why did the policy response to the Great Recession only partly reflect the lessons learned from the Great Depression? Until recently, the smart money was on the answers given by the Financial Times commentator Martin Wolf and my Berkeley colleague Barry Eichengreen. Each has argued that while enough was remembered to prevent the 1929-size shock of 2008 from producing another Great Depression,

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What to Do About China?

June 5, 2019

By attempting to "get tough" with China, US President Donald Trump’s administration is highlighting the extent to which America’s star has fallen this century. If the US ever wants to reclaim the standing it once had in the world, it must become the country it would have been if Al Gore had won the 2000 presidential election.

BERKELEY – In a recent issue of The New York Review of Books, the historian Adam Tooze notes that, “across the American political spectrum, if there is agreement on anything, it is on the need for a firmer line against China.” He’s right: On this singular issue, the war hawks, liberal internationalists, and blame-somebody-else crowd all tend to agree. They have concluded

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Robo-Apocalypse? Not in Your Lifetime

May 21, 2019

Not a week goes by without some new report, book, or commentary sounding the alarm about technological unemployment and the "future of work." Yet in considering the threat posed by automation at most levels of the value chain, we should remember that robots cannot do what humans cannot tell them to do.

BERKELEY – Will the imminent “rise of the robots” threaten all future human employment? The most thoughtful discussion of that question can be found in MIT economist David H. Autor’s 2015 paper, “Why Are There Still so Many Jobs?”, which considers the problem in the context of Polanyi’s Paradox. Given that “we can know more than we can tell,” the twentieth-century philosopher Michael Polanyi

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The Fed Board Unmoored

March 25, 2019

Over the course of his presidency, Donald Trump has consistently prized sycophancy above expertise in his selection of advisers and political appointees. But by nominating the right-wing talking head Stephen Moore to the US Federal Reserve Board of Governors, Trump is taking his war on expertise to a new level.

BERKELEY – In December 2015, the right-wing commentator Stephen Moore, US President Donald Trump’s pick to fill a vacancy on the US Federal Reserve Board of Governors, savagely attacked then-Fed Chair Janet Yellen and her predecessor, Ben Bernanke, for maintaining loose monetary policies in the years following the “Great Recession.”

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Wojtek

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The Fed Should Buy Recession Insurance

March 15, 2019

If the United States falls into recession in the next year or two, the US Federal Reserve may have very little room to loosen policy, yet it is not taking any steps to cover that risk. Unless the Fed rectifies this soon, the US – and the world – may well face much bigger problems later.

BERKELEY – The next global downturn may still be a little way off. The chances that the North Atlantic as a whole will be in recession a year from now have fallen to about one in four. German growth may well be positive this quarter, while China could rebound, too. And although US growth is definitely slowing – to 1% or so this quarter – this may yet turn out to be a blip.

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Debt Derangement Syndrome

February 7, 2019

Standard policy economics dictates that the public sector needs to fill the gap in aggregate demand when the private sector is not spending enough. After a decade of denial, the Global North may finally be returning to economic basics.

BERKELEY – For the past decade, politics in the Global North has been in a state of high madness owing to excessive fear of government debts and deficits. But two recent straws in the wind suggest that this may at long last be changing.

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Earlier this month, I read a Brexit-related column in The Sunday

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The Great American Tax Heist Turns One

December 14, 2018

Last December, Republicans relied on the support of conservative economists who predicted that the party’s corporate tax cuts would boost productivity and investment in the United States substantially. The forecasts were wrong, and the silence of those who made them suggests that they knew it all along.

BERKELEY – It has now been one year since US President Donald Trump and his fellow Republicans rammed their massive corporate tax cut through Congress. At the time, critics of the “Tax Cuts and Jobs Act” described it as a cynical handout for wealthy shareholders. But a substantial number of economists came out in support of it.

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Blame the Economists?

November 1, 2018

Ever since the 2008 financial crash and subsequent recession, economists have been pilloried for failing to foresee the crisis, and for not convincing policymakers of what needed to be done to address it. But the upheavals of the past decade were more a product of historical contingency than technocratic failure.

BERKELEY – Now that we are witnessing what looks like the historic decline of the West, it is worth asking what role economists might have played in the disasters of the past decade.

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From the end of World War II

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Self-Fulfilling Financial Crises

October 15, 2018

Many mistaken assumptions about the 2008 financial crisis remain in circulation. As long as policymakers believe the crisis was rooted in the housing bubble rather than human psychology, another crisis will be inevitable.

BERKELEY – The 2008 financial crisis and subsequent recession left the Global North 10% poorer than it otherwise would have been, based on 2005 forecasts. For those hoping to understand this episode better, I have long recommended four books, in particular: Manias, Panics, and Crashes, by the twentieth-century economist Charles P. Kindleberger; This Time Is Different, by Carmen M. Reinhart and Kenneth S. Rogoff of Harvard University; The Shifts and the Shocks, by the Financial Times economics commentator Martin Wolf; and

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For Whom the Climate Bell Tolls

September 7, 2018

Those living large in temperate zones across the Global North might like to think that a warming planet is an inconvenient, costly, but ultimately manageable problem that need not affect their current standard of living. Yet, to believe that, one must be prepared to write off the rest of humanity.

BERKELEY – Scarcely had I begun my first lecture of the fall semester here at the University of California, Berkeley, when I realized that I was too hot. I desperately wanted to take off my professorial tweed jacket.

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A tweed jacket is a wonderful but peculiar costume. If all you

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The Ahistorical Federal Reserve

August 8, 2018

The most effective – and thus the most credible – monetary policy is one that reflects not only the lessons of history, but also a willingness to reconsider long-held assumptions. Unfortunately, neither attribute is much in evidence at today’s Federal Reserve.

BERKELEY – Economic developments over the past 20 years have taught – or ought to have taught – the US Federal Reserve four lessons. Yet the Fed’s current policy posture raises the question of whether it has internalized any of them.

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The first lesson is that, at least as long as the

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America the Loser

July 4, 2018

Donald Trump’s unhinged recent attacks on the iconic motorcycle maker Harley-Davidson distill his larger assault on American democracy. Even if Democrats do manage to retake one or both houses of Congress this November, the damage that Trump and Republican leaders have done to the country’s global standing cannot be repaired.

BERKELEY – The Washington Post’s Catherine Rampell recently recalled that when US President Donald Trump held a session for Harley-Davidson executives and union representatives at the White House in February 2017, he thanked them “for building things in America.” Trump went on to predict that the iconic American motorcycle company would expand under his watch. “I know your business is now doing very

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America’s Founders vs. Trump

June 1, 2018

In the early years of the American republic, James Madison warned his fellow countrymen that their chosen system of governance would only survive if they adhered to the principles of representation and kept factionalism in check. In the era of Donald Trump, it would seem that these two conditions are no longer being met.

BERKELEY – From the very beginning of the American experiment, Alexander Hamilton, one of the new country’s founders, had serious doubts about democracy. “It is impossible to read the history of the petty republics of Greece and Italy without feeling sensations of horror and disgust at the … state of perpetual vibration between the extremes of tyranny and anarchy,” he wrote in The Federalist Papers No. 9.

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The Destruction of the Republican Party

May 7, 2018

There can no longer be any doubt that America has an unhinged, unqualified kleptocrat presiding in the White House. Nor can there be any question that the Republicans who put him there may be sealing their party’s fate as the manifestation of Trumpism, rather than traditional conservatism.
BERKELEY – It has been one and a half years since Donald Trump was elected to the US presidency, so now is as good a time as any for Americans to take a deep breath and contemplate their broken political system.

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To be sure, the United States has not experienced any major catastrophes, even though massive

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Crisis, Rinse, Repeat

April 4, 2018

Key economic data from the periods following the 1929 stock-market crash and the 2007-2008 financial crisis suggest that the current recovery has been unnecessarily anemic. If policymakers refuse to heed the lessons of the New Deal era, then the next crisis is destined to be as prolonged as the last.
BERKELEY – Later this century, when economic historians compare the “Great Recession” that started in 2007 with the Great Depression that started in 1929, they will arrive at two basic conclusions.

The Year Ahead 2018

The world’s leading thinkers and policymakers examine what’s come apart in the past year, and anticipate what will define the year ahead.

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Trump’s Tax on America

March 6, 2018

After a year of serving as a useful idiot for congressional Republicans and their wealthy donors to push through tax cuts and deregulation, US President Donald Trump is now following through on his protectionist promises. Sooner or later, Republicans might realize that inept kleptocracy is not the best form of government after all.
BERKELEY – Mitch McConnell, the US Senate’s Republican Majority Leader, recently proclaimed that “2017 was the best year for conservatives in the 30 years that I’ve been here,” not least because President Donald Trump’s administration “has turned out to be … very solid, conservative, right of center, pro-business.”

The Year Ahead 2018

The world’s leading thinkers and policymakers

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