Berkeley’s Professor of Economics Brad DeLong spoke at Reed
College (11/7/09). I attended. This was a treat for me. I am a regular reader
of his blog (here). He is a Democrat with distinctly liberal views.He's also a first rate public intellectual.
The title of his Reed presentation was “Financial Crisis and the Macroeconomy, 1825 – Present.” The slides used in the presentation are posted on his blog site (here).
(1) I really enjoy his sense of humor and wit.
(2) Check out his first slide “The Employment-to-Population Ratio is in Free Fall.” It gives him nightmares.
(3) I wondered why he started at 1825. It was the first industrial era financial crisis in which the failure of financial institutions could have caused massive unemployment. The Bank of England bailed out the first “too big to fail” private firm.
(4) DeLong thinks more stimulus is needed. He would have created the initial stimulus in two parts, with the second part set to trigger-in now if unemployment was over 10%.
(5) DeLong thinks China will continue to finance US debt. He noted he has a Berkeley colleague who has been predicting China would stop for eight years.
(6) DeLong suggested $50 billion capitalization as the maximum size a financial firm should have, but stressed the difficulties of getting any such legislation through the US political system.
DeLong, several years ago, blogged the strongest reason for
developing more Mandarin and study abroad programs in China. I’ll take this as
an opportunity to reposted it. From DeLong:
Think of it this way: Consider a world that contains one country that is a true superpower. It is preeminent--economically, technologically, politically, culturally, and militarily. But it lies at the east edge of a vast ocean. And across the ocean is another country--a country with more resources in the long-run, a country that looks likely to in the end supplant the current superpower. What should the superpower's long-run national security strategy be?
I think the answer is clear: if possible, the current superpower should embrace its possible successor. It should bind it as closely as possible with ties of blood, commerce, and culture--so that should the emerging superpower come to its full strength, it will to as great an extent possible share the world view of and regard itself as part of the same civilization as its predecessor: Romans to their Greeks.
In 1877, the rising superpower
to the west across the ocean was the
Throughout the twentieth century
it has been greatly to
There is a good chance that
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