6 ms·

Finding Better Economic Ideas to Rebuild America

33 points by Osiris30 10y ago

analog31 10y ago
Ask HN: Somebody help me out with the term "sewage" as used here. It's cropped up in a few other HN threads as well.
- pohl 10y ago
  Could you quote the context? I couldn't find it in the article.
  - analog31 10y ago
    Holy smoke, I think I've been virus'd. Here it is in the article: The just-published book “Concrete Sewage dynamics,” by University of California-Berkeley professors Brad DeLong and Stephen S. Cohen, needs an expanded sequel -- 900 pages long, with charts, data, theory and an exhaustive list of historical case studies. The word "sewage" shows up 17 times on that page. Now I pull up the same article on another computer, and the word "sewage" is absent. I'd been seeing this word in other articles, and wondered if it was some sort of newfangled slang. Now I may have a bigger problem on my hands. Glad I asked. Looks like I'll be switching this computer over to Linux sooner than I thought. Update: I am the victim of a harmless prank, perpetrated by my children. How embarrassing that it had to play out on Hacker News.
    - dragonwriter 10y ago
      Sounds like something similar to "cloud to butt" converting "economics" to "sewage dynamics"
      - analog31 10y ago
        It was a Chrome extension, apparently related to XKCD. In fact I saw a little symbol for it in the bookmarks bar, and assumed it was just a link to XKCD, which I know my kids are interested in.
        pohl 10y ago
        That's awesome. Give your children a round of high-fives.
        analog31 10y ago
        I can't imagine where they got the hacker gene from. ;-)
- nerdponx 10y ago
  Your post is the only place in the article or this thread where I've seen that word. Typo?
russell 10y ago
According to the review, DeLong and Cohen have written a historical analysis of what has worked as economic engines in America's economic history. Their observation is that it is big concrete advancements like Hamilton's banking system, the railroads, and Roosevelt's trust busting. They say things went awry in the 70s and 80s when the economy turned from manufacturing to healthcare and rentier industries like finance, and the adoption of the Free Market ideology. The way back on course is for the government to back big ideas once more. I'm not sure. The Japanese tried very hard (remember 5th generation computing?) and failed. However, the idea of the historical analysis is intriguing enough that I have ordered a copy. If I can read fast enough, I will try to report back before the topic has migrated into oblivion. We certainly need some concrete and philosophical changes. The rentier class cannot continue to siphon of all productivity increases to stash into their private asset accounts, without bringing the world to its knees.
- Osiris30 10y ago
  Is the point of the article really asking government to make bets on industry (like your Japanese example)? Or is that government needs to back employment-absorbing industries like manufacturing (like China today, and Japan / Korea / Taiwan in post-WW2 period)?
- internaut 10y ago
  > I will try to report back before the topic has migrated into oblivion. I'll be interested in hearing it.
dmfdmf 10y ago
What is the proper function of government?
- supster 10y ago
  To provide 1) rule of law and 2) services that benefit from economies of scale yet are too important for privatization (e.g. national defense)
- cjfjdjxbxbf 10y ago
  If you live in the United States it's to promote life, liberty, and the pursuit of happiness. Whether or not our government actually tries to achieve those goals is another question.
- deleted 10y ago
  [deleted]
- mitchtbaum 10y ago
  for all definitions of government
- mindcrime 10y ago
  http://bastiat.org/en/the_law.html http://bastiat.org/en/the_law.html
rmason 10y ago
In the free market if you're a venture capitalist and your job is picking winners and you fail you've got to find another career. It's a self correcting mechanism. If you're a Fed whose job is picking winners and you fail there aren't any negative consequences for it. I think these guys are being selective with history to make their case. There's a role for government in regulation. Government can even encourage certain industries like the $7,500 tax rebates on electric cars but not in deciding who wins and who loses. There's a role for government in financing basic research that leads to breakthroughs. More often dying dinosaurs use campaign contributions and lobbying to protect their companies and we can agree that is wrong. If you're an immigrant who lacks money and political connections your startup shouldn't be held back in favor of inferior technology by a Fed trying to pick winners.
- wycx 10y ago
  Please elaborate on how they are being selective with their history. It is demonstrable that during the post-war period when the suggested policies were in place was the period when the middle class was ascendant and wealth inequality was lower than today. Contrast with the post-1970s when such policies were progressively abandoned, and the middle class is shrinking, and wealth inequality is rising, and the structure of the economy has changed, notably a decrease in manufacturing and an increase in the financial sector. Learn some more history: https://en.wikipedia.org/wiki/Small_Business_Administration#Small_Business_Investment_Companies https://en.wikipedia.org/wiki/Small_Business_Administration#...
- Osiris30 10y ago
  "...you fail you've got to find another career"... I think thats true in a textbook theoretical sense - but not in practice. There is very little 'hard failure' which causes a VC to lose everything. Their incentive structure is not that dis-similar to a government official. The gov't official has far less upside, for probably similar downside (short-term embarrassment). Secondly - there are many cases where governments have picked winners - e.g. EU (or EC at the time) choice of 'GSM' as a mobile standard. Of course, we don't know what the counter-factual here is - what would have happened without GSM having being made a Europe-wide standard...
- 10y ago
mindcrime 10y ago
The problem with this kind of retrospective is that the counrerfactuals remain unknown. That likely makes this largely a matter of speculation. Not having read the book, it's hard to say for sure. But I'd read this with a big grain of salt and beware of just-so stories and post-hoc rationalization. You also have to consider the effect of confounding variables... did the authors find a way to do that?

33 points by Osiris30 10y ago

analog31 10y ago

Ask HN: Somebody help me out with the term "sewage" as used here. It's cropped up in a few other HN threads as well.

pohl 10y ago
Could you quote the context? I couldn't find it in the article.
- analog31 10y ago
  Holy smoke, I think I've been virus'd. Here it is in the article: The just-published book “Concrete Sewage dynamics,” by University of California-Berkeley professors Brad DeLong and Stephen S. Cohen, needs an expanded sequel -- 900 pages long, with charts, data, theory and an exhaustive list of historical case studies. The word "sewage" shows up 17 times on that page. Now I pull up the same article on another computer, and the word "sewage" is absent. I'd been seeing this word in other articles, and wondered if it was some sort of newfangled slang. Now I may have a bigger problem on my hands. Glad I asked. Looks like I'll be switching this computer over to Linux sooner than I thought. Update: I am the victim of a harmless prank, perpetrated by my children. How embarrassing that it had to play out on Hacker News.
  - dragonwriter 10y ago
    Sounds like something similar to "cloud to butt" converting "economics" to "sewage dynamics"
    - analog31 10y ago
      It was a Chrome extension, apparently related to XKCD. In fact I saw a little symbol for it in the bookmarks bar, and assumed it was just a link to XKCD, which I know my kids are interested in.
      - pohl 10y ago
        That's awesome. Give your children a round of high-fives.
        analog31 10y ago
        I can't imagine where they got the hacker gene from. ;-)
nerdponx 10y ago
Your post is the only place in the article or this thread where I've seen that word. Typo?

russell 10y ago

According to the review, DeLong and Cohen have written a historical analysis of what has worked as economic engines in America's economic history. Their observation is that it is big concrete advancements like Hamilton's banking system, the railroads, and Roosevelt's trust busting. They say things went awry in the 70s and 80s when the economy turned from manufacturing to healthcare and rentier industries like finance, and the adoption of the Free Market ideology. The way back on course is for the government to back big ideas once more. I'm not sure. The Japanese tried very hard (remember 5th generation computing?) and failed. However, the idea of the historical analysis is intriguing enough that I have ordered a copy. If I can read fast enough, I will try to report back before the topic has migrated into oblivion. We certainly need some concrete and philosophical changes. The rentier class cannot continue to siphon of all productivity increases to stash into their private asset accounts, without bringing the world to its knees.

Osiris30 10y ago
Is the point of the article really asking government to make bets on industry (like your Japanese example)? Or is that government needs to back employment-absorbing industries like manufacturing (like China today, and Japan / Korea / Taiwan in post-WW2 period)?
internaut 10y ago
> I will try to report back before the topic has migrated into oblivion. I'll be interested in hearing it.

dmfdmf 10y ago

What is the proper function of government?

supster 10y ago
To provide 1) rule of law and 2) services that benefit from economies of scale yet are too important for privatization (e.g. national defense)
cjfjdjxbxbf 10y ago
If you live in the United States it's to promote life, liberty, and the pursuit of happiness. Whether or not our government actually tries to achieve those goals is another question.
deleted 10y ago
[deleted]
mitchtbaum 10y ago
for all definitions of government
mindcrime 10y ago
http://bastiat.org/en/the_law.html http://bastiat.org/en/the_law.html

rmason 10y ago

In the free market if you're a venture capitalist and your job is picking winners and you fail you've got to find another career. It's a self correcting mechanism. If you're a Fed whose job is picking winners and you fail there aren't any negative consequences for it. I think these guys are being selective with history to make their case. There's a role for government in regulation. Government can even encourage certain industries like the $7,500 tax rebates on electric cars but not in deciding who wins and who loses. There's a role for government in financing basic research that leads to breakthroughs. More often dying dinosaurs use campaign contributions and lobbying to protect their companies and we can agree that is wrong. If you're an immigrant who lacks money and political connections your startup shouldn't be held back in favor of inferior technology by a Fed trying to pick winners.

wycx 10y ago
Please elaborate on how they are being selective with their history. It is demonstrable that during the post-war period when the suggested policies were in place was the period when the middle class was ascendant and wealth inequality was lower than today. Contrast with the post-1970s when such policies were progressively abandoned, and the middle class is shrinking, and wealth inequality is rising, and the structure of the economy has changed, notably a decrease in manufacturing and an increase in the financial sector. Learn some more history: https://en.wikipedia.org/wiki/Small_Business_Administration#Small_Business_Investment_Companies https://en.wikipedia.org/wiki/Small_Business_Administration#...
Osiris30 10y ago
"...you fail you've got to find another career"... I think thats true in a textbook theoretical sense - but not in practice. There is very little 'hard failure' which causes a VC to lose everything. Their incentive structure is not that dis-similar to a government official. The gov't official has far less upside, for probably similar downside (short-term embarrassment). Secondly - there are many cases where governments have picked winners - e.g. EU (or EC at the time) choice of 'GSM' as a mobile standard. Of course, we don't know what the counter-factual here is - what would have happened without GSM having being made a Europe-wide standard...
10y ago

mindcrime 10y ago

The problem with this kind of retrospective is that the counrerfactuals remain unknown. That likely makes this largely a matter of speculation. Not having read the book, it's hard to say for sure. But I'd read this with a big grain of salt and beware of just-so stories and post-hoc rationalization. You also have to consider the effect of confounding variables... did the authors find a way to do that?