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1/Today's @bopinion post is about the New Deal.

Some folks, like @benshapiro, claim that the New Deal prolonged the Depression. They are wrong.

bloomberg.com/opinion/articl…
2/Shapiro and other New Deal revisionists tend to base their arguments on the research of economists Harold Cole and Lee Ohanian.

But, as many other economists have pointed out, Cole and Ohanian's research is not right.

jstor.org/stable/10.1086…
3/Cole and Ohanian base their arguments on Real Business Cycle theory. But this theory has been generally debunked as a description of economic fluctuations.

pubs.aeaweb.org/doi/pdfplus/10…
4/The Great Depression did not result from a slowdown in technological progress, as RBC theory would have us believe cause all recessions.

cambridge.org/core/journals/…
5/So how did the New Deal help get us out of the Depression? The first way was by getting us off the gold standard, in 1933.

oxfordscholarship.com/view/10.1093/0…
6/In addition to providing needed monetary stimulus, abandoning the gold standard and declaring the policy objective of price reflation probably boosted confidence.

jstor.org/stable/2973013…
7/Fiscal policy's impact was more muted, since FDR was actually very cautious about deficit spending.

But as economist Price Fishback writes, “public works and relief spending…increased consumption activity".

nber.org/papers/w21925
8/A large payment to veterans in 1936 stimulated some spending as well.

pubs.aeaweb.org/doi/pdf/10.125…
9/In general, the problem with the New Deal's fiscal policy was that it *didn't go far enough*. The turn to austerity in 1937 was especially damaging. But overall, it did help relative to what Hoover was doing.

nber.org/papers/w16477
10/How about the New Deal's microeconomic policies? Many now agree that the National Recovery Administration, which supported monopoly power as a way to raise prices and profits for business, was a mistake. But the NRA may have helped fight deflation.

cambridge.org/core/journals/…
11/So even the New Deal's worst mistake might have had some positive macroeconomic side effects.

jstor.org/stable/4140878…
12/Overall, the case is clear: The New Deal helped America out of the Depression, even if it didn't go far enough.

Don't listen to the revisionists.

(end)

bloomberg.com/opinion/articl…
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@Noahpinion
1/A trumpet from Heaven sounds, a beam of light shines down, and lo and behold, it's:

Coronavirus Tweets From the Experts, 5/16/2020

twitter.com/Noahpinion/lis…
2/Slavitt thread about reopening

3/"Flatten the curve" rhetoric was bad from the start

Read 31 tweets
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@Noahpinion
Lots of tech people talk about disrupting college and replacing it with online education. But so far they only seem to think of college in terms of education. It's also:
* long-term networking
* group socialization and personal growth
* fun, partying, and sex
* independent living
If you're going to disrupt college with apps, you need to think about how to provide ALL of those things. Not necessarily in one app, but in a suite of them. Without the full package, apps will never replace the college model.
Also, every would-be college-disrupter that I've talked to seems to think ONLY about software skills (and maaaaybe electrical engineering) as important educational skills. That's only a modest piece of the skills universe, though, and it will remain thus.
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@Noahpinion
1/OK, let's talk about the COLLEGE APOCALYPSE.

Coronavirus, with a bit of help from Trump, is going to smash the U.S. university system. And it's going to smash the economic model that has sustained college towns.

bloomberg.com/opinion/articl…
2/The first thing that is going to smash colleges is CUTS TO STATE FUNDING.

It's important to realize that much of this devastation already happened in the 2010s. State funding was still way down, many years into the recovery from the Great Recession!

cbpp.org/research/state…
3/So:

1. The Great Recession dramatically cut state funding for colleges.

2. That funding did not recover afterward.

What do you think coronavirus is going to do? Probably the same. States have a LOT of other stuff they're going to prioritize - like keeping people fed.
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