Footnote from, The Economic Consequences of the Pandemic,

The requirement that the rate of growth exceeds the rate of interest on government debt may be written algebraically as g > r. Readers of Piketty’s Capital in the 21st Century will recall that he places a lot of stress on the opposite formula r > g. What is going on here? The answer, in simple terms, is that Piketty is talking about the rate of return to investment, and more particularly the rate of return earned by high-wealth investors. This rate is as much as 6 percentage points higher than the rate of interest on government bonds. The magnitude of the difference, referred to as the ‘equity premium’ is a long-standing puzzle for economists, with profound implications, which will be discussed below.

Spooled thread on Biden and bipartisanship

Amateur political analysis ahead. What are the chances for bipartisanship under Biden. Roughly speaking, that means whose votes would he need to get to 60 in the Senate, requiring 10 Republicans

Repubs who have voted with Trump less than 75 per cent of the time
Of these, Paul and Lee have dissented mostly from the right

Next 5
Scott voted to overturn the election

Next 5
Toomey, Graham, Johnson, Hawley (!), Lankford

Need I say more


Note: I excluded far-right Senator Lummins, who took her seat two weeks ago, and has cast hardly any votes


A new sandpit for long side discussions, conspiracy theories, idees fixes and so on.

To be clear, the sandpit is for regular commenters to pursue points that distract from regular discussion, including conspiracy-theoretic takes on the issues at hand. It’s not meant as a forum for visiting conspiracy theorists, or trolls posing as such.

Luck and fate in politics

There’s a lot of luck[1] in politics. If a handful of events had gone differently in 2016, we’d probably be discussing President Clinton’s second term right now. If the Brexit referendum had been held a few weeks earlier, Remain would probably have won, and David Cameron might still be PM. A few lucky breaks and Labor would have won the 2019 Australian election. And if things had gone slightly differently in Georgia (with the Repubs falling just short in the first round, then losing both runoffs), the prospects for a Biden Administration would be greatly worse than they are.

The first three of these events were unexpected wins for the Trumpist right. And while nobody much pays attention to Australia, the first two were interpreted by Trumpists as much more than lucky breaks. They fed a whole set of beliefs which built up to an expectation that, no matter how bad things looked, their side was destined (for a lot of Trumpists, divinely ordained) for victory.

It’s not surprising then, that Trump’s supporters expected victory in November, and were willing to believe, without any evidence that their victory had been stolen. But as it became more and more evident that the election results were not going to be overturned, cognitive dissonance started to set in. The options were to accept that, fairly or not, they had lost, or to embrace the apocalyptic vision of QAnon and the far right, manifested in the Capitol last week. From the polling evidence, it looks as if the Republican base split down the middle on this.

Now that the insurrection has failed, and Biden’s inauguration is about to take place, the choice gets even sharper. As those who rejected the election result and tried to overturn it are increasingly ostracised and increasingly forced to recant[2], there’s no middle ground between accepting defeat, at least this time around, and going all the way down the insurrectionist rabbit hole and into rightwing terrorism.

From the politics as usual viewpoint of someone like Mitch McConnell, the advisability of the first course of action is obvious. But to the extent that the energy of the Trumpists was built on faith in inevitable victory, that may be difficult to sustain[3].

As for rightwing terrorism, it’s bound to keep on happening. The history of events like the Beer Hall Putsch shows that clownish initial failure does not guarantee defeat (no inevitability, again). We have to hope that, having been directly and personally threatened by the terrorists, the Democrats won’t shrink from the responses necessary to suppress them and the Republicans won’t be willing to defend them.

fn1. My friend, fellow-economist and now politician Andrew Leigh has a great little book called The Luck of Politics It’s mostly about luck as it affects individual political careers, where the same point applies: a bit of good luck is often the difference between being revered and being reviled.

fn2. In this context, the coverage by the Washington Times is just as significant as the apology extracted from American Thinker. The story includes, as background, the observation that

Mr. Trump and some fellow Republicans pushed false claims and conspiracy theories to justify the election’s outcome prior to mobs of the president’s supporters raiding the U.S. Capitol last week, including baseless allegations involving Dominion and its machines.

Republicans will have to get used to reading this kind of thing, even in reliably rightwing media.

fn3. The 20th century debates within Marxism about the inevitability of socialism illustrate this, as do even older debates about predestination within Christianity. Logically, you might expect a belief in inevitability to discourage costly action (why work hard for a cause that is going to win anyway?), but in practice, the feeling of being on the winning side has always won out.

74 million Americans …

… voted for someone who immediately attempted to overturn the election and promote an insurrection. Either they made a terrible mistake or they are complicit in his actions. Impeachment will force them to decide between these two. That could turn out badly.

The alternative is to let them keep the illusion that they are good people who made a reasonable choice last November. I can’t see how that could possibly turn out other than badly.