Mark Thoma makes a graph: those who have been unemployed for more than six months divided by the civilian noninstitutional population 16 and over:
It's very scary: long-term unemployment has a way of turning into structural unemployment...
Mark Thoma makes a graph: those who have been unemployed for more than six months divided by the civilian noninstitutional population 16 and over:
It's very scary: long-term unemployment has a way of turning into structural unemployment...
It is remarkable:
More Signs Of Trouble For 2010: Still, Democrats must ask themselves whether there’s anything they can do over the next year--for example, a meaningful shift toward fiscal restraint--to reduce the intensity level of the conservative assault. If not, the combination of an energized opposition and an electorate battered by high unemployment, slow growth, and the perception of out-of-control spending could set the stage for an ugly outcome...
A "meaningful shift toward fiscal restraint" means an unemployment rate that is likely to be not steady at around 10% a year from now but rising toward 12%.
Even if one is as narrow-minded as Bill Galston and focuses not on what are good policies but what policies are politically advantageous, adopting policies to raise the unemployment rate does not seem to be the kind of thing one should advocate, does it?
Does Bill Galston ever talk to any economists?
Does Bill Galston even know any economists?
He talks about the federal budgetary impact of the stimulus program as if it were its net "cost." It isn't.
Of course, the misinformation starts with ABC's Jake Tapper:
$160,000 Per Stimulus Job? White House Calls That 'Calculator Abuse': Posting its results late this afternoon at Recovery.gov, the White House claimed 640,329 jobs have been created or saved because of the $159 billion in stimulus funds allocated as of Sept. 30.... Ed DeSeve, senior advisor to the president for Recovery Act implementation, said he'd been "scrubbing" the job estimates so much since they came it at the beginning of the month that he now has "dishpan hands and my fingers are worn to the nub."...
The White House argues that the actual job number is actually larger than 640,000 -- closer to 1 million jobs when one factors in stimulus jobs added in October and, more importantly, jobs created indirectly, such as "the waitress who's still on the job," Vice President Biden said today.
So let's see. Assuming their number is right -- 160 billion divided by 1 million. Does that mean the stimulus costs taxpayers $160,000 per job? Jared Bernstein, chief economist and senior economic advisor to the vice president, called that "calculator abuse." He said the cost per job was actually $92,000 -- but acknowledged that estimate is for the whole stimulus package as of the end of 2010...
Jared fell into a trap. The right way to do the accounting is, for each extra year of employment we get:
|-$92,000||Direct federal cost|
|+$27,000||Extra federal and state revenue|
|$0||Extra costs of debt financing|
|$110,000||Value of goods and services produced|
|-$18,000||Discount because we are buying different goods and services than we would ideally, or buying them at a different time|
|$50,000||Value of having a job to the person who gets one--these aren't people who are indifferent between going to work and getting their head together, after all|
|+$77,000||Net Benefit to Economy|
It's OK to talk about the federal budgetary impact of the stimulus program per job as a "cost" when you are talking to economists who understand the issues.
It is not OK when you are talking to Jake Tapper, who is playing a game of "gotcha."
The right way to do it is, as the table above suggests:
Net impact: +$77,000 for each employment-year rescued.
We should be doing more of this right now.
Why shouldn't we be doing more deficit spending all the time? Usually because of (6): when the economy is in its normal state, the marginal worker is somebody who doesn't value having a job all that much--the (6) number is usually on the order of $10,000 rather than $50,000, and so isn't worth the -$18,000 cost of having the government actually do the buying. Plus there is (3): (3)--the crowding-out term--can be quite substantial.
But it isn't now.
As long as it employs utter fools like Chris Edwards, the smart people who work there will have a hard time being taken seriously.
Think about it. Think hard about it.
Nancy Stokey, "Catching Up and Falling Behind"
Josh Lerner, "Biulevard of Broken Dreams: Why Public Efforts to Boost Entrepreneurship and Venture Capital Have Failed--and What to Do About It"
David Moss and John Cistercino, "New Perspectives on Regulation"
William Eggers and John O'Leary, "If We Can Put a Man on the Moon...; Getting Big Things Done in Government"
Scott de Marchi and James Hamilton, "You Are What You Choose: The Habits of Mind That Really Determine How We Make Decisions"
Tyler Cowen and Alex Tabarrok, "Modern Principles"
"Give us fiscal continence--but not yet." That's a very good line. I am going to steal it.
You know, Warren Buffett and company could choose to make the Washington Post as informative and as witty as the Financial Times tomorrow--if they cared to. Both may die in the coming crash of the newspaper industry. But we all should really be doing everything we can to make sure that the FT and its culture survive: it is a global treasure.
US engine revs up: his spending spree is brittler than one would like. The durable goods spurt--even as disposable incomes fell--was powered by a car scrappage scheme that borrowed GDP from the future more than anything else. With motor vehicles excluded, output grew by only 1.9 per cent. Up to half of that in turn consisted of businesses rebuilding depleted inventories – a sign of optimism, but also, like cash-for-clunkers, a one-off boost to output that will not persist.
Which is why government action remains crucial to nurse this economy back to health. The administration is a good third of the way through a stimulus package that is indispensable to prevent growth from slowing down again. Federal spending rose briskly; now is not the time to cut this stimulus short.
Moreover, cash-strapped state and local governments are the dark spot in this improving picture: their spending was the only GDP component that went into decline. Congress would do well to consider using its ability to borrow cheaply to assist capitols and town halls banned from engaging in deficit spending on their own.
A credible plan for deficit-cutting is urgently needed; its implementation is not. Those who think deficit spending a sin may pray for government continence – but not yet.
 And that the *Washington Post dies quickly: it is not.
UPDATE: Paul Krugman and St. Augustine, 20 months ago:
St. Augustine and macroeconomic policy: I’ve had a few comments on my post about defining the macroeconomic problem, in which I say that the US economy is unbalanced, with too much consumption and too large a trade deficit, and that
the goal of monetary and fiscal policy should be to bridge the gap — to sustain spending until a falling trade deficit comes to the rescue, and to hasten the rise in net exports.
The objections run along these lines: since consumption has to come down, we should do nothing to delay the adjustment.
My answer, basically, is St. Augustine’s prayer:
Grant me chastity and continence, but not yet.
Ideally, we want the fall in consumption spending to move no faster than the rise in net exports caused by a weak dollar — if consumption falls too fast, we’ll have a deep recession.
Now, we can’t expect perfect timing, and my guess is that at least a moderate recession is already baked in. But we can try to make this less painful.
Mark Zandi on the Great Recession:
http://jec.senate.gov/index.cfm?FuseAction=Files.View&FileStore_id=c71959bb-2a15-4834-a6a2-a16646d17a85: The Great Recession has finally given way to recovery. This downturn will go into the record books as the longest, broadest and most severe since the Great Depression (see Table 1). The recession was twice the length of the average economic contraction, and it dragged down nearly every industry and region in the country. Its final toll in terms of increased unemployment and falling real GDP will be greater than that seen during any other recession on record....
The fiscal stimulus is also working. The American Recovery and Reinvestment Act passed early this year has reduced payroll tax withholding, sent checks to Social Security recipients, and provided financial help to unemployed workers whose normal benefits have run out. The cash for clunkers program revved up vehicle sales, and the housing tax credit has boosted home purchases.iii It is no coincidence that the Great Recession ended just as the stimulus began providing its maximum economic benefit (see Chart 1).iv The stimulus is doing what it was supposed to do: short-circuit the recession and spur recovery....
Criticism that only $175 billion of the $787 billion stimulus plan has been distributed through tax cuts and increased government spending is misplaced (see Table 2).v What matters for economic growth is the pace of stimulus spending, which surged from nothing at the beginning of the year to about $80 billion in the third quarter. That is a big change in a short period and is why the economy is growing again after more than a year....
The part of the stimulus providing the biggest bang for the buck—the most economic activity per federal dollar spent—is the extension of unemployment insurance benefits (see Table 3). Workers who lose their jobs before the end of 2009 can temporarily receive more UI, food stamps, and help with health insurance payments. Without this extra help, laid-off workers and their families would be slashing their own spending, leading to the loss of even more jobs....
Federal aid to strapped state and local governments also is providing significant economic benefits, lessening their need to slash programs and jobs or to hike taxes and fees. State and local tax revenues have fallen by nearly $120 billion during the past year, but government expenditures have merely gone flat, because federal grants in aid have soared by almost $110 billion (see Chart 2).vi The decline in income, sales, property and capital gains taxes has been unprecedented and shows only marginal signs of abating...
But, unfortunately, it looks as though the odds are better than even that the jobless recovery has begun.
October 29, 1939:
German Supplies of Iron Ore from Narvik
It must be understood that an adequate supply of Swedish iron ore is vital to Germany, and the interception or prevention of these Narvik supplies during the winter months, i.e., from October to the end of April, will greatly reduce her power of resistance. For the ﬁrst three weeks of the war no iron ore ships left Narvik owing to the reluctance of crews to sail and other causes outside our control. Should this satisfactory state of affairs continue, no special action would be de- manded from the Admiralty. Furthermore, negotiations are proceeding with the Swedish Government which in themselves may effectively reduce the supplies of Scandinavian ore to Germany.
Should however the supplies from Narvik to Germany start moving again, more drastic action will be needed....
Ought we not to secure the control, by charter or otherwise, of all the free neutral shipping we can obtain, as well as the Norwegian, and thus give the allies power to regulate the greater part of the sea transport of the world and recharter it, proﬁtably, to those who act as we wish?
And ought we not to extend to neutral shipping not under our direct control the beneﬁt of our convoy system?
The results so far achieved by the Royal Navy against the U-boat attack seem, in the opinion of the Admiralty, to justify the adoption of this latter course. This would mean that we should offer safe convoy to all vessels of all countries traversing our sea routes, provided they conform to our rules of contraband and pay the necessary premiums in foreign devisen. They would therefore be able to contract themselves out of the war risk, and with the success of our anti-U-boat campaign we may well hope to make a proﬁt to offset its heavy expense
Thus not only vessels owned by us or controlled by us, but independent neutral ships, would all come to enjoy the British protection on the high seas, or be indemniﬁed in case of accidents. it is not believed at the Admiralty that this is beyond our strength. Had some such scheme for the chartcring and insurance of neutral shipping been in force from the early days of the last war, there is little doubt that it would have proved a highly proﬁtable speculation....
Almost at this very moment... German eyes were turned in the same direction. On October 3 Admiral Raeder, Chief of the Naval Staff, submitted a proposal to Hitler headed "Gaining of Bases in Norway." He asked, "That the Fuehrer be informed as soon as possible of the opinions of the Naval War Staff on the possibilities of extending the operational base to the north.... "In these notes," he wrote, "I stressed the disadvantages which an occupation of Norway by the British would have for us: the control of the approaches to the Baltic, the outﬂanking of our naval operations and of our air attacks on Britain, the end of our pressure on Sweden. I also stressed the advantages for us of the occupation of the Norwegian coast: outlet to the North Atlantic, no possibility of a British mine barrier, as in the ycar 1917-18.... The Fuehrer saw at once the signiﬁcance of the Norwegian problem; he asked me to leave the notes, and stated that he wished to consider the question himself...."
[Alfred] Rosenberg, the foreign affairs expert of the Nazi Party... had discovered an instrument in the extreme Nationalist Party in Norway, which was led by a former Norwegian Minister of War named Vidkun Quisling. Contacts were established...
It may take years, or even decades, for Democrats to relearn the lessons we thought, naively, they had learned for good under Clinton. But one day, Joe Lieberman's warnings in this campaign will look prophetic. And the principles he has espoused will once again guide the Democratic Party. It will be the work of this magazine, to whatever small degree possible, to hasten that day.
The New Republic, January 19, 2004, "Our Choice"
Henry Kissinger once said, people say: "It has the added advantage of being true." For today's Republican standard bearers like Meg Whitman, that is no longer the case: telling the truth never crosses their minds, and the idea that something being true might be an advantage for it is completely foreign to them.
Brian Leubitz watches Meg Whitman try to become governor:
Calitics:: Oh, It's Going to Be Like That?: George Skelton catches a few, ahem, tall tales in some of Meg Whitman's radio spots.
"Did you know," Whitman asks radio listeners, "that in the last 10 years, state spending has gone up 80%?"
It doesn't take much digging to learn that general fund spending "in the last 10 years" has risen just 27%, according to finance department data. Adjusted for inflation and population growth, spending actually has decreased by 16.6%.
(LA Times 10/29/09)....
Meg Whitman has a story for the people of California. A story that bears no resemblance to the more complicated reality, but it's simple: California's state government spends too much. That somehow California is just tossing around money because the numbers are big. Yet, despite the numbers that Whitman would like to show you, here are the real numbers. California is 26th in per capita state spending with about $5,000 per capita. And that's from FY 2007, the high water mark where eMeg's ads were proclaiming out of control spending. (Data from Kaiser Foundation). Since that time, we've slashed and burned through our budget. We're spending substantially less money, and providing a lot fewer services. But, we can't all keep up with those spend happy states like Oklahoma (#18), Louisiana (#9), Alabama (#7) and Alaska (#1).
So, it's going to be more of the same crap. Lies, deceptions, and half-truths. Yup, a real change candidate, that Meg Whitman.
This week's must read: Barbara Demick in the New Yorker:
The Booth Auditorium says:
Berkeley Law - Global Financial & Economic Crisis Series: Global Unemployment: Despite recent upticks in the economy, the U.S. and worldwide employment picture continues to be bleak. Are we facing a “jobless recovery?” Did the international economic collapse in 2008-09 alter the labor market permanently? What employment patterns and prospects should we expect as global markets and economies recover? Join a panel of distinguished UC Berkeley scholars who will answer these questions, explore the role of international organizations such as the G20 in addressing them, and offer proposals to prevent protectionism and promote a global solution.
Please Join Us
WEDNESDAY OCTOBER 28TH, 2009
12:30 - 1:45 PM
BERKELEY SCHOOL OF LAW
A panel discussion featuring:
- John Quigley, Goldman School of Public Policy
- J. Bradford DeLong, Department of Economics
- David Card, Department of Economics
- Andrew Rose, Haas Business School
Economist's View: "The Weakest Recovery in Modern Memory"?: Output is not expected to return to potential until well into 2012. Now recall the long delay between the end of the last two recessions and the peak in the unemployment rate.... To be fully effective, plans for additional stimulus should have been in place long ago. However, given how long the recovery is expected to take, it's not too late to do more if we get started right away. But the political climate makes it highly unlikely that labor markets and the economy will get the help that they need.
Unlike vote 60--or even vote 50--in the senate, and unlike every single congressional republican, they have a clue:
The Case for More Stimulus: Corporate profitability has been boosted by job cuts, pay cuts and a drive to restock depleted inventories. Immense federal stimulus has jolted the economy. But what happens when those measures run their course? The economy is going to need more government support, or it is bound to be very weak for a very long time — and vulnerable to a relapse into recession. Unemployment is expected to worsen well into next year, exceeding 10 percent. Foreclosures are expected to rise, which will push home values down further. Hundreds of small and midsize banks are likely to fail in coming years. State and local governments face budget shortfalls in 2010 that are as bad or worse than this year’s.
Yet Washington is not providing a coherent plan for effective stimulus.... Congressional Republicans say continued economic weakness is proof that February’s stimulus package failed. Lawmakers in both parties fret that large budget deficits preclude more stimulus.... Both arguments are wrong.... [T]he immediate need for stimulus trumps the longer-term need for deficit reduction....
Congress and the administration should agree on ways to ease the dire financial condition of the states. Most important is continued aid for state Medicaid programs, which would ensure vital services, support jobs and free up money for other needs. Governors will begin to prepare their new budgets in early 2010, and those budgets will be in effect for a year, starting in July....
Without another round of effective stimulus, the worst recession in modern memory will likely become — at best — the weakest recovery in modern memory. Another boost to federal spending that is targeted and timely should not be too much for politicians to deliver.
Via Mark Thoma:
This is why I have always thought that the argument that "Fannie and Freddie did it" is a non-starter. Two reasons:
Loans owned by Fannie and Freddie can be a problem for the government, but they are not a problem for the financial system--nobody thinks that they could create a linked domino chain of destabilizing bankruptcies. Securitized loans without a public backstop owned by banks, on the other hand...
Fannie, Freddie, and Ginnie were losing market share as the housing bubble grew--not gaining it. They did not force more lax lending standards on the private market, they followed the private market down.
Seth Borenstein of AP writes:
AP IMPACT: Statisticians reject global cooling: Have you heard that the world is now cooling instead of warming? You may have seen some news reports on the Internet or heard about it from a provocative new book.
(In this book cover image released by Random House, "Super Freakonomics: Global Cooling, Patriotic Prostitutes, and Why Suicide Bombers Should Buy Life Insurance," by Steven D. Levitt and Stephen J. Dubner is shown. (AP Photo/Random House))....
Apart from the conflicting data analyses is the eyebrow-raising new book title from Steven D. Levitt and Stephen J. Dubner, Superfreakonomics: Global Cooling, Patriotic Prostitutes and Why Suicide Bombers Should Buy Life Insurance. A line in the book says:
Then there's this little-discussed fact about global warming: While the drumbeat of doom has grown louder over the past several years, the average global temperature during that time has in fact decreased....
That led to a sharp rebuke from the Union of Concerned Scientists, which said the book mischaracterizes climate science with "distorted statistics." Levitt, a University of Chicago economist, said he does not believe there is a cooling trend. He said the line was just an attempt to note the irony of a cool couple of years at a time of intense discussion of global warming. Levitt said he did not do any statistical analysis of temperatures, but "eyeballed" the numbers and noticed 2005 was hotter than the last couple of years. Levitt said the "cooling" reference in the book title refers more to ideas about trying to cool the Earth artificially...
More from Seth:
AP IMPACT: Statisticians reject global cooling | ajc.com: Only one problem: It's not true, according to an analysis of the numbers done by several independent statisticians for The Associated Press.
The case that the Earth might be cooling partly stems from recent weather. Last year was cooler than previous years. It's been a while since the super-hot years of 1998 and 2005. So is this a longer climate trend or just weather's normal ups and downs? In a blind test, the AP gave temperature data to four independent statisticians and asked them to look for trends, without telling them what the numbers represented. The experts found no true temperature declines over time. "If you look at the data and sort of cherry-pick a micro-trend within a bigger trend, that technique is particularly suspect," said John Grego, a professor of statistics at the University of South Carolina.
Yet the idea that things are cooling has been repeated inopinion columns, a BBC news story posted on the Drudge Report and in a new book by the authors of the best-seller "Freakonomics." Last week, a poll by the Pew Research Center found that only 57 percent of Americans now believe there is strong scientific evidence for global warming, down from 77 percent in 2006.
Global warming skeptics base their claims on an unusually hot year in 1998. Since then, they say, temperatures have dropped — thus, a cooling trend. But it's not that simple. Since 1998, temperatures have dipped, soared, fallen again and are now rising once more. Records kept by the British meteorological office and satellite data used by climate skeptics still show 1998 as the hottest year. However, data from the National Oceanic and Atmospheric Administration and NASA show 2005 has topped 1998. Published peer-reviewed scientific research generally cites temperatures measured by ground sensors, which are from NOAA, NASA and the British, more than the satellite data.
The recent Internet chatter about cooling led NOAA's climate data center to re-examine its temperature data. It found no cooling trend. "The last 10 years are the warmest 10-year period of the modern record," said NOAA climate monitoring chief Deke Arndt. "Even if you analyze the trend during that 10 years, the trend is actually positive, which means warming."
The AP sent expert statisticians NOAA's year-to-year ground temperature changes over 130 years and the 30 years of satellite-measured temperatures preferred by skeptics and gathered by scientists at the University of Alabama in Huntsville. Statisticians who analyzed the data found a distinct decades-long upward trend in the numbers, but could not find a significant drop in the past 10 years in either data set. The ups and downs during the last decade repeat random variability in data as far back as 1880. Saying there's a downward trend since 1998 is not scientifically legitimate, said David Peterson, a retired Duke University statistics professor and one of those analyzing the numbers. Identifying a downward trend is a case of "people coming at the data with preconceived notions," said Peterson, author of the book "Why Did They Do That? An Introduction to Forensic Decision Analysis"...
WEDNESDAY OCTOBER 28TH, 2009; 12:30 - 1:45 PM; BOOTH AUDITORIUM; BERKELEY SCHOOL OF LAW A panel discussion featuring:
Now what was the Booth Auditorium called the last time I was in it? And where is it?
OMB Director Peter Orszag has had enough of the misinformation being pushed by the Washington Post.
Peter Orszag: Fred Hiatt... writing... that the two biggest steps that can be taken to reduce the rate of health care cost growth--changes in health care’s tax treatment and an independent Medicare commission--are missing. I agree with Hiatt on the potential substantial benefits in terms of cost containment from these two changes. But a note... the Senate Finance Committee bill includes both of these measures... creates an excise tax on insurance companies offering high-premium plans--which would create a strong incentive for more efficient plans that would help reduce the growth of premiums... establishes a Medicare commission--which would develop and submit proposals to Congress aimed at extending the solvency of Medicare, slowing Medicare cost growth, and improving the quality of care delivered to Medicare beneficiaries. If [Fred Hiatt's] concern is that these two provisions would not survive the rest of the congressional process, then [Fred Hiatt should] say that--rather than suggesting that they aren’t already reflected in legislation. Moreover, as I blogged a couple of weeks ago, the Senate Finance Committee’s bill is not the only measure that includes important cost constraining provisions... that experts from across the spectrum agree will help transform health care... penalties for hospitals with high, preventable 30-day readmission rates... encouraging the establishment of accountable care organizations... bundled payments for high-cost, chronic conditions.... Hiatt writes that "no one knows for sure how to control costs." True, we have never transformed the health sector before, and it is therefore difficult to quantify precisely how these steps will work together to promote quality and reduce cost growth. But it is wrong to conclude that these steps--even the ones beyond the excise tax on high-cost plans and the Medicare commission--are merely hypothetical pie in the sky.
Why oh why can't we have a better press corps?
In my email inbox:
Scientists demonstrate wafer-scale graphene-on-silicon technology: demonstrated graphene-on-silicon field effect transistors (FETs) at full wafer scale—a revolutionary advancement in electronics that will enable unprecedented capabilities in high-bandwidth communications, imaging and radar systems. The work is part of the Carbon Electronics for RF Applications, or CERA program, sponsored by the Defense Advanced Research Projects Agency (DARPA) and under the management of the Space and Naval Warfare Systems Center. HRL has been collaborating with a group of universities, commercial companies and the Naval Research Laboratory on the program.
The goal of CERA is to exploit the unique physical characteristics of graphene to create electronic components that will provide game-changing enhancements to imaging, radar and communications applications, which have been hindered by component cost, limited resolution and high power dissipation. Graphene—a single layer of carbon atoms densely packed in a tight, honeycomb crystalline lattice configuration—has enormous potential because of its extremely high current-carrying capacity, excellent thermal conductivity and low-voltage operation. The challenge was to integrate graphene onto a silicon platform to reap the benefits the material provides....
HRL began work on CERA in July 2008, reaching an initial milestone in December 2008 by successfully integrating and demonstrating the world’s first graphene FETs in the RF frequency range. Researchers then took the technology to the next level by demonstrating epitaxial graphene FETs on a two-inch wafer scale that consisted of graphene on silicon carbide....
HRL Laboratories, LLC, Malibu, California is a corporate research-and-development laboratory owned by The Boeing Company and General Motors specializing in research into sensors and materials, information and systems sciences, applied electromagnetics, and microelectronics. HRL provides custom research and development and performs additional R&D contract services for its LLC member companies, the U.S. government, and other commercial companies.
Source: HRL Laboratories
The point is being missed here. The point is not that employoment in America is falling because spending on American-made products is falling. Spending on American-made goods and services is rising. Real spending on American-made products is rising at a rate of about 3.5% per year right now and has been since May.
The point is that even though spending on American products is rising, employment in America is still falling.
That's what Uggabugga is missing.
Quiddity at Uggabugga:
uggabugga: Experts see rebounding economy shedding jobs:
Forget a jobless recovery. The economy may be entering a recovery with job losses.
Third-quarter estimates this week are expected to show that the economy grew for the first time since the quarter ending in June 2008. Despite the estimated 3 percent expansion and a stock market that has been on a tear since March, hundreds of thousands of people are still being laid off each month.
Eight million jobs have been lost nationwide since the recession began two years ago, and by some measures workers face the worst job market since the Depression. The average laid-off worker has been without a job for 6 1/2 months, a post-World War II record. Many of those workers will never recover financially.
Economists are puzzled as to why job growth has slowed, citing everything from higher health care costs, to higher productivity, to Chinese currency manipulation.
"It's a complete mystery to me," said Brad DeLong, a liberal economist at Berkeley, as he drove home from purchasing a made-in-China flat screen television in his Kia Optima. "I'll have to get online to research this, but first I have to contact Verizon's Bangalore-based call center to restore my DSL service."
Okay, that last paragraph is satire.
Why oh why can't we have a better press corps?
Stan Collender writes:
Capital Gains and Games: Washington Post Budget Editorial Is So Wrong It Hurts: I'm going to have much more to say about this early next week, but this editorial in today's Washington Post is so wrong about the federal budget that it really has to make you wonder what they were thinking. Here's the whole editorial for what I'd normally say should be your reading enjoyment. I doubt you'll find it very enjoyable, however.
No, I am not going to link to it.
I am currently wrestling with the question of whether linking to anything published in the Washington Post incurs grave moral fault--it does, after all, deliver eyeballs to its advertisers, and delays its bankruptcy.
Rick Perlstein emails--and says that I can broadcast if I fix his typos:
So I lectured at San Angelo State U today in West Texas. We repaired for the evening to "In Vino Veritas," a combination wine store/wine bar. We go in, and there are half a dozen men in cowboy hats enjoying the vintages--I learn they're in town for the "Roping Fiesta," in which, to quote the local paper:
top ropers from around the world converge in San Angelo for the San Angelo Stock Show and Rodea Association's Wrangler Roping Fiesta.... (New to this year's lineup is the double mugging competition, in which competitors work in teams of two to rope and tie down a steer.)
At the end of the bar, a VERY Texan dude with a burly beard--I'm not making any of this up--lectures me about how it's absurd to drink a decent claret unless it's aerated first. Then he tells me the criteria for what constitutes an authentic honkey tonk.
The owner's name is Steve. His store is filled with $100 vintages with their "Wine Spectator" scores marked on the bottle; and, some of them, tags reading "Steve's Picks." I remark how ironic it is that liberals from the East like me are always excoriated by Texas Republican types for being wine snipping snobs. His indelible response:
Most liberals have really shitty taste in wine...
David Landes says that back when Carlo Cipolla was the senior economic historian at the University of California at Berkeley, Carlo demonstrated that he was a real gentleman by:
Lloyd Blankfein thinks different:
David Coggins wonders:
Sartorial Balance Sheet: Friday’s Times ran a photo of Lloyd Blankfein.... [W]hat struck us was the sight of Mr. Blankfein leaving the last button of his suit cuff unbuttoned.... [T]he sight of Mr. Blankfein roused certain sartorial misgivings. Part of Mr. Blankfein’s job, no doubt, is to reassure investors of the soundness of his strategy and prescience of his worldview. Is Mr. Blankfein so bullish that he is compelled to add a dash of flair to his suits, an outward sign of his market optimism? Or does this dandified element of his wardrobe represent a misreading of the public’s mood--a needless bit of self-satisfied swagger in an uncertain time?...
And points out:
At one time, an unbuttoned cuff meant that your suit was handmade--no longer.... [T]he workable buttonhole is now a staple of off the rack coats...
I keep looking at this, and thinking I will come back to it when I have an even wiser comment to make about it. But I don't.
Economist Free Exchange:
A few comments about risk: FELIX SALMON quotes one of his commenters, who writes:
The person most willing to take on risk is the one unaware he is doing so. He charges no risk premium… The resulting market equilibrium is that the guy who is unaware of the risk ends up loaded with it. Then the music stops.
The Epicurean Dealmaker, as part of his epic blog series on compensation, says:
Notwithstanding what legions of indignant and self-righteous commentators contend, the incentive system currently in place operates exactly as most of them propose: a large portion of banker pay is deferred for years and is tightly tied to the overall health and success of the firm. Bankers are not incentivized to print huge risky trades and run away as soon as they collect their bonus at the end of the year. In fact, they are more closely tied to the long-term health of the firm and its stock price than any other stakeholder. They just can't do anything about it. Unfortunately for them and for us, such a system does not seem to have prevented anything.
And Kevin Drum adds:
The problem wasn't so much that bankers didn't care about long-term results as it was that they never realized they were taking on so much risk in the first place. They thought they had safely hedged it all away. Reining in compensation may still be a good idea, but it's just a backstop. The real fixes to the system are deeper and more fundamental.
I would say that whether the problem is that bankers can't recognise risk when they see it or recognise it but are incentivised by their pay structures to embrace it, a good policy response is to increase capital requirements.
Statement from PricewaterhouseCoopers on health care "study" featured on A1 by Washington Post reporter Ceci Connolly repudiating that study:
PricewaterhouseCoopers LLP issued the following statement regarding a report it prepared on behalf of the America's Health Insurance Plans (AHIP). This statement should be attributed to PricewaterhouseCoopers:
America's Health Insurance Plans engaged PricewaterhouseCoopers to pepare a report that focused on four components of the Senate Finance Committee proposal:
Insurance market reforms and consumer protections that would raise health insurance premiums for individuals and families if the reforms are not coupled with an effective coverage requirement.
An excise tax on employer-sponsored high value health plans.
Cuts in payment rates in public programs that could increase cost shifting to private sector businesses and consumers.
New taxes on health sector entities.
The analysis concluded that collectively the four provisions would raise premiums for private health insurance coverage. As the report itself acknowledges, other provisions that are part of health reform proposals were not included in the PwC analysis. The report stated on page 1:
The reform packages under consideration have other provisions that we have not included in this analysis. We have not estimated the impact of the new subsidies on the net insurance cost to households. Also, if other provisions in health care reform are successful in lowering costs over the long term, those improvements would offset some of the impacts we have estimated.
Julian Sanchez on why it would be a better world if there simply were no Washington Post:
Unreasonable Balance: I’ve got one of a bunch of letters in the Sunday Washington Post objecting to their facile editorial on PATRIOT Act renewal, which weirdly asserted that a “reasonable balance” is struck by a bill that reauthorizes surveillance powers almost unaltered.
My original letter, incidentally, had somewhat more pointedly said that the Post “duly transcribed” the anonymous claims of administration officials about the utility of these powers, changed to “reported” in the course of editing. I tacitly consented to the change, since they ran their edit by me first, but not without a measure of bemusement.
Steve Benen on the Washington Post's religious "coverage":
The Washington Monthly: Catholic League President Bill Donohue, published by the WashingtonPost.com's "On Faith" website, an influential and widely-read faith-based site. While Donohue has a well-deserved reputation for publishing angry, unhinged screeds against those who disagree with him, this particular tirade stood out -- in secular and spiritual communities -- in large part because it's the kind of wild-eyed rant major news publications tend to avoid. It's hard to know what to except from the 800-word tirade, but to summarize, Donohue believes gays and atheists are desperate to destroy western civilization and modern Christianity.
Sexual libertines, from the Marquis de Sade to radical gay activists, have sought to pervert society by acting out on their own perversions. What motivates them most of all is a pathological hatred of Christianity. They know, deep down, that what they are doing is wrong, and they shudder at the dreaded words, "Thou Shalt Not." But they continue with their death-style anyway....
Catholics were once the mainstay of the Democratic Party; now the gay activists are in charge. Indeed, practicing Catholics are no longer welcome in leadership roles in the Party....
The culture war is up for grabs. The good news is that religious conservatives continue to breed like rabbits, while secular saboteurs have shut down: they're too busy walking their dogs, going to bathhouses and aborting their kids. Time, it seems, is on the side of the angels.
It's vile and it's ridiculous. Donohue's accusations don't even make any sense -- if "practicing Catholics are no longer welcome in leadership roles in the Party," how did Nancy Pelosi become Speaker and Ted Kennedy become the heart of the party? But putting aside reason and reality, the question many asked this week is what on earth the Post was thinking publishing Donohue's enraged invective. Alex Koppelman noted, "The idea of printing a controversial piece, even one that insults as many people as this did, is a fine one. But there's simply no way anyone can say that what Donohue wrote here added to the discourse. There were no facts, no arguments, nothing new -- just a long string of insults."
Special Newsweek edition from bmaz:
Emptywheel: Mark Sanford Goes Galt: Jon Meacham and his deputy editors at Newsweek could use a refresher course in compelling journalism from their sister ship test proctors at the Stanley Kaplan Corporation. Newsweek, you see, has just seen fit to publish a lengthy interpretation of Ayn Rand by none other that Appalachian Trail aficionado Mark Sanford.
The Fountainhead is a stunning evocation of the individual and what he can achieve when unhindered by government or society. Howard Roark is an architect who cares nothing about the world’s approval; his only concerns are his integrity and the perfection of his designs. What strikes me as still relevant is its central insight—that it isn’t “collective action” that makes this nation prosperous and secure; it’s the initiative and creativity of the individual. The novel’s “second-handers,” as Rand called them—the opportunistic Peter Keating, who appropriates Roark’s architectural talent for his own purposes, and Ellsworth Toohey, the journalist who doesn’t know what to write until he knows what people want to hear—symbolize a mindset that’s sadly familiar today.
Yeah, because the guy using state money to fly himself around the globe to meet his Latin lover, while his wife and children are back in the government paid for Governor’s mansion, ought to be talking about second hand leeches...
Why oh why can't we have a better press corps?
I am completely bemused. This is either a proof of the existence or of the nonexistence of God, depending on your taste.
Stanford's Ken Caldeira attacks:
Yale Climate 360: The main misrepresentation [of my work and my beliefs by Steve Levitt and Steve Dubner] is the quote [in Superfreakonomics] that says that CO2 is not “the right villain”.... [P]ull back to the case of the biosphere taking up 70 percent of CO2--well, yes, we have a published study that said that. It also... [said we] risk melting Antarctica.... [T]here is a selective use of quotes. If you spend several hours talking to somebody and they take a half-dozen things and put it in a book, then it’s going to be in the context and framing of arguments that the authors are trying to make... very different from the context and framing that I would put those same facts in... So I think that the casual reader can [get]... a misimpression of what I believe and what I feel about things...
And Steve Dubner counterattacks:
The Anatomy of a Smear: Most gravely, we stand accused of misrepresenting the views of one of the most respected climate scientists on the scene, [Ken Caldeira,] whom we interviewed extensively. If everything they said was actually true, it would indeed be a damning indictment. But it’s not...
The world is indeed a most remarkable place...
On second thought, this is definitely a conclusive proof of the existence of Coyote...
Hoisted from comments: A recommendation for "harsh measures" from Robert Waldmann:
Ken Caldeira on Levitt and Dubner and Geoengineering: That's an excellent interview [with Caldeira]. On the other hand, I think we are getting close to the point where we ought to let Caldeira get back to doing research.
I would like to focus on one point "China or India then went into a decade or two of deep drought." That is not just a scary story Caldeira pulled out of his hat. Simulations tend to suggest that SO2 geoengineering will cause reduced precipitation in India and China. To be very very frank, I think that there is a silver lining to that cloudlessness. A big global warming problem is getting China and India on board. If, say, the USA could honestly say:
that's a nice monsoon you have there. It would be a pity if something were to happen to it.
Oh and by the way, we really really don't want to send SO2 into the stratosphere, because it might cause you a terrible drought. But if we see no alternative way to fight global warming, we might feel forced to send the SO2 up the tubes and hope for the best."
I'd say the effect on geopolitics is a feature not a bug of SO2 geoengineering research.
My personal position is that China and India are poor, so rich countries should pay all of the costs of reducing their emissions. But that's not going to happen is it? Might as well put our faith in global cooling ponies. So I conclude that threatening them with an 18 mile long tube is third best.
Whether relative-value arbitrage is, as I think Myron Scholes once said, "using computers to suck up nickles on a global scale" or "using borrowed money to put a chip on 35 of the 36 roulette numbers and hoping for no zero/36" and in the long run profiting from the shield of limited liabiity and your lenders' idiocy--that is a genuinely hard problem. Which it is depends extremely sensitively on the shape of the tails of the return distribution--and that information is, of course, hard to get because the tails of the distribution are, you know, the tails, and we don't see them very often.
John Meriwether's two attempts to test this as a strategy rather than as a small part of the portfolio of a much better capitalized firm that can be rescued by Warren Buffett and so wait out panics have not turned out so well. So he's going to do it again! Matthew Yglesias:
Matthew Yglesias: Another Spin at the Wheel: Good news for investors who like to lose all their money, “John Meriwether, the hedge fund manager and arbitrageur behind Long-Term Capital Management, is in the process of setting up a new hedge fund – his third.” What’s that, you ask, didn’t his first fund lose all its money? Why, yes. And didn’t the second fund fold because it lost a ton of money? Yes, quite so. So how will this new one be different? It won’t! It’s
expected use the same strategy as both LTCM and JWM to make money: so-called relative value arbitrage, a quantitative investment strategy Mr Meriwether pioneered when he led the hugely successful bond arbitrage group at Salomon Brothers in the 1980s.
The way this works is that you identify arbitrage opportunities such that you make trades you’re overwhelmingly likely to make money on. But those opportunities only exist because the opportunities are very small. So to make them worth pursuing, you need to lever-up with huge amounts of debt. Which means that on the rare moments when the trades do go bad, everything falls apart: “The strategy typically has a high ‘blow-up’ risk because of the large amounts of leverage it uses to profit from often tiny pricing anomalies.”
As a friend puts it, this strategy is “literally the equivalent of putting a chip on 35 of the 36 roulette numbers and hoping for no zero/36.” But you’re doing it with borrowed money. I’m not a huge believer in human rationality, so I totally understand how this scam worked once. That he was able to get a second fund off the ground is pretty amazing. If he finds investors for a third spin around the wheel I’m going to propose confiscating all the rich peoples’ money and giving it to capuchin monkeys.
From Christy Romer's JEC testimony:
My hunch is that both real GDP growth and unemployment are likely to be somewhat higher than today's blue-chip forecast predicts.
Two nations; between whom there is no intercourse and no sympathy; who are as ignorant of each other's habits, thoughts, and feelings, as if they were dwellers in different zones, or inhabitants of different planets; who are formed by a different breeding, are fed by a different food, are ordered by different manners, and are not governed by the same laws...
Who else? Jonathan Weisman:
Romer Predicts High Jobless Rate Through Election Year: The Romer testimony appears to be a shift toward the negative for the administration. On Tuesday, White House economist Jared Bernstein took a more upbeat position in a talk before the New America Foundation. While he called the lack of job creation “the most important challenge we face,” his speech emphasized progress made, not stagnation ahead. “I think we have to give the Recovery Act some props,” he said. “In the second quarter, the average monthly change in jobs was about 170,000 less bad than the baseline forecast. For the third quarter, the actual was about 270,000 better than the baseline. That’s about 1 million jobs saved or created so far”...
From the Christy Romer testimony that Jonathan Weisman was, ahem, "covering":
What kept the economy from heading into a second Great Depression in 2008 and 2009 was the strong and timely policy response.... A key piece... was the American Recovery and Reinvestment Act... $787 billion...to counteract the shortfall in aggregate demand... the boldest countercyclical fiscal action in American history.... [Our] estimates suggest that the ARRA added two to three percentage points to real GDP growth in the second quarter and three to four percentage points to growth in the third quarter.... [A]s of August, the ARRA had raised employment relative to the baseline by between 600,000 and 1.5 million jobs...
Add up Jared's monthly numbers and you get the midpoint of Christy's range.
You know, if you are going to say: "X said something different from Y. X said Z." Then--unless you want everyone to conclude that you are a liar or an idiot--you check to make sure that Y said something different from Z. It's not a hard principle to grasp. It's not hard to do.
Is it too much to ask Rupert Murdoch's Wall Street Journal to have reporters who actually listen to what people say and read the texts they are handed? Apparently.
Why oh why can't we have a better press corps?
With Jeff Goodall, of Yale Environment 360:
Geoengineering the Planet: The Possibilities and the Pitfalls: Caldeira argues that sharply reducing greenhouse gas emissions is by far the most prudent course. Still, given the huge volume of carbon dioxide that humanity continues to pour into the atmosphere, Caldeira says it would be folly not to undertake research into geoengineering. With the prospect that the world could reach a level of dangerous warming this century, Caldeira maintains it’s necessary to determine which projects — such as putting particles in the stratosphere to reflect sunlight into space — might work and which will not. He likens geoengineering schemes to seatbelts — a technology that might reduce the chance of injury in case of a climate crash. But, warned Caldeira, “Thinking of geoengineering as a substitute for emissions reduction is analogous to saying, ‘Now that I’ve got the seatbelts on, I can just take my hands off the wheel and turn around and talk to people in the back seat.’ It’s crazy.”
Yale Environment 360: I want to start with this little dust-up over SuperFreakonomics. In the book, you are quoted as saying, when it comes to global warming, “Carbon dioxide is not the right villain.” Is that accurate?
Ken Caldeira: That is not accurate. I don’t believe I said anything remotely like that because I believe that we should be outlawing the production of devices that emit carbon dioxide, and I don’t think we can solve this carbon climate problem unless we drastically reduce our carbon dioxide emissions very soon.
e360: They also write that you are convinced that human activity is responsible for “some” global warming. What does that mean?
Caldeira: I don’t think we can say with certainty whether we’re responsible for 90 percent of it or we might be responsible for 110 percent of it...
e360: Another thing that plays in to the same kind of sensibility is the idea that the doubling of CO2 traps less than 2 percent of the outgoing radiation emitted by the Earth. When that’s phrased like that, it makes it sound like it’s not really much of a problem.
*Caldeira: *You should think of the whole global warming problem as a 1 percent problem, at least for doubling of CO2. In absolute temperature Kelvin — scientists like to use the Kelvin scale — the current Earth temperature is around 288 degrees Kelvin, and a 3-degree warming on top of that is basically a one-percent additional warming. And so this whole issue of climate change, when viewed from an Earth-system perspective, is a story about 1 percents and 2 percents...
e360: The authors also cite you as saying that a doubling of CO2 yields a 70-percent increase in plant growth, suggesting it would be a boon to agricultural activity. It sounds like one of those old CO2-is-good-for-you ads. Can you explain that?
Caldeira: Yes... the 70-percent increase in plant growth... came out of a paper that we produced, I believe, in 2005. We took a model... which has a very low climate sensitivity, and what I would consider a hyperactive land biosphere--produced 9-degree Centigrade warming globally and 20 degrees around East Antarctica. Now that’s 16 degrees Fahrenheit globally, and something like 36 degrees around Antarctica.... So we were showing, look, even if CO2 fertilization is at the high end of anybody’s imagination, we still produce rather frightening temperatures. But I do believe the basic sign is correct, that with more CO2, plants can use water more efficiently... agricultural productivity will increase in the mid and high latitudes, where warmer weather will help the plants grow, but will decrease productivity in the poor equatorial nations where heat is already stressing crop yield.
e360: Overall, do you feel like your work has been accurately and fairly represented in this book?
Caldeira: The main misrepresentation is the quote that says that CO2 is not “the right villain”... but if you say what’s the primary gas responsible for the planetary warming, I would say it’s carbon dioxide.... [T]he other statements that are attributed to me... based in fact and based on studies.... [P]ull back to the case of the biosphere taking up 70 percent of CO2--well, yes, we have a published study that said that. It also presented results saying that we might warm up the planet enough to risk melting Antarctica.... [T]here is a selective use of quotes. If you spend several hours talking to somebody and they take a half-dozen things and put it in a book, then it’s going to be in the context and framing of arguments that the authors are trying to make... the contexts and the framing of those issues are very different from the context and framing that I would put those same facts in... So I think that the casual reader can... come up with a misimpression of what I believe and what I feel about things.
e360: Let’s talk a little bit more broadly about geoengineering. I was struck by something one of the authors said on NPR the other day — that he got interested in geoengineering when he realized that the problem with global warming is not that there is too much carbon in the air; it’s that it is too hot. Do you agree with that?
Caldeira: The reason it is too hot is that there is too much carbon dioxide in the air. Now the carbon dioxide itself, of course, has big negative implications for ocean acidification and ecosystems, including coral reefs. So there are direct CO2 effects.... [I]f we had some magic thing that would reverse all effects of CO2 perfectly, then you could say, “Well the problem is not CO2.” But nobody really expects that we are going to have some magic, perfect CO2 nullifier.... [T]o present it as if, “Well, it not’s really CO2, but the effects of CO2,” it’s like if you got shot by a bullet and you said, “Well, it wasn’t really the bullet that was the problem, it was just that I happened to have this hole through my body...”
e360: Right. Well, a lot of people think of geoengineering as a quick and cheap fix for global warming. Is it?
Caldeira: Let’s pretend for a moment that putting dust in the stratosphere is easy to do and works reasonably well... and that China or India then went into a decade or two of deep drought. Whether the system caused that drought or not, I think the Chinese or the Indians would rightly suspect that the reason they have this drought and ensuing famines might be due to this system that was put up by these other countries. And you could easily imagine that there would be a great amount of political tension.... Then, of course, the system is not going to work perfectly... not going to address... ocean acidification... not going to perfectly offset global warming.... [G]eoengineering options [are] something we would only want to consider if our backs were really up against the wall... because the alternatives look so frightening.
e360: I know that some scientists have suggested that there should be some kind of taboo on geoengineering research. But I know that you’ve been outspoken in the need for a federally-funded geoengineering research program. Can you explain that?
Caldeira: Yes, I think we don’t know right now whether these kinds of approaches have the potential to reduce risk or not. In our climate models, the amount of climate change can be reduced by these kinds of approaches, but the climate models are an imperfect reflection of reality.... Let’s say geoengineering doesn’t work, and that it would add to risk. It seems to me it would be worth having a research program to demonstrate that beyond a reasonable doubt so we can all forget about this and move on. On the other hand, if these options do have the potential to reduce risk, then it seems to me that we would like to have the option to reduce that risk should a time come where that would seem necessary. I kind of think of these geoengineering options as seeing, “Well, can we invent some kind of seatbelts for our climate system?” We need to drive the climate system carefully, we need to greatly reduce emissions. But even if we’re driving carefully we still run the risk of getting into an accident. And seatbelts can potentially reduce the damage when we’re in an accident.... I’m much in favor of a very broad-spectrum approach.... [T]hinking of geoengineering as a substitute for emissions reduction is analogous to saying, “Now that I’ve got the seatbelts on, I can’t just take my hands off the wheel and turn around and talk to people in the back seat.” It’s crazy.
e360: Can you sketch briefly what a geoengineering research program might look like?
Caldeira: The first thing I would do is use the plural, and say “programs.” Because many different things are lumped into the same category.... David Keith and Klaus Lackner have been looking at capture of carbon dioxide from the air.... [T]hat’s very different from, say, putting sulfur dust in the stratosphere.... [T]wo new programs — one looking at what are the scalable, fast-acting things we could do in the event of an emergency. What could we do fast that would start the earth cooling within a couple of years if we really wanted to? And then I think we need another research program in saying how can we backpedal out of our high greenhouse gas concentrations....
e360: Do you think it’s inevitable that we’re going to try to engineer the Earth’s climate?
Caldeira: First of all, nobody can really see the future.... I think that there are pathways that we might start regionally and slowly ramp up to something more global. I think that’s a possibility. The other possibility is a real emergency situation where there’s a phase change in public opinion, [where] it becomes conventional wisdom that we can’t tolerate this climate change any more, that we have to do something.... I would wager that we would never deploy any geoengineering system, and that we’re more likely just to try our best to adapt to it. But I think there’s enough of a risk that it’s worth investigating whether there are options to reduce risk and damage....
[W]e’re talking here about people’s lives... I don’t think we’re going to deploy these systems to save polar bears... [but] to help people from dying of famines, or something dramatic like that. And I think that these techniques have a potential to save lives and reduce suffering, and we should explore whether that’s true or not.... [W]e’re obviously interfering with the climate system wholesale now, and it’s possible that more intelligent interference could reduce the damage from the first interference. But it could make it worse. I don’t think we know, which is why we need the research program.
- Don’t whine.
That is all....
I know a little bit about contrarianism. So I’m disturbed to see that people who are making roughly infinity more money than me out of the practice aren’t sticking to the unwritten rules of the game.
Viz Nathan Mhyrvold:
Once people with a strong political or ideological bent latch onto an issue, it becomes hard to have a reasonable discussion; once you’re in a political mode, the focus in the discussion changes. Everything becomes an attempt to protect territory. Evidence and logic becomes secondary, used when advantageous and discarded when expedient. What should be a rational debate becomes a personal and venal brawl....
The whole idea of contrarianism is that you’re “attacking the conventional wisdom”, you’re “telling people that their most cherished beliefs are wrong”, you’re “turning the world upside down”. In other words, you’re setting out to annoy people. Now opinions may differ on whether this is a laudable thing to do – I think it’s fantastic – but if annoying people is what you’re trying to do, then you can hardly complain when annoying people is what you actually do.... If Superfreakonomics wanted a calm and rational debate, this chapter would have been called something like: “Geoengineering: Issues in Relative Cost Estimation of SO2 Shielding”, and the book would have sold about five copies.
Viz also, Stephen Dubner:
They have given the impression that we are global-warming deniers of the worst sort, and that our analysis of the issue is ideological and unscientific. Most gravely, we stand accused of misrepresenting the views of one of the most respected climate scientists on the scene, whom we interviewed extensively. If everything they said was actually true, it would indeed be a damning indictment. But it’s not....
The other point of contrarianism is... you assemble... points which are individually uncontroversial... and put them together to support a conclusion which is surprising and counterintuitive.... [T]he aim of the thing is the overall impression you give.... [T]he entire point is to make a defensible argument which strongly resembles a controversial one. So... you don’t get to complain that people have “misinterpreted” your piece by taking you to be saying exactly what you carefully constructed the argument to look like you were saying. Fair enough, you might not care to defend the controversial point it looked like you were making, but a degree of diffidence is appropriate here, because the confusion is entirely and intentionally your fault:
(That is the “global cooling” in our subtitle. If someone interprets our brief mention of the global-cooling scare of the 1970’s as an assertion of “a scientific consensus that the planet was cooling,” that feels like a willful misreading.)
No it doesn’t; it feels like someone read the first two pages for the plain meaning of the words and didn’t spot that you were actually playing a little crossword-puzzle game where the answer was “consensus”. In general, whatever “global cooling” meant, it was put on the cover in full knowledge of the impression it would give to a normal reader so once more, it is not legitimate to complain that this phrase was interpreted in the way in which it was intended to be interpreted.
In general, contrarians ought to have thick skins, because their entire raison d’etre is the giving of intellectual offence to others. So don’t whine, for heaven’s sake. Own your bulls---...
Somebody should ask her if she is going to try to turn the Washington Post back into a real newspaper:
Duncan Black: Shorter Richard Cohen: "Because some poor people from the Bronx projects have managed to succeed, it's ridiculous to be impressed by any of them." Not even going to link to it. You can find it on Fred Hiatt's crayon scribble page...
And, you know, the first two times I read chapter 5 of Superfreakonomics I missed this one totally. It was only after Yoram Baumann started raving and weeping like a child that I picked up on it...
Neil B ♪ said...
Yet More Superfreakonomics Blogging. Yes. I Know. I Know...: “When Al Gore urges the citizenry to sacrifice… the agnostics grumble that human activity accounts for just 2 percent of global carbon-dioxide emissions, with the remainder generated by natural processes like plant decay.”..
Absolutely no even marginally competent writer would put out fraudulent drivel like that about plant decay. That's like loon Beck blabbering about exhaled CO2. The existence of a surface carbon cycle (get it - cycle?) that runs carbon around between the atmosphere and plants etc. is one thing, and the new CO2 from underground is another. This is what you learn in eighth grade earth science. Levitt et al are either flaky incompetents or deliberate frauds.
Twenty years ago--with the end of the Cold War--American policy got dammed up:
It was clear we needed to do something to balance the long-term social-insurance spending promises both parties were making with the long-term tax base, and we haven't.
It was clear--first for national-security and domestic-congestion reasons, and then for global-warming reasons as well--that we needed to start imposing Pigovian taxes on coal and oil-driven energy use, and we haven't.
It was clear that we needed to reform America's health care financing system, and we haven't.
It was clear that America, as the globe's sole hyperpower, had a unique opportunity to build a world in which we could live very comfortably and peacefully once we were no longer a hyperpower or even a superpower but instead only one (if we are lucky) of several great powers--and we haven't.
To this in the past three years we have added:
A recognition that the "Greenspanist" bet--deregulate finance, rely on financial company shareholders via corporate control to limit moral hazard, and bet that the Federal Reserve can lean up after any elephants that stampede through--was wrong. We need to restructure financial regulation--and we haven't.
A recognition that the "central problem of macroeconomics" has not in fact been solved. We need to solve it--both in the short run of recovery from this recession, and in the long run of creating a world that is net, whether through global imbalances or other factors, as vulnerable to episodes like this as our world turns out to be.
About these six issues, two questions:
Which of these six policy issues will--as many of them have been doing--continue to drift, and what damage will drifting do?
Which of these six policy issues will the Obama administration actually be able to address--and what will be the consequences for the world of how it addresses them?
"I now know it is a rising, not a setting, sun" --Benjamin Franklin, 1787
J. Bradford DeLong—that's me—is a professor of economics at the University of California at Berkeley, a research associate of the National Bureau of Economic Research, a weblogger for the Washington Center for Equitable Growth, and was in the Clinton administration a deputy assistant secretary of the U.S. Treasury.
My best work extends from business cycle dynamics through economic growth, behavioral finance, political economy, economic history, international finance to the history of economic thought and other topics.
Among my best works are: "Is Increased Price Flexibility Stabilizing?" "Productivity Growth, Convergence, and Welfare," "Noise Trader Risk in Financial Markets," "Equipment Investment and Economic Growth," "Princes and Merchants: European City Growth Before the Industrial Revolution," "Why Does the Stock Market Fluctuate?" "Keynesianism, Pennsylvania-Avenue Style," "America's Peacetime Inflation: The 1970s," "American Fiscal Policy in the Shadow of the Great Depression," "Review of Robert Skidelsky (2000), John Maynard Keynes, volume 3, Fighting for Britain," "Between Meltdown and Moral Hazard: Clinton Administration International Monetary and Financial Policy," "Productivity Growth in the 2000s," "Asset Returns and Economic Growth."
I have signed up with the Leigh Speakers' Bureau for non-academic and non-public service talks...