John Maynard Keynes (1926): The end of laissez-faire: "Let us clear… the ground…. It is not true that individuals possess a prescriptive 'natural liberty'…. There is no 'compact' conferring perpetual rights on those who Have or on those who Acquire. The world is not so governed from above that private and social interest always coincide. It is not so managed here below that in practice they coincide. It is not a correct deduction… that enlightened self-interest always operates in the public interest. Nor is it true that self-interest generally is enlightened…. Experience does not show that… social unit[s] are always less clear-sighted than [individuals] act[ing] separately. We [must] therefore settle… on its merits… 'determin[ing] what the State ought to take upon itself to direct by the public wisdom, and what it ought to leave, with as little interference as possible, to individual exertion'."
Annie Lowrey: Attorneys General Press White House to Fire F.H.F.A. Chief: "Prominent state attorneys general are calling on President Obama to fire the acting director of the Federal Housing Finance Agency and name a new permanent director, arguing that current policies are impeding the economic recovery. Under its current leader, Edward J. DeMarco, the F.H.F.A., which oversees the bailed-out mortgage financiers Fannie Mae and Freddie Mac, has refused to put in place a White House proposal to reduce the principal on so-called underwater mortgages — a move that might prevent foreclosures and thus save the mortgage giants money, but also might expose taxpayers to additional losses. Led by Eric T. Schneiderman of New York and Martha Coakley of Massachusetts, the attorneys general argue that writing down the principal on underwater mortgages — those where the outstanding mortgage is greater than the current value of the home — would aid the recovery. They note that write-downs were a central part of a multibillion-dollar mortgage settlement that 49 state attorneys general negotiated with five major banks a year ago. And they say the White House should name a director to take that action."
Larry Summers: Europe cannot allow unfinished business to fester: "There is a striking difference between financial crises in memory and financial crises as they actually play out. In memory, they are a concatenation of disasters. But as they play out, the norm is moments of panic separated by lengthy stretches of apparent calm. It was eight months from the South Korean crisis to the Russian default of 1998, six months from Bear Stearns’ demise to Lehman Brothers’ fall, and there were several 30 per cent stock market rallies between 1929 and 1933…. A worrisome indicator in much of Europe is the tendency of stock and bond prices to move together. In healthy countries, when sentiment improves stock prices rise and bond prices fall, as risk premiums decline and interest rates rise. In unhealthy economies, as in much of Europe today, bonds are seen as risk assets, so they move just like stocks in response to changes in sentiment…. Growth has been dismal, with eurozone gross domestic product still below its 2007 level. Forecasts predict little, if any, growth this year. For every Ireland, where there is a sense that a corner is being turned, there is a France, where the sustainability of current policy is increasingly questionable…. It is true, as German policy makers constantly point out, that fiscal consolidation and structural reform were key to Germany’s rise from being the 'sick man of Europe' to its current position of strength. What they do not recognise is that there cannot be exports without imports. Germany’s export growth and huge trade surplus were enabled by borrowing by the European periphery. If the debtor countries of Europe are to follow Germany’s path without economic implosion there must be a strategy that assures increased external demand for what they produce. This could come from a German economy that was prepared to reduce its formidable trade surplus, from easier monetary policies in Europe that spurred growth and competitiveness, or from increased deployment of central funds such as those of the European Investment Bank…. [R]equiring a nation to service large debts by being austere in a context where there is no growth in demand for its exports is far from being a viable strategy."
Gavin Kennedy: Those who are blind to the generality of the roles of Smithian exchange behaviour (e.g., Graeber, Polanyi, et al) really are blinkered when it comes to understanding the deep time-proven role of human (and indeed, among con-specifics in other species) exchange behaviours | UK Needs $15 Billion Spending 'Kick Start' in Budget: Economists | Carola Binder: The Cyprus Levy: Historical Precedents | Wolfgang Münchau: Europe is risking a bank run | Martin Wolf: Why bankers are intellectually naked | Erik Olin Wright: Transforming Capitalism through Real Utopias | This is Ashok. | my life in bits… | Jeremy Stein |
Jonathan Sattler: The Iraq War: Who Got It Right: On August 27, 2002, "Vice President Dick Cheney gave a speech to the Veterans of Foreign Wars that explicitly laid out the case to invade Iraq based on an assumption that 'Saddam has resumed his efforts to acquire nuclear weapons'. Cheney’s speech conflated the threat presented by Saddam Hussein with al Qaeda, as he had been doing since the 9/11 attacks, arguing for a sudden shift in American policy from containment and deterrence to preemption. In doing so, the Bush administration ignored an opportunity to make diplomatic inroads with Iran and instead destabilized the Middle East with an unprovoked disaster that killed and injured more than 100,000 civilians, thousands of U.S. soldiers, and evaporated more than a trillion dollars in American wealth…. American officials made the case for war using dubious intelligence while effectively casting any and all opposition to the effort as unpatriotic and un-American. A complicit media generally repeated the case unquestioned and though millions protested the invasion all over the globe, the American public supported the administration’s lust for a second war in response to 9/11 by a margin of 72-22. Still, critics of the “the single worst foreign policy decision in American history” (including many liberals in Congress and much of the left-leaning media, including editor-in-chief Joe Conason) did their best to break through the drumbeat, even before the Bush administration’s foolish prosecution of the war made the capricious folly of the Iraq War apparent to the world. Here are a few of the people who criticized the invasion of Iraq."
John Holbo: Utopianism, Conservatism, Ideal Theory: Who is Trying to Get Where, From Here?: "Wright suggests that conservatives are all Burkeans. So we need to break the Burkean back, as it were. But they aren’t. Conservatives tend to be utopians, of a weird, cognitively dissonant sort. Wright’s strategy isn’t calibrated to deal with that…. [C]onservatives aren’t actually – never have been, aren’t now, probably will never be, in significant numbers – conservatives…. They aren’t Burkean (starting with Burke himself)…. ][C]onservatism is: a meditation on—and theoretical rendition of—the felt experience of having power, seeing it threatened, and trying to win it back.”… Conservatives don’t mind utopianism, so Wright is banging on an open door. They only say they are opposed to utopianism when it’s the other fellow’s style of utopianism that is in question…. If they don’t think ‘may all human beings enjoy freedom and the opportunity to flourish!’ is appealing, then to hell with them, at least philosophically (and presumably in the afterlife, should there prove to be one.) There’s nowhere to start, if we can’t get an ‘amen!’ to something as basic as that. But this is obviously not quite the situation we are in. Conservatism, it seems to me, is in a perpetual and strikingly deep state of cognitive dissonance…. [C]onservatives constantly paper over conflict between the values Wright espouses – freedom, equality, opportunity for all! – and the values that Robin correctly attributes to conservatives – hierarchy and privilege. This papering over is managed with anti-viability arguments. Perverse consequences arguments. ‘If we gave the poor more money it would only make everyone, including them, poorer.’ Since most of these arguments are bad, we should rip back the paper to see the sorry mix of confused values conservatives are concealing back there. We should argue about ‘viability’, as Wright says. And yet: since conservatives can always generate new, bad arguments of this sort, the fight on this front is eternal. I don’t see that Wright-style meditations on ‘real utopias’ are likely to do much more than set off another chorus of ‘unintended consequences’ wailing. (And some of that wailing is likely to prove valid, even if it is self-interested confabulation.) I am actually inclined to say that going straight to the ideal theory level may be the more winning utopian strategy, for more or less Chestertonian reasons. Don’t worry so much about what is achievable, or even viable. Just force people to be clear about what they truly want, in principle. Don’t let them derail that question onto the ‘viability’ track, because that actually makes it easier to conceal the sorry state of their ultimate value commitments."
Paul Krugman: Grand Bargaining: "Like others, Greg Sargent has been pleading with 'centrist' pundits to acknowledge an obvious truth: Barack Obama has actually proposed the mix of spending cuts and revenue increases they want, while Republicans are unwilling to make so much as a dime of compromise. Greg looks at yesterday’s talk shows and finds this confirmed openly by GOP leaders: there is no ratio of spending cuts to revenues that will reconcile them to any tax hike whatsoever. Greg presumably hopes that this admission will finally cure pundits of the habit of blaming both sides for the failure to reach a Grand Bargain — or, in practice, devoting most of their criticism to Obama. Silly Greg. As Scott Lemieux explains, the centrist view is that all Obama has to do is have the leadership to lead, with leadership. Nothing Republicans say or do can shake this conviction."
On March 18, 2013:
- Liveblogging World War II: March 18, 1943 http://delong.typepad.com/sdj/2013/03/liveblogging-world-war-ii-march-18-1943.html
- Noted for March 18, 2013 http://delong.typepad.com/sdj/2013/03/noted-for-march-18-2014.html
- The Real Underlying Source of Washington Gridlock: "The President Is a--CLANG!" http://delong.typepad.com/sdj/2013/03/the-real-underlying-source-of-washington-gridlock-the-president-is-a-clang.html
- DELONG (AND KRUGMAN) SMACKDOWN WATCH: BILL BLACK, STEPHANIE KELTON, AND RANDY WRAY ARE JUSTIFIABLY IRATE MODERN MONETARY THEORY HOW DO DEFICITS MATTER?: MONDAY HOISTED FROM COMMENTS WEBLOGGING http://delong.typepad.com/sdj/2013/03/bill-black-is-justifiably-irate-monday-hoisted-from-comments-weblogging.html
- WHY DOES GAVYN DAVIES THINK "THE FED’S EXIT [FROM EXTRAORDINARY ACCOMODATION] WILL BE GRADUAL AND DIFFICULT"? http://blogs.ft.com/gavyndavies/2013/03/17/feds-exit-will-be-gradual-and-difficult/ Gradual, yes. Difficult? Not in my view… http://delong.typepad.com/sdj/2013/03/why-does-gavyn-davies-think-the-feds-exit-from-extraordinary-accomodation-will-be-gradual-and-difficult.html
- PAWEL MORSKI: CYPRUS: REALPOLITIK AND OTHER LESSONS http://delong.typepad.com/sdj/2013/03/pawel-morski-cyprus-realpolitik-and-other-lessons.html
- J. Bradford Delong for Democracy Journal: Shrugging off Atlas http://delong.typepad.com/sdj/2013/03/j-bradford-delong-for-democracy-journal-shrugging-off-atlas.html