L'Esprit de l'Escalier: April 26, 2013
Why start with IS-LM? Because IS-LM is the simplest possible monetary model of the economy. The quantity theory is not a complete model--you need to know the interest rate i to calculate velocity V. And whatever you add to the quantity theory to determine i becomes your IS curve...
Consider Abba Lerner's (1943) "Functional Finance": It requires a healthy constant-monetary-and-financial-conditions multiplier (so that activist fiscal policy can move the IS curve left or right) that is relatively steeply sloped (so that what the interest rate is is not of first-order importance in determining the spending on currently-produced goods and services). It requires that debt issue and money-printing do little to shift the IS curve back via raising expected future taxes and little to raise spreads by increasing perceived financial risks. It requires that the mix of money and debt have little effect on inflation expectations. If all of these are true, then Abba Lerner's (1943) conclusions that fiscal policy should be used to close any deflationary or inflationary gap to maintain full employment and monetary policy should be used to ensure that interest rates are low enough that the debt is not a burden are cogent and correct. If not, not.
"Jeet Heer: The thing with [Michael] Kelly was not just that he was 'wrong about Iraq', but he was belligerently, willfully, wrathfully and stupidly wrong. The blinkered rage Kelly brought to the debate makes it harder to forgive him than someone who just made a simple & honest miscalculation."
I was watching @TheStalwart sitting next to and watching @ezraklein at the conference. Joe's jaw dropped--like Toshiro Mifune watching Takashi Shimura in "Shichinin no Samurai"
Game of Thrones: "@attackerman: Barristan Selmy: Return of the Jedi." 12 min of Dragons, 0 min of Ice Zombies, 48 min of Veal Calves not a good balance
"Top Conservative Cat: Ron Portman announces he opposes gay marriage again: 'Turns out my son was only pretending to be gay to break up with girlfriend.'"
"Christopher Mims: How robots are eating the last of the routine cognitive jobs http://qz.com/67323/how-the-internet-made-us-poor/ …" Including the job of internet troll!
Obama takes $700 billion that was going to be wasted on inefficient and ineffective parts of Medicare--waste and abuse, in short--and spends it on (i) pharmaceuticals for seniors and (ii) better coverage for everyone. Ryan took the same $700 billion and spent it on tax cuts for the rich. Now Ryan says--once again--he wants to give it back to the insurance companies.
@TheStalwart. Perhaps most characteristic of @davidgraeber is http://www.webcitation.org/65KpxkaVf, where he says those who want Occupy to be peaceful are actually the ones who are violent. War Is Peace! Freedom Is Slavery! Ignorance Is Strength! #GraeberErrors
"marcsobel @marcsobel: @delong claims he invented Sub-Turing Evocation, not knowing Free Republic's a news aggregator and 2^20 twitter bots http://bit.ly/1791KdU"
@PykeA @jbouie Are you saying that the Cilizza piece wreaks wrongness, or that it reeks of wrongness?
"Kevin T. Keith @KTKeith: @billmon1 @delong More importantly, we didn't openly endorse torture till Bush. Now we've made it our signature, not aberration."