Jane Mayer: Senator Ted Cruz, Communists, Harvard Law School, and Joe McCarthy: "Ted Cruz gave a stem-winder of a speech at a Fourth of July weekend political rally in Austin, Texas…. His spokeswoman didn’t respond to a request to discuss the speech…. Cruz greeted the audience jovially, but soon launched an impassioned attack on President Obama, whom he described as 'the most radical' President 'ever to occupy the Oval Office…. There were fewer declared Republicans in the [Harvard Law School] faculty when we were there than Communists! There was one Republican. But there were twelve who would say they were Marxists who believed in the Communists overthrowing the United States government.'… Harvard Law School Professor Charles Fried, a Republican who served as Ronald Reagan’s Solicitor General from 1985 to 1989, and who subsequently taught Cruz at the law school, suggests that his former student has his facts wrong. 'I can right offhand count four “out” Republicans (including myself) and I don’t know how many closeted Republicans when Ted, who was my student and the editor on the Harvard Law Review who helped me with my Supreme Court foreword, was a student here.' Fried went on to say that… 'I would be surprised if there were any members of the faculty who "believed in the Communists overthrowing the U.S. government"'."
Felix Salmon: The tragedy of long term unemployment: "The lesson of the past few years is that this is not a normal recovery: corporate profits are doing great, while total employment remains anemic. We can’t trust the invisible hand to generate the millions of jobs that are needed, especially with regards to the long-term unemployed. With gridlock in Washington, the result is a huge amount of unnecessary human misery."
Michael Specter: Marco Rubio Needs Evolution: "Suddenly, all we could hear about were the next generation of [Republican] leaders. And nobody has been talked about with more excitement than Florida Senator Marco Rubio…. In the December issue of GQ, which was published online today, Rubio tells Michael Hainey that he loves the music of Afrika Bambaataa. And Tupac. He feels empowered by Eminem. Rubio is cool…. So it was with genuine amazement that I read his response when Hainey asked him about the age of the earth. I think, in fairness to Rubio, it’s best to reprint the entire exchange: 'GQ: How old do you think the Earth is?' 'Marco Rubio: I’m not a scientist, man. I can tell you what recorded history says, I can tell you what the Bible says, but I think that’s a dispute amongst theologians and I think it has nothing to do with the gross domestic product or economic growth of the United States. I think the age of the universe has zero to do with how our economy is going to grow. I’m not a scientist. I don’t think I’m qualified to answer a question like that. At the end of the day, I think there are multiple theories out there on how the universe was created and I think this is a country where people should have the opportunity to teach them all. I think parents should be able to teach their kids what their faith says, what science says. Whether the Earth was created in 7 days, or 7 actual eras, I’m not sure we’ll ever be able to answer that. It’s one of the great mysteries.' Actually, there are two basic theories about how the universe was created. There is a scientific explanation: that the universe began to expand about 13.7 billion years ago and continues today to do so. And there’s an explanation offered by people who believe that angels are real. There is a great deal of evidence to support the first…. Physics, astronomy, and molecular genetics have all made it possible to trace our genetic, viral, and biological heritage back millions of years. The earth, give or take a few hundred thousand years, is 4.54 billion years old. That is considerably more than seven days. I guess it could be divided into Rubio’s 'seven actual eras', each of which would have lasted roughly 650 million years."
Behavioral Finance Explains Bubbles | TechCrunch: EU austerity measures offered few gains in 2012 | Aaron Carroll: Medicaid Expansion: Good for Children, Their Parents, and Providers | Jared Bernstein: Deficit reduction is not the enemy of jobs | Eric Chaney: Democratic Change in the Arab World, Past and Present | Thomas Herndon: The Grad Student Who Took Down Reinhart And Rogoff Explains Why They're Fundamentally Wrong | Paul Krugman: A Heartbreaking Work of Staggering Folly |
Paul Krugman: Very Sensitive People: "When it comes to inflicting pain on the citizens of debtor nations, austerians are all steely determination – hey, it’s a tough world, and hard choices have to be made. But when they or their friends come under criticism, suddenly it’s all empathy and hurt feelings. We saw that in the case of Olli Rehn…. And today we see it in Anders Aslund’s defense of Reinhart and Rogoff against what he calls a “vicious” critique by Herndon et al. Aslund praises R-R for providing: 'an important corrective to the view that fiscal stimulus is always right – a position that is common across the Anglo-American economic commentariat, led by Paul Krugman in the New York Times.' This is a curious thing for him to say, because it’s an outright lie…. I can’t believe that Aslund doesn’t know this; why, then, would he discredit himself by repeating an easily refuted falsehood? But then, why would he describe Herndon et al as 'vicious'? Their paper was a calm, reasoned analysis of how R-R came up with the famous 90 percent threshold; it came as a body blow only because of the contrast between the acclaim R-R received and the indefensible nature of their analysis."
Martin Wolf: Austerity loses an article of faith: "In 1816, the net public debt of the UK reached 240 per cent of gross domestic product. This was the fiscal legacy of 125 years of war against France. What economic disaster followed this crushing burden of debt? The industrial revolution. Yet Carmen Reinhart and Kenneth Rogoff of Harvard university argued, in a famous paper, that growth slows sharply when the ratio of public debt to GDP exceeds 90 per cent. The UK’s experience in the 19th century is such a powerful exception, because it marked the beginning of the consistent rises in living standards that characterises the world we live in. The growth of that era is the parent of subsequent sustained growth everywhere. As Mark Blyth of Brown University notes in a splendid new book, great economists of the 18th century, such as David Hume and Adam Smith warned against excessive public debt. Embroiled in frequent wars, the British state ignored them. Yet the warnings must have appeared all too credible. Between 1815 and 1855, for example, debt interest accounted for close to half of all UK public spending. Nevertheless, the UK grew out of its debt. By the early 1860s, debt had already fallen below 90 per cent of GDP. According to the late Angus Maddison, the economic historian, the compound growth rate of the economy from 1820 to the early 1860s was 2 per cent a year. The rise in GDP per head was 1.2 per cent. By subsequent standards, this may not sound very much. Yet this occurred despite the colossal debt burden in a country with a very limited tax-raising capacity. Moreover, that debt was not accumulated for productive purposes. It was used to fund the most destructive of activities: war. Quite simply, there is no iron law that growth must collapse after debt exceeds 90 per cent of GDP."
Kaushik Basu: Two Policy Prescriptions for the Global Crisis: "One thing that experts know, and that non-experts do not, is that they know less than non-experts think they do. This much was evident at the just-completed Spring Meetings of the International Monetary Fund and the World Bank Group – three intense days of talks that brought together finance ministers, central bankers, and other policymakers…. Consider monetary and fiscal policies. Despite decades of careful data collection and mathematical and statistical research, on many large questions we have little more than rules of thumb…. As with all behaviors shaped by evolution, when the environment changes, there is a risk that existing adaptations become dysfunctional. This has been the fate of some of our standard macroeconomic policies. The formation of the eurozone and a half-century of relentless globalization have altered the global economic landscape, rendering once-proven policies ineffective."