Paul Krugman: The Urge to Purge: "When the Great Depression struck, many influential people argued that the government shouldn’t even try to limit the damage…. Andrew Mellon…. Joseph Schumpeter… “artificial stimulus leaves part of the work of depressions undone.” Like many economists, I used to quote these past luminaries with a certain smugness…. How naïve we were. It turns out that the urge to purge — the urge to see depression as a necessary and somehow even desirable punishment for past sins, while inveighing against any attempt to mitigate suffering — is as strong as ever…. Now, the fact is that these ranters have been wrong about everything, at every stage of the crisis, while the Keynesians have been mostly right…. But the Mellonites just keep coming. The latest example is David Stockman…. So what should we be doing? By all means, let’s restore the kind of effective financial regulation that, in the years before the Reagan revolution, helped deter excessive leverage. But that’s about preventing the next crisis. To deal with the crisis that’s already here, we need monetary and fiscal stimulus, to induce those who aren’t too deeply indebted to spend more while the debtors are cutting back. But that prescription is, of course, anathema to Mellonites, who wrongly see it as more of the same policies that got us into this trap. And that, in turn, tells you why liquidationism is such a destructive doctrine: by turning our problems into a morality play of sin and retribution, it helps condemn us to a deeper and longer slump."
The Onion: Roger Ebert Hails Human Existence As 'A Triumph': "CHICAGO—Calling the overall human experience 'poignant', 'thought-provoking', and a 'complete tour de force', film critic Roger Ebert praised existence Thursday as 'an audacious and thrilling triumph'. 'While not without its flaws, life, from birth to death, is a masterwork, and an uplifting journey that both touches the heart and challenges the mind', said Ebert, adding that while the totality of all humankind is sometimes 'a mess in places', it strives to be a magnum opus and, according to Ebert, largely succeeds at this goal. 'At times brutally sad, yet surprisingly funny, and always completely honest, I wholeheartedly recommend existence. If you haven’t experienced it yet, then what are you waiting for? It is not to be missed'. Ebert later said that while human existence’s running time was 'a little on the long side', it could have gone on much, much longer and he would have been perfectly happy."
Tom Scocca: A Stupid Death in a Stupid War: Remembering Michael Kelly: "Ten years ago today, somewhere south of Baghdad, the editor and columnist Michael Kelly became the first journalist to die in the invasion of Iraq. His Humvee, reportedly under fire, went off the road and rolled into a canal… drowned. Writing the news in the New York Times, the reporter David Carr added, 'The driver was also killed'. War is stupid. War kills people. War kills people in stupid ways, and in unanticipated ways, and in multiples. These are not complicated facts, but they were too complicated for Michael Kelly…. Michael Kelly’s death was a painful loss for many good people…. But: The driver was also killed. And so were more than 4,400 other American troops. And so were more than 200 other journalists and their assistants. And so were an uncountable number of Iraqis—so many that we do not even know how many tens of thousands of them there were, each one as alive and individual and human as Michael Kelly was. Most of them did not leave as clear a record of their thoughts as Michael Kelly did…. That Kelly was brave in going to cover the combat does not change the fact that he chose to be bold with other people’s lives…. There were more like three Kellys: the loving and loyal personal Kelly; the impish, incisive, and sometimes courageous observer; and the nasty, often petty polemicist, who wrote things for effect that he knew were untrue. But they blended into each other, and not to his benefit. It was Kelly’s notion of collegial devotion that led him to brutally defend his New Republic protege Stephen Glass, past the bitter end, refusing to concede to Buzz Bissinger that a smear Glass had written about the healthy-eating activist Michael Jacobson, in a story admitted to have been fabricated, was inaccurate. 'When interviewed, Kelly said that he would gladly apologize to Jacobson for the opening anecdote—as long as he was given definitive proof of its embellishment.' So he shared with Sullivan, who had originally hired Glass, the distinction of an active role in two of the worst failures of journalism in a generation. Perhaps… he would have changed his position on Iraq…. What might he have written, if he’d had the chance to engage with the terrible truths of this past decade? What might a hundred thousand other people have done, if they’d lived too?"
ricardian ambivalence | Sarah Kliff: Cancer clinics are turning away thousands of Medicare patients. Blame the sequester | Gary Brecher (2005): It’s All Greek to Victor Davis Hanson | Economic Report of the President 1994 | Gauti Eggertsson and Paul Krugman: Debt, Deleveraging, and the Liquidity Trap: A Fisher-Minsky-Koo Approach | Herbert Hoover: the “leave it alone liquidationists” headed by [my] Secretary of the Treasury Mellon, who felt that government must keep its hands off and let the slump liquidate itself. Mr. Mellon had only one formula: “Liquidate labor, liquidate stocks, liquidate the farmers, liquidate real estate.” He insisted that, when the people get an inflation brainstorm, the only way to get it out of their blood is to let it collapse. He held that even a panic was not altogether a bad thing. He said: “It will purge the rottenness out of the system. High costs of living and high living will come down. People will work harder, live a more moral life. Values will be adjusted, and enterprising people will pick up the wrecks from less competent people”... | Pawel Morski: How to Interpret an ECB Press Conference: April 4th, Annotated Highlights |
Kevin Drum: Can We Talk About the Global Investment Drought, Please?: "[T]he real problem we're facing is the mirror image of a global savings glut: namely, a global investment drought. For more than a decade now, no matter how low interest rates have gone, the appetite for real-world investment has remained anemic. During the aughts, this problem was partly masked by the flow of money into property and related derivatives, but after that blew up nothing was left. Capital is still sloshing around the system and is available at ever more attractive rates, but it goes begging nevertheless. So forget the savings glut. The real question is why, over the past decade, the world has gotten so bearish on real-world investment opportunities. The answer, almost by definition, is that confidence in future economic growth has waned. But why?"
Christina Romer and David Romer: The Macroeconomic Effects of Tax Changes: Estimates Based on a New Measure of Fiscal Shocks: "This paper investigates the impact of tax changes on economic activity. We use the narrative record, such as presidential speeches and Congressional reports, to identify the size, timing, and principal motivation for all major postwar tax policy actions. This analysis allows us to separate legislated changes into those taken for reasons related to prospective economic conditions and those taken for more exogenous reasons. The behavior of output following these more exogenous changes indicates that tax increases are highly contractionary. The effects are strongly significant, highly robust, and much larger than those obtained using broader measures of tax changes."
On April 5, 2013:
- Liveblogging World War II: April 5, 1943 http://delong.typepad.com/sdj/2013/04/liveblogging-world-war-ii-april-5-1943.html
- Noted for April 5, 2013 http://delong.typepad.com/sdj/2013/04/noted-for-april-5-2013.html
- Understanding the Adversaries: UMKC Seminar Talk Slides, 3:30-5:00 PM, April 5, 2013 http://delong.typepad.com/sdj/2013/04/understanding-the-adversaries-umkc-seminar-talk-slides-330-500-pm-april-5-2013.html
- Joe Weisenthal Gets a Media Scoop!: Amazon Invests in Business Insider http://delong.typepad.com/sdj/2013/04/joe-weisenthal-gets-a-media-scoop-amazon-invests-in-business-insider.html
- Less than 100,000 Payroll Jobs, a 58.5% Employment-to-Adult-Population Ratio Exactly Where It Was a Year Ago, and Labor Force Participation Down by 0.5 Percentage Points in the Past Year http://delong.typepad.com/sdj/2013/04/less-than-100000-payroll-jobs-a-585-employment-to-adult-population-ratio-exactly-where-it-was-a-year-ago-and-labor-force.html
- The Bank of Japan Listens to Ben Bernanke After Fifteen Years, and Goes for Reflation http://delong.typepad.com/sdj/2013/04/the-bank-of-japan-listens-to-ben-bernanke-after-fifteen-years-and-goes-for-reflation.html
- Why People Think I Am So Smart: Medicaid Expansion Edition http://delong.typepad.com/sdj/2013/04/why-people-think-i-am-so-smart-medicaid-expansion-edition.html
- L'Esprit de l'Escalier: April 5, 2013 http://delong.typepad.com/sdj/2013/04/lesprit-de-lescalier-april-5-2013.html
- Friday Night Music http://delong.typepad.com/sdj/2013/04/friday-night-music.html