Yellen was SF FRB President in 2008 and could not, institutionally, advocate cramdown. So it isn't fair to say that Summers was more favorable to cramdown than Yellen. But it is fair to say that Summers was more favorably inclined toward cramdown than Kohn, or Bernanke, or Ferguson, or Geithner. Or Obama.
This strikes me as some of the 50% of the s--- that Larry is getting that should really be directed at Obama (or Clinton), as opposed to the 40% of the s--- that Larry is getting that he doesn't deserve (or the 90% of the much lesser amount of s--- that Janet is getting that she doesn't deserve), or the 10% of the s--- that Larry is getting that he does deserve,..
A comment on Gavyn Davies and Dean Baker http://blogs.ft.com/gavyndavies/2013/09/12/lies-damned-lies-and-the-us-unemployment-statistics/:
As I see it, the points Dean should have made are:
Demographers say that labor force participation should be falling at 0.1%/year due to the aging of the population and 0.1%/year due to increasing wealth and the resulting demand for more schooling and earlier retirement.
"Structuralists" say that the recession has given us 15 years of this trend in labor force participation in five as people have changed their life plans in response to the lousy job market.
"Structuralists" say that we should not expect a better job market to reverse this acceleration of the demographic trend--because people who have retired early cannot unretire, and once people are expected to have masters degrees to get jobs that used to require bachelors successive cohorts will have no option but to match
Structuralists are wrong:
- Increasing wealth is not a thing for anyone outside the top 5%.
- Most of the unemployed young are not building skills but instead are being depressed
- The over-65 crowd is frantically unretiring as the collapse of their 401k wealth and housing equity has impoverished them.
At least, that is what I would have said, if I believed what I think Dean believes. Me? I'm not sure what I believe...
Comment on Whose Central Bank?:
Negative real interest rates hurt lenders and help borrowers... exactly as much. They hurt those who are going to buy financial assets and help those who are about to sell financial assets... exactly as much. To say "low real interest rates hurt lenders and asset purchasers..." is not an argument without a reason: you then have to say "...and we care more about lenders and asset purchasers than about borrowers and asset sellers because X." And you do not provide that X. By contrast, high unemployment helps nobody and hurts a lot of people...
What To Read?: Finance, Entrepreneuship, and Social Value:
Robin Greenwood: "The Growth of Finance" http://www.aeaweb.org/articles.php?doi=10.1257/jep.27.2.3
Thomas Philippon: "An International Look at the Growth of Modern Finance" http://people.virginia.edu/~ar7kf/papers/PR_JEP_publlished.pdf
William Baumol: "Entrepreneurship: Productive, Unproductive, and Destructive" http://web.econ.unito.it/gma/massimo/sdt/sdt/baumol90.pdf ￼
Nicola￼ Gennaioli, Andrei Shleifer, and Robert Vishny: "A Model of Shadow Banking" http://www.nber.org/papers/w17115
Raghuram Rajan: "Has Financial Development Made the World Riskier?" NBER Working Paper 11728 http://www.nber.org/papers/w11728
Adair Turner: "What Do Banks Do? Why do Credit Booms and Busts Occur and What Can Public Policy Do about It?" http://harr123et.files.wordpress.com/2010/07/futureoffinance-chapter11.pdf