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As Cosma Shalizi Says, "The Singularity Is in Our Past": Saturday Twentieth Century Economic History Weblogging

Noted for March 9, 2013

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  • Rick Perlstein reads Bob Woodward: "Woodward's three-volume series of books… 2002… Bush At War…. 'The George W. Bush who strides across the pages of Bush at War', I wrote, 'was a superhero.... And while the picture of the commander in chief in Plan of Attack (2004)… was rounder, the White House found if flattering enough to put it on the recommended reading list as they prepared for the Bush-Cheney re-election campaign.'… Then came 2006… State of Denial… depicted [Bush as] a dangerous idiot…. Descriptions that were deferentially polite in 2002—'Bush, 55, has a quick, joshing manner'—became downright rude by 2006. ('Bush and Rove in particular dwelled on "flatulence"—passing gas—and they shared an array of fart jokes.' In 2002 Woodward's Bush was a careful empiricist…. In 2006? He's an ignoramous…. As I wrote, 'The two most recent books end with the same interview: Mr. Woodward’s several hours with the President on Dec. 10 and 11, 2003. Both books contain the same exchange: Mr. Woodward says, "But we have not found any weapons of mass destruction", and Mr. Bush replies, "We have found weapons programs that could be reconstituted."… the 2004 and 2006 versions end with him characterizing the same interview entirely differently. 'True, true, true', the President is quoted as saying in Plan of Attack. Mr. Woodward then offers this paraphrase of what Bush said next: 'He contended that they had found enough'. That line, in 2004, 'He contended that they had found enough', comes off as Woodwardian self-criticism: the last word belongs to the president, turning the reporter into a quisling who would happily leave a dictator in power because he only had a little bit of weapons of mass destruction. In 2006, however, [Woodward] gives himself the last word, as an internal dialogue: 'It had taken five minutes and 18 seconds for Bush simply to acknowledge the fact that we hadn’t found weapons of mass destruction.' It completely changes the meaning of the very same discussion: the man who came off as a steely protector of the nation when he was up above 50 percent in the approval ratings has suddenly become feckless now that he was below 40…. Continue reading Bob Woodward. But not the prose. You won't learn much from that. Read the man instead. That way you'll learn what the people in power think about what you're supposed to think."

  • Teresa Nielsen Hayden: tnielsenhayden (tnielsenhayden) on Twitter: "The role of journalism in a democracy is a public trust. It is much abused. It is a scandal. Writers aren't expensive, but they aren't free. If Atlantic isn't paying them, someone else is. By not paying its writers, the Atlantic has thrown itself open to manipulation, astroturfing, and other disinformation. The principle you learn in Cinema 101 is that movies don't film themselves. There's always someone behind the camera. The same goes for journalism. We thought we knew what it was: this publication hires these writers. Now we know other agendas and relationships were in play, and we don't know what they were. So yes, we feel betrayed."

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  • Menzie Chinn: Still in Search of Expansionary Fiscal Contraction: "[O]ne interesting commonality is the pace of fiscal consolidation…. The UK and the Eurozone countries by and large started fiscal consolidation earlier than the US…. This message is a variant of that conveyed by a scatterplot Paul Krugman posted nearly a year ago, showing the correlation between growth in government purchases and GDP growth (it’s positive), but here by use of structural budget balances…. The point is not that fiscal consolidation is unnecessary. Over the longer term, one wants to bring revenues in line with spending (if only we’d done that in 2005!). But when output is around 6% below potential GDP, one wants to go very slow on cutting spending, especially spending that takes place now, as opposed to in the future. So, the search for expansionary fiscal contraction continues."

  • Patrick Caldwell: Outmatched: "Conservatives’ support for state-based think tanks is paying off in regressive legislation. Liberals are scrambling to keep up"

  • Hidari: Great sentences on the modern condition: "I am sure that Amazon are exploiting their labourers as much as they can…. Amazon’s long term gameplan is to fire all their manual-labour staff and replace them with robots. My point was much more basic…. There is probably no better evidence that journalism is a public good than the fact that none of America’s financial geniuses can figure out how to make money off it. The comparison to education is striking. When manag­ers apply market logic to schools, it fails, because education is a cooperative public service, not a business…. No one has ever made profits doing qual­ity education—for-profit education companies seize public funds and make their money by not teaching. In digital news, the same dynamic is producing the same results, and leads to the same conclusion.”

  • Mark Thoma sends us to Eric Swanson and John Williams: Measuring the Effect of the Zero Lower Bound on Medium- and Longer-Term Interest Rates: "The federal funds rate has been at the zero lower bound for over four years, since December 2008. According to many macroeconomic models, this should have greatly reduced the effectiveness of monetary policy and increased the efficacy of fiscal policy. However, standard macroeconomic theory also implies that private-sector decisions depend on the entire path of expected future short-term interest rates, not just the current level of the overnight rate. Thus, interest rates with a year or more to maturity are arguably more relevant for the economy, and it is unclear to what extent those yields have been constrained. In this paper, we measure the effects of the zero lower bound on interest rates of any maturity by estimating the time-varying high-frequency sensitivity of those interest rates to macroeconomic announcements relative to a benchmark period in which the zero bound was not a concern. We find that yields on Treasury securities with a year or more to maturity were surprisingly responsive to news throughout 2008–10, suggesting that monetary and fiscal policy were likely to have been about as effective as usual during this period. Only beginning in late 2011 does the sensitivity of these yields to news fall closer to zero. We offer two explanations for our findings: First, until late 2011, market participants expected the funds rate to lift off from zero within about four quarters, minimizing the effects of the zero bound on medium- and longer-term yields. Second, the Fed’s unconventional policy actions seem to have helped offset the effects of the zero bound on medium- and longer-term rates."

  • Ta-Nehisi Coates:** The Good, Racist People: "The deli where Whitaker was harassed happens to be in my neighborhood. Columbia University is up the street. Broadway, the main drag, is dotted with nice restaurants and classy bars that cater to beautiful people. I like my neighborhood. And I’ve patronized the deli with some regularity, often several times in a single day. I’ve sent my son in my stead. My wife would often trade small talk with whoever was working checkout. Last year when my beautiful niece visited, she loved the deli so much that I felt myself a sideshow. But it’s understandable. It’s a good deli. Since the Whitaker affair, I’ve read and listened to interviews with the owner of the establishment. He is apologetic to a fault and is sincerely mortified…. In modern America we believe racism to be the property of the uniquely villainous and morally deformed, the ideology of trolls, gorgons and orcs. We believe this even when we are actually being racist. In 1957, neighbors in Levittown, Pa., uniting under the flag of segregation, wrote: 'As moral, religious and law-abiding citizens, we feel that we are unprejudiced and undiscriminating in our wish to keep our community a closed community'. A half-century later little had changed."

Martin Wolf: The man at Number 10 is not for turning: If the British government’s plan is working, what would a failing one look like? | | James O’Keefe to pay $100K over ACORN sting - | Henry Farrell: Slaves of Defunct Economists | Simon Wren-Lewis: mainly macro: Looking for a Robust Defence of Austerity | John Miller and Scott Page: Complex Adaptive Systems: An Introduction to Computational Models of Social Life | Felix Salmon: The stagnation behind the excellent jobs report | The Romney That Time Forgot: Immigration Edition |

On March 8, 2009: