## Noted for April 13, 2013

• David Glasner: The Gold Bubble Is Bursting: Who’s To Blame?: "The New York Times finally caught on today that the gold bubble is bursting, months after I had alerted the blogosphere. But even though I haven’t received much credit for scooping the Times, I am still happy to see that word that the bubble has burst is spreading…. Of course now that it is semi-official that the gold bubble has burst, isn’t it time to start looking for someone to blame it on? I mean we blamed Greenspan and Bernanke for the housing bubble…. Juliet Lapidos, on the editorial page editor’s blog of  the Times, points an accusing finger at Ron Paul, dredging up quotes like this from the sagacious Congressman: 'As the fiat money pyramid crumbles, gold retains its luster.  Rather than being the barbarous relic Keynesians have tried to lead us to believe it is, gold is, as the Bundesbank president put it, ‘a timeless classic.’ The defamation of gold wrought by central banks and governments is because gold exposes the devaluation of fiat currencies and the flawed policies of government.  Governments hate gold because the people cannot be fooled by it.' Fooled by gold? No way. But the honorable Mr. Paul is surely not alone in beating the drums for gold. If he were still alive, it would have been nice to question Murray Rothbard about his role in feeding gold mania. But we still have Rothbard’s partner Lew Rockwell with us, maybe we should ask him for his take on the gold bubble. Indeed, inquiring minds want to know: what is the Austrian explanation for the gold bubble?"

• Paul Krugman: Lust for Gold: "News flash: Recent declines in the price of gold, which is off about 17 percent from its peak, show that this price can go down as well as up. You may consider this an obvious point, but… it has come as a rude shock to many small gold investors…. One of the central facts about modern America is that everything is political; on the right, in particular, people choose their views about everything, from environmental science to gun safety, to suit their political prejudices. And the remarkable recent rise of 'goldbuggism'… shows that this politicization can influence investments as well as voting. What do I mean by goldbuggism? Not the notion that buying gold sometimes makes sense. Gold has been a very good investment since the early 2000s… gold is like a very long-term bond that’s protected from inflation; and actual long-term inflation-protected bonds have also seen big price increases…. No, being a goldbug means asserting that gold offers unique security in troubled times…. Fox… talking heads touting gold, not to mention many, many ads from the likes of Goldline. Many Americans were convinced: A third of those polled by Gallup in 2011 declared that gold was the best long-term investment…. Conservative-minded people tend to support a gold standard — and to buy gold — because they’re very easily persuaded that “fiat money,” money created on a discretionary basis in an attempt to stabilize the economy, is really just part of the larger plot to take away their hard-earned wealth and give it to you-know-who….. So will we be seeing prominent goldbugs change their views, or at least lose a lot of their followers? I wouldn’t bet on it. In modern America, as I suggested at the beginning, everything is political; and goldbuggism, which fits so perfectly with common political prejudices, will probably continue to flourish no matter how wrong it proves."

Stephen Gandel: The 10 stages of Jamie Dimon's blubbering London Whale grief | Paul Solman et al.: Does Obama Have it Right or Wrong on Social Security?

• Buce: Underbelly: Gamma: "'…[H]unter-gatherer egalitarianism is rather a sham. ... [E]ven the most egalitarian of them had a dominance hierarchy as clear-cut as tht in any ape society. The difference is that for humans, the alpha elite were invisible supernatural beings, far too powerful to be overthrown, while the betas were ancestors who did the bidding of the alphas.  No "egalitarian" hunter-gatherer was ever more than a gamma in the social hierarchy.' --Steven Mithen, "Foresomes and so on," reviewing and interpreting Kent Flannery and Joyce Marcus, The Creation of Inequality (2012), London Review of Books 11 April 2013, 17-18, 17."

• Bernie DeGroat: What do tax policy experts think about U.S. tax policy?: "ANN ARBOR—Large majorities of tax policy experts in the U.S. favor a graduated personal income tax, taxing long-term capital gains as ordinary income, a net income tax on corporations and extending the retail sales tax to services. These are among the findings of a nonpartisan survey conducted by the University of Michigan's Office of Tax Policy Research and the National Tax Association that polled 415 NTA members on their opinions regarding U.S. tax policy. The survey is part of a year-long project to mark this year's 100th anniversary of the U.S. federal income tax. Some of the 100 survey questions related to the respondents' personal views about tax equity, such as the degree of "progressivity," while others dealt with their views about the behavioral responses to taxation and the effective structure of various tax systems. The NTA membership is comprised of tax policy experts in business and consulting, government and academia."

• Wonkette: Hey How Is It Going In Our Quest To Buy An Entire Person? An Update!: "Last week or something, we asked you, the faithful Wonkvillein, to help us buy an entire person in the form and shape of Doktor Zoom. And many of you immediately started sending us money — so much and so fast, we actually were not able to send you personalized thank you notes, so we decided not to send you any thank you notes at all! (Nobody tell our beloved Miss Manners; we cannot stand to disappoint her.) We did not even send thank you notes to the several of you who forked over $50 a month, which is f#$%ing ridiculous. Well, we are here to update at ya, and to tell you that Ben Howe, from Redstate, wants you to come together as one to help us, for liberal togetherness and community. HE DOES??? Yes, he does. Would we lie to you?"

• Paul Krugman: Simple Natural Goodness: "One of the baffling aspects of economic debate during this Lesser Depression, or so it seems to me, is the apparent urge of many economists to shy away from straightforward conclusions…. Other things equal, a lower real interest rate leads to higher demand… we are currently suffering from inadequate demand, but can’t get the interest rate any lower because of the zero lower bound. So in that sense interest rates are too high…. But Cowen and co. say no, interest rates aren’t too high, they’re too low. What do they mean?… I think they mean that it’s too low compared with some Platonic ideal of the interest rate — what the rate would be if we didn’t have safe asset shortage, or something…. To which my response is, so? I guess this is an interesting point…. [But] it changes nothing about the policy analysis. And I have no idea at all why claiming, say, that we’re suffering from a safe asset shortage means that increasing government spending isn’t expansionary. You don’t have to fill a flat tire through the hole; whatever the sources of inadequate demand, the logic of increasing demand remains."

• Ryan Avent: Monetary policy: The mystery of stable prices: "The IMF studies the experience of advanced economies over the past half century and reckons that central bank credibility… helps explain…. When central banks whipped inflation in the early 1980s and adopted low targets for it, they firmly anchored beliefs about future growth in prices and wages. This credibility is self-reinforcing. Workers who expect prices to rise only slowly tend not to push as hard for higher wages. That helps firms to keep costs and prices down. When the crisis struck, this process also helped avert deflation. If prices are not expected to drop, workers are less likely to accept wage cuts. Anticipating stable wage demands, employers are more reluctant to cut prices…. In a study of 21 rich countries since the 1960s, the IMF shows that changes in unemployment now influence inflation much less than in the past."