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August 2013

Ryan Avent:: Labour markets: On "bullshit jobs": Noted for August 22, 2013

Ryan Avent: Labour markets: On "bullshit jobs":

Productive jobs have, just as predicted, been largely automated away…. But rather than allowing a massive reduction of working hours…. we have seen the ballooning not even so much of the “service” sector as of the administrative sector…. Why in the world would firms spend extraordinary amounts of money employing people to do worthless tasks (especially when they've shown themselves to be exceedingly good at not employing people to do worthless tasks)? Says Mr Graeber: "The ruling class has figured out that a happy and productive population with free time on their hands is a mortal danger…."

I am immediately bursting with questions. Such as, should we conclude that protesters… are in fact too happy? How does the ruling class co-ordinate all this hiring, and if much of the economy's employment is useless in the first place why not just keep them on during recessions?

Continue reading "Ryan Avent:: Labour markets: On "bullshit jobs": Noted for August 22, 2013" »

Ryan Avent: The global economy: The emerging-market squeeze, short version: Noted for August 22, 2013

Ryan Avent: The global economy: The emerging-market squeeze, short version:

Paul Krugman [wrote]: "This would be scary if India was like the Asian crisis countries of 1997-1998 or Argentina in 2001, with large amounts of debt denominated in foreign currency. But unless I’m misreading the data, it isn’t…. So at first examination this doesn’t look like as big a deal as some headlines are suggesting. What am I missing?" I had the same question…. My conclusion was that the big risk is a policy overreaction in affected economies. Governments or central bankers worried about depreciation or its effect on inflation will be tempted to move monetary policy in an inappropriately tight direction. And that risks turning a broad regional slowdown into a recession. That would be really bad, particularly in economies where expectations of steady improvements in employment opportunities and living standards are key to maintaining social order. But this isn't the Asian financial crisis all over again, and we should be clear about that.

And I Do Not Understand the Federal Reserve's Current Thinking at All...

FRED Graph St Louis Fed

There are no signs in the pace of technological progress, in the level of investment, in the pace at which the American labor force educates itself, in measures of capacity utilization, in signs of upward wage pressure due to labor quality bottlenecks, or in surging commodity prices due to supply bottlenecks to suggest that the path of growth of U.S. sustainable potential GDP is materially lower today than was believed back in 2007.

Yet real GDP in the U.S. today is and remains at least 5.5% below the path that past history tells us is consistent with stable inflation, and thus with rough balance in the labor market.

Continue reading "And I Do Not Understand the Federal Reserve's Current Thinking at All..." »

OK. I Give Up. Who Is Ted Truman's Favored Candidate for Fed Chair?

He's not on #TeamLarry. He's not on #TeamJanet. He's not on #TeamDon or #TeamRoger. He's not on #TeamChristie of #TeamLaura or #TeamAlan. He's for an "outsider"--the last outsider was G. William Miller (1978-1979), who came to the Fed Chair after running a synthetic textiles manufacturing conglomerate. That did not work out well--although everybody agrees that G. William Miller was "a lovely person".

Before Miller, the last outsider was Scott Paper President McCabe from 1948-51--but the Board and the FOMC appear to have continued to act as though ex-Chair Mariner Eccles was still Chair. No other "outsiders" have been appointed Chair since the founding of the Fed.

But Ted Truman wants one:

Continue reading "OK. I Give Up. Who Is Ted Truman's Favored Candidate for Fed Chair?" »

Tim Noah: The Heritage Foundation disowns its baby: Noted for August 22, 2013

Tim Noah: The Heritage Foundation disowns its baby:

Obamacare is largely Heritage’s own invention…. Look out, donors: the policies you pay Heritage to develop today may be policies you pay Heritage to defeat tomorrow…. Dr. Frankenstein is Stuart Butler, then director of domestic policy research at Heritage and, since 2010, director of Heritage’s Center For Policy Innovation. (No, they didn’t fire him.)… Butler wrote a 1989 pamphlet titled A National Health System For America in collaboration with Edmund Haislmaier (then a health care policy analyst at Heritage and now a senior research fellow there—no, they didn’t fire him, either). The pamphlet is not currently available on Heritage’s Web site…. In the lecture, Butler repeatedly called his proposal “the Heritage plan”…. Under Butler’s (whoops, make that Heritage’s) scheme, everyone would have to purchase his or her own health insurance. Butler proposed a consumer-choice system in which the government “set broad rules of the ‘game,’” and the context strongly suggested that by “government” Butler meant “federal government.”… When Massachusetts Gov. Mitt Romney was putting together a state-level health reform plan that was another model for Obamacare, Heritage “helped us construct an exchange,” according to Romney’s 2010 book, No Apology…. Heritage denies that it ever favored a health plan that remotely resembled Obamacare. Conceding this point too conspicuously would compromise its splashy campaign to defeat Obamacare by any means necessary. How can Obamacare be the work of the devil if much of that work was done at Heritage? A subject, perhaps, for future scholarly inquiry.

Paul Krugman: 2009 And All That: Noted for August 22, 2013

Paul Krugman: 2009 And All That:

It is overwhelmingly clear that, as some of us warned at the time, the stimulus was too small and too short-lived. We can argue until we’re blue in the face whether the WH could have gotten a bigger stimulus, or at least built into its plans a mechanism to get additional stimulus down the road… via reconciliation… driven a harder bargain with the banks…. What is clear… is that the inner circle badly misjudged the scale of the problem…. Oh, and Yellen was right when they were wrong. So how has 2009 become the administration’s economic Camelot, the golden age--in their own minds--when they achieved miracles, so that anyone who wasn’t there is considered second-class?… Cardiff Garcia mocks the WH position as being that they want a pushover who would be fun to have a beer with during a crisis--and there’s enough truth there to make it sting. All in all, this whole episode is not making anyone think better of Obama’s judgment.

Noted for August 21, 2013


Chris Blattman:U Is it nuts to give money to the poor? | Cardiff Garcia: White House wants pushover bubble-watching Fed chair who would be fun to have a beer with during a crisis | *Adam Ozimek: Should We Regulate Our Way To Innovation? | Spencer Ackerman et al.: Snowden NSA files: US and UK at odds over security tactics as row escalates | Aaron Carroll: Can we all get a little bit more knowledgeable about Obamacare? President Bush would not have been hurt by the ACA | Derek Thompson: Two Graphs Showing, Decisively, That Obamacare Is Not Creating a Permanent Part-Time America |


Richard Hornbeck and Suresh Naidu: When the Levee Breaks: Black Migration and Economic Development in the American South | Simon Gilchrist and Egon Zakrajsek: The Impact of the Federal Reserve's Large-Scale Asset Purchase Programs on Corporate Credit Risk |

Lindsay Beyerstein: Lizards Save California from Lyme Disease: Noted for August 21, 2013

Lizards Save California from Lyme Disease Hillman Foundation

Lindsay Beyerstein: Lizards Save California from Lyme Disease:

In California, Lyme Disease levels remain very low, despite large deer populations. California's detox secret is the humble Western Fence Lizard…. "In prime Lyme disease territory… up to 30% of deer ticks carry the infection. Almost all cases… occur in 13 states. California isn’t among them… we have… our own little natural vaccine program going. In this state, nymphal ticks’ favorite host is the common western fence lizard, which has a protein in it blood that kills the bacterium responsible for Lyme. As a result, few adult ticks are carriers." Three cheers for the Western Fence Lizard!

Ryan Avent: The global economy: The emerging-market squeeze: Noted for August 21, 2013

Ryan Avent: The global economy: The emerging-market squeeze

THE flow of troubling news out of emerging markets is picking up…. Growth is cratering around the region. Most news stories relate the carnage to anticipated changes in Federal Reserve policy: "tapering"…. But why should that matter?… As rich-world central banks amped up their QE programmes, many emerging markets voiced their frustration…. The international dimension of the anxieties is centered, I believe, on the fact that advanced economy measures force a choice upon emerging markets: to accept capital inflows (perhaps offsetting domestic effects by sterilisation), to stem those inflows by way of capital controls, by allowing currency appreciation, or a combination of these measures…. The bigger concern, however, may be the threat of big policy errors in response to these dynamics. Recklessly imposed capital controls could fuel panic and impair long-run growth. Worse still, central banks may strangle their economies with high rates in an attempt to protect their currencies' values. The end of QE risks squeezing demand around the world…. Tapering plans are triggering effective monetary tightening despite the fact that advanced economies remain short of demand…. Yet emerging economies may end up fighting this transition, due to worries about the knock-on effects of sinking currencies, by raising interest rates…. If policymakers aren't careful, things could end badly.

Liveblogging World War II: August 21, 1943

World War II Today

Captain Edward Young:

The great moment had arrived. I sent everyone below, shut the voice-pipe cocks (we had one each side of the bridge), and took a final look at Cutty Sark, now dropping back to take station on our port beam. Turning aft, I stepped down through the hatch. There was no hurry, for this was to be a dive in slow time. I had no intention of diving on the klaxon until the crew had reached a higher state of training. Pulling the hatch lid down over my head, I pushed home the long-handled clips and inserted the safety-pins.

Continue reading "Liveblogging World War II: August 21, 1943" »

Genuinely New Ways of Understanding IS-LM Watch: Karl Smith Is Really Smart and Thoughtful: Wednesday Hoisted from the Archives Weblogging

Karl smith university of north carolina Google Search

Let me start with this:

Hoisted from the Archives: October 8, 2011: IS-LM Watch: Three Ways of Looking at a (Closed-Economy) IS Curve: Karl Smith Raises My intelligence Department:

1) The way I was taught: the national income identity:

Y = C(Y-T) + I(r) + G

Spending (the right hand side) must equal production (the left-hand side, which is also income). If spending is greater than production, inventories fall and businesses hire more workers, raising production and income.

2) The way I found in Hicks's (1937), "Mr. Keynes and the Classics": the Wicksellian flow-of-funds through financial markets:

S(Y - T) = I(r) + [G - T]

Planned borrowing (the right-hand side) to finance investment by businesses I plus borrowing to finance the government deficit G-T must equal saving (the left-hand side). If planned borrowing is greater than saving, firms must cut the prices of the bonds they are issuing and so the interest rate rises. As the interest rate rises, the velocity of money increases.

3) Now Karl Smith comes along with a third way: bank lending: the BL curve:

S(Y - T) = BL(i; π, ρ)

where "BL" stands for bank lending. It is no longer the case, as it was in (2), that governments and businesses issue as many bonds as they wish and that businesses decide how much they want to borrow at the current interest rate r. Instead, we have a Stiglitzian credit-rationing situation: banks take a look at their cost of funds and at the riskiness spectrum of borrowers, and decide how much their borrowers--businesses and governments--are going to be allowed to borrow.

Continue reading "Genuinely New Ways of Understanding IS-LM Watch: Karl Smith Is Really Smart and Thoughtful: Wednesday Hoisted from the Archives Weblogging" »

EPI to Hold Media Teleconference on Wages and the State of the U.S. Labor Market: Noted for August 21, 2013

Larry Mishel:

On Wednesday, August 21, at 11:00 a.m. EDT, the Economic Policy Institute will hold a media teleconference on the new EPI report A Decade of Flat Wages: The Key Barrier to Shared Prosperity and a Rising Middle Class. In the report, EPI President Lawrence Mishel and economist Heidi Shierholz conduct a comprehensive analysis of wage trends (and, where possible, compensation trends, which include fringe benefits such as health care and pensions). They find that across all available data sources, the story is essentially the same: the vast majority of the workforce—including white-collar and blue-collar workers and those with and without a college degree—have seen their wages and benefits stagnate. The authors will distill the report’s findings, answer questions on the wide range of data and identify ways to generate wage growth.

A Decade of Flat Wages: The Key Barrier to Shared Prosperity and a Rising Middle Class will be released in advance of the press call. It uses the most up-to-date data—up to the second quarter of 2013—and provides a thorough overview of wage trends for the past three decades.

Roger Altman: Why the Fed needs Summers’ firefighting skills: #TeamLarry : Noted for August 21, 2013

Roger Altman: Why the Fed needs Summers’ firefighting skills:

The Fed is both independent of the executive branch and, more important, the most powerful group of financial firefighters on earth. So its chair is the world’s most important crisis manager…. That is the right context for evaluating the forthcoming appointment…. It may not be 2008 any more but serious financial crises are occurring with ever greater frequency…. The next Fed chair, therefore, must be experienced in managing crises such as these. That brings us to the apparent choice between the two lead candidates. Full disclosure: I have worked with Prof Summers and know Ms Yellen slightly. Both are highly qualified in virtually every respect. But Prof Summers had the key role in the Clinton Treasury during both the Asian financial crisis and the Mexican default. And, later, in the Obama White House during the huge credit crisis in 2009…. That is why he should be the choice.

Liveblogging World War II: August 20, 1943

20th August 1943 Das Reich Division panzers rush to the defence of Kharkov

Erhard Raus: Panzer Operations:

It was clear that the Russians would not make a frontal assault on the projecting Kharkov salient but would attempt to break through the narrowest part of XI Corps’s defensive arc west of the city (the so-called bottleneck) in order to encircle the town. We deployed all available antitank guns on the northern edge of the bottleneck, which rose like a bastion, and emplaced numerous 88mm flak guns in depth on the high ground. This anti-tank defense alone would not have been sufficient to repulse the expected Soviet mass tank attack, but at the last moment the reinforcements we had so long been requesting – in the form of the Das Reich SS Panzergrenadier Division — arrived with a strong panzer component; I immediately dispatched it to the most endangered sector.

Continue reading "Liveblogging World War II: August 20, 1943" »

Noted for August 20, 2013


Stuart Butler | Paul Krugman: Keynes, Kalecki, Konczal, etc. | Kevin Drum: Leaked IPCC Report Says Climate Change Is Now More Certain Than Ever | Michael Specter: Lyme Disease's Staggering New Numbers | Peter Gleick: Peak Water in the American West | Josh Lehner: More on Job Growth Quality |


Stuart Butler (1993): Why Conservatives Need a National Health Plan | J. Bradford DeLong (1997): Robber Barons |

Neil Irwin Listens to Footsteps in the Topkapi Palace: Federal Reserve Succession Weblogging

I had thought that the White House's economic advisors were not so much uneasy with picking Janet Yellen as Fed Chair as enthusiastic about picking Larry Summers?

Neil Irwin:

Why the White House is uneasy with picking Janet Yellen as Fed chair: Many of the economic advisers whom President Obama consults with favor Larry Summers…. But what is it, exactly, that they have against Janet Yellen?… People who have worked with Yellen… overwhelmingly spoke favorably of her intellect, diligence and approach to leadership. But… some aspects… are different from the qualities that Obama insiders favor…. [While] Kohn and Ferguson worked much like deputies to the chairman… Yellen… is more of her own thinker… urging Bernanke and her other fellow policymakers to shift policy to try to do more to combat unemployment…. And people dealing with her within the Fed have viewed her not so much as Bernanke’s emissary but as her own intellectual force…. Obama’s advisers… are big on the team player concept, people diving in together to sort through the hard and messy challenges they face.

Continue reading "Neil Irwin Listens to Footsteps in the Topkapi Palace: Federal Reserve Succession Weblogging" »

Oliveto: Tomato Dinners 2013: Noted for August 20, 2013

Oliveto: Tomato Dinners 2013:

Specialty Cocktail

  • Oliveto Bloody Mary of course

Antipasti: smaller items, soup, salad…

  • Peak-of-season tomato platter with Frantoio di Campagna olive oil and fleur de sel
  • Terrina of heirloom tomatoes and watermelon with basil and cucumber
  • Salad of tomatoes with eggplant crema, Lipstick peppers, house-pulled mozzarella, and red wine vinaigrette
  • Crudo of local king salmon with tomato-water gelée, dill pollen, and nectarine
  • Marinated Monterey Bay sardines with cherry tomatoes, arugula, and breadcrumbs
  • Terrina of rabbit with smoked Early Girl tomato mostarda and frisée
  • Garden lettuces vinaigrette
  • Grilled flatbread with dry-farmed Early Girl tomatoes, garlic, basil, and McEvoy olive oil
  • Fried green tomatoes with lobster rémoulade
  • Charcoal-grilled octopus with spicy San Marzano tomato sauce, fregola, and charred Tropea onions
  • Burrata-stuffed Black Prince tomato in carozza with basil pesto
  • Tuscan tomato-bread soup with olive oil and Parmesan cheese

Continue reading "Oliveto: Tomato Dinners 2013: Noted for August 20, 2013" »

Itzhak Gilboa, Andrew Postlewaite, Larry Samuelson, and David Schmeidler: Economic Models as Analogies: Noted for August 20, 2013

Itzhak Gilboa, Andrew Postlewaite, Larry Samuelson, and David Schmeidler: Economic Models as Analogies:

People often wonder why economists analyze models whose assumptions are known to be false, while economists feel that they learn a great deal from such exercises. We suggest that part of the knowledge generated by academic economists is case-based rather than rule-based. That is, instead of offering general rules or theories that should be contrasted with data, economists often analyze models that are “theoretical cases”, which help understand economic problems by drawing analogies between the model and the problem. According to this view, economic models, empirical data, experimental results and other sources of knowledge are all on equal footing, that is, they all provide cases to which a given problem can be compared. We offer complexity arguments that explain why case-based reasoning may sometimes be the method of choice and why economists prefer simple cases.

Does Anybody Understand What John Cochrane Thinks He Is Doing Here? Anybody? Anybody? Bueller?: Tuesday Crickets Weblogging

Tonight a correspondent who, I think, does not wish me well sends me this from last January:

john Cochrane: The Grumpy Economist: More new-Keynesian paradoxes: These are just the beginning of the strange predictions new-Keynesian models (or modelers) make. "Fiscal stimulus" is the prediction that even completely wasted government spending is good for the economy. Paul Krugman recommended, with refreshing clarity, that the US government fake an alien invasion so we could spend trillions of dollars building useless defenses. (I'm not exactly sure why he does not call for real defense spending. After all, if building aircraft carriers saved the economy in 1941, and defenses against imaginary aliens would save the economy in 2013, it's not clear why real aircraft carriers have the opposite effect. But I'm still working on the nuances of new-Keynesianism, so I'll let him explain the difference. I'm not a big fan of huge defense spending anyway.)

The remarkable thing right now is this:

  1. I do not know if Cochrane doesn't understand that Krugman's point is that, right now, under these special conditions, expanding government purchases to buy even useless things passes the benefit-cost test so expanding government purchases to buy useful things really is a no brainer.
  2. I do not know if Cochrane understands this point that considering the consequences of a useless government expenditure is intended to put a lower bound on the benefit-cost ratio, and yet hopes to mislead his readers into not understanding this point.
  3. I do not know whether Cochrane has thought about the issues at all.

Could somebody please tell me which of (1), (2), or (3) applies here?

Anybody? Anybody? Bueller?

Myself, I think the most likely possibility is that we simply need to classify this--along with so much else on the internet--as: "hayters gotta hate; bullshitters gotta bullshit." It's what they do. It's who they are.

Krugman, with more bonus intellectual garbage collection by Daniel Kuehn, below the fold...

Continue reading "Does Anybody Understand What John Cochrane Thinks He Is Doing Here? Anybody? Anybody? Bueller?: Tuesday Crickets Weblogging" »

Noted for August 19, 2013


Matt Bruenig: Who Pays When the Cost of Public College Increases? | Erica Chenoweth: "Civil resistance involves unarmed people using a combination of actions… the single most important factor was wide participation… elite defections and the backfiring of repression seemed to depend in part on the size and diversity of the campaign to begin with" | Mark Bittman: Not All Industrial Food Is Evil | Duncan Black: "recent immigrants are basically saving Philly. White gentrification gets most of the attention, but it's (mostly) Mexican and Asian immigrants who are reversing the depopulation trend and keeping neighborhoods alive" | How Climate Change Became A Major Factor In Australia's Upcoming Election | Jared Bernstein: Does the Government Stifle Innovation? On the Contrary | Jonathan Chait: Modern Vote Suppression Better Than Jim Crow | Airbears2 | Patrick Iber | N.K. Jemisin: Time to pick a side | Oliveto Restaurant and Cafe | Jack of Kent: Nine hours in the life of David Miranda |


Felix Salmon: Content Economics: Part 1 Part 2 Part 3 | Michael D. Bauer and Glenn D. Rudebusch: Monetary Policy Expectations at the Zero Lower Bound |

Kevin Drum: Here's Why the Pentagon Is Facing $20 Billion in Extra Cuts Next Year: Noted for August 19, 2013

Kevin Drum: Here's Why the Pentagon Is Facing $20 Billion in Extra Cuts Next Year: Matt Glassman explains: "The 2011 BCA sets up different def of 'security spending' for FY12/13 and for FY14+."… Aha!… In the 2013 sequester, "security" was trimmed about $55 billion in annual terms, but some of that went to cuts at the VA, DHS, and State. In 2014, the entire $55 billion gets taken from the Pentagon budget. Apparently that adds up to about $20 billion more in pure defense cuts.

Mark Thoma: The Polarized Economic Policy Debate: All Markets Fail, Some More Than Others: Noted for August 19, 2013

Mark Thoma: Economist's View: The Polarized Economic Policy Debate: All Markets Fail, Some More Than Others:

I, and others like me, are more than willing to say that most of the time, markets work well and we ought to leave them alone. Government should stay out of the way…. But we on the left also recognize that sometimes markets can fail--in fact all markets fail to some degree when measured against the requirements for the pure competitive markets found in textbooks--and when those failures are severe enough, government intervention can make them work better…. I could understand if the right wanted to debate where the line is…. But to simply say that government should never intervene in any case at all gets us nowhere…. Debating] where the line between intervening, or not, ought to be… is a debate that doesn't seem possible right now due to the polarized, uncompromising position that one side has taken.

In Which We Watch Felix Salmon Vanish into the Weeds of the Economics of the Washington Post...

Felix Salmon:

Content economics, part 3: costs: The Washington Post… was sold for less than the value of its pension…. What Bezos paid for the Post was… negative $88 million. To be sure, Bezos is $250 million out of pocket: the $333 million in the pension fund is ring-fenced for the Post‘s pensioners.

The first question is: How thoroughly is the pension money ring-fenced? Could Jeff Bezos take the pension fund and invest it in… junior debentures of the Washington Post for example? Will he? Bezos will personally own 100% of the stock of the Washington Post. But is there anything preventing him from making any cash he commits to the Post senior debt, and thus have an $333 million mezzanine cushion that must be burned through as a firewall in any liquidation before he is out more than his initial $250 million in cash?

Continue reading "In Which We Watch Felix Salmon Vanish into the Weeds of the Economics of the Washington Post..." »

Paul Krugman: Stupid Is A Strategy: Noted for August 19, 2013

Paul Krugman: Stupid Is A Strategy:

Bill Keller has a strong, stinging column about Republican attacks on the… up to now bipartisan… Common Core curriculum…. [But] right-wing leaders don’t strike me as being at all stupid (although I have to say that I’ve never understood why Jindal himself has a reputation for brilliance). Incurious… not given to self-analysis… not stupid…. GW Bush… anti-intellectual, but very cunning…. John Stuart Mill’s dictum: "I never meant to say that the Conservatives are generally stupid. I meant to say that stupid people are generally Conservative."… Even that, however, doesn’t get you all the way there, because there are many things [right-wing leaders] could pretend to be stupid about…. I think that the best model is, as I said the other day, the Corey Robin notion that it’s about preserving hierarchy. The idea of a common core disturbs a lot of people on the right not because they fear that it will lead to left-wing indoctrination…. No project, no matter how worthy and blameless, can escape becoming a target for orchestrated rage.

Uwe Reinhardt: Talmudic-Like Studies of Republican Health Reform Ideas: Noted for August 19, 2013

Uwe Reinhart: Talmudic-Like Studies of Republican Health Reform Ideas: THE FRONT PAGE

After doing Talmudic-like studies of the doctrines on health reform promulgated by Republican health-policy makers and the conservative economists who inspired them during the past two decades, I am devastated to discover that all of those studies have been for naught. We are now told, sometimes by the same prophets of yore, that these doctrines were not only wrong, but outright heretical, which in this context means un-American. New doctrines are rumored to be in the making, but the first word on them has yet to be committed to new, sacred tablets, mainly because there have not yet emerged any new ideas…. Newt Gingrich, one of the Grand Old Party’s aging prophets, said so himself…. What is a befuddled immigrant to the United States like me, eagerly trying to become a right thinking American, to make of it all? My early introduction to the texts coming from conservative thinking on health reform was the Heritage Plan of 1989, Viewed through the prism of the ACA of 2010, its language seems eerily familiar…. So what are we to make of the spectacle of Republican anti-Obamacare insurgents, busily fielding hit-and-run attacks against sections of the very sacred tracts that their own prophets had promulgated as principles during the past 20 years? On what principles, new or old, are these hit-and-run raids conducted?…

Continue reading "Uwe Reinhardt: Talmudic-Like Studies of Republican Health Reform Ideas: Noted for August 19, 2013" »

John Quiggin: Krugman, Keynes, Kalecki, Konczal: Noted for August 19, 2013

John Quiggin: Krugman, Keynes, Kalecki, Konczal:

Paul Krugman’s recent columns… have made interesting reading… a marked shift to the left both…. Among the critical points he has made

  • Endorsement of Kalecki’s argument (which he got via Konczal) that “hatred for Keynesian economics has less to do with the notion that unemployment isn’t a proper subject of policy than about the notion of shifting power over the economy’s destiny away from big business and toward elected officials.”
  • Rejection of the Hicks-Samuelson synthesis of Keynesian macroeconomics and neoclassical microeconomics and advocacy of (at a minimum) comprehensive financial controls
  • Abandonment of the idea that the economics profession is engaged in honest intellectual debate, in favor of the conclusion that the rightwing of the profession, including leading economists, is characterized by denialism and bad faith. As he says, while many economists would like to believe otherwise ” you go to economic debates with the profession you have, not the profession you want.”

As with most intellectual shifts, it is hard, and not particularly helpful to assign a precise date. These themes have been evident for a while, but for me at least, this is the first time the points have been made so clearly…. Krugman is certainly going to upset plenty of people in the econ profession with this. But… it’s a case of sauce for the gander. The public choice school has routinely represented economic arguments for government intervention as the product of rent-seeking by interest groups, and the economists who make such arguments as pawns or hirelings of these groups. Still, this marks a striking shift in macroeconomics, where only five years ago, the leading figures were congratulating themselves on the convergence between saltwater and freshwater schools.

Paul Krugman: The Pathologies of the RIght Wing of Economics: Noted for August 19, 2013

Paul Krugman: Stagflation, Stagnation, and Intellectual Asymmetry:

[The] stagflation [of the 1970s] led to a major rethinking of macroeconomics, all across the board; even staunch Keynesians conceded that Friedman/Phelps had been right (indeed, they may have conceded too much), and the vertical long-run Phillips curve became part of every textbook. But the Great Recession and the long stagnation that followed (and continues) have brought no such concessions from the anti-Keynesians…. Even the most spectacular failures of prediction… have been met with nothing but excuses (It’s Obamacare! It’s interest on reserves! It’s uncertainty!)

What accounts for this asymmetry? Partly, I think… anti-Keynesian macroeconomics is… comfortable… because it involves a return to notions of perfect markets and perfectly rational individuals; so the anti-Keynesians find it hard to leave that comfort zone…. But it’s also the usual left-right asymmetry…. The right is purist, uncompromising, and ultimately not interested in contrary evidence; the left is much more open and empirical. And the economics profession, it turns out, is not that different from the political sphere. This is an uncomfortable truth…. But you go to economic debates with the profession you have…

Friedman-Phelps Were Not "Very Correct": DeLong Smackdown Watch for Monday, August 19, 2013

Robert Waldmann write:

By "very correct" you mean [that Friedman-Phelps's prediction that loose monetary policy was about to de-anchor inflation expectations] "corresponds to post WWII US data because all the other evidence is long ago or far away and irrelevant". The virtical long run Phillips Curve of Friedman (and Phelps) was a terrible approximation to European data from 70 something through now. Europe has not been in a liquidity trap all those decades.

Continue reading "Friedman-Phelps Were Not "Very Correct": DeLong Smackdown Watch for Monday, August 19, 2013" »

Noted for August 18, 2013


Mike Konczal: Kristol, Kalecki, and a 19th Century Economist Defending Patriarchy all on Political Macroeconomics | Dani Rodrik: The Problem is Authoritarianism, Not Islam |


Mark Thoma sends us to Tim Johnson: Lady Credit | Hyman Minsky (1993): The Essential Characteristics of Post-Keynesian Economics |

Andrew Sullivan: Cameron Proves Greenwald Right: Noted for August 18, 2013

Andrew Sullivan: Cameron Proves Greenwald Right:

When the NSA leaks burst onto the scene, I was skeptical of many of the large claims made by civil libertarians and queasily sympathetic to a program that relied on meta-data alone, as long as it was transparent, had Congressional buy-in, did not accidentally expose innocent civilians to grotesque privacy loss, and was watched by a strong FISA court… all the checks I supported have been proven illusory…. I’ve found myself moving further and further to Glenn’s position. What has kept me from embracing it entirely has been the absence of any real proof than any deliberate abuse has taken place…. So it is a strange and awful irony that the Coalition government in Britain has today clinched the case for Glenn…. I have met David Miranda…. The thought of his being detained by the British police for nine hours because his partner embarrassed the American government really sickens me at a gut level…. David was detained under an anti-terrorism law… for nine hours--the maximum time under the law, to the minute. He therefore falls into the 3 percent of interviewees particularly, one assumes, likely to be linked to terrorist organizations. My obvious question is: what could possibly lead the British security services to suspect David of such ties to terror groups?… Although David was released, his entire digital library was confiscated--including his laptop and phone. So any journalist passing through London’s Heathrow has now been warned: do not take any documents with you. Britain is now a police state when it comes to journalists, just like Russia is. In this respect, I can say this to David Cameron: Thank you for clearing the air…. You have attacked British democracy itself. What on earth do you have to say for yourself? And were you, in any way, encouraged by the US administration to do such a thing?

Mike Konczal: Conservatives don’t get that some problems are public, and it’s hurting them: Noted for August 18, 2013

Mike Konczal: Conservatives don’t get that some problems are public, and it’s hurting them:

It might be useful to remember that one of the leading intellectual lights of the early conservative movement, William F. Buckley, got his start red-baiting the great economist Paul Samuelson… accused [him] of preaching a “brand of collectivism.” Buckley conceded that, when it came to them, one wouldn’t find “textbooks who advocated the overthrow, violently or otherwise of all vestiges of capitalism” but that “approach is not needed to accomplish, ultimately, the same transformation.”… Samuelson would later say “make no mistake about it, intimidation often did work in the short run” when it came to campus management and Keynesian textbooks. So what upset Buckley?… What really upset him was the idea that the economy was now a public issue. As Buckley emphasizes in his own paraphrase of Samuelson, “economics has become a matter of public policy, not individual action…. Let us bear in mind that unemployment is a public problem” (italics in original) because “the individual firm, the individual himself, is powerless to cope with the complexities in times of stress.”

Wonkette Sends Us to the Bizarrest Craziest of the Bizarre Crazy Crazies...


Wonkette commits a crime against humanity by sending us to Sarah Hoyt--endorsed by Glenn Reynolds!

Sarah Hoyt: I Am Spartacus!

And here are her first four particulars:

I am Spartacus because they think a hellish mix of Brave New World and 1984 is a consummation devoutly to be hoped for.

I am Spartacus because I have two sons and might have grandchildren. For the generations uncounted ahead, mine or others, with my blood or not, I am Spartacus so they don’t have to live with a boot stomping on a human face forever.

I am Spartacus because our institutions are being corrupted, our system of checks and balances ignored, and we’re being ruled by Imperial Dictate by a blind man who sees the world through instruments and his instrument is an ideology made of Hegelian dialectic and fury signifying nothing and leading to death.

I am Spartacus because our betters have decided that the national debt no longer needs to be reported and that it will now simply be copy pasted from the total about two weeks ago, forever.  And because they believe this can go on forever.

It gets much crazier later on. But when it is pointed out that the first factual statement she makes is totally wrong, she will rethink and repent, right?


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Jonathan Chait: Why Jeff Bezos Needs to Clean House at the Washington Post: George Will: Noted for August 18, 2013 Why Oh Why Can't We Have a Better Press Corps Weblogging

Jonathan Chait: George Will: Intentional Irrationality Now Bad:

George F. Will visits the National Institutes of Health, and produces a column praising the economic and humanitarian power of federal science research. Sadly, Will observes, budget sequestration is imposing needless, infuriating hardship on the agency's work: "much research proposed by extraordinarily talented physicians and scientists cannot proceed because the required funding is prevented by the intentional irrationality by which the sequester is administered."

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Antonio Fatas and Ilian Mihov: Recoveries: The missing third phase of the business cycle: Noted for August 18, 2013

Antonio Fatas and Ilian Mihov: Recoveries: The missing third phase of the business cycle:

Business cycles are clearly richer phenomena than a set of dates that define the turning points of an economy. But if we are going to use those dates as a reference to characterise the recession and expansion phase of a cycle, we believe that there is the need to analyse separately the earlier years of the expansion. This is when the economy regains what was lost during the recession. If recoveries where simply a mirror image of the recession phase, understanding the recession might give us enough information about the full consequences of a crisis. But our analysis of US cycles indicates that this is not the case and that the pattern of recession/recovery has changed over time with recent longer recoveries relative to the length of recessions.

Liveblogging World War II: August 18, 1943

World War II Today

William Lubbeck: Leningrad: The Besiegers Become the Besieged:

Over the course of the war, most of the casualties in our regiment resulted from Russian artillery and mortars, to a lesser extent from small-arms fire. About this time, however, we also began to endure our first bombing and strafing raids by Soviet aircraft. During the daytime, we occasionally faced a threat from Soviet ground-attack planes like the Illyushin-2 Sturmovik. At night, we confronted the menace of the Polyarkov-2, nicknamed the Nahmaschine (Sewing Machine) for the loud rhythmic clattering of its engine.

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The Worst Washington Post Ombudsman of All Time: Patrick Pexton

The competition was fierce, but a veritable Gröfaz of Washington Post ombudscreatures is Patrick Pexton.

David Weigel does the intellectual garbage collection:

Jennifer Rubin: Former Washington Post ombudsman Patrick Pexton says she should go: The Internet loves how Pexton closes out, by asking the new management to sack an opinion blogger…. [But] in his ombud days, Pexton actually defended Rubin's role whenever she came under fire…. If he found Rubin so objectionable, why didn't he say anything when his opinion mattered? I don't think l'esprit de l'escalier is the best motto for an ombud.

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Cyberterror Stalks Robert Samuelson Redux: Why Oh Why Can't We Have a Better Press Corps Weblogging?

Paul Krugman writes:

The Good Web: Jonathan Chait mocks Robert Samuelson for his column lamenting the rise of the Internet. I don’t especially want to pile on…

But even though he does not want to, and resists mightily, in the end he is compelled by an irresistible force to do so:

The effect of the Internet on the quality of reporting… has been overwhelmingly positive…. Economics reporting in the pre-Internet era… was terrible…. Reporters and pundits often knew little economics…. A reporter or pundit could say something that everyone who knew anything about the subject realized was all wrong, but those with better knowledge had no way of getting that knowledge out in real time. Let me give an example. A couple of years ago [Robert] Samuelson dismissed the relevance of Keynes, because conditions have changed; these days we have lots of debt, whereas:

When Keynes wrote “The General Theory of Employment, Interest and Money” in the mid-1930s, governments in most wealthy nations were relatively small and their debts modest….

In the pre-Internet era, an assertion like that would simply have sat there; economists would complain about it in the coffee room, but that would be it. In this case, however, the whole econoblogosphere… point[ed] out that Britain’s debt/GDP ratio in the 30s was actually much higher than it is today…. Real journalists… benefit…. It’s true that there’s a lot of misinformation out there on the web; but is it any worse than the misinformation people used to get from other sources? I don’t think so…

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Noted for August 17, 2013


John Authers: The CAPE of Less Hope | David Glasner: Leijonhufvud on Friedman | Jérémie Cohen-Setton : "The financial crisis brought the era of rapid financial globalization to a halt… this retrenchment has been quantitatively larger and more persistent for Europe, where the dislocation is still affecting the very short-term euro-area money markets…" | Spencer Ackerman: NSA revelations of privacy breaches 'the tip of the iceberg' | Gabe Gabliano: Tech of the Hub: Home Theater, Gadgets, Streaming Video Blog | Mark Gongloff: The U.S. Has The Worst Income Inequality In The Developed World, Thanks To Wall Street | Aura Bogado: On Cat-Calling and Gentrification | Julian Sanchez: "Equally disturbing, however, is the systematic failure of America’s elected representatives to level with the public about the scale of the NSA’s illicit spying – and their failure to admit just how little meaningful oversight they conduct" | John le Carré: 'I was a secret even to myself' |


Jordan Weissman: Entrepreneurship: The Ultimate White Privilege?: "Future entrepreneurs score high on measures of teenage delinquency. They're also disproportionately white, highly educated, and male. Here's why that might not be a coincidence" | John Maynard Keynes: The Economic Consequences of the Peace Economic Possibilities for Our Grandchildren |

Domo Arigato Mister Roboto!: Cardiff Garcia Asks a Question About Growth, Inequality, Malthus, and History

Malthusian devil Google Search

Yes: the title is stolen from Paul Krugman, and from Styx--it is too good not to steal…

Cardiff Garcia writes:

The history of the robot future’s future history: The graph represents three decades of US middle class employment shrinking…. Frank Levy… and Richard Murnane….

The hollowing-out is… consistent with the idea… [of]computer substitution…. Low wage work--Personal Care, Personal Services, Food Preparation, and Building and Grounds Cleaning--have all grown… involve non-routine physical work that is hard to computerize. Technicians and Professional and Managerial Occupations also have grown… involve abstract, unstructured cognitive work that is hard to computerize…. Machine Operators, Production, Craft and Repair Occupations, Office and Administrative… have declined… [as] routine work… [following] deductive or inductive rules and so were candidates for computer substitution….

And the BLS expects these trends to roughly continue….

The history of the robot future s future history FT Alphaville

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Rick Nevin: Race, Lead, and Juvenile Crime: Noted for August 17, 2013

Rick Nevin: Race, Lead, and Juvenile Crime:

African-American boys disproportionately involved in the criminal justice system were also disproportionately exposed to lead contaminated dust as young children, because black children were disproportionately concentrated in large cities and older housing. In 1976-1980, 15.3% of black children under the age of three had blood lead above 30 mcg/dl (micrograms of lead per deciliter of blood), when just 2.5% of white children had blood lead that high. In 1988-1991, after the elimination of leaded gasoline, 1.4% of black children and 0.4% of white children under the age of three had blood lead above 25 mcg/dl.

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Prairie Weather: Republicans Are Trying To Be Polite to "Those People": Noted for August 17, 2013

Prairie Weather: Republicans, worried about 2016, are trying to be polite to "those people":

The first step is, of course, to make sure we all forget Romney ever existed.... I'm not so sure we--that is to say,  "those people"--are so willing to separate Rand Paul, Rich Santorum, and (above all!) Ted Cruz (for cryin' out loud!) from Mitt Romney.... Republicans are still convinced that they can talk their way out of trouble.  We know where that has taken them.  Maybe someday they'll  come  to realize that it's what they are doing...

Noted for August 16, 2013


Jay Rosen: When you’re in a Fourth Estate situation | Bruce Bartlett: How the March on Washington Flipped the Southern Vote | Paul Krugman: Stagflation, Stagnation, and Intellectual Asymmetry | David Glasner: "Milton Friedman never understood that under the gold standard, it is the price level which is fixed and the money supply that is endogenously determined, which is why much of the Monetary History… is fundamentally misguided owing to its comprehensive misunderstanding of the monetary adjustment mechanism under a convertible standard" | Paul Krugman: Moment of Truthiness |


Thomas Piketty and Gabriel Zucman: Capital is Back: Wealth-Income Ratios in Rich Countries, 1700-2010 | Rahul Anand, Saurabh Mishra, and Shanaka Peiris: Inclusive Growth: Measurement and Determinants |

The American Right Has Long Thought in Its Secret Heart That Roosevelt Was a Communist. Eisenhower Too!

Eisenhower hammer and sickle Google Search

When you got a certain class of Republicans of a generation ago--Meldrim Thomson comes immediately to mind--together in an arena where they feel comfortable--feel willing to let their hair down--and, I found, pretty soon they began to muse: President Franklin Delano Roosevelt was certainly a Communist--look at how he gave eastern Europe to Josef Stalin. U.S. Army Chief of Staff, Secretary of State, and Secretary of Defense George Marshall likewise--look at how he gave China to Mao Zedong. And Eisenhower--Marshall was Eisenhower's patron, did you know that? Typical of this class was science-fiction author Robert Heinlein. First, the setup--what Heinlein wrote in 1958 during the nuclear test-ban debate:

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