Afternoon Must-Read: Barry Eichengreen: Financial Crisis: The Banking Rules that Died by a Thousand Small Cuts
For the Weekend: Pseudolus!

Noted for Your Nighttime Procrastination for January 16, 2015

Screenshot 10 3 14 6 17 PMOver at Equitable Growth--The Equitablog

  • [Barry Eichengreen: Financial Crisis: The Banking Rules that Died by a Thousand Small Cuts
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  • [Tim Worstall: Facebook Explains Why Marc Andreessen And Larry Summers Disagree
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  • [Sahil Kapur: Paul Ryan Undermines SCOTUS Case To Topple Obamacare
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  • [Plato in Syracuse
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  • Would Somebody Please Tell Me Why Switzerland Abandoned Its Currency Peg Today?


Must- and Shall-Reads:

And Over Here:

  • [For the Weekend: Pseudolus!
  • ](
  • [Plato's Seventh Letter: Live from the Fortress of Ortygia in Syracuse
  • ](
  • [Liveblogging World War II: January 16, 1945: Hitler Descends into His Bunker
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  1. Barry Eichengreen: Financial Crisis: The Banking Rules that Died by a Thousand Small Cuts: "The financial crisis of the late 2000s… …was not brought on by the lack of Glass-Steagall per se but instead by a whole set of measures that loosened regulation. The end of Glass-Steagall was simply emblematic…. It all started in 1980 with the abolition of Regulation Q…. That led to a cascade of unintended consequences…. The Garn-St. Germain Act of 1982 allowed S&Ls to engage in a range of commercial banking activities..."

  2. Tim Worstall: Facebook Explains Why Marc Andreessen And Larry Summers Disagree: "I was a little puzzled to see that Larry Summers and Marc Andreessen were disagreeing... over the effects of technology on the passing landscape.... Take, for example, Facebook. As far as the general economic statistics are concerned, GDP, labour productivity and all that, the output of Facebook is the advertising it sells.... Valuing Facebook’s contribution to living standards as being the advertising it sells is near insane... but that advertising is the only part of the value which we do ascribe to Facebook that is actually monetised. And given that GDP, labour productivity and all that are described only in monetised terms then we’re missing a very large part of what it’s all about. People (for some unknown reason to me) like Facebook. Their lives are made richer by Facebook’s existence: they are in fact richer. We’re just not measuring that extra wealth that they derive from Facebook’s existence.... Brad Delong once pointed out (or perhaps pointed to someone who pointed out) that one way of looking at rising living standards in the 20th century was a factor of about 8. Rich world people in 2000 were 8 times better off than rich world people in 1900. Roughly true by those standard measures of GDP and so on. But if we than added what people could do, the improvements in quality, all something analagous to that consumer surplus. it might be more true to say that people were 100 times better off. That’s how I would explain (some of) that productivity puzzle.... Andreessen is... talking to that Facebook example above.... I do tend to think that the gap between “real living standards” and “recorded living standards” is growing simply because so much more of the value of the new technologies is not in fact monetised."

  3. Sahil Kapur: Paul Ryan Undermines SCOTUS Case To Topple Obamacare: "Remarks in 2010 by Rep. Paul Ryan... weaken the premise of... King v. Burwell.... The lawsuit... contends that the text of the Affordable Care Act unambiguously blocks premium tax credits for Americans in three-dozen states which didn't build their own insurance exchange.... Ryan... believed otherwise.... 'You're taking money out of this program to create a brand new open-ended entitlement. And it's a new open-ended entitlement that basically says to just about everybody in this country, people making less than $100,000, "You know what? If your health care expenses exceed anywhere from 2 to 9.8 percent of your adjusted gross income, don't worry about it. Taxpayers got you covered. Government's gonna subsidize the rest."... What we’re basically saying to people making less than... $100,000, is "Don’t worry about it. Taxpayers got you covered."' Ryan expressed no doubt that the relevant language... would apply the subsidies to Americans... regardless of where in the country they lived. His remarks... add to the overwhelming body of evidence that members of Congress, staffers, policy experts, and the media covering the health reform debate all understood the law to be providing for subsidies on the exchanges, whether state or federal..."

  4. Annalee Newitz: Welcome to the Future Initiative: "The world is changing. And things are changing at io9 and Gizmodo, too. I'm heading up the the Future Initiative, which is a project to bring io9 into closer collaboration with Gizmodo and Sploid, plus a handful of boutique sites like Paleofuture, Space, Reframe, and more. These sites already share an obsession with science, technology and the world of tomorrow. Now it's time to bring them together, and build a habitat for slipstream journalism that combines speculative wonder with skepticism and hard truths. I'll be serving as the editor-in-chief of Gizmodo, and Charlie Jane Anders is going to become editor-in-chief of io9. The two sites, along with Sploid and our diagonals, will be collaborators within the greater universe of the Future Initiative. Some editors and writers will be shared across the sites, and we'll be working together on a lot of story packages. But the sites will also retain separate identities, with separate commenter communities. My goal for the Future Initiative is to produce original reporting, must-read explainers, and smart analysis. I want our sites to have clear opinions — even if they piss everybody off — and distinct voices. And I also want us to be experts in the topics we cover..."

  5. Paolo Squatriti: Of Seeds, Seasons, and Seas: Andrew Watson's Medieval Agrarian Revolution Forty Years Later: "Andrew Watson’s... 'The Arab Agricultural Revolution and Its Diffusion, 700–1100', has been used and cited widely by... many working in fields far removed from Watson's.... The seventh century unification of Central Asia... created unprecedented opportunities for unhindered circulation... specialized techniques of cultivation, particularly irrigation, and... rice, sorghum, hard wheat, sugar cane, cotton, watermelons, eggplants, spinach, artichokes, taro root, sour oranges, lemons, limes, plantains, mangos, and coconut palms... into a single agronomic 'package'.... Most... originated in India.... Except for coconuts and mangos, they could be acclimatized to different environmental conditions within the Caliphate by judicious cultivation... in the space of 400 years... achieved widespread diffusion and became economically significant.... This 'achievement', unparalleled before European expansion... permitted high and stable agricultural profits... stimulated a demographic upswing... fed urbanism..."

  6. Nick Bunker : Weekend reading - Washington Center for Equitable Growth : " Justin Wolfers and Jan Zilinsky... on the connection between higher wages and productivity.... Neil Irwi... wage growth could pick up in 2015.... Mark Thoma... long-term forces will hold back wage growth.... Carola Binder... problems with central banks targeting inflation when inflation is already low.... Noah Smith... Fed should consider letting inflation run above its target.... Matthew C. Klein... the relationship.... Gwynn Guilford... toxic mix of deflation and debt in the Chinese economy. "

Should Be Aware of:


  1. Polemic: Trust Me, I’m a Swiss Central Banker: "One trade structure I have always liked is the peg break trade. I first deployed it in 1997 with the Thai Baht. It is fairly simple and involves the option market pricing smooth curves of probability, thanks to nice models, over realities that are far from such. If I had had the confidence to put it on in EURCHF, or rather a lack in confidence in the Swiss national bank, then It would have looked a bit like this. Sell 1.2000 Eur puts Chf calls and buy twice as many 1.1750 or there about Euro puts choosing the period to make this 2x1 put spread at zero premium. The payoff being zero if no break but if there is to be a break I lose between 1.15 and 1.20 but make on everything below. The theory being that when pegs break they don’t mess around with 500pt moves instead jumping right over the loss zone into profit. This isn’t a bleat about missed trades, but an idea for future application and, more importantly, a lesson in faith. Hands up. I had complete faith in what I was told by the SNB.... Why?... Because removing the prop of central bank credence in the midst of a market that is completely controlled by central banks and the expectations of what they will do to save the world leaves a financial world orphaned. It's is a bit like hearing that your parents aren’t yours..."

  2. Max Fisher and Amanda Taub: Vox got no threats for posting Charlie Hebdo cartoons, dozens for covering Islamophobia: "Though we do enjoy a readership among Muslims inside and outside of the United States, some of whom have not hesitated to express displeasure or worse at our coverage of stories such as the Israel-Palestine conflict, none has seen the Charlie Hebdo cartoons as worth sending an angry email or even an annoyed tweet, much less a threat of violence. Our coverage of Islamophobia has brought a very different response. Articles decrying anti-Muslim bigotry and attacks on mosques have been met with dozens of threats on email and social media. The most common states a desire that jihadist militants will murder the offending writer: a recent email hoped that Muslims will 'behead you one day' so that 'we will never have to read your trash again.' Some directly threaten violence themselves, or imply it with statements such as 'May you rot in hell.' Others express a desire to murder all Muslims — one simply read 'I agree with maher  Kill them all' — also often implying the emailed journalist is themselves Muslim. One pledge to attack Vox writers begins, 'Fuck you and any cunt who believes in allah.' As is often the case, the strongest threats have been reserved for women. One writer received a message arguing that someone should 'put a gun up your ass' to make her understand..."

  3. Daniel Kuehn: Very quick, context free thoughts on Magness & Murphy (forthcoming) and Piketty's Figure 10.5: "I am now curious about a couple things: 1. Did Magness and Murphy notice the three points I made here where Piketty's data decisions work against his narrative? And if they did why didn't they include them? 2. Did Magness and Murphy even try to email Piketty and ask for do-files, etc.? (This is a little less relevant for Figure 10.5 but more relevant for some of the other wealth series, particularly the UK). 3. What did the referee reports at the Journal of Private Enterprise say? I'm really curious about where the referees pushed back."