Comment of the Day: DilbertDogbert: Anyone Can Wear the Mask. You Can Wear the Maskk: "The good prof has an 'I'm with her' image. I propose he have an 'I'm with him' image of this man: https://www.latimes.com/world/la-fg-new-zealand-hero-20190317-story.html. Funny how white nationalists are hero's in their own minds when armed but are sheep when confronted without one.

AP: To stop the New Zealand gunman, Abdul Aziz needed a weapon. He picked up the first thing he found: "'"I realized this is something else. This is a killer', he said.... Aziz said as he ran outside screaming, he was hoping to distract the attacker. He said the gunman ran back to his car to get another gun, and Aziz hurled the credit card machine at him.... Aziz spotted a gun the gunman had abandoned and picked it up, pointed it and squeezed the trigger. It was empty.... 'He gets into his car and I just got the gun and threw it on his window like an arrow and blasted his window', he said. The windshield shattered: 'That's why he got scared'...

Comment of the Day: Graydon: What a Politics Based on Lies Looks Like: "Y'all are making something simple complicated. There's a Murdoch quote out there about why Murdoch supported leave; when he goes to Number 10, they do what he says. When he goes to Brussels, they don't know or care who he is. Basic primate status is defined by who can tell you what to do. The British upper class are raised in environments which make this really, really obvious, and also which make norm violation especially intolerable. (Yes, this is an imperial hangover.)... The driver is to make damn sure no one can tell them what to do. The Tory support for the whole thing derives from norm-violation; the norms of their childhood have changed, and they're having a coping failure. It's all aligned, from the money on down. People like predictable, and this particular predictable is Those People Can't Tell ME What To Do. Laws, the economy, good sense, or the basic tenet of civilization—indirect benefit beats direct gain from exercising power—all have nothing to do with it. It's impossible to tolerate existing in some other hierarchy...

Amy Davidson Sorkin: The Magical Thinking Around Brexit: "Scornful shorthand for all that the Brexiteers promised voters in the June, 2016, referendum and cannot, now or ever, deliver. An E.U. official, referring to what he saw as the U.K.’s irrational negotiation schemes, told the Financial Times that 'the unicorn industry has been very busy'.... 'A lot of the people who advocated Brexit have been chasing unicorns now for a very long time', Leo Varadkar, the Prime Minister of Ireland, said last week in Washington, D.C., where he attended St. Patrick’s Day celebrations. His visit coincided with a series of votes in Parliament that were meant to clarify the plans for Brexit but which did nothing of the kind. Instead, the next two weeks will test how deeply a nation can immerse itself in self-delusion...

Dominic Gates: Flawed Analysis, Failed Oversight: How Boeing and FAA Certified the Suspect 737 Max Flight Control System: "Federal Aviation Administration (FAA) managers pushed the agency’s safety engineers to delegate safety assessments to Boeing itself, and to speedily approve the resulting analysis.... The safety analysis: Understated the power of the new flight control system, which was designed to swivel the horizontal tail to push the nose of the plane down to avert a stall. When the planes later entered service, MCAS was capable of moving the tail more than four times farther than was stated in the initial safety analysis document. Failed to account for how the system could reset itself each time a pilot responded, thereby missing the potential impact of the system repeatedly pushing the airplane’s nose downward. Assessed a failure of the system as one level below 'catastrophic'. But even that 'hazardous' danger level should have precluded activation of the system based on input from a single sensor—and yet that’s how it was designed.... Both Boeing and the FAA were informed of the specifics of this story and were asked for responses 11 days ago, before the second crash of a 737 MAX last Sunday.... Citing a busy week, a spokesman said the agency was 'unable to delve into any detailed inquiries'.... Boeing... is 'unable to comment... because of the ongoing investigation' into the crashes, Boeing did not respond directly to the detailed description of the flaws in MCAS certification, beyond saying that there are some significant mischaracterizations'...

Via Bob Reich: Harry S Truman (1952): Batavia, New York: Rear Platform: "Senator Taft... explained that the great issue in this campaign is 'creeping socialism'. Now that is the patented trademark of the special interest lobbies. Socialism is a scare word they have hurled at every advance the people have made in the last 20 years. Socialism is what they called public power. Socialism is what they called Social Security. Socialism is what they called farm price supports. Socialism is what they called bank deposit insurance. Socialism is what they called the growth of free and independent labor organizations. Socialism is their name for almost anything that helps all the people...

Joseph A. Schumpeter (1947): History of Economic Analysis: "Analytic effort is of necessity preceded by a pre-analytic cognitive act that supplies the raw material for the analytic effort. In this book, this pre-analytic cognitive act will be called Vision... Factual work and ‘theoretical’ work... will eventually produce scientific models.. to which increasingly more rigorous standards of consistency and adequacy will be applied. This is indeed a primitive but not, I think, misleading statement of the process by which we grind out what we call scientific propositions...

#noted


J. M. Keynes (1937): The General Theory of Employment: "I am more attached to the comparatively simple fundamental ideas with underlying my theory than to the particular form in which I have embodied them, and I have no desire that the latter should be crystallized at the present state of the debate. It’s a simple basic ideas can become familiar and acceptable, time and experience and the collaboration of a number of minds will discover the best way of expressing them...

## The Fed Needs to Be Buying Recession Insurance—But Is Not: DeLong's Morning Coffee

Morning Coffee Podcast: The Fed Needs to Be Buying Recession Insurance—But Is Not: Should the U.S. fall into recession soon, the Federal Reserve will have very little room to loosen policy to cushion the downturn. This is a large asymmetric risk. The right way to manage an asymmetric risk is to buy insurance: the Federal Reserve should be buying recession insurance. It is not. This is a substantial problem...

Continue reading "The Fed Needs to Be Buying Recession Insurance—But Is Not: DeLong's Morning Coffee" »

## The Fed Should Buy Recession Insurance: Fresh at Project Syndicate

Fresh at Project Syndicate: The Fed Should Buy Recession Insurance: If the United States falls into recession in the next year or two, the US Federal Reserve may have very little room to loosen policy, yet it is not taking any steps to cover that risk. Unless the Fed rectifies this soon, the US–and the world–may well face much bigger problems later. The next global downturn may still be a little way off. The chances that the North Atlantic as a whole will be in recession a year from now have fallen to about one in four. German growth may well be positive this quarter, while China could rebound, too. And although US growth is definitely slowing–to 1% or so this quarter–this may yet turn out to be a blip. Let’s hope so. Because if the next downturn is looming, North Atlantic central banks do not have the policy room to fight it effectively... Read MOAR at Project Syndicate

Continue reading "The Fed Should Buy Recession Insurance: Fresh at Project Syndicate" »

## REMIND YOURSELF: We Are with Her!

Looking Forward to Years During Which Most if Not All of America's Potential for Human Progress Is Likely to Be Wasted:

• With each passing day Donald Trump looks more and more like Silvio Berlusconi
• Bunga-bunga governance
• With a number of unlikely and unforeseen disasters
• And a major drag on the country
• Except in states where his policies are neutralized.

Nevertheless, remember: WE ARE WITH HER!

Continue reading "REMIND YOURSELF: We Are with Her!" »

Edward Luce: Why America Cannot Fly Alone: "Trump’s Boeing reversal is a teachable moment for the America First president.... No black box is needed to discover why. The biggest factor is falling global trust in US institutional probity. Mr Trump’s budget this week proposed a cut to the FAA in spite of the fact that its air traffic control system remains years behind many of its counterparts. Moreover, the FAA lacks a chief. Mr Trump nominated his own pilot, John Dunkin—the man who flew Trump planes, not Air Force One—to head it. When the Senate laughed him off as unqualified to lead an 18bn agency, Mr Trump failed to come up with a new name. The FAA has been flying without a pilot, so to speak, for more than a year. Little surprise America’s partners have lost trust in its direction. Much the same could be said of US diplomacy...

Ed Luce: Dublin’s Irish-American Trump Card: "Richie Neal... Massachusetts’ congressman... ally of Sinn Féin... could block any trade deal Trump plans to negotiate with Britain. Indeed, he has vowed to do so if Britain jeopardises the open border between the republic and Northern Ireland.... A hard deal Brexit would trigger an equally hard Irish-American roadblock. Why jeopardise peace in Ireland (and therefore Britain) in quest of a US trade deal that’ll hit instant roadblocks in DC?... From what I can tell, the Brexiters have done precious little homework on any aspect of a no-deal Brexit. Let me save them some time on the American end: no US-UK trade deal can emerge from the ashes of the Good Friday Agreement. There. I’ve got it off my chest...

## Framing the Industrial Revolution

https://www.icloud.com/keynote/0-3JUJaZHlPgS6_6W91jmkw8Q

#berkeley #teachingeconomics #teachinggrowth #teachinghistory #highlighted


Frances Coppola: Tether's U.S. Dollar Peg Is No Longer Credible: "Tether does not have 100% traditional currency backing for its reserves. It has 'cash equivalents'... has become an unregulated fractional reserve bank. It’s a very risky fractional reserve bank, too. Loans that you can’t sell, can’t pledge for cash, and may or may not be able to call are not by any stretch of the imagination 'reserves'.... Tether may regard one USDT as the same as one U.S. dollar, but without either the reserves or the central bank backing to guarantee this, its words are empty. The Fed isn’t going to step in and bail it out. Remarkably, though, crypto markets still believe Tether’s guarantee...

I must confess that my knee-jerk reaction given my socialization into the neoliberal cult when young to paid leave programs is to worry that loading responsibility for providing social insurance onto employers is a hazardous activity—it is not the 1920s, and we are not the tarry-eyed Edward Filene certain that paternalistic companies engaged in welfare capitalism can do more to enhance societal well-being than the ardent socialists and social democrats. But evidence is piling up from the laboratories of social insurance that are the states that my knee-jerk reaction is wrong: Heather Boushey: Increasing Evidence of the Benefits of Paid Leave Means Congress Needs to Consider a Federal Program like the FAMILY Act: "The existing state programs—the oldest, in California, dates back to 2004—have provided a laboratory for researchers to study labor and health outcomes for individuals, performance and productivity outcomes for firms, and broader macroeconomic outcomes of paid family and medical leave. This work builds on a considerable body of research from long-established programs in some European countries. The answers to many questions are already coming into focus...

John Ostrower: The World Pulls the Andon Cord on the 737 Max: "Lion Air 610 should never have been allowed to get airborne on October 29.... The plane simply was not airworthy.... PK-LQP's Angle-of-Attack sensors were disagreeing by 20-degrees as the plane taxied for takeoff. A warning light that would have alerted the crew to the disagreement wasn't part of the added-cost optional package.... A guardrail wasn't in place.... Erroneous Angle-of-Attack data collided with an apparently unprepared crew with tragic consequences as the MCAS system repeatedly activated, driving the jet's nose into a fatal dive...

## Fairly Recently: Must- and Should-Reads, and Writings... (March 13, 2019)

1. Marne Levine: How Did I Get Here?

2. Sean Illing: "Fascism: a Warning" from Madeleine Albright

3. Neil Cummins: The Missing English Middle Class: Evidence From 60 Million Death And Probate Records: "Despite the great equalisation of wealth over the 20th century, most English have no significant wealth at death...

4. David H. Autor: Work of the Past, Work of the Future: "A disproportionate polarization... shunting non-college workers out of specialized middle-skill occupations into low-wage occupations... diminishing the set of non-college workers that hold middle-skill jobs in high-wage cities... attenuating... the steep urban wage premium for non-college workers...

5. Paul Krugman (2015): On Econoheroes: "Look at hits on Google News. If you put in “mankiw economy” you get about 5200 hits, many of them involving debates at the recent economics meetings. If you put in “stephen moore economy” you get 65,700 hits. If you put in “stiglitz economy” you get 43,800. I see this as a real asymmetry...

6. Sanjiv Das, Kris Mitchener, and Angela Vossmeyer: Bank Networks and Systemic Risk in the Great Depression: "The Global Crisis brought attention to how connections among financial institutions may make systems more prone to crises. Turning to a major financial crisis from the past, this column uses data from the Great Depression to study risk in the commercial banking network leading up to the crisis and how the network structure influenced the outcomes. It demonstrates that when the distribution of risk is more concentrated at the top of the system, as it was in 1929, fragility and the propensity for risk to spread increases...

7. Alicia Sasser Modestino: Is the "Skills Gap" ReaL?: "Since the Great Recession, employers have cited a skills gap in which workers lack the education and experience needed to fill vacant jobs. While job requirements increased for many openings during the recession, the inverse has happened as the labor market has recovered...

8. Matthew Yglesias: Great Tariff Debate of 1888: Trump’s Love of the McKinley Tariff: "Trump’s side won, and it was an unpopular disaster...

9. Karl Smith: [Why Centrists Have to Become More Partisan(https://www.bloomberg.com/opinion/articles/2019-03-11/why-centrists-have-to-become-more-partisan): "In America’s polarized political climate, credibility within the party is a prerequisite for getting anything done...

10. James Fallows: ET302: Is the Boeing 737 Max 8 to Blame?: "No one knows for sure—but here is where experts will be looking for clues...

11. Herman Melville: Moby-Dick: "Ahab: 'Aye, aye! and I’ll chase him round Good Hope, and round the Horn, and round the Norway Maelstrom, and round perdition’s flames before I give him up. And this is what ye have shipped for, men! to chase that white whale on both sides of land, and over all sides of earth, till he spouts black blood and rolls fin out. What say ye, men, will ye splice hands on it, now? I think ye do look brave'...

12. Ernst Renan: What Is a Nation?: "The essence of a nation is that all of its individual members have a great deal in common and also that they have forgotten many things. No French citizen knows whether he is a Burgund, an Alain, a Taifala, or a Visigoth. Every French citizen has forgotten St. Bartholomew’s Day and the thirteenth-century massacres in the Midi...

13. Wikipedia: Cauchy Distribution

14. Anna Mikusheva: Weak Instrumental Variables

15. Max Roser and Esteban Ortiz-Ospina: Global Extreme Poverty

16. Isaiah Andrews and James H. Stock: Weak Instruments and What to Do About Them

17. Philip Auerswald: The Code Economy: A 40000-Year History

18. Absolute lunacy from a politician who is the essence of a twit: Nigel Farage: The Betrayal of Brexit Is One of the Most Shameful Chapters in Our Country’s History: "498 MPs voted to trigger Article 50.... They all knew that the consequence was that the UK would leave the EU on March 29 2019, with or without a deal. And yet now they have decided to claim the vote was meaningless.... We are living through one of the most shameful chapters in our country’s history...

Continue reading "Fairly Recently: Must- and Should-Reads, and Writings... (March 13, 2019)" »

And here is the launch explanation of the analytical perspective that the brand-new group Economists for Inclusive Prosperity hopes to take. It is good. Perhaps we at Equitable Growth should steal it?: Suresh Naidu, Dani Rodrik, and Gabriel Zucman: Economics After Neoliberalism: "Economists of the real world... understand that we live in a second-best world rife with market imperfections and in which power matters enormously.... The competitive model is rarely the right benchmark.... This requires an empirical orientation, an experimental mind set, and a good dose of humility to recognize the limits of our knowledge.... Throughout [our] proposals is the sense that economies are operating well inside the justice-efficiency frontier, and that there are numerous policy 'free-lunches' that could push us towards an economy that is morally better without sacrificing (and indeed possibly enhancing) prosperity...

The ERM system of a generation ago was in one important respect vastly superior to the Euro mechanism. THE ERM system had a fiscal backstop that the Euro mechanism lacked, and Europe today is much the poorer for it: Giancarlo Corsetti, Barry Eichengreen, and Galina Hale: The Euro Crisis in the Mirror of the EMS: How Tying Odysseus to the Mast Avoided the Sirens but Led Him to Charybdis: "What explains the longer and deeper downturn after 2009?.... Six lessons of the ERM-euro crisis comparison...

## Modern Economic Growth Memo Question

Economics tends to view growth as a continuous and diffuse process: if one firm does not solve the problem of how to efficiently utilize resources, others will and drive the first out of business; if one technological vein plays itself out, energy will focus on others. These readings all argue different. They argue one side of a debate. They argue either that some unique and particular institutions and technologies matter a lot. What kinds of evidence not presented in these readings might lead you to come down on one or the other of the many, many sides in this debate—either on the side of economists' standard prior, or that in fact it is still other and still different institutions or technologies or simply the aggregate state of the economy that matters the most?

Continue reading "Modern Economic Growth Memo Question" »

## Modern Economic Growth: Eagle's-Eye View Slides

https://www.icloud.com/keynote/0uV-761YfOFH171v7LfWSara

#teachingeconomics #teachinggrowth #teachinghistory #moderneconomicgrowth #highlighted #berkeley


Please let me be your neighbor Wigner's friend. It's Everett's many-worlds universe, and we just live in it: Massimiliano Proietti, Alexander Pickston, Francesco Graffitti, Peter Barrow, Dmytro Kundys, Cyril Branciard, Martin Ringbauer, and Alessandro Fedrizzi: Experimental Rejection of Observer-Independence in the Quantum World: "The scientific method relies on facts, established through repeated measurements and agreed upon universally, independently of who observed them. In quantum mechanics, the objectivity of observa- tions is not so clear, most dramatically exposed in Eugene Wigner’s eponymous thought experiment where two observers can experience fundamentally different realities. While observer-independence has long remained inaccessible to empirical investigation, recent no-go-theorems construct an ex- tended Wigner’s friend scenario with four entangled observers that allows us to put it to the test. In a state-of-the-art 6-photon experiment, we here realise this extended Wigner’s friend scenario, exper- imentally violating the associated Bell-type inequality by 5 standard deviations. This result lends considerable strength to interpretations of quantum theory already set in an observer-dependent framework and demands for revision of those which are not...

Alberto Nardelli: The EU Is Telling European Leaders There Are Only Three Reasons They Should Allow Brexit To Be Delayed: "The European Union will advise EU leaders that delaying Brexit makes sense only... to give more time to prepare for no deal, to complete ratification of the withdrawal agreement or if the UK decides to hold an election or a referendum. The assessment is contained in an internal memo... which sets out the thinking at the highest level of the European Commission following Theresa May’s heavy defeat on her revised Brexit deal in parliament.... Ultimately, it will be a political decision for the EU’s 27 leaders...

I am not sure I buy the argument that the market-friendly version of social democracy is only stable if backed by a "broader social movement". Say, rather, a broader social understanding—that, to use the Roman Republican analogue again, the whole going concern was worth maintaining via compromise: "nobles yielding from fear of the multitude, and the people out of respect for the senate" even though political clashes were "neither trifling nor raised for trifling objects": Henry Farrell: The Transformation of Left Neoliberalism: "Brad, Matt Yglesias and Ezra Klein... a formal acknowledgment of a shift that has been taking place for a long time.... They have plausibly changed from being left neoliberals to neoliberal leftists.... They tacitly or explicitly realize that preferred neoliberal means of policy delivery need to be embedded in a framework that is being built up by a broader social movement.... If they are pushing for market means towards social democratic ends, that is fine and good–markets can indeed sometimes be the best way to deliver those ends.... But one key lesson of the last couple of decades is that market provision of benefits makes it harder to build and sustain coalitions–private gain and public solidarity are at best uncomfortable bedfellows...

Tim Ross, Robert Hutton, and Ian Wishart: This Is the New Brexit Deal Theresa May Got From the EU: "Juncker says it’s this deal or U.K. might never leave EU. May, Juncker agree new legal texts on Irish border backstop.... Three new documents... includ[ing] a 'unilateral declaration' setting out how the U.K. believes it can escape the backstop....Wording in a legally binding joint statement goes as far as the EU says is possible in reiterating that the backstop—an insurance policy that effectively keeps the U.K. in a customs union with the EU—is only meant to be temporary. And it gives the U.K. some authority to walk away if the EU doesn’t do enough to replace it with a full trade deal.... The independent arbitration panel (comprising senior judges) could rule that the EU is acting in such a way as to make the backstop last indefinitely.... 'Persistent failure' to comply with a ruling 'may result in temporary remedies'. This doesn’t go as far as meeting the demands of Attorney General Geoffrey Cox....But the joint document does go on to say that the U.K. (or EU, for that matter) would 'ultimately' have the right 'to enact a unilateral, proportionate suspension of its obligations under the Withdrawal Agreement' including the backstop.... The U.K. also published a separate document, 'interpreting' the joint statement in its own wording but with the tacit consent of the EU...

Andrés Velasco: The Challenge of Monetary Independence: "By shadowing the US Federal Reserve so closely, Latin American countries are foregoing the policy flexibility that their floating exchange-rate regimes are intended to allow. They also risk relying too heavily on possible US interest-rate cuts to boost their economies, and not enough on deeper, long-term reforms...

## Fairly Recently: Must- and Should-Reads, and Writings... (March 11, 2019)

• Carville-Hunt "Two Old White Guys" Podcast

• Weekend Reading: Raphael Hogarth: 'No Deal' Actually Means Total Supplication...

• Comment of the Day: JEC: "This sentence: 'This high-stakes approach was much criticised by liberals, who feared nuclear Armageddon more than they feared the consequences of appeasing the Soviet Union...' It tells you everything you need to know about Niall Ferguson. Well, that and the fact that Ferguson imagines this to be a sick burn on the 'liberals', rather than an acknowledgment of their obviously superior wisdom, prudence, and foresight...

1. KJV: John 5: "Now there is at Jerusalem by the sheep market a pool, which is called in the Hebrew tongue Bethesda, having five porches. In these lay a great multitude of impotent folk, of blind, halt, withered, waiting for the moving of the water. For an angel went down at a certain season into the pool, and troubled the water: whosoever then first after the troubling of the water stepped in was made whole of whatsoever disease he had...

2. Edward Luce: Ivanka Trump and the Rise of the Stepford Daughter: "The first daughter’s drive to improve the skills of American workers mainly involves photo-ops. Washington’s most surreal event this week—an absurdly high bar—was Ivanka Trump’s roll-out of her workforce development council. It opened with her father calling the chief executive of America’s largest smartphone company 'Tim Apple'. Tim Cook barely flinched...

3. Madeline Peltz: Tucker Carlson's interviews on 'Bubba The Love Sponge'...

4. Benjamin Dreyer: Jeanine Pirro was permanently banned from Leonard’s of Great Neck after she tried to walk out with a table floral arrangement from a bat mitzvah she wasn’t even attending. So grain of salt on the constitutional scholarship...

5. The Vela: A Leisurely Extinction

6. Paul N. Van de Water: [More Evidence of Post-ACA Slowdown in Health Care Spending(https://www.cbpp.org/blog/more-evidence-of-post-aca-slowdown-in-health-care-spending): "In early 2010 we projected that federal debt would reach 289 percent of gross domestic product (GDP) by 2048; we now project 113 percent of GDP. Over half of that improvement stems from lower health care costs; the rest largely reflects lower interest rates. Although health care costs remain a major driver of future increases in federal spending, that shouldn’t obscure how much their projected costs have fallen in recent years...

7. Nyum Bai: Our Menu —

9. Marica Restaurant: Current Food & Drink Offerings

10. Pete Buttigieg: On Pence's support of Trump: "How could he allow himself to become the cheerleader of the porn star presidency. Is it that he stopped believing in scripture when he started believing in Donald Trump?...

11. Tobias S. Buckell: What Tools Does a Professional Fiction Writer Use?

12. Microeconomic Insights: About: "Microeconomic Insights is a home for accessible summaries of high quality microeconomic research which informs the public about microeconomic issues that are, or should be, in the public’s eye...

13. Emma Hyman

14. Wikipedia: Al Hunt

15. Alfred, Lord Tennyson: Ulysses: "Tho' much is taken, much abides; and tho'/We are not now that strength which in old days/Moved earth and heaven, that which we are, we are...

Continue reading "Fairly Recently: Must- and Should-Reads, and Writings... (March 11, 2019)" »

## Carville-Hunt "Two Old White Guys" Podcast

### Edited for Coherence and Clarity

https://www.pscp.tv/w/1OwxWOzBQgkxQ?q=alhuntdc

Al Hunt: Brad Delong, a Rubin Democrat, a mainstream, a Clinton-Obama Democrat, if you will, has said in the [intra-]democratic wars: My side has lost. We can't form any coalitions with [even] a handful of moderate Republicans. Cap-and-trade was a Republican idea. Every single Republican basically turned their back.

As soon as you're with us, let us know.

Brad, you hit the smiley face.

We are going to ask Brad what this means for the Democratic Party’s [position] on major economic issues.

I think we have Brad, right?

Brad DeLong: [The Machine] says I am here.

Al Hunt: Terrific. I'm talking about your vox[.com] interview. I also note that you are one of the 750 most influential economists. James and I hope to be one of the 70,000 most influential podcasters at some point. We once again have been elevated by our guests.

James [Carville], let me turn it over to you to ask the first couple of questions to Brad about his new thesis.

Brad DeLong: May I first compliment the two of you?

Continue reading "Carville-Hunt "Two Old White Guys" Podcast" »

## Weekend Reading: What I think of James Carville: Substituted in "James Carville" for "Sadie Burke"

Weekend Reading: What I think of James Carville, but substitute in "Bill Clinton" for "Willie", and substitute in "James Carville" for "Sadie Burke": Robert Penn Warren: All the King's Men: "He announced in the Democratic primary.... It was hell among the yearlings and the Charge of the Light Brigade and Saturday night in the back room of Casey's saloon rolled into one, and when the dust cleared away not a picture still hung on the walls.... There was just [Bill Clinton], with his hair in his eyes and his shirt sticking to his stomach with sweat. And he had a meat ax in his hand and was screaming for blood. In the background of the picture, under a purplish tumbled sky flecked with sinister white like driven foam, flanking [Bill Clinton]... [James Carville]...

Continue reading "Weekend Reading: What I think of James Carville: Substituted in "James Carville" for "Sadie Burke" " »

From any sensible risk-management perspective, the Fed ought to have been cutting interest rates for the past month. Yet it has not been. They seem to me to bet playing a game not of "risk management" but rather "let's pretend we have not wedged ourselves into a corner and should be working much harder to get out of it":

Jon Hilsenrath and Nick Timiraos: Central Banks Play a Game of Risk Management: "The world’s central banks are engaged in a major policy reversal to prevent the world economy from sinking into unexpected recession... calling off interest-rate increases.... In many cases, the central bankers are boxed in, with few policy tools available to cushion their economies.... Six months ago, Fed officials thought they would raise short-term interest rates three times in 2019 on the way toward a policy rate near 3.5% in 2020. Fed officials recently signaled they have paused for now, with short-term rates just below 2.5%. Their actions and words strongly suggest they could be done altogether.... They have unlimited space to fight accelerating inflation with higher interest rates and little-to-no space to fight slowing inflation with lower rates.... The risk may be diminished after the latest reversal by central banks, but it’s hardly gone...

## Weekend Reading: Raphael Hogarth: 'No Deal' Actually Means Total Supplication...

Weekend Reading: Raphael Hogarth: "Some MPs Talk about 'No Deal' as a Great Liberation. 'No Deal' Actually Means Total Supplication, Handing Huge Control over the UK to the European Commission.Read the government’s technical notices on no deal, and you will find that an awful lot of sectors will need a decision from Brussels to keep trading...

Continue reading "Weekend Reading: Raphael Hogarth: 'No Deal' Actually Means Total Supplication..." »

Miranda Aldersley: The Girl Who Executed Nazis after Seducing Them in Bars Dies Aged 92: "Freddie Oversteegen... with her older sister Truus and their friend Hannie Schaft... blew up bridges and railway tracks with dynamite, smuggled Jewish children out of concentration camps and executed as many Nazis as she could, using a firearm hidden in the basket of her bike.... First approach the Nazi men in bars, and, having successfully seduced them, ask if they wanted to 'go for a stroll' in the forest, where, as Freddie herself put it, they would be 'liquidated'.... 'It was a necessary evil, killing those who betrayed the good people'. When asked how many people she had killed or helped kill, she demurred: 'One should not ask a soldier any of that'.... She was the last surviving member of the Netherlands' most famous female resistance cell...

Larry Kudlow (December 7, 2007): Bush Boom Continues: "There’s no recession coming. The pessimistas were wrong. It’s not going to happen. At a bare minimum, we are looking at Goldilocks 2.0. (And that’s a minimum). Goldilocks is alive and well. The Bush boom is alive and well. It’s finishing up its sixth consecutive year with more to come. Yes, it’s still the greatest story never told...

Larry Kudlow (February 5, 2008): “I’m going to bet that the economy will be rebounding sometime this summer, if not sooner. We are in a slow patch. That’s all. It’s nothing to get up in arms about...

Even though the first quarter of 2019 is only three-quarters over, practically all of the private-sector decisions that will determine the level of economic growth from the first quarter of 2018 to the first quarter of 2019 have already been made. Moreover, because of a statistical quirk 8/9 of the components of the growth rate have already occurred, and we have reasonable data on 2/3 of the components. So the Federal Reserve Bank of New York's forecast that the first-quarter growth rate will be only 1.4% is now a semi-solid thing: you cannot take it to the bank, but you can borrow on it (the last three month-out misses were 0, +0.2, and -0.4 respectively):

It's not a recession. But it is clear that even if 2.5% were the right target for the short safe nominal interest rate two months ago, it is not the right target for the short safe nominal interest rate now. The Fed should cut.

It is far from clear to me that the risk of a U.S. recession this year is low. The risk that a recession will be called is low. The risk that a recession will start is 30%:

Gavyn Davies: Alarm Bells Ring for the Goldilocks World Economy: "Markets seem willing to overlook the continuing slowdown in the advanced economies, which has taken the latest growth rate to only 0.8 per cent.... This is perversely seen as good news because it will reduce the likelihood of further interest rate increases.... The dovish turn in US monetary policy has been confirmed by an unusual volte-face in policy guidance by the Fed leadership in the space of a few weeks.... This phase of the cycle is often described as the Goldilocks zone, in which growth — like the heroine’s porridge in The Story of the Three Bears—is neither too hot nor too cold.... Meanwhile, growth is still high enough to indicate that the risk of outright recession in the next 12 months remains close to zero.... While the US is still clinging to the middle of the Goldilocks zone, the eurozone is flirting with the bottom boundary of its zone. Any further decline in the nowcast would see a large increase in the probability of a European recession this year. With the Japanese nowcast already in negative territory and Asian trade flows headed sharply downwards, the markets may not be able to ignore much further weakness in the world economy...

#noted


Let me hoist this from last year: Kate Bahn summarizing the evidence that imposing work requirements simply does not work: it has none of the benefits that people wish that it would have, and all of the drawbacks you can think of: Kate Bahn: Work Requirements for U.S. Public Assistance Programs Don’t Work: "Analysis from the Center on Budget and Policy Priorities finds that imposing work requirements simply doesn’t work. One reason is because increased red tape may lead to eligible recipients losing their benefits even though they are eligible for them. People with volatile work hours or who hold multiple jobs may have a hard time collecting and submitting sufficient documentation to demonstrate they are working regularly. As CBPP points out, completing work-requirement red tape is even harder for self-employed workers, which should be cause for concern as gig-based employment becomes more prevalent...