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Comments on Links for 11-20-2012 TypePad 2012-11-20T05:42:11Z Mark Thoma http://economistsview.typepad.com/economistsview/ tag:typepad.com,2003:http://economistsview.typepad.com/economistsview/2012/11/links-for-11-20-2012/comments/atom.xml/ cm commented on 'Links for 11-20-2012' tag:typepad.com,2003:6a00d83451b33869e2017c33d2fd91970b 2012-11-21T05:24:48Z 2012-11-21T05:24:48Z cm The about only context in which I have heard this debt vs. inflation argument is mortgage debt. The way people...
The about only context in which I have heard this debt vs. inflation argument is mortgage debt. The way people are pricing in some percentage of sustained inflation into the model makes it very clear that it means rising nominal income (by that rate). Whether they understand that or not. I'm inclined to believe most interpret it that way, and there is usually language attached to the effect of "as you progress in your career" etc.
 im1dc commented on 'Links for 11-20-2012' tag:typepad.com,2003:6a00d83451b33869e2017d3e0025a9970c 2012-11-21T01:12:17Z 2012-11-21T01:12:17Z im1dc anne, some advice for you "To be persuasive we must be believable; to be believable we must be credible; to...
anne, some advice for you

"To be persuasive we must be believable; to be believable we must be credible; to be credible we must be truthful."

Edward R. Murrow
 anne commented on 'Links for 11-20-2012' tag:typepad.com,2003:6a00d83451b33869e2017d3e000bc7970c 2012-11-21T00:53:38Z 2012-11-21T00:53:38Z anne "America is all about war and has been through the Obama years." President Obama has been waging wars and supporting...
"America is all about war and has been through the Obama years."

President Obama has been waging wars and supporting wars from the day of entering the White House. Simple. President Obama is spending money on the military far, far above any spending that came before.

From Afghanistan to Pakistan to Libya to Syria to Yemen, President Obama has been about war.
 anne commented on 'Links for 11-20-2012' tag:typepad.com,2003:6a00d83451b33869e2017d3e000801970c 2012-11-21T00:50:29Z 2012-11-21T00:50:29Z anne We can't get involved in everyone of them, we are not the Globes Cops, and the USA must protect its...
We can't get involved in everyone of them, we are not the Globes Cops, and the USA must protect its vital interests first.

[ What malicious rubbish, when we are all about war, all about the death and destruction of war and have been for longer than we have ever been at war before. We crazily are all about being global war-wagers and war-supporters:

http://www.nytimes.com/2012/08/27/world/middleeast/us-foreign-arms-sales-reach-66-3-billion-in-2011.html

August 26, 2012

U.S. Foreign Arms Sales Are 78% of Global Market
 By THOM SHANKER ]
 im1dc commented on 'Links for 11-20-2012' tag:typepad.com,2003:6a00d83451b33869e2017c33d17606970b 2012-11-21T00:50:14Z 2012-11-21T00:50:14Z im1dc "America is all about war and has been through the Obama years." Oh really? Just the Obama years? Amazing your...
"America is all about war and has been through the Obama years."

Oh really? Just the Obama years? Amazing your grasp of American history and foreign policy, amazing.
 im1dc commented on 'Links for 11-20-2012' tag:typepad.com,2003:6a00d83451b33869e2017ee57500ed970d 2012-11-21T00:48:21Z 2012-11-21T00:48:21Z im1dc Here is an example of an superb overall person and Democrat, S. Mark Warner, who perhaps could be convinced to...
Here is an example of an superb overall person and Democrat, S. Mark Warner, who perhaps could be convinced to take a high office in the next Obama Administration, State, DoD, CIA...

http://www.politico.com/news/stories/1112/84107.html

"Warner won't run for Va. governor"

By SCOTT WONG ... 11/20/12... 3:58 PM EST

"Democratic Sen. Mark Warner said Tuesday he's staying in the Senate and won't run next year for Virginia governor, a job he held from 2002 to 2006.

After giving it "heartfelt consideration," Warner said he wants to remain in the Senate to continue working to cut the federal debt and deficit. Elected to the Senate in 2008, Warner has been a member of the bipartisan "Gang of Six" senators working on a $4 trillion deficit-reduction deal..."

 anne commented on 'Links for 11-20-2012' tag:typepad.com,2003:6a00d83451b33869e2017c33d17151970b 2012-11-21T00:46:58Z 2012-11-21T00:46:58Z anne America is supporting war in Congo and supporting war in Gaza and supporting war in Syria and waging war in...
America is supporting war in Congo and supporting war in Gaza and supporting war in Syria and waging war in Afghanistan and Pakistan and Yemen. America waged war in Libya and Iraq, so the heck with preaching about all those wars.

America is all about war and has been through the Obama years.
 im1dc commented on 'Links for 11-20-2012' tag:typepad.com,2003:6a00d83451b33869e2017c33d1699b970b 2012-11-21T00:41:31Z 2012-11-21T00:41:31Z im1dc FYI, there are usually 18 to 30 'wars' going on at any one time on our globe. We can't get...
FYI, there are usually 18 to 30 'wars' going on at any one time on our globe. We can't get involved in everyone of them, we are not the Globes Cops, and the USA must protect its vital interests first.
 im1dc commented on 'Links for 11-20-2012' tag:typepad.com,2003:6a00d83451b33869e2017ee574f66f970d 2012-11-21T00:39:49Z 2012-11-21T00:39:49Z im1dc Probably not, most likely he's seen as someone with the requisite knowledge to be able to step into the Director...
Probably not, most likely he's seen as someone with the requisite knowledge to be able to step into the Director position immediately and take over and is willing to work with DEMs and President Obama.

But it would be a very bad mistake for Obama to look outside the DEM Party if he's looking for an Intell knowledgeable politician. Obama should ONLY look at DEMs willing to leave their seat in Congress and work at the CIA for 4 years.

DEMs must be given the opportunity to lead, to gain experience, to be able to be the next one up and ready to take over when this President is gone, and he will be gone in 4 years. Build the bench.
 anne commented on 'Links for 11-20-2012' tag:typepad.com,2003:6a00d83451b33869e2017d3dfff936970c 2012-11-21T00:39:23Z 2012-11-21T00:39:23Z anne http://www.democracynow.org/2012/11/20/gaza_ceasefire_to_be_decided_in November 20, 2012 AMY GOODMAN: Phyllis, give us a quick time line. Israel says they're doing this because rockets,...
http://www.democracynow.org/2012/11/20/gaza_ceasefire_to_be_decided_in

November 20, 2012

AMY GOODMAN: Phyllis, give us a quick time line. Israel says they're doing this because rockets, Hamas and other groups from Gaza, fired hundreds of rockets onto Israeli soil. Can you give us the timeline of how all of this has taken place?

PHYLLIS BENNIS: History can be determined by when you start the clock. If we start the clock the way most of the U.S. press now is, which is a change, now saying that this escalation began when Israel assassinated a Hamas leader on November 14, that is one time line. The Israeli position is, well, we did it because they fired — the Palestinians fired a rocket at an Israeli Jeep. Well, why did that happen? That happened because a few hours before there had been that firing on an Israeli military Jeep and a patrol, there had been the killing of a 13-year-old child in Gaza who was playing soccer. Two days before that, there had been the assassination of a young man walking in the no walk area, the no go zone near the border, where Israelis say, we told him, we called out to him not to go there and he did not listen.

It turns out this was a mentally disabled man who maybe didn't hear, maybe didn't understand, continued to walk and was shot dead. We could start the clock then. But, at the end of the day, we can look back four years, we can look back to the end of Cast Lead and say, since Cast Lead, 271 Palestinians, according to the Israeli human rights organization B'tselem, have been assassinated by Israeli air strikes, by drones, by planes, by helicopters. 271 Palestinians in Gaza killed by Israelis, zero Israelis killed by Palestinian rockets.

If Israel was seriously trying to protect its population, that's the period when no Israelis were killed. During this escalation, three Israelis were killed, tragically, civilians who should not have been killed. But, the reality is, that this goes back to the occupation. If we don't acknowledge this in the context of occupation, the siege of Gaza, the traditional occupation of the West Bank and East Jerusalem, we will never be able to stop it. We can get a cease fire right now, stop it for the moment, but then it will continue because there is no option.

When the world abandons a people under occupation, as we have seen in the Palestinian Territories, there is reaction from those people. We hear a great deal from world leaders about the responsibility to protect the new mantra of the United Nations. We have a responsibility to protect the people of Libya, we have a responsibility to protect the the people of Syria. There are serious reasons why the responsibility to protect should have been invoked, in my view, not the way it was, but the world did owe a level of protection to people living under repressive regimes around the world. That has also been true of U.S.-backed regimes that continues around the world. What we have seen in Bahrain and other places.

But, in the question of Palestine, that responsibility to protect for the Obama administration as was true of every administration before it, only applies to Israel. We heard it again and again from President Obama, from other officials of the administration, members of congress. Israel has the right to defend itself. Israel has the right of self-defense. Asked whether Palestinians have the right of self-defense, the State Department's spokesperson said, "Israel has the right of self-defense." Implying Palestinians have no rights at all, they only apparently have the right to die under Israeli rockets.
 im1dc commented on 'Links for 11-20-2012' tag:typepad.com,2003:6a00d83451b33869e2017d3dffea58970c 2012-11-21T00:28:48Z 2012-11-21T00:28:48Z im1dc Grover Norquist is a has been, perhaps a never was, or even an excuse but not an important power inside...
Grover Norquist is a has been, perhaps a never was, or even an excuse but not an important power inside the Beltway

http://www.washingtonpost.com/opinions/dana-milbank-grover-norquists-rear-guard-action-on-taxes/2012/11/19/33f5d48a-3298-11e2-9cfa-e41bac906cc9_story.html

"Grover Norquist's rear-guard action on taxes"

By Dana Milbank, November 19, 2012

"Some prominent Republicans — among them House Speaker John Boehner, publisher Bill Kristol and Sen. Bob Corker — have been making noise about the need for the GOP to be flexible about raising taxes.

But the keeper of the Pledge is not concerned. Grover Norquist, the party's Prefect of the Congregation for the Doctrine of the Faith, says he sees no chance of Republicans going squishy.

"The Rs are holding," he announced at a luncheon Monday of the Center for the National Interest..."
 anne commented on 'Links for 11-20-2012' tag:typepad.com,2003:6a00d83451b33869e2017ee574dcea970d 2012-11-21T00:21:41Z 2012-11-21T00:21:41Z anne Were a Republican nominated as CIA Director, the reason would be to dampen any possible Republican criticism while at the...
Were a Republican nominated as CIA Director, the reason would be to dampen any possible Republican criticism while at the same time insuring the most aggressive CIA posture or a military posture by the agency.
 anne commented on 'Links for 11-20-2012' tag:typepad.com,2003:6a00d83451b33869e2017d3dffd990970c 2012-11-21T00:17:33Z 2012-11-21T00:17:33Z anne Apart from the tragedy in Gaza, there is a war being waged in Congo that I do not properly understand...
Apart from the tragedy in Gaza, there is a war being waged in Congo that I do not properly understand but that is being supported by Rwanda which in turn is supported by America. Likely the war is simply for territorial control or influence by Rwanda, but why America should support Rwanda I do not know. The point I would make is that we have a shockingly self-defeating foreign policy or foreign-military policy, but a policy that gains minimal attention.
 im1dc commented on 'Links for 11-20-2012' tag:typepad.com,2003:6a00d83451b33869e2017ee574c5f2970d 2012-11-21T00:05:39Z 2012-11-21T00:05:39Z im1dc Thought this worth sharing, it made me laugh... Quote of the Day "My colleagues, they study artificial intelligence; me, I...
Thought this worth sharing, it made me laugh...

Quote of the Day

"My colleagues, they study artificial intelligence; me, I study natural stupidity." -Amos Tversky, Stanford psychologist and a founding father of behavioral economics

h/t Barry Ritholtz The Big Picture.com
 Fred C. Dobbs commented on 'Links for 11-20-2012' tag:typepad.com,2003:6a00d83451b33869e2017d3dffb3ec970c 2012-11-20T23:50:27Z 2012-11-20T23:50:27Z Fred C. Dobbs Autonomy's Ex-Chief: HP's Claims 'Completely and Utterly Wrong' http://nyti.ms/Ta7DhW NYT: 'The former chief executive of Autonomy, the British software maker...
Autonomy's Ex-Chief: HP's Claims 'Completely
 and Utterly Wrong' http://nyti.ms/Ta7DhW

NYT: 'The former chief executive of Autonomy, the British software maker at the center of Hewlett-Packard's latest scandal denied that his former company committed any accounting chicanery or misled anyone about its financial information.

The executive, Mike Lynch, insisted that the first he had heard of the allegations when H.P. announced its findings on Tuesday morning. And even afterward, he vigorously rejected any notion that Autonomy had committed accounting fraud.

"We were shocked and very surprised because no one had actually been in touch with us," he told DealBook by telephone. "It's completely and utterly wrong."'...

 im1dc commented on 'Links for 11-20-2012' tag:typepad.com,2003:6a00d83451b33869e2017ee574a178970d 2012-11-20T23:40:10Z 2012-11-20T23:40:10Z im1dc President Obama must STOP appointing Republicans to important positions and appoint DEMs, the bench is rich use it! http://firstread.nbcnews.com/_news/2012/11/20/15309589-gop-intel-chairman-talks-about-potential-cia-director-job "GOP...
President Obama must STOP appointing Republicans to important positions and appoint DEMs, the bench is rich use it!

http://firstread.nbcnews.com/_news/2012/11/20/15309589-gop-intel-chairman-talks-about-potential-cia-director-job

"GOP Intelligence chairman flirts with gig as CIA director"

"First Read: House Intelligence Committee Chairman Mike Rogers, R-Mich., did little to tamp down speculation that he's under consideration to become the next CIA director, saying he could neither confirm nor deny conversations with the Obama administration about the vacant position"

 im1dc commented on 'Links for 11-20-2012' tag:typepad.com,2003:6a00d83451b33869e2017c33d10879970b 2012-11-20T23:36:34Z 2012-11-20T23:36:34Z im1dc The PACA is taking shape. http://vitals.nbcnews.com/_news/2012/11/20/15309331-federal-government-releases-long-awaited-health-reform-rules "Federal government releases long-awaited health reform rules" By Maggie Fox, NBC News "Long-awaited federal...
The PACA is taking shape.

http://vitals.nbcnews.com/_news/2012/11/20/15309331-federal-government-releases-long-awaited-health-reform-rules

"Federal government releases long-awaited health reform rules"

By Maggie Fox, NBC News

"Long-awaited federal rules for health insurance plans came out Tuesday, and they make clear that insurance plans that people can buy on the open market next year will look a lot like some of the most popular plans on offer now – with a few big differences...

...The new rules from the Health and Human Services Department cover the new state exchanges, where people will be able to buy health insurance starting in 2014.

The rules lay out how much extra insurers can charge to cover certain groups of people, like smokers and people who are older..."
 anne commented on 'Links for 11-20-2012' tag:typepad.com,2003:6a00d83451b33869e2017d3dff96dc970c 2012-11-20T23:34:24Z 2012-11-20T23:34:24Z anne http://angryarab.blogspot.com/2012/11/a-most-racist-piece-by-jodi-rudoren-who.html November 20, 2012 A most racist piece by Jodi Rudoren, who is proving that she can be as zealous...
http://angryarab.blogspot.com/2012/11/a-most-racist-piece-by-jodi-rudoren-who.html

November 20, 2012

A most racist piece by Jodi Rudoren, who is proving that she can be as zealous in propaganda for Israel as her other colleagues

So Palestinians don't cry and they don't mourn their children. This is the kind of trash that colonialists used to write about the natives back in another century. "There were few if any visible tears at the intense, chaotic, lengthy funeral on Monday of Jamal and seven relatives...But the tone, far more fundamentalist than funereal, was also a potent sign of the culture of martyrdom that pervades this place, and the numbness that many here have developed to death and destruction...the mourners, except for a few close relatives inside the mosque, were neither overcome with emotion nor fed up..." * Ms. Rudoren came close to maintaining that the Palestinians expressed gratitude to the Israeli army for killing their children.

* http://www.nytimes.com/2012/11/20/world/middleeast/gazans-mourn-dalu-family-killed-by-israeli-bomb.html

-- As'ad AbuKhalil
 anne commented on 'Links for 11-20-2012' tag:typepad.com,2003:6a00d83451b33869e2017c33d1001a970b 2012-11-20T23:32:37Z 2012-11-20T23:32:37Z anne http://www.nytimes.com/2012/11/21/world/middleeast/gaza-hospitals-quiet-day-shattered-by-rockets-and-sirens.html November 20, 2012 Gaza Hospital's Day Is Shattered by Rockets and Sirens By JODI RUDOREN Explosions near Al Shifa...
http://www.nytimes.com/2012/11/21/world/middleeast/gaza-hospitals-quiet-day-shattered-by-rockets-and-sirens.html

November 20, 2012

Gaza Hospital's Day Is Shattered by Rockets and Sirens
 By JODI RUDOREN

Explosions near Al Shifa Hospital were followed by a deluge of wounded people.

[ Fascinating and tragic, the lack of politically influential voices asking for peace, for a ceasefire, just as there was a lack of such voices in 2008. ]
 Jan commented on 'Links for 11-20-2012' tag:typepad.com,2003:6a00d83451b33869e2017d3dfef58d970c 2012-11-20T21:42:01Z 2012-11-20T21:42:01Z Jan Robert Lucas gobsmacking stupidities on debt- Professor Lars Pålsson Syll Malmö University 20 November, 2012 at 18:08 http://larspsyll.wordpress.com/2012/11/20/robert-lucas-gobsmacking-stupidities-on-debt/ Interviewed in...

 Robert Lucas gobsmacking stupidities on debt- Professor Lars Pålsson Syll Malmö University
 20 November, 2012 at 18:08
 http://larspsyll.wordpress.com/2012/11/20/robert-lucas-gobsmacking-stupidities-on-debt/

 Interviewed in a Swedish Television documen-tary on the the economic crisis (aired yesterday on SvT), Nobel laureate Robert Lucas answered a question (wind to 19:40 in the programme here http://www.svtplay.se/video/591940/19-11-del-2-av-3 ) if the level of debt was a problem, by telling us that the high level of debt is not an interesting problem, since, for a country as a whole, debt and credit always "cancel out." Unbelievable stupidity even to come from a Chicago economist. Fortunately Dirk Bezemer and Steve Keen were also interviewed and could sort things out and give a more sensible view on the increasing indebtedness of modern economies.

 Debt-deflation and austerity-Professor Lars Pålsson Syll-Malmö University
 20 November, 2012 at 21:24 | Posted in Economics | Leave a comment
 Some of my readers have asked me if there really is any difference between solving the liquidity trap by lowering real wages via inflation or by lowering nominal wages. Are they not equivalent measures?

No, they are not!
 As John Maynard Keynes wrote in General Theory (1936):

 The method of increasing the quantity of money in terms of wage-units by decreasing the wage-unit increases proportionately the burden of debt; whereas the method of producing the same result by increasing the quantity of money whilst leaving the wage-unit unchanged has the opposite effect. Having regard to the excessive burden of many types of debt, it can only be an inexperienced person who would prefer the former … If a sagging rate of interest has to be brought about by a sagging wage-level … there is … a double reason for putting off investment and thus postponing recovery.

Or as Irving Fisher – the originator of the debt-deflation theory – wrote in Debt-Deflation Theory of Great Depressions (Econometrica, 1933):

In summary, we find that: (1) economic changes include steady trends and unsteady occasional disturbances which act as starters for cyclical oscillations of innumerable kinds; (2) among the many occasional disturbances, are new opportunities to invest, especially because of new inventions; (3) these, with other causes, sometimes conspire to lead to a great volume of over-indebtedness; (4) this in turn, leads to attempts to liquidate; (5) these, in turn, lead (unless counteracted by reflation) to falling prices or a swelling dollar; (6) the dollar may swell faster than the number of dollars owed shrinks; (7) in that case, liquidation does not really liquidate but actually aggravates the debts, and the depression grows worse instead of better, as indicated by all nine factors; (8) the ways out are either laissez faire (bankruptcy) or scientific medication (reflation), and reflation might just as well have been applied in the first place.

Austerity policies will only bring our economies deep into the kind of debt-deflationary depressions that Fisher and Keynes warned us of in the 1930s.
 anne commented on 'Links for 11-20-2012' tag:typepad.com,2003:6a00d83451b33869e2017d3dfe97f0970c 2012-11-20T20:30:26Z 2012-11-20T20:30:26Z anne A dramatic difference in the rationale for militarism or war from the Bush to the Obama years came in justifying...
A dramatic difference in the rationale for militarism or war from the Bush to the Obama years came in justifying wars or war efforts as through bombing in humanitarian terms. Samantha Power who was close to Obama from the beginning of the initial campaign for the Presidency may have sold the idea of war for the sake of humanitarian purposes or Obama may have taken to the idea alone, but the idea was championed by Democrats and has effectively stopped any viable anti-war movement.

We are at war for the sake of little girls in Afghanistan, as Senator Obama and President Sarkozy told us in Paris in 2008, and there were only cheers.
 anne commented on 'Links for 11-20-2012' tag:typepad.com,2003:6a00d83451b33869e2017d3dfe8dd1970c 2012-11-20T20:21:49Z 2012-11-20T20:21:49Z anne [ I do not see meaningful cuts in military spending but do see meaningful though masked cuts in Medicare and...
[ I do not see meaningful cuts in military spending but do see meaningful though masked cuts in Medicare and Social Security benefits. There will only be a pretense of military spending cuts. ]

in other words

you see dead people

[ What a powerful response. ]
 Goldilocksisableachblonde commented on 'Links for 11-20-2012' tag:typepad.com,2003:6a00d83451b33869e2017ee5738f4f970d 2012-11-20T20:11:49Z 2012-11-20T20:11:49Z Goldilocksisableachblonde A++
A++
 anne commented on 'Links for 11-20-2012' tag:typepad.com,2003:6a00d83451b33869e2017c33cfc551970b 2012-11-20T19:37:51Z 2012-11-20T19:37:51Z anne http://angryarab.blogspot.com/2012/11/the-almost-perfect-iron-dome-system.html November 20, 2012 The "almost perfect" Iron Dome system Authorities this week disclosed that an Iron Dome malfunction probably...
http://angryarab.blogspot.com/2012/11/the-almost-perfect-iron-dome-system.html

November 20, 2012

The "almost perfect" Iron Dome system

Authorities this week disclosed that an Iron Dome malfunction probably contributed to a rocket strike on an apartment complex in the town of Kiryat Malachi. Three people, including a pregnant woman, died in the attack, the most significant Israeli casualties of the violence.

Israeli press reports indicate that the Iron Dome installation in Kiryat Malachi suffered a communications problem. There have also been reports of shrapnel damage on the ground from the remains of Israeli interceptor missiles.

U.S. taxpayers have paid much of the reported $500-million price tag — to date — of Iron Dome, which Israel began developing five years ago. The U.S. ambassador here, Dan Shapiro, appeared with the Israeli defense minister in the ceremony installing the latest battery.

U.S. funding is also expected to underwrite Israeli's next-generation antimissile shield, known as David's Sling, aimed at longer-range missiles, fired from as far away as Iran. Rafael Advanced Defense Systems, the Israeli firm that developed Iron Dome, is also working on David's Sling, along with Raytheon, the U.S. defense giant. Rafael would like to market Iron Dome globally. *

* http://www.latimes.com/news/nationworld/world/la-fg-israel-iron-dome-20121120,0,2227164.story

- As'ad AbuKhalil
 Darryl FKA Ron commented on 'Links for 11-20-2012' tag:typepad.com,2003:6a00d83451b33869e2017c33cfbfe2970b 2012-11-20T19:33:08Z 2012-11-20T19:33:08Z Darryl FKA Ron If there is a grand economic formula involved that we should learn from, then I can offer two. 1. Camouflaged...
If there is a grand economic formula involved that we should learn from, then I can offer two.

1. Camouflaged opportunism will out perform brazen opportunism.

2. Over a billion people heading in one direction can move a lot of stuff.
 Mark A. Sadowski commented on 'Links for 11-20-2012' tag:typepad.com,2003:6a00d83451b33869e2017d3dfe50a1970c 2012-11-20T19:32:55Z 2012-11-20T19:32:55Z Mark A. Sadowski http://esoltas.blogspot.com/2012/11/fiscal-cliffs-and-policy-mixes.html November 19, 2012 Fiscal Cliffs and Policy Mixes By Evan Soltas "I've got a bunch of posts coming this...
http://esoltas.blogspot.com/2012/11/fiscal-cliffs-and-policy-mixes.html

November 19, 2012

Fiscal Cliffs and Policy Mixes
 By Evan Soltas

"I've got a bunch of posts coming this week on Bloomberg View. Here's the first, about why the fiscal cliff is a problem only because of inappropriate monetary-fiscal policy mix, and my thoughts about what is to be done:

http://bloom.bg/ROUiwo

"Federal Reserve Chairman Ben S. Bernanke, taking questions during a February House hearing on monetary policy, uttered two very special words: fiscal cliff.

"Under current law, on January 1, 2013," Bernanke said, "there's going to be a massive fiscal cliff of large spending cuts and tax increases."

It was the first time the phrase had been used, but the idea behind it was far from news. Well before Bernanke testified, the Bush-era tax cuts and the recovery stimulus were scheduled to sunset, and the sequester was set to take effect. Nor was Bernanke's coinage particularly apt, as it likened an accumulation of fiscal policy decisions to a geological phenomenon, a gradual austerity to a sudden apocalyptic plummet.

Still, it stuck. The vivid imagery and false urgency of the term transformed budget arcana into a national Wile E. Coyote moment. The words lent themselves to media overexposure and political opportunism. Despite efforts by Chris Hayes, Ezra Klein and Suzy Khimm to rebrand it the "fiscal curb" or "austerity crisis" -- either of which would be more consistent with reality -- Bernanke's original phrasing has held fast. (Disclosure: I am also a writer for Klein's Wonkbook newsletter.)

Whatever Bernanke's intention in February, Congress now works in fear of falling off his fiscal cliff. The irony is that while economic recovery rests largely in Bernanke's hands, the tyranny of impending austerity is leading Congress toward poor decisions about the long-term structure of public spending and tax policy. These are mistakes monetary policy could never offset.

The cause of our cliff problem rests in the commingling of responsibility between fiscal and monetary policy in managing the economic recovery. A more mature way of doing business would charge the Fed with stabilizing demand in the short run and Congress with a structural environment conducive to the social welfare and economic growth over the long run. The U.S. is doing neither well right now..."
 Darryl FKA Ron commented on 'Links for 11-20-2012' tag:typepad.com,2003:6a00d83451b33869e2017ee57359d0970d 2012-11-20T19:29:21Z 2012-11-20T19:29:21Z Darryl FKA Ron Developing Asia and the developed west have an economic marriage of convenience, but it is loveless and the in-laws are...
Developing Asia and the developed west have an economic marriage of convenience, but it is loveless and the in-laws are pithy and two-faced. The developed west nation MNCs provide Asia capital, IP rights, and starter markets, while developing Asia provides the MNCs a vast Asian growth market, labor arbitrage two-fer of lower real domestic wages against even further over-valued western currencies of the developed inflation fearing nations. There is lots of arbitrage and lots of noodling. The US and China are the archetypes of these phenomena. Each is big and bold and by the very nature of the arrangement must disparage the other in an attempt to deflect attention from their own guilt in their loveless pursuit of economics convenience. There are big down sides in the future for all peoples involved, but the plutocrats will do fine all around. It is what nations do when pursuing the self interest of their people, but especially the elites interest. After all, the losses will be either sucked up or socialized on both ends. Power corrupts, but those that have it think that it is really kool.

 anne commented on 'Links for 11-20-2012' tag:typepad.com,2003:6a00d83451b33869e2017c33cfb89a970b 2012-11-20T19:26:59Z 2012-11-20T19:26:59Z anne http://angryarab.blogspot.com/2012/11/barry-in-asia.html November 20, 2012 Barry in Asia Obama's visit comes amid a conflagration in western Arakan State, where violence has...
http://angryarab.blogspot.com/2012/11/barry-in-asia.html

November 20, 2012

Barry in Asia

Obama's visit comes amid a conflagration in western Arakan State, where violence has flared between Muslim Rohingya and the Myanmar Buddhist majority, displacing tens of thousands and reducing dozens of Rohingya townships to piles of smoking rubble. The subsequent outpouring of prejudice against the Rohingya, even by avowed Myanmar democrats, former political prisoners, and the crimson-robed monks who took to the streets against the military in 2007, has come as a surprise to many. Aung San Suu Kyi herself, perhaps jockeying for support ahead of elections in 2015, has been hesitant to say whether the stateless and rightless Rohingya qualify for citizenship in Myanmar, allowing more radical elements to dominate the debate and leading one analyst to call her "the worst person in Burma." *

* http://www.foreignaffairs.com/articles/138439/sebastian-strangio/what-obama-wants-from-myanmar?page=show

-- As'ad AbuKhalil
 anne commented on 'Links for 11-20-2012' tag:typepad.com,2003:6a00d83451b33869e2017ee573538d970d 2012-11-20T19:24:53Z 2012-11-20T19:24:53Z anne http://angryhttp://angryarab.blogspot.com/2012/11/the-wrong-house-in-gaza.htmlarab.blogspot.com/2012/11/the-wrong-house-in-gaza.html November 20, 2012 The wrong house in Gaza? "And that is where the Dalu family story must be especially...
http://angryhttp://angryarab.blogspot.com/2012/11/the-wrong-house-in-gaza.htmlarab.blogspot.com/2012/11/the-wrong-house-in-gaza.html

November 20, 2012

The wrong house in Gaza?

"And that is where the Dalu family story must be especially troubling for Americans—not just because of our support for the Netanyahu government and its policies, whatever they are (which is an issue of its own), and not just because it's particularly hard to see how this campaign ends in anything other than a tragedy and a prelude for the next conflict—but because the illusion of surgical war has become our illusion, too, in Afghanistan and Pakistani border regions and elsewhere." *

* http://angryarab.blogspot.com/2012/11/the-wrong-house-in-gaza.html

-- As'ad AbuKhalil
 Mark A. Sadowski commented on 'Links for 11-20-2012' tag:typepad.com,2003:6a00d83451b33869e2017ee57350b8970d 2012-11-20T19:22:57Z 2012-11-20T19:22:57Z Mark A. Sadowski http://www.slate.com/blogs/moneybox/2012/11/20/what_job_does_stephen_williamson_think_narayana_kocherlakota_is_angling.html November 20, 2012 What Job Does Stephen Williamson Think Narayana Kocherlakota Is Angling For? By Matthew Yglesias "I just...
http://www.slate.com/blogs/moneybox/2012/11/20/what_job_does_stephen_williamson_think_narayana_kocherlakota_is_angling.html

November 20, 2012

What Job Does Stephen Williamson Think Narayana Kocherlakota Is Angling For?
 By Matthew Yglesias

"I just noticed that Stephen Williamson took issue with my praise of Minneapolis Federal Reserve President Narayana Kocherlakota's change of positioning on monetary policy issues.

http://newmonetarism.blogspot.com/2012/10/when-is-it-time-to-take-vacation.html

He didn't really explain himself in the post per se, but in ensuing comments in the discussion thread Williamson makes clear that he doesn't buy the idea that Kocherlakota was persuaded to change his mind by evidence. Rather, he states that the only good theory he has for the flip-flop is that "ambition collides with economic science." In general my impression is that people who run around talking a lot about "economic science" are generally engaged in an unscientific level of self-puffering and BS. But that aside, it would be interesting to engage in a little psychological science. Having put forward the theory that Kocherlakota is only pretending to be persuaded by evidence, Williamson doesn't offer any theory as to what the nature of the ambition is. What job is he angling for?

Here's what I think about ambition. I think that if I were an ambitious monetary economist who believed in good faith that the current course being pursued by the FOMC will be ineffective in boosting employment and is likely to produce a troubling level of inflation, I'd be shouting that from the rooftops.

 Why? Because when we're mired in inflation, all the whores and politicians will look up and shout "save us!" and they'll be shouting at the people who called it right. When Milton Friedman warned that the naive Phillips Curve economics being pursued by the Federal Reserve in the late-60s and 70s would lead to ruinous inflation, nobody listened to him. Until suddenly they did listen to him and low and behold Milton Friedman was super-famous. Developing a correct analysis of the situation and then explain it is obviously no guarantee of success in your career. But all else being equal, it tends to help. That said, sometimes things aren't equal. But I wonder what it is Williamson thinks isn't equal here? What job is Kocherlakota angling for? And how will pretending to believe something he knows is wrong help him get it?"
 Mark A. Sadowski commented on 'Links for 11-20-2012' tag:typepad.com,2003:6a00d83451b33869e2017ee5734aa4970d 2012-11-20T19:18:11Z 2012-11-20T19:18:11Z Mark A. Sadowski http://www.slate.com/blogs/moneybox/2012/11/19/retail_wage_surge_what_would_the_federal_reserve_do.html November 20, 2012 What Would The Federal Reserve Do If Retail Wages Surged? By Matthew Yglesias "Catherine Ruetschlin has...
http://www.slate.com/blogs/moneybox/2012/11/19/retail_wage_surge_what_would_the_federal_reserve_do.html

November 20, 2012

What Would The Federal Reserve Do If Retail Wages Surged?
 By Matthew Yglesias

"Catherine Ruetschlin has produced an outside-the-box policy brief for Demos arguing for "a new wage floor for the lowest-paid retail workers equivalent to $25,000 per year for a full-time, year-round retail worker at the nation's largest retail companies—those employing at least 1,000 workers."

http://www.demos.org/publication/retails-hidden-potential-how-raising-wages-would-benefit-workers-industry-and-overall-ec

 Conventional thinking would say this would result in massive job losses, but she argues that we should actually see it as a form of fiscal stimulus:

"The economy would grow and 100,000 or more new jobs would be created. Families living in or near poverty spend close to 100 percent of their income just to meet their basic needs, so when they receive an extra dollar in pay, they spend it on goods or services that were out of reach before. This ongoing unmet need makes low-income households more likely to spend new earnings immediately – channeling any addition to their income right back into the economy, creating growth and jobs. This "multiplier effect" means that a higher wage standard for retail workers will also generate new jobs. Our estimates of the job creation effect are derived from widely accepted multipliers on consumer spending. It includes the benefits of a raise on disposable income and accounts for the impact of any additional costs to the firm and the potential for businesses to pass-through the cost of decent wages onto their customers through higher prices."

You can model the impact of the higher wages on profits and consumer prices in different ways, but she concludes that if firms engaged in 100 percent consumer pass-through of the costs it would amount to a one percent increase in retail prices.

 This is where I get interested in the monetary policy tie-in. In a classical framework, Ruetschlin is offering a prescription for massive job losses. The key argument here is that the classic framework is inappropriate given the large existing outgap gap. Her view is that under the circumstances, you'd see both higher real output and an increase in the price level and that the benefits in terms of real output far outweigh the costs. This is precisely the calculus made by advocates of monetary stimulus (myself included)—given the large output gap, a little more relaxation on inflation targeting could create a lot of additional real output. Alternatively, the same thing could be achieved through adopting a nominal GDP target. And within any monetary policy framework, it's possible that you would need some kind of fiscal or other "kick" to deliver the goods more rapidly. That's essentially what Ruitschlin is pushing for here.

But then another question you might ask is what would be the impact on the economy of this policy switch in the context of continued strict two percent inflation targeting? Well, the higher consumer prices would militate in favor of tighter money. And the higher wages would also militate in favor of tighter money. So any possible benefits would likely be wiped out.

The moral of the story, in short, is that whatever it is you care about in economic policy you have to care about monetary policy, because anything with a big impact on the national economy is going to have a measurable impact on the price level. How does the Fed react is a key question."
 Mark A. Sadowski commented on 'Links for 11-20-2012' tag:typepad.com,2003:6a00d83451b33869e2017c33cfa73f970b 2012-11-20T19:13:38Z 2012-11-20T19:13:38Z Mark A. Sadowski http://www.forbes.com/sites/modeledbehavior/2012/11/20/some-thoughts-on-housing/ November 20, 2012 Some Thoughts on Housing By Karl Smith "...That's the kind of thing we need to escape...
http://www.forbes.com/sites/modeledbehavior/2012/11/20/some-thoughts-on-housing/

November 20, 2012

Some Thoughts on Housing
 By Karl Smith

"...That's the kind of thing we need to escape from the Zero Lower Bound.

Why it didn't happen is a complex kind of question. A good candidate for the precipitating event was the seeming near breakdown of the Eurozone that happened earlier this year and a resulting credit tightening. However, it is precisely the job of the Federal Reserve to offset such things. Moreover, its not clear that some other set events pushed this into motion.

For one thing, the composition of the housing turn-up is different than expected. Here is year-over-year growth in single family vs. multi-family

[Graph]

It's the absolute change in starts that determines contribution to GDP growth. As you can see multi-family has been growing strongly for a while now, but it has not be growing at an ever faster rate. Given the build-up in rent pressure and the decline in vacancies, this is surprising.

An interpretation here is that this is a direct result of the failure of the Fed to make a credible commitment to be irresponsible. Though the fundamentals of the renting market were tightening quickly in 2011, banks perceived the Fed as unwilling to allow rents – the largest component of core CPI – to grow above trend.

Hence, in the face of high demand and rapidly improving fundamental banks were reluctant to lend. This hypothesis is bolstered by the fact that private equity started to move into the rental game. One way to think about Private Equity is as a way to get around constraints placed on you by the Fed. You drive down liquidity demand among a somewhat insulated set rich people using personal relationships as a substitute for liquid traction instruments. This allows you to make far less liquid investments or take on far higher levels of leverage then would otherwise be possible.

Since we see that in the rental market, it is a sign that the rental property market is liquidity constrained and hence is a place where Private Equity could earn abnormally high returns.

I don't have time for much more but I did want to look at absolute quarterly change in permits, as this is the best proxy we have for GDP growth. Indeed, in a dynamic period like this, it's likely better than the real time releases by the BEA. That is, I suspect in the years to come the BEA will revise its 2012 estimates towards what quarterly permit change now suggests.

[Graph]

As you can see absolute quarterly permit growth is closing in on levels seen during the 2000s, suggesting a contribution to GDP growth that may be inline with and eventually even above what we saw during the early 2000s.

This confuses some folks because housing construction is small fraction of GDP. It makes huge percentage fluctuations, however. So, if housing construction is 2% of GDP and it doubles over 12 months, then its direct contribution to GDP is 2%. That's not including an multiplier effects or amplification and the 2% added on top of what GDP growth would have been otherwise.

That is, of course, assuming the Fed does not respond by cranking down on the rest of the economy or that the housing growth was not prompted by monetary moves in foreign countries. In those cases there would be some almost necessarily offsetting reduction in either Non-Residential Investment or Net Exports, respectively."
 Mark A. Sadowski commented on 'Links for 11-20-2012' tag:typepad.com,2003:6a00d83451b33869e2017ee5733cdd970d 2012-11-20T19:07:14Z 2012-11-20T19:07:14Z Mark A. Sadowski http://macromarketmusings.blogspot.com/2012/11/there-is-no-fiscal-slope.html November 19, 2012 There Is No Fiscal Slope By David Beckworth "...If households and firms expect the economy to...
http://macromarketmusings.blogspot.com/2012/11/there-is-no-fiscal-slope.html

November 19, 2012

There Is No Fiscal Slope
 By David Beckworth

"...If households and firms expect the economy to get much worse because of this fiscal tightening--and they have no reason not to given all of media coverage--it does not matter that it is will unfold slowly over next year. They will change their behavior today in anticipation of this fiscal cliff and make it a self-fulfilling outcome. So unless the Fed offsets the fiscal tightening, there is no fiscal slope. It is a pipe dream.

This understanding may shed some light on recent developments in expected inflation that have folks like Ryan Avent worried. Expected inflation, as measured by treasury breakeven rates, during this crisis has been a good indicator of the market's economic outlook. Higher expected inflation implies higher future nominal spending. Given the current slack and nominal rigidities, higher expected nominal spending in turn implies higher future real economic growth. That is why the stock market has closely tracked this indicator over the crisis as seen below:

http://4.bp.blogspot.com/-sF-PluAcNLo/UKpvZg6VlTI/AAAAAAAACm4/n0So0C1sk68/s1600/fredgraph1.png

 But lately expected inflation has been falling. Here is Ryan Avent:

http://www.economist.com/blogs/freeexchange/2012/11/monetary-policy

"[S]ince mid-October, there has been an unmistakable reversal in the inflation-expectations trend. Based on 5-year breakevens, all of the September spurt has been erased. And 2-year breakevens are back at July levels. Given my optimism over the Fed's September moves and the apparent strength of underlying fundamentals in the economy, I would like to disregard this trend, but one should be very reluctant to abandon guideposts that have served one well just because they've moved in an inconvenient way."

Avent goes on to speculate why expected inflation would be falling now. He cites as possible explanations an expected economic slowdown elsewhere in the world or the breakdown of the relationship between expected inflation and demand growth. There is a third alternative: markets in mid-October began to price in the increasing likelihood of the fiscal cliff materializing since they realized President Obama was probably going to win reelection. This fits nicely with the fact that the decline in expected inflation is being matched by a sustained fall in the stock market, indicating the relationship is still strong. This can be seen in the figure above or in the close up below:

http://2.bp.blogspot.com/-_6gC0MJI8_0/UKpy9j4B4uI/AAAAAAAACnM/rviFqimGAjY/s1600/fredgraph2.png

If this interpretations is correct, then it supports the view that it is a mistake to hope for a fiscal slope. Expectations matter."
 Mark A. Sadowski commented on 'Links for 11-20-2012' tag:typepad.com,2003:6a00d83451b33869e2017ee573351f970d 2012-11-20T19:01:06Z 2012-11-20T19:01:06Z Mark A. Sadowski http://noahpinionblog.blogspot.com/2012/11/lets-have-little-chat-about-inflation.html November 20, 2012 Let's have a little chat about inflation... By Noah Smith "Inflation is one of those things...
http://noahpinionblog.blogspot.com/2012/11/lets-have-little-chat-about-inflation.html

November 20, 2012

Let's have a little chat about inflation...
 By Noah Smith

"Inflation is one of those things that almost nobody who isn't an economist (but also a large chunk of economists) seems to understand. First of all, there is the fact that most people don't even seem to know what inflation is. Some people seem to equate the word "inflation" with "a decrease in [my] real wages" - if things seem harder to afford, then it must be "inflation". Others seem to think that if stock prices go up, then that is "inflation". Still others use the word "inflation" to describe specific price changes - for example, if oil gets more expensive, people call that "oil price inflation". And the other day, I had a friend tell me: "[It's] simple. Low [interest] rates mean the price of money is low. That's a form of deflation."

(Note that that last statement is the exact opposite of correct. Inflation is a decrease in the value of money. Deflation is an increase in the value of money.)

Or the other day, someone on Twitter asked me: "How is it possible for inflation to help debtors when wages are going down? If wages are going down, doesn't inflation just make it harder for people to pay off their debts?"

The answer is no. Here's why. Suppose you make $50,000 a year and you have $50,000 in debt. Your debt-to-income ratio is 1. Also, just for convenience, let's say the general price level starts out at "1".

Situation A: -50% real wage growth, 100% inflation.
 In this case, the new price level is 2. Your new real wage is $25,000. Your new nominal wage is $25,000 x 2 = $50,000. Your debt is still $50,000. Your debt/income ratio is still 1.

Situation B: -50% real wage growth, 0% inflation.
 In this case, the new price level is 1. Your new real wage is $25,000. Your new nominal wage is $25,000 x 1 = $25,000. Your debt is still $50,000. Your debt/income ratio is now 2.

Situation C: -50% real wage growth, 50% deflation.
 In this case, the new price level is 1/2. Your new real wage is $25,000. Your new nominal wage is $25,000 x 1/2 = $12,500. Your debt is still $50,000. Your debt/income ratio is now 4.

So as you can see, even if your real wage is going down by 50%, it's better to have inflation than no inflation if you are a net debtor. Inflation erodes the value of your debt no matter what is happening to your real wages.

So what's going on here? Why do so many people misunderstand inflation? Maybe it's a form of "Stockholm Syndrome". Inflation-hawkish economists have been bellowing, so loudly and so vehemently, that inflation is Satan - this goes back at least a hundred years - that non-economists just can't help believing it. People end up trying to think up reasons why inflation must be bad after all. When you offer them freedom - when you tell them that sometimes inflation can erode debt, relieve balance sheet recessions, and help stimulate the economy - they don't want to take it. , and they come up with more brilliant ways to identify with their captors. Or something like that.

I don't know. I feel like that's kind of a weak theory. What's really going on here? Why don't most non-economists seem to get what inflation is or what it does?"
 Fred C. Dobbs commented on 'Links for 11-20-2012' tag:typepad.com,2003:6a00d83451b33869e2017ee5732c7c970d 2012-11-20T18:54:49Z 2012-11-20T18:54:49Z Fred C. Dobbs Hmmm. Rule of thumb: to increase 'entitlement' spending (which is what you mean, I think), we'd have to increase *defense*...
Hmmm. Rule of thumb: to increase 'entitlement'
 spending (which is what you mean, I think),
 we'd have to increase *defense* spending
 a like amount, at least. Crazy, but
 that's how it works.

Federal guv'mint = National Security =
 Keeping US safe from *Whatever* =
 Defense Spending, up the wazoo.

(What we *might* do, if there's a
 consensus, is put a few $T towards
 shooting down incoming asteroids.)

Alternatively, of course, do more QE
 and have the $$$ just appear on
 balance sheets somewhere.
 Mark A. Sadowski commented on 'Links for 11-20-2012' tag:typepad.com,2003:6a00d83451b33869e2017c33cf8eef970b 2012-11-20T18:54:25Z 2012-11-20T18:54:25Z Mark A. Sadowski http://www.economist.com/blogs/freeexchange/2012/11/monetary-policy-2 November 20, 2012 Making better institutions, in America and Europe By M.C.K. "...The après-lunch speech was given by John...
http://www.economist.com/blogs/freeexchange/2012/11/monetary-policy-2

November 20, 2012

Making better institutions, in America and Europe
 By M.C.K.

"...The après-lunch speech was given by John Taylor. Mr Taylor is known for his concern with governing the Fed's actions according to transparent policy rules. The eponymous "Taylor Rule" is one example, although it was not derived from a first-principles analysis but a regression that compared the actual level of the Fed Funds rate between the mid-1980s and the early 1990s to a simple model.

http://www.stanford.edu/~johntayl/Papers/Discretion.PDF

Mr Taylor's rule became very popular in the late 1990s. Over the past decade, he has argued that the Fed held the short-term interest rate too low between 2003 and 2005 on the basis of his rule. Ironically, many who disagree with Mr Taylor's analysis of the bubble nevertheless cite alternative formulations of the policy rule to justify both quantitative easing and fiscal stimulus; according to their interpretation, nominal short-term rates should be negative. Mr Taylor disagrees, preferring the original version of his rule. The dispute is an illustration of the problem afflicting discussions of monetary policy. As Robert Hetzel noted earlier that day, it is hard to have a useful debate about which rule is best when there is no hard consensus about how the central bank affects the economy.

Like Mr Warsh and Mr Poole, Mr Taylor agreed that the expansion of the Fed's balance sheet in the aftermath of Lehman's collapse was appropriate, comparing the episode to what occurred after the terrorist attacks of September 11, 2001. He believes that the panic was a liquidity crisis rather than a solvency crisis, which is why he argued that the balance sheet should have shrunk back to its pre-crisis level by the beginning of 2009. Again, it is difficult to square this support of the Fed's concessional lending programmes with his campaign against the evils of moral hazard. Unlike Warsh and Poole, however, Mr Taylor argued that he cared deeply about the fate of the unemployed. He seems to sincerely believe that reversing the Fed's current policies would eliminate "uncertainty" and lead to a robust recovery. Regrettably, I was not able to ask Mr Taylor to provide more detail on how this would work.

Despite the fact that your correspondent was not called on, Mr Taylor was nevertheless asked two interesting questions. One young man asked whether the adoption of a nominal GDP target would satisfy Mr Taylor's desire for the Fed to be governed by rules rather than the whims of policymakers. Mr Taylor had no problem with steady nominal GDP growth as a goal of monetary policy but he did not see how a rule along the lines of "keep NGDP on its trend path" would be useful because it does not address how to achieve this objective. Expectations matter, he noted, but they are nothing without actions that justify those expectations. A policy rule is useless if it does not to relate to the instruments at the disposal of policymakers. Mr Taylor's critique applies equally to consumer price inflation targets. In fact, he argued that the Fed was too concerned with the threat of deflation in the early 2000s. Unconstrained by a simple rule, policymakers acted too aggressively and, according to Mr Taylor, inflated an asset bubble.

Interestingly, Mr Taylor seems to have had a different answer to this question back when he wrote about the subject twenty years ago (from the paper linked above):

"A policy rule need not be a mechanical formula, but here there is more disagreement among economists. A policy can be implemented and operated more informally by policymakers who recognize the general instrument responses that underlie the policy rule, but who also recognize that operating the rule requires judgment and cannot be done by computer. This broadens the definition of a policy rule significantly and permits the consideration of issues that would be excluded under the narrower definition. By this definition, a policy rule would include a nominal income rule in which the central bank takes actions to keep nominal income on target, but it would not include pure discretionary policy."

Another young man asked whether a policy rule or an inflation index should include asset prices. This is an old idea historically rejected by the academic establishment.

http://www.jstor.org/discover/10.2307/1991070?uid=3739584&uid=2&uid=4&uid=3739256&sid=21101383275181

Mr Taylor, reflecting the consensus, said that asset prices are too volatile for a central bank to react to them. He also argued that it is not necessary for central bankers to focus on asset prices in order to prevent bubbles. According to Mr Taylor, America's housing bubble would have been prevented had the FOMC simply followed his advice at the time. Most of the people involved in running the Federal Reserve during the period, including Alan Greenspan and Ben Bernanke, now claim that higher short-term interest rates would have made little difference because long-term interest rates were being suppressed by the "global savings glut".

However, transcripts of the meetings of the FOMC from this period (like this one)

http://federalreserve.gov/monetarypolicy/files/FOMC20040316meeting.pdf

suggest that the Fed felt perfectly capable of raising long-term rates at the time. After all, the yield curve was quite steep. The debate among policymakers was whether the output gap was wide enough to justify inflating a bubble. As Donald Kohn, then the Vice Chairman of the Federal Reserve Board, said:

"Some observers have been arguing that our patience should be wearing thin sooner rather than later. One argument is that policy is very accommodative by historical standards and that many of the reasons for adopting such an accommodative policy no longer pertain. Demand has strengthened substantially, and the threat of pernicious deflation has receded. A second concern is that policy accommodation—and the expectation that it will persist—is distorting asset prices. Most of this distortion is deliberate and a desirable effect of the stance of policy. We have attempted to lower interest rates below long-term equilibrium rates and to boost asset prices in order to stimulate demand."

Advocates of low rates within the FOMC evidently agreed with Mr Taylor's claim that the Federal Reserve was inflating asset prices. Unlike Mr Taylor and other critics, however, Mr Kohn and his colleagues thought the positive consequences of this decision outweighed the negative ones. The more interesting question is whether Mr Taylor's preferred policy would have been sufficient to prevent the housing bubble. It is doubtful that it will be answered anytime soon..."
 Darryl FKA Ron commented on 'Links for 11-20-2012' tag:typepad.com,2003:6a00d83451b33869e2017c33cf8da9970b 2012-11-20T18:53:44Z 2012-11-20T18:53:44Z Darryl FKA Ron Have we had any reasonable understanding of political events in and about the Middle East? What of Asian policy? [We...
Have we had any reasonable understanding of political events in and about the Middle East? What of Asian policy?

[We may know sooner than later. The POTUS will have a lot on his plate, especially if today's Roubini link is any where near correct. Doc Doom says 2013 will be an interesting year. Romney is probably breathing a sigh of relief. Better to have run and failed than actually be POTUS over the next term.]
 Darryl FKA Ron commented on 'Links for 11-20-2012' tag:typepad.com,2003:6a00d83451b33869e2017c33cf87c3970b 2012-11-20T18:48:59Z 2012-11-20T18:48:59Z Darryl FKA Ron Yep, except whether cutting defense will be easier. Easier on the soul for sure. Whether WellPoint or General Dynamics is...
Yep, except whether cutting defense will be easier. Easier on the soul for sure. Whether WellPoint or General Dynamics is better represented in Congress and has more friends among former Goldman Sachs economists remains to be seen.
 Mark A. Sadowski commented on 'Links for 11-20-2012' tag:typepad.com,2003:6a00d83451b33869e2017ee573235d970d 2012-11-20T18:48:14Z 2012-11-20T18:48:14Z Mark A. Sadowski http://www.economist.com/blogs/freeexchange/2012/11/monetary-policy-japan November 20, 2012 Battle of the BOJ By H.T. "IT IS rare in Japan for politicians to say anything...
http://www.economist.com/blogs/freeexchange/2012/11/monetary-policy-japan

November 20, 2012

Battle of the BOJ
 By H.T.

"IT IS rare in Japan for politicians to say anything meaningful enough to move markets. But in the space of a few days, Shinzo Abe, who is leading in opinion polls to become Japan's next prime minister, has spoken so provocatively about monetary policy that it has sent the stockmarket, currency and bond markets into spasms of hope and fear. So effective has been his intervention that on November 20th, Masaaki Shirakawa, the governor of the Bank of Japan (pictured), launched what looked like a counter-attack to defend the bank's independence.

Stockmarket analysts have generally welcomed Mr Abe's pledge to inflate the economy with aggressive pump-priming measures, saying it has already cheapened the yen and boosted share prices. They hope he will do more to stir business activity if his Liberal Democratic Party (LDP) wins the December 16th election. But they should consider carefully what they wish for. As share prices have risen recently, so have long-term bond yields. If too reckless a reflationary effort awakens Japan's "bond vigilantes" from a 20-year coma, there could be hell to pay.

That was the point that Mr Shirakawa guardedly made at a news conference to explain why there was no change in policy on November 20th after the BOJ's regular board meeting. Without picking a fight directly with Mr Abe, he said the latest policy proposal espoused by the LDP leader—setting an inflation target as high as 3%—was "unrealistic and in fact would have a big negative impact on the economy." Another proposal—buying government bonds to finance public-works programmes —would lead to "reckless money printing". A third idea —to foster negative interest rates—could cause financial markets to seize up in an emergency.

Many market participants may dismiss this as the defeatist talk of an over-cautious central banker whose term ends next April and who knows he will not be re-appointed if Mr Abe wins the election. But Mr Shirakawa has a point.

Pushing too aggressively for 3% inflation when Japan's consumer price index has barely risen by more than 1% for decades could shock a country whose banking system is up to its neck in government bonds. As an indication of growing nervousness in the inflation-sensitive long end of the bond market, the gap between the 30-year and ten-year Japanese government bonds has reached its widest since March 2008, according to Bloomberg. Though the moves are still relatively miniscule, a full-scale sell-off in the bond market would cripple Japanese banks. That fear makes it hard for the BOJ to reach its 1% inflation goal, let alone a 3% one.

Meanwhile, the prospect of debt monetisation is especially risky when Japan has one of the largest government debts in the world. The country is lucky to have a big enough pool of domestic savers to finance such borrowing. But their loyalty cannot be taken for granted, especially to fund a rehash of one of the LDP's failed economic policies of the past: massive, often wasteful, construction spending.

It may be possible to shrug off Mr Abe's tough talk as electioneering. After all, it must look good to voters to see the moribund stockmarket rallying for a change on his comments. It is quite possible that if he wins the election, more hawkish elements of his party will restrain his reflationary impulses.

One worry, however, is that he is already on record as saying he would appoint a more like-minded governor than Mr Shirakawa in April—in other words, his man, not the BOJ's. That would be a blow to the bank's autonomy. Another worry is that if a future government thinks monetary policy is the only cure for the economy, it feels less pressure to take bold steps to deregulate markets, spur innovation and make Japan more competitive.

As the head of a party whose main selling point to the electorate is its experience, thanks to more than five decades in power until 2009, Mr Abe may feel it is a mark of his prestige that he can talk down the yen so easily. But just as easily, loose talk can start to chip away at people's confidence. And confidence, on which Japan's huge stock of domestically held savings depends, is the most precious asset the country has left."
 Mark A. Sadowski commented on 'Links for 11-20-2012' tag:typepad.com,2003:6a00d83451b33869e2017ee5731ef4970d 2012-11-20T18:44:49Z 2012-11-20T18:44:49Z Mark A. Sadowski http://ftalphaville.ft.com/2012/11/20/1269683/a-year-in-a-life/ November 20, 2012 A year in a life… By David Keohane "Dear euro, this has been your 2012 so...
http://ftalphaville.ft.com/2012/11/20/1269683/a-year-in-a-life/

November 20, 2012

A year in a life…
 By David Keohane

"Dear euro, this has been your 2012 so far. Do try and get through the rest safely:

http://ftalphaville.ft.com/files/2012/11/Euro-dollar-a-year-in-a-life.png

(Chart from Morgan Stanley — click to enlarge.)

We note, the French downgrade needs to be added — as we type the euro is down a monstrous 0.1 per cent — and as Simon Derrick from BNY Mellon said recently, there are enough risks out there right now to make ducking into a haven until the New Year look pretty sensible.

 For what it's worth MS are targetting $1.20 in 2013.

 Related links:..."

 http://soberlook.com/2012/11/is-sandy-effect-on-economic-data.html
 Mark A. Sadowski commented on 'Links for 11-20-2012' tag:typepad.com,2003:6a00d83451b33869e2017d3dfe1123970c 2012-11-20T18:41:18Z 2012-11-20T18:41:18Z Mark A. Sadowski http://blogs.wsj.com/economics/2012/11/20/gloomy-ben-bernanke-says-great-recession-reduced-u-s-potential-growth-rate/?mod=WSJBlog November 20, 2012 Gloomy Ben: Bernanke Says Great Recession Reduced U.S. Potential Growth Rate By David Wessel "Federal Reserve...
http://blogs.wsj.com/economics/2012/11/20/gloomy-ben-bernanke-says-great-recession-reduced-u-s-potential-growth-rate/?mod=WSJBlog

November 20, 2012

Gloomy Ben: Bernanke Says Great Recession Reduced U.S. Potential Growth Rate
 By David Wessel

"Federal Reserve Chairman Ben Bernanke covers a lot of ground in a speech "The Economic Recovery and Economic Policy" he delivers Tuesday to the New York Economic Club — from the fiscal cliff (avoid it!) to Europe (policy makers are moving in right direction, follow through) to monetary policy (foot on the gas until Fed is "sure that the recovery is established.)

http://www.federalreserve.gov/newsevents/speech/bernanke20121120a.htm

One passage stands out because of its long-lived implications.

Before the Great Recession of 2007-2009, the U.S. economy was capable of growing at 2.5% a year at full employment without generating inflation. That's what economists call "the potential growth rate." It's basically the rate of growth in the labor force plus the rate of growth in output per hour, or productivity. To the Fed, it's the speed limit for growth once the economy returns, as it expects will happen a few years from now, to full employment..."
 Darryl FKA Ron commented on 'Links for 11-20-2012' tag:typepad.com,2003:6a00d83451b33869e2017c33cf7abe970b 2012-11-20T18:38:39Z 2012-11-20T18:38:39Z Darryl FKA Ron we need plans federal plans that range from forex policy down to industry by industry analysis aimed at clean green...
we need plans federal plans that range from forex policy down to industry by industry analysis
 aimed at clean green and import substitution

[Now you are just preaching to the choir. I love the sermon, but its been my church for decades so I could be biased.]
 anne commented on 'Links for 11-20-2012' tag:typepad.com,2003:6a00d83451b33869e2017c33cf7894970b 2012-11-20T18:37:00Z 2012-11-20T18:37:00Z anne Petraeus as such is not my concern, rather American militarism as personified by such mythologized figures and the intensifying of...
Petraeus as such is not my concern, rather American militarism as personified by such mythologized figures and the intensifying of militarism accordingly. Petraeus was a highly influential political figure, not just a military operations officer. Also, there is a need for us to understand just how politicized or militarized our intelligence service has become so that intelligence reaching the President has been slanted.

Have we had any reasonable understanding of political events in and about the Middle East? What of Asian policy?
 Mark A. Sadowski commented on 'Links for 11-20-2012' tag:typepad.com,2003:6a00d83451b33869e2017c33cf7797970b 2012-11-20T18:36:07Z 2012-11-20T18:36:07Z Mark A. Sadowski http://www.calculatedriskblog.com/2012/11/bernanke-economic-recovery-and-economic.html November 20, 2012 Bernanke: "The Economic Recovery and Economic Policy" By Bill McBride "From Fed Chairman Ben Bernanke: The...
http://www.calculatedriskblog.com/2012/11/bernanke-economic-recovery-and-economic.html

November 20, 2012

Bernanke: "The Economic Recovery and Economic Policy"
 By Bill McBride

"From Fed Chairman Ben Bernanke: The Economic Recovery and Economic Policy. A few excerpts:..."

http://www.federalreserve.gov/newsevents/speech/bernanke20121120a.htm

"...Bernanke is mostly repeating what he has said before: address the budget deficit, but not too quickly: "the federal budget is on an unsustainable path" and "avoid unnecessarily adding to the headwinds that are already holding back the economic recovery". Hopefully policymakers will resolve the "fiscal slope" and not play politics again with the debt ceiling."
 Darryl FKA Ron commented on 'Links for 11-20-2012' tag:typepad.com,2003:6a00d83451b33869e2017ee5731429970d 2012-11-20T18:36:00Z 2012-11-20T18:36:00Z Darryl FKA Ron Well we have a comprehensive industrial policy de facto which is financialization and arbitrage of the means of production. But...
Well we have a comprehensive industrial policy de facto which is financialization and arbitrage of the means of production. But that is a really bad plan for labor, unless you work at an investment bank. Something tells me there is a shelf life to Triffen's delimna and the imperial dollar.

So, I do get your point. Rather I got the same point a long time ago, between 1966 and 1972. That was before we even started the run on trade deficits, but the financialization was already showing itself. The buyout or sellout paradigm had several effects on effective operations well before the consolidation formed MNCs capable of influencing trade policy.
 Mark A. Sadowski commented on 'Links for 11-20-2012' tag:typepad.com,2003:6a00d83451b33869e2017d3dfe0281970c 2012-11-20T18:30:12Z 2012-11-20T18:30:12Z Mark A. Sadowski Jeffrey Lacker explains why the Fed shouldn't spend a lot of time worrying about meaningless statistics like the unemployment rate....
Jeffrey Lacker explains why the Fed shouldn't spend a lot of time worrying about meaningless statistics like the unemployment rate.

http://blogs.wsj.com/economics/2012/11/20/feds-lacker-is-skeptical-of-more-explicit-policy-thresholds/

November 20, 2012

Fed's Lacker Is Skeptical of More Explicit Policy Thresholds
 By Michael S. Derby and Kristina Peterson

"More explicitly stating what would prompt a change in monetary policy could risk a breakdown in the Federal Reserve's inflation fighting credibility, a veteran policy maker said Tuesday.

"Crisp numerical thresholds may work well in the classroom models used to illustrate policy principles, but one or two economic statistics do not always capture the rich array of policy-relevant information about the state of the economy," Federal Reserve Bank of Richmond President Jeffrey Lacker said in a speech given to a gathering of the Shadow Open Market Committee in New York.

http://www.richmondfed.org/press_room/speeches/president_jeff_lacker/2012/pdf/lacker_speech_20121120.pdf

Placing "great weight" on a single indicator of labor market conditions like the unemployment rate "can easily lead you astray," Mr. Lacker said. "It's important to avoid spurious precision," he said..."
 anne commented on 'Links for 11-20-2012' tag:typepad.com,2003:6a00d83451b33869e2017c33cf6e01970b 2012-11-20T18:28:20Z 2012-11-20T18:28:20Z anne There is a fierce slanting of reporting and analysis on China, from social to economic life, and there is a...
There is a fierce slanting of reporting and analysis on China, from social to economic life, and there is a determined foreign policy effort by the Obama administration to limit and counter Chinese political and economic influence internationally. So understanding where China is presently socially and politically and how successful economic policy has been recently is quite difficult.
 Darryl FKA Ron commented on 'Links for 11-20-2012' tag:typepad.com,2003:6a00d83451b33869e2017ee5730900970d 2012-11-20T18:26:27Z 2012-11-20T18:26:27Z Darryl FKA Ron However, I do prefer to confine our Rage Against the Machine to the plutocrats, oligarchs, and their pet trolls instead...
However, I do prefer to confine our Rage Against the Machine to the plutocrats, oligarchs, and their pet trolls instead of each other.
 Darryl FKA Ron commented on 'Links for 11-20-2012' tag:typepad.com,2003:6a00d83451b33869e2017ee573068d970d 2012-11-20T18:24:23Z 2012-11-20T18:24:23Z Darryl FKA Ron Yeah, half and half for half wits. No offense taken, even when you do refer to me. We effectively want...
Yeah, half and half for half wits.

No offense taken, even when you do refer to me. We effectively want the same things. This is just a blog any way.
 anne commented on 'Links for 11-20-2012' tag:typepad.com,2003:6a00d83451b33869e2017d3dfdf985970c 2012-11-20T18:22:58Z 2012-11-20T18:22:58Z anne Timmy * on China even with good if interested studies in hand turns it into mush the rural New Economic...
Timmy * on China
 even with good if interested studies in hand
 turns it into mush

the rural New Economic Policy revival of the 80's was indeed
 largely spontaneous
 but the commune structure
 from which it sprung was essential

* http://conversableeconomist.blogspot.com/2012/11/chinas-economic-growth-different.html
 Darryl FKA Ron commented on 'Links for 11-20-2012' tag:typepad.com,2003:6a00d83451b33869e2017ee57300d4970d 2012-11-20T18:19:41Z 2012-11-20T18:19:41Z Darryl FKA Ron U R prolly right. Less funny than ol' Stunney with a duller edge. Still humor may be the best medicine...
U R prolly right.

Less funny than ol' Stunney with a duller edge.

Still humor may be the best medicine we get and I much prefer to confine our Rage Against the Machine and their pet trolls, instead of each other.
 save_the_rustbelt commented on 'Links for 11-20-2012' tag:typepad.com,2003:6a00d83451b33869e2017d3dfdf546970c 2012-11-20T18:19:38Z 2012-11-20T18:19:38Z save_the_rustbelt For those of you interested, the Obama administration (DHHS-CMS) today published some long awaited administrative rules on existing conditions and...
For those of you interested, the Obama administration (DHHS-CMS) today published some long awaited administrative rules on existing conditions and essential benefits.

http://www.cms.gov/apps/media/press/release.asp?Counter=4478&intNumPerPage=10&checkDate=&checkKey=&srchType=1&numDays=3500&srchOpt=0&srchData=&keywordType=All&chkNewsType=1%2C+2%2C+3%2C+4%2C+5&intPage=&showAll=&pYear=&year=&desc=&cboOrder=date

Now I choose between reading this promptly or playing with my grandsons.

Grandsons.
 paine commented on 'Links for 11-20-2012' tag:typepad.com,2003:6a00d83451b33869e2017d3dfdef79970c 2012-11-20T18:15:30Z 2012-11-20T18:15:30Z paine http://earthmart.blogspot.com/ timmy on china even with good if interested studies in hand turns it into mush the rural NEP revival of...
timmy on china
 even with good if interested studies in hand
 turns it into mush

the rural NEP revival of the 80's was indeed
 largely spontaneous
 but the commune structure
 from which it sprung was essential
 paine commented on 'Links for 11-20-2012' tag:typepad.com,2003:6a00d83451b33869e2017c33cf5934970b 2012-11-20T18:12:09Z 2012-11-20T18:12:09Z paine http://earthmart.blogspot.com/ i refer to second here not u of course D for example i like this line a good deal: "With...
i refer to second here not u of course D

for example
 i like this line a good deal:

"With a nation divided
 any idiot can get about half of the people
 to agree with him with very little effort"

half of the time eh ?

 paine commented on 'Links for 11-20-2012' tag:typepad.com,2003:6a00d83451b33869e2017d3dfdc49d970c 2012-11-20T17:42:54Z 2012-11-20T17:42:54Z paine http://earthmart.blogspot.com/ ksey is noticing spontaneous re industrialization here based on shifting resource costs and present location of fastest growing sectors ie...
ksey is noticing
 spontaneous re industrialization here
 based on shifting resource costs
 and present location of fastest growing sectors
 ie naked corporate profit driven development
 isn't enough
 we need plans federal plans that range from forex policy down to industry by industry analysis
 aimed at clean green and import substitution
 paine commented on 'Links for 11-20-2012' tag:typepad.com,2003:6a00d83451b33869e2017ee572cb68970d 2012-11-20T17:37:46Z 2012-11-20T17:37:46Z paine http://earthmart.blogspot.com/ really important topic we gravely lack a comprehensive industrial policy it really isn't about creating jobs its about greening global...
really important topic

 we gravely lack a comprehensive industrial policy

it really isn't about creating jobs its about greening global production
 and closing our gaping trade imbalances of nearly 30 year standing

those who wish to reduce uncles long term borrowing
 ought to address this gap
 paine commented on 'Links for 11-20-2012' tag:typepad.com,2003:6a00d83451b33869e2017c33cf27c0970b 2012-11-20T17:32:50Z 2012-11-20T17:32:50Z paine http://earthmart.blogspot.com/ manneristic all about forms not about substance in this case irony executed with energy even cleverly but containing no deep...
manneristic
 all about forms not about substance

in this case
 irony executed with energy even cleverly
 but
 containing no deep cutting inner meaning
 paine commented on 'Links for 11-20-2012' tag:typepad.com,2003:6a00d83451b33869e2017c33cf1ad0970b 2012-11-20T17:23:10Z 2012-11-20T17:23:10Z paine http://earthmart.blogspot.com/ look its obvious we as a society compared to our peers spend toohigh...way too high a percent of gdp on...
look its obvious
 we as a society compared to our peers
 spend toohigh...way too high a percent of gdp on national security and health

 these are both serious long term challenges

cutting defense is of course much the easier task
 but cutting it by half barely surpasses
 cutting health by 15 percent
 paine commented on 'Links for 11-20-2012' tag:typepad.com,2003:6a00d83451b33869e2017c33cf140a970b 2012-11-20T17:18:06Z 2012-11-20T17:18:06Z paine http://earthmart.blogspot.com/ no it demands fiscal thrust which means a huge deficit get it tax cuts so long as they are big...
no it demands fiscal thrust
 which means a huge deficit

get it

tax cuts so long as they are big enough
 can more then off set spending cuts

why is this skipped over

macro is not about limits to the size of government spending
 until all government spending
 is from borrowed funds

if that total deficit budget
 isn't enough to restore FE
 then we need other means

the real zero bound
 paine commented on 'Links for 11-20-2012' tag:typepad.com,2003:6a00d83451b33869e2017ee572ac58970d 2012-11-20T17:13:30Z 2012-11-20T17:13:30Z paine http://earthmart.blogspot.com/ in other words you see dead people
in other words

you see dead people
 paine commented on 'Links for 11-20-2012' tag:typepad.com,2003:6a00d83451b33869e2017ee572aab7970d 2012-11-20T17:12:09Z 2012-11-20T17:12:09Z paine http://earthmart.blogspot.com/ Pet is not the first uniformed hero of the new post kold war era of global combat nope remember that...
Pet is not the first uniformed hero
 of the new post kold war era of global combat

nope
 remember that guy from desert storm

 H. Norman Schwarzkopf, Jr.

 the hegemon's champion
 vs that era's
 sax rohmer cartoon
 "thug of the month"
 anne commented on 'Links for 11-20-2012' tag:typepad.com,2003:6a00d83451b33869e2017c33cf0169970b 2012-11-20T17:03:56Z 2012-11-20T17:03:56Z anne http://www.bea.gov/iTable/iTableHtml.cfm?reqid=9&step=3&isuri=1&910=X&911=0&903=5&904=1992&905=2011&906=A January 30, 2012 National Defense Consumption Expenditures and Gross Investment, 2000-2012 (Billions of dollars) 2000 ( 371.0) 2001 (...
http://www.bea.gov/iTable/iTableHtml.cfm?reqid=9&step=3&isuri=1&910=X&911=0&903=5&904=1992&905=2011&906=A

January 30, 2012

National Defense Consumption Expenditures and Gross Investment, 2000-2012

(Billions of dollars)

2000 ( 371.0)
 2001 ( 393.0) Bush
 2002 ( 437.7)
 2003 ( 497.9)
 2004 ( 550.8)

2005 ( 589.1)
 2006 ( 624.9)
 2007 ( 662.3)
 2008 ( 737.8)
 2009 ( 776.0) Obama

2010 ( 817.7)
 2011 ( 820.8)

2012

Qtr1 ( 806.4)
 Qtr2 ( 807.8)
 Qtr3 ( 834.6)

* Quarterly at annual rates, seasonally adjusted
 anne commented on 'Links for 11-20-2012' tag:typepad.com,2003:6a00d83451b33869e2017ee5729e76970d 2012-11-20T17:02:33Z 2012-11-20T17:02:33Z anne the size of the national security budget is not up for grabs has not been up for grabs since George...
the size of the national security budget
 is not up for grabs
 has not been up for grabs since George McGovern
 --god rest his noble soul--
 got cut to pieces on that subject in 1972

[ I do not see meaningful cuts in military spending but do see meaningful though masked cuts in Medicare and Social Security benefits. There will only be a pretense of military spending cuts. ]
 Jesse commented on 'Links for 11-20-2012' tag:typepad.com,2003:6a00d83451b33869e2017c33cefa17970b 2012-11-20T16:58:30Z 2012-11-20T16:58:30Z Jesse https://news.uchicago.edu/multimedia/keynes-solution-path-global-economic-prosperity-serious-monetary-theory Paul Davidson has an interesting, somewhat dry but not wonkish, talk about 'Keynes Solution to Global Economic Prosperity through...
https://news.uchicago.edu/multimedia/keynes-solution-path-global-economic-prosperity-serious-monetary-theory

Paul Davidson has an interesting, somewhat dry but not wonkish, talk about 'Keynes Solution to Global Economic Prosperity through Serious Monetary Theory' which he presented recently at the U of Chicago. It talks quite a bit about the Great Depression and reflects on what is occurring today.
 paine commented on 'Links for 11-20-2012' tag:typepad.com,2003:6a00d83451b33869e2017ee5729827970d 2012-11-20T16:58:11Z 2012-11-20T16:58:11Z paine http://earthmart.blogspot.com/ spending here means something quite special the entitlement system and sundry related discretionary welfare give outs the size of the...
spending here means something quite special

the entitlement system
 and sundry related
 discretionary welfare give outs

the size of the national security budget
 is not up for grabs
 has not been up for grabs since george mcgovern
 --god rest his noble soul--
 got cut to pieces on that subject in 1972

clinton?

simply road a lull

 if we actually get serious no attritional
 non reversible defense cuts
 it will mark a change in policy at the top
 that we haven't seen
 since 1949 since that screw ball johnson got chased away by dean acheson and company in 1950

http://en.wikipedia.org/wiki/Louis_A._Johnson
 anne commented on 'Links for 11-20-2012' tag:typepad.com,2003:6a00d83451b33869e2017c33cef979970b 2012-11-20T16:58:04Z 2012-11-20T16:58:04Z anne "euphuistic" Bland, I like that but had never read the word before.
"euphuistic"

Bland, I like that but had never read the word before.
 paine commented on 'Links for 11-20-2012' tag:typepad.com,2003:6a00d83451b33869e2017c33ceee76970b 2012-11-20T16:49:59Z 2012-11-20T16:49:59Z paine http://earthmart.blogspot.com/ balanced budget amendment paleo conservative fiscalism the error here as often noticed elsewhere believing core reaganites ever wanted to control...
balanced budget amendment
 paleo conservative fiscalism

the error here
 as often noticed elsewhere

believing core reaganites
 ever wanted to control federal spending
 or reduc the deficit

nope
 they wanted to

one :
 cut "their taxes"

 two:
 pay for the limitless necessary
 aramadas of sea and air

three:
 get re elected as often as possible

the rest is tactics
 anne commented on 'Links for 11-20-2012' tag:typepad.com,2003:6a00d83451b33869e2017ee57288e6970d 2012-11-20T16:46:21Z 2012-11-20T16:46:21Z anne wasting time is what this guy is all about posture not policy [ Agreed. ]
wasting time is what this guy is all about
 posture not policy

[ Agreed. ]
 paine commented on 'Links for 11-20-2012' tag:typepad.com,2003:6a00d83451b33869e2017d3dfd7490970c 2012-11-20T16:41:47Z 2012-11-20T16:41:47Z paine http://earthmart.blogspot.com/ if the 35 buck big mac is actually the result of a run away wage boom glory days !!!!
if the 35 buck big mac is actually
 the result of a run away wage boom

glory days !!!!
 paine commented on 'Links for 11-20-2012' tag:typepad.com,2003:6a00d83451b33869e2017ee5728032970d 2012-11-20T16:40:10Z 2012-11-20T16:40:10Z paine http://earthmart.blogspot.com/ fred into rap time heals all sounds and you got plenty of that you old idler
fred into rap

 time heals all sounds

and you got plenty of that you old idler
 anne commented on 'Links for 11-20-2012' tag:typepad.com,2003:6a00d83451b33869e2017c33cedc82970b 2012-11-20T16:37:12Z 2012-11-20T16:37:12Z anne http://www.tomdispatch.com/post/175619/tomgram%3A_engelhardt%2C_an_obit_for_the_general/ November 20, 2012 The Fall of the American Empire (Writ Small) History, Farce, and David Petraeus By Tom Engelhardt...
http://www.tomdispatch.com/post/175619/tomgram%3A_engelhardt%2C_an_obit_for_the_general/

November 20, 2012

The Fall of the American Empire (Writ Small)
 History, Farce, and David Petraeus
 By Tom Engelhardt

History, it is said, arrives first as tragedy, then as farce. First as Karl Marx, then as the Marx Brothers. In the case of twenty-first century America, history arrived first as George W. Bush (and Dick Cheney and Donald Rumsfeld and Paul Wolfowitz and Douglas Feith and the Project for a New America -- a shadow government masquerading as a think tank -- and an assorted crew of ambitious neocons and neo-pundits); only later did David Petraeus make it onto the scene.

It couldn't be clearer now that, from the shirtless FBI agent to the "embedded" biographer and the "other other woman," the "fall" of David Petraeus is playing out as farce of the first order. What's less obvious is that Petraeus, America's military golden boy and Caesar of celebrity, was always smoke and mirrors, always the farce, even if the denizens of Washington didn't know it.

Until recently, here was the open secret of Petraeus's life: he may not have understood Iraqis or Afghans, but no military man in generations more intuitively grasped how to flatter and charm American reporters, pundits, and politicians into praising him. This was, after all, the general who got his first Newsweek cover ("Can This Man Save Iraq?") in 2004 while he was making a mess of a training program for Iraqi security forces, and two more before that magazine, too, took the fall. In 2007, he was a runner-up to Vladimir Putin for TIME's "Person of the Year." And long before Paula Broadwell's aptly named biography, All In, was published to hosannas from the usual elite crew, that was par for the course.

You didn't need special insider's access to know that Broadwell wasn't the only one with whom the general did calisthenics. The FBI didn't need to investigate. Even before she came on the scene, scads of columnists, pundits, reporters, and politicians were in bed with him. And weirdly enough, many of them still are. (Typical was NBC Nightly News anchor Brian Williams mournfully discussing the "painful" resignation of "Dave" -- "the most prominent and best known general of the modern era.") Adoring media people treated him like the next military Messiah, a combination of Alexander the Great, Napoleon, and Ulysses S. Grant rolled into one fabulous piñata. It's a safe bet that no general of our era, perhaps of any American era, has had so many glowing adjectives attached to his name.

Perhaps Petraeus's single most insightful moment, capturing both the tragedy and the farce to come, occurred during the 2003 invasion of Iraq. He was commanding the 101st Airborne on its drive to Baghdad, and even then was inviting reporters to spend time with him. At some point, he said to journalist Rick Atkinson, "Tell me how this ends." Now, of course, we know: in farce and not well.

For weeks, the news has been filled with his ever-expanding story, including private rivalries, pirate-themed parties, conspiracy theories run wild, and investigations inside investigations inside investigations. It's lacked nothing an all-American twenty-first-century media needs to glue eyeballs. Jill Kelley, the Tampa socialite whose online life started the ball rolling and ended up embroiling two American four-star generals in Internet hell, evidently wrote enough emails a day to stagger the imagination. But she was a piker compared to the millions of words that followed from reporters, pundits, observers, retired military figures, everyone and anyone who had ever had an encounter with or a thought about Petraeus, his biographer-cum-lover Paula Broadwell, Afghan War Commander General John Allen, and the rest of an ever-expanding cast of characters. Think of it as the Fall of the House of Gusher.

Here was the odd thing: none of David Petraeus's "achievements" outlasted his presence on the scene. Still, give him credit. He was a prodigious campaigner and a thoroughly modern general. From Baghdad to Kabul, no one was better at rolling out a media blitzkrieg back in the U.S. in which he himself would guide Americans through the fine points of his own war-making.

Where, once upon a time, victorious commanders had to take an enemy capital or accept the surrender of an opposing army, David Petraeus conquered Washington, something even Robert E. Lee couldn't do. Until he made the mistake of recruiting his own "biographer" (and lover), he proved a PR prodigy. He was, in a sense, the real life military version of F. Scott Fitzgerald's Jay ("the Great") Gatsby, a man who made himself into the image of what he wanted to be and then convinced others that it was so.

In the field, his successes were transitory, his failures all too real, and because he proved infinitely adaptable, none of it really mattered or stanched the flood of adjectives from admirers of every political stripe. In Washington, at least, he seemed invincible, even immortal, until it all ended in a military version of Dallas or perhaps previews for Revenge, season three.

His "fall from grace," as ABC's nightly news labeled it, was a fall from Washington's grace, and his tale, like that of the president who first fell in love with him, might be summarized as all-American to fall-American.

Turning the Lone Superpower Into the Lonely Superpower

....
 paine commented on 'Links for 11-20-2012' tag:typepad.com,2003:6a00d83451b33869e2017c33cedb97970b 2012-11-20T16:36:28Z 2012-11-20T16:36:28Z paine http://earthmart.blogspot.com/ the long straggly sub thread yesterday after an earlier extended curlie cue of yours was multiple wind mill time here...
the long straggly sub thread yesterday
 after an earlier extended curlie cue of yours
 was multiple wind mill time
 here at the thoma ranch
 paine commented on 'Links for 11-20-2012' tag:typepad.com,2003:6a00d83451b33869e2017c33ced904970b 2012-11-20T16:34:32Z 2012-11-20T16:34:32Z paine http://earthmart.blogspot.com/ wasting time this guy is all about posture not policy bright and grasps lots of this stuff but sterile as...
wasting time this guy is all about
 posture not policy

bright and grasps lots of this stuff
 but sterile as a brass goat
 Darryl FKA Ron commented on 'Links for 11-20-2012' tag:typepad.com,2003:6a00d83451b33869e2017ee572794f970d 2012-11-20T16:34:21Z 2012-11-20T16:34:21Z Darryl FKA Ron The oligarchy is primarily interested in economists with close ties to the plutocracy when it comes to appointments of high...
The oligarchy is primarily interested in economists with close ties to the plutocracy when it comes to appointments of high level government posts. Former Goldman Sachs employees are in high demand.
 paine commented on 'Links for 11-20-2012' tag:typepad.com,2003:6a00d83451b33869e2017d3dfd6995970c 2012-11-20T16:33:10Z 2012-11-20T16:33:10Z paine http://earthmart.blogspot.com/ irony that is euphuistic is as tiresome as prose that is euphuistic get less tiresome jon stewart is for kids...
irony that is euphuistic is as tiresome
 as prose that is euphuistic

get less tiresome
 jon stewart is for kids

have you anything real to add?

btw
 get your references right
 if you intend to fly at such high altitudes

corrected text :

 the late 19th century when " political economy" became " economics"

Let's not go backwards
 let's stick with Marshallian economics
 Economists should not meddle in politics
 Fred C. Dobbs commented on 'Links for 11-20-2012' tag:typepad.com,2003:6a00d83451b33869e2017d3dfd59eb970c 2012-11-20T16:20:44Z 2012-11-20T16:20:44Z Fred C. Dobbs Read My Lips: No New Taxes http://nyti.ms/pEZnlp Grover Norquist (July 21, 2011): ... The problem to be solved is not...
Read My Lips: No New Taxes http://nyti.ms/pEZnlp

Grover Norquist (July 21, 2011): ... The problem to be solved is not the deficit; it is overspending. Federal spending in the 2008 fiscal year was $2.9 trillion, and Washington will now spend $3.8 trillion in the fiscal year that ends on Sept. 30. Raising taxes is what politicians do instead of reforming and reducing the cost of government. Advocates of larger government prefer to talk about deficits rather than spending. ...

----

(The paradox is, of course, it's tough - even
 inappropriate - to cut spending when dealing
 with a recession demands spending increases.)
 Michael Pettengill commented on 'Links for 11-20-2012' tag:typepad.com,2003:6a00d83451b33869e2017ee5725f91970d 2012-11-20T16:14:48Z 2012-11-20T16:14:48Z Michael Pettengill http://profile.typepad.com/pettengill I worked for DEC in engineering before and after it was bought by Compaq by a CEO who foresaw the...
I worked for DEC in engineering before and after it was bought by Compaq by a CEO who foresaw the rise of the computer services in the Internet age, and the looming end of PC dominance, but his shift from PC-centric business doomed him.

Everything that defines the "tech" industry today was the direction engineering was trying to steer the company. Altavista preceded Google and would have gone that direction of engineers had their way, by Wall Street driven management drove me-too "liberating wealth IPO" ideology. Cloud computing was the direction engineering wanted to go from and engineering standpoint. Mobile computing was the direction engineering wanted to go (with StrongARM intended to be a competitive advantage). Services wanted to expand into cloud computing serving cloud service providers or providing cloud services. Fault tolerances in the cloud was an engineering priority.

In the convergence on DEC satisfying Wall Street's Compaq, and Yahoo, and HP, and Intel, and Sun envy, DEC was stripped of every aspect that aspired to be Amazon (or its primary partner), Google, and Apple.

The icons of tech when DEC began its trip to oblivion by merging with Compaq's trip were (no real order):
 1. Compaq
 2. HP
 3. Intel
 4. Microsoft
 5. Cisco
 6. Oracle
 7. Yahoo
 8. Sun

Apple was washed up. Amazon would never make a profit. Google was overshadowed by DEC's Altavista.

All three came to become the dominant forces in tech by going against Wall Street, while the firms gone or in trouble today were guided by Wall Street focused MBAs.

Just an case study in how Wall Street killed the American Dream.
 Fred C. Dobbs commented on 'Links for 11-20-2012' tag:typepad.com,2003:6a00d83451b33869e2017c33cebac1970b 2012-11-20T16:10:45Z 2012-11-20T16:10:45Z Fred C. Dobbs The New Republican Tax Policy http://nyti.ms/UQVEWm NYT - November 20, 2012 - BRUCE BARTLETT Although it is commonly believed that...
The New Republican Tax Policy http://nyti.ms/UQVEWm
 NYT - November 20, 2012 - BRUCE BARTLETT

Although it is commonly believed that the Laffer curve - the idea that tax cuts pay for themselves - is the core Republican idea about tax policy, this is wrong. The true core idea is something called starve-the-beast - the idea that tax cuts will force cuts in spending precisely because they reduce revenue. But there are slight indications that some conservatives have awakened to the reality that not only does starve-the-beast not work, but it also leads to higher spending.

The notion came into being in the 1970s to allow conservative Republican economists to reconcile their support for a balanced budget with their party's intense desire to cut taxes without worrying about the deficit. Proposition 13 in California had proven unmistakably that voters didn't much care whether spending was cut; they just wanted lower taxes. ...

During the Obama administration, the principal enforcer of that doctrine among Republicans is the anti-tax crusader Grover Norquist. He continually argues against tax increases because they feed the beast and lead to higher spending. As he put it in an Op-Ed page column last year in The New York Times, "Raising taxes is what politicians do instead of reforming and reducing the cost of government."

The problem for Republicans, as is so often the case, is that the real-world impact of their theories doesn't measure up to their theories. There was no reduction in spending as a share of the gross domestic product despite a sharp fall in revenues as a share of G.D.P. during the Reagan years. By the time Reagan left office the spending/G.D.P. ratio was about the same as it was in Jimmy Carter's last year: 21.7% in 1980 vs. 21.3% in 1988.

During the George W. Bush administration, spending increased sharply even as revenues collapsed. Revenues as a share of G.D.P. fell to 17.5% in 2008 from 20.6% in 2000, yet spending rose to 20.1% in 2006, before the economic crisis hit, and 20.7% in 2008, from 18.2% of G.D.P.

In short, we have tested starve-the-beast theory in the laboratory, and it has failed miserably. At least a few conservatives have had the courage to acknowledge that lowering the tax cost of spending may be a culprit. After all, the main reason to oppose higher spending is that it will lead to higher taxes. But if people can have tax cuts and higher spending at the same time, why should they not have their cake and eat it too? ...

 im1dc commented on 'Links for 11-20-2012' tag:typepad.com,2003:6a00d83451b33869e2017c33cea968970b 2012-11-20T15:58:48Z 2012-11-20T15:58:48Z im1dc Question. Why are we not hearing that Mark Thoma and other progressive Economists are being vetted top posts in Obama's...
Question. Why are we not hearing that Mark Thoma and other progressive Economists are being vetted top posts in Obama's second term?

The Democrat Party is in need of experienced people at all levels of government posts. Out with Republican hacks, out damn spot, out!
 Darryl FKA Ron commented on 'Links for 11-20-2012' tag:typepad.com,2003:6a00d83451b33869e2017ee5722c50970d 2012-11-20T15:36:19Z 2012-11-20T15:36:19Z Darryl FKA Ron The Year of Betting Conservatively [Doctor Doom and his dancing bear are all so full of cheer. His bottom line...
The Year of Betting Conservatively

[Doctor Doom and his dancing bear are all so full of cheer. His bottom line excerpted:]

 As consumers, firms, and investors become more cautious and risk-averse, the equity-market rally of the second half of 2012 has crested. And, given the seriousness of the downside risks to growth in advanced and emerging economies alike, the correction could be a bellwether of worse to come for the global economy and financial markets in 2013.

[Remind me how it is that globalization is supposed to work. Is it a rising tide swamps all boats or a falling tide grounds all boats? I get so confused!]
 Michael Pettengill commented on 'Links for 11-20-2012' tag:typepad.com,2003:6a00d83451b33869e2017c33ce75f0970b 2012-11-20T15:21:04Z 2012-11-20T15:21:04Z Michael Pettengill http://profile.typepad.com/pettengill Andrew Ferguson has written a wonderful piece for Weekly Standard which liberals should be promoting as brilliant conservative intellectual insight:...
Andrew Ferguson has written a wonderful piece for Weekly Standard which liberals should be promoting as brilliant conservative intellectual insight:
 http://weeklystandard.com/articles/gorging-beast_663547.html

Quoting highlights out of order:

"Reagan never showed a sign that his "starve the beast" strategy was failing, had failed. "Raising taxes won't balance the budget," he said in his 1982 State of the Union address, as revenues fell and spending rose. "It will encourage more government spending. . . .""

"Reagan, Friedman, and other early advocates of STB had counted on something that never materialized. They had assumed that as the debt piled up to finance annual budget deficits caused by free-flowing benefits, public outrage would force politicians to restrain spending without raising taxes. Yet we've had the deficits and the borrowing, in amounts that would have left Friedman and Reagan agog; what's been missing is the outrage."

"Why do tax increases lead to decreased spending? "Demand by current voters for federal spending," he explained, "declines with the amount of this spending that is financed by current taxes." When you make them pay for government benefits out of their own pockets, in other words, voters will want fewer of them. The journalist Jonathan Rauch put Niskanen's point more pithily: "Voters will not shrink Big Government until they feel the pinch of its true cost."

"For that reason, the great libertarian pot-stirrer said that spending would never decrease—that government would never get smaller—until federal revenues increased from 15.8 percent of GDP, where they are today, to higher than 19 percent of GDP: an amount totaling in the hundreds of billions of dollars."

"Beginning in 2002, Niskanen published a series of papers and op-eds about tax cuts and spending increases that turned conventional conservative wisdom on its head. Since both taxes and spending are much in the news, his critique is worth another visit.

"If we wanted a smaller government, he said, we would have to raise taxes."

"And then Niskanen, looking over 25 years of budget data, noticed something about STB: It didn't work. In fact, attempts to starve the beast by tax cuts seemed to lead to increased federal spending.

"Niskanen looked at both spending and taxes as a percentage of GDP. On average, he found, if federal revenues declined by 1 percent, federal spending increased by 0.15 percent. When revenues rose, on the other hand, relative spending decreased. A further study in 2009 by another Cato economist, Michael New, came to the same conclusion after the gluttonous administration of George W. Bush. Under Bush and his mostly Republican Congress, new benefits like subsidized Medicare drugs and increased federal education spending followed on the heels of large tax cuts.

"Niskanen's explanation for the failure of STB was straightforward, a conjecture based on standard economics: When you cut the price of something, demand for it will increase. Lowering taxes without lowering benefits meant that tax- payers were getting the benefits at a discount. The government made up the true cost with borrowed dollars that future taxpayers would have to repay. There was a big difference, Niskanen said, between a kid on an allowance and the federal government: The government has a credit card with no debt limit."

Demonstrating the current conservative's refusal to face the facts, he concludes:

"We know now Reagan was wrong. But that doesn't mean Niskanen was right. There may be reasons to raise taxes—if you give me a couple years I might come up with some—but the failure of "starve the beast" isn't one of them."

Of course, the quote attributed to Cheney (modified) best describes the Reagan created conservative economic intellect:
 "Reagan proved deficits don't matter (if Republicans are increasing the deficit)."
 EMichael commented on 'Links for 11-20-2012' tag:typepad.com,2003:6a00d83451b33869e2017d3dfd0364970c 2012-11-20T15:16:25Z 2012-11-20T15:16:25Z EMichael Why I worry. Overheard at a cocktail party at a very exclusive country club in Scottsdale: "We'll see how happy...
Why I worry.

Overheard at a cocktail party at a very exclusive country club in Scottsdale:

"We'll see how happy they are with Obamacare when they are paying $35 or a Big Mac."
 Darryl FKA Ron commented on 'Links for 11-20-2012' tag:typepad.com,2003:6a00d83451b33869e2017d3dfcf69c970c 2012-11-20T15:06:44Z 2012-11-20T15:06:44Z Darryl FKA Ron Or in brief allegorical form: John Galt, the famous and brilliantly successful industrialist, was afraid that an organized proletariat was...
Or in brief allegorical form:

John Galt, the famous and brilliantly successful industrialist, was afraid that an organized proletariat was going to rob him of the just rewards of his entrepeneural genius, so he went to the financiers for help...

And we see how that turned out :<)

 Darryl FKA Ron commented on 'Links for 11-20-2012' tag:typepad.com,2003:6a00d83451b33869e2017c33ce4aef970b 2012-11-20T14:51:31Z 2012-11-20T14:51:31Z Darryl FKA Ron Manufacturing production creates a lot of different jobs, much as the article stated but also more than the article stated....
Manufacturing production creates a lot of different jobs, much as the article stated but also more than the article stated. Making more of what we consume onshore keeps our money circulating domestically. The combination works out better than just importing stuff and exporting capital. Since we must import oil, then we also need to export some stuff to balance trade. The trade deficit is a bleending wound on our economy. The Triffen Delimna prevents exchange rates from making the natural currency devaluation adjustment due to trade deficits.

The best part of the service economy, finance, is about the integration of capital with technology. Logistics and technical operations jobs are good in either finance or manufacturing. The problem with finance is the effect that it has on the rest of the economy via financialization of non-financial firms through its intermediation when debt and equity return incentives are focused on short term windfalls and arbitrage methods. Without those games, then finance would be a much smaller piece of the economy and the economy would have to be more production focused and, in turn, sustainable. This in turn places a burden on competency in operations and reduces the returns to capital relative to wages.
 Fred C. Dobbs commented on 'Links for 11-20-2012' tag:typepad.com,2003:6a00d83451b33869e2017ee571ed0f970d 2012-11-20T14:51:08Z 2012-11-20T14:51:08Z Fred C. Dobbs Kevin Drum/'Mother Jones': Besides, all the fuss over this quote has obscured the real quote of the day from Rubio,...
Kevin Drum/'Mother Jones':

Besides, all the fuss over this quote has obscured the real quote of the day from Rubio, about his love of hip hop:

 'The only guy that speaks at any sort of depth is, in my mind, Eminem.'

 Okey dokey. My favorite Eminem song, by the way, is "The Way I Am." I'll bet you're surprised I even have a favorite Eminem song, aren't you? So am I.

----

(Things are looking up after
 Meat Loaf & Kid Rock, maybe?)

 Fred C. Dobbs commented on 'Links for 11-20-2012' tag:typepad.com,2003:6a00d83451b33869e2017d3dfccd5c970c 2012-11-20T14:38:27Z 2012-11-20T14:38:27Z Fred C. Dobbs (Make that $8.8B.) (Reuters) - Hewlett-Packard Co said on Tuesday it took an $8.8 billion charge related to its acquisition...
(Make that $8.8B.)

(Reuters) - Hewlett-Packard Co said on Tuesday it took an $8.8 billion charge related to its acquisition of software firm Autonomy, citing "serious accounting improprieties," as it swung to a fourth-quarter loss.

HP said personal computer sales shrank again and its quarterly revenue fell 6.7%.

The stock lost 11.8% to $11.73 in premarket trading.

The company, fresh off a nearly $11 billion charge last quarter for its EDS services division, said more than $5 billion of the Autonomy charge was tied to "improprieties, misrepresentation and disclosure failures" discovered after a whistleblower came forward. ...

HP takes $8.8 bln charge from Autonomy
 accounting http://reut.rs/WhSdJl via @reuters
 Darryl FKA Ron commented on 'Links for 11-20-2012' tag:typepad.com,2003:6a00d83451b33869e2017c33ce35f0970b 2012-11-20T14:37:10Z 2012-11-20T14:37:10Z Darryl FKA Ron Economics is hard. Politics is easy. Correct or not over 90% of people will criticize your economics, unless it is...
Economics is hard. Politics is easy. Correct or not over 90% of people will criticize your economics, unless it is terribly wrong and full of assumptions that all economists have already agreed upon. Those assumptions would be the ones that got us in this mess. Things like trade is good (unqualified) or mergers improve economic efficiency. With a nation divided any idiot can get about half of people to agree with him with very little effort. Meddling in politics is the economically efficient thing for an economist to do. Who would know that Paul Ryan is a useless dweeb if Krugman did not tell them so?
 EMichael commented on 'Links for 11-20-2012' tag:typepad.com,2003:6a00d83451b33869e2017d3dfcc825970c 2012-11-20T14:34:35Z 2012-11-20T14:34:35Z EMichael Here's the next candidate for the GOP(course, it will take them another election to figure out that immigration policies, or...
Here's the next candidate for the GOP(course, it will take them another election to figure out that immigration policies, or a last name, is not the deciding factor in gathering the Hispanic vote).

 "From Sen. Marco Rubio, asked how old the Earth is:

 'I'm not a scientist, man.'

Yeah, I think we knew that. Here's the rest of the quote:

'I can tell you what recorded history says, I can tell you what the Bible says, but I think that's a dispute amongst theologians and I think it has nothing to do with the gross domestic product or economic growth of the United States. I think the age of the universe has zero to do with how our economy is going to grow. I'm not a scientist. I don't think I'm qualified to answer a question like that. At the end of the day, I think there are multiple theories out there on how the universe was created and I think this is a country where people should have the opportunity to teach them all. I think parents should be able to teach their kids what their faith says, what science says. Whether the Earth was created in 7 days, or 7 actual eras, I'm not sure we'll ever be able to answer that. It's one of the great mysteries.'

As it happens, both Rubio's church and the secular god Google agree on this question, so there's not much excuse for him to pretend he doesn't know. Still, for the record, I have no objection to anything Rubio says here. I agree that the age of the Earth has nothing to do with economic growth and I agree that parents should be able to teach their kids what their faith says.

It would be nice if Rubio had added that science classes should teach kids science, but he managed to dodge that bullet—barely. Maybe next time someone will follow up on this."

http://www.motherjones.com/kevin-drum/2012/11/quote-day-im-not-scientist-man

geez
 Fred C. Dobbs commented on 'Links for 11-20-2012' tag:typepad.com,2003:6a00d83451b33869e2017c33ce2abb970b 2012-11-20T14:29:08Z 2012-11-20T14:29:08Z Fred C. Dobbs If/when jobs come back, they will be arranged so that pay & benefits are not as good as they once...
If/when jobs come back, they will
 be arranged so that pay & benefits
 are not as good as they once were.
 Fred C. Dobbs commented on 'Links for 11-20-2012' tag:typepad.com,2003:6a00d83451b33869e2017c33ce25db970b 2012-11-20T14:25:34Z 2012-11-20T14:25:34Z Fred C. Dobbs Tax Talks Raise Bar for Richest Americans http://nyti.ms/UEeVdb NYT - November 19, 2012 - DAVID KOCIENIEWSKI ... But for all...
Tax Talks Raise Bar for Richest Americans http://nyti.ms/UEeVdb
 NYT - November 19, 2012 - DAVID KOCIENIEWSKI

 ... But for all the broad brush rhetoric of political debate, the rate increases and limits on deductions now being discussed by the president and Congressional Republicans are calibrated to take the biggest bite out of the highest earners. They would lead to a smaller increase for those who earn less than $500,000 a year. The figures are all adjusted gross incomes, and since some deductions would be preserved, a household would probably have more than $250,000 in total income, perhaps $300,000, before it would fall into the wealthy definition used by the president.

If all Mr. Obama's tax proposals for wealthy Americans were enacted, they would raise $1.6 trillion over the next decade. And an analysis by the Tax Policy Center, a nonpartisan research firm, found that the increases would be heavily weighted toward the wealthiest. Taxpayers with adjusted gross incomes over $1 million would see average increases of $184,504, the study found, with higher taxes on the ultrawealthy bloating that average. Those with adjusted gross incomes from $200,000 to $500,000 would face a tax increase averaging $4,446, with people toward the lower end having only a modest increase and people on the higher end paying several times more. ...

 Darryl FKA Ron commented on 'Links for 11-20-2012' tag:typepad.com,2003:6a00d83451b33869e2017ee571be45970d 2012-11-20T14:19:02Z 2012-11-20T14:19:02Z Darryl FKA Ron American manufacturing is coming back. Manufacturing jobs aren't. [I am pretty sure that jobs will follow the money. Onshore production...
American manufacturing is coming back. Manufacturing jobs aren't.

[I am pretty sure that jobs will follow the money. Onshore production has secondary and tertiary effects. Seems like it has something to do with economics.]
 Fred C. Dobbs commented on 'Links for 11-20-2012' tag:typepad.com,2003:6a00d83451b33869e2017d3dfcaae3970c 2012-11-20T14:13:10Z 2012-11-20T14:13:10Z Fred C. Dobbs (Those of us who worked in the computer biz do worry about those idiots at HP.) HP Takes Huge Charge...
(Those of us who worked in the computer
 biz do worry about those idiots at HP.)

HP Takes Huge Charge on 'Accounting
 Improprieties' at Autonomy http://nyti.ms/TVCCPG

($8B is indeed 'huge' for Accounting Improprieties
 associated with the purchase of UK software maker
 'Autonomy' last year.)
 Second Best commented on 'Links for 11-20-2012' tag:typepad.com,2003:6a00d83451b33869e2017ee5715c53970d 2012-11-20T13:03:03Z 2012-11-20T13:03:03Z Second Best Such a spectacle, Nobel Prize winner Paul Krugman crawling into the gutter with the likes of politicians Paul Ryan and...
Such a spectacle, Nobel Prize winner Paul Krugman crawling into the gutter with the likes of politicians Paul Ryan and Marco Rubio to give them the dignity of a response.

It's a return to the 18th century when political economics was economics. Let's not go backwards. Marshallian economics is dead. Economists should not meddle in politics.
 Fred C. Dobbs commented on 'Links for 11-20-2012' tag:typepad.com,2003:6a00d83451b33869e2017ee570f9f0970d 2012-11-20T11:47:47Z 2012-11-20T11:47:47Z Fred C. Dobbs 'Gold standard bullet points' What could possibly be wrong with basing an economic system on a substance that can be...
'Gold standard bullet points'

What could possibly be wrong with basing
 an economic system on a substance that can
 be dug out of the ground (and then burned up
 to produce energy?)

(Bullet points made out of gold?
 Now we are getting somewhere!)

 Fred C. Dobbs commented on 'Links for 11-20-2012' tag:typepad.com,2003:6a00d83451b33869e2017ee570ed68970d 2012-11-20T11:38:46Z 2012-11-20T11:38:46Z Fred C. Dobbs ('members who signed on, many of them years ago, have started to back away, apparently leaving (Grover) several votes shy...
('members who signed on, many of them years ago,
 have started to back away, apparently leaving
 (Grover) several votes shy of the majority
 he would need to block any tax increase.'...)

For Tax Pledge and Its Author, a Test of Time http://nyti.ms/RPRgYI
 NYT - JEREMY W. PETERS - November 19, 2012

WASHINGTON — Next to the oath of office, it has been perhaps the most important commitment that Republicans in Congress can make. It is called simply "the Pledge," and its enforcer is such a fixture in the party that he is known simply by his first name, Grover.

Signing it means a promise never, ever to vote for a tax increase.

But the pledge and its creator, Grover Norquist, a 56-year-old conservative lobbyist, have never before faced a test as they do now. The federal deficit stands at $1 trillion. The social safety net continues to grow — and, in the case of Medicare and Social Security, remains hugely popular. And unless the two parties can agree on a fiscal plan before Jan. 1, hundreds of billions of dollars of tax increases will go into effect automatically, meaning that Congress does not even need to act for taxes to rise.

The combination means that Mr. Norquist, whose long record of success is a rarity in Washington, finds himself in a tricky spot. Some top Republicans, including Speaker John A. Boehner, are saying they now agree with Democrats that the government must collect more tax revenue. Others have gone so far as to break with Mr. Norquist publicly.

By Mr. Norquist's count, 219 House members — enough for a majority — and 39 senators have committed to the pledge. But some of those members who signed on, many of them years ago, have started to back away, apparently leaving him several votes shy of the majority he would need to block any tax increase. ...

 Fred C. Dobbs commented on 'Links for 11-20-2012' tag:typepad.com,2003:6a00d83451b33869e2017d3dfbcaa3970c 2012-11-20T11:21:32Z 2012-11-20T11:21:32Z Fred C. Dobbs PK (on Paul Ryan): 'What he actually offered was a plan to hurt the poor and reward the rich, actually...
PK (on Paul Ryan): 'What he actually offered was a plan to hurt the poor and reward the rich, actually increasing the deficit along the way, plus magic asterisks that supposedly reduced the debt by means unspecified. ...'

The genius of Paul Ryan is that he is politically shrewd
 (where PK is not). 'Deficits don't matter' (per Dick
 Cheney) to the extent that *if* entitlements can be
 brought down, then so can the deficit; *if* the rich
 are rewarded (and only if) then growth will happen
 (maybe), and that could improve the lot of the
 common, non-mooching people.

Yes, it *is* vague, in that no actual promises are
 made, except perhaps to the rich, implicitly.

BTW, the earth *may* be seven 'somethings' old.
 Who knows for sure, and if they do, we don't
 intend to annoy them unnecessarily.
 Edward Lambert commented on 'Links for 11-20-2012' tag:typepad.com,2003:6a00d83451b33869e2017d3dfb1f03970c 2012-11-20T09:17:52Z 2012-11-20T09:17:52Z Edward Lambert The theory that I have being reviewed would say this about Paul Ryan... If Paul Ryan´s economic policies calculate a...
The theory that I have being reviewed would say this about Paul Ryan...
 If Paul Ryan´s economic policies calculate a future rate of 4% unemployment and something like an 84% capacity utilization, according to the equation of my theory, labor share of income would have to rise to around 106 from the current 95 (2005=100) to have an unemployment threshold buffer in the economy of just 3%. That's a big jump that he would have to explain. My view is that he probably doesn't think that labor share of income is important, which is why his policies could easily fail.

The last time we saw numbers like that was July 2000 (labor share=106, unemployment=4%) but capacity utilization was at 81.3% and falling, eventually going to 75% before 9/11/01.

So, unless he can show how labor share of income could be raised and then sustained at a level over 106, he is being delusional.