State Fiscal Meltdown Musical Comedy Blogging...
Washington Post Crashed-and-Burned Watch

links for 2009-07-14

  • A potentially key witness, Sen. Tom Coburn... said last week he would "never" testify before the committee or in court. He noted that he counseled Ensign "as a physician" -- Coburn is an obstetrician and gynecologist... and therefore could not be compelled to testify because of doctor-patient privilege.... That seems pretty conclusive to us -- after all, if a guy can't trust his OB-GYN, who can he trust? But some lawyers think neither assertion, though quite creative, would stand up.... Even so, Coburn's got other options, perhaps better ones.... To be absolutely bulletproof, however, he may want to marry Ensign -- they'd have to travel to Iowa...
  • If you take a picture of the moon and claim that the resulting photograph is proof that the moon’s a stationary object and then someone shows you a video of it moving across the night sky, you cannot claim that your interpretation of the event depicted in the photograph is still valid. What you are effectively claiming is that the photograph is a photograph, i.e. that it is a still image captured from a moving tableau. This is not a matter of interpretation, but a description of the medium; to claim otherwise is to deny the very reality to which the photograph pertains, which is precisely what Althouse is doing. Her analysis of a manipulated photograph trumps reality, and she can’t be bothered to articulate why exactly that is. But that won’t stop her (or the hoard of equally incompetent illiterates who base their opinion on her photographic “expertise”) from claiming that her “interpretation” is still valid. They’ll be doing that until the moon stops dead in the sky and fal
  • Not only does the cost of putting a payload into orbit increase with the cube of the payload weight — this rule holds true in the opposite direction, too. Stick a LEM on the moon and bring the contents back? Easy. Increase the mass that the LEM brings back? Very expensive — the price goes up as the sixth power of the weight you're returning from the lunar surface (because you have to loft the heavier LEM into Earth orbit to begin with). Think about it. The real mission wasn't to go to the moon; it was to bring two astronauts and 100Kg of moon rocks back from the lunar surface and into lunar orbit (to rendezvous with the CSM stack for the journey home) — and it took a 3000 ton behemoth to accomplish this. Launching a bigger, more useful LEM (one that could carry 3 or 4 astronauts to the lunar surface, along with a decent-sized rover and supplies for a couple of weeks) would have added tonnes to the LEM payload ... and hundreds, if not thousands of tons to the launch stack. With cost sc
  • Mike Rorty follows up today in The Atlantic's business blog with an interview with Perry Mehrling on shadow banking and its role in the crisis. Mehrling's bottom line for regulators is a "new Bagehot Rule" for modern markets: Insure freely but at a high premium.
  • Also interesting to note that both Sessions and Kyl have essentially accused Sotomayor of being prejudiced against whites -- sort of the kinder, gentler version of Newt's 'racist' charge.
  • Brad DeLong observes that Obama administration officials being put out there to deny that no further fiscal stimulus is necessary aren’t making a great deal of sense. And of course they’re not making sense because they’re in a political predicament. But I think they’d do better to just admit that: "Congress gave us less stimulus than we asked for last time around so we don’t see any point in making a futile effort to go back to the well; if it looks like Congress is prepared to act then we can start talking about what appropriate action would look like. Until then we’re working with the tools that we have, tools that we think are making the situation much better than it otherwise would be, but recovery will take time." Trying to demand additional stimulus when the votes aren’t there in congress could do more harm than good. But pretending to believe that what’s been done is adequate is a fool’s game and just invites the criticism that the stimulus hasn’t “worked.”
  • When the zero bound on nominal interest rates is binding. (And when price flexibility is substantial.)
  • The Great Depression was marked by protectionist trade policies and the breakdown of the multilateral trading system. But contrary to the presumption that all countries scrambled to raise trade barriers, there was substantial cross-country variation in the movement to protectionism. Specifically, countries that remained on the gold standard resorted to tariffs, import quotas, and exchange controls to a greater extent than countries that went off gold. Just as the gold standard constraint on monetary policy is critical to understanding macroeconomic developments in this period, national policies toward the exchange rate help explain changes in trade policy. This suggests that trade protection in the 1930s was less an instance of special interest politics run amok than second-best macroeconomic policy management when monetary and fiscal policies were constrained.
  • "To the poor the state is both an enemy and a friend. It tantalizes them with a ladder that promises to lift them out of poverty but it habitually kicks them in the teeth when they turn to it for help. It inspires both fear and promise. To India's poor the state is like an abusive father whom you can never abandon. It is through you that his sins are likely to live on."
  • Morgan Stanley’s European media analysts asked Matthew Robson, one of the bank’s interns from a London school, to describe his friends’ media habits. His report proved to be “one of the clearest and most thought-provoking insights we have seen. So we published it.”... “Teenagers do not use Twitter,” he pronounced. Updating the micro-blogging service from mobile phones costs valuable credit.... His peers find it hard to make time for regular television, and would rather listen to advert-free music on websites such as than tune into traditional radio. Even online, teens find advertising “extremely annoying and pointless”. Their time and money is spent instead on cinema, concerts and video game consoles which, he said, now double as a more attractive vehicle for chatting.... [N]o teenager he knew regularly reads a newspaper since most “cannot be bothered to read pages and pages of text” rather than see summaries online or on television...