How Would We Figure Out Whether Cash-for-Clunkers Makes Sense?
Why Oh Why Can't We Have Better Nobel Laureates in Economics (Robert Lucas Suddenly BFF with Ben Bernanke Edition)

links for 2009-08-06

  • The notion that the stimulus package failed is based on a very unrealistic benchmark. An assumption of stimulus critics seems to be that for the package to succeed, household consumption must remain constant or even rise in the face of sharply lower private incomes and household wealth. How realistic is this expectation? Not very. My interpretation is that the massive swing in taxes and government transfer payments, produced in part by the stimulus packages, moderated the fall in household consumption that would otherwise have occurred. The stimulus packages did not end the recession, but they reduced its severity. Critics of the government’s stimulus measures seem to forget another thing. The goal of these programs is not simply to provide a counter-cyclical boost to consumption. An equally important goal is to help offset the income losses experienced by the victims of recession. The hardest hit victims include laid off workers who have suffered long spells of unemployment and loss
  • Asteroids are another story. The near-earth asteroid 99942 Apophis has a mass of only about 2 x 1010 kg. That's only a dozen or so bombs, even with only a week's notice. Now our estimate is very generous in terms of the effects of one bomb, but it's certainly plausible that a few dozen or a few hundred bombs might well do the trick if we caught it reasonably early.
  • For very nearly a generation, right-wing and left-wing Israelis alike have behaved as if they believed that the special relationship with America would, by its mere existence, solve Israel’s most difficult problems in their preferred manner. But there is very nearly no truth to this belief, and the sooner Israelis come to understand that neither can America secure Israel’s maximal territorial ambitions, nor can it guarantee a secure peace on terms more congenial to Israel’s adversaries, the better.
  • No one in the press confused ACT-UP with broader public opinion. No pundits said "the public is clearly feeling rising unease about government inaction on AIDS, as evidenced by the latest ACT-UP protest." Why? Because they were gay, and they had AIDS and they didn't look like "average citizens" or "heartland" voters. At their root, the town hall protests are a very similar phenomenon. I think these people, unlike ACT-UP, are wrong. Deeply wrong. (They're also not literally fighting for their lives because of a homophobic and indifferent government, but that's neither here nor there). But they're a small, tightly coordinated, enraged minority. They want to scream and fuss, it's a free country, as they say. The problem is the overwhelming instinct on the part of pundits and the MSM to look, and see old white men in overalls and Legionnaire hats and think they are watching someone give voice to the sentiments of broad swaths of the electorate. And it's just not true. What we're seeing at
  • In his newest book, novelist Mark Helprin sets out to single-handedly defend copyright from the barbarian freetard hordes. He advocates long-term copyright extensions and happily insults anyone who disagrees with him by comparing them to Idi Amin and Adolf Eichmann. The result is almost... uncivilized.
  • t's not quite how it happened. There was a genuine (if low-profile) media discussion of a Swedish-style bank rescue back in March 2008. I know because I participated in it—as did Krugman. It started on March 14 with a report right here at the Curious Capitalist of a speech by current Bank of Sweden Governor Stefan Ingves, who as a Finance Ministry bureaucrat in the early 1990s had been one of the masterminds of Sweden's successful bank job. A couple days later economist David Rosenberg, then at Merrill Lynch, made a far more forceful case than I had for doing things the Swedish way. Then Krugman weighed in on my post about Rosenberg, saying it all sounded interesting but the price tag could be in the vicinity of $850 billion. Then, in a post I remain inordinately proud of, I responded