Grasping Reality on TypePad, by Brad DeLong

Clark Hoyt: Is Vastly, Vastly Better than Danny Okrent

Hoyt: "Sorkin came right back Wednesday on his blog with a salutation that some took as sarcastic..." I did not see it as such. Hoyt goes on: “[Sorkin] cited three examples... a full and fair reading of the column where they appeared does not support the notion that he favored nationalizing the entire banking system. Nor did he say that without nationalization the banks would fail again.... Krugman wrote that he agreed with Alan Greenspan, who had said, “It may be necessary to temporarily nationalize some banks in order to facilitate a swift and orderly restructuring.” Krugman’s argument for doing so was that, if the government was going to have to put up all the money to get the banks going again, it should get the ownership.... Sorkin... said [Sweden] took over some banks but guaranteed the debts of all of them. “That’s how many people would define ‘nationalizing the entire banking system,’” he said." That's not nationalization. That's a bailout. Two different things.

Justin Wolfers on Greg Mankiw: Cherry-Picking Income Distribution Statistics

Wolfers: "If we are interested in thinking about the potential taxes the rich can pay, Mankiw’s 0.2 percent is incredibly misleading. The issue here isn’t how many people are rich, but rather how many dollars are earned by the rich.... Families earning more than $1 million probably do represent close to 14 percent of total income, and maybe more. By arguing that only 0.2 percent of families are this rich, Mankiw risks distracting his readers from the fact that increasing the taxes paid by the rich can be a big part of the solution to our fiscal woes."

Robert Scoble: Why was Apple’s prediction on iPads so wrong?

Scoble: "Apple has announced it is selling far more iPads than it expected.... So why did Apple guess its prediction so wrong? Several reasons: 1. They didn’t realize just how many apps would ship on day one and how good the quality of those apps would be. 2. Even the app developers never had their hands on iPads... so the marketplace couldn’t tell them before it shipped just how hot this would be. 3. The focus groups that Apple talked with didn’t hype it up... because they, themselves, didn’t have the apps.... They didn’t realize how fast skeptics would be convinced.... gThis is one of those dangers that Apple has: predicting demand is really tough when your market really can’t see the complete product before it ships. On the other hand, this is a very positive sign for Apple. It means that the iPad is moving outside of the “Apple faithful” very quickly.... Apple has a runaway hit."

Matthew Yglesias: Cato Explains Fundamental Similarity Between RomneyCare and Affordable Care Act

Hans-Hermann Hoppe: The Road to Serfdom: Libertarianism!

Yes, he is serious: Hans-Hermann Hoppe: "[S]tates disarm their citizens so as to be able to rob them more surely... a natural order is characterized by an armed citizenry... [and] insurance companies, which play a prominent role as providers of security... the relationship between insurer and client is contractual.... States have not just disarmed their citizens by taking away their weapons, democratic states in particular have also done so in stripping their citizens of the right to exclusion.... [T]o lower the production cost of security and improve its quality, a natural order is characterized by increased discrimination, segregation, spatial separation, uniculturalism (cultural homogeneity), exclusivity, and exclusion.... [A] natural order is distinctly un-egalitarian: "elitist," "hierarchical," "proprietarian," "patriarchical," and "authoritorian," and its stability depends essentially on the existence of a self-conscious natural – voluntarily acknowledged – aristocracy.

http://www.dtc.umn.edu/~odlyzko/doc/mania01.pdf

Andrew Odlyzko: This time is different: An example of a giant, wildly speculative, and successful investment mania

Another Reason that the Republican Party Needs to Die Immediately: Mike Huckabee

Leah Finnegan: "Mike Huckabee has come out swinging at an unlikely target: a student journalist from New Jersey.... Today, Huckabee responded to the interview on his website, saying he was taken out of context. "The young college student hopefully will find a career other than journalism. I would ask that he release the unedited tape of our conversation...." The Perspective, in turn, responded to the governor on their site: "It is telling that nowhere in his statement did Huckabee suggest he was misquoted in the article, and rightfully so.... Huckabee's problem seems to lie more in the focus of the article.... We feel that same-sex marriage, laws prohibiting gays and lesbians from adopting children, and 'Don't Ask Don't Tell' are legitimate policy concerns about which to question national political figures. Gov. Huckabee may disagree." Looks like the proof may be in the student paper -- listen for yourself in this excerpt of the interview.

via Matthew Yglesias: Bernanke to Unemployed: Drop Dead

Neil Irwin: "In recent weeks, there have been a series of positive readings on the economy, including news that job growth was its strongest in three years in March and a report Wednesday that March retail sales rose a strong 1.6 percent. But in describing his view of the economic outlook to the Joint Economic Committee, Bernanke sounded the same restrained tone in describing his expectations that he did in testimony back in the winter. “On balance, the incoming data suggest that growth in private final demand will be sufficient to promote a moderate economic recovery in coming quarters,” Bernanke said in prepared testimony. He added later that, “if the pace of recovery is moderate, as I expect, a significant amount of time will be required to restore the 8 1/2 million jobs that were lost during the past two years.”"

Menzie Chinr: Averting the Consumption Disaster

Chinn: "The CEA has just released the newest quarterly report on the impact of the ARRA. In addition to tabulating the impacts on output and employment, there's a special section by Chris Carroll (one of the leading authorities on modeling consumption behavior -- I used to teach his papers in my PhD macro course), which concludes in the absence of the ARRA "...consumer spending would likely have continued to fall" (which is consistent with my post from a couple days ago)."

Tim Duy's Fed Watch: Consumers Come to Life

Duy: 'Today's retail sales report should dispel any lingering concerns that American consumers remain huddled in their basements, clutching a bar of gold with one hand and a loaded shotgun with the other. Indeed, even a relative pessimist like me has to admit that recent trends (log differences) look pretty good"

Rebecca Wider: Final Destination “Rising Public Deficits” with a Stopover in “Falling Public Deficits”

Wilder: "Brad DeLong and Mark Thoma posit that a falling US public deficit is bad news – they are right! Deficit hysteria is now mainstream thinking, while the more appropriate hysteria should be “jobs hysteria”. How in the world is nominal income growth expected to finance a drop in consumer debt leverage if the government supports a smaller deficit? TARP costs less and tax receipt growth is beating expectations. But that's all it is, beating expectations."

Spencer Ackerman on Israel's Downward Spiral

Ackerman: "This New York Times piece reminds us of a 2006 quote from Condoleezza Rice, if you remember her: 'Three years ago, Condoleezza Rice, then secretary of state, declared during a speech in Jerusalem that a peace deal between Israel and the Palestinians was a “strategic interest” of the United States. In comments that drew little notice at the time, she said, “The prolonged experience of deprivation and humiliation can radicalize even normal people.”'... [Y]ou need to strike the word “even” there. The rational response to persistent, entrenched injustice... is radicalization. Ever talk to a Palestinian stopped at a checkpoint? And ever hear how he can’t remember a time when he wanted to drive from Jerusalem to Ramallah when he wasn’t stopped at a checkpoint? It’s not the mass murderers and conspiracy theorists who are radicalized.... Those guys use that experience as a catalyst for something deeper. It’s the normal people who react that way..."

Spencer Ackerman: Washington Post FAIL

Ackerman: "But oh God, this Dana Milbank column on Attorney General Holder’s testimony yesterday. 'Eric Holder is a Guantanamo Bay prisoner.' Stop right there. I have personally seen Guantanamo detainees. (“Prisoners” have been convicted of something.) I’ve seen them strapped to the flatbeds of small vehicles just to be driven a few yards. I’ve seen the bolts in the floors of their interrogation chambers where they’ve been “short-shackled.” I’ve seen them, in restraints, plead their cases through translation to a panel of colonels in air-conditioned trailers that they were just employees on a Taliban road construction crew and why are they still here.... I’ve read the reports about the torture.... I didn’t see anything like that at Eric Holder’s testimony yesterday. (Dana, your throat-clearing caveat about how “He’s not imprisoned at Gitmo, but he’s imprisoned by Gitmo” is just a pathetic excuse for your frivolous opening sentence, and so you are granted no absolution.)"

Chris Bertram: J.K. Rowling on welfare and patriotism

Bertram: "Surfing around, listening to Neil Young, and thinking that, perhaps, someone should buy Bryan Caplan some Edith Wharton novels (or, failing that, Terence Davies’s film of The House of Mirth), when I came across J.K. Rowling’s magnificent piece in today’s Times about what it was like as an impoverished single mother under the last Tory government, how her life changed when she became one of the richest women in Britain, her attitudes not so much"

ProGrowthLiberal: 3.5 Million New Jobs is Not Nearly Enough

PGL: "CNNMoney and the Vice President must think this is excellent news: 'The government's Recovery Act is responsible for between 2.2 and 2.8 million jobs through the first quarter of 2010... on track to create or save 3.5 million jobs by the end of the year. "From tax cuts to construction projects, the Recovery Act is firing on all cylinders when it comes to creating jobs and putting Americans back to work." Vice President Joe Biden said...." Job growth is better than job losses.... But let’s assume that simply keeping pace with a rising population and labor force means we have to create 100,000 new jobs per month. With the civilian non-institutional population being near 237 million, the projected increase in the employment to population ratio for 2010 seems to be a mere 1 percent. This ratio was 58.2% as of December 2009 and has risen to 58.6% as of March 2010. If it rises to 59.2% by the end of the year, we will still have a very weak labor market."

Economics of Contempt: Exchanges vs. Clearinghouses

Edmund Andrews Gives the Reason that MItch McConnell Should Resign Today

Andrews: "Is McConnell right?... [T]he Senate bill would require financial institutions to put up $50 billion to deal with possible future meltdowns. It is also true that federal regulators would have new "resolution authority."... But those are very different things from pre-authorizing future bailouts. The recent bailouts kept zombie banks and AIG alive, because... their collapse would set off a chain-reaction.... The new resolution authority would give the government new powers to... shut down failing giants... [not] bailing out a bank.... What's that $50 billion for? The same thing that the FDIC fund is for: shutting down institutions without sending shockwaves through the whole system.... The Democratic bill may not be nearly tough enough on Wall Street and the banks. But it certainly doesn't set up a system to bail them out all over again. Republicans might be able to cloak their opposition with what sounds like anti-Wall Street rhetoric, but they do so at their peril."

Duncan Black: Economic Forecasters FAIL

Black: "Uh... To the extent that such distortions are real, they're generally predictable, and since when do Sunday holidays have a major impact on such things... 'Claims [for unemployment insurance] have unexpectedly risen two straight weeks, but a Labor official said the Easter holiday and a special holiday in California, the nation's largest state, disrupted collection of jobless data. The distortions should fade over the next few weeks, he said. Economists surveyed by MarketWatch had forecast that claims would drop to 430,000. Claims have to fall to 400,000 or lower to indicate an accelerated hiring trend, economists say.' Maybe get some new economists who are aware of the obvious impacts of these 'distortions.'"

John Cole: Things That Should Take Less Than Five Years to Figure Out

Greg Jaffe: "It was as if the five years of almost ceaseless firefights and ambushes had been a misunderstanding—a tragic, bloody misunderstanding. More than 40 U.S. troops have been killed, and scores more wounded, in helicopter crashes, machine-gun attacks and grenade blasts in the Korengal Valley.... The Afghan death toll has been far higher.... The valley’s extreme isolation, its axle-breaking terrain and its inhabitants’ suspicion of outsiders made it a perfect spot to wage an insurgency.... U.S. troops arrived here in 2005.... They stayed on the theory that their presence drew insurgents away from areas where the U.S. role is more tolerated.... The troops were, in essence, bullet magnets..... [N]ew... commanders concluded that the United States had blundered into a blood feud with... villagers who wanted... to be left alone.... subduing the Korengal wasn’t worth the cost..." Cole: "It took five years to figure that out? And we’re dumping more blood and treasure in Afghanistan?"

Simon Johnson on Why Mitch McConnell Should Resign Immediately

Johnson: "Senator Mitch McConnell continues to insist that the Dodd bill creates permanent bailouts – and that it would be definitely better to do nothing. Apparently, he has indicated a willingness to make a Senate floor statement to that effect every day. Senator McConnell is completely wrong on this issue – and, if he gets any traction, we will feel the need to point this out every day. His remarks today and yesterday go far beyond any reasonable level of partisanship. This is about playing games with the financial stability of this country and the world; it should stop."

Tyler Cowen Sends Us to Rowan Williams Reviewing "A History of Christianity" by Diarmaid MacCulloch

Williams: "The provocative subtitle alerts you to the fact that this is going to be much more than a textbook. Diarmaid MacCulloch begins with what turns out to be one of many tours de force in summarising the intellectual and social background of Christianity in the classical as well as the Jewish world, so that we can see something of the issues to which the Christian faith offered a startlingly new response. Greco-Roman religion... an uneasy mixture of the cult of the emperor... and a chaotic plurality of local rites and myths. The Jewish world was marked by a lively tension over... Jewish identity.... Christianity brought... a definition of Jewish identity that opened up to become a definition of human identity... a religion as a form of belonging together that did not depend on political loyalties. Of course, Christians rapidly worked out how to deploy political power and to enforce conformity. But MacCulloch resists the glib narrative of decline and fall..."

Peter Boone and Simon Johnson: The Next Global Problem: Portugal

Boone and Johnson: "The bailout of Greece, while still not fully consummated, has brought an eerie calm in European financial markets. It is, for sure, a massive bailout by historical standards. With the planned addition of IMF money, the Greeks will receive 18% of their GDP in one year at preferential interest rates. This equals 4,000 euros per person, and will be spent in roughly 11 months. Despite this eye-popping sum, the bailout does nothing to resolve the many problems that persist.... Next on the radar will be Portugal. This nation has largely missed the spotlight, if only because Greece spiralled downwards. But both are economically on the verge of bankruptcy, and they each look far more risky than Argentina did back in 2001 when it succumbed to default. The main problem that Portugal faces, like Greece, Ireland and Spain, is that it is stuck with a highly overvalued exchange rate when it is in need of massive fiscal adjustment..."

Arundhati Roy FAIL

Limousine Maoist Arundhati Roy: "Kolkata, April 14 (IANS) Writer-activist Arundhati Roy Wednesday virtually justified the Maoist attack on the Central Reserve Police Force in Chhattisgarh's Dantewada.... 'I salute the people of Dantewada who have stood up against such a mighty state. Was there any other alternative to the people of Dantewada? The tribals have been neglected for decades. And now when they have started protesting against this injustice, the government is waging war against them,' said Roy while addressing a gathering in Kolkata. On April 6, 75 paramilitary troopers and a lone policeman were massacred by the Maoist in Dantewada district in one of the biggest attacks by the Left wing rebels to date..."

Simon Johnson: Senator McConnell Is Completely Wrong On Financial Reform

Johnson: "The Republican Senate leadership finally express clear positions on the financial industry... what they are proposing is downright scary. In a Senate floor speech yesterday, Senator Mitch McConnell (Senate Republican leader) said, 'The way to solve this problem is to let the people who make the mistakes pay for them. We won’t solve this problem until the biggest banks are allowed to fail.' Do not be misled by this statement. Senator McConnell’s preferred approach is not to break up big banks; it’s to change nothing now and simply promise to let them fail in the future. This proposal is dangerous, irresponsible, and makes no sense."

Jim Hamilton: More on oil prices and the economic recovery