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February 2012

Econ 1: Spring 2012: U.C. Berkeley: Review "Office Hours" in Wheeler Fridays 11-12

From: Brad DeLong
To: Econ 1 Students
Subject: Review "Office Hours" in Wheeler on Fridays...

The 200 people who came to the pre-midterm Friday "office hour" in Wheeler 11-12 believed that it was useful...

So given that attendance at my W2-5 office hours up in Evans Hall has been low--a total of only 27 people in the 5 weeks the term has been running--I am going to repeat Wheeler Friday "Office Hours"...


  1. They will run from 11-11:50, so that we can be out of Wheeler before Robert Reich's class starts to funnel in...

  2. March 2 I have to be in New York for my niece's Bat Mitzvah, March 23 I have to be in Washington for a Brookings Institute Conference, April 13 I have to be in New York for a Russell Sage Conference, and April 27 I have to be in Los Angeles...

  3. That leaves us with March 9, March 16, April 6, April 20, and May 4...

Mark Thoma: Save Social Security (and Medicare) First

Mark Thoma:

Economist's View: "Romer Advised Obama To Push $1.8 Trillion Stimulus": If Obama goes go "big on entitlements," it will be a mistake. People don't object to the benefits they receive. They like Social Security and Medicare. The worry is that these programs won't be there for them -- politicians have scared them into believing they might not be. After paying into programs like Social Security for so many years, middle class America feels entitled to the benefits they have been promised. But people have been made to believe that others are stealing this future from them -- lazy, schemers who live off the government in one way or the other -- and that's what they want eliminated, the "undeserving others". But keep your hands off their Medicare and Social Security.

Liveblogging World War II: February 17, 1942

Robert Stephens in the New York Post:

'PEACE' CHOIR CHANGES TUNE: Before the Nazis invaded Russia, a small mixed chorus called the Almanac Singers was using its talents to criticize conscription — already enacted by Congress. One of its songs had as its theme the vicious isolationist catchphrase, "Plow under every fourth American boy." Another referred to the Selective Service Act as "that goddamned bill." Last Saturday at the premiere of the government's morale broadcast, "This Is War", the Almanac Singers, now all-out for democracy and conscription, sang a number called "Round and Round Hitler's Grave."

Norman Corwin, director of "This Is War", chose them for his show after hearing them sing some innocuous songs six weeks ago on "We The People", A representative of Corwin said today that Corwin was entirely unaware of the singers' background….

Remember when the AAA
Killed a million hogs a day?
Instead of hogs, it's men today -
Plow the fourth one under!
Plow under, plow under,
Plow under every fourth American boy!…

A boy's no better than a cotton plant;
But we are here to say you can't
Plow the fourth one under!

These recordings were made by the Almanac Singers, who have now radically changed their tune.

The record album entitled "Songs for John Doe" was withdrawn and is no longer purchasable.


Quote of the Day: February 17, 2012

"1. TEMPERANCE. Eat not to dullness; drink not to elevation. 2. SILENCE. Speak not but what may benefit others or yourself; avoid trifling conversation. 3. ORDER. Let all your things have their places; let each part of your business have its time. 4. RESOLUTION. Resolve to perform what you ought; perform without fail what you resolve. 5. FRUGALITY. Make no expense but to do good to others or yourself; i.e., waste nothing. 6. INDUSTRY. Lose no time; be always employ'd in something useful; cut off all unnecessary actions."

--Benjamin Franklin, The Autobiography of Benjamin Franklin

David Brooks Smackdown Watch: Ta-Nehisi Coates on Twitter

Why oh why can't we have a better press corps?

David Brooks:

The Jeremy Lin Problem: Jeremy Lin is anomalous in all sorts of ways. He’s a Harvard grad in the N.B.A., an Asian-American man in professional sports. But we shouldn’t neglect the biggest anomaly. He’s a religious person in professional sports…. The sports hero tries to perform great deeds in order to win glory and fame…. [T]here’s no use denying — though many do deny it — that this ethos violates the religious ethos on many levels. The religious ethos is about redemption, self-abnegation and surrender to God…

(5) Ta-Nehisi Coates (tanehisi) on Twitter:

@TheAlexKnapp I'm not even clear that--removing Lin--the argument stands. A great many fields could be said to conflict with religion. In reply to Alex Knapp

@TheAlexKnapp Again, though. Without Lin you have a piece that just doesn't say much. This isn't new.

Vinson Cunningham Paul of Tarsus was obsessed with analogy between Xtians and Greek Olympians, the idea that life of faith is a battle, a contest. @tanehisi

@TheAlexKnapp And it certainly isn't "the biggest anomaly." If you understand that then the question becomes "Why write this now?"

@TheAlexKnapp That's the problem. There's nothing anomalous about Jeremy Lin being a religious athlete. It's actually quite normal.

@TheAlexKnapp But that's not what anomalous means.

@tsayguy The problem is then you just have a rather broad piece about 'Sports" which says "Humans need oxygen" or some such.

If you start your Jeremy Lin piece making a sweeping statement about millions (or billions) of people, just stop. Ask somebody.

Also. It's OK for writers to ask questions instead making broad declarations.

Way too many trip-wires. Don't start with the Dougie. Learn the Electric Slide first

I think if you weren't writing about sports before, you shouldn't start with Lin. It will be really hard to not say something regrettable.

@vcunningham If you think any of those things about pro athletes and religion you probably don't know much about pro athletics.

@vcunningham The definition of "anomalous" is "Deviating from what is standard, normal, or expected."

@NPRinskeep Dungy's religiosity is quite a story. Part of his coaching, the culture of the team. And Dungy's a notoriously "gentle" guy.

@NPRinskeep I just wish he'd written that column five years ago about Tony Dungy.

One word, @tanehisi, in re: D.Brooks: religion not "anomaly" in sports, but rest of column provocative: contradiction btwn faith & act

@mltaylor13pt1 @tanehisi I can't wait for his column on why Rick Santorum is such an outlier in politics, because of his vocal religiousness

@vcunningham A religious person in pro athletics is no more anomalous than a religious person in the military.

@vcunningham I don't think "anomalous" means what you think. I think you mean "conflicted" or some such.

@EyalPress @tanehisi Don't forget Trent Dilfer who won a Super Bowl w/the Ravens. He also missed RGIII's Heisman acceptance speech

@tanehisi he's in DC.....does he not know about Joe Gibbs? Or Darrell Green?

@felixgilman @vcunningham Yes exactly. But then he'd be open to obvious, and disturbing, "Why now?" question.

@tanehisi @vcunningham FWIW I think problem here is that Brooks is misusing "anomaly" when really all he means is "thing" or "column hook"

@vcunningham Again. It doesn't much matter. Either it's true that he is an "anomaly" or it isn't.

@tanehisi You're forgetting the devout Mormon Steve Young, a big 'God is Not Great' fan...

davesgonechina @tanehisi I think you're forgetting that Christopher Hitchens led the Green Bay Packers to five championships in seven years.

@tanehisi Mike Singletary is an ordained minister. In fact, I think he was back when he played for the Bears.

Joe DeMartino @tanehisi "All credit for this win goes to the scientific method, secular humanism, and Richard Dawkins" #davidbrooksfantasysports

@AmyAlex63 @professorkim They got the Wizards, Redskins and Nationals. He should know.

@EyalPress @tanehisi Don't forget Ali- once Cassius Clay, converted to Islam, Tyson.

@ChiaLynn But that doesn't make it true or right. He's way off.

@tanehisi It's almost like Brooks knows nothing about sports and is just trying to use a cultural phenomenon to make some empty statement

@tanehisi has he not seen prayer circles, @DwyaneWade huge tithes, ad, and a new church?

@vcunningham "But we shouldn’t neglect the biggest anomaly. He’s a religious person in professional sports."

@vcunningham Dude he literally called it the "biggest anomaly." Those are his actual words.

Yoni Appelbaum @tanehisi What kills me is that basketball was invented to inculcate Christian virtue, brought to China by missionaries. Does he not know?

Since when was pro sports filled with Dawkins-quoting, Hitchens-thumbing secularists?

You know what would make Jeremy Lin an anomaly? If he were atheist.

@tanehisi Not to go there, but I'll go there: I've never seen a black man pray in football, but Asian dudes RUN THE SHOW in the NBA, right?!

@EyalPress It's ridiculous. It's really skirts the line of "factual error."

@tanehisi I saw that column. Yeah, no religious people in professional sports: Kurt Warner, Evander Holyfield, Tebow, all arch secularists!

That is exactly backwards. Religiosity might be the least anomalous thing about #linsanity.

He didn't just claim Lin was an anomaly for being religious. He said it was the "biggest anomaly."

@wesleyhill That's not what he said. He literally wrote that Lin was an "anomaly. He’s a religious person in professional sports."

@tanehisi they said the same thing about tebow. Imget the feeling black religious people have no real value to white conservatives.

Sorry. Had a ginger ale this morning. Bad idea. “@eliasisquith: @tanehisi You're so much feistier than you used to be!”

Like, is Tony Dungy invisible??? Dude is the first black coach to win a Super Bowl!

Right WTF?? “@shackle52: @tanehisi Obviously Brooks thinks little of men like Tony Dungy and others”

Go back to telling us how immoral we are. I'll take black pathology over this any day.

Worst thing about #linsanity is a bunch of Ivy dudes who know nothing about sports now having an excuse to write about it.

Pro football is a hotbed of religiosity. What is he talking about? Reggie White was LITERALLY an ordained minister.

The first person these cats thank is God. Pro Athletes routinely point at the sky. Deion Sanders baptized Emmitt Smith.

Did David Brooks just claim Lin is an anomaly because "he's a religious person in professional sports?" Are there no black people in sports?

As one observer put it in email:

Sports are carefully designed so that skill and hard work matter a lot and so do luck and chance and fortune. It is designed--to make it interesting to spectators--as an arena in which the players are not masters of their fate. And that recognition is as much a religious ethos as is the "redemption, self-abnegation, and surrender to God" that Brooks claims is the only religious ethos. I don't think David Brooks has participated in or watched many sports, or talked to many athletes.

Come to think of it, it looks as though Brooks hasn't spent much time talking to God-fearers either…

Lisa MacIntyre McIntire Smacks Down James Poulos via Twitter

James Poulos:

What are women for?: Today the significant battle is over what women are for…. The prevailing answer is the non-answer, a Newt-worthy challenge to the premise that insists the real purpose of women is nothing in particular.

Such an answer… is anathema to most conservatives…. [T]he left’s alleged philosophical uniformity on the woman question is a complete fabrication…. The purpose of lifting the left’s Potemkin skirts is not to score tits for tats…. Liberals, of course, generally and characteristically deny that abortion is barbaric. But the Casey decision substituted a progressive passivity for that very active moral claim…. Lip service is often paid to the impression that the point of empowering women is to empower them to do whatever they want, but… [the liberal] framework hasn’t come anywhere close to answering even the most basic questions about what women are for….

Much good would come from a broader recognition that women have a privileged relationship with the natural world. That’s a relationship which must receive its social due — if masculinity in its inherent and imitative varieties (including imitation by quasi-feminized males of quasi-masculinized females!) is not to conquer the world.

This is a thing of beauty: Lisa McIntire's twitter stream:

Lisa McIntire (lisamcintire) on Twitter:

@avram I'm pretty sure it's the latter, as amply demonstrated by his word salad, I mean, article.

@johndburger @zunguzungu The point is, even though he didn't have a discernible thesis, his question was appallingly insulting.

Oh, your prose has a "style." That's a flattering way of putting it. MT @jamespoulos: Yes: I am not a stranger to this writing style

@amaeryllis I've gotten all the swears. (Used to work for pro-choice Democrats.) Also was called an unfunny spinster by The Daily Caller.

Oh, did I force you to read my tweets? I'm terribly sorry. RT @chogokin: @LisaMcIntire if itll help you shut up, go for it!

Going to drink a goddamned beer. Is that all right, fellas? Is a hearing necessary? How about probes? Is it what I'm for???

RT @amaeryllis: I almost started writing a post, "What are men for?" ...but I respect men and think they are valuable, so I decided not to.

@randomsubu Irony.

@PeterKretzman Obfuscation is a common tactic when you really have no point.

Any privileged white dudes want to go on record about women today? Because you've been AWFULLY QUIET.

@stefanjbecket Um, the first graf contains: "Today the significant battle is over what women are for."

Gosh darnit! No answers from @jamespoulos. I guess I'll go eat dinner like an autonomous being and wait on his reply? #whatamIfor

Is this right, @jamespoulos?? RT @cloudmir: they're reproductive vessels and if they ever question that they're considered malfunctional

I'm sorry, @jamespoulos. I didn't mean to be so difficult "grasp, translate, and reconcile." I thought I was a person. Pretty silly, huh?

Shall I part my hair behind, @jamespoulos? Do I dare to eat a peach?

Dear @jamespoulos: how should I begin to spit out all the butt-ends of my days and ways? And how should I presume?

Me again, @jamespoulos. Can you maybe hurry up and tell me what I'm for? Want to eat dinner soon but not sure if I can make decisions?

Also, @jamespoulos? Is the idea that what men are for is to write nonsensical pieces questioning the purpose of 51% of the population?

Hi, @jamespoulos? Woman here. Your prose made me want to stick a fork in my eye, so I'm still not sure what I'm for? Help?

Sometimes I say to myself, I say, "Lisa? What are you for?" "Well golly, my ladybrain sure doesn't know! Best consult the Daily Caller."

RT @ClaraJeffery: LADIES-->> The @dailycaller asks, "What Are Women For?" // Absolutely nothing? (Good god!)

Foster Friess's aspirin comment was a classic gaffe: truth-telling by accident. His ilk truly believes women are filthy sluts.

@irincarmon I can't even get past the headline. I'm all for taking a hot shower after that word vomit.

@losinghand Please do. Not like the Catholic Church is OK with vasectomies, either.

Almost as if women vote... RT @TPM: How the GOP turned back the clock six decades in just one day, via @evanmc_s:

RT @tbogg: As I have said before "Some choose celibacy, others have it chosen for them". See: CPAC, most guys spotted at

If you're a straight man not speaking up for birth control, then I can only assume you're celibate or want a whole lot of kids.

@DanteAtkins @cruickshank Making moves around abortion makes political sense, for the GOP. Going after BC does not.

Excellent advice! RT @DanteAtkins: take some aspirin for the brain freeze. But put it between your legs. It works better that way.

Remember when we said they're coming after birth control and you didn't want to believe it? Do you believe it now?

@la_belle_t Stupid us, being born with ladyparts. Guess we asked for all the punishment, really.

Dark days, indeed, for women's rights. Guess you just don't know what's good for you, ladies. Let us help:

The bottom line is that this farcical "debate" over contraception is just the expression of seething contempt for women.

Do not cede this ground: limiting access to contraception is IMMORAL. The inability to control one's fertility is misery.

OPEN internet, #CLOSED legs RT @DarrellIssa: Today's hearing was on religious freedom, not birth control.

I just can't even with the contraception "debate" today. Follow those with more strength at the moment: @pemalevy, @WentRogue, @LEBassett.

@stefanjbecket No, no, you said you had a headache AS birth control. #backinmyday

I can't think of someone who sets a worse example than Rick Santorum: ignorant, hateful, priggish, bigoted, and moronic.

@junedaisy Since you live in Virginia, I say go on the offense: incorporate your ladyparts. Legal protections galore!

@jbouie Understandable. I'm trying to be fair and only call out VA Republicans -- can't blame a whole state.

I'm sorry, does it get more Orwellian than a law sold as "informed consent" that forces vaginal probes? #doublespeak

Virginia Republicans, have you considered passing a chastity belt law? At this point, what's holding you back?

Can women in Virginia have a religious exception to mandated probing for the exercise of their constitutional rights? #questions

I like that birth control is a political issue this year because it means the year is 1964 and the Beatles are about to get huge.

Are we getting it yet? THIS IS NOT OK. RT @jesseltaylor: The Virginia Legislature's gift to women:

Counter-proposal to Virginia ultrasound law: probes to confirm that GOP lawmakers do, in fact, have their heads up their asses.

To clarify: state government can perform an invasive bodily probe before a LEGAL medical procedure. How is this constitutional?

Lawyers, help me out here. Police need a warrant to search your property, but can require vaginal probes? @Hegemommy

RT @KagroX: Virginia is for lovers. Vagina is for state-mandated probing.

Econ 210a: Spring 2012: U.C. Berkeley: Memo Question for February 22: American Exceptionaism:

Econ 210a: Spring 2012: U.C. Berkeley: Memo Question for February 22: American Exceptionalism:

Robert Allen for Britain and Peter Temin for the U.S. (in Temin's case, channeling earlier historians like Rothbarth and Habakkuk) both argue that high real wages combined with abundant resources led to a distinctive pattern of industrialization. Along with obvious similarities, their arguments also display important differences. What are these differences and for what do they matter?

Twitterstorm delong: February 16, 2012

  • radleybalko Have a look at the guy in the mug photo. Police say those injuries are from a single fall after he was Tased.…

  • Eric Boehlert and yes, that was a Bush-appointed judge who mocked @andrewbreitbart's legal team in Sherrod ruling;

  • David Leonhardt Hamilton Nolan on upper-middle-class self pity: "Money: once you spend it all, you don't feel rich any more." (Ht @ryanchittum)

  • Betsey Stevenson @DLeonhardt: The whole point is that the top 1% are not the upper middle class. They are rich!

  • Eric Kleefeld BREAKING: Bayer stock price up 1%.

  • Eric Boehlert @EricBoehlert leadership! RT @nationaljournal: BREAKING: Mitt Romney is skipping the March 1 GOP debate because of scheduling issues

  • Kat Hate to break it to Mr. Friess, but I can do a lot of things with aspirin between my knees.

  • Brian Beutler @brianbeutler RT @KagroX: Friess: Her aspirin said no, but her eyes said yes.

  • Garance Franke-Ruta RT @BuzzFeedBen: So is the damage Foster Friess did to Santorum today valued

  • Jesse Taylor Aleve would like to remind you that it's the doctor-recommended alternative to knee aspirin.

  • Sarah Kliff @sarahkliff In leaving the contraceptives beat for about an hour to cover Medicare, I apparently missed something involving aspirin and knees? #help

  • Matthew Zeitlin RT @ObsoleteDogma: Sigh. Next thing you know, Catholic hospitals will try to stop paying for aspirin for their employees. #backinmyday

  • Erick Erickson The more I think about it, and I know they deny it, I just don't believe George Stephanpolous's question on birth control wasn't coordinated

  • @EWErickson "Although they deny it, I don't believe Stephanpolous's question on birth control wasn't coordinated" JOURNOLIST LIVES!!!!!!

  • Tim Harford Exactly. RT @benschott: OK. For the last time, IMHO … ENVY is directed at what others have; JEALOUSY is protecting what you have.

  • emptywheel Again, Foster Friess and his wife either spent abt 20 years of their marriage not fucking, or he's used more than Bayer aspirin.

  • @TimHarford @benschott SPITE is conspicuous consumption in public so other people envy what you have...

  • Ed Schultz Fox News host to Congresswoman Maxine Waters "step away from the crack pipe"

  • David Leonhardt @BetseyStevenson Fair enough. I was using the self-description the group prefers.

  • Betsey Stevenson @DLeonhardt oh so you needed irony quotes around "upper middle class"

  • David Leonhardt @BetseyStevenson The point of Nolan's essay, on Gawker, is that UMC claims to be mid class -- bc it doesn't have much after spending a lot.

  • Nu Wexler Secy. Geithner to House Budget Repubs: "You guys just spent six months threatening to default on obligations. You call that leadership?"

  • Ryan Lizza So this means Newt vs. John King? MT @michaelpfalcone: Santorum hasn't "made a firm" decision on GA debate, but ... likely to skip too

  • Markos Moulitsas Best part about this year? GOP base no longer satisfied with dog whistles. They want entire agenda out in the open.

  • Markos Moulitsas RT @timkmak: Under fire by Paul supporters all wk, ME GOP is now recounting straw poll votes, POLITICO has learned

  • emptywheel One of the best parts of the Foster Friess BS is that he was lecturing a woman just 6 years younger than he is.

  • Markos Moulitsas @markos RT @KagroX: Man-on-Bayer #Santorum

  • Congressmember Bass since the contraceptive debate began, the leading voices have been men. Even Republican women aren't speaking out in support of this madness

  • Talking Points Memo GOPers asked if they would refuse to back a Prez hopeful who enacted Obama rule they detest. Awkwardness ensues:

  • Josh Marshall Romney pulls the alarm, says he's bagging on big Super Tuesday debate

  • Adam Goldman I faintly remember all this noise about feds reading underwear bomber his Miranda rights. AP has story about him going to prison forever.

  • Steve Benen How long until GOPers ask, "If Romney lacks the confidence to debate, what will he do vs Obama?"

  • Eric Boehlert i'm sure @ericbolling wishes @mmfa didn't exists; didn't catch him telling black Dem to step away from "crack pipe";

  • Garance Franke-Ruta RT @rushlimbaugh: Dems Ginned Up Contraception Debate to Fire Up Their Base, Divide the GOP and Distract from the Economy...

  • watertigernyc Sweater vests -- Nature's contraceptive. #everyoneonsantorumscampaignisinsane

  • Thoughts on Potential Output, Monetary Policy, and Economic Weblogging: A Comment on Scott Sumner's Comment on Bulla...

  • May We Please Keep Talking About Family Planning Until November?: Garry Wills Smacksdown E.J. Dionne Watch

  • Effects of the 2009 Recovery Act: Heartening News About What Economists Think--Although Caroline Hoxby and...…

  • David Roberts Yes, that was exactly the problem. RT @nycsouthpaw: @drgrist it's just much, much dumber than what you're thinking

  • David Leonhardt From '79 to '07, middle-class incomes grew 11% pretax and 23% after tax. For top earners: 73% pretax, 160% after tax.

  • Matt Yglesias You must play @dsquareddigest's Greece Choose Your Own Adventure right now!

  • Eric Boehlert Rep. Issa: no women allowed to testify about birth control. Santorum sugar daddy: ladies use aspirin as birth control; #gendergapGOP

  • DanRiehl RT @rollcall: .@stupolitics asks: Just how much does @MIttRomney hate @NewtGingrich?

  • Democratic Grandee on Romney on Detroit: "Gee, I know we Democrats are not at our most coherent on the campaign trail. But this is absurd!"

  • Jane Agdern @TPM Desperation will drive a man to say anything!

  • @TPM "Romney is a son of Detroit in the same way that Oedipus is a son of Laertes."

  • Garance Franke-Ruta Shakira attacked by a sea lion that mistook her BlackBerry for a fish. Via @zbyronwolf

  • Greg Sargent Any poll that gauges whether people think religious institutions should have to cover birth control is obsolete. That's not the policy.

  • Pam Spaulding THIS: MT @joesudbay: Been saying for years that theocratic GOPers weren't just coming for gays - birth control ...

  • daveweigel If we just keep debating birth control and fetal citizenship for a few months, the GOP surge will be unstoppable.

  • sarah wildman OMG. really now. OMFG. Santorum backer Friess: ‘Gals’ Used To Put Aspirin Between Their Knees For Contraception

  • "Iran is definitely to Santorum's left on birth control. Far to his left."

  • @TedGayer @justinwolfers 46-12 is characterized as "more evenly divided" Not "still an overwhelming majority"?

  • Justin Wolfers Survey of leading (D & R) economists asks if the unemployment rate lower b/c of fiscal stimulus? 33 agree; 2 disagree.…

  • davidfrum In a Florida cab listening to Limbaugh urge listeners not to be "disheartened" by improving economy

  • Talking Points Memo OHIO POLL: Santorum 42, Romney 24

  • The London Economist Antiendorses Mitt Romney

  • Amanda Marcotte @AlyssaRosenberg I know! Telling women how to use their benefits doesn't seem different to me than telling them how to use their salary.

  • Steve Benen Romney said Obama's plan "would make GM the living dead." Zombie GM is looking pretty spry

  • Jesse Taylor Bishop Lori unable to comment on Georgetown's provision of birth control benefits to employees. Because of conscience.

  • Amanda Marcotte @AlyssaRosenberg Of course, we must remember that religiously affiliated orgs AREN'T required to pay for BC, but insurers are.

  • Amanda Marcotte @AmandaMarcotte
    I, for one, love that Issa is giving the Democrats reels of footage to use in campaign ads pointing

  • Amanda Marcotte Is Issa working for the Democrats? Blocking women from testifying about women's health care is just too easy.

  • Jesse Taylor Amazingly, more women are involved in the fight over skirts at CPAC than a congressional hearing on birth control for women.

  • Brian Beutler Pelosi says she wants to leave the GOP nomination process to the GOP. "They're branding it in a very special way." #lulz

  • Mobutu Sese Seko Latinos were blocked from entering the Alabama statehouse yesterday. Why can I easily picture minorities denied entry to Alabama buildings?

  • Ana Marie Cox Or even a lady who agrees with him? RT @emptywheel: Does that also mean Issa has never heard of a woman minister?

  • Ana Marie Cox To be fair, all the women who Issa had lined up to testify canceled because had to go to the menstrual hut.

  • Amanda Marcotte Huh, you'd think if this is such a toxic issue for the GOP, they wouldn't fight so hard against contraception.

  • Matt Yglesias All-male House GOP leadership gets all-male witness panel to agree that all-male Catholic hierarchy should set contraceptives policy.

  • jennifer bendery Pelosi on fire today about GOP's birth control complaints: "I may at some point be moved to explain biology to my colleagues."

  • Mark Thoma Praises the New York Fed's Expansion of Its LOLR Role

  • Noam Scheiber's 'The Escape Artist' Is Leaking Out...

  • Matt Yglesias @Atrios definitely agree that we should hear more about Sweden. Great exchange rate devaluation success story.

  • Lobsterdammerung: An Interview with the GOP Chairman of the Maine Caucuses's Missing County

  • daveweigel The GOP chairman of the missing Maine caucus county says there are enough votes there to give Paul a win

  • Daniel Gross which MI voters that don't already support Romney does he think he's appealing to w/ false claims re: auto bailout?

  • Working spouses cause inequality? Can this emerging

  • Mark Thoma on the American Social Fabric

  • Paul Krugman: Cameron and the Confidence Fairy: An Update

  • Chris Blattman I am kind of shocked at how many of my PhD students are emailing or tweeting at 630am. I did not. They must be in another time zone.

  • Nate Silver Romney doubles down on "let Detroit go bankrupt" in Detroit News op-ed:

  • DeLong Smackdown Smackdown Watch by Digby and Company: Von Mises as Patriarch Edition

  • Mitt Romney Runs to the Left of Obama on Entitlements: Attacks Budget for Not More Spending More

  • DeLong Smackdown Watch: Gene Callahan Edition

  • @zunguzungu Two big questions: (i) what happens to current Greek debt? (ii) who pays for how much Gk gvt in the future? Different questions

  • klhoughton @stevebenen @delong Given the candidates who are skipping the 1 March debate, the only possible response is "KNEEL BEFORE Z/O/D/ GINGRICH!"

  • “@delong: May We Please Keep Talking About Family Planning Until November?: Garry Wills Smacksdown E.J. Dionne Watch

  • Rebecca Schoenkopf @delong "After buying all this Eames furniture and vacations and $2k/mo on clothes, we are poor, with just this house full of things!"

  • Alexander Cocotas RT @delong: @TPM "Romney is a son of Detroit in the same way that Oedipus is a son of Laertes."

  • Pragmatonomics Veritable pantheon of econ giants discuss Milton on PBS series incl: @delong @mattyglesias @bryan_caplan @amityshlaes…

  • RT @delong: The London Economist Antiendorses Mitt Romney

  • New Deal 2.0 RT @pdacosta: Citigroup saddled taxpayers with losses by lying to FHA, former employee says

  • Christana Romer and Manufacturing @delong

  • Eric Martin RT @delong: There's Racist Dog-Whistling, and Then There's ... Racism - National - The Atlantic

  • Roubini Global @delong on 'the first genuinely good new unemployment claims number since 2007':

  • Mahesh P-Subramanya “Fun fact: Siri does not recognize Inagaddadavida.” via @delong

  • Mike Konczal Paging Dr. Romer material RT @delong: 'The Escape Artist': Christina Romer Advised Obama To Push $1.8 Trillion Stimulus…

  • Dan Hirschman @delong If something happens 18,520 times in six years, it's not really a Black Swan is it?

  • Felix Gilman everyone's dose of posthuman horror for the day right here RT @delong Financial black swans driven by ultrafast machine ecology

  • Heath Graham Chilling phrase. Also, ping @cstross ! RT @delong: Financial black swans driven by ultrafast machine ecology

  • Helena ! RT @delong: Hoisted from the Archives: Unleash Chiang Kai-Shek!!

  • Chang Koo @delong What conservatives don't get is that just because there is a safety net, people, like acrobats, don't necessarily want to be on it.

  • Mike Konczal @delong @ObsoleteDogma @MarkThoma I must direct everyone to @Econofcontempt's epic post on Cochrane from moons past:…

  • Mark Thoma @delong Yes there's a point -- gov/reg bad, private sector good -- but is it a good point? Wallison is involved. Enough said.

  • Matt O'Brien John Cochrane: Lehman's failure didn't directly threaten other financial institutions cc @delong @MarkThoma

  • jontalton RT @delong: America's Cod Collapse

  • Tyler Cowen: "the sluggishness of the current recovery" (paragraph 6)… Huh??? @delong @MarkThoma

  • Ted Gayer RT @delong: @TedGayer "But not a lot of revenue". So? If we do one big good thing and lots of small stupid things, we wind up behind...

  • Patti @PatCPA @delong: Republicans Go All-in Against Contraception Watch

  • Stephen Bové RT @delong: Mind-Blowing Charts From the Senate's Income Inequal

  • You know who RT @delong Santorum’s involvement with Abramoff to protect sweatshops of Saipan should get some exposure.

  • Bruce Dust @delong: Every Time You Think the Republicans Couldn't Get Any Worse Tinfoil hats As required headwear party.

  • Jeffrey Joslin @TheStalwart @delong Habañero antidote: milk. Or vanilla ice cream if you'd prefer a nice, cool dessert.

  • Feb Benigno Piñera @delong: Robert Allen: The British Industrial Revolution in Global Perspective

  • Ellie K @ModeledBehavior Self-tweet! Why don't you listen up to @delong? He KNOWS what he's talking about. And very patient w/you btw.

Thoughts on Potential Output, Monetary Policy, and Economic Weblogging: A Comment on Scott Sumner's Comment on Bullard and Duy

Scott Sumner:

TheMoneyIllusion » Where Bullard is right and where he is wrong: Now we can see the damage to monetary policy by the widespread (but false) view that this recession was caused by the bursting of the housing bubble, and the resulting financial crisis [rather than by a failure to properly inflate the money supply]. Interestingly, this is exactly that same argument that the Fed used in the 1930s; “Do you mean you want us to go back to the false prosperity of 1929?”  Most economists would now say; “Yes.  The 1927-29 expansion saw no inflation at all.  There is no evidence the economy was overheated in 1929.”…

Both [2007 and 2009] might have seen output slightly above the mythical “natural rate.”… But it’s important to recognize the nature of Bullard’s argument… a return to 1930s macro after a 70 year hiatus…. NGDP growth followed a fairly stable path along a 5% trend line after 1990.  It might have been slightly too high in 2007, but nothing of the sort that would cause a major crisis….


This is admittedly a qualitative story, but much of the rhetoric about the U.S. economy during this period fits this description.  So it is not that the bubble destroyed potential, instead it is that actual output was higher than properly-defined potential during the mid-2000s, and then it crashed back as the bubble burst.

But where is the evidence for this?  I think everyone agrees that housing construction was too high in 2004-06.  But that doesn’t mean RGDP was too high… the resources that went into housing could have come at the expense of other sectors. Housing is only about 5% of GDP. Is there evidence that AD was too high? Maybe a tad too high, but nothing out of the ordinary compared to other business cycle expansions. How about SRAS? Bullard mentions a rise in labor supply caused by the housing bubble, but I don’t see the logic. What would be evidence for a rise in labor supply? Presumably you’d see unusual patterns in the employment to population ratio during the 2000s, but I just don’t see it. His best argument would be that… increased preference for leisure was temporarily covered up by a housing bubble that mysterious caused people to want to work more. Then when they found they could no longer build houses, they decided they didn’t want to work at all…. I just don’t see the argument, or the data to support such an argument….

Here’s the Bullard argument I find most troublesome:

As I noted earlier, the Irwin description is the dominant view of the U.S. economy.  But, as you and many others have stressed, we have not seen the bounce back toward potential that would be suggested by that picture.  That is giving me pause, and frankly I think it is giving everyone who follows the U.S. economy pause….

I think… Bullard is confusing two completely unrelated issues, the link between monetary policy and NGDP, and the link between NGDP and RGDP…. During this period of recovery NGDP has been growing at about 4%, which I consider tight money. So the explanation for the slow recovery is quite easy, money has been too tight…. But even if money has been easy, it doesn’t help Bullard’s case. Now the mystery would be why the “easy money” hasn’t boosted NGDP, not why slow NGDP growth hasn’t triggered fast RGDP growth. There’s no direct effect of easy money on RGDP. It works, if it works at all, by boosting NGDP growth. Then if we assume wages and prices are sticky in the short run, the higher NGDP growth will (partly) translate into higher RGDP. But only if you get the desired NGDP growth.  And that hasn’t happened…. Ben Bernanke has called for fiscal stimulus at various times, tacit admission that the Fed sees an AD shortfall.

The Fed’s current position is very similar to the Fed’s stance in 1932—they’ve done their job, provided low rates and a greatly enlarged monetary base, now why isn’t the economy recovering? I think we now know why the economy wasn’t recovering in 1932, money was way too tight. As soon as FDR adopted a (Woodfordian) price level target, the economy turned around on a dime…. If we get adequate NGDP growth, growth high enough where Bernanke doesn’t have to worry about Congress suddenly getting religion on the deficit, and if the economy still doesn’t recover, then we can entertain real[-side] theories of the recession….

I do like Bullard’s new argument better than the old one….

A better interpretation of the behavior of U.S. real GDP over the last five years may be that the economy was disrupted by a permanent, one-time shock to wealth…. This has lowered consumption and output, and lower levels of production have caused a significant disruption in U.S. labor markets….

[But t]here is no reason to assume that building too much investment goods (housing) would cause people to want to build fewer consumer goods. Indeed in a well functioning economy overbuilding in one sector should cause resources to re-allocate into other sectors. Output of consumer goods would probably rise…. And even if I’m wrong about the effect of less housing wealth on consumer goods production… [y]ou can’t simply assume that lower consumption translates into lower output; it could lead to higher investment or exports.  Indeed that’s the sort of adjustment predicted by most equilibrium models. Now you might make a Keynesian argument that less wealth depressed AD, but Bullard is claiming the problem is not a lack of AD.

I notice that Bullard did not repeat this argument… criticism by economics bloggers may have nudged him in the right direction.  This represents a sort of victory for the economics blogosphere, and especially Tim Duy.

And, I would add, a victory for Mark Thoma who built "Economist's View" into a must-visit platform and then shared that platform with Tim Duy.

Those of us who have wasted our time in this business over the past decade got into it because we were horrified by episodes that showed the conventional press corps engaged in extraordinary efforts to lower the level of the economic policy debate and felt that somebody, somewhere needed to try to do something constructive. The Bullard-Duy exchange is a powerful piece of evidence that we--and those of us whom the fish that are the conventional news media have hired in their attempt to turn into birds, and those of our fellow travelers in the conventional press corps who kept the faith and tried to keep the cold altars lit--have to a surprising degree succeeded: our time was not, after all, wasted.

At least not completely.

May We Please Keep Talking About Family Planning Until November?: Garry Wills Smacksdown E.J. Dionne Watch

Gary Wills:

Contraception’s Con Men: By a revolting combination of con men and fanatics, the current primary race has become a demonstration that the Republican party does not deserve serious consideration for public office. Take the controversy over contraceptives. American bishops at first opposed having hospitals and schools connected with them pay employee health costs for contraceptives. But when the President… [said] insurance companies can pay the costs, the bishops doubled down and said no one should have to pay for anything so evil as contraception. Some Republicans are using the bishops’ stupidity to hurt the supposed “moderate” candidate Mitt Romney, giving a temporary leg up to the faux naïf Rick Santorum; others are attacking Barack Obama as an “enemy of religion.”

Pusillanimous Catholics—Mark Shields and even, to a degree, the admirable E. J. Dionne—are saying that Catholics understandably resent an attack on “their” doctrine (even though they do not personally believe in it). Omnidirectional bad-faith arguments….

The Phony Religious Freedom Argument: The bishops’ opposition… is a way of imposing Catholic requirements on non-Catholics. This is religious dictatorship, not religious freedom. Contraception is not even a religious matter…. Catholic authorities themselves say it is a matter of “natural law,” over which natural reason is the arbiter—and natural reason, even for Catholics, has long rejected the idea that contraception is evil…. To disagree with Catholic bishops is called “disrespectful.” an offense against religious freedom…. Yet a man who believes that contraception is evil is an aberrant from the American norm, like the polygamist or the faith healer.

The Phony Contraception Argument: The opposition to contraception has, as I said, no scriptural basis. Pope Pius XI once said that it did, citing in his encyclical Casti Connubii (1930) the condemnation of Onan for “spilling his seed” rather than impregnating a woman (Genesis 38.9). But later popes had to back off from this claim, since everyone agrees now that Onan’s sin was not carrying out his duty to give his brother an heir (Deuteronomy 25.5-6). Then the “natural law” was fallen back on…. But a primary natural purpose does not of necessity exclude ancillary advantages. The purpose of eating is to sustain life, but that does not make all eating that is not necessary to subsistence “unnatural.” One can eat, beyond the bare minimum to exist, to express fellowship, as one can have sex, beyond the begetting of a child with each act, to express love.

The Roman authorities would not have fallen for such a silly argument but for a deep historical disrelish for sex itself….

The Phony “Church Teaches” Argument: Catholics who do not accept the phony argument over contraception are said to be “going against the teachings of their church.” That is nonsense. They are their church. The Second Vatican Council defines the church as “the people of God.” Thinking that the pope is the church is a relic of the days when a monarch was said to be his realm…. When Paul reaffirmed the ban on birth control in Humanae Vitae (1968) there was massive rejection of it…. [T]he document formed to convey the idea that papal teaching is inerrant just convinced most people that it can be loony….

The Phony “Undying Principle” Argument: Rick Santorum is a nice smiley fanatic. He does not believe in evolution or global warming or women in the workplace…. He equates contraception with the guillotine. Only a brain-dead party could think him a worthy presidential candidate. Yet he is praised by television pundits, night and day, for being “sincere” and “standing by what he believes.” He is the principled alternative to the evil Moderation of Mitt Romney and the evil Evil of Newt Gingrich…

Effects of the 2009 Recovery Act: Heartening News About What Economists Think--Although Caroline Hoxby and Ed Lazear Do Go All-in for Team Republican...

The University of Chicago's IGM Forum:

Poll Results | IGM Forum: Question A: Because of the American Recovery and Reinvestment Act of 2009, the U.S. unemployment rate was lower at the end of 2010 than it would have been without the stimulus bill.

At the time, back at the start of 2009, arguments that the Recovery Act would not push the unemployment rate down over the two years after its enactment took one of three lines:

  1. Unemployment is really not cyclical but structural, so whatever boost to spending it might generate would show up in higher prices and wages as businesses trying to satisfy demand bid against each other for a fixed pool of non-zero-marginal-product workers.

  2. Government purchases must be financed by issuing government debt, and debt issues would push up interest rates and so would discourage private investment spending.

  3. Government purchases must be financed by issuing government debt, and the future taxes needed to amortize the extra debt would frighten businesses and investors, so we would see equity prices tank as this fear would discourage private investment.

None of those things happened. And that is why the Chicago panel agrees 80%-4% with the statement that the Recovery Act the unemployment rate in 2010 below what it would otherwise have been.

And in this context it is worth noting that the two members who want to go on record agreeing with the Republican Party line and disagreeing with the statement appear to do so very carefully. We have only two of their polled economists: Caroline Hoxby and Ed Lazear, both of Stanford:

Poll Results | IGM Forum

Poll Results | IGM Forum 1

Note that Hoxby appears to be evaluating a different statement--that the ARRA was worth doing--rather than the question asked--that the ARRA reduced the unemployment rate in 2010 below what it would otherwise have been. At least, that is how I read her claim that "the depressing effects of future liabilities likely exceed benefits".

And note that Lazear's comments--"the estimates [of the Recovery Act's effects] are varied and the highest are based on ex-ante models, not experience-based data. The upper bound estimate is low"--appear to justify the position that he is uncertain about the truth of the statement, not that he disagrees with the statement.

From one perspective, this is quite heartening: 183 years after John Stuart Mill and Jean-Baptiste Say agreed that Say's Law applies in the long run but not in the short business-cycle run, 4 years after what John Quiggin calls its zombie-like rising from the grave, the claim that increases in government purchases must by the metaphysical necessity of the case--no matter what happens to asset or commodity prices--crowd out an equal and opposite amount of private spending appears to be dead.

And staked.


To Be Continued...

Ritholtz: Here's Why Most Investors Are Guaranteed To Lose

Barry Ritholtz:

Here's Why Most Investors Are Guaranteed To Lose: Your Three Investing Opponents: Tough Year!” We hear that around the office nearly every day – from professional traders to money managers to even the ‘most-hedged’ of the hedge fund community....

[I]ndividual investors need to understand exactly whom they are going up against when they step onto the field of battle. You have three opponents to consider whenever you invest. The first is Mr. Market himself. He is, as Benjamin Graham described him, your eternal partner in investing. He is a patient if somewhat bipolar fellow. Subject to wild mood swings, he is always willing to offer you a bid or an ask. If you are a buyer, he is a seller – and vice versa. But do not mistake this for generosity: he is your opponent....

[Y]our next rivals are nearly as tough: they are everyone else buying or selling stocks. Recall what Charles Ellis said when he was overseeing the $15-billion endowment fund at Yale University: "Watch a pro football game, and it's obvious the guys on the field are far faster, stronger and more willing to bear and inflict pain than you are. Surely you would say, 'I don't want to play against those guys!' “Well, 90% of stock market volume is done by institutions, and half of that is done by the world's 50 largest investment firms, deeply committed, vastly well prepared – the smartest sons of bitches in the world working their tails off all day long. You know what? I don't want to play against those guys either."... With billions at risk, they deploy anything that gives them even a slight advantage. These are who individuals are doing battle with. Armed only with a PC, an internet connection, and CNBC muted in the background, investors face daunting odds. They are at a tactical disadvantage, outmanned and outgunned....

That is even before we meet your third opponent, perhaps the most difficult one to conquer of all: You. You are your own third opponent. And, you may be the opponent you understand the least.... The biggest disadvantage you have is that melon perched atop your 3rd opponent’s neck.... [I]t does not work nearly as well as you assume. At least, not when it comes to investing. The wiring is an historical remnant, hardly functional for modern living. It is overrun with desires, emotions, and blind spots. Its capacity for cognitive error is nearly endless. It was originally developed for entirely other purposes than risk assessment in capital markets. Indeed, when it comes to money, the way most investors use those 100 billion neurons or so of grey matter, they might as well not even bother using their brains at all....

If we ask any group of automobile owners how good their driving skills are, about 80% will say “Above average.” The same applies to how well we evaluate our own investing skills. Most of us think we are above average, and nearly all of us believe we are better than we actually are.... The worse we are at any specific skill set, the harder it is for us to evaluate our own competency at it....

Underperformance is not a disease suffered only by retail investors – the pros succumb as well. In fact, about 4 out of 5 mutual fund managers underperform their benchmarks every year. These managers engage in many of the same errors that Main Street investors make. They overtrade, they engage in “groupthink,” they freeze up, some have been even known to sell in a panic....

To do well in the capital markets requires developing skills that very often are the opposite of what our survival instincts are telling us. Our emotions compound the problem, often compelling us to make changes at the worst possible times.... [O]ur evolutionary “flight or fight” response developed for a reason – it helped keep us alive out on the savannah. But the adrenaline necessary to fight a Cro-Magnon or flee from a sabre-toothed tiger does not help us in the capital markets. Indeed, study after study suggests our own wetware works against us; the emotions that helped keep us alive on the plains now hinder our investment performance. The problem, as it turns out, lies primarily in those large mammalian brains of ours. Our wiring evolved for a specific set of survival challenges, most of which no longer exist...

The London Economist Antiendorses Mitt Romney

People interested in serious policy should not vote for, give money, or work for this guy. No way. No how.

Matthew Yglesias:

Economist Devastates Romney On The Auto Bailout: Probably the most devastating critique you'll read of Mitt Romney's claim that "The course I recommended was eventually followed" on the GM/Chrysler bailout is this from the Economist becuase they agreed with him at the time:

As with much of Mr Romney's excessive rhetoric, there is some truth to this statement. Following the bail-outs, the president eventually forced Chrysler and GM into bankruptcy, a step Mr Romney thought should occur naturally. And the government oversaw painful restructurings at both companies, which were largely in line with Mr Romney's broad suggestions. But the course Mr Romney recommended in 2008 began with the government stepping back, and it is unlikely things would've turned out so well had this happened.

Free-marketeers that we are, The Economist agreed with Mr Romney at the time. But we later apologised for that position. "Had the government not stepped in, GM might have restructured under normal bankruptcy procedures, without putting public money at risk", we said. But "given the panic that gripped private is more likely that GM would have been liquidated, sending a cascade of destruction through the supply chain on which its rivals, too, depended." Even Ford, which avoided bankruptcy, feared the industry would collapse if GM went down. At the time that seemed like a real possibility. The credit markets were bone-dry, making the privately financed bankruptcy that Mr Romney favoured improbable. He conveniently ignores this bit of history in claiming to have been right all along…

There's a good reason why sensible people don't normally recommend that the government own manufacturing companies. But… bad things didn't happen, and given the total lack of private financing for anything at the time the alternative was liquidation rather than reorganization…. [Obama] did handle it in a responsible way and the skeptics were largely mistaken. If you want to argue that as a point of principle liquidation is still the better alternative, then have at it…

Santorum Is Neither a Social Nor an Economic Libertarian...

Mark Kleiman:

Under the Tea Party veneer: The purported small-government libertarianism of the Tea Party was always a fairly thin veneer over its John Birch Society core.  Now some libertarians are finding that out; Tea Party voters are going for Santorum over Romney. If Santorum actually becomes the Republican nominee – still a long shot, but no longer a far fetch – we’ll discover what fraction of the glibertarian commentariat actually prefers personal liberty and Enlightenment values to looser regulations on polluting companies and lower taxes on the rich. Damned few, I’ll warrant.

Gene Healy:

Santorum Is Severely Wrong: [T]he Romney-2012 Presidential Unit still has a few bugs in its pandering software…. Rick Santorum… has… a slight lead on Romney among Republican voters nationally….

I'm not severely conservative, but I do have a case of Stage IV libertarianism. And anyone who shares that condition will find Santorum's rise particularly vexing. The former senator from Pennsylvania is libertarianism's sweater-vested arch-nemesis. In a Pennsylvania Press Club luncheon in Harrisburg last summer, Santorum declared, "I am not a libertarian, and I fight very strongly against libertarian influence within the Republican Party and the conservative movement."…

[V]oting for the No Child Left Behind Act… the 2005 "bridge to nowhere"… expanded national service program…. Santorum's 2012 campaign platform even includes a pledge to "re-direct funds within HHS, so it can create public/private partnerships ... for the purpose of strengthening marriages, families, and fatherhood."…

The Tea Party movement was supposed to represent an end to this sort of moralistic Big Government conservatism. Animated by "fiscal responsibility, limited government, and free markets," as the Tea Party Patriots' credo put it, the movement had supposedly put social issues on the back burner to focus on the crisis of government growth…. [Yet i]n this year's contests, he's regularly drawn more support from Tea Party voters than Ron Paul, who has been described as the "intellectual godfather of the Tea Party movement." Exit polls show Santorum beating Paul among self-described Tea Party supporters in Iowa, South Carolina and Florida, trailing him only in independent-heavy New Hampshire and Nevada….

Santorum['s]… agenda rests on meddling with other people, sometimes with laws, sometimes with aircraft carrier groups. "This idea that people should be left alone, be able to do whatever they want to do," Santorum complained to NPR in 2006, "that we shouldn't get involved in the bedroom, we shouldn't get involved in cultural issues ... that is not how traditional conservatives view the world." That version of conservatism has a new standard bearer, and he's rising in the polls.

Mark Thoma Praises the New York Fed's Expansion of Its LOLR Role

Mark Thoma:

Economist's View: "NY Fed to Take More Direct Role in Repo Market": I've complained many times that the risk of non-traditional bank runs in the repo market, a key factor in the financial crisis, is still present. As noted below in a quote from the NY Fed, the "systemic risk associated with this market remains unchanged." So it's good to see that the NY Fed is finally stepping in with oversight of this market after it waited for the industry to fix itself, and that didn't happen. But why did anyone think the industry would fix itself in the first place?

Quote of the Day: February 16, 2012

"As he spoke he smiled, and the lamplight fell on a hard-looking mouth, with very red lips and sharp-looking teeth, as white as ivory. One of my companions whispered to another the line from Burger's 'Lenore': 'Denn die Todten reiten Schnell'. ('For the dead travel fast'.)"

--Bram Stoker, Dracula

Liveblogging World War II: February 16, 1942

A Letter:

auschwitz-letter: Auschwitz, February 16th, 1942

Dear Walter,

You really surprised me, first of all, with your letter and second, with your announcement. I congratulate you on the results of your medical test for military service. If you want to join the air force that much, I won't spoil it for you and will send back the paper for you with my signature. I hope you get lucky with that as well, my friend.

I take it for granted that you have to sign up only for the duration of the war. What happened to the other comrades who took the test? By the way, what did your mother think about your plan? She won't be too excited about it. You wrote that you will take your final examinations soon. Do the best you can to get a high score because if you want to succeed in life you must be able to do something. How did your examinations in vocational school go?

Here it is a hellish mess, everything is upside down. They have built a village of barracks, and they are not small - on average some twelve to fourteen rooms per barrack and each is about six to seven meters long and about four and a half to five meters wide, with a nice corridor in the middle. We have five men to a room. Each of us has his own desk and closet for coats, office jackets, hats.

They also have a concentration camp here with about 50,000 convicts . They all wear black and white striped suits. Most of them are Polish, but also German. Among the Polish are many men of the more intelligent class. They will keep them here on purpose. With these people we can get anything done, especially since many of them have learned a trade. Each one is working in his own trade. In the camp there are a furniture workshop, a sawmill, concrete shop, etc. In Poland, just one false move, and it is a striped suit.

Break a leg and friendly greetings.

Your father

This (Greece) Is What the IMF Was Made For

Lorenzo Bini Smaghi:

Only a full IMF programme can save Greece from default: When discussing Greece, some policy officials and market participants have suggested that ‘the markets are now better prepared to deal with a default’. When was the other time such statements were being made? Probably in mid-September 2008, a few days before the collapse of Lehman Brothers.

If there is one thing to learn from the past five years, it’s that financial contagion operates in unexpected ways, especially after a major shock such as the failure of a major financial institution or the default of a country.

Even if markets have prepared for the possibility of a default by Greece, the practical consequences of such an event can be of a much higher order of magnitude.

First, Greece would most probably have to exit the euro, as it would have no other way of financing its current expenditures other than to print its own money. Capital controls, bank holidays and nationalisations would be required to try to counter a run on the banking system. Litigations between creditors and debtors would rise exponentially. The social and political stability of the country would be in grave danger.

Second, the political crisis would spread to European institutions because of their inability to solve the problem….Third, creditors would be further discouraged from investing in the eurozone, given its inability to manage its debt problems. Contagion could extend to the core of the euro system. Fourth, the financial tensions around the euro would produce a serious blow for the economic recovery not only of Europe but also the US and Japan, and possibly in emerging markets….

So what should be done to prevent such a scenario from occurring?

Greece does not suffer from a typical balance of payment problem that can be dealt with short to medium-term adjustment and financing. It has a major structural problem that can be resolved only through a combination of macroeconomic, structural and social measures. It also needs prolonged technical assistance….What is required is much more similar to the kind of programme that the International Monetary Fund applies to low-income countries, under the Poverty Reduction and Growth Facility (recently renamed Extended Credit Facility), with official financing provided for several years, at concessional terms to ensure debt sustainability. Strong conditionality has to be implemented, in line with the IMF practice for this type of programme, but not under the threat of continuous default that alienates the political support in Greece for the right policies and fuels instability in financial markets.

This avenue raises three fundamental issues. First, it is costly…. Second, other debtor countries may be tempted to seek the same concessional conditions as those granted to Greece. But European authorities have stated that Greece is unique. They should stick to that commitment….Third, at this stage of the negotiation, it might be too late to introduce such a game changer. But it’s never too late to try to avoid a disaster.

Job Market No Longer Flatlining...

Economagic Economic Chart Dispenser 2

The first genuinely good new unemployment claims number since 2007:

ETA Press Release: Unemployment Insurance Weekly Claims Report: In the week ending February 11, the advance figure for seasonally adjusted initial claims was 348,000, a decrease of 13,000 from the previous week's revised figure of 361,000. The 4-week moving average was 365,250, a decrease of 1,750 from the previous week's revised average of 367,000.

The advance seasonally adjusted insured unemployment rate was 2.7 percent for the week ending February 4, a decrease of 0.1 percentage point from the prior week's unrevised rate. The advance number for seasonally adjusted insured unemployment during the week ending February 4, was 3,426,000, a decrease of 100,000 from the preceding week's revised level of 3,526,000. The 4-week moving average was 3,492,500, a decrease of 8,250 from the preceding week's revised average of 3,500,750.


The advance number of actual initial claims under state programs, unadjusted, totaled 361,928 in the week ending February 11, a decrease of 39,328 from the previous week. There were 424,400 initial claims in the comparable week in 2011.

The advance unadjusted insured unemployment rate was 3.1 percent during the week ending February 4, a decrease of 0.1 percentage point from the prior week's unrevised rate. The advance unadjusted number for persons claiming UI benefits in state programs totaled 3,964,007, a decrease of 133,493 from the preceding week. A year earlier, the rate was 3.6 percent and the volume was 4,575,640. The total number of people claiming benefits in all programs for the week ending January 28 was 7,681,911, an increase of 18,304 from the previous week.

Extended benefits were available in Alabama, Alaska, California, Colorado, Connecticut, Delaware, the District of Columbia, Florida, Georgia, Idaho, Illinois, Indiana, Kansas, Kentucky, Maine, Maryland, Massachusetts, Michigan, Missouri, Nevada, New Jersey, New Mexico, New York, North Carolina, Ohio, Oregon, Pennsylvania, Rhode Island, South Carolina, Tennessee, Texas, Washington, West Virginia, and Wisconsin during the week ending January 28.

Economagic Economic Chart Dispenser 1

Mitt Romney Rises to Amazing Heights of Incoherence in Michigan

Jonathan Chait Cohn:

Mitt Romney Needs To Get His Facts Straight About The Auto Bailout: Romney’s Latest Attempt to Spin the GM BailoutMitt Romney is talking about the auto industry rescue again. But his latest argument is even more convoluted, and misleading, than his previous ones…. Romney has criticized the Obama Administration for rescuing the industry in early 2009, but the industry is clearly on the rebound – making profits, selling cars, and hiring back workers. So doesn’t Obama deserve credit for that? No way, says Romney. As he sees it, Chrysler and GM are succeeding because they did what Romney had advised all along: They went through structured bankruptcies, shedding unsustainable contracts and assets. But like all companies attempting to reorganize through bankruptcy, Chrysler and GM needed loans in order to keep their operations going. Romney says he would have told the companies to get money from the private sector. Obama allowed the companies to get financing directly from the government, which meant that  “The U.S. Department of Treasury – American taxpayers – was asked to become a majority stockholder of GM.”

Romney is correct: The U.S. did become GM's majority stockholder. And there was a very good reason for that, as many of us have noted before.

In late 2008 and early 2009, when Chrysler and GM ran out of money, private financing was not available. Remember, this was not long after Lehman had collapsed and the entire financial industry was on the brink of collapse…. That would have meant liquidation and mass layoffs. Chrysler and GM would be gone…. Every company connected to the domestic auto industry would have suffered, which is why Ford, although healthy enough to survive without federal assistance in 2009, supported the Obama rescue…. The new twist is his portrayal of the rescue as a form of “crony capitalism.”…

While a lot of workers and investors got the short end of the stick, Obama’s union allies – and his major campaign contributors – reaped reward upon reward, all on the taxpayer’s dime.

That’s a pretty skewed version of the truth. As Kristin Dziczek of the Center for Automotive Research reminds me, the unions had by 2009 already made major concessions in order to help the companies restructure: Among other things, they agreed to a two-tier pay scale, changes to retiree health benefits, and changing work rules that had protected union jobs. Those changes helped the automakers reduce their hourly labor costs by nearly a third. Then, during the bankruptcy, the unions agreed to further concessions…. [T]raditional Chrysler and GM hourly employees have seen no annual raises since 2003 and will see no raises until at least 2015…. The concessions on retiree health benefits concession were particularly significant….

You can argue that the concessions were necessary, given what the competition was paying their workers. You can argue that the union should have structured the concessions differently. But to call the rescue a “sweetheart deal” or example of “crony capitalism” is way off the mark….

Prioritizing workers over investors may seem strange to the co-founder of Bain Capital. That doesn’t mean it’s wrong.

Marcy Wheeler:

Mitt Advocates Taking Healthcare from Retirees to Give Money to Bailed Out Banks: There’s a lot that is fact-impaired in this op-ed doubling down on the “let GM go bankrupt” (starting with the lack of funding for a bankruptcy, meaning a managed bankruptcy was impossible)…. [Mitt] is complaining, of course, that VEBA (the trust fund run by professionals that allowed the auto companies to spin off contractual obligations–retiree healthcare–to the unions) got a stake in Chrysler while Chrysler’s secured creditors took a haircut. So, in part, he’s basically complaining that the bailout preserved the healthcare a bunch of 55+ year old blue collar workers were promised….He’s also complaining that… a bunch of banks that themselves had been bailed out had to take a haircut. He’s complaining, for example, that JP Morgan Chase, Chrysler’s largest creditor at the time and the recipient, itself, of $68.6B in bailout loans, had to take a haircut on $2B in loans to Chrysler….

[T]he UAW retirees who still have healthcare today instead of Jamie Dimon having another yacht probably don’t feel the same way as Mitt does.

David Dayen:

Romney’s Auto Rescue Double-Down: Mitt Romney, struggling to regain the lead from Rick Santorum in national polls and facing a serious deficit in the key primary state of Michigan, has doubled down on his position against the auto industry rescue…. Basically, Mitt is mad that the unions stayed in place after the auto rescue, and that they got, through their health care management trust fund VEBA, a stake in Chrysler…. Mitt would rather that the stake in the auto companies went to bailed-out banks instead of the union health care fund.

This isn’t quite as suicidal as it looks. Romney needs to win Michigan, and Michigan Republicans actually don’t support the auto rescue, in true what’s-the-matter-with-Kansas fashion…. [It's] pandering… playing to the conservative lizard brain conception of greedy unions.

For the state as a whole, however, it’s a really dumb double-down… Romney favoring banks over people’s health care….

UPDATE: A commenter at Brad DeLong’s place adds:

As I am sure you all remember, going into bankruptcy with no source of continued funding would mean liquidation for the auto makers and everyone understood that at the time including Keith Hennessy in public.

Saying he was for managed bankruptcy without a funding source was like saying he was for medical treatment but at the time refused to pay for the medicine or that he was for having a kid finish their degree only he refused to pay the tuition.

Noam Scheiber's 'The Escape Artist' Is Leaking Out...

Sam Stein:

'The Escape Artist': Christina Romer Advised Obama To Push $1.8 Trillion Stimulus: Scheiber writes…. The $1.8 trillion figure was included in a December 2008 memo authored by Christina Romer (the incoming head of the Council of Economic Advisers) and obtained by Scheiber in the course of researching his book.

"When Romer showed [Larry] Summers her $1.8 trillion figure late in the week before the memo was due, he dismissed it as impractical. So Romer spent the next few days coming up with a reasonable compromise: roughly $1.2 trillion," Scheiber writes…. [W]hen the final document was ultimately laid out for the president, even the $1.2 trillion figure wasn't included. Summers thought it was still politically impractical. Moreover, if Obama had proposed $1.2 trillion but only obtained $800 billion, it would have been categorized as a failure. "He had a view that you don't ever want to be seen as losing," a Summers colleague told Scheiber….

The most persistent internal division inside the White House, however, was between the deficit hawks and those who believed more stimuli were needed…. Orszag, writes Scheiber, "worried that the sheer size of the stimulus could undermine the confidence of businessmen and money managers." In the subsequent year, when other advisers argued that an additional dose of stimulus would prop up a staggering economy, he downplayed the potential impact….Summers fought Orszag's pursuit of a deficit reduction commission…. He also pushed back on Orszag's idea of a domestic spending freeze, insisting the cuts would be too close to the bone.

"We're Democrats," Summers harrumphed. "We believe in these things." Besides, both ideas struck him as gimmicks unworthy of a president…. Orszag, in turn, so distrusted Summers' influence that, as Scheiber writes, he "enacted a special rule for Summers's deputy, Jason Furman: anyone receiving an unsolicited inquiry from Furman was to alert Orszag's chief of staff, Jill Blickstein."

In the end, however, only one economic adviser truly argued that deficit reduction should be put off for another day. And by the time the 2010 elections were over, even Obama's top political advisers were arguing that Christina Romer's position was utterly untenable.

[Top Adviser David] Plouffe urged the president to give [entitlement reform] a shot. "I said he [Obama] should be big on entitlements," Plouffe told one former administration official, by which he meant reining in these budgetary elephants. Sure, this would enrage the party's base. But the political upside with the rest of the country would more than make up for it ... "Plouffe is pretty big on accomplishments trump normal politics," said one White House colleague. "Plouffe's view is that big trumps the little."…

[W]hile internal staff disputes did play a role, Scheiber ascribes blame ultimately to the president. As he concludes:

[T]he Jobs Act punctuated the chronic confusion about the connection between politics and governing. Too often, the two activities were treated as an either-or proposition in the West Wing. Obama generally believed the way to pass his program was to engage earnestly with the opposition, not take his case public. A president never has more leverage with Congress than when he's riling up voters, but Obama rarely exploited the massive stature of his office as a tool for influencing legislation.

Quote of the Day: February 15, 2012

"[I]deals come to life in dozens of political transactions every day. Some of those transactions aren’t pretty. You can understand this and try to work with this knowledge, or you can look away. But ignoring politics will not make it stop. It will simply go on without you—and sooner or later will happen to you."

--Richard Brookhiser, James Madison

Liveblogging World War II: February 15, 1942

"I do not write this in any way to excuse myself. I ought to have known. My advisers ought to have known and I ought to have been told, and I ought to have asked. The reason I had not asked about this matter, amid the thousands of questions I put, was that the possibility of Singapore having no landward defences no more entered into my mind than that of a battleship being launched without a bottom."

Winston Churchill: The Hinge of Fate


Flying back up the California coast in the late afternoon was glorious.

Fun fact: flying from LAX to 0AK, from when you cleared 10,000 feet after take off to Quincy they start the approach is just enough time to listen to Inagaddadavida twice.

Fun fact: Siri does not recognize Inagaddadavida.

Econ 1: Spring 2012: U.C. Berkeley: Midterm Information

  1. The exam will take place on Wednesday, February 22 from 11:10 AM - 12:00 PM. We will need to start handing out exams a few minutes before the official start, so please arrive promptly and get seated quickly so we can be ready to start right at 11:10.

  2. No blue books are necessary; you will write directly on the exam. No calculators, cell phones, or electronic devices are allowed in the exam. Time will be announced periodically during the exam. If you are worried about keeping track of time, please wear a wristwatch that day.

  3. To give you ample space during the exam, we have divided the students, based on GSI, into different rooms for the exam. Students (except DSP) should report to classrooms on Feb. 22 at 11:10 AM as follows:

Wheeler Aud: Ashley Clark, Haozhe Wang, Eric Huff, Natarajan Chakrapani, Jason Barbose, Sean LaGuardia

106 Stanley: Sarah Thomason

1 Pimentel: Katherine Murtha, David Puzey, Frankie Le, Fahd Majeed

105 North Gate: Gaurav Shetti

GSI names and emails are in "GSI-section info" under the Resources tab on bspace. Please go to your assigned room. It is not good if exams go to the wrong GSIs.

Financial black swans driven by ultrafast machine ecology

Courtesy of Walter Jon Williams:

[1202.1448] Financial black swans driven by ultrafast machine ecology: Neil Johnson, Guannan Zhao, Eric Hunsader, Jing Meng, Amith Ravindar, Spencer Carran, Brian Tivnan:

Society's drive toward ever faster socio-technical systems, means that there is an urgent need to understand the threat from 'black swan' extreme events that might emerge. On 6 May 2010, it took just five minutes for a spontaneous mix of human and machine interactions in the global trading cyberspace to generate an unprecedented system-wide Flash Crash. However, little is known about what lies ahead in the crucial sub-second regime where humans become unable to respond or intervene sufficiently quickly. Here we analyze a set of 18,520 ultrafast black swan events that we have uncovered in stock-price movements between 2006 and 2011. We provide empirical evidence for, and an accompanying theory of, an abrupt system-wide transition from a mixed human-machine phase to a new all-machine phase characterized by frequent black swan events with ultrafast durations (<650ms for crashes, <950ms for spikes). Our theory quantifies the systemic fluctuations in these two distinct phases in terms of the diversity of the system's internal ecology and the amount of global information being processed. Our finding that the ten most susceptible entities are major international banks, hints at a hidden relationship between these ultrafast 'fractures' and the slow 'breaking' of the global financial system post-2006. More generally, our work provides tools to help predict and mitigate the systemic risk developing in any complex socio-technical system that attempts to operate at, or beyond, the limits of human response times.


Mark Thoma on the American Social Fabric

Mark Thoma

Economist's View: I was struck by this statement by David Brooks:

The American social fabric is now so depleted that even if manufacturing jobs miraculously came back we still would not be producing enough stable, skilled workers to fill them."

I'll leave the response to Dean Baker:

Five years ago we had two million more people employed in manufacturing than we do today. Has the social fabric become so depleted in this period that these people or others could now not fill these jobs if they came back? If Brooks really thinks that the ill effects of unemployment are that extreme he should be screaming for more stimulus in every column.

I think Brooks is wrong about the cause. It's not moral decay of the middle class, it's the desperation that comes with lack of opportunity, and the lock-in that comes with some of the solutions to that problem. But I will note that I have been emphasizing the social value of keeping people connected to the labor force through temporary jobs programs since the onset of the recession.

Hoisted from the Archives: Unleash Chiang Kai-Shek!!

Brad DeLong: Unleash Chiang Kai-Shek!!:

I'm sorry, but this is just too weird: | The Gainesville Sun | Gainesville, Fla.: After more than an hour of solemn ceremony naming Rep. Marco Rubio, R-West Miami, as the 2007-08 House speaker, Gov. Jeb Bush stepped to the podium in the House chamber last week and told a short story about "unleashing Chang," his "mystical warrior" friend. Here are Bush's words, spoken before hundreds of lawmakers and politicians:

Chang is a mystical warrior. Chang is somebody who believes in conservative principles, believes in entrepreneurial capitalism, believes in moral values that underpin a free society.

I rely on Chang with great regularity in my public life. He has been by my side and sometimes I let him down. But Chang, this mystical warrior, has never let me down.

Bush then unsheathed a golden sword and gave it to Rubio as a gift. "I'm going to bestow to you the sword of a great conservative warrior," he said, as the crowd roared.

The crowd, however, could be excused for not understanding Bush's enigmatic foray into the realm of Eastern mysticism. We're here to help. In a 1989 Washington Post article on the politics of tennis, former President George Bush was quoted as threatening to "unleash Chang" as a means of intimidating other players. The saying was apparently quite popular with Gov. Bush's father, and referred to a legendary warrior named Chang who was called upon to settle political disputes in Chinese dynasties of yore. The phrase has evolved, under Gov. Jeb Bush's use, to mean the need to fix conflicts or disagreements over an issue. Faced with a stalemate, the governor apparently "unleashes Chang" as a rhetorical device, signaling it's time to stop arguing and start agreeing.

No word on if Rubio will unleash Chang, or the sword, as he faces squabbles in the future.

When George H. W. Bush in the 1970s and 1980s threatened to "unleash Chang" on his tennis opponents, he was referring to China's onetime strongman and thereafter Taiwan's dictator Chiang Kaishek, leader of the Nationalist Party, the man who had largely reunified China in the 1920s with his army's "Northern Expedition," lost the Chinese Civil War to Mao Zedong's Chinese Communist Party, and then taken refuge with his Guomindang party cadres on Taiwan. After the start of the Korean War, the American 7th Fleet protected Chiang (and Taiwan) from Mao's People's Liberation Army.

Republican wingnuts, however, pretended that the 7th Fleet actually protected Mao's Communists (who had, after all, won the Chinese Civil War) from Chiang's Nationalists (who had, after all, lost it) by keeping Chiang Kaishek leashed. They periodically called for the U.S. to "unleash Chiang Kaishek"--so that Chiang, you see, could invade and conquer the Chinese mainland.

When George H. W. Bush, playing tennis (and losing) in the 1970s and 1980s, would threaten to "unleash Chiang," he was mocking the right-wing nuts of his generation.

But George H. W. Bush's sons--even the smart one, Jeb--never got the joke. They, you see, didn't know enough about world history or even the history of the Republican Party to know who Chiang Kaishek was, or what "Unleash Chiang!" meant. Hence Jeb Bush's explanation that twentieth-century Chinese nationalist, socialist, general, and dictator Chiang Kaishek was a "mystical warrior... who believes in conservative principles, believes in entrepreneurial capitalism, believes in moral values that underpin a free society."

To me, that level of uncuriosity is scary. Why is this family ruling us, again?

UPDATE: Tim Noah claims that Jeb Bush did indeed know back in 2005 what "Unleash Chiang!" meant, but chose to pretend that he did not.

I have no idea why Tim Noah thinks this--Noah appears to be working off nothing but the hypothesis that Jeb Bush knows everything that Doro Bush Koch does. But my sister knows lots of things that I don't know:

Marco Rubio Flunks History | The New Republic: Jeb's whimsical reworking of "Chang" from a real-life quixotic obsession of the 1950s American right into a "mythical conservative warrior" was his way to perpetuate a cherished family tradition without re-litigating the question of who lost China. Since Doro knows its real provenance, I assume Jeb must, too.

Quote of the Day: February 14, 2012

"James [II Stuart]'s opponents were, by and large, revolutionaries, not reactionaries. They appreciated that only a modernized English state could compete in contemporary Europe. Unlike James, however, the revolutionaries looked to the Dutch Republic rather than to the French monarchy for political inspiration."

--Steve Pincus, 1688: The First Modern Revolution

No Excuse for Anybody Interested in Good Policy to Vote for Mitt Romney

A correspondent writes, apropos of the astonishingly dishonorable Mitt Romney oped:

As I am sure you all remember, going into bankruptcy with no source of continued funding would mean liquidation for the auto makers and everyone understood that at the time including Keith Hennessy in public.

Saying he was for managed bankruptcy without a funding source was like saying he was for medical treatment but at the time refused to pay for the medicine or that he was for having a kid finish their degree only he refused to pay the tuition.

Other things of note: when he is blasting the pension slashing of non UAW folks, I assume he means dumping them on the PBGC, where their pensions would be much lower for people less than 65. but Bain did exactly that same move with several companies it took through bankruptcy--dumped the pensions onto the pbgc--so it's ironic he would be touting his private sector experience here...

Paul Krugman: Cameron and the Confidence Fairy: An Update


Cameron and the Confidence Fairy: An Update: Back in June 2010, when George Osborne unveiled the Cameron government’s austerity plan, it was all about confidence:

Higher interest rates, more business failures, sharper rises in unemployment, and potentially even a catastrophic loss of confidence and the end of the recovery. We cannot let that happen. This Budget is needed to deal with our country’s debts. This Budget is needed to give confidence to our economy. This is the unavoidable Budget.

So how’s it going?

The Cameron government likes to point to low British interest rates — which are not just the result of safe-haven flight into the bonds of every advanced-country government that still has its own currency. Except, actually they are…. Still, the government’s commitment to fiscal responsibility has led to rising consumer confidence. Or, actually, not…. Business confidence! That’s the ticket! Or, well, no…. Still, Serious People are sure that the policy was necessary and is yielding results. I wonder what it would take to convince them otherwise.update/?pagewanted=all#>######

Paul Krugman Is Much More Polite to John Cochrane and John Taylor than Economics of Contempt Is

Paul Krugman:

It Was Lehman Wot Did It - These days the bizarre economic notions are flying so thick and fast that it’s hard to keep up. Economics of Contempt informs us that Taylor and Cochrane(pdf) are denying the importance of the Lehman shock. This is, among other things, a demonstration of just how far Chicago has run away from the legacy of Milton Friedman, who put bank runs — starting with the failure of small banks — at the heart of his account of the Great Depression. But it’s also amazing given that these events were so recent, and so clear.

Look at what happened to yields on riskier, illiquid assets. Anyone else have the impression that something happened in the second half of September 2008?

Now, I would argue that Lehman was more of a trigger than an ultimate cause, that the overhang of household debt rather that continuing disruption of the financial sector is what’s holding us back now. But trying to diminish the centrality of Lehman to the crisis with arguments to the effect that most of Lehman’s big counterparties survived — because the government bailed them out — is just amazing.

It Was Lehman Wot Did It  NYTimes com

Heh. Indeed.

As I, at least, see it, the key to Lehman was that in its aftermath not only was a great deal of liquid cash frozen but nobody was certain how big the bailout would be or who the bailout would go to or what institutions would still be surviving when the dust cleared.

The settlement of the Bear-Stearns bankruptcy had convinced everybody that the U.S. government had guaranteed the unsecured debt of practically every single commercial bank, investment bank, and shadow bank in and outside the United States--and thus that even though people felt overleveraged, it was still worthwhile for them to hold on to their risky asset positions because in the end they were not that risky.

Lehman revealed that that was not true.

And then, of course, the attempts by financial institutions to rebalance their portfolios and shed risk made their risky assets all much, much, much more risky--and diminished the willingness to hold them.

Miss that--as it appears that Taylor and Cochrane have--and you have missed practically everything important about the fall of 2008.

Economics of Contempt Is Very Unhappy This Morning...



Economics of Contempt: Mind-Boggling Nonsense from John Cochrane: After reading John Taylor and John Cochrane's analyses of Lehman's failure, I'm beginning to understand how it's possible for economists to say that "we're still arguing about the causes of the Great Depression." It's generally hard to come to an agreement when one side simply lies, or refuses to acknowledge undeniable facts…

DeLong Smackdown Smackdown Watch by Digby and Company: Von Mises as Patriarch Edition


Hullabaloo: Update: Be sure to read Konczal's piece and the ensuing argument over Mises' "endorsement" of birth control. He endorsed it --- for the husband/father to make women use if he didn't feel it was financially viable to have more children. Rick Santorum wouldn't agree with that. But in the end they can both agree on one thing: men are looking out for "the family" when they control women's reproduction. What could be wrong with that?

Mike Konczal:

Ludwig Von Mises Makes the Libertarian Case against “Free Love” (and Implicitly Against Birth Control) | Rortybomb: Check out dueling Mises quotes and interpretation in the comment section from Gene Callahan - ”With the spread and progress of capitalism, birth control becomes a universal practice” – and Corey Robin (whose recent book on conservatives looks even stronger in light of these arguments by Mises) who points out that Mises isn’t talking in terms of woman’s autonomy but the husband as family owner: “In the market economy every individual is spontaneously intent upon not begetting children whom he could not rear without considerably lowering his family’s standard of life.”

Corey Robin:

Ludwig Von Mises Makes the Libertarian Case against “Free Love” (and Implicitly Against Birth Control) | Rortybomb: Given that Mike’s point was the connection between sexual autonomy for women and birth control, I don’t think the quote Gene cites — not when it’s read in context — actually undermines what Mike is trying to get. If you go onto read after the passage in question — the whole discussion is on 667-672 of Human Action (Volume 3 if you have the four volume edition) — Mises makes it very clear that it’s the father/husband who’s making the decision as to whether he wants to reproduce. And he’s making that decision as a market actor, balancing his sexual desire against what the market dictates he can support (in terms of the number of children). Mises writes (on 672): “In the market economy every individual is spontaneously intent upon not begetting children whom he could not rear without considerably lowering his family’s standard of life. Thus the growth of population beyond the optimum size as determined by the supply of capital available and the state of technological knowledge is checked. The interest of each individual coincide with those of all other individuals.” (In addition, and tangentially, Mises refers to abortion as one of several “egregious and repulsive practices” that include infanticide.) He never speaks of birth control as an advance for women’s autonomy, and he never once says it’s the woman who will be deciding it. It’s always the man, and the larger context in which he speaks of the issue is that it has resolved the Malthusian conundrum of population size versus scarcity. There’s absolutely nothing to suggest that he’d be in favor of women using birth control outside the confines of marriage — i.e., free love — or on their own initiative or for the sake of their own desire.

Mitt Romney Runs to the Left of Obama on Entitlements: Attacks Budget for Not More Spending More

Mitt Romney on the 2013 Obama budget proposal:

This week, President Obama will release a budget that won’t take any meaningful steps toward solving our entitlement crisis. The President has failed to offer a single serious idea to save Social Security and is the only president in modern history to cut Medicare benefits for seniors…

Is there any reason that anybody who cares about public policy should vote for this for president? Anybody? Anybody? Bueller?

DeLong Smackdown Watch: Gene Callahan Edition

Gene Callahan:

La Bocca della Verita: Why Oh Why Can't We Have a Better Blogosphere?: Mike Konczal… claims that Ludwig von Mises's case against "free love" is "implicitly" a case against birth control…. [T]his new tool called Google, with which one can actually find out what Mises thought about birth control, rather than just giving it your best guess. If he had tried this Google thingie, he might have discovered that Mises was a birth control enthusiast:

It is not the practice of birth control that is new, but merely the fact that it is more frequently resorted to. Especially new is the fact that the practice is no longer limited to the upper strata of the population, but is common to the whole population. For it is one of the most important social effects of capitalism that it deproletarianizes all strata of society. It raises the standard of living of the masses of the manual workers to such a height that they too turn into 'bourgeois' and think and act like well-to-do burghers. Eager to preserve their standard of living for themselves and for their children, they embark upon birth control. With the spread and progress of capitalism, birth control becomes a universal practice. The transition to capitalism is thus accompanied by two phenomena: a decline both in fertility rates and in mortality rates. The average duration of life is prolonged." -- Human Action

My point here is… to note, once again, how the desire to bash one's political opponents tends to throw even minimal standards of truth-seeking right out the window. It would have taken Mike about two or three minutes to find out what Mises really thought about birth control... but why bother, when he thought he had a juicy quote with which he could order libertarians to "man up"? And Brad DeLong, without bothering to check this himself, enthusiastically jumped on the bandwagon.

Brad, why oh why can't we have a better blogosphere?


I would plead, unconvincingly:

  1. That having plowed my way through Socialism and Money and Credit, there is no way in the Holy Name of the One Who Is that I will spend any time plowing through Human Action: "time's winged chariot…" you know…

  2. That I was thinking of Friedrich von Hayek's take on how Harriet Taylor bewitched John Stuart Mill into socialism…

  3. That, historically, since before the days of Wollstonecraft the combination of enthusiasm for birth control and enthusiasm for female sexual subordination is something quite rare…

  4. That I am now eagerly looking forward to reading people from the Ludwig von Mises institute denounce Mitch McConnell for attempting to reproletarianize America…

But I will redouble my efforts to first verify, then trust…

Daily Kos: Mitt's Math #2

A Republican delegate count:


Daily Kos: Mitt's Math #2: Maine Update! Not Enough Delegates To Avoid Brokered Convention: Here's how it stands right now for Mitt (based on the delegate projection most favorable to Romney): IA - 12, NH - 9, FL - 50, NV - 14, CO - 13, MN - 6, ME - 11, Superdelegates - 17, Hunstman endorsement - 2. So far: 134….

There are only 122 winner-take-all delegates left. If Mitt gets all of those, and I'm counting the Superdelegates right, he needs 898 out of 1797 from the other states, or, just about exactly 50%.

Republicans Go All-in Against Contraception Watch

Matthew Yglesias:

Freedom of Conscience And Its Limits: Let me pull a point out of a rather long John Holbo post. Start with the assumption that ObamaCare is repealed, in its entirety, tomorrow. The day after tomorrow Abdul Hussain, owner and CEO of a large private firm with 5,000 employees, announces that his firm will no longer offer employees health insurance that permits women to visit male doctors or male employees to be treated by female doctors. This is a newsworthy event, and the day after the day after tomorrow Health and Human Services Secretary Kathleen Sebelius and Attorney General Eric Holder both offer the opinion that this is a form of illegal discrimination…. Will Mitch McConnell and other Congressional Republicans stand up for Hussain's "freedom of conscience" in this case? Will my conservative twitter followers?

I'm going to guess no.

Conservatives don't like the Affordable Care Act and are sympathetic on the merits to the claims of those who think contraceptives or morally wrong, so in this particular case the principle of "freedom of conscience" seems appealing to them. But there's actually nobody who endorses the general principle being invoked here.

Quote of the Day: February 13, 2012

"A lesion in one spot leaves you unable to tell a Jack Russell from a badger (not that there is much difference), and with damage in another spot, the toaster is unrecognizable. There are even people with certain brain lesions who specifically cannot recognize fruit. Harvard researchers Alfonso Caramazza and Jennifer Shelton claim that the brain has specific knowledge systems (modules) for animate and inanimate categories that have distinct neural mechanisms. These domain-specific knowledge systems aren’t actually the knowledge itself, but systems that make you pay attention to particular aspects of situations, and by doing so, increase your survival chances. For example, there may be quite specific detectors for certain classes of predatory animals such as snakes and big cats. A stable set of visual clues may be encoded in the brain that make you pay attention to certain aspects of biological motion, such as slithering…"

--Michael S. Gazzaniga, Who's in Charge?: Free Will and the Science of the Brain

What Is the Republican Delegate Count?


Balloon Juice » (&(#^@ Smiler: [Ron Paul's] supporters are being elected as delegates in bigger numbers than the straw poll totals indicate…. Romney, Santorum and Gingrich supporters vote in the straw poll, then leave. Paul supporters vote in the poll and stay around for the county business meeting to be elected delegates. Because those delegates are completely loyal to Paul, not to the straw poll results, Paul, not Romney, Gingrich or Santorum, might actually be winning the caucuses. So, who the hell knows how many delegates any Republican has at this point.

Even before this news broke, it was pretty clear that the Republican caucuses were a shitshow. For example, in Maine, which Romney “won” this week, there were about 5,500 votes cast. That’s something like 1% of the registered Republicans in the state. That makes it about as meaningful as the 3,400 vote CPAC straw poll, which Romney also won.

If their strategy is as effective as the Paulists want us to believe, I don’t know why they aren’t keeping quiet about it. They’re either stupid, exaggerating for effect, or both. No matter: it’s becoming clearer every day that Republicans can’t even be trusted to run an election, much less the country.

You know, this is something that a press corps could make some phone calls and find out about...

Read of the Year: Larry Ball: Ben Bernanke and the Zero Bound

Read of the year. Larry Ball:

Ben Bernanke and the Zero Bound: NBER Working Paper No. 17836:

From 2000 to 2003, when Ben Bernanke was a professor and then a Fed Governor, he wrote extensively about monetary policy at the zero bound on interest rates. He advocated aggressive stimulus policies, such as a money-financed tax cut and an inflation target of 3-4%. Yet, since U.S. interest rates hit zero in 2008, the Fed under Chairman Bernanke has taken more cautious actions. This paper asks when and why Bernanke changed his mind about zero-bound policy. The answer, at one level, is that he was influenced by analysis from the Fed staff that was presented at the FOMC meeting of June 2003. This answer raises another question: why did the staff's views influence Bernanke so strongly? I seek answers to this question in the social psychology literature on group decision-making.