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March 2013

Tim Duy: What Fed Policy Is

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Tim Duy:

Fed Checks: A more interesting change can be seen in the Fed's statement regarding the future of the asset purchase program….

The Committee will closely monitor incoming information on economic and financial developments in coming months. If the outlook for the labor market does not improve substantially, the Committee will continue its purchases of Treasury and agency mortgage-backed securities, and employ its other policy tools as appropriate, until such improvement is achieved the outlook for the labor market has improved substantially in a context of price stability. In determining the size, pace, and composition of its asset purchases, the Committee will, as always, continue to take appropriate account of the likely efficacy and costs of such purchases as well as the extent of progress toward its economic objectives.

The addition of the final clause appears to be a bow to policymakers who are concerned that the pace of easing might need to be curtailed in the nearer future…. It appears to give the Fed room to alter the pace of purchases as the unemployment rate tends toward the 6.5 percent threshold even if, for example, jobs continue to grow in the 150k-200k range.   That said, I expect asset purchases to continue at this pace for most of this year (if not into next year).  Moreover, most policymakers expect this as well…. The combination of high unemployment and low inflation argue for sustained easing. Indeed, the combination could argue that policy needs to be even more accommodative… with unemployment this high and inflation this low, the benefits of continued easing exceed any potential costs.  And with this in mind, note that Federal Reserve Chairman Ben Bernanke, in the press conference, stated that he did not see anything unusual in current equity valuations, another indication that he believes that concerns about financial market distortions are overblown.

Bottom Line:  Policy is on hold.  On hold for a long time.  Unless activity accelerates substantially, asset purchases will continue at the current rate through most of this year (if not until well into next year), while short-term interest rates will remain locked down near zero until 2015.  Beware of reading too much into the comments of the more hawkish monetary policymakers; they still represent a minority view.  

Liveblogging World War II: March 21, 1943

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[A] good many people were so much impressed by the favorable turn in our fortunes which has marked the last six months that they have jumped to the conclusion that the war will soon be over and that we shall soon all be able to get back to the politics and party fights of peacetime. I am not able to share these sanguine hopes, and my earnest advice to you is to concentrate even more zealously upon the war effort and, if possible, not to take your eye off the ball even for a moment. If tonight, contrary to this advice, I turn aside from the course of the war and deal with some post-war and domestic issues it is only because I hope that by so doing I may be able to simplify and mollify political divergencies and enable all our political forces to march forward to the main objectives in unity and, so far as possible, in step.

First of all, we must beware of attempts to over-persuade or even to coerce His Majesty's Government to bind themselves or their unknown successors in conditions which no one can foresee and which may be years ahead….

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These Are Not the Deficit or GDP Numbers That George Osborne Was Looking For...

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Nick Clegg should end this farce, let the Wookie win, and allow a party with Balls take over the government. He has no future as a politician. Why doesn't he try being a patriot?

Ryan Avent:

Britain's budget: Not the result they'd hoped for: GEORGE OSBORNE, Britain's Chancellor of the Exchequer, is out with the government's new budget. The Spectator, which live-blogged the proceedings, posted this interesting chart. Not exactly what the government had in mind when it rolled out its austerity plans, I'm sure. And the sort of thing that should make it difficult for the chancellor to continue arguing that it is confidence in the government's commitment to fiscal prudence that is responsible for Britain's low interest rates. Stephanie Flanders does the explaining:

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Whitehall departments have stuck to the chancellor's budget plans since then. In fact, they have spent rather less than he first asked them to. That is why he has again felt able to take a few billion more pounds out of their budgets for the next two years, to increase infrastructure spending and perhaps deliver other minor goodies later today. No, it's not Whitehall, but the UK economy that's wildly departed from the chancellor's original script.Britain's national output has risen by just over 1% since the election, instead of the 7% George Osborne was hoping for in his first Budget.

Eric Rosten's Shtick Is Asking Dumb Questions: Harry Potter vs the Codfish Weblogging

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Eric Rosten:

Dumb Question: Is Harry Potter Really Less Important Than Global Warming? - Bloomberg: This week’s dumb question was put to J. Bradford DeLong, who is professor of economics at the University of California at Berkeley, a research associate of the National Bureau of Economic Research, a blogger, and a former Clinton administration Treasury official. 

The Grid: Can I ask you a dumb question?  Last week you wrote a blog post that asks why people seem to care more about “imaginary friends” like Harry Potter than about real stories from the past or even projections of the future -- whether it holds global wealth or global warming. Do you mind explaining a bit more why imaginary friends like Harry Potter are less important than imaginary issues like global warming? 

Brad DeLong: Hundreds of millions of people are greatly concerned with Harry Potter--he’s one of the most important things in life. What happens to him is what they most desperately want to know.

Why are they paying attention to the imaginary Harry Potter, instead of the man behind the curtain -- global warming? There are two billion peasants living in the great river valleys of Asia. Global warming either means more or less snow on the Tibetan plateau, which melts either faster or slower, which means either drought or flood or both. And none of these two billion people have enough resources to leave their land and move to the cities, because the land is what they’ve got.

Surely what happens to all two billion of them is a more important story than what happens to one single person, who doesn't even exist. Isn't it?

It’s not just the “eight million stories in the naked city.” It’s two billion. Why, if we can organize ourselves to have Harry Potter festivals, can’t we organize ourselves to deal with global warming?

The right answer is that we are jumped-up East African plains apes who have barely managed to evolve an inferior and inadequate kind of intelligence.

This is yet more evidence of how inferior and inadequate our intelligence is. 

Continue reading "Eric Rosten's Shtick Is Asking Dumb Questions: Harry Potter vs the Codfish Weblogging" »

Thursday Baker's Dozen Hoisted from the Archives: Keepers from June 2005


A Baker's Dozen Keepers from June 2005:

Noted for March 21, 2013

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  • Brad DeLong (2003): Let's Get Even More Depressed About Castro's Cuba: "The hideously depressing thing is that Cuba under Battista--Cuba in 1957--was a developed country… lower infant mortality than France, Belgium, West Germany, Israel, Japan, Austria, Italy, Spain, and Portugal… as many doctors and nurses per capita as the Netherlands… more than Britain or Finland…. as many vehicles per capita as Uruguay, Italy, or Portugal… 45 TVs per 1000 people--fifth highest in the world. Cuba today has fewer telephones per capita than it had TVs in 1957. You take a look at the standard Human Development Indicator variables… you come out in the range of Japan, Ireland, Italy, Spain, Israel. Today? Today the UN puts Cuba's HDI in the range of Lithuania, Trinidad, and Mexico. (And Carmelo Mesa-Lago thinks the UN's calculations are seriously flawed: that Cuba's right HDI peers today are places like China, Tunisia, Iran, and South Africa.) Thus I don't understand lefties who talk about the achievements of the Cuban Revolution: '…to have better health care, housing, education, and general social relations than virtually all other comparably developed countries'. Yes, Cuba today has a GDP per capita level roughly that of… Bolivia or Honduras or Zimbabwe, but given where Cuba was in 1957 we ought to be talking about how it is as developed as Italy or Spain."

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  • Gavin Kennedy: Adam Smith's Lost Legacy: Further Thoughts on Polanyi's "Great Transformation": "Nothing was more total throughout human history than the constant tyranny of daily subsistence…. Only in cooperation have humans continued their propagation through the generations.  This requires, as Smith pointed out, the mediation of self-interest (not the ‘dictatorship’ a la Ayn Rand over others) in human contact…. Markets are but one form of social and individual exchange, and not the only one…. Smith understood that.  He wrote about markets because his book’s title was aimed at explaining the 'nature and cause of the wealth of nations', particularly since the 5th century and the fall of the Western Roman Empire in Europe…. Smith also wrote an earlier work… known today as his “History of Astronomy”…. In Section III, Smith discusses the ‘Origins of Philosophy’ and includes the following lines: 'Mankind, in the first ages of society, before the establishment of law, order, and security, have little curiosity to find out those hidden chains of events which bind together the seemingly disjointed appearances of nature. A savage, whose subsistence is precarious, whose life is every day exposed to the rudest dangers, has no inclination to amuse himself with searching out what, when discovered, seems to serve no other purpose than to render the theatre of nature a more connected spectacle to his imagination. Many of these smaller incoherences, which in the course of things perplex philosophers, entirely escape his attention. Those more magnificent irregularities, whose grandeur he cannot overlook, call forth his amazement. Comets, eclipses, thunder, lightning, and other meteors, by their greatness, naturally overawe him, and he views them with a reverence that approaches to fear. His inexperience and uncertainty with regard to every thing about them, how they came, how they are to go, what went before, what is to come after them, exasperate his sentiment into terror and consternation.'… Smith concludes 'in the first ages of the world, the lowest and most pusillanimous superstition supplied the place of philosophy… but when law has established order and security …the leisure which they enjoy renders them more attentive to the appearances of nature'…. In short, the history of civilizations… is about the decline in the evident dominance of the economy in the minds and attention of, at first, a minority of the ruling humans, and later of successive layers of their subordinate populations, who are drawn to increasing individual consumption of 'necessities, conveniences and amusements'. This process reached unprecedented heights of per capita income as from around the 1800s from around $1 a day towards the $100 a day reached in the 20th century in the democratic capitalist-type countries."

Jennifer Bendery and Sabrina Siddiqui: GOP Lawmakers Who Voted Against Iraq War Stand Their Ground 10 Years Later | Peter Orszag: Medicare Cost Slowdown Could Close U.S. Budget Gap | China's first president for life: Present at the miscreation: Yuan Shikai and the murder of Song Jiaoren | Pawel Morski: Cyprus, Fight Club & Capital Controls | Samuel Brittan: Budget 2013: It’s the monetary policy that matters | Martin Wolf: Budget 2013: Shrewd politics disguises brutal economics |

Continue reading "Noted for March 21, 2013" »

The Future of the Euro: Lessons from History

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The 1919-1939 interwar period taught us four lessons:

  1. In order for the world economy to be prosperous, adjustment to macroeconomic disequilibrium needs to be undertaken by both "surplus" and "deficit" economies--not by "deficit" economies alone.

  2. If the world economy is to have any chance of avoiding or limiting crises, an integrated banking system requires an integrated bank regulator and supervisor.

  3. In order for crises to be successfully managed, the lender of last resort must truly be a lender of last resort: it must create whatever asset the market thinks is the safest in the economy, and must be able to do so in whatever quantity the market demands.

  4. In order for any monetary union or fixed exchange rate system larger than an optimum currency area to survive, it must be willing to undertake large-scale fiscal transfers to compensate for the exchange rate movements to rapidly shift inter-regional terms of trade that it prohibits.

I, at least, thought that everybody--or everybody who mattered in governing the world economy--had learned these four lessons that 1919-1939 had so cruelly taught us. Now it turns out that the dukes and duchesses of Eurovia had, in fact, learned none of them. History taught the lesson. But while history was teaching the lesson, the princes and princesses of Eurovia and their advisors were looking out the window and gossiping on Facebook.

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Liveblogging World War II: March 20, 1943

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King-Emperor George VI:

The KING has been graciously pleased to approve the posthumous award of the VICTORIA CROSS to:

Major (temporary Lieutenant-Colonel) Derek Anthony Seagrim: (26914) The Green Howards (Alexandra Pnncess of Wales Own Yorkshire Regiment) (Westward Ho Devon)

On the night of the 20th/21st March 1943 the task of a Battalion of the Green Howards was to attack and capture an important feature on the left flank of the main attack on the Mareth Line.

The defence of this feature was very strong and it was protected by an anti-tank ditch twelve feet wide and eight feet deep with minefields on both sides. It formed a new part of the main defences of the Mareth Line and the successful capture of this feature was vital to the success of the main attack.

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Society Telling American Conservatives: You Must Act Stupid If You Want to Be One of Us!

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Sarah Palin consumes 25% of her daily requirement of calories, and obtains no other nutrients at all…

Doug J.:

Career opportunities: There’s also this sort of thing:

What message did Sarah Palin send to her CPAC ’13 audience Saturday, and thence to the world, by sipping from a Big Gulp soda during her speech and, in conclusion, brandishing it as if it were a trophy? Oh, I know what message she intended to send: Don’t tell us real Americans how to live our lives. We’ll decide what’s best for ourselves and our children. Stop treading on our liberty. But… the message Sarah Palin sent was this: Republicans will start winning elections again by telling Americans they should be proud of acting stupid.

When I was in school, there was a lot of talk about population groups (classified by gender, ethnicity, class, income, etc.) not performing as well as they could academically because society — in some cases, other members of the population group — sent them the message that they must be stupid because they were poor or women or black. I think there’s something to that, people are affected a lot by what society tells them to think of themselves. And I think it probably is happening to conservatives today, to some extent.

Math is hard, let’s go drink big gulps.

Hey! Young conservative kids! If Sarah Palin jumped off a bridge, would you jump off a bridge too?

Moishe ben Amram and the "Nation of Takers": Wednesday Hoisted from the Archives from the Reign of Rameses II Weblogging

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Another thought...

Focus on those entitlements--unlike Social Security or unemployment insurance--where you do get more the poorer you are. These are programs that you can think of as providing an incentive to slackerhood, of subsidizing moocherhood. Nicholas Eberstadt writes in his A Nation of Takers:

[p]overty- or income-related entitlements... increased over thirty-fold [since 1960]...

Yes, I know that these are aggregate--not per capita--nominal--not real--spending-growth numbers, and hence the wrong numbers to look at. But he does then take much of it back:

two-thirds of those... are... Medicaid... traditional safety-net programs now comprise only about a third of entitlements granted on income terms...

Had Eberstadt gone a step further, he would have computed that cyclically-adjusted spending on traditional safety-net programs have risen from 1.1% of GDP in 1960 to a cyclically-adjusted 1.5% of GDP today. That is an increase. Our safety-net programs really are somewhat more generous as a share of our national resources than they were in 1960. Should they be?

Eberstadt likes to talk about how Americans in the past were self-reliant Randite individuals, scornful of dependency and charity, different from the moochers of these degenerate days, and how we should return to our old time values. But before America's rich were Randites America's settlers were church-going Protestants. They saw themselves as building a City Upon a Hill, building the New Jerusalem, becoming the New Israel. I know: those who hit the beaches at Plymouth in 1620 and Boston in 1630 were pretty much all (some of) my ancestors.

My New England WASP Puritan ancestors read the Hebrew Bible very seriously indeed. And they hearkened unto Moishe ben Amram:

Continue reading "Moishe ben Amram and the "Nation of Takers": Wednesday Hoisted from the Archives from the Reign of Rameses II Weblogging" »

Noted for March 20, 2013

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  • Scott Lemieux: Well, If It Affects Me, That’s Different!: "Rob Portman has decided that he’s only comfortable denying fundamental rights to strangers: 'Sen. Rob Portman has renounced his opposition to gay marriage, telling reporters from Ohio newspapers Thursday that he changed his position after his son Will told the Ohio Republican and his wife Jane that he is gay.' This is a classic example of what Mark Schmitt calls 'Miss America' compassion…. 'I’m tired of giving quasi-conservatives credit…. Senator Pete Domenici’s daughter’s mental illness made him an advocate for mandating equitable treatment of mental and physical well-being in health insurance…. Again, I’m all for it…. But what has always bothered me about such examples is that their compassion seems so narrowly and literally focused on the specific misfortune that their family encountered… shouldn’t it also lead to a deeper understanding that there are a lot of families, in all kinds of situations beyond their control, who need help from government?… Shouldn’t it call into question the entire winners-win/losers-lose ideology of the current Republican Party? Shouldn’t it also lead to an understanding that if we want to live in a society that provides a robust system of public support for those who need help — whether for mental illness or any of the other misfortunes that life hands out at random — we will need a government with adequate institutions and revenues to provide those things?… These Senators are like Miss America contestants, each with a "platform"…. Mr. Oregon: "Suicide Prevention"…. Mr. New Mexico: 'Mental Health Parity'…after the "platform segment" they return to play their obedient part in a degrading exercise that makes this country crueler and government less supportive…. It’s not too likely that you’ll see Miss Alabama adopt “Income inequality” as her platform or Miss Colorado, “Corporate tax evasion.” Nor is a Senator likely to have a family experience with lack of health insurance, or personal bankruptcy, or Food Stamps.'"

  • Alec MacGillis: RNC Plan 2013: Authors' Own Words at Odds With Recommendations: In reading through the report's 99 pages I had a nagging sense that what it was recommending was directly at odds with what I remember hearing not long ago from the very people putting forward the report. To wit: Page 7: “The Republican Party needs to stop talking to itself. We have become expert in how to provide ideological reinforcement to like-minded people, but devastatingly we have lost the ability to be persuasive with, or welcoming to, those who do not agree with us on every issue.” "@Reince: Obama sympathizes with attackers in Egypt. Sad and pathetic." (Sent on September 11, the night that four Americans were killed in Benghazi.)

History Channel: Obama Isn’t the Devil | Benjy Sarlin: Reince Priebus Says Self-Deportation Is 'Not Our Party's Position' -- But It Is | Cosma Shalizi: Ten Years of the Three-Toed Sloth | Karl Polanyi: The Essence of Fascism | Daniel Davies: What would you do: Part 2, the Island of Surpyc | Brad DeLong (2011): "Austerity" in the Context of the Global Economic Downturn | David Corn: Iraq 10 Years Later: The Deadly Consequences of Spin | Ta-Nehisi Coates: The Ghetto Is Public Policy |

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No, John Taylor's Piece Doesn't Say What Taylor Says It Says: Noah Smith to the Rescue! Weblogging


Noah Smith plays Three-Card Monte, and wins! Taylor has a model in which (a) interest rates can go negative, (b) the Federal Reserve is successfully stabilizing GDP, and (c) the damaging effects of taxation on work effort are so large that western Europe ought to be an impoverished hellhole.

Noahpinion: John Taylor's austerity model: [Y]our friendly neighborhood Noah is here to read and explain where Taylor is getting his arguments…. The "1970s" reference is pure conservative herp-derpery. People weren't trying to fight stagflation with fiscal policy in the 70s; deficits were quite low. "The 70s" is just a word that conservative writers throw into their pieces so that conservative old men who read the article will nod their snowy heads in sage agreement and mumble "Yes, the 70s. Carter. Stagflation. Mmm-hmm!"…

Why does Taylor think austerity will produce growth?… This is NOT the "Treasury View."… This is NOT the "Confidence Fairy."… Taylor's model has distortionary taxation in it, and the distortions are large…. [T]he GDP boost in Taylor's model doesn't come from reducing the deficit, it comes from cutting taxes…. Taylor assumes that the Fed… cancels out… positive demand shocks from stimulus. So it's hardly surprising that Taylor is not going to see government spending doing much good for the economy; he's assumed that 1) the Fed is… managing aggregate demand, and 2) the Fed will tighten to… counteract stimulus…. There is no Zero Lower Bound…. The "New Old Keynesians" such as Paul Krugman and Gauti Eggertsson, who advocate fiscal stimulus, explicitly make reference to the ZLB as the reason stimulus works. Taylor just ignores that idea…. In Taylor's model, if you cut government purchases, it throws the economy into a recession. Taylor's suggested austerity plan makes big spending cuts, but the cuts are almost entirely cuts in transfers…. Now as you should remember from Econ 102, government purchases make much more effective stimulus than transfers…. The reason he gets short-run benefits from spending cuts has everything to do with the fact that it's almost all transfers being cut….

Upshot: If you have no Zero Lower Bound, and if the Fed partially counteracts the demand-side effects of fiscal policy, and if people have forward-looking expectations, and if you don't cut government purchases much, and if taxes are very distortionary, then austerity works…. [T]he result… ignores the real Keynesian critique that… the Zero Lower Bound matters a lot… assumes… taxes are… more distortionary than they really are… overestimates the Republicans' real willingness to cut transfers… underestimates their willingness to cut government purchases… ignores distributional concerns, but that's pretty much par for the course…

Is There Still a Demand for Even More Modern Monetary Theory Weblogging?

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If not, don't look below the fold!

Sigh. This morning was supposed to have been spent outlining the inner logic of the perspective of today's Austerians. It wasn't. It was spent thinking about MMT.

My lack of self-discipline is depressing. It is particularly so because, as Paul Krugman says, this is not an argument to be having now. Right now the question of how the government budget constraint binds in a floating-rate fiat-money economy in which government debt is perceived as a highly valuable safe nominal asset is a question of interest only to schoolmen. There are other questions that are much more important to deal with--like why John Taylor thinks that Europe's taxes must have turned it into an impoverished hellhole...

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No, You Should Not Take What John Cogan and John Taylor Write in the Wall Street Journal Seriously Until They Even Try to Explain What They Got Wrong in 2009. Why Do You Ask?


They are highly likely to be wrong for three reasons:

  1. It is in the Wall Street Journal, hence presumptively wrong.
  2. They were wrong in 2009, and hence likely to be wrong now.
  3. They have made no effort to figure out why they were wrong in 2009, hence they are very likely to be making the same mistakes still.

Paul Krugman collects the intellectual trash:

Economics and Politics by Paul Krugman: Ugh. And I say that advisedly. John Cogan and John Taylor have a piece in the WSJ (where else) arguing that the latest Ryan budget would actually be expansionary, because confidence! It’s as if all the experience of recent years, in which the confidence fairy has yet to make an appearance, hasn’t happened….

Cogan and Taylor [also] make a basically dishonest claim about the state of research. Reading them, you’d think that anyone who believes that contractionary policy is contractionary is just a simpleton who doesn’t know about expectations:

Our assessment is based on a modern macroeconomic model (developed with Volker Wieland of the University of Frankfurt and Maik Wolters of the University of Kiel) whose features include a recognition that the resources to finance government expenditures aren’t free—they withdraw resources from the private economy….

[But i]n a depressed economy the resources to finance government expenditures are free, because they would otherwise be unemployed…. [T]he notion that Keynesians don’t believe that expectations of future conditions affect decisions today is … strange. Both old Keynesian and new Keynesian models — like Mike Woodford, whom they appear never to have read — are very much about expectations.

In fact, the only interesting question here is why their results are so different from Woodford’s. My guess is that they have slipped in some assumption that won’t stand scrutiny, like the notion that the Fed will raise rates even with the economy deeply below capacity. (They’ve done that before).

Anyway, sad stuff to see, and a disservice to readers.

Liveblogging World War II: March 19, 1943

Eleanor Roosevelt:

WASHINGTON, Thursday—I wonder whether you agree with the statement I made yesterday, that we cannot overcome difficulties unless we recognize them. In talking to some Russians once, I was struck by the fact that they kept insisting that everything in their country was perfect. It seemed to me, at the time, as rather childish and adolescent, but forgiveable in a young country trying a new experiment. In us, a mature democracy, it would seem to me unforgiveable to deny the existence of unpleasant facts.

A certain gentleman in Congress seems to have forgotten that groups of sharecroppers attracted the attention of the whole country not so very long ago, because they were living along the highways and their living conditions were as bad as bad could be. This gentleman thinks it odd that a group of people are willing to back a union which will try to improve conditions for these people, and that acknowledges the fact of the conditions under which sharecroppers in the United States of America have had to live in certain parts of our country.

Continue reading "Liveblogging World War II: March 19, 1943" »

Thoughts on Ludwig von Mises's Lectures to His "Inferiors"

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Arianne Emory, Administrator of Reseune on Cyteen around Lalande 46650 in Union, speaks:

Absolutely essential... are adequately diverse [human] genepools. We do not create Thetas because we want cheap labor. We create Thetas because they are an essential and important part of human alternatives. The ThR-23 hand-eye coordination, for instance, is exceptional. Their psychset lets them operate very well in environments in which geniuses would assuredly fail. They are tough, ser, in ways I find thoroughly admirable, and I recommend you, if you ever find yourself in a difficult [wilderness] situation... hope your companion is a ThR... who will survive, ser, to perpetuate his type, even if you do not...

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Mike the Mad Biologist: The Profoundly Serious David Brooks on Iraq: Tuesday Ten Years Ago on the Internet Weblogging

Mike the Mad Biologist:

Ten Years Ago, What One Very Serious Person Was Writing About Iraq: Here’s what David Brooks, now respectable rightwing (but not too rightwing! Must…reposition…in…political…landscape…) pundit for the New York Times wrote in his then-home The Weekly Standard ten years ago to the day:

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The Smart and Thoughtful Gavyn Davies Is Gloomy About the Fed

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Gavyn Davies:

Fed’s exit will be gradual and difficult: The first question is whether the exit will be gradual or abrupt. The chairman’s personal preference is very well known: it should be gradual, and extremely well flagged in advance. But Mr Bernanke might not be in office after next January, and there are others on the FOMC who could have different ideas. Furthermore, economic and market circumstances could change. In 1994, GDP growth and inflation both rose markedly, and the Fed slammed on the brakes without any warning. The resulting 3 per cent rise in the Fed funds rate delivered a major shock…. [T]he consequences for a complacent financial system were extremely severe (remember Orange County and the Mexican debt crisis?) Bond traders who were around at the time still have nightmares about it…

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Why Oh Why Can't We Have a Better Press Corps? Digby on Howard Fineman



Hullabaloo: 10 years on: the press reconsiders:

If he’s a cowboy, he’s the reluctant warrior, the Shane in the movie, strapping on the guns as the last resort because he has to, to protect his family, drawing on the emotions of 9/11, tying them to Saddam Hussein, using the possible or likely rejection vote from the U.N. as a badge of honor. --- Howard Fineman 3/6/03

That's probably his most famous quote. But it wasn't the only one extolling the virtues of our manly president. One of the most notorious pieces of the Iraq run-up for me was this one in TIME, which epitomized the press's fawning crush on George W. Bush:

FINEMAN (11/27/01): So who are the Bushes, really? Well, they’re the people who produced the fellow who sat with me and my Newsweek colleague, Martha Brant, for his first interview since 9/11. We saw, among other things, a leader who is utterly comfortable in his role. Bush envelops himself in the trappings of office. Maybe that’s because he’s seen it from the inside since his dad served as Reagan’s vice president in the ‘80s. The presidency is a family business. Dubyah loves to wear the uniform—whatever the correct one happens to be for a particular moment. I counted no fewer than four changes of attire during the day trip we took to Fort Campbell in Kentucky and back. He arrived for our interview in a dark blue Air Force One flight jacket. When he greeted the members of Congress on board, he wore an open-necked shirt. When he had lunch with the troops, he wore a blue blazer. And when he addressed the troops, it was in the flight jacket of the 101st Airborne. He’s a boomer product of the ‘60s—but doesn’t mind ermine robes.

Today Fineman writes about that interview and the media's failure after 9/11….

For journalists, the most patriotic thing we can do is our jobs -- which meant that we all should have doubled down on skepticism and tough questions. Some did. I wish I could say that I was one of them.

He certainly wasn't one of them. Indeed, he was a very reliable, enthusiastic mouthpiece for the administration…. Here's a little quote from Fineman from 2003:

I am told by what I regard as a very reliable source inside the White House that aides there did, in fact, try to peddle the identity of Joe Wilson’s wife to several reporters. But the motive wasn’t revenge or intimidation so much as a desire to explain why, in their view, Wilson wasn’t a neutral investigator, but, a member of the CIA’s leave-Saddam-in-place team.

It actually makes you yearn for he said/she said, doesn't it? At least the other side would be represented…. [T]o me, it didn't take a professional journalist to see that George W. Bush and the Cheney cabal were warmongering liars. After all, they'd signaled their intentions for years. It was even on the internet. I hope he's wiser too, but I'm not getting my hopes up.

Noted for March 19, 2013

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  • John Maynard Keynes (1926): The end of laissez-faire: "Let us clear… the ground…. It is not true that individuals possess a prescriptive 'natural liberty'…. There is no 'compact' conferring perpetual rights on those who Have or on those who Acquire. The world is not so governed from above that private and social interest always coincide. It is not so managed here below that in practice they coincide. It is not a correct deduction… that enlightened self-interest always operates in the public interest. Nor is it true that self-interest generally is enlightened…. Experience does not show that… social unit[s] are always less clear-sighted than [individuals] act[ing] separately. We [must] therefore settle… on its merits… 'determin[ing] what the State ought to take upon itself to direct by the public wisdom, and what it ought to leave, with as little interference as possible, to individual exertion'."

  • Annie Lowrey: Attorneys General Press White House to Fire F.H.F.A. Chief: "Prominent state attorneys general are calling on President Obama to fire the acting director of the Federal Housing Finance Agency and name a new permanent director, arguing that current policies are impeding the economic recovery. Under its current leader, Edward J. DeMarco, the F.H.F.A., which oversees the bailed-out mortgage financiers Fannie Mae and Freddie Mac, has refused to put in place a White House proposal to reduce the principal on so-called underwater mortgages — a move that might prevent foreclosures and thus save the mortgage giants money, but also might expose taxpayers to additional losses. Led by Eric T. Schneiderman of New York and Martha Coakley of Massachusetts, the attorneys general argue that writing down the principal on underwater mortgages — those where the outstanding mortgage is greater than the current value of the home — would aid the recovery. They note that write-downs were a central part of a multibillion-dollar mortgage settlement that 49 state attorneys general negotiated with five major banks a year ago. And they say the White House should name a director to take that action."

  • Larry Summers: Europe cannot allow unfinished business to fester: "There is a striking difference between financial crises in memory and financial crises as they actually play out. In memory, they are a concatenation of disasters. But as they play out, the norm is moments of panic separated by lengthy stretches of apparent calm. It was eight months from the South Korean crisis to the Russian default of 1998, six months from Bear Stearns’ demise to Lehman Brothers’ fall, and there were several 30 per cent stock market rallies between 1929 and 1933…. A worrisome indicator in much of Europe is the tendency of stock and bond prices to move together. In healthy countries, when sentiment improves stock prices rise and bond prices fall, as risk premiums decline and interest rates rise. In unhealthy economies, as in much of Europe today, bonds are seen as risk assets, so they move just like stocks in response to changes in sentiment…. Growth has been dismal, with eurozone gross domestic product still below its 2007 level. Forecasts predict little, if any, growth this year. For every Ireland, where there is a sense that a corner is being turned, there is a France, where the sustainability of current policy is increasingly questionable…. It is true, as German policy makers constantly point out, that fiscal consolidation and structural reform were key to Germany’s rise from being the 'sick man of Europe' to its current position of strength. What they do not recognise is that there cannot be exports without imports. Germany’s export growth and huge trade surplus were enabled by borrowing by the European periphery. If the debtor countries of Europe are to follow Germany’s path without economic implosion there must be a strategy that assures increased external demand for what they produce. This could come from a German economy that was prepared to reduce its formidable trade surplus, from easier monetary policies in Europe that spurred growth and competitiveness, or from increased deployment of central funds such as those of the European Investment Bank…. [R]equiring a nation to service large debts by being austere in a context where there is no growth in demand for its exports is far from being a viable strategy."

Gavin Kennedy: Those who are blind to the generality of the roles of Smithian exchange behaviour (e.g., Graeber, Polanyi, et al) really are blinkered when it comes to understanding the deep time-proven role of human (and indeed, among con-specifics in other species) exchange behaviours | UK Needs $15 Billion Spending 'Kick Start' in Budget: Economists | Carola Binder: The Cyprus Levy: Historical Precedents | Wolfgang Münchau: Europe is risking a bank run | Martin Wolf: Why bankers are intellectually naked | Erik Olin Wright: Transforming Capitalism through Real Utopias | This is Ashok. | my life in bits… | Jeremy Stein |

Continue reading "Noted for March 19, 2013" »

J. Bradford Delong for Democracy Journal: Shrugging off Atlas

J. Bradford Delong for Democracy Journal: Shrugging off Atlas: Issue #28: Exactly how did once-respectable conservative economists get swept up in “moocher class” mania?

Review of Nicholas Eberstadt (2012), A Nation of Takers: America’s Entitlement Epidemic (Templeton Press)

If there was a single moment when Mitt Romney lost the 2012 presidential election, it was in May when he stood in front of the $50,000-a-plate audience at Sun Capital honcho Marc Leder’s home in Boca Raton and spoke his soon-to-be-infamous words:

There are 47 percent of the people who will vote for the President no matter what…. There are 47 percent who are with him, who are dependent upon government…who believe that government has a responsibility to care for them, who believe that they’re entitled to health care, to food, to housing, you name it…. These are people who pay no income tax…. My job is not to worry about those people—I’ll never convince them that they should take personal responsibility and care for their lives…

This is what Mark Schmitt of the Roosevelt Institute calls “the theory of the moocher class.” And Romney is all in with it. In July, after a poorly received speech at the NAACP convention, he boasted:

When I mentioned I am going to get rid of Obamacare, they weren’t happy…. But I hope people understand this… if they want more stuff from government tell them to go vote for the other guy—more free stuff.

Those of us who know the numbers, or who simply live in America and look around, know that the 47 percent who aren’t paying federal income taxes this year are by and large not “moochers.” About a fifth are elderly retired. About two-thirds are in households with incomes of less than $20,000 a year—definitely not living high. And nearly one-third owe no income taxes because of the earned-income and child tax credits, which both became law with bipartisan support.

As a group, the 47 percent who pay no income taxes do not lack work ethic. They do take personal responsibility for their lives. They may not pay federal income taxes this year, but they pay plenty of sales, property, and payroll taxes. For the most part, they do not constitute the Democratic base. More than half of the 47 percent are the elderly white and Southern white voters who voted for Romney by substantial margins.

So how does someone like Romney, along with his peers and all their staffs and everyone else in that Boca Raton room, become convinced that 47 percent of Americans are the moochers, the takers, dependent on “free gifts” from the government, lacking work ethic, lacking personal responsibility?

Enter Nicholas Eberstadt of the American Enterprise Institute (AEI), with his contribution to the think tank’s “New Threats to Freedom” series. We need venture no further into A Nation of Takers than the bottom of the second page…

Pawel Morski: Cyprus: RealPolitik and Other Lessons

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Pawel Morski:

Cyprus: A Brutal Lesson in RealPolitik | Some of it was true...: So it turns out that those who noted that the Cyprus bailout took place ahead of a local bank holiday on Monday were onto something. The terms of the bailout deal represent a huge leap in how the EU is tackling the crisis. Time will tell whether this leap is over or into the chasm…. Deposits below EUR100,000 to suffer 6.75% tax; above 100,000, 9.9%….

Cypriot finance minister Michalis Sarris said his government had already moved to ensure deposit holders could not make large withdrawals electronically before Tuesday’s open; Jörg Asmussen, a member of the European Central Bank executive board, said a portion of deposits equivalent to the levies would likely be frozen immediately.

What does this all mean?…. Four choices have been faced ahead of every bailout; screw the local taxpayer; screw the creditors; the Germans pay for everything; or fiddle the numbers in the hope the crisis just goes away. The Irish programme rested heavily on option 1, the Portuguese and Greek (especially) on options 1 & 4. Hopes for option 3 (ESM buys shares in the banks) are dead in the water. This programme indicates option 2 gaining in strength, 3 & 4 sinking. Taxing local small depositors. This is really shocking, being both the least fair and the riskiest part of this plan. The fairness aspects are obvious, but the risk that other Peripheral depositors will reconsider is clear, albeit so far more popular with the usual suspects than with locals…. The hedge funds win again. A favourite trade for speculators has been Cypriot government debt. And it’s done very nicely. Mayfair sends its thanks. Update: This implies that you’re better off with your money in peripheral government debt than in  a bank. That’s a message I personally would be very hesitant to send.

And the Russians? The reason small depositors have been hit is that the losses inflicted would be much bigger if a) only large deposits b) only non-EU deposits were haircut. The data on Cyprus deposits is here (MUMs = Monetary Union Members). I would guess the thinking is that 10% is seen as a cost of doing business when it comes to money laundering, but 30% would probably finish Cypriot banking for good. If the infliction of losses on small depositors has a purpose, it’s probably to reassure the Russians that they are not being discriminated against…

Continue reading "Pawel Morski: Cyprus: RealPolitik and Other Lessons" »

The Real Underlying Source of Washington Gridlock: "The President Is a--CLANG!"

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Greg Sargent:

Why We're at a Fiscal Impasse: 1. Obama can't sell entitlement cuts to his base, or indeed Democrats in general, without Republicans agreeing to new revenues, and has offered them a straightforward compromise -- one that would anger the base on both sides -- based on the premise that total victory for the GOP is not an acceptable or realistic outcome. 2. Republican leaders can't even begin to acknowledge that Obama has offered them a real compromise, because they can't sell their base on the idea that the President is being flexible, let alone get them to seriously entertain accepting any compromise with him, because the base sees total victory over Obama as the only acceptable outcome.

So why is it that the Republican base refuses to believe that Obama is not a Kenyan Muslim Socialist, and demands total victory over him?

DeLong (and Krugman) Smackdown Watch: Bill Black, Stephanie Kelton, and Randy Wray Are Justifiably Irate Modern Monetary Theory How Do Deficits Matter?: Monday Hoisted from Comments Weblogging

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Jeff Sachs is irate. He says that Paul Krugman says that deficits don't matter.

And that makes Paul Krugman irate:

Crude - I came into this crisis with what I think can be described as a pretty sophisticated view of liquidity-trap economics… [and] made some predictions — about interest rates, about the effect of large increases in the monetary base, and about the size of fiscal multipliers — that were very much at odds with what a lot of people were saying… [and that] have been overwhelmingly confirmed by recent experience. I guess I can understand some people not wanting to believe that evidence. But they don’t help their case by pretending that there is no evidence, and certainly not by pretending that people like me, Brad DeLong, Martin Wolf, Larry Summers etc. etc. are ignoramuses who unconditionally favor fiscal expansion under all conditions, as opposed to as a specific remedy under special conditions that happen to apply right now…

And Krugman points out that Sachs and Scarborough link to Krugman saying that deficits do matter:

Deficits and the Printing Press: Right now, deficits don’t matter — a point borne out by all the evidence. But there’s a school of thought — the modern monetary theory people — who say that deficits never matter, as long as you have your own currency. I wish I could agree with that view — and it’s not a fight I especially want, since the clear and present policy danger is from the deficit peacocks of the right. But for the record, it’s just not right…. [E]ventually [we will] go back to a situation in which interest rates are positive, so that monetary base and T-bills are once again imperfect substitutes…. Suppose... the government [were] still running deficits of more than $1 trillion a year, say around $100 billion a month. And now suppose that for whatever reason, we’re suddenly faced with a strike of bond buyers.... [T]he government would in effect be financing itself through creation of base money... the first month’s financing would increase the monetary base by around 12 percent. And in my hypothesized normal environment, you’d expect the overall price level to rise (with some lag, but that’s not crucial) roughly in proportion to the increase in monetary base. And rising prices would, to a first approximation, raise the deficit in proportion. So we’re talking about a monetary base that rises 12 percent a month, or about 400 percent a year. Does this mean 400 percent inflation? No, it means more…. [R]unning large deficits without access to bond markets is a recipe for very high inflation…. And no amount of talk about actual financial flows, about who buys what from whom, can make that point disappear…. At this point I have to say that I DON’T EXPECT THIS TO HAPPEN…

And this makes Bill Black irate:

For the record, Paul's description of MMT's position is incorrect, as we have repeatedly explained to him. This is a strawman claim. If Paul ever cites a work by academic MMT scholar (X) to support his claim (Y) that "MMT" argues that "deficits never matter" we will be able to show that the MMT scholar's work actually argues "not Y." Indeed, it is worse to make the claim without citation because it does not allow the reader to check the citation and realize that it actually argues "not Y."

Continue reading "DeLong (and Krugman) Smackdown Watch: Bill Black, Stephanie Kelton, and Randy Wray Are Justifiably Irate Modern Monetary Theory How Do Deficits Matter?: Monday Hoisted from Comments Weblogging" »

Liveblogging World War II: March 18, 1943

Convoys HX 229/SC 122 - Wikipedi:

During the night of 17th/18th the attack on both convoys, now just 70 miles apart, continued. U-338 sank the freighter Granville, of SC122 in the evening, surviving a fierce counter-attack by escorts, and after midnight U-305 sank 2 more ships ( Port Auckland and Zouave); however, HX229 escaped further losses that night.

HX 229s escort suffered a blow as HMS Mansfield was forced to detach during the night of 17th/18th; however help was on its way in the form of destroyer HMS Highlander, under Cdr ECL Day RN. Arriving on the 18th, Day, as a senior and more experienced officer, he would take command of B4 group for the rest of the engagement. Also en route from Hvalfjord, in Iceland, were HMS Vimy and USS Babbitt, for HX 229, and USCG Ingham for SC 122. These were dispatched on the morning of the 18th, and arrived the following day. On the afternoon of the 18th U-221 succeeded in sinking 2 ships of HX 229, but further losses were avoided. HMS Highlander joined that afternoon, a welcome addition as B4 was by this time reduced to 5 ships.

Continue reading "Liveblogging World War II: March 18, 1943" »

Noted for March 18, 2013

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  • Gillian Flaccus: LA Archdiocese Settles Four Sex Abuse Cases For $10M: "The Roman Catholic Archdiocese… will pay nearly $10 million… priest… told Cardinal Roger Mahony nearly 30 years ago he had molested children…. Mahony… didn’t do enough to stop Baker…. Mahony… was rebuked by his successor, Archbishop Jose Gomez, last month after confidential church files showed the cardinal worked behind the scenes to shield molesting priests and protect the church from scandal."

  • Paul Krugman: Delusions at the European Commission: "[T]he European Commission… is pursuing a 'delicate balance'… how does that… feel in countries with 15, 20, 25 percent unemployment?… [I]t’s quite a spectacle to see officials patting themselves on the back over an economic strategy that… tipped Europe back into recession…. For me, however, the real 'tell' is… 'In Germany, the fiscal stance is now broadly neutral, hence consistent with the call for a differentiated fiscal stance according to the budgetary space.' Translation: Germany isn’t imposing Greek-level austerity, which proves that we’re flexible!… Europe as a whole is pursuing… fiscal austerity… inappropriate in a still-depressed economy…. [T]he Commission should be urging those countries not suffering from a debt crisis to be engaged in offsetting expansion — not giving Germany a thumbs up when it has in fact been moving in the the wrong direction…. Instead, they’re engaged in self-justification, covering over the horror of the European situation with a blanket of soothing words."

Austin Frakt: MedPAC’s latest thinking on hospital readmissions | Face Stealer | 8 things The Wedding Singer taught us about the 80s | Hyde Park on Hudson | Lyndon Johnson: Richard Nixon's 1968 Vietnam Treason | Lucius Apuleius Africanus: Cupid and Psyche |

Continue reading "Noted for March 18, 2013" »

Noted for March 17, 2013

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  • Brad DeLong: Right from the Start?: "Friedman swung to the libertarian edge of the political and economic spectrum, having, in his later words, 'woken up to reality'. I don’t want to say to the right: drug liberalization, an end to the military draft, civil rights, government out of the bedroom, and free immigration were not right-wing causes even then. But… his respect for even the possibility of government action was gone…. Those elements [of the New Deal] that weren’t positively destructive were ineffective… [what] would have cured the Great Depression [was] a substantial expansion of the money supply… Ebenstein covers this as a triumphal march, as the victory of rationality and truth… paper[ing] over the inconsistencies, conflicts, and errors of Friedman’s thought."

  • Joseph E. Gagnon: The Elephant Hiding in the Room: Currency Intervention and Trade Imbalances: "Official purchases of foreign assets… are strongly correlated with current account (trade) imbalances…. A country’s current account balance increases between 60 and 100 cents for each dollar spent on intervention. This is a much larger effect than is widely assumed. These results raise serious questions about the efficiency of international financial markets."

Nixon in China: an opera in two acts | Joe Romm: How Arctic Ice Loss Amplified Superstorm Sandy | Kieran Healy: Crowdsourcing Sociology Department Rankings: 2013 Edition | Ezra Klein: How the White House thinks about climate change | Brad DeLong: My Day: Magister Ludi, or From Econ 115 to Tesla to Gernsback to "The Skylark of Space" to Oliver Wendell Holmes to Arianne Emory... | Pemy Levy: No Consensus At CPAC On How Romney Lost The Election: 'Voter Fraud,’ ‘The Media,’ ‘Hurricane Sandy’ |

Continue reading "Noted for March 17, 2013" »

Andrew Gelman Attempts to Preach to the Econometricians

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Andrew Gelman:

Everyone’s trading bias for variance at some point, it’s just done at different places in the analyses: Unbiased estimation used to be a big deal…. The basic idea is that you don’t want to be biased; there might be more efficient estimators out there but it’s generally more kosher to play it safe and stay unbiased. But in practice one can only use the unbiased estimates after pooling data…. That’s why you’ll see economists (and sometimes political scientists, who really should know better!) doing time-series cross-sectional analysis pooling 50 years of data and controlling for spatial variation using “state fixed effects.” That’s not such a great model, but it’s unbiased—conditional on you being interested in estimating some time-averaged parameter. Or you could estimate separately using data from each decade but then the unbiased estimates would be too noisy. To say it again: the way people get to unbiasedness is by pooling lots of data. Everyone’s trading bias for variance at some point, it’s just done at different places in the analyses.

Continue reading "Andrew Gelman Attempts to Preach to the Econometricians" »

Yes, CPAC Speakers Think the Big Problem with the Democrats Is That They Loathe Black People. Why Do You Ask?


Josh Marshall:

When The GOP Told Whitey I Aint Gonna Take It No More: Yesterday, a CPAC breakout session on reaching out to black voters broke down in shouting and acrimony as a handful of ‘disenfranchised whites’ attacked the premise of the session (along with black complaints about slaveholders), got into a verbal fight with a black female attendee and with all that managed to unite the crowd against the black woman as the one who somehow spoiled all the fun…. [T]he whole imbroglio ended with denunciations of the black woman who was the one person to go into freak out mode — pretty understandably — on hearing the merits of chattel slavery being argued in the 21st century at a panel on racial tolerance and outreach. (And I’m using ‘freak out mode’ here in the most positive sense.) And that, I think, goes to the heart of the enterprise, this panel, itself…. The panel (“Trump The Race Card: Are You Sick And Tired Of Being Called A Racist When You Know You’re Not One?”) was run by an African-American man named K. Carl Smith (founder of something called “Frederick Douglass Republicans”) whose schtick is to rant against Democrats as the party of the Confederacy and the Ku Klux Klan… preaching/ranting to a crowd of Republicans (an almost entirely lilly white party) against the racism, softness on paramilitary violence and Confederacy-love of the Democratic party (roughly half of which is made up of non-whites). There’s just too much denial, bad faith and comedy there under high pressure for the center to hold. And you can’t tempt the gods of farce on such an epic scale and not have a blow up.

Liveblogging World War II: March 17, 1943

My Day by Eleanor Roosevelt, March 17, 1943:

NEW YORK, Tuesday—The Progressive Schools' Committee for Refugee Children, Inc., is doing a really very appealing piece of work. I was glad yesterday afternoon to be able to speak for them before a small group, but I was even more interested to see the photographs of some of the children who have been in this country for two years or more. The Committee places these children in farm schools, where they can live close to earth with the animals as companions. This seems to help them to adjust to the new life here after the horrors they have been through. Every nationality in Europe seems to be represented among these children.

Some of them have neither father nor mother here, most of them have one parent, sometimes a mother and sometimes a father. The other parent is frequently left behind in a concentration camp.

Continue reading "Liveblogging World War II: March 17, 1943" »

Ezra Klein Points Out That the "House Progressive" Budget Would Actually Be Good for the Country

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Ezra Klein:

Washington should be worrying about education, infrastructure and health care: Earlier today I tweeted, “If we got education, health care and infrastructure right, a lot of our other economic problems would take care of themselves.”… It’s a tall order, I admit. But Washington is spending all its time right now pursuing a “grand bargain” between the two parties, and that’s an even taller, and perhaps even impossible, order….

The partisan differences on education and infrastructure are smaller than they are on taxes and spending. As for health care, we’ve actually kept costs under control in recent years, we’ve already passed the Affordable Care Act, and we’re seeing movement among Republican governors to engage constructively with the law…. And it’s not as if emphasizing education, infrastructure and health care is some kind of second-best to another deficit-reduction deal. Another deficit-reduction deal is a distant second-best to improving the education system and infrastructure and bringing down health-care costs — all of which would both reduce the budget deficit and make people’s lives better.

And, for the record, I’d love to add energy legislation to this list…

Ezra Klein:

House Progressives have the best answer to Paul Ryan: The correct counterpart to the unbridled ambition of the Ryan budget isn’t the cautious plan released by the Senate Democrats. It’s the “Back to Work” budget released by the House Progressives. The “Back to Work” budget is about… putting Americans back to work…. The budget begins with a stimulus program that makes the American Recovery and Reinvestment Act look tepid. It includes $2.1 trillion in stimulus and investment from 2013-2015. The main policies there are a $425 billion infrastructure program, a $340 billion middle-class tax cut, a $450 billion public-works initiative, and $179 billion in state and local aid. This is a lot of stimulus. The liberal Economic Policy Institute estimates that would be sufficient to “boost gross domestic product (GDP) by 5.7 percent and employment by 6.9 million jobs at its peak level of effectiveness (within one year of implementation).”…

Investment on this scale will add trillions to the deficit. But the House Progressives have an answer for that: Higher taxes. About $4.2 trillion in higher taxes over the next decade, to be exact. The revenues come from raising marginal tax rates on high-income individuals and corporations, but also from closing a raft of deductions as well as adding a financial transactions tax and a carbon tax. They also set up a slew of super-high tax rates for the very rich, including a top rate of 49 percent on incomes over $1 billion…. [T]hese taxes aren’t just about reducing the deficit — though they do set debt-to-GDP on a declining path. They’re also about reducing inequality and cutting carbon emissions and slowing down the financial sector. They’re not just raising revenues, but trying to solve other problems….

As for the spending side, there’s more than $900 billion in defense cuts, as well as a public option that can bargain down prices alongside Medicare. But this budget isn’t about cutting spending. Indeed, the House Progressives add far more spending than they cut…

Continue reading "Ezra Klein Points Out That the "House Progressive" Budget Would Actually Be Good for the Country" »

Liveblogging World War II: March 16, 1943

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Convoys HX 229/SC 122: Wikipedia:

The Allied Cipher Number 3 used by the convoy escorts had been broken by the Germans. This allowed them to position wolfpacks in the way of HX229, which was following a similar course. It passed through Raubgrafs rake in the night of 15th/16th without being sighted due to bad weather. However on the morning of 16th U-653, which had detached from Raubgraf to return to base with mechanical problems, sighted HX 229 heading east, and sent a sighting report.

Donitz immediately ordered Raubgraf to pursue and intercept, while Stürmer and Dränger were ordered west to form a line ahead of the convoy. He saw in this an opportunity to attack an east-bound convoy, full of war materials bound for Europe, with the full width of the Air Gap to cross. Raubgraf caught up with HX 229 on the evening of the 16th and mounted an attack that night. Three ships were sunk that night and another five on the morning of the 17th, a total of 8 in just 8 hours. The escort was reported to be weak, as 2 ships had dropped out to pick up survivors The escorts chased 3 contacts during the night but with no result…

Why Should We Care?: Saturday Twentieth Century Economic History Weblogging

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Why should you care about how our history and the history of our parents and grandparents and great-grandparents--the history of the long twentieth century, 1870-2010--will appear to people five and more centuries into the future?

First of all, it makes a very good story. And it makes an even better story because the story is real. We are gossiping animals—we have evolved to like to tell and hear stories about what is happening and has happened to our friends and not-friends. We like this so much. We like this so much that out of our time that is not spent hewing wood and drawing water we spend a very large chunk gossiping and listening to gossip about not our real friends and not-friends but about imaginary friends: there is no such person as Harry Potter, and so there is no strong reason to care about what happens to him or to Severus Snape, but we do.

And the best stories to tell and listen to are the real stories, about real people: they have a depth and an import that fiction cannot reach.

Continue reading "Why Should We Care?: Saturday Twentieth Century Economic History Weblogging" »

The Arkansas Medicaid Budget-Buster

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Austin Frakt:

So efficient you can’t afford not to buy it: Medicaid private option edition: David Ramsey of the Arkansas Times has done a ton of great reporting on the private option. His latest post begins:

The strangest part of the “private option” is that the plan grew out of pressure from local Republican lawmakers, the very same folks who had the loudest concerns about costs of the original Medicaid expansion. That’s strange because the new “private option” is going to cost more (not necessarily for the state — see here and here — but almost certainly for the feds)…. There are a number of reasons that offering coverage via private insurance is costlier than offering it via Medicaid but the main one ain’t rocket science: private insurers reimburse at higher rates. Even conservatives that like the “private option” better agree that it will cost more. Well here’s the thing. Despite a broad consensus about cost, Republicans at the forefront of advocating for a “private option” as a possible alternative to Medicaid expansion do not agree. They think that the “private option” might not be any more expensive for the feds, and could even cost less.

He gives those Republican views a generous airing in the rest of his piece. Go read it! I didn’t see anything in it that I didn’t touch on in my “prebuttal.” (I should be clear. I’m not against expanding the scope of exchanges. I just think it will cost more and we should not be deluding ourselves that it won’t.) It’s crucial to separate two propositions: (1) Competition can be efficiency increasing; (2) Competition on a state insurance exchange of the type permitted under the ACA can bring spending below that of Medicaid. The former can be true even if the latter isn’t. That’s a reasonable expectation if Arkansas or any other state goes forward with the private option, as we currently know it (which is not very well).

Noted for March 16, 2013

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  • John C. Wright: The Guest Law: "When the recitation of the law was done, Captain Descender and Captain Ereshkigal bound themselves by formidable oaths to abide by every aspect of this law. They exchanged grave and serious assurances of their honesty and good intent. Smith, listening, felt cold. The oathtaking concluded with Captain Ereshkigal saying: '… and if I am forsworn, let devils and ghosts consume me in Gaia’s Wasteland, in God’s Hell, and may I suffer the vengeance of the Machines of Earth.' 'Exactly so', said Captain Descender, smiling."

  • Margaret Hartman from Bartender Scott Prouty: Don’t Be Like Mitt Romney!: "Scott Prouty, a college-educated bartender in his late thirties... was recording Romney’s remarks as a souvenir when he realized, 'this is not a normal stump speech'. Prouty was initially undecided on whether or not to release the tape, but says, 'I felt an obligation for all the people that couldn’t be there. You shouldn’t have to be able to afford $50,000 to hear what a candidate actually thinks.'… Prouty told Ed Schultz that he deliberated about releasing the video for about two weeks, and was leaning against it when... 'I walked into the bathroom and I just looked in the mirror and the words "you coward" just came out of my mouth'."

Brad DeLong (2009): Leading Sector Technology and Aggregate Economic Growth: A Finger Exercise in the Secret History of the Industrial Revolution | Lawrence Summers (1985): On Economics and Finance | Brad DeLong (2009): Economic Growth: The Ultimate Birdʼs-Eye View | John Boehner Doesn’t Want To Pick A Government Shutdown Fight Over Defunding Obamacare | VA AG Ken Cuccinelli: "I’m a person who appeals to women with a variety of issues that they just happen to care more about that I also happen to care about. I’ve worked to improve mental health and worked to help the mentally ill for over a decade and a half, including when I was in the legislature. Women’s issues aren’t just abortion. Women’s issues are everything women care about. And I have an awful lot of issues that I appeal to women on, just as a natural course." | Sovereign wealth funds to hit record $5.6 trln by year end | Blogtrottr: Free realtime RSS and Atom feed to email service. Get your favourite blogs, feeds, and news delivered to your inbox. | Rob Portman reverses stance on gay marriage, says son is gay | For Xi, a 'China Dream' of Military Power | Today Kansas City, Tomorrow Oklahoma City! | UK Budget: No Plan B for the economy | Anne Laurie: Eavesdropping on CPAC: “Hunger Games Karaoke!” | Dave Weigel: Opening Act: Your CPAC questions answered. | Daniel Kuehn: Three unconventional theses on immigration policy: 1. It's a really bad idea to give high skill immigrants a leg up in the immigration process…. 2. Illegal immigrants are exactly who we want here and occasional amnesty is not that bad of a policy…. 3. The population that should benefit from immigration policy is a moving target. | Molly Rants: I don't get offended very often. But Samsung's long parade of '50s-era female stereotypes, in the midst of an entirely other long parade of bad stereotypes, just put me over the edge. Oh, they announced a phone? You'd barely know it. | Paul Krugman: Via Mark Thoma, a new paper in Vox on the effects of increased rail service, making clever use of natural experiments created by changes in German ownership and regulation. The results aren’t that surprising — more frequent rail service sharply reduces pollution and other costs associated with driving |

Continue reading "Noted for March 16, 2013" »

The Onion Is America's Finest News Source

GOP Senator Flips On Gay Marriage After Son Comes Out:

Sen. Rob Portman (R-OH), a leading conservative who was on Mitt Romney’s shortlist for vice president, announced the reversal of his longstanding position against same-sex marriage, saying he had a change of heart after his son came out to him two years ago. What do you think?

“Let’s hope his kid has a tough time finding affordable health care.”

Lee Swart – Wharf Worker

Liveblogging World War II: March 15, 1943

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UG convoys:

Convoy UGS 6 came under attack by wolf packs Unverzagt, Wohlgemut, and Tummler…. U-524 torpedoed the freighter Wyoming on 15 March 1943…

Convoy SC 122:

B-Dienst had given notice of an east-bound convoy and by 8pm on the 13th had a location for SC122; Grand Admiral Karl Dönitz directed Raubgraf to intercept, forming a new rake to the west. However a westerly gale gave speed to SC122, which passed through Raubgrafs patrol area on the morning of the 15th just 24 hours before the patrol line was formed. The Enigma intelligence which had helped the Admiralty to divert convoys away from wolf packs, had been "blinded" on March 10, 1943 by the result of the Germans bringing in a new short weather report. This resulted in the English codebreakers being starved of the cribs necessary to break "Shark". The Admiralty OIC U-Boat tracking room was therefore unable to divert convoys around the U-Boat packs. Fortunately a message from a U-Boat gave away its position once that position had been fixed by DF and the convoy SC122 was diverted around the estimated danger area. The Allied Cipher Number 3 used by the convoy escorts had been broken by the Germans. This allowed them to position wolfpacks in the way of HX229, which was following a similar course.

Convoy HX 228:

HX 228 was an east bound convoy of 60 ships, plus local contingents, which sailed from New York on 28 February 1943 bound for Liverpool and carrying war materials. Mid-Ocean Escort Force group B3 joined the convoy from St Johns… led by Cdr AA Tait of HMS Harvester…. Arrayed against them in the North Atlantic were patrol lines, Wildfang, Burggraf and Neuland, although in the event only a re-configured Neuland, comprising 13 U-boats, engaged HX 228…. HX 228 arrived safely at Liverpool on 15 March 1943…. HX 228 cannot be seen as a victory for either side; HX 228 had lost 4 ships and a warship, with the loss also of Cdr Tait, an effective and well-respected Escort Group commander; while Neuland had lost 2 boats, a potentially ruinous rate of exchange.

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L'Esprit de l'Escalier: March 15, 2013

  • Overheard: Q: "Who is most worth reading these days who is writing in the New Keynesian tradition?" A: "Pascal Michalliet (and Emmanuel Saez), Michael Woodford, and Yuriy Gorodnichenko."

  • Q: "How is the business of making space for social democracy in a neoliberal age?" A: "You need to get a new line: I cannot do anything. I am paralyzed. I can get no traction until you first make the world safe for vulgar Keynesianism."

  • The elimination of the [Washington Post] ombudsman position will not erode both credibility and criticism. Instead, it will erode credibility and increase criticism! We will redouble our efforts! Correct Thought is the thought of the populace. The populace cannot betray the populace or the Group of Seventeen! Behind our efforts, let there be found our efforts!

  • "Um. Your clown picture. I think you may have an Inigo Montoya/Vizzini issue…. [The] 'Insane Clown Posse'… is not really a 'clown' per se, but rather a dark and disturbing simulacrum of a clown. A bit more of the original, perhaps Mephistopheles/Devil type clowns of the early modern era." Yes! A dangerous clown… "But I would submit 'Insane Clown Posse', of which I hasten to add I do not approve, suggests a self-aware clown. A clown that knows and revels in its very clownness." Touché… "It is an evocative picture though. I miss the Mayberry Machiavellis." Yes. At least the Mayberry Machiavellis wanted to govern. The current crop of Republicans only want to (a) hold onto their jobs, (b) get lobbying jobs/wingnut welfare after they leave, or (c) scream at the world. Of course, there are a lot of dead people in Iraq who do not especially miss the Mayberry Machiavellis…

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Did Stan Lebergott Implicitly Compare U.S. WPA Workers with Nazi German Labor Camp Inmates?

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Sure looks like it…


Eric Rauchway:

Louis Menand and New Deal Denialism in The New Yorker — Crooked Timber: Tyler, if you’d follow the link, you’d see, or possibly remember, that it’s Darby with whom I agree. It’s Lebergott to whose usage I object. I’ll quote him again here:

These estimates for the years prior to 1940 are intended to measure the number of persons who are totally unemployed, having no work at all. For the 1930′s this concept, however, does include one large group of persons who had both work and income from work—those on emergency work. In the United States we are concerned with measuring lack of regular work and do not minimize the total by excluding persons with made work or emergency jobs. This contrasts sharply, for example, with the German practice during the 1930′s when persons in the labor-force camps were classed as employed, and Soviet practice which includes employment in labor camps, if it includes it at all, as employment.

Noted for March 15, 2013

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  • Bruce D. Meyer and Wallace K.C. Mok: Disability, Earnings, Income and Consumption: "Using longitudinal data for 1968-2009 for male household heads… [we] study current compensation for the disabled…. [A] person reaching age 50 has a 36 percent chance of having been disabled at least temporarily once during his working years, and a 9 percent chance that he has begun a chronic and severe disability…. Ten years after disability onset, a person with a chronic and severe disability on average experiences a 79 percent decline in earnings, a 35 percent decline in after-tax income, a 24 percent decline in food and housing consumption and a 22 percent decline in food consumption…. [T]ime use and detailed consumption data further indicate that disability is associated with a decline in well-being."

John Maynard Keynes (1926): The end of laissez-faire | David Cay Johnston: On Ryan budget plan, Wonkblog shines |

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Yes, Cameron, Osborne, and Ryan Will Never Admit That Austerity Is Not Expansionary. Why Do You Ask?

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Paul Krugman:

Night of the Living Alesina: Ah, remember the good old days of expansionary austerity?… [A]usterians seized on academic work by Alberto Alesina and Silvia Ardagna claiming that fiscal consolidation, if focused on spending cuts, would if anything lead to economic expansion…. Since then we’ve had what has to be one of the most decisive combinations of scholarly critique and real-world tests…. The IMF went about identifying austerity through an examination of actual policy, and A-A’s results were reversed. Critics showed that all of the alleged examples of expansion through austerity involved factors like currency depreciation or sharp falls in interest rates…. Osbornian policies in the UK led to stagnation; and in the euro area, well….

So you might have expected austerians to change their minds, or at least to come up with other justifications.

But no.

Both David Cameron and Paul Ryan are still preaching that old expansionary austerity religion, confidence fairy and all. This is, by the way, a fairly big deal for the Ryan budget, which… keeps the tax hikes that finance Obamacare while canceling the Medicaid expansion and exchange subsidies. The result would be a lot of fiscal drag in 2014 and 2015…. Luckily it isn’t going to happen. And a quick read of reactions suggests that the new Ryan plan is being greeted with derision rather than adulation. Is our pundits learning? A bit, maybe.

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John Cassidy: Paul Ryan in Wonderland

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John Cassidy:

Paul Ryan in Wonderland: Chapter 6: Having wandered back into writing about U.S. politics for the past eighteen months or so, I sometime wonder how the full-time Washington correspondents, the lifers, do it: cover the same old junk year after year. The key to career longevity and job satisfaction, I suppose, is to buy into the notion, assiduously promoted by the politicians and their flacks, that what they are doing is serious. Budgets, national security, energy policy, health policy—these things matter….

Sorry folks. After watching Representative Paul Ryan launch his much-anticipated budget for the fiscal year 2014, I can’t keep up the pretense. The plan is a joke… and nobody should pay much attention to it, except as another exhibit in the indictment of latter-day Republicanism. Ryan’s numbers don’t add up. His proposals—cutting domestic programs, converting Medicare to a voucher program, returning Medicaid to the states, reducing the top rate of income tax to twenty-five per cent—were roundly rejected by the voters just five months ago. And the philosophy his plan is based upon—trickle-down economics combined with an unbridled hostility toward government programs designed to correct market failures—is tattered and shop worn….

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Liveblogging World War II: March 14, 1943

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Third Battle of Kharkov - Wikipedia:

Manstein's counterattack: What was known to the Germans as the Donets Campaign took place between 19 February and 15 March 1943. Originally, Manstein foresaw a three-stage offensive. The first stage encompassed the destruction of the Soviet spearheads, which had over-extended themselves…. The second stage included the recapture of Kharkiv, while the third stage was designed to attack the Soviets at Kursk, in conjunction with Army Group Center—this final stage was ultimately called off due to the advent of the Soviet spring thaw… and Army Group Center's reluctance….

First stage: 19 February – 6 March: On 19 February, Hausser's SS Panzer Corps was ordered to strike southwards, to provide a screen for the 4th Panzer Army's attack. Simultaneously, Army Detachment Hollidt was ordered to contain the continuing Soviet efforts to break through German lines. The 1st Panzer Army was ordered to drive north in an attempt to cut off and destroy Popov's Mobile Group, using accurate intelligence on Soviet strength which allowed the Germans to pick and choose their engagements and bring about tactical numerical superiority. The 1st and 4th Panzer Armies were also ordered to attack the overextended Soviet 6th Army and 1st Guards Army.

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