Liveblogging World War II: May 31, 1943
First Half of 2013 Growth Looks Like It Will *Increase* the Output Shortfall Relative to Potential by 0.4% Points

L'Esprit de l'Escalier: May 31, 2013

L'Esprit de l'Escalier: May 31, 2013

  • The Daily Edge: "Reagan turned his back on gays during AIDS epidemic. Iran-Contra scandal was an unthinkable abuse of power #ObamaIn3Words Better Than Reagan" Me: But there was that awesome episode of "Reagan" in which a scrappy band of misfits--an astrologer, a fashionista, and a washed-up ex-actor with early-stage Alzheimer's--banded together and tried to end the Cold War…

  • Apropos of The difference is that Ken Rogoff is both scary-smart and has done his homework, and Carmen Reinhart has definitely done her homework and looked at every historical episode: they have reasons for thinking that using Germany's debt capacity for debt restructuring would be much better from a technocratic-economic point-of-view than fiscal expansion in Germany, and the fact that I don't full grasp those reasons may well say something not about their errors but about mine. I could say something not quite as strong but analogous about Robert Barro: scary-smart, does his homework--the big problem with his analyses, I think, is that for him it is always 1976, Gerald Ford is always President, and Arthur Burns is always chairing the Fed. Fama, Cochrane, Lucas, and company… with them, by contrast, they simply don't bother to do their homework, and then feel it would be too humiliating to ever admit any error on their part. But it's not doing your homework that's uncool. And it's not being willing to admit error that is truly humiliating. As for Steve Williamson... Well, what do you think of

  • Two comments... First, I look back through my archives in chronological order, and I find: "The thoughtful Adam Ozimek..." "Kudos to Adam Ozimek..." "Adam Ozimek's complaint.... I believe that what I was thinking was that Adam Ozimek... was thus telling his readers that modern American conservatism has pieces that are more than either a lust for office, a lust for more boodle, or a free-floating ressentiment. Whether it is Adam's assumption that there are such pieces that make him sadly deluded, or my belief that there are no such pieces that make me sadly deluded, is something I leave to the Tribunal of History to decide..." It seems to me that the optimal mode is to tell it straight--to criticize when you think people worth reading have gotten it wrong (and to say why you think people have gotten it wrong), to praise when you think that people have gotten it right and done a good job, and to have and express a sense of your own fallibility. That way people do not have to decode what you think and feel--you tell them. And that improves communication... Second, I think you need a different word than "civility". You call Ken's open letter to Joe Stiglitz "civil". I read it as snide and sarcastic.. Ken doesn't tell the story about Joe so that "the Fund staff who you once blanket-labeled as 'third rate'—and I guess you meant to include World Bank staff in this judgment also—will feel better if they know they are in the same company as the great Paul Volcker". That is not Ken's aim. And that Joe thinks that he and Carl and Ken are smart along one dimension in a way that Paul Volcker is not smart is not an example of Joe's overweening arrogance, but is, instead, a judgment that Joe, Ken, and Carl all share--Paul Volcker is extremely capable and smart, but in a different way than Ken Rogoff is smart. And I do not think that Joe believes his conversation was fairly represented the way that Ken reported it. A reader has to do a lot of work and be highly attuned to social nuances to properly understand what Ken is saying in his open letter to Joe. And when a reader does that, the message the reader understands is not a civil message at all. By contrast, a reader doesn't need to do much work to understand what I am saying when I say that I think you are "sadly deluded" when you write "conservatives more than anyone should support more high-skilled immigrants": I mean that I think that you are sadly deluded, because American conservatives today are by and large not people who want a small government spending share of GDP but, rather, people fearful of those they regard as strange and strangers.

  • I would put it differently. I would say that Carmen and Ken have been consistently pro-higher inflation, pro-debt write downs, anti-fiscal expansion, all as part of their general orientation toward S=I rather than C+I+G=Y formulations of macro. The problem is that monetary expansion at appropriate scale and debt writedowns have been mostly frozen for three years, with all the policy action coming on the fiscal side, where their influence has been overwhelmingly to reinforce the "we have to cut the deficit now! We dare not let the debt-to-annual-GDP ratio go above 90%!" side. There is an alternate universe--one I really wished we lived in--in which Ken Rogoff, Carmen Reinhart, Greg Mankiw, Christie Romer, and Larry Ball led a politically-effective "we need a higher inflation target" campaign over the past four years. But, alas, we do not live there...

  • "Oakley ‏.@tiredboredblog: Am I the only one who is disappointed that @delong's trolling was automated? I wish he'd been banging out those tweets every day." Yes, you are the only one. Sorry to disappoint you. I’m not that OCD, monomaniacal, and crazed. Yet. #GraeberErrors ;-)

  • With wage settlements subdued and with more than 2.5 million out of work in the United Kingdom, any new Bank of England's top priority has to be boosting aggregate demand. With possibilities for expanded government spending blocked by the ideological fundamentalism of the Parliamentary majority, with the interest rates the Bank of England controls at rock-bottom, and quantitative easing of unknown effectiveness, only one obvious lever remains: the exchange rate. It is time for The Governor to announce that a (somewhat) weaker pound is in Britain's (short--run) interest, and make it so.