Friday Night Music
Liveblogging World War II: June 8, 1943

Noted for June 8, 2013

Austin Frakt: The Oregon Medicaid study and the Framingham risk score | Noam Scheiber: GOP Obamacare Strategy Is Dooming the Republican Party | Scott Eric Kauffman: It’s always been raining in Castamere |

  • Mitt Romney on the causes of his loss to Obama: "That [47%] was not a statement, if you will. It was taken off the record. Nonetheless, it did not reflect my views. I said it didn’t come out the way I wanted it to. But surely, that didn’t help me, and there were other things that didn’t help my campaign either."

  • Mitt Romney on the causes of his loss to Obama: "Obviously, a hurricane with a week to go before the election stalled our campaign. I wish the hurricane hadn’t have happened when it did because it gave the president a chance to be presidential and to be out showing sympathy for folks. That’s one of the advantages of incumbency. But, you know, you don’t look back and worry about each little thing and how could that have been different.”

  • Olivier Blanchard and Jordi Gali (2005): Real Wage Rigidities and the New Keynesian Model: "Most central banks perceive a trade-off between stabilizing inflation and stabilizing the gap between output and desired output. However, the standard new Keynesian framework implies no such trade-off. In that framework, stabilizing inflation is equivalent to stabilizing the welfare-relevant output gap. In this paper, we argue that this property of the new Keynesian framework, which we call the "divine coincidence", is due to a special feature of the model: the absence of non trivial real imperfections. We focus on one such real imperfection, namely, real wage rigidities. When the baseline new Keynesian model is extended to allow for real wage rigidities, the divine coincidence disappears, and central banks indeed face a trade-off between stabilizing inflation and stabilizing the welfare-relevant output gap. We show that not only does the extended model have more realistic normative implications, but it also has appealing positive properties. In particular, it provides a natural interpretation for the dynamic inflation--unemployment relation found in the data."

  • Robert Skidelsky - Robert Skidelsky and Niall Ferguson discuss austerity (2012):

  • Paul Krugman: The Unbearable Lightness of Being Right: "Ezra Klein and Evan Soltas had a rather uncharacteristically dyspeptic post this morning lamenting the failure of essentially anyone in DC to change policy proposals despite all the information that has come in undermining whatever intellectual basis those proposals might once have had…. The austerity consensus that took over Washington (and Brussels, and London, and Frankfurt, and …) never actually had many facts behind it to begin with . It flourished through sheer incestuous amplification: the in-crowd reassuring each other that they were right, with journalists — as Ezra himself pointed out — simply adding to the problem: 'For reasons I’ve never quite understood, the rules of reportorial neutrality don’t apply when it comes to the deficit. On this one issue, reporters are permitted to openly cheer a particular set of highly controversial policy solutions. At Tuesday’s Playbook breakfast, for instance, Mike Allen, as a straightforward and fair a reporter as you’ll find, asked Simpson and Bowles whether they believed Obama would do “the right thing” on entitlements — with “the right thing” clearly meaning “cut entitlements.”' Yet there were some people challenging the whole consensus. Yes, I’m going to pat myself on the back…. It’s hard to think of any previous episode in in the history of economic thought in which we had as thorough a showdown between opposing views, and as thorough a collapse, practical and intellectual, of one side of the argument. And yet nothing changes. Not only don’t the policies change; by and large even the people don’t change…. Bowles and Simpson are still touring, the same people at the BIS and the OECD are still issuing dire warnings about the dangers of easy money, George Osborne is still making pronouncements, Paul Ryan is still the intellectual leader of his party… the lack of accountability, for ideas and people, is truly remarkable in a time of massive policy failure."