Mark Thoma sends us to: Dean Baker: When Someone Says Paul Krugman Called for Greenspan to Create a Housing Bubble Back in 2002, They are Trying to Say That They are Either a Fool or a Liar: "Paul Krugman is a very smart person who does a fine job of defending himself. But he has enough detractors who repeat the same nonsense enough times that some reasonable people may actually be deceived. For this reason, I will briefly intervene to point out that the people claiming Krugman called on Greenspan to create a housing bubble in 2002, like Bret Stephens in the Wall Street Journal today, are just making stuff up..."
Bill C.: Twenty-Cent Paradigms: Rodrik on Our Science-ish-ness: "Dani Rodrik offers offers a number of characteristically interesting thoughts on the topic, including.... 'Economics is really a toolkit with multiple models--each a different, stylized representation of some aspect of reality. The contextual nature of its reasoning means that there are as many conclusions as potential real-world circumstances. All economic propositions are “if-then” statements. One’s skill as an economic analyst depends on the ability to pick and choose the right model for the situation... a craft rather than a science'.... As Keynes said: 'Economics is the science of thinking in terms of models joined to the art of choosing models which are relevant to the contemporary world'."
Review of The Second Machine Age: Technology and work: Learn ‘n’ go: "The Second Machine Age: Work, Progress, and Prosperity in a Time of Brilliant Technologies. By Erik Brynjolfsson and Andrew McAfee. W.W. Norton; 320 pages; $26.95. IN 2012 Erik Brynjolfsson and Andrew McAfee took a ride in one of Google’s driverless cars.... Only a few years earlier, 'We were sure that computers would not be able to drive cars'.... Machines have mastered driving. And not just driving. In ways that are only now becoming apparent, the authors argue, machines can forecast home prices, design beer bottles, teach at universities, grade exams and do countless other things better and more cheaply than humans.... Information technology... is... exponential... explosive... recombinant.... This will have one principal good consequence, and one bad. The good is bounty. Households will spend less on groceries, utilities and clothing; the deaf will be able to hear, the blind to see. The bad is spread. The gap is growing between the lucky few whose abilities and skills are enhanced by technology, and the far more numerous middle-skilled people competing for the remaining jobs that machines cannot do, such as folding towels and waiting at tables."
Jonathan Portes: Keynesians, supply-siders, and the labour market: "Reading both articles in full, it certainly seems like the first economist was broadly correct ('spectacularly right' would be overdoing it), while the second was far too pessimistic. So who were they? Well, as you've probably guessed by now, the 'Keynesian' was none other than Allister Heath, while the 'free market economist' was, er, me.OK, that was the fun bit. I don't think Allister (a good economist, and one who I agree with on a number of issues) was deliberately rewriting history. Rather, he is the victim of his own ideological blindness.... He doesn't seem to understand that it's perfectly possible to have a 'Keynesian' view of the macroeconomy (although what precisely that means, apart from understanding some basic principles of macroeconomics, is unclear, as I explained here), and at the same time to believe that the supply side matters.... He is determined to believe that the UK economy is desperately overtaxed and overregulated, and needs deregulation across the board. In some areas (housing and planning, immigration) he's at least partly right.... But on the labour market he's completely wrong: in fact, the reforms introduced by successive governments over the last three decades have left the UK with one of the most flexible labour markets in the developed world."
Jared Bernstein: Why Was the Housing Bubble So Much More Damaging than the Dot.Com Bubble?: "Not because it was bigger.... The vast majority of stock market wealth is concentrated at the top of the wealth scale.... Equity bubbles versus debt bubbles.... As Bob Hall put it recently.... 'In 2001, the value of business assets, especially tech-related assets, fell dramatically, but the financial system showed no signs of stress.... In the Great Recession, banks and other financial institutions became insolvent or nearly so because of direct and indirect exposure to real-estate values.'... ZLB and inflation.... The 2001 recession never hit the lower bound.... What about fiscal policy?... Our policy makers recently pivoted way too quickly to deficit reduction and that too has made it much harder to repair the damage from the housing bubble."
Will Wilkinson: Inequality: Why poor Americans aren't up in arms: "Access to better goods among the least well-off has ensured that material inequality is not as profound as income inequality. Basically, most people can afford a decent microwave.... Affordable modern conveniences have taken some of the sting out of a relatively small income.... Day-to-day experience is mostly a matter of our material circumstances, and if those are decent enough, a widening gap in income, consumption or wealth is unlikely to come often to our attention.... If the absolute quality of private consumables and public goods has improved for the poor even as inequality has gone up and up, some of the mystery of why those at the bottom of the income ladder haven't taken to the streets is dissolved. Yet rising absolute standards of living are not, in my opinion, the main reason Americans aren't taking to the streets over inequality. The real reason is that Americans aren't egalitarian..."
Stephane Deo: We’ve swapped global imbalances for domestic disequilibrium: "Over the past five years there has been a clear inverse relationship between changes in domestic demand and changes in the external balance.... The US is still the sole major economic region capable of driving up its rate of growth via increased domestic demand. If the US is to restore full employment, it will have to do so without much help from the rest of the world. Given that the US economy does not have the same vitality that it did before the crisis, the exported recoveries elsewhere will remain correspondingly weaker for longer."
Stan Collender: Extreme GOP Federal Budget Hypocrisy Early In 2014 | Kenneth Rogoff: * Creating Eurozone 'Giant Historic Mistake' | *Richard Mayhew: "Health policy wonks across the political spectrum have at least a shared common stated goal of decoupling employment from health insurance over the long run. Companies don’t want to be health insurance purchasers and managers, people don’t want to be tied to a job because that is the only place they can get health insurance and the federal government does not want health insurance tied to employment for tax reasons. It is a massive economic and societal distortion that should be facilitated away" | Prairie Weather: "How much did it all cost? 'It' is, of course, the 2007 financial crash followed by a long, deep recession--all set off by failures within the financial system. Eduardo Porter comes up with... a 'minimum' of $20,000 for every American. That's lowballing it. Porter finds other, no less reliable, responses heading towards $120,000 per person" | Zachary Goldfarb: Michelle Smith, working behind the scenes to shape the Fed’s public image |
Should Be Aware of:
Will Wilkinson: Old School Blogging: "The Zen masters are right. There is nothing in there, and the deeper you look the less you find. The self is more like a URL. It’s an address in a web of obligation and social expectation... an app of the organism 'designed' to play iterated cooperative games, and we desire a sense of stable identity because a stable identity keeps us in the repeated games that pay. (Also those that don’t. The self can be a trap.) Expectation, reputation, obligation--these are what make the self coalesce, and the more locked in those expectation and obligations become, the more solid the self feels. There’s nothing wrong with blogging for money, but the terms of social exchange are queered a little by the cash nexus. A personal blog, a blog that is really your own, and not a channel of the The Daily Beast or Forbes or The Washington Post or what have you, is an iterated game with the purity of non-commercial social intercourse. The difference between hanging out and getting paid to hang out. Anyway, in old-school blogging, you put things out there, broadcast bits of your mind. You just give it away and in return maybe you get some attention, which is nice, and some gratitude, which is even nicer. The real return, though, is in the conclusions people draw about you based on what you have said, about what what you have said says about you, about what it means relative to what you used to say.... I mostly stopped blogging for myself because I thought I couldn’t afford to give it away. But I miss the personal gift economy of the original blogosphere, I miss the self it helped me make, and I want at least a little of it back."
Sarah Posner: Uncle Sugar as Religious Bogeyman: "Mike Huckabee's instant classic in the canon of modern Republican misogyny, denouncing overbearing government bogeyman 'Uncle Sugar' for contraceptive handouts to women who 'cannot control their libido or their reproductive system' may seem, on the surface, to be merely Tea Party anti-governmentism blended with run of the mill Rush Limbaugh slut-shaming.... Huckabee may have not been this effort's best messenger, but in reality he's an honest one: religious conservatives see 'Uncle Sugar'... as encouraging women to--gasp!--have lots of sex, when women should only be having sex with husbands, and on their husbands' terms.... Huckabee isn't the first Republican called to answer for his endorsement of biblical patriarchy.... As Kathryn Joyce, who wrote about biblical patriarchy in her book Quiverfull, noted, 'submission is a contentious and tricky issue even within conservative evangelical churches.... What is womens' most important collective role, in Gothard's view? 'Serving' by having a womb. In the Southern Baptist Convention's view, 'nurturing the next generation'. Contraception, especially doled out (allegedly) by 'Uncle Sugar', gets in the way.... Huckabee's comments reveal not just his fear that the contraception benefit threatens womens' traditional role, but how he worries that 'Uncle Sugar'--and more crucially, women themselves--infringe on his."
Ed Kilgore: Rebranding: Who Needs It?: "The Mike Huckabee brouhaha yesterday offered about the 155th recent opportunity for non-conservatives to observe that the 'rebranding' exercise of the Republican Party isn’t going that well. But... Republicans really just don’t care.... Republicans are almost guaranteed to keep the House of Representatives in November; they have about a 50-50 chance of taking the majority in the U.S. Senate; and they are likely to keep their majority of the nation’s governor’s mansions. The erosion of public trust in Obama and Democrats spurred by the botched introduction of the healthcare exchanges continues to reverberate.... And there are just enough grounds for 2016 optimism among Republicans to make a good midterm outcome quite enough to convince most of these birds that a genuine 'rebranding' is a fallback measure, only to be used in emergencies, and vastly less attractive than taking a chance on winning with their full freak flag displayed.... All they need now is a decent 2016 presidential candidate..."
Carola Binder: Lance Davis (1928-2014): "A renowned economic historian with major contributions in financial history and institutional economics, Davis was a professor at Caltech from 1968 to 2005. Davis is associated with cliometrics, a quantitative and systematic approach to analyzing economic history. The term cliometrics--combining Clio, the muse of history, with metrics from econometrics--was coined in the 1950s by a group of economic historians and mathematical economists at Purdue.... The Cliometrics Conferences helped bring about a renewal in the economic history field. The new generation of economic historians in the 1950s and 60s began integrating economic theory and empirical evidence more rigorously and creatively than before.... The cliometric approach also brought about a new way of thinking about economic institutions and institutional change. Neoclassical institutional theory flourished in the 1960s, led by Davis and Douglass North.... Davis and North's hugely influential book, Institutional Change and American Economic Growth (1971), outlines their model and applies it to American economic history."
Scott Lemieux: Today In GOP Minority Outreach: "It’s a 'joke,' but it reflects the very real belief that the only problem with race in America is white people being falsely accused of racism."
Tom Perkins has not been involved in KPCB in years. We were shocked by his views expressed today in the WSJ and do not agree.— Kleiner Perkins (@kpcb) January 25, 2014
Nicole Flatow: Oklahoma Lawmaker Wants To Ban All Marriages |