Lunchtime Must-Read: Jared Bernstein: Where Do the Fiscal Headwinds Come From?
Noted for Your Lunchtime Procrastination for March 22, 2014

Things to Read at Lunchtime on March 22, 2014


  1. Jared Bernstein: Where Do the Fiscal Headwinds Come From?: "Richard Kogan and William Chen shows that relative to projections that were made in 2010, spending reductions... [have] generated deficit savings of $2.5 trillion over the current 10-year budget window (2015 to 2024).  Adding in the associated reduced interest payments of about $650 billion amounts to $3.2 trillion in deficit savings from spending cuts. Revenue added about $950 billion and technical and economic changes added savings of about $840 billion.... $5 trillion in savings over the budget window relative to the 2010 baseline... 77 percent of the savings that come from policy changes... are from spending cuts.... Neither of these developments should be seen as... great achievements.  The stimulus response to the Great Recession was too short-lived, and many of the program cuts... have been thoughtless slash-and-burn.... And from the perspective of the macroeconomy... [are] the source of the fiscal headwinds that have consistently held back the recovery."

  2. Cardiff Garcia: Yellen’s words vs what you heard: "[Yellen] doesn’t think inflation will threaten to breach the 2 per cent level so long as unemployment is 'quite high'. his could be read either hawkishly or dovishly. The potentially hawkish interpretation is... that such language reinforces the implicit, extant policy of 2 per cent as an inflation ceiling.... The dovish reading is that if she doesn’t think this tradeoff is likely to be an issue, then it’s because she also thinks there is more labour slack than the unemployment rate is communicating.... It’s also possible to mash together the two interpretations: policy will stay looser for longer, but only because the health of the labour market is worse off than the unemployment rate suggests. No change relative to the status quo on the hawkish-dovish spectrum.... Markets gravitated instead to two hawkish signals. One was the median forecast for the federal funds rate at the end of 2015 and 2016.... The other hawkish signal was Yellen’s definition of what constitutes 'a considerable time after the asset purchase program ends' before the first rate hike... 'on the order of around six months'.... As for the rest of the presser, I believe this extended passage was especially important: 'I have talked in the past about indicators I like to watch or I think that are relevant in assessing the labor market. In addition to the standard unemployment rate, certainly look at boarder measures of unemployment.... U6... five percent of the labor force working part time on an involuntary basis... is an exceptionally high number... discouraged and marginally attached workers... immensely high and can be very stubborn in bringing down... a cyclical component in the fact that labor force participation is depressed... quit rates now are below normal pre-recession levels... hires rate, however, remains extremely depressed... wage growth has really been very low...'"

  3. Angus Deaton: The Great Escape: The great escape from death and deprivation vox


  • Andrew Gelman and Eric Loken: The AAA Tranche of Subprime Science

    1. Jay Rosen: Review and comment on the launch of Nate Silver’s for ESPN: "One way of introducing a product: make it like the other products, but try to find better people. Nate Silver and ESPN aren’t doing that. Neither is Ezra Klein with Vox, or Pierre Omidyar with First Look, or Jessica Lesson with The Information. These ventures may go nowhere.... To illuminate a different starting point is easy. To practice differently by starting from that point: way harder.... Benjamin Wallace-Wells[:]... 'The hope invested in these projects is that as the industry shrank, perhaps, at the very least, what was left might become smarter. The profession has retreated, but maybe it has retreated to higher ground. Which explains, I think, some of the big talk that has accompanied their introduction....' The rise of Nate Silver’s FiveThirtyEight has been an important marker of… we can be way smarter.... He isolates three 'your practices are weak, I have a better way' opportunities: * what counts as explanation in advanced news writing today; * the making of generalizations by journalists steeped in the particulars; * the art of prediction, the science of likelihood, and products in between. In these areas he thinks he can make improvements by bringing the discipline of data science to the topsy turvy of news..."

    2. J.F.: Data and straw men: In defence of the numbers: "Leon Wieseltier, the New Republic's literary editor, seems to train by destroying straw men... his characteristically overblown explosions: Nate Silver is... ignorant of public reason... John Judis, Peter Beinart and Andrew Sullivan... are, respectively, a tourist, a naif and an anti-Semite.... Mr Silver's project is eminently worthwhile.... First, it does not scream. This may sound like a joke; it is not.... I will lay the facts as I understand them before you, explain why I think the facts matter, show you where I think they lead, and leave you to your own conclusions—surely is preferable to the unspoken attitude underpinning much American political discourse.... There is, in fact, a near-total consensus among scientists that climate change is happening and is 'unpredictable' and 'highly damaging'. Many people deny this. Best to lay the facts before them, over and over again.... There are sound data-driven arguments to be made over... whether the Earned Income Tax Credit helps make people less poor, or if receiving food stamps promotes sloth and dependence. Concrete, answerable questions are better than opinionated hunches for framing policy discussions.... Mr Silver's mission is to shrink bullshit's share of our national conversation, I can only wish him Godspeed."

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Should Be Aware of:

  1. Kos: Third Way['s Matt Bennett and Jim Kessler] put words in my mouth to defend Zell Miller: "So Third Way took a shot at me today, using Politico as their vehicle, because I guess having no constituency is no barrier to access if you have enough hedge fund managers on your board.... It happened because Third Way co-founder Jonathan Cowan was once an aide to Andrew Cuomo, who is the second coming of Joe Lieberman. I've been beating up on Cuomo lately, so Third Way is leaping to his defense by attacking me.... What's truly funny about their attacks on me is that they have to invent words in my mouth to make a coherent argument. I've written over 10 million words the past decade, and yet we get passages like this: 'A charge implicit in the Moulitsas post is that moderate Democrats lack political courage—that they would do the right thing if only they were brave enough. This just doesn’t withstand scrutiny.' You rarely see that blatant an example of a strawman argument. It's actually a thing of beauty. 'He didn't say this thing, but let's pretend that he did, and OMG that pretend argument that we invented out of thin air fails scrutiny!' Note that bullshit arguments are part and parcel of Third Way's repertoire..."

  2. Andrew J. Bacevich: Tom Clancy: "Tom Clancy qualifies as a great writer in the same sense that Texas senator Ted Cruz qualifies as a great orator.... Clancy did for military pop-lit what Starbucks did for the preparation of caffeinated beverages: he launched a sprawling, massively profitable industrial enterprise that simultaneously serves and cultivates an insatiable customer base. Whether the item consumed provides much in terms of nourishment is utterly beside the point. That it tastes yummy going down more than suffices to keep customers coming back.... Yet to argue that Clancy’s books and ancillary byproducts offer little in terms of lasting value is not to say that they have lacked influence. Indeed, just the reverse is true. As a shaper of the zeitgeist, Tom Clancy may well rate as one of the most influential creative entrepreneurs of the last several decades.... Clancy’s abiding theme is the never-ending struggle between good guys and bad guys.... Clancy, who never served in the military, imagined a world of selfless patriots performing feats of derring-do to overcome evil—a world that large numbers of Americans were certain had once existed.... Soon after Clancy’s death, the Washington Post published an appreciation entitled 'How Tom Clancy Made the Military Cool Again', written by a couple of self-described Gen-Xer policy wonks. 'Clancy’s legacy lives on in the generations he introduced to the military', they gushed.... But any understanding gained by either soldiers or society,whether engaged in Patriot Games or fending off The Sum of All Fears, was illusory, rooted in fantasies that sanitized war and conveyed a false sense of what military service really entails.... He contributed in no small way to the conditions breeding the misguided and costly military adventurism that has become the signature of U.S. policy. Clancy did prove to be a figure of consequence. Alas, almost all of those consequences have proven to be pernicious. And there’s no Jack Ryan anywhere in sight to come to our rescue."


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