Evening Must-Read: David Beckworth: Follow-Up to: The Fed's Dirty Little Secret
Weekend Reading: From Perry Anderson (1976): Considerations on Western Marxism

Noted for Your Nighttime Procrastination for December 26, 2014

Screenshot 10 3 14 6 17 PMOver at Equitable Growth--The Equitablog


Must- and Shall-Reads:

And Over Here:

On Twitter:

  • @GaryLegum: This first graf alone should disqualify Sully from decent society forever: http://t.co/nnu7TwCeRW
  • @delong: .@GaryLegum Wasn’t Sully already disqualified from polite society forever? http://pic.twitter.com/bEoHwtYo8a
  • @GaryLegum: @delong God, I always block that out of my mind. Consider this piece what would, in a better world, be one more nail in the coffin.
  • @delong: .@GaryLegum I usually block that out too. Some merciful Lovecraftian amnesia usually settles over my brain like a fog…
  • --
  • @BennSteil: @AntonioFatas @delong So it's clear that you're the only one who's "easily fooled," Brad ...
  • @delong: .@BennSteil (1/3) U don’t understand how this “twitter dialogue” thing works, do U? Cryptic contextless tweets R useless cc: @SantiagoAfonso
  • @delong: .@BennSteil (2/3) I presume U refer to Ur belief that Argentina has experienced “lost 15yrs” cc: @SantiagoAfonso http://pic.twitter.com/l1TsFPhHp1
  • @delong: .@BennSteil (3/3) I don’t believe Argentina-truthers Bcuz real exports hard to fudge, have grown at 5.6%/yr since ~2000 cc: @SantiagoAfonso
  • @BennSteil: @delong @SantiagoAfonso So Kirchner says GDP UP 60 pct, the IMF censures their stats, and you say it's "DOUBLED"
  • @delong: .@BennSteil (1/2) My bad. I apologize: I was supposed to say that real exports had doubled. Not that GDP has doubled. cc: @SantiagoAfonso
  • @delong: .@BennSteil (2/2) But Argentina has done well over the past 15 years. It hasn’t lost a decade. Do you have a point? cc: @SantiagoAfonso
  • --
  • @YaelTAbouhalkah: Why does Missouri have such insane gun laws? Because of scary legislators like Rick Brattin & Will Kraus. http://news.stlpublicradio.org/post/legislature-expands-gun-rights-override-nixons-veto
  • @delong: .@YaelTAbouhalkah (1/2) 20 years ago, when I did this stuff for the Clinton Administration rural sheriffs, and to some degree legislators,
  • @delong: @YaelTAbouhalkah (2/2) absolutely did not want their mentally unbalanced constituents with submachineguns. Now it’s their core platform…
  • @YaelTAbouhalkah: @delong I had forgotten Brattin's insane "this is a scary world" quote, implying we all need to be armed. Jesus.
  • --
  • Daniel Davies vs. Billionaires Who Have Much too Much Time to Spend on Twitter https://storify.com/delong/daniel-davies-vs-billionaires-who-have-too-much-ti

  1. David Beckworth: Follow-Up to: The Fed's Dirty Little Secret: "Monetary regime change is hard. But why do we think that fiscal policy would work any better given the Fed's dedication to its low inflation target?... If the U.S. Treasury Department sent $5000 checks... and... [people] began to spend... we would begin to see inflation go up.... The Fed would tighten.... For the same reason QE was limited from the beginning it also true that fiscal policy was limited from the beginning. With highly-credible inflation targeting central banks, both monetary and fiscal policy require monetary regime change to work at the ZLB. So I am puzzled as to why Krugman put his energy into drumming up support for more fiscal policy rather than drumming up support for a change in monetary regimes..."

  2. Noah Smith: Ten Investing Facts of Life: "Morgan Housel recently came up with an impressive list of 122 investing aphorisms.... Almost all... are good advice.... There was really only one I didn’t like: '67. Finance would be better if it was taught by the psychology and history departments...'. As someone who teaches finance, I might sound a little self-serving for saying that academic finance has valuable things.... But... [many of] Housel’s... aphorisms... come from... finance professors!... 10 of my favorites..."

  3. Robert Rubin and Nicholas Turner: The Steep Cost of America’s High Incarceration Rate: "Crime itself has a terrible human cost and a serious economic cost. But appropriate punishment... shouldn’t obscure the vast deficiencies in the criminal-justice system.... The U.S. rate of incarceration, with nearly one of every 100 adults in prison or jail, is five to 10 times higher than the rates in Western Europe and other democracies.... Long sentences have had at best a marginal impact on crime reduction. This is not only a serious humanitarian and social issue, but one with profound economic and fiscal consequences.... For the more than 600,000 people who leave prison and re-enter society every year, finding employment can be a severe challenge.... Up to 60% of formerly incarcerated people are unemployed one year after release.... It’s no surprise that 43% of people released from prison end up back behind bars within three years, according to a recent Pew study on recidivism. The costs of incarceration extend across generations. Nearly three million American children have a parent in prison or jail.... There is widespread bipartisan agreement that we are using prison for too many crimes and for too long.... The time has come to make sensible reform in these four areas—sentencing, parole, rehabilitation and re-entry—a national priority..."

  4. Martin Feldstein: The Fed’s Needless Flirtation With Danger: "The risks involved in... quantitative easing.... [which] reduced long-term interest rates and raised... equities and real estate... caused lenders and investors to reach for yield... taking greater risks through lower-quality loans... and accepting narrower spreads.... The risks... were unnecessary. Well-designed tax policies... an enlarged investment tax credit... converting the deduction for business interest to a credit... allowing deductions for dividends on common or preferred equity.... The resulting revenue loss could be balanced by a temporary rise in the corporate income-tax rate... taxing more highly the return on old capital while stimulating new investment.... A direct tax incentive to home builders.... The... deduction of mortgage interest... extended to non-itemizers... converted to an optional tax-credit.... Quantitative easing increase[s] the risk of financial instability.... Increased government spending and reduced tax revenue increase budget deficits and national debt.... Changes in the tax structure could stimulate spending... without raising... deficits."

  5. Paul Krugman: Nothing Non-Gold Can Stay: "David Beckworth has a good post pointing out... the Fed has been signaling... the big expansion in the monetary base is... temporary... this vitiates the effectiveness of quantitative easing.... My only small peeve.... I made this point sixteen years ago.... I’m turning into one of those crotchety old economists.... Beckworth offers as an example of how it should be: FDR’s exit from the gold standard.... Effective monetary policy in a liquidity trap requires both an actual and a perceived regime change, and that’s very hard to engineer.... I get annoyed with... ‘the Fed has pursued a tight-money policy’.... [when] reality... is ‘The Fed hasn’t been willing to commit to a permanent regime change in the face of what it considers a temporary problem.’ And even if it had... would people have believed it?... Going off the gold standard isn’t something you get to do very often..."

  6. Paul Krugman: 1980 and All That: "Robert Waldmann is shocked, shocked, to find conservative economists not doing their homework.... I’m shocked that he’s shocked.... Why, he asks, didn’t they look up the data--which takes only a few seconds on FRED--before making their claims? But this... applies... across the board.... Why this failure to do even the simplest homework?... They hear everyone around them saying stuff, repeat it, and that becomes what everyone knows; the idea of checking the facts themselves never seems to arise, indeed is almost anathema.... Mainly, I suppose, it’s the epistemic closure that comes from serving the interests of big money... think tanks that don’t want too much thinking, partisan media that don’t do fact-checking, and for that matter professional journals that erect high barriers....

Should Be Aware of:


  1. Alex Abad-Santos: The Holiday: "Why you should see this movie: Because you're in the mood to see the greatest holiday-inspired romantic comedy ever made. This movie was made in 2006, so it's unlikely it will be shown in theaters. If you somehow happen upon a theater showing it, check to make sure you haven't time traveled. What you should know: This movie has Jude Law at his peak, a Nancy Meyers kitchen scene, and Kate Winslet. Chances of a sex scene that you and your parents will want to avoid: Even if it had the most jaw-droppingly erotic scene in the history of cinema, you would have to see it, just to experience the glory of The Holiday. (This may be an oversell. But you don't know until you've watched!)"

  2. Michelle Conlin: Off duty, black cops in New York feel threat from fellow police: "Reuters interviewed 25 African American male officers on the NYPD.... All but one said that, when off duty and out of uniform, they had been victims of racial profiling, which refers to using race or ethnicity as grounds for suspecting someone of having committed a crime... being pulled over for no reason, having their heads slammed against their cars, getting guns brandished in their faces, being thrown into prison vans and experiencing stop and frisks while shopping. The majority of the officers said they had been pulled over multiple times while driving. Five had had guns pulled on them. Desmond Blaize, who retired two years ago as a sergeant in the 41st Precinct in the Bronx, said he once got stopped while taking a jog through Brooklyn’s upmarket Prospect Park. 'I had my ID on me so it didn’t escalate,' said Blaize, who has sued the department alleging he was racially harassed on the job. 'But what’s suspicious about a jogger? In jogging clothes?'..."