Over at the London Economist: May Zanny Minton Beddoes Do as Well Relative to John Micklethwait as Barack Obama Has Done Relative to George W. Bush
Liveblogging 300 BC: Spring: Founding of Antioch on the Orontes

Noted for Your Nighttime Procrastination for January 22, 2015

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


Must- and Shall-Reads:

And Over Here:

  1. Stuart Kemp: Economist Appoints Its First Female Editor: "Zanny Minton Beddoes has been appointed editor of the Economist, the first female to land the role in the publication’s 170-year history..."

  2. Robert Skidelsky: The Fall of the House of Samuelson: "[Paul] Samuelson was a convinced Keynesian... in a limited sense. He dismissed most of Keynes’s attack on the orthodox economics of his day as unnecessary, writing ‘had Keynes [started] with the simple statement that he found it realistic to assume that money wages...were sticky and resistant to downward movements... most of his insights would have remained just as valid.’ For Samuelson, Keynes’s real contribution was the tools he gave governments to prevent depressions. Reading The Samuelson Sampler, it is extraordinary to realize just how confident economists of his generation were that the New Economics... had solved the problem of depression and mass unemployment. As Samuelson put it in his 1973 introduction, ‘the specter of a repetition of the depression of the 1930s has been reduced to a negligible probability.’... Because governments knew how to stop depressions, voters would insist that they use this knowledge. ‘If printing bits of green can save banks and business from ruin,’ he argued in 1966, ‘today’s electorate will ensure that either party in power will [so] act.’ This was irrespective, Samuelson thought, of the ideological preferences of those in power..."

  3. Joseph Heath: Why People Hate Economics, in One Lesson: "What is wrong with this?... Tabarrok and Cowen are trying to communicate... ‘incentives matter’... a methodological point... [that] should be presented in... as platitudinous [a way] as possible.... There are many ways of doing that, since the problem with the public... is not that they think incentives don’t matter... it’s just that they underestimate the[ir] power of incentives, or they don’t see some of the unexpected ways.... The right way... is to say ‘here’s something that we can all agree upon--but have you thought through the consequences of it? Perhaps not. That’s what economists do.’ But Tabarrok and Cowen are unable to restrain themselves..."

  4. Dean Baker: Betting Against Subprime Mortgages Was a Good Thing: "Billionaire Robert Burns... richly deserves to be ridiculed... [for] want[ing] people to get used to lower living standards.... People are wrongly attacking Burns when they complain about his betting against subprime mortgage backed securities.... The securities were in fact bad. Burns betting against them made that clear in the markets somewhat sooner than would have otherwise been the case, bringing down the bubble earlier and more rapidly. This is good... fewer people were caught up in it than if the bubble had continued.... It would have saved people an enormous amount of pain if there had been lots of Robert Burns betting against subprime mortgage backed securities in 2003-2004.... Burns was acting out of greed, not a desire to help the economy and society. But this is a case where greed was good..."

  5. Tony Yates: ECB QE. Much too Late and Not to Be Counted on: "The slow, drawn out, reluctant, piecemeal way that the ECB has handled the crisis... and the disputes that have raged about whether and how to do QE... minimise the bang per buck.... Second, in so far as QE works by signalling intentions about future central bank rates, there is now little to be got.... Third, in so far as QE acts through lowering term, liquidity or other premia, it’s too late for that too. Something has squeezed those premia out in Northern countries. And the risk that the remaining premia in the South reflect is not going to be taken off the local sovereign balance sheet..."

Should Be Aware of:


  1. Scott Lemieux: High Broderism, Once Influential Conservative Democrat Edition: "Bill Galston, the prescient analyst cryogenically frozen at a 1991 DLC meeting, has some Deep Thoughts about the SOTU: 'Still, as Mr. Obama began speaking, a key uncertainty remained:  What balance would he strike between the desire to shape the political terrain for 2016 and the imperatives of governing in 2015?  The former required bold initiatives, of a kind likely to evoke sharply negative reactions from Republicans who command majorities in both the House and the Senate.  But successful legislating this year will require compromise with those very majorities.  Could he thread the needle, making the Democratic political case for next year without undermining the possibility of legislative progress this year?' Yes, in 2015 it’s very, very hard to tell if congressional Republicans would be willing to pass sensible middle-of-the-road compromises. But either way, I think that we can agree that whether it will happen will depend on the precise wording of the State of the Union address..."

  2. @lorcanrk: On ECB QE: "€60 billion a month including: Sovereign Debt; Super-national (read EIB/ESM) debt; Asset-Back Securities; Covered Bonds. It does NOT include Corporate Bonds. (or equities..) It will buy bonds with remaining maturity between 2 and 30 years. It will buy inflation linked bonds. Purchases will start in March (in six weeks, when that month's reserve maintenance period starts) and will continue until at least September 2016. The breakdown of purchases will be by Central Bank capital key, with the ECB itself accounting for 8% of purchases. So, if you want to work out how much each national central bank will buy, get the banks capital share here (be sure to adjust to 100% total), multiply that by €60bn, then multiply that by 0.92. Interestingly, there is nothing in the guidelines stopping an NCB buying the sovereign debt of another euro-area country, although it would be doing so at its own risk. I've written here about why the non-risk sharing is probably a good thing. But, also, I think ECB QE buying at this level is most likely to work more to weaken the € currency than necessarily have a positive portfolio effect. Overall, this is good news. It would be churlish to ask for more, at the moment."

  3. Henry Farrell: The Peripheral: "A blogpost on the William Gibson book of the same name, with copious spoilers... his best for some time; maybe, depending on your druthers, the best novel that he’s ever written.... Gibson... wants, I think, to talk about the relationship between the 99% and the 1%, using science fiction to turn the social relationships that Piketty and Saez talk about into a kind of ontology. The farther future is one in which the 1% has won and become a global ruling class.... The nearer future timeline is set in a rural America where the real economy has collapsed, leaving illicit drugs and dead end jobs working for the homeland security.... In this timeline, we don’t see the 1%, although they’re there in the background. Instead we see the kind of people who are about to be left behind and perish in the Jackpot..."