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April 2015

Jacob Hacker and Paul Pierson: American Politics: No Cost for Extremism

Jacob Hacker and Paul Pierson: American Politics: No Cost for Extremism: "This article appears in the Spring 2015 issue of The American Prospect magazine. And click here for a free PDF of this 25th Anniversary Issue of the Prospect....

According to the news media, 2014 was the year that the GOP “Establishment” finally pulled Republicans back from the right-wing brink. Pragmatism, it seemed, had finally triumphed over extremism in primary and general election contests that The New York Times called “proxy wars for the overall direction of the Republican Party.” There’s just one problem with this dominant narrative. It’s wrong. The GOP isn’t moving back to the center. The “proxy wars” of 2014 were mainly about tactics and packaging, not moderation.

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Liveblogging World War II: April 25, 1945: The Meeting at the River Elbe

Soldiers from the Soviet Union and United States Meet at the River Elbe:

Just outside the town of Torgau in eastern Germany, elements of the United States Army’s 69th Infantry Division and the 5th Guards Army of the Soviet Union came face to face following a long campaign of rolling back Adolf Hitler’s conquest of the continent. Less than two weeks later, the Allies would celebrate victory in Europe....

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Live from La Farine: As I have said before, one important reason I was for Barack Hussein Obama rather than Hillary Rodham Clinton was my belief that America was now more sexist than racist and that Obama would be treated by the Republicans and the political class with the respect appropriate for a serious presidential candidate and for a president.

The second part of that belief was clearly wrong.

The first part, however, may well be right: get ready for the sewage avalanche:

Paul Krugman: Clinton Rules: "So there’s a lot of buzz about alleged scandals involving the Clinton Foundation...

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No, I Do Not Believe Dean Baquet Wants to Turn the New York Times into a Trusted Information Intermediary. Why Do You Ask?

Live from La Farine: For every time somebody emails me, privately, and tells me that Dean Baquet--in spite of his failure to commission a deep dive on New York Times dysfunction and Jeff Gerth and company on Whitewater, in spite of his failure to commission a deep dive on New York Times dysfunction and Judy Miller on Iraq, in spite of such things as yesterday's misrepresentations of the Department of State's role in CFIUS--sincerely wants to turn the Grey Lady into a trusted information intermediary, two or three examples of things like the following cross my desk:

Michael Barbaro: Paleo Diet In and Pizza Out, a Slimmer Jeb Bush Seems Intent on Staying That Way - NYTimes.com: "Steak Tips Susanne, the $21 entree at the Hilton Garden Inn...

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Re-Reading My Weblog: September 2005

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Looking for something I had written relevant to Ken Rogoff's attempt to explain the current constellation of asset prices, I found it on my weblog for September 2005.

And then I went on the reread the whole month:

The highlight was what I was looking for--the extremely sharp-witted Robert Barro had a very interesting but, I concluded, ultimately unpersuasive paper on "Rare Events and the Equity Premium". The problem is that any rare catastrophe large enough to permanently crash the U.S. stock market almost surely crashes the real returns on Treasury bonds as well--hence cannot explain the ex-ante equity return premium vis-a-vis Treasuries:

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Noted for Your Lunchtime Procrastination for April 23, 2015

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Must- and Should-Reads:

Over at Equitable Growth--The Equitablog

Plus:

And Over Here:

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Thinking About Ken Rogoff: Overleverage, Secular Stagnation, Savings Glut, Impaired Financial Trust

Over at Equitable Growth: Ken Rogoff--of whom my standard line is: everything he says is very interesting, and almost everything he says is completely correct--is weighing in: on secular stagnation, the global savings glut, the safe-asset shortage, the balance-sheet recession, whatever you want to call it.   His view is that excessive debt issue and overleverage are at the roots of most of our problems. He thus believes that our difficulties will end when deleverage has reduced the overhang of risky and underwater debt to a sustainable level: READ MOAR

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Comment of the Day: CAbridges: Keeping Up With the Hugos, 4/20/15: "You can’t kick all the other books off the table, slam a stack of yours in front of me and then demand I judge them on their merits. I’m too busy being pissed about that book-kicking that happened a few minutes ago."


A Suggestion for the Burned-Out Political Reporter George Packer

Across the Wide Missouri: Does George Packer really think the purpose of American politics is to thrill him?

George Packer: American Politics: Why the Thrill Is Gone: "The Upshot... [ran] an original and useful guide to the race, helping make sense of the state of play...

...The author, Nate Cohn, concluded, ‘It will be fun to watch.’ That was when he lost me.... The 2016 campaign doesn’t seem like fun to me.... If this is any kind of fun, it’s the kind of fun I associate with reading about seventeenth-century French execution methods, or watching a YouTube video of a fight between a python and an alligator. Fun in small doses, as long as you’re not too close....

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How Does Ben Bernanke Add Value to Citadel?

Over at Equitable Growth: Before fees, the performance of Ken Griffin's Citadel is almost surely above the market's risk/return line. After fees and since 2007, I doubt it. After fees, investors in Ken Griffin's Citadel hedge fund appear have lagged the S&P500's 6%/year nominal return since its peak in 2007. And it is not as though Griffin is selling a greater degree of safety than the S&P500 offers: Citadel came very, very close to blowing up in 2008, and the most I can say is that I do not know what its true beta is. READ MOAR

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Hoisted from Others' Archives from a Year Ago: Jonathan Rauch: Opposing Gay Marriage Doesn’t Make You a Crypto-Racist

I must say I did not know what to make of this a year ago. I know even less what to make of this now:

Jonathan Rauch: Opposing Gay Marriage Doesn’t Make You a Crypto-Racist: "Lots of people compare the opposition to gay marriage and the resistance to interracial relationships.

It’s a flawed analogy. Here’s why.

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Must-Read: Francesco Saraceno: The Blanchard Touch: "Yesterday I commented on... the IMF staff challeng[ing] one of the tenets of the Washington consensus...

...the link between labour market reform and economic performance. But the IMF is not new to these reassessments... has increasingly challenged the orthodoxy that still shapes European policy making... the widely discussed mea culpa in the October 2012 World Economic Outlook, when the IMF staff basically disavowed their own previous estimates of the size of multipliers, and in doing so they certified that austerity could not, and would not work... broke another taboo, i.e. the dichotomy  between  fairness and efficiency... a presentation by IMF economists showing how austerity and inequality are positively related with political instability... research linking increased inequality with the decline in unionization. Then, of course, the ‘public Investment is a free lunch’ chapter three of the World Economic Outlook, in the fall 2014.

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Today's Must-Must-Read: Olivier Blanchard: Rethinking Macroeconomic Policy: Introduction

Today's Must-Must-Read: Olivier Blanchard: Rethinking Macroeconomic Policy: Introduction: "I thought of the first conference in 2011 as having identified the main failings of previous policies, the second conference in 2013 as having identified general directions, and this conference as a progress report...

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April 21, 2015 Trans-Pacific Partnership Briefing Conference Call: Questions for US Government Representatives

Over at Equitable Growth: Trying to get the issues straight in my mind here...

>antonio.white@xxxxxx.xxx: Dear Mr. Delong: I hope this note finds you well. In light of recent activity in Congress related to the Trade Promotion Authority legislation, I write to invite you to join an off-the-record conference call with XXXXXX senior staff for an update on the current state of play. The call is scheduled for today, Tuesday, April 21 at 3:45 p.m. ET

Dear Mr. White:

Thank you very much for your invitation. I will try. I will have to move a couple of things--and I am not the most important person involved in them...

But if you want to know where my concerns are, let me start by quoting something that I wrote before http://www.bradford-delong.com/2015/03/the-debate-over-the-trans-pacific-partnership.html: READ MOAR

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Noted for Your Lunchtime Procrastination for April 21, 2015

Might Like to Be Aware of:

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Liveblogging History: 753 BC: Livy on the Founding of Rome

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Titus Livius: The Founding of Rome:

To begin with, it is generally admitted that, after the taking of Troy, while all the other Trojans were treated with severity, in the case of two, Aeneas and Antenor, the Greeks forbore to exercise the full rights of war, both on account of an ancient tie of hospitality, and because they had persistently recommended peace and the restoration of Helen....

It is also agreed that Aeneas... came first to Macedonia, that he was then driven ashore at Sicily in his quest for a settlement, and sailing thence directed his course to the territory of Laurentum. This spot also bears the name of Troy. When the Trojans, having disembarked there, were driving off booty from the country, as was only natural, seeing that they had nothing left but their arms and ships after their almost boundless wandering, Latinus the king and the Aborigines, who then occupied these districts, assembled in arms from the city and country to repel the violence of the new-comers.

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Where Oh Where Is the Excess Demand Going?

Graph Consumer Price Index for All Urban Consumers All Items Less Food Energy FRED St Louis Fed

Over at Equitable Growth:: How is it that people can think that an excess supply of money can show up as an excess demand for financial assets--and thus produce large losses on leveraged portfolios and thus a financial crisis when it unwinds--without also showing up as an excess demand for currently-produced goods and services--and thus as inflation? That is the question that perplexes Paul Krugman as he tries to decode the thought of John Taylor and the BIS financial-stabilistas. It perplexes me too:

Paul Krugman: The Stability Two-Step: "Ben Bernanke['s]... takedown of... John Taylor and maybe the BIS.... READ MOAR

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Comment of the Day: Adam Morrow: "At the family practice office I worked at the past 2 months (a Federally qualified community health center)...

...there was a constant stream of patients (often with multiple chronic conditions) who were seeing a doctor for the first time in years, because of the ACA coverage expansion. My question would be, who has lost care or access under the ACA? Has anyone been pushed out of care to accommodate these folks? If so, where are they? We have also been turning out more primary care doctors, especially DOs, so the proportional stats comparing today to a decade ago are somewhat misleading: they just as readily suggest we have added enough capacity to withstand all the newly covered. As well, measures of access are notoriously unreliable.... Goodman's complaint seems to boil down to: yes you expanded coverage, but coverage isn't access (we knew that thanks), and high-deductible plans aren't always great coverage (ditto). Sour grapes. And if anything, his points could support the argument the ACA didn't go far enough...


Mark Dow on Twitter: ""How can you put a financial crisis in real life down to departures from a rule whose benefits were derived in a model that had no finance?""

Tweet of the Day: Mark Dow: On Twitter on Tony Yates on John Taylor: "How can you [i.e., John Taylor] put a financial crisis in real life down to departures from a rule whose benefits were derived [by John Taylor] in a model that had no finance?"