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June 2015

Must-Read: I used to think Mark Duggan and company had a point about SSDI. But with more and more things like this coming across the desk--and with my inability to find any holes in them--I am coming more and more to the conclusion that he does not...

Monique Morrissey: Are Disability Rates Increasing?: "Congressional Republicans are trying to block a routine reallocation of funds to the SSDI Trust Fund...

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Noted for Your Afternoon Procrastination for June 30, 2015

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Must- and Should-Reads:

Over at Equitable Growth--The Equitablog


And Over Here:

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I Visit Right-Wing Websites...

...and things like this show up in my email inbox in rapid order:

Why Is FEMA Hoarding Survival Food?

You're not going to believe what FEMA just tried to pull.

You won't believe what the government is doing now...

>> Click here to watch the banned video now.

It's true, Friend. They are coming. Like it or not.

And they won't leave empty-handed.

Don't wait. You snooze, you lose.

Get the truth about what the government is trying to get away with, before they yank it offline.

>> Secret video exposes what you need to know.

PS...It's going to be every man, woman and child for themselves... food mobs will strip store shelves bare... get prepared by watching this ground-breaking video before it's taken down by government hackers...

Must-Read: As I first said back in 1995: Yes, Mexico had sinned against the Gods of Monetarism. But the punishment inflicted was way out of proportion to the initial sin, and strongly suggested deep fundamental flaws in the international macroeconomic order. The same is the case for Greece today.

Paul Krugman: The Awesome Gratuitousness of the Greek Crisis: "But doesn’t the ultimate cause lie in wild irresponsibility on the part of the Greek government?...

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Hoisted from the Archives from Eighteen Years ago: Friedrich A. von Hayek

Friedrich A. von Hayek:

Moral Philosophy:

Samuel Brittan--who I believe is extremely perceptive and penetrating (although not at all unsympathetic)--on Friedrich Hayek. From 'Hayek, Freedom, and Interest Groups,' in The Role and Limits of Government (London: Maurice Temple Smith, 1983):

The first page of the first chapter of Hayek's own Constitution of Liberty starts with the sentence:

We are concerned in this book with that condition of men in which coercion of some by others is reduced as much as possible.

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A Problem in Need of Attention: Assessing the Great 21st Century American Housing Bust

Comment of the Day: Charles Steindel: Monday Austrian-Economists Smackdown: The "Hangover Theory" of the 2008-2009 Crash Fails Because of Timing: "Yes, the housing slump started well before the actual recession...

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Monday Austrian-Economists Smackdown: The "Hangover Theory" of the 2008-2009 Crash Fails Because of Timing

Over at Equitable Growth: By coincidence, two people this past weekend have soberly informed me of what they call a "hard truth": that nationwide employment simply had to go down in 2008 and 2009.

You see, they said, we had to move people out of me industry of building houses and the occupations connected to that industry, and it was impossible to do that without lowering employment. READ MOAR

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Links and Tweets for the Week of June 22, 2015

Sanzio 01 The School of Athens Wikipedia the free encyclopedia



  • RT @R_Thaler: What Barry needs to rethink is assuming both parties will behave rationally. In this case maybe neither did. Jun 28, 2015
  • .@dsquareddigest i.e., each side assumed the other wasn’t serious—wouldn’t value prestige over chaos? cc: @R_Thaler @B_Eichengreen Jun 28, 2015
  • RT @boes_: Probability of a September rate hike implied by fed funds futures tonight is 25%, down from 45% on Friday Jun 28, 2015
  • RT @freakonometrics: amazing "What happens to sardine prices when fishermen get mobile phones ?" ht @liotier http://… Jun 28, 2015
  • RT @HeerJeet: That time William F. Buckley's Jewish friend wanted to marry his sister Jane & WFB intervened to break up engagement. Jun 28, 2015
  • .@mattyglesias Does the Atlantic have no editors? Has it no prisons? No workhouses? Jun 28, 2015
  • RT @LOLGOP: Think you're upset that the Supreme Court allowed people to marry and get health insurance? Imagine you're Al Gore. Jun 28, 2015
  • RT @AliceDreger: My friend: How come X hadn't gotten a tenure track job? Me: She lacks a personality disorder. Cc @AcademicsSay Jun 28, 2015
  • RT @BeardyHowse: @SLevelt Well, @ClerkofOxford has succeeded better than anyone I know in bringing her world of learning to outsiders. Jun 28, 2015
  • RT @interfluidity: “Austerity + structural reforms need to be the only way to go. Otherwise ppl cld start asking questions” Jun 28, 2015
  • RT @mark_dow: DSK's piece is basically a 'wea'-culpa on front-loaded fioscal adjustment (austerity) and monetary conservatism. Jun 27, 2015
  • RT @ReformedBroker: "The S&P 500 is up 167%, it could easily be one of the best five-year investing periods you will ever experience.” htt… Jun 26, 2015
  • RT @martaforesti: If you missed brilliant @rodrikdani at @ODIdev here is the video and a great summary by @fp2pJun 26, 2015
  • RT @LOLGOP: It's going to be a bad week for people who love the flag of slavery but hate sick people getting insurance and gay people being…

Continue reading "Links and Tweets for the Week of June 22, 2015" »

Noted for Your Nighttime Procrastination for June 28, 2015

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Must- and Should-Reads:

Over at Equitable Growth--The Equitablog

And Over Here:

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Across the Wide Missouri: What would "civil disobedience" against the Supreme Court's ruling in Obergefell even mean? What does Mike Huckabee want his people to do? Run up to people's weddings and interrupt them? Grab people's marriage licenses and rip them up?

'This Week' Transcript:

STEPHANOPOULOS: So what exactly are you calling on people to do right now? You say resist and reject this judicial tyranny. Spell out exactly what that means?

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Today's Economic History: Joseph Schumpeter on "Liquidationism"

Three things strike me while rereading Schumpeter's 1934 "Depressions" (and also his 1927 Explanation of the Business Cycle):

  1. How much smarter Schumpeter is than our modern liquidationists and austerians--he says a great many true things in and amongst the chaff, which is created by his fundamentally mistaken belief that structural adjustment must be triggered by a downturn and a wave of bankruptcies that releases resources into unemployment. How much more fun and useful it would be right now to be debating a Schumpeter right now than the ideologues calling for, say, more austerity for and more unemployment in Greece!

  2. How very strange it is for Schumpeter to be laying out his depressions-cause-structural-change-and-growth theory of business cycles at the very same moment that he is also laying out his entrepreneurs-disrupt-the-circular-flow-and-cause-structural-change-and-growth-theory of enterprise. It is, of course, the second that is correct: Growth comes from entrepreneurs pulling resources into the sectors, enterprises, products, and production methods of the future. It does not come from depressions pushing resources into unemployment. Indeed, as Keynes noted, times of depression and fear of future depression are powerful brakes halting Schumpeterian entrepreneurship: "If effective demand is deficient... the individual enterpriser... is operating with the odds loaded against him. The game of hazard which he plays is furnished with many zeros.... Hitherto the increment of the world’s wealth has fallen short of the aggregate of positive individual savings; and the difference has been made up by the losses of those whose courage and initiative have not been supplemented by exceptional skill or unusual good fortune. But if effective demand is adequate, average skill and average good fortune will be enough..."

  3. How Schumpeter genuinely seems to have no clue at all that the business cycle is a feature of a monetary economy--how very badly indeed he needed to learn, and how he never did learn, what Nick Rowe and company teach today about the effects of monetary stringency on economic coordination.

Joseph Schumpeter (1934): [Depressions: What Can We Learn from Past Experience?](,+which+we+might+attempt+to+suppress&hl=en&sa=X&ei=rQ2QVZTfHsnvoASqpYaAAw&ved=0CCwQuwUwAg#v=onepage&q=schumpeter depressions are not simply evils, which we might attempt to suppress&f=false)

The problems presented by periods of depression may be grouped as follows: First, removal of extra economic injuries to the economic mechanism: Mostly impossible on political grounds. Second, relief: Not only imperative on moral and social grounds, but also an important means to keep up the current of economic life and to steady demand, although no cure for fundamental cases.

Third, remedies: The chief difficulty of which lies in the fact that depressions are not simply evils, which we might attempt to suppress, but--perhaps undesirable--forms of something which has to be done, namely, adjustment to previous economic change.

Continue reading "Today's Economic History: Joseph Schumpeter on "Liquidationism"" »

Must-Read: And my loyal readers inform me that the only even half-economist half-clown they have seen carrying water for Jeb Bush's 4%/Year Growth Plan is... John Cochrane.

Surprise, surprise.

I do not know why back in 2008 John Cochrane decided to start turning himself into a clown. But he did. And now he is three-quarters of the way there.

Matthew Yglesias: Jeb Bush's 4% Growth Promise Is 104% Nonsense: "Asked by Reuters to describe his thought process...

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Must-Read: The curious thing about Robert Farley's piece is that he says: "today, the wiser among us recognize that 'dual containment' was, in large part, [more] a solution" rather than a problem. Why the "today"? From 1991-2003, in every sophisticated strategic discussion of the Middle East I participated in, the smart people always made the point that dual containment and the continued maintenance of the Saddam Hussein régime was bad for the people of Iraq but probably good for the people of the Middle East as a whole--and precisely for dual containment reasons.

And, of course, Cheney and Junior Bush's attack on Iraq turned out to be bad for the people of Iraq as well.

Robert Farley: The Ultimate 'What If': A World Where America Never Invaded Iraq: "In 2003, we spoke of the policy of ‘dual containment’ as a problem...

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Liveblogging World War I: June 28, 1915: Battle of Gully Ravine

Wikipedia: Battle of Gully Ravine:

The third battle of Krithia on 4 June had made some progress in the centre of the line at Helles but had failed on the left flank (west) along Gully Spur and Gully Ravine and on the right flank (east) where the French contingent were confronted by a number of strong Ottoman redoubts on Kereves Spur. As a prelude to a new offensive the commander at Helles, Lieutenant General Aylmer Hunter-Weston ordered separate limited attacks to advance the flanks.

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Noted for Your Afternoon Procrastination for June 27, 2015

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Must- and Should-Reads:

Over at Equitable Growth--The Equitablog


And Over Here:

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Across the Wide Missouri: Debating, on Bloomberg, a guy who had subpoenad a dead woman to appear in his committee hearing room was... creepy. Highly creepy:

Wikipedia: Thomas M. Davis: "The Terri Schiavo case. The committee subpoena...

...signed by Davis, ordered the appearance of Schiavo, her husband, Michael, and her doctors. The subpoenas specified that the witnesses bring to the hearing:

all medical and other equipment that provides nutrition and its current and continuing state of operations.

Davis issued a joint statement with House Majority Leader Tom DeLay (R-Texas) and Speaker of the House Dennis Hastert (R-Illinois) that stated:

This inquiry should give hope to Terri, her parents and friends, and the millions of people throughout the world who are praying for her safety. This fight is not over.

Many legal scholars criticized this action as an inappropriate congressional intervention in an ongoing court case that defied the rule of law and amounted to a bill of attainder—not against the party the politicians are attempting to aid, but against the party on the other side of the courtroom.

Liveblogging World War II: June 27, 1945: Ralph Bard's Alternative

Undersecretary of the Navy Ralph Bard: MEMORANDUM ON THE USE OF S-1 BOMB:

Ever since I have been in touch with this program I have had a feeling that before the bomb is actually used against Japan that Japan should have some preliminary warning for say two or three days in advance of use. The position of the United States as a great humanitarian nation and the fair play attitude of our people generally is responsible in the main for this feeling.

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Liveblogging the American Revolution: June 24, 1777: John Paul Jones

John Paul Jones takes command of the USS Ranger:

Wikipedia: John Paul Jones:

Jones sailed from the Delaware River in February 1776 aboard Alfred on the Continental Navy's maiden cruise... hoisting the first U.S. ensign over a naval vessel.... Nassau was raided for its military supplies. On the fleet's return voyage it had an unsuccessful encounter with a British packet ship.

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Must-Read: Dani Rodrik: The Future of Economic Transformation in Developing Countries: "Economic transformation in low-income countries is changing...

...For years, developing countries have tended to transition from agriculture to manufacturing to services. Yet recent evidence suggests that countries are running out of industrialisation options much sooner than expected. Is this a cause for concern? Or are there opportunities in agriculture and services that are just as effective at generating growth and ending poverty?

Liveblogging World War I: June 26, 1915: Armenia

Wikipedia: Armenian reform package:

A reform plan devised by Ditte Wiberg in 1912-1914 that envisaged the creation of two provinces in Turkish Armenia (Western Armenia) placed under the supervision of two European inspectors general, who would be appointed to oversee matters related to the Armenian issues... and hold the highest position... where the bulk of the Armenian population lived... resid[ing]... respective[ly]... in Erzerum and Van. The reform package was signed into law on February 8, 1914... [and] abolished on December 16, 1914.... Louis C. Westenenk, an administrator for the Dutch East Indies, and [Nicolai] Hoff, a major in the Norwegian Army, were selected as the first two inspectors. Hoff was in Van when the war broke out, just as Westenenk was preparing to depart for his post in Erzerum.

Hoff was expelled from Turkey at the end of August 1914.

Noted for Your Morning Procrastination for June 26, 2015

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Must- and Should-Reads:

Over at Equitable Growth--The Equitablog


And Over Here:

Continue reading "Noted for Your Morning Procrastination for June 26, 2015" »

How Long Is the Short Run This Time?

How long does it take to go from the short run to the long run? As I say repeatedly, I used to teach my students that the "short run" was the next couple of years, that the long run was from seven years from now on out, and that in between were interesting and confused medium-run transition dynamics--plus there is always the possibility that forward-looking expectations can lead the long run to come like a thief in the night, suddenly, immediately, long before you expect it to.

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Across the Wide Missouri: Scott Lemieux: Friday Links: The Repulsion of the Moopish Invasion: "Nice to see the conspiracy theories already heating up already...

...The reviews of Scalia’s dissent continue to come in.  (Tushnet has been on this beat for a while, and his analysis looks more prescient than ever.) Lead plaintiff David King, earlier this month:

Mr. King said that he was not really worried about the outcome of the case, King v. Burwell, because as a Vietnam veteran, he has access to medical care through the Department of Veterans Affairs.

Yeah, really sorry you lost this one, buddy. Smart analysis from Brianne Gorod, Nicholas Bagley, Ian Millhiser, and Jon Cohn. Cue Nelson Muntz.

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Why Did the Supreme Court Decide Yet Another ObamaCare Case Today?: The Honest Broker for the Week of June 28, 2015

This morning, Republican-appointed Supreme Court Chief Justice John Roberts wrote and five of his colleagues -- Democrat-appointed Breyer, Ginsburg, Sotomayor, and Kagan, and Republican-appointed Kennedy -- agreed that:

Section 18031 [of the Affordable Care Act--i.e., the ObamaCare Law--] provides that “[e]ach State shall . . . establish an American Health Benefit Exchange..." [But] if [a] State chooses not to do so, Section 18041 provides that the Secretary [of Health and Human Services] “shall . . . establish and operate such Exchange..." (emphasis added [by Roberts]).... The phrase “such Exchange”... instructs the Secretary to establish and operate the same Exchange that the State was directed to establish.... Black’s Law Dictionary 1661... (defining “such” as “That or those; having just been mentioned”).... State Exchanges and Federal Exchanges are equivalent—they must meet the same requirements, perform the same functions, and serve the same purposes...
A simple matter of black-letter law, no? The plain meaning of the phrase "such Exchange" means that anything legal that is true of a health-insurance exchange established by, say, the state of New York is also true of a health-insurance exchange established by the federal government for, say, the state of Florida if the state of Florida fails to establish its exchange, no?

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Live from Oceana Naval Air Station: Am I wrong to be repeatedly gobsmacked and disgusted by the narcissism of the Bush clan?

No More Mister Nice Blog: That Other Time George W. Bush Suggested 9/11 Was No Big Whoop: "BooMan flags this passage...

I remember a comment George W. Bush made to me during a one-on-one, in-flight interview. He said the toughest moment of his life wasn’t what to do after 9/11 but seeing his father... defeated by Clinton. I thought for a moment he might cry, but of course he wouldn’t.

BooMan is understandably appalled:

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