Grasping Reality on TypePad, by Brad DeLong

• 2006-08-09: Robert Waldmann Politely Says He Thinks I Have Got the Carrot/Stick Balance Wrong...: Well, I wouldn't say "peace" with Tom Ricks. To my view, the excellence and the... strong nature of Ricks's conclusions in Fiasco make the tone of Washington Post Iraq coverage in 2002, 2003, and 2004 that much more reprehensible. One would, I think, have gotten a much better idea of what was going on back then by ditching Ricks and the Post and relying on Knight-Ridder and the Manchester Guardian. Apropos of which, here's a snippet from Tom Ricks today...

• 2006-08-08: The Pause that Might Not Refresh: Shortly before 2:15 p.m. Eastern time Tuesday, after a meeting in Washington that nearly every American would've found mind-numbingly dull, someone made a phone call to the Federal Reserve Bank in New York. The purpose of the phone call was to tell the bank's trading desk that the Federal Reserve's Federal Open Market Committee, known as the FOMC, had decided that the level of bond prices -- specifically, the price of three-month Treasury bills: promises by the U.S. Treasury to pay cash in three months -- was just right.... As a result of this phone call, the trading desk at the Federal Reserve Bank will buy or sell a few extra billion dollars in bonds, far less than $100 worth for each person in the United States. Banks and other financial institutions will have a little more or less cash, and a little fewer or more bonds, but the proportion of cash and bonds in their portfolios will change by what seem to be insignificant amounts. Yet such relatively small actions by the Federal Reserve's FOMC affect every single bond price and interest rate in the entire world...

• 2006-08-07: Sigh It's Donald Luskin Time. It's Donald Luskin Time.: Every once in a while it is my painful duty to surf over to http://poorandstupid.com and document that Donald Luskin, who regularly trashes Paul Krugman in the "Paul Krugman Watch" column for National Review is... not an unarmed man in a battle of wits, it's worse than that... say merely that if he had a contest with Wile E. Coyote, Wile E. Coyote would emerge the clear winner. So with enough Dutch courage in me to view the train wreck, I surf on over and find that today, August 7 2006, Donald Luskin is claiming that Paul Krugman "officially says [that a recession] is here." But Luskin's wrong. What Paul writes is.... And I find Donald Luskin also claiming that Paul Krugman has declared that the U.S. economy is in recession "over and over during the past three booming years." He even provides links to three Paul Krugman columns.... Of course Donald Luskin is wrong, again. In the first case Luskin points to, Krugman doesn't declare that the economy was then--summer 2004--in a recession. Instead, Paul says.... In the second example, Paul Krugman doesn't declare that the economy was then--spring 2005--in a recession. Instead, Paul says.... And in the third example, Paul Krugman does not declare that the economy was then--spring 2003--in recession. Instead, Paul says.... I could pile on: I could point out that although Paul Krugman wrote in April 2003 that the economy might (not was: might) be in or fall back into recession, Donald Luskin has written since that he [prefers]... "using a different date for the end of the [last] recession... April 2003." I could ask why the other regular writers for National Review haven't begged the editors to drop Luskin to stop the damage to their reputations (some claim that they have done so). But what's the point? The only useful thing to do is to lay down a marker stating how ridiculous he is, and move on...

• 2006-08-07: The intellectuals have taken over the asylum: Jurek Martin: "I began to realise that the American neo-conservative movement had become truly unhinged when a columnist I normally respect equated an ideologue I do not with Winston Churchill. The writer was David Brooks in the New York Times and his Churchillian doppelgänger was William Kristol, who sees existential threats to America everywhere and now believes bombing Iran is perfectly all right.... If Kristol was Churchill, he wrote, George Will, the prim columnist who now doubts regions of the world can be transformed on an American whim, had to be Burke.... The arrogance that makes these comparisons possible is actually quite disturbing..."

• 2006-08-07: THE WAGES OF DESTRUCTION: The Making and Breaking of the Nazi Economy Adam Tooze. Allen Lane 30,: Adam Tooze appears to have written a real home run...

• 2006-08-07: Tom Ricks Explains Why He Did Not Write the Stories He Thought He Should Be Writing: Tom Ricks talks about the runup to the war on Iraq. Ricks has said that there were major failures of five different institutions: the Administration, the CIA, the military, the media, and congress.... Congress? Congress did nothing. Why does Ricks assign blame to congress. That puzzled me. Here he explains: He assigns blame to congress because without the aircover provided by senators asking touch questions at hearings, Tom Ricks found that his editors at the Washington Post would not let him write the stories he knew he should be writing to inform his readers of what was going on. Because congress did not do its job, Ricks thinks, he and his colleagues in the media could not do their job. It's a very interesting point for Ricks to make.... Howard Kurtz, of course, should be fired immediately for his question: "[Y]ou've written a book that concludes... that the military made huge mistakes that contributed to the success of the insurgency. Doesn't that make it difficult to continue to cover the Pentagon as a objective observer?" Anybody who has not concluded that the military has made huge mistakes that contribued to the successof the insurgency is a shill who has no business claiming to be an objective observer. And go buy Ricks's excellent Fiasco: http://www.amazon.com/exec/obidos/asin/159420103X.

  • 2006-08-07: Hoisted from Comments: Tom Ricks Explains Why He Did Not Write the Stories He Thought He Should Be Writing: Drew writes... "This drove me nuts back on '02. I worked for a Congressman at the time who, along with quite a group of similar minded folk, would give regular coordinated floor speeches at appropriate times in the build up to war asking the hard questions.... After the speeches, we would then send personalized emails and cold call national tv and newspaper reporters alerting them of the types of questions that were being raised and then subsequently following up by asking why they weren't reporting about about the strategy, intelligence etc. questions we were asking. Obviously, we were all ignored.... I remember calling a guy who had had reported on national network news the night before that "no one in Congress" had raised certain issues related to some aspect before the war. He admitted that members of Congress like Rangel, Inslee, Doggett and others were regularly asking these very questions -- the ones that supposedly weren't being asked -- and that they had done so the night before his report. He did not offer to correct his inaccurate reporting and did nothing further to represent what was going on in the House." I think that what Ricks means is not that nobody in Congress was asking questions and making points, but that nobody in Congress whom Ricks's editors regarded as A-list players was asking questions and making points. Who do Ricks's editors regard as A-list players? At times I think the list contains two: Joe Lieberman and Chuck Hagel...

• 2006-08-05: Mankiw and Swagel Reflect on the Politics and Economics of Offshore Outsourcing: Well worth reading. Greg Mankiw and Phil Swagel reflect on their unfair trashing by the Washington media machine in February 2004.... Well, it depends on what the meaning of "bias" and "malice" are. Journalists may have been "obligated to cover the political reaction and fallout," but they were also obligated--an obligation they failed to perform--to inform their readers. If it was indeed the case, as Mankiw and Swagel say (and I believe them) that the "reporters writing the stories universally acknowledged in private that the CEA Report was both correct and unremarkable on the substance," then the reporters had an obligation to inform their readers of that fact--a obligation they did not meet, yet easily could have met. Had they met the obligation, they would have better informed their readers. They would also have annoyed a few members of congress by making them look ill-informed...

• 2006-08-05: Bush's OIRA: I had always thought that the benefit-cost ratio from flame-retardant pajamas was high. The fact that Susan Dudley sees this as an example of government overreach.... As someone who believes in getting the benefit-cost analysis right, I find this... disturbing.... This kind of stuff--in a manner analogous to the b.s. perpetrated by Dan Quayle's "Council on Competitiveness" in the Bush I administration--degrades the power of the analytical tools we have to make government be the right size and do the right things. It makes it harder for people like me to argue that OIRA has an important role to play...

• 2006-08-03: Thomas Jefferson: American Sphinx: Andrew Olmsted is right to highly recommend the Jefferson biography American Sphinx

• 2006-08-03: The odds of economic meltdown: Forecasting recessions is a fool’s game. If there is enough solid economic information to make it appear highly likely that a recession is coming — that production, employment and consumer demand will actually fall — then it is highly likely that there already is a recession. Businesses are not stupid, and they don’t have to wait for economists.... So: Never say that a recession is coming. Say only that a recession is here, or that there might be a recession on the way. Which, in fact, is what I’m saying today.... A recession is not here.... I’m not going to violate my own rule by saying one is coming. But there is a good chance — for the first time since 2003 — that there might be a recession in progress six months from now. Why? Three factors: 1) A Federal Reserve that finds itself with less inflation-fighting credibility than it thought it had; 2) upward pressure on inflation from rising energy and, perhaps, import prices; and 3) millions of middle-class homeowners who for too long have treated their houses as gigantic ATMs.... In this situation it seems reasonable that the Federal Reserve should stop raising interest rates. Waiting to see what the interest-rate increases of the past couple of years will do to the economy would be a prudent strategy...

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