Previous month:
October 2016
Next month:
December 2016

November 2016

On the Excellences of Nate Silver and http://fivethirtyeight.com

Has Trump Already Lost Nevada FiveThirtyEight

This is the kind of story that I remember Nate Silver and his http://fivethirtyeight.com doing right over and over again in 2012 and 2008. Take the model--a very useful poll-aggregating model, even with what I regard as its unhelpful Bayesian frame--and use it as a springboard for a really smart, really high quality moderately-deep dive into some aspect of the situation that can be illuminated by the data.

Continue reading "On the Excellences of Nate Silver and http://fivethirtyeight.com" »


Ken Rogoff's Hooverismo...: Hoisted from the Archives from Three Years Ago

NewImage

Just what is Ken Rogoff's argument that the Cameron-Osborne-Clegg government in Great Britain was correct to hit the British economy over the head with the austerity hammer in the spring of 2010, anyway?

Simon Wren-Lewis opens: Ken Rogoff on UK austerity: "Ken Rogoff’s article… is a welcome return to sanity…

...Rogoff focuses on what was always the critical debate: was austerity necessary because financial markets might have stopped buying government debt…. As critical pieces go, you couldn’t have a friendlier one than this…. Rogoff agrees that it was a mistake to cut back on public sector investment…. He says that austerity critics “have some very solid points”…. His comment after putting the austerity critics’ case is “perhaps” or “maybe”…

But… But… But…

Continue reading "Ken Rogoff's Hooverismo...: Hoisted from the Archives from Three Years Ago" »


Must-Read: There are two big questions for the Federal Reserve:

  1. Why, if you want to tighten monetary policy, are you doing so first by raising interest rates rather than by shrinking the balance sheet?
  2. Why are you so sure that your models predicting inflation rising above 2% in 2018 are superior to market expectations which see inflation as remaining below 2% into the next decade?

The first remains a mystery to me. Nobody has yet set out for me how the Federal Reserve views the relationship among its four tools of interest on reserves, the Federal Funds rate, the size of its balance sheet, and forward guidance.

I think the answer to the second is: The Fed does not think that its forecasts are superior, but does think that if inflation gets above 2% it will be unable to nudge it down without triggering a recession. This belief that attempts to nudge inflation down will fail has turned 2% from a target to a ceiling. And the FT is not a happy camper:

FT: The Prevailing Case for Caution by Central Banks: "The US Federal Reserve signalled a high likelihood that interest rates will be raised when it meets next in December...

Continue reading " " »


Paul Ryan's Choice

Preview of Test

Paul Ryan had a choice: he could have shaped his future political career as the sensible Republican Speaker who had moderated Democratic policy initiatives and made Washington work. Or he could have shaped his future career as another raving loony nutcase who strove to the last to try to make Donald Trump President, get caught between the millstones of the Teabaggers to his right and deserting moderate ex-Republicans and the demographics to his left, and be ground to dust.

Paul Ryan has chosen:

Paul Ryan: The Choice Facing America: "Hillary Clinton... has offered no new ideas...

Continue reading "Paul Ryan's Choice" »


Why the Republicans have made and dragged us into their Trump hell. In America today, party affiliation reflects character:

Matthew Yglesias: @mattyglesias: "This is absolutely correct. But the corollary is GOP elected officials' failure of character has been massive."

Michael B Dougherty: [@michaelbd][]: "It’s boring to say it. But the best explanation of how people are going to vote next week is their party affiliation, not their character."

Those with character are or soon will be ex-Republicans.


People like Ari Fleischer are why the Republicans are in their self-made Trump hell--and have dragged the rest of us in here with them:

Kyle Cheney: @kyledcheney: "Five weeks ago, Ari was featured in a Trump press release announcing the "Bush Alumni Coalition" for Trump."

Katie Glueck: _@katieglueck: ".@arifleischer, one of the most prominent Bush admin alums to back Trump, has now decided he can't vote for him..."

Kaili Joy Gray: @KailiJoy: "TLDR Ari Fleischer: I'm not voting for president because I'm a coward who doesn't want to save this country"


Let Us Dispel with the Fictions That Trump Has Nothing to Do with Conservatism and That Trump's Republican Party Is Not an Existential Threat to America

Let us dispel with the fiction that today's Republican Party, with a primary-voting base that can nominate a Trump, and an establishment of office holders, donors, and apparatchiks that can fall in line behind him, is not an existential threat to America:

Brendan Nyhan: @BrendanNyhan: "Trump's pivot wasn't to the center...

...but to a new divide in American politics that would fundamentally change the party system if Republicans adopt it. Reminder: Not a word of this is conservative. Trying to shift axis of conflict to cosmopolitanism vs. race-inflected version of nationalism:

Preview of 1 Brendan Nyhan BrendanNyhan Twitter

Continue reading "Let Us Dispel with the Fictions That Trump Has Nothing to Do with Conservatism and That Trump's Republican Party Is Not an Existential Threat to America" »


Live from the Journamalists' and Republicans' Self-Made Trump Hell:

Julian Sanchez: @normative:

Xeni: @xeni


There is no silver lining from Donald Trump's winning the Republican primaries, or for 99% of the Republican Party's falling in line behind them. (Live from the Republicans' Self-Made Trump Hell)

If there were to be a silver lining, it is in the painful education it is providing--it is now impossible for Jews and Mormons to pretend that Republicans see them as "normal" people:

Kevin Cohen: @DudeMarmite:

Donald J. Trump: @realDonaldTrump:


Must-Read: I do not understand this at all: if "the supply side... is the real constraint", then we would not be seeing central banks and governments incapable of reaching their inflation targets. We would now be seeing inflation rates that had raced ahead of inflation targets and were still climbing:

Kenneth Rogoff: [The Fear Factor in Global Markets by][]: "Some say that governments did not do enough to stoke demand.... That is true... [but] not the whole story...

Continue reading "" »


Note to Self: Inadequate Musings on Elements of Rogoff's Debt Supercycle Hypothesis

Real Gross Domestic Product for European Union 28 countries © FRED St Louis Fed

It is, once again, time for me to think about Ken Rogoff's hypothesis: his claim that right now the world economy as a whole is depressed because we are in the down phase of a debt supercycle--dealing with a debt overhang.

I have never been able to make enough sense of Rogoff's perspective here to find it convincing.

I should, however, warn people that when I fail to see the point of something that Ken Rogoff has written, the odds are only one in four that I am right. The odds are three in four that he is right, and I have missed something important:

Continue reading "Note to Self: Inadequate Musings on Elements of Rogoff's Debt Supercycle Hypothesis" »


Trumpist Peter Thiel: Against Women's Suffrage--But Not so Much Against Apartheit

Preview of Test

Julie Lythcott-Haims: (91) Gotta say I wasn't surprised when tech...: "Gotta say I wasn't surprised when tech billionaire Peter Thiel endorsed Trump... (Live from the Republicans Self-Made Trump Hell)

...Peter and I were dormmates at Stanford freshman year, and while I barely knew him - we ran in different circles - his fiercely Libertarian views were often a topic of conversation among those of us living in Branner Hall. One day I heard a rumor that Peter defended apartheid (which was then still the law of the land in South Africa), which I found morally repugnant.

Continue reading "Trumpist Peter Thiel: Against Women's Suffrage--But Not so Much Against Apartheit" »


Claire McCaskill: 'Majority' Of Senate Republicans Won't Vote Trump: "I believe, and I'm basing this on some of the things my colleagues have said to me... (Live from the Republicans Self-Made Trump Hell)

...I believe the majority of the Republicans in the U.S. Senate are not going to vote for Donald Trump.... They know that they can work with Hillary Clinton and get some things done.... I believe that a great number of them will not be voting for Donald Trump, and a great number of them will in fact vote for Hillary Clinton...


Procrastinating on November 2, 2016

NewImage

Over at Equitable Growth: Must-Reads:

Continue reading "Procrastinating on November 2, 2016" »


Must-Read: There were at least six different Cold Wars. Respectively, the Cold War in:

  1. the United States,
  2. the North Atlantic,
  3. Eastern Europe,
  4. East Asia
  5. Africa, and
  6. Latin America.

The Cold War in the United States saw realistic yet idealistic centrist advocates of containment by and large, successfully but imperfectly, hold the line and win the three-front long twilight struggle against the adversary behind the iron curtain, against the naïve who did not understand the dangers of Stalinist and Maoist totalitarianism, and against the sinister who sought to win domestic political dominance via bad-faith arguments that the containerizes were cowards.

The Cold War in the North Atlantic saw the same struggle--save that the center and reasonable left were united against an unreasonable left that was, nevertheless, more dangerous because the GSFG on the far side of the Fulda Gap was closer.

The Cold War in Eastern Europe saw the rich and lazy of the Western alliance sacrifice two generations to suffer under the knout of the Kremlin, and then saw the rich and lazy refuse to pay the weregild they owed for their indolence.

The Cold War in East Asia saw the United States, tragically, failed to understand in Vietnam that its soft power was much stronger than its hard power; but otherwise rescue a third of a billion people from Mao's dungeons, communes, and work camps.

The Cold War in Africa saw a disaster of moral equivalence as the well-being of the continent who sacrificed for a generation as great powers competed to entrench identical-looking military dictatorships.

The Cold War in Latin America--well, I still want to know what Ronald Reagan told Jeanne Kirkpatrick and what Jeanne Kirkpatrick told her friends among the Argentine generals that made them think at the aid they had given d'Aubission and the contras gave them a check they could cash in to conquer two small islands, 1000 English-speaking shepherds, and 50,000 sheep.

Curiously enough, people's opinions today on Jonathan Chait of New York Magazine seem strangely determined by which Cold War they learned the most about when they were younger.

The past is not only not dead. It is not even past:

Patrick Iber (March 2016): @PatrickIber:

Jeet Heer @HeerJeet: @PatrickIber Would love to hear your thoughts on Chait!

Patrick Iber @PatrickIber: Oh, man, really? OK. Caught a bit of the conversation between you and @davidimarcus and that covered a lot. Here is the Chait essay everyone on the left hates today: http://nymag.com/daily/intelligencer/2016/03/reminder-liberalism-is-working-marxism-failed.html.

Continue reading "" »


Must-Read: As I have said before, I think Ann Pettifor here fundamentally misreads what is going on. I think she has fallen victim to a version of what Ernst Gellner cruelly but accurately called the "wrong address" neo-Marxist theory of history: that parcels that were supposed to be delivered to "class" were somehow delivered to "nation-state" or "ethnicity" instead. This theory has a codicil that if we close our eyes, Tap our heels together three times, wish really hard, and argue really eloquently then when we open our eyes we will see that it was always really about class, exploitation, and capitalism all along.

I am sorry: they have been waiting up on the hilltop for the millennium ever since 1848. It is time to try something very different.

Still: very well argued, and very much worth reading:

Ann Pettifor: Brexit and Its Consequences: "The ‘Brexit’ vote is but the latest manifestation of popular dissatisfaction with the utopian ideal of autonomous markets beyond the reach of regulatory democracy...

Continue reading "" »


Must-Read: No. It will not. It would have had to shift its inflation target up to 3% or 4%/year--and then met that target--in order to have what it takes to fight the next recession. Its failure to recognize that will in all likelihood be judged very harshly by future monetary historians:

Jared Bernstein: Will the Federal Reserve really have what it takes to fight off the next recession?: "Someone called me the other day all wound up because some market prognosticator convinced her that a U.S. recession was right around the corner...

Continue reading "" »


Must-Read: I have concluded that I have a strong disagreement with Ann Pettifor here. The BREXIT vote is not the result of a class- and social structure-based Polanyi process. Yes, people believe that the communities in which they live, the money they make, and the industries in which they work are important parts of their lives, that they deserve to have their expectations about those things satisfied, and that a society that fails to satisfy those expectations is not a good society. Yes, Polanyi was correct in his grand argument that turning land, labor, and finance into commodities subject to the wreakings of a market society would inevitably disappoint a great many of those expectations and so potentially causing massive backlash against a liberal or neoliberal order.

But what we are seeing now is not that backlash.

Consider Germany: the secret Keynesianism of an undervalued currency means the neoliberal economic order is just dandy for Germany: no "economic anxiety" here! Yet Angela Merkel is in as much trouble from her indigenous domestic Trumpists as is any centrist political leader in the North Atlantic.

The "economically anxious" did not drive the BREXIT vote. The nativists did:

Ann Pettifor: Brexit and Its Consequences: "The ‘Brexit’ vote is but the latest manifestation of popular dissatisfaction with the utopian ideal of autonomous markets beyond the reach of regulatory democracy...

Continue reading "" »


Must-Read: More on Nick Rowe's self-assumed Sisyphean task...

Look: the standard New Keynesian model is a version of the Prescott RBC model, minimally tweaked to deliver Old Keynesian qualitative behavior. Its purpose is to show that the methodological straitjacket demanded by Prescott has no implications other than making it much harder to fit the data.

It has no other proper purpose.

Nick Rowe's criticisms are correct:

Nick Rowe: New Keynesians Just Assume Full Employment: "Anyone with even an ounce of Old Keynesian blood... if they understood what the New Keynesians are doing, would be screaming blue murder that we are teaching this New Keynesian model to our students as the main macro model, and that central banks are using this model to set monetary policy...

Continue reading "" »


Best Business Books 2016: Economy

Best Business Books 2016 Economy

Over at Strategy+Business: Best Business Books 2016: Economy: The Crisis Is Over: Welcome to the New Crisis:

  • Robert J. Gordon: The Rise and Fall of American Growth: The U.S. Standard of Living since the Civil War (Princeton University Press, 2016) http://amzn.to/2eYBETT

  • Adair Turner: Between Debt and the Devil: Money, Credit, and Fixing Global Finance (Princeton University Press, 2015) http://amzn.to/2fahiHY

  • Jacob S. Hacker and Paul Pierson: American Amnesia: How the War on Government Led Us to Forget What Made America Prosper (Simon & Schuster, 2016) http://amzn.to/2ekuOdg

It’s been quite a decade for the global economy. The popping of the American housing bubble in 2006, the subprime mortgage financial crisis and its spread to Wall Street in 2007–08, the collapse of the world economy into the first global recession in decades in 2008–09, the knock-on eurozone financial crisis that began in 2010, and a slow, often faltering recovery — it’s been a tumultuous 10 years. And the period has produced a bumper crop of excellent economics books by academics, journalists, and practitioners who have attempted to grapple with the extraordinary macroeconomic disaster. They have examined why it happened, how to fix it, what it means, and how to avoid a recurrence of anything even remotely as hellish. Read MOAR at Strategy+Business


Understanding the Divide Between U.S. Democrats and Republicans Today

In 22 States a Wave of New Voting Restrictions Threatens to Shift Outcomes in Tight Races

The divide between Democrats and Republicans in the United States in 2016 is best conceptualized as a divide between those who think that an America in which black, brown, yellow, red, etc. people vote is great, and a place in which they have a great deal to gain; and those who think that an America in which black, brown, yellow, red, etc. people vote is no longer great, and is a place in which they have something--maybe not a great deal if they do not have much, but something--to lose.

Let me start with the very sharp Francis Wilkinson's argument that the ressentiment driving the Republican Party today is not class-based--is not the result of the economic disappointments and difficulties suffered by the white working class over the past generation--but rather extends all the way up the income ladder:

Continue reading "Understanding the Divide Between U.S. Democrats and Republicans Today" »


Reformicons!!!!

Scott Lemieux: The Reformicon Faction Speaks: "[Shorter Ross Douthat:] 'The important thing... is not that conservatives dislike the potential substantive policy outcomes of a Supreme Court with a median Democratic-appointed vote, it’s that liberals lack a sufficiently rigorous constitutional grand theory. Hence, the ends justify any means..." (Live from the Republicans' Self-Made Trump Hell)

Continue reading "Reformicons!!!!" »