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June 2018

Dan Nexon wrongly still thinks the media's crafting its headlines and first paragraphs so that they do not offend the Trumpists is a mistake on the part of the Washington Post, the New York Times, and so forth. It is not a mistake: it is a strategy: Dan Nexon: "The same media that carefully tracks Trump’s constant lying & gaslighting still crafts headlines that repeat his tweets and statements. Discussions of Trump all need to begin from—and be guided by—the proposition that everything he says is false until proven otherwise."

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The Last Financial Crisis of the Nineteenth Century: Hoisted from the Grasping Reality Archives from Ten Years Ago

Il Quarto Stato

The slides from my “Macroeconomic Situation and Outlook” talk as it stood ten years ago, in June 2008. The subtitle and the conceit of the talk was that what we were then going through was an eruption into the twenty-first century of the kind of financial crisis that was typical of the pre-Great Depression period.

What did I get right and what did I miss? The main thing I missed was that I misunderstood what Bernanke, Paulson, and Geithner were doing. I thought that they were following the now century and a half-old Bagehot rule from Lombard Street for how to handle a financial crisis:

  1. Lend freely
  2. On collateral that is good in normal tomes
  3. At a penalty rate

Most of the talk is therefore devoted to explaining what the Bagehot Rule is, why it is a good thing, and how it is all likely to work out.

But when Lehman hit the wall in the fall they refused to follow (2) in evaluating its collateral, and so they did not do (1). And they never showed any interest in doing (3). And so here we are...

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Ten Years Ago on Grasping Reality: June 10-14, 2008

Topkapi Palace

Neither Louis Uchitelle or Tom Hamburger would ever tell me whose bidding they were doing in writing hit pieces on Jason Furman, or why they thought this was the way they should be doing their jobs:

  • Louis Uchitelle on Jason Furman: The odd thing is that Jason Furman has a very strong and very wide reputation as an honest broker and as a consensus builder, which is exactly the kind of thing that you want in the job--as long as you think that truth is on your side, and thus that you are more likely than not to win honest, substantive, evidence-based debates. It's not right to say that Jason Furman was closely associated with Robert Rubin without also saying that he was closely associated with Joe Stiglitz...

  • Why Oh Why Can't We Have a Better Press Corps? (Tom Hamburger of the Los Angeles Times Edition): "On June 11, 2008, you wrote: "Obama's selection of Jason Furman as economic advisor is criticized: [Jason Furman] was also quoted in a transcript from a CNBC interview in 2006 as suggesting openness to changes in Social Security that might include private accounts and benefit cuts. The approach he described sounded similar in some ways to that proposed at the time by President Bush."... Jason Furman was not a friend, advocate, or supporter of President Bush's Social Security privatization plan back in 2005, but instead one of its most strident and effective opponents...

  • We Get an Email from Tom Hamburger...: Apropos of the astonishing and false claim in this morning's LA Times that Jason Furman is some sort of a crypto-Bushie with views on Social Security matters "similar" to those Bush proposed in 2005, I write to the reporter involved, Tom Hamburger... He writes back. Mr. Hamburger's bottom line appears to be that his leaving a lot of readers with a false view of Jason Furman's position on Social Security is OK because that was "not the point of this story..."

  • Greg Anrig on Tom Hamburger on Jason Furman: Apropos of LA Times reporter Tom Hamburger's gross mispresentation of Jason Furman, Greg Anrig comments: "It wasn't a matter of 'space'—Hamburger simply got the facts totally wrong. If he had left out his errors about Social Security, he would have had more space. Jason may have been the single most effective wonk in the victory against SS privatization..."

Other things:

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Twitter Has Crap Aggregation Tools: June 13, 2018

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I think Michael Berube overstates his case—as his character "His" notes at the end: Slate and #Slatepitch are still a thing. But they are much less of a thing. And everyone who writes for Slate or who used to write for the "never predictably Reaganite" Even the Liberal New Republic bears the mark on their reputation: Michael Berube: R.I.P., Liberal Contrarianism: "Before #Slatepitch became a punchline, Slate (and others) really did thrive on a certain kind of anti-liberalism. It’s dead now—well, almost...

...ILLE: Here’s your reliable index: the death of the liberal contrarian.

HIC: Come again?...

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The Nevilles, the Percys, and the Murdochs...

Wars of the roses Google Search

Back in fifteenth century England the landholdings of nearly all nobles were parcelized—manors and such fairly widely scattered. That made it difficult for individual nobles to raise a large force from their affinity, or even to develop a strong affinity. There were, however two exceptions: the nobles watching the Welsh and watching the Scottish border had been allowed—encouraged—by the king to develop large contiguous landholdings. Hence the Percys: Earls of Northumberland. Hence the Beauchamp-Nevilles: Earls of Warwick. These "ouer myghtye subgettes", in the words of Lord Chief Justice John Fortescue's Laws and Governance of England, could and did raise affinities and could and did shake the realm. Richard Neville the 16th Earl of Warwick was, after all, called "Warwick the Kingmaker".

The extremely shrewd Charlie Stross wonders at the presslords of the right as our modern-day "overmighty subjects":

Charlie Stross: The Pivot: "Brexit requires no introduction.... Nor... the main UK media players... pro-Brexit to the extent of attacking national institutions seen as being soft on Brexit...

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MOAR Links for June 12, 2018

  1. Petra Moser: Further extending long-lived US copyrights will do no good. : No benefits from extensions. And if extensions ever get applied to science, there'd be huge welfare loss, especially for people at less affluent institutions...

  2. Paul Krugman: We've basically crossed the line into treason now -- and a whole party is acquiescing: Benjamin Wittes: "I have a whole lot to say about how the chairman of the House Intelligence Committee and the President of the United States teamed up to out an intelligence source who aided our country in a properly predicated counterintelligence investigation against a hostile foreign power..."

  3. Jen Kirby: Laurel/Yanny: the science behind the audio trick, explained: "It comes down to how our brains pick up on, and interpret, different frequencies..."

  4. Yes, there are first-class New York-style bagels in Greater San Francisco: Bagel Baron: "2701 Eighth St Berkeley, CA 94710..."

  5. Lois McMaster Bujold: The Flowers of Vashnoi goes live

  6. Sangria

  7. Captain Mardens

  8. British governance appears at least as bad today as American governance even though they are not helmed by an unstable and corrupt kleptocrat: Simon Wren-Lewis: Delusions of National Power: "Inevitable that the UK would stay in the Customs Union (CU) and the Single Market (SM)...

  9. Claremont Canyon Conservancy: Map/Trails

  10. Eduard Bernstein: (1895): Cromwell and Communism

Monday Smackdown: Stupidest Man Alive Donald Luskin Retains His Crown!

I know I promised only one Smackdown a week—or, at least, only one non-DeLong Smackdown a week. But...

I put this in the tickler file three years ago, to see whether OPEC could raise prices and oil would go to $30 a barrel and whether lower oil prices would in fact trigger an oil patch and global superzoom, as "there will be no limits to growth in the global economy in a few years when... oil... becomes, for all practical purposes, free... the lower oil prices go, the more money the frackers can make...". Look today, and what do we see: 75 dollars a barrel. Not: 30. Nor: "for all practical purposes, free":

Crude Oil Prices Brent Europe FRED St Louis Fed

And the promised oil patch superboom—"the lower oil prices go, the more money the frackers can make..."? Employment in Oklahoma City relative to the nation as a whole:

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Monday Smackdown: Finally We Find What Makes Clive Crook Stop Being an Anti-Anti-Trump Poseur!


A correspondent who wishes me ill writes and asks me what I think of Niall Ferguson and Clive Crook these days. I won't rise to the bait for Niall, but I will note that trade issues have made Clive Crook forget that back in November 2016 he decided to swim with what he saw as the tide carrying him to his niche as an anti-anti-Trump poseur. The talk about how we must be measured in our response—must listen carefully and respectfully to those with "the intelligible and legitimate opinions of that large minority" who will, after they have been marinated in Fox News, applaud Trump's actions—is gone, 100% gone:

Clive Crook: Congress Must Blunt Trump’s Assault on Trade: "What Trump did last week matters...

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The big problem China will face in a decade is this: an aging near-absolute monarch who does not dare dismount is itself a huge source of instability.

The problem is worse than the standard historical pattern that imperial succession has never delivered more than five good emperors in a row. The problem is the aging of an emperor. Before modern medicine one could hope that the time of chaos between when the grip on the reins of the old emperor loosened and the grip of the new emperor tightened would be short. But in the age of modern medicine that is certainly not the way to bet.

Thus monarchy looks no more attractive than demagoguery today.

We can help to build or restore or remember our “republican remedy for the diseases most incident to republican government“. An autocracy faced with the succession and the dotage problems does not have this option. Once they abandon collective aristocratic leadership in order to manage the succession problem, I see little possibility of a solution.

And this brings me to Martin Wolf. China's current trajectory is not designed to generate durable political stability: Martin Wolf: How the west should judge the claim sof a rising China: “Chinese political stability is fragile...

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Reviewing Richard Baldwin's _The Great Convergence...

Preview of Reviewing Richard Baldwin s The Great Convergence

My review of the superb and extremely thought provoking: Richard Baldwin (2016): The Great Convergence: Information Technology and the New Globalization Reviewed for Nature The iron-hulled oceangoing steamships and submarine telegraph cables of the second half of the 19th century set off a first wave of economic globalization. The intercontinental transport of both staple commodities and people became extraordinarily cheap. The container of the second half of the 20th century made the transport of everything non-spoilable—and some things spoilable—essentially free. It set off a second wave of economic globalization.

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Necessities become things that are beneath our notice. Conveniences become necessities. Luxuries become conveniences. And then we invent new luxuries—like feeling put upon yesterday because a new 2 terabyte backup disk cost as much as $70 and took 8 hours to get delivered to my door, so I couldn't get all of my backups done last night: Jeff Bezos: Divine Discontent: Disruption’s Antidote: "One thing I love about customers is that they are divinely discontent...

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After the Next Nuclear Fire...: Hoisted from 2007

Nuclear explosion Google Search

Hoisted from the Archives: Rather more urgent than I thought it would be 27 months ago: After the Next Nuclear Fire...: In the early 1980s the U.S. NSA—or perhaps it was the Defense Department—loved to play games with Russian air defense. They would send probe planes in from the Pacific to fly over Siberia. And they would watch and listen: Where were the gaps in Russian sensor coverage? How far could U.S. planes penetrate before being spotted? What were Russian command-and-control procedures to intercept intruders? And so on, and so forth.

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June 9, 2008: Ten Years Ago on Grasping Reality

  • Washington Post Death Spiral Watch (Fred Hiatt Edition): Why oh why can't we have a better press corps? Fred Hiatt tells a lot of lies himself as he cherrypicks the Rockefeller report. Duncan Black notes:: "the headline given... is 'Blaming Bush for Iraq Is Too Easy.' And that's true! I also blame Fred Hiatt!" Fred Hiatt would prefer it if we didn't say that Bush and Cheney lied. He says that there is "no question" that Bush and Cheney "spoke with too much certainty" at times—but, he says, that's not lying...

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Twitter Is Crap at Aggregation Tools: June 9, 2018

  • Dan Davies: "The phrase 'virtue signalling', uttered with a sneer, is always both (a) the sound of a guilty conscience and (b) the leper's bell of the modern online asshole..."

  • Matthew Yglesias: "Democratic Party governance ended up underdelivering in part because of policies that failed in technical design terms. Gotta do better next time!: Something that frustrates me about the current moment is that Team Obama owned the “bloodless technocrat” brand so well that it’s obscured the existence of very real technical failures of 2009-2010 Democratic governance. That, in turn, tends to lead people on the left who are critical of Obama-era policymaking to be completely blind to the very real importance of making your policies technically sound. There were little technical failures like so many TIGER grants for useless streetcar projects and big significant failures like crafting a stimulus bill that didn’t consider the possibility that the recession was worse than early data indicated. A fair amount of the problems were more with congressional Democrats than with the administration, but either way Democratic Party governances ended up underdelivering in part because of policies that failed in technical design terms. Gotta do better next time!..." Joseph Britt: _"How well do you think the public understood what Obama's stimulus was intended to do? I think that was a pretty significant failure right there. For such noted communicator, Obama didn't communicate very well..."

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Note to Self: I wouldn't call Thrush-Watkins etc. a "mistake" by the New York Times as much as a strategic decision. I always thought that Harris, VandeHei, Allen & co. worked for their sources first, their bosses second, and their readers not at all—and that's how thy shaped Politico. Hiring a politics team from Politico got them what they paid for. And that is what the New York Times wanted to do...

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Teddy Roosevelt (2007): "We Have Traveled Far...": Weekend Reading

Ptowntedd jpg 1 280×834 pixels

How to make proper use of the good parts of an at best ambiguous past: Teddy Roosevelt: "There is nothing easier than to belittle the great men of the past by dwelling only on the points where they come short of the universally recognized standards of the present...

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Rick Petree: "He was more cogent, more linear: I suspect this is, again, a sign of mental deterioration. There have been many instances of him not knowing the words to our most common songs. I recall a Pentagon ceremony where he gave up singing entirely & waved his hands in time with the music. It's not at all funny...

...You don't unlearn the words to the national anthem. If you knew them in high school (a military academy, in this case), you know them for the rest of your life, unless your brain starts to deteriorate.... I agree on his basic level of intelligence. Never stellar. However, having been around him a bit over the years in NYC, he's way off his own mark of 10-20 years ago. He was more cogent, more linear. He could follow a discussion, make multi-part points over a period of minutes. He had greater concentration and focus. His vocabulary was notably larger. IMO, he's no better than 50-60% of what he was 20 years ago..."


June 8, 2008: Ten Years Ago on Grasping Reality

  • Making the Case for Globalization: I suspect that we are, right now, seeing the peak of anti-globalization economic agitation in the United States. The fall in the real value of the dollar against European currencies and its coming real value fall against Asian currencies mean that export and import-competing sectors are likely to be expanding their employment rapidly over the next several years. It would be a pity if a look back deranged our policy going forward, especially if it is because trade is perceived to be a problem by politicians even though it has ceased to be perceived as a problem by voters...

  • What Does John McCain Think?: Digby writes: "A reader sent me this link to the Cunningrealist from May 5 and I was surprised by what it contained. Were you aware that John McCain wrote the forward to an edition of The Best And the Brightest? And were you aware that it said this?: 'It was a shameful thing to ask men to suffer and die, to persevere through god-awful afflictions and heartache, to endure the dehumanizing experiences that are unavoidable in combat, for a cause that the country wouldn’t support over time and that our leaders so wrongly believed could be achieved at a smaller cost than our enemy was prepared to make us pay. No other national endeavor requires as much unshakable resolve as war. If the nation and the government lack that resolve, it is criminal to expect men in the field to carry it alone.' Will anyone ask him about this?..."

  • Shut Up and Calculate!: Eliezer Yudkowsky wonders aloud just what the Born probabilities in quantum mechanics are. It is, I think, an object lesson that nobody should try to understand quantum mechanics: it simply cannot be done...

Well, since capitalism delivers higher real wages than any other system we know about, how can you oppose it root-and-branch except by somehow claiming it is fruit from a poisoned tree?: Matthew Yglesias: "I would like to read an intellectual history of how exactly “slavery was a boon to economic development” became the leftist position, and “actually, slavery is a retrograde anti-growth system as well as an immoral one” (Marx’s view!) became the neoliberal sellout view:"

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Twitter Is Crap on Aggregation Tools

June 5, 2008: Ten Years Ago on Grasping Reality

  • Biomedical Literary Criticism Ask the Internet "Age of Innocence" Blogging: "Edith Wharton's 1920 The Age of Innocence: My brother wonders if perhaps Edith Wharton meant us to understand that Count Olenski had tertiary syphilis a la Friedrich Neitzsche and Lord Randolph Spencer-Churchill—hat he was not just your standard garden-variety European aristocrat libertine unfaithful cold penniless mentally-unbalanced domineering husband who married you for your money alone and from whom you fled back to New York—and that for Madame Ellen Olenska to return to him in Europe is to consign herself to marital rape, likely infection, and ultimate deep insanity herself. Is this a reading that Edith Wharton intended? A part of the book that literary critics lost with the discovery of penicillin? Or is it a reading that I am tempted to impose on the book simply because I have lived in the age of AIDS? And, in either case, does this reading deepen or trivialize the book?...

  • Delong Smackdown Watch: Why Cap-and-Trade Beats a Carbon Tax: Felix Salmon: "Brad DeLong reckons that the relative merits of carbon taxes and cap-and-trade 'roughly offset'.... 'Cap-and-trade runs the risk that the cap will be set at the wrong place and so the price will go damagingly above its social optimum value. Carbon taxes run the risk that the tax will be set too low and so the quantity emitted will go damagingly above its social optimum value.' These two considerations do not offset each other. The second risk is high and real; the first risk is low and politically much more unrealistic..."

  • The Meaning of Box 722: Rick Perlstein is a national treasure. Buy his Nixonland. Buy it now...

  • Answers to Easy Questions (Why Oh Why Can't We Have a Better Press Corps New York Times Pitiful Embarrassment Department): Marty Lederman asks:" Today's New York Times story about the arraignment of Khalid Shaikh Mohammed concludes with this sentence: 'C.I.A. officials have said that Mr. Mohammed was one of three detainees who were subjected to the simulated-drowning technique known as waterboarding during interrogation, which is described by some as torture.' If the Attorney General insisted that the sun rises in the west, would the New York Times treat it as a contested question?" Answer: Yes. The New York Times death spiral continue...