Grasping Reality on TypePad, by Brad DeLong

Menzie Chinn: “Top US Economist Stephen Moore: Powell Should Resign”: "Sunday (12/23/2018)... Stephen Moore.... [Trump] 'was infuriated that the Fed, through very tight monetary policy, reversed the economic expansion. Donald Trump wanted to drain the swamp. Well, John, the Fed is the swamp. The big question now that’s been debated about is whether Donald Trump has the authority as president to replace the Federal Reserve Chairman. The law says he can replace the Federal Reserve Chairman for cause. I would say, well, the cause is that he’s wrecking our economy...

Ah, yes. There is a distinct asymmetry between economists who are Democrats and economists who are Republicans: Saddest of all were Ron McKinnon and Jagdish Bhagwati...: Paul Krugman: "Thinking about Trump's attempt to bully the Fed, I found myself remembering the open letter by a who's who of conservative economists (plus some 'economists') accusing Ben Bernanke of 'currency debasement'. Four years later, Bloomberg went to ask signatories why they were wrong; none of them—not one—would admit having been wrong..."

Douglas Holtz-Eakin, on November 24, 2010, trying to claim that the letter was not the partisan political attack that it was:

The letter... does not say... anything...that might be genuinely politicizing the Fed.... [T]he issue became “political” the moment that the QE II defenders asserted that it was a political attack. It is disappointing that when presented with a serious critique by academics, think tank analysts, and market participants the immediate response is “it must be a conservative attack on the Fed.” Note that implicitly this also carries the message: “I’d never consider that conservatives have ideas or that I might learn something from them.” So sad...

Immediately pre-undermined by Kevin Hassett the day before:

Paul Krugman: "Thinking about Trump's attempt to bully the Fed, I found myself remembering the open letter by a who's who of conservative economists (plus some 'economists') accusing Ben Bernanke of 'currency debasement' https://economics21.org/html/open-letter-ben-bernanke-287.html. Four years later, Bloomberg went to ask signatories why they were wrong; none of them—not one—would admit having been wrong https://www.bloomberg.com/news/articles/2014-10-02/fed-critics-say-10-letter-warning-inflation-still-right...

1. We Are with Her!:

2. No. The Fed Was Wrong to Raise Interest Rates

3. Comment of the Day: Ebenezer Scrooge: "If I were in an unusually forgiving mood, I would say that many on the list are financial economists, not macroeconomists. Non-Dunning-Krueger people are stupidest when opining on a field near, but not precisely with, their own expertise. (xkcd's 'Physicists' cartoon is particularly on point.) But I'm not in an unusually forgiving mood...

1. Brandi Neal: Illustrator Tyler Feder's ‘Work-From-Home Fashions’ Cartoon Is Relatable AF

2. I'm bad, and that's good. I will never be good, and that's not bad. There's no one I'd rather be than me...

3. Legal Information Institute: Sutherland: Humphrey's Executor: "When Congress provides for the appointment of officers whose functions, like those of the Federal Trade Commissioners, are of Legislative and judicial quality, rather than executive, and limits the grounds upon which they may be removed from office, the President has no constitutional power to remove them for reasons other than those so specified. Myers v. United States, 272 U.S. 52, limited, and expressions in that opinion in part disapproved...

4. Christina's Cucina: Cranachan, A Lovely Scottish Dessert

5. Google: Search operators you can use with Gmail

6. Richard Feynman: Fire Is Stored Sunshine

7. James Dean: Black and White Spanish Castle in Color Illusion

8. Since 2007 growth in the Global North has totally cratered. Thus if you run convergence regressions for which the past decade is a considerable share of the sample, you find unconditional convergence. Why? Because the Global North has had a horrendous business cycle. The Global North is was initially rich. And the computer is smart enough to use initial wealth as an indicator that cyclical performance since 2008 has been abysmal. But for any regressions starting before 1990 even when they include 2008-2018 (and much more so when they do not), the divergence up until 2008 is larger than the convergence induced by the post-2007 cratering of the Global North. The big fact for the entire period since World War II remains: Divergence, Bigtime—at least when observations are countries. It's not "everything you know about cross-country convergence is (now) wrong". Estimated β over the entire period since 1960 is still -0.2. It's "catastrophic policy failure in the Global North since 2008". (Of course, if your unit of observation is people rather than nations, that China & India have done very well and have 2.3 billion matters a lot): Dietz Vollrath: New Evidence on Convergence: "Dev Patel, Justin Sandefur, and Arvind Subramanian posted the other day some new evidence on cross-country convergence... poor countries grow faster than rich ones, on average... #economicgrowth #convergence #divergence

9. Sandy Darity (2016): The Latino Flight to Whiteness: "...Hispanics collectively are unlikely to share common cause with black Americans over a common racial identity.... If a coalition ever forms... it will not be on the basis of linked fate or fictive kinship anchored on race...

10. Paul Krugman: The Ghost of Trump Chaos Future: "None of Individual-1’s tantrums, unpresidential as they are, have much direct economic impact.... Even trade war might not do that much harm.... The really big economic risk was that Trump might break up Nafta, the North American trade agreement: U.S. manufacturing is so deeply integrated with production in Canada and Mexico that this would have been highly disruptive. But he settled for changing the agreement’s name while leaving its structure basically intact, and the remaining risks don’t seem that large.... [But] it’s not so much what Trump is doing, as what he might do in the future — or, perhaps even more important, what he might not do... #orangehairedbaboons

11. Starting from where we are now, I think that the best outcome is: (a) Trump tries to fire Powell, and (b) the Supreme Court immediately slaps him down 9-0, affirming Humphrey's Executor: Tim Duy: Markets In Crisis: Trump Has Damaged the Fed: "We are now well into uncharted and dangerous territory. It is not obvious that the government has the capacity to respond effectively to a financial crisis. That means that the Fed would have to shoulder an even greater role than in the last crisis. But now, the Fed may be less effective because of the damage inflicted by Trump...#orangehairedbaboons #monetaryopolicy

12. Jon Schwarz: The 10 Most Awful Articles in the Weekly Standard’s Short Life VI: "'Campus Disrupter' by Naomi Schaefer Riley, 2018. It’s hard to remember in the age of Trump, but conservatives used to be fixated on the fear that American universities were no longer teaching the classics of Western civilization. This article is one of several of this type published by the Weekly Standard. Whatever the merits of the Western classics, read this from Book II, Chapter XXXI of Machiavelli’s “Discourses on Livy.” Then think about the Iraq War and ask yourself whether William Kristol, who has a Harvard Ph.D. in government, has ever actually read these old books.... 'A Prince, therefore, ought to go slowly in undertaking an enterprise upon the representations of an exile, for most of the times he will be left either with shame or very grave injury'...#journamalism #orangehairedbaboons #moralresponsibility

13. Jon Schwarz: The 10 Most Awful Articles in the Weekly Standard’s Short Life VII: "'Are Syria’s Chemical Weapons Iraq’s Missing WMD? Obama’s Director of Intelligence Thought So' by Mark Hemingway, 2017: It was inevitable that someone on the right would be stupid enough to write this, and the Weekly Standard would be the magazine stupid enough to publish it.... The CIA spent $1 billion investigating Iraq’s WMD programs, and found no evidence this happened... #journamalism #orangehairedbaboons #moralresponsibility

I see this argument a bunch of places. Here it is from the sharp Felix Salmon. But I think it is wrong: Felix Salmon: Why the Fed Was Right to Hike: "When interest rates stay very low for an extended period of time, that has the effect of creating asset bubbles like the credit and housing boom of the mid-2000s.... If your stocks, bonds and real estate holdings were worth the same today, relative to GDP, that they were worth in 1995, they would have to crash in value by 33%, or $43 trillion. That's more than enough to trigger another financial crisis...

Comment of the Day: Ebenezer Scrooge: The Great American Tax Heist Turns One: No Longer Live at Project Syndicate: "If I were in an unusually forgiving mood, I would say that many on the list are financial economists, not macroeconomists. Non-Dunning-Krueger people are stupidest when opining on a field near, but not precisely with, their own expertise. (xkcd's "Physicists" cartoon is particularly on point.) But I'm not in an unusually forgiving mood. Many on the list are macroeconomists, and financial economics is just a little bit too close to '80's-style lawn economics to be taken seriously...

#shouldread #commentofhteday

Jon Schwarz: The 10 Most Awful Articles in the Weekly Standard’s Short Life VII: "'Are Syria’s Chemical Weapons Iraq’s Missing WMD? Obama’s Director of Intelligence Thought So' by Mark Hemingway, 2017: It was inevitable that someone on the right would be stupid enough to write this, and the Weekly Standard would be the magazine stupid enough to publish it.... The CIA spent $1 billion investigating Iraq’s WMD programs, and found no evidence this happened...

Jon Schwarz: The 10 Most Awful Articles in the Weekly Standard’s Short Life VI: "'Campus Disrupter' by Naomi Schaefer Riley, 2018. It’s hard to remember in the age of Trump, but conservatives used to be fixated on the fear that American universities were no longer teaching the classics of Western civilization. This article is one of several of this type published by the Weekly Standard. Whatever the merits of the Western classics, read this from Book II, Chapter XXXI of Machiavelli’s “Discourses on Livy.” Then think about the Iraq War and ask yourself whether William Kristol, who has a Harvard Ph.D. in government, has ever actually read these old books.... 'A Prince, therefore, ought to go slowly in undertaking an enterprise upon the representations of an exile, for most of the times he will be left either with shame or very grave injury'...

Starting from where we are now, I think that the best outcome is: (a) Trump tries to fire Powell, and (b) the Supreme Court immediately slaps him down 9-0, affirming Humphrey's Executor: Tim Duy: Markets In Crisis: Trump Has Damaged the Fed: "We are now well into uncharted and dangerous territory. It is not obvious that the government has the capacity to respond effectively to a financial crisis. That means that the Fed would have to shoulder an even greater role than in the last crisis. But now, the Fed may be less effective because of the damage inflicted by Trump...

Paul Krugman: The Ghost of Trump Chaos Future: "None of Individual-1’s tantrums, unpresidential as they are, have much direct economic impact.... Even trade war might not do that much harm.... The really big economic risk was that Trump might break up Nafta, the North American trade agreement: U.S. manufacturing is so deeply integrated with production in Canada and Mexico that this would have been highly disruptive. But he settled for changing the agreement’s name while leaving its structure basically intact, and the remaining risks don’t seem that large.... [But] it’s not so much what Trump is doing, as what he might do in the future — or, perhaps even more important, what he might not do...

Since 2007 growth in the Global North has totally cratered. Thus if you run convergence regressions for which the past decade is a considerable share of the sample, you find unconditional convergence. Why? Because the Global North has had a horrendous business cycle. The Global North is was initially rich. And the computer is smart enough to use initial wealth as an indicator that cyclical performance since 2008 has been abysmal. But for any regressions starting before 1990 even when they include 2008-2018 (and much more so when they do not), the divergence up until 2008 is larger than the convergence induced by the post-2007 cratering of the Global North. The big fact for the entire period since World War II remains: Divergence, Bigtime—at least when observations are countries. It's not "everything you know about cross-country convergence is (now) wrong". Estimated β over the entire period since 1960 is still -0.2. It's "catastrophic policy failure in the Global North since 2008". (Of course, if your unit of observation is people rather than nations, that China & India have done very well and have 2.3 billion matters a lot): Dietz Vollrath: New Evidence on Convergence: "Dev Patel, Justin Sandefur, and Arvind Subramanian posted the other day some new evidence on cross-country convergence... poor countries grow faster than rich ones, on average...

Looking Forward to Four Two More Years During Which Most if Not All of America's Potential for Human Progress Is Likely to Be Wasted:

• With each passing day Donald Trump looks more and more like Silvio Berlusconi
• Bunga-bunga governance
• With a number of unlikely and unforeseen disasters
• And a major drag on the country
  • Except in states where his policies are neutralized.

Nevertheless, remember: WE ARE WITH HER!

1. Note to Self: America's Equities Are Worth 20% Less than They Were Worth Three Months Ago...

2. The Great American Tax Heist Turns One: No Longer Live at Project Syndicate: Let me hammer this point again: the failure of any of Barro, Bhagwati, Boskin, Calomiris, Cogan, Holtz-Eakin, Hubbard, Lazear, Lindsey, Mankiw, Rosen, Shultz, Taylor, and a hundred-odd others to write about—or even express curiosity about why—their confident predictions of a year ago that the Trump-McConnell-Ryan corporate tax cut would generate a huge investment boom—that silence speaks very loudly about the genre in which they viewed their forecasts back at the time...

3. For the Weekend: Mary J Blige: Real Love

4. Weekend Watching: Barry Eichengreen: The Economic Consequences of Mr. Trump

1. Jon Schwarz: The 10 Most Awful Articles in the Weekly Standard’s Short Life V: "'Breaking the Climate Spell' by Rupert Darwell, 2017. The Weekly Standard has published dozens upon dozens of articles ridiculing anyone who believes climate change is real and a serious problem. But perhaps their best work on the subject is this.... 'Trump is breaking the spell of inevitability of the transition to renewable energy', Darwell writes excitedly. 'The impression of irresistible momentum has been one of the most potent tools in enforcing compliance with the climate catechism. Like socialism, the clean-energy transition will fail because it doesn’t work'. Don’t get mad, snowflakes, that’s just science... #journamalism #orangehairedbaboons #moralresponsibility

2. If the Fed had had a 4%/year inflation target for the past decade, odds are that right now the Federal Reserve would be in a situation without great workers. But it hasn't, and it isn't: Mohamed A. El-Erian: Fed Rate Hike: Powell Tries to Balance Growth and Volatility: "Fed’s No-Win.... Powell increasingly must make the best of factors mostly outside his control, increasing fears of a policy mistake... #monetarypolicy

3. Narayana Kocherlakota: The Fed’s Risky Plan to Boost Unemployment - Bloomberg: "The Fed is planning to raise its interest-rate target above its long-run level of around 2.8 percent. We can actually see this happening in the Fed’s rate forecasts for the next three years.... The Fed is planning to eliminate over a million jobs — and put millions more at risk — in order to avoid a tiny deviation from its inflation target. I’ll leave it for readers to judge whether this is a desirable gamble... #monetarypolicy

4. It was a huge mistake for the Federal Reserve to nearly invest the yield curve in 2007. In fact, I cannot think of any reason why a central bank with inflation not well above target would ever seek or tolerate such a near-inverted yield curve: Joe Rennison: Yield Curve Hits New Cycle Low in Wake of Fed Meeting: "The difference between two- and 10-year Treasury yields, a common permutation of the so-called yield curve, sank below 10 basis points for only the second time this year, and hit 9.87 basis points in morning trading on Thursday. It’s the lowest level for the measure since June 2007...

5. Popehat: Alan Dershowitz Is Lying To You: "Trading on his reputation as a legal titan, he's offering normative views (what the law should be) as descriptive views (what the law is.)... Alan Dershowitz, in describing the Special Counsel investigation, is posing as a subject-matter expert but acting like an advocate—and a dishonest one... #orengehairedbabooons

6. Josh Chafetz: "Never tweet is looking better and better as life advice: "'The entire party supports Trump, which is why we are considering canceling a party primary to make sure he doesn't lose it.' https://www.washingtonexaminer.com/news/campaigns/south-carolina-gop-could-scrap-2020-primary-to-protect-trump. Special shout-out to all the people who thought... [this] was a sincere statement of my own views. Keep doing what you do. You make this website the wondrous place. Never tweet is looking better and better as life advice... #journamalism #orangehairedbaboons

7. Matthew Yglesias: Paul Ryan’s Farewell Address: Transcript Shows Nonsense on Poverty: "Leaving Congress with a legacy of empty words.... A perfect capstone to Ryan’s career: Rich people get tax cuts; poor people get pious words and misleading rhetoric.... It’s important... to correctly understand the hierarchy of Ryan’s priorities. Ideas to help the poor, like the EITC, need to take a back seat to deficit concerns. Tax cuts for the rich, however, are worth doing even when they increase the deficit. And when it comes time to cut the deficit, the best way to do it is to take away poor people’s health insurance. Under the circumstances, America’s struggling families should feel lucky that Ryan never really got around to implementing his vision for their future... #orangehairedbaboons

8. The Fed ought to pursue a symmetric 4%/year inflation target. It cannot even successfully communicate and pursue a 2%/year symmetric inflation target. And Tim Duy is an unhappy camper: Tim Duy: Fed Hikes Rates, Market Tumbles: "The implication here is that there is substantial downside risk to the economy. So much that the Fed is reducing its forecasts across the board. So much so that the Fed anticipates they will fall short of their inflation target yet again. And yet they continue to hike rates and signal more rate hikes to come. It is an unnecessarily and explicit hawkish message that is an artifact of a communications strategy that only made sense when you could reasonably promise zero rates for an extended period... #monetarypolicy

9. Antonio Fatas: How low is low for Chinese GDP growth? ~ Antonio Fatas on the Global Economy: "The deceleration of GDP growth rates in China can be seen as a natural evolution of the economy as it follows its convergence path, in particular if we use recent decades in South Korea as a benchmark...

10. Barry Ritholtz: Transcript: Bethany McLean (Enron & Fracking): "I was naïve then. I never would’ve guessed that a company could be so riddled with overstatements and outright fraud as Enron was.... The piece was skeptical... pointed out problems in Enron’s business... lack of cash flow... burgeoning debt load... nobody understood how this company actually made its money. But if you would ask me at that time that I—would be bankrupt in six months or nine months, I would have said 'What? No'...

11. James Montier: The Late Cycle Lament: The Dual Economy, Minsky Moments, and Other Concerns: "Clinical studies have found one group of people who perceive reality the way it truly is. These are the clinically depressed, which is of course why they are clinically depressed! This leaves us with an unenviable choice–either be happy and deluded, or sad and accurate...

12. Karl Smith is correct: to solve the "skills gap", create an economy in which companies have an incentive to solve the "skills gap": Karl Smith: @karlbykarlsmith: "Meh. Turn demand up to 11, watch gap solve itself..." Noah Smith: @Noahpinion: "YESSSSS..." : Joe Nocera: How to Turn a Community College into an Economic Engine: "Bridging the skills gap starts with a conversation between community colleges and employers... #labormarkets #equitablegrowth

13. Ernie Tedeschi: Unemployment Looks Like 2000 Again. But Wage Growth Doesn’t: "Trying to solve an economic mystery: This is, to put it mildly, a mystery. If workers are as scarce as the unemployment rate and many other measures suggest, employers should be raising wages to compete for them...#labormarkets #equitablegrowth

14. Binyamin Appelbaum : "As the old saying goes, there are no efficient market hypothesists in foxholes. They gave a guy a Nobel Prize for writing that financial markets are efficient. I'll never find that not funny." *Noah Smith: "EMH is the best investing advice you or most people will ever receive."... *Brad DeLong: EMH is a reasonable theory of short run returns. It is a lousy theory of values. And it is an even lousy her theory of price movements. Fans and co’s inability to distinguish between those three at all was what convinced me they were morons... #twitter #economicsgonewrong #finance

15. WTF?!?!? Paul Krugman: "This is amazing.: It's as if Mnuchin was trying to create a panic over something nobody was worried about until this release. Alternatively, Mnuchin could just be an idiot. Not just me... #finance #orangehairedbaboons

16. And a happy Feast of Sunreturn to you too: Brendan Greeley: There's No Process Left at the White House: "Literally on the night before Christmas, after determining that a thing that is not a problem is not a problem, the Secretary of the Treasury of the United States of America is convening the President's Working Group on Financial Markets, an organisation that doesn't really exist. It doesn't have an office, or legal authority, or even employees. There's an executive order from 1988 that says the president can tell several department and agency heads to get together and talk... Whatever the working group used to periodically do, it's been replaced since the financial crisis by the formal work of the Financial Stability Oversight Council. Mr Mnuchin could just as easily call on the order of the garter to take up arms and defend the realm. He's throwing glitter on a football. This isn't how any of this is done... #oranghairedbaboons

Note to Self: America's equities are worth 20% less than they were worth three months ago. Needless to say, the only change in fundamentals between then and now is... that now investors in the stock market are no longer as optimistic or risk tolerant. Risk-free rates going forward are the same. Expected future productivity levels are the same. The curvature of individuals' utility functions as their wealth increase is the same...

And a happy Feast of Sunreturn to you too: Brendan Greeley: There's No Process Left at the White House: "Literally on the night before Christmas, after determining that a thing that is not a problem is not a problem, the Secretary of the Treasury of the United States of America is convening the President's Working Group on Financial Markets, an organisation that doesn't really exist. It doesn't have an office, or legal authority, or even employees. There's an executive order from 1988 that says the president can tell several department and agency heads to get together and talk... Whatever the working group used to periodically do, it's been replaced since the financial crisis by the formal work of the Financial Stability Oversight Council. Mr Mnuchin could just as easily call on the order of the garter to take up arms and defend the realm. He's throwing glitter on a football. This isn't how any of this is done...

WTF?!?!?

Paul Krugman: "This is amazing.: It's as if Mnuchin was trying to create a panic over something nobody was worried about until this release. Alternatively, Mnuchin could just be an idiot. Not just me...

Let me hammer this point again: the failure of any of Barro, Bhagwati, Boskin, Calomiris, Cogan, Holtz-Eakin, Hubbard, Lazear, Lindsey, Mankiw, Rosen, Shultz, Taylor, and a hundred-odd others to write about—or even express curiosity about why—their confident predictions of a year ago that the Trump-McConnell-Ryan corporate tax cut would generate a huge investment boom—that silence speaks very loudly about the genre in which they viewed their forecasts back at the time:

A year ago there were a substantial number of economists who were assuring us that the Trump-McConnell-Ryan corporate tax cut was not just a giveaway to rich stockholders but would provide a sustained and substantial boost to investment in America that would boost productivity by:

• Barro, Boskin, Cogan, Holtz-Eakin, Hubbard, Lindsey, Rosen, Shultz, and Taylor said "3% to 4%... if achieved over a decade, the... increase in... annual... growth would be about 0.4%..."

• Hubbard, Lindsay, Holtz-Eakin, and a fourth (who is either Lazear or Mankiw) said, according to Sen Susan Collins (R-ME), by enough to raise tax collections enough to keep the deficit from going up by much.

• Miller, Calomiris, Bhagwati, and a hundred-odd others said by enough to raise tax collections enough to keep the deficit from going up at all—and boost annual growth by 0.4%.

• Barro, endorsed by Boskin, doubling down and claiming not 4% but 7% as the long-run boost to productivity and prosperity—and boost annual growth by 0.4%.

And Kevin Hassett and Greg Mankiw told us that these productivity gains would primarily boost wages not profits—because the relevant model was not one in which the tax cut raised after tax profit and interest rates but rather one in which foreigners would flood America with savings, lending to and investing in this country on a large scale to finance the bulk of this surge and investment.

The EMH account of mean-reversion in asset values is "unforecastable, unmotivated, unexplained time-varying required rates of return". The EMH account of large swing in asset values is "rapid, unforecastable, unmotivated, unexplained shifts in time-varying required rates of return". It's not a theory: it's an academic grift: Comment of the Day; Charles Steindel: Binyamin Appelbaum: "As the old saying goes, there are no efficient market hypothesists in foxholes. They gave a guy a Nobel Prize for writing that financial markets are efficient. I'll never find that not funny: "That's the point. (Fluctuations in) returns for all practical purposes (any set investment horizon, particularly shorter ones) aren't predictable. But levels of prices can be way out of whack. The resolution is that we just don't know when sanity will be restored. Another way to say it is that over a sufficiently long horizon the average level of prices is about equal to the value assumed by efficient markets. Just means prices fluctuate (a lot!) around that efficient value...

Mary J Blige: Real Love:

Binyamin Appelbaum: "As the old saying goes, there are no efficient market hypothesists in foxholes. They gave a guy a Nobel Prize for writing that financial markets are efficient. I'll never find that not funny." Noah Smith: "EMH is the best investing advice you or most people will ever receive."... Brad DeLong: EMH is a reasonable theory of short run returns. It is a lousy theory of values. And it is an even lousy her theory of price movements. Fans and co’s inability to distinguish between those three at all was what convinced me they were morons...

Ernie Tedeschi: Unemployment Looks Like 2000 Again. But Wage Growth Doesn’t: "Trying to solve an economic mystery: This is, to put it mildly, a mystery. If workers are as scarce as the unemployment rate and many other measures suggest, employers should be raising wages to compete for them...

Karl Smith is correct: to solve the "skills gap", create an economy in which companies have an incentive to solve the "skills gap": Karl Smith: @karlbykarlsmith: "Meh. Turn demand up to 11, watch gap solve itself..." Noah Smith: @Noahpinion: "YESSSSS..." : Joe Nocera: How to Turn a Community College into an Economic Engine: "Bridging the skills gap starts with a conversation between community colleges and employers...

Barry Eichengreen: The Economic Consequences of Mr. Trump:

The Fed ought to pursue a symmetric 4%/year inflation target. It cannot even successfully communicate and pursue a 2%/year symmetric inflation target. And Tim Duy is an unhappy camper: Tim Duy: Fed Hikes Rates, Market Tumbles: "The implication here is that there is substantial downside risk to the economy. So much that the Fed is reducing its forecasts across the board. So much so that the Fed anticipates they will fall short of their inflation target yet again. And yet they continue to hike rates and signal more rate hikes to come. It is an unnecessarily and explicit hawkish message that is an artifact of a communications strategy that only made sense when you could reasonably promise zero rates for an extended period...

Josh Chafetz: "Never tweet is looking better and better as life advice: "'The entire party supports Trump, which is why we are considering canceling a party primary to make sure he doesn't lose it.' https://www.washingtonexaminer.com/news/campaigns/south-carolina-gop-could-scrap-2020-primary-to-protect-trump. Special shout-out to all the people who thought... [this] was a sincere statement of my own views. Keep doing what you do. You make this website the wondrous place. Never tweet is looking better and better as life advice...

Popehat: Alan Dershowitz Is Lying To You: "Trading on his reputation as a legal titan, he's offering normative views (what the law should be) as descriptive views (what the law is.)... Alan Dershowitz, in describing the Special Counsel investigation, is posing as a subject-matter expert but acting like an advocate—and a dishonest one...

It was a huge mistake for the Federal Reserve to nearly invert the yield curve in 2007. In fact, I cannot think of any reason why a central bank with inflation not well above target would ever seek or tolerate such a near-inverted yield curve: Joe Rennison: Yield Curve Hits New Cycle Low in Wake of Fed Meeting: "The difference between two- and 10-year Treasury yields, a common permutation of the so-called yield curve, sank below 10 basis points for only the second time this year, and hit 9.87 basis points in morning trading on Thursday. It’s the lowest level for the measure since June 2007...

Narayana Kocherlakota: The Fed’s Risky Plan to Boost Unemployment: "The Fed is planning to raise its interest-rate target above its long-run level of around 2.8 percent. We can actually see this happening in the Fed’s rate forecasts for the next three years.... The Fed is planning to eliminate over a million jobs — and put millions more at risk — in order to avoid a tiny deviation from its inflation target. I’ll leave it for readers to judge whether this is a desirable gamble...

If the Fed had had a 4%/year inflation target for the past decade, odds are that right now the Federal Reserve would be in a situation without great worries. But it hasn't, and it isn't: Mohamed A. El-Erian: Fed Rate Hike: Powell Tries to Balance Growth and Volatility: "Fed’s No-Win.... Powell increasingly must make the best of factors mostly outside his control, increasing fears of a policy mistake...

Jon Schwarz: The 10 Most Awful Articles in the Weekly Standard’s Short Life V: "'Breaking the Climate Spell' by Rupert Darwell, 2017. The Weekly Standard has published dozens upon dozens of articles ridiculing anyone who believes climate change is real and a serious problem. But perhaps their best work on the subject is this.... 'Trump is breaking the spell of inevitability of the transition to renewable energy', Darwell writes excitedly. 'The impression of irresistible momentum has been one of the most potent tools in enforcing compliance with the climate catechism. Like socialism, the clean-energy transition will fail because it doesn’t work'. Don’t get mad, snowflakes, that’s just science...

1. Jon Schwarz: The 10 Most Awful Articles in the Weekly Standard’s Short Life II: "'What to Do About Iraq' by Robert Kagan and William Kristol, 2002... 'If too many months go by without a decision to move against Saddam, the risks to the United States may increase exponentially.... We know... that Mohamed Atta, the ringleader of September 11, went out of his way to meet with an Iraqi intelligence official a few months before he flew a plane into the World Trade Center.... There is no debate about the facts'... #journamalism #orangehairedbaboons #moralresponsibility

2. Jon Schwarz: The 10 Most Awful Articles in the Weekly Standard’s Short Life III: "'Case Closed' by Stephen F. Hayes, 2004... Hayes spent years trying to prove that Saddam Hussein and Osama bin Laden were collaborators. 'Case Closed' is a perfect example of his work, in that Hayes successfully demonstrates two things: (1) Iraq had fewer ties to al Qaeda than any other Gulf state, and (2) he is the world’s most gullible human being. Here Hayes faithfully scribbled down the pensées of Douglas J. Feith, then Undersecretary of Defense, and known at the Pentagon as 'the fucking stupidest guy on the face of the earth'... #journamalism #orangehairedbaboons #moralresponsibility

3. Jon Schwarz: The 10 Most Awful Articles in the Weekly Standard’s Short Life IV: "'The Bumpy Road to Democracy in Iraq” by Fred Barnes, 2004. 'Operation Iraqi Freedom has gained impressive momentum', Barnes told us when he ventured to Baghdad a year after the Iraq War began. But like so many of history’s pith-helmeted white people, Barnes was concerned by the recalcitrance of the dusky natives. Iraqis, wrote Barnes, 'need an attitude adjustment.... Iraqis are difficult to deal with. They’re sullen and suspicious and conspiracy-minded.... Papers obsess on the subject of brutal treatment of innocent Iraqis by American soldiers.' But Barnes knew Iraqis were being treated well by U.S. troops, because the troops were super-nice to him. Barnes concluded by saying that he wanted to see Iraqis demonstrate 'an outbreak of gratitude for the greatest act of benevolence one country has ever done for another'... #journamalism #orangehairedbaboons #moralresponsibility

4. Paul Krugman (January 26, 2010): Obama Liquidates Himself: "A spending freeze? That’s the brilliant response of the Obama team to their first serious political setback? It’s appalling on every level... bad economics, depressing demand when the economy is still suffering from mass unemployment... bad long-run fiscal policy... a betrayal of everything Obama’s supporters thought they were working for. Just like that, Obama has embraced and validated the Republican world-view.... This looks like pure disaster... and

5. Suresh Naidu: Imperfect Labor Markets Are a Hot Topic: "We are a long way from "concentration affects wages" and onto the much more precise "outside options affect wages" and it is awesome. Sydnee [Caldwell]... looks at variation in outside options given by hiring at firms that employ your ex-coworkers...

6. Here at Equitable Growth, our Kate Bahn responds to Redwood Girl in Chico's puzzlement about why she is not seeing opportunity in the low-unemployment economy: @RedwoodGirl: On Twitter: "Does the U6 number also include self-employed folks like myself who need more work to afford to live?..." @LipstickEcon: "It does not, since it only includes unemployed workers plus workers who aren't looking for a job but say they would take one if offered plus workers who are part-time wage and salary workers but would rather be full-time. Under-employed self-employed workers aren't counted here. This is part of why economists like Blanchflower and Bell think U.S. statistics do not capture under-employment accurately, since it doesn't include people who wish they worked more (or fewer) hours but can't find a job that is the right fit of hours https://www.nber.org/papers/w24927...

7. Lawrence Mishel: Further Evidence That the Tax Cuts Have Not Led to Widespread Bonuses, Wage or Compensation Growth: "Following the bill’s passage, a number of corporations made conveniently-timed announcements that their workers would be getting raises or bonuses.... Newly released Bureau of Labor Statistics’ Employer Costs for Employee Compensation data allow us to examine nonproduction bonuses in the first two quarters of 2018...

8. Sarah Jane Glynn: Gender wage inequality: "Across countries, women’s labor force participation rates and per capita income have a U-shaped relationship...

9. Rich Clarida: Data Dependence and U.S. Monetary Policy: "As the economy has moved to a neighborhood consistent with the Fed's dual-mandate objectives, risks have become more symmetric and less skewed to the downside than when the current rate cycle began three years ago. Raising rates too quickly could unnecessarily shorten the economic expansion, while moving too slowly could result in rising inflation and inflation expectations down the road that could be costly to reverse, as well as potentially pose financial stability risks. Although the real federal funds rate today is just below the range of longer-run estimates presented in the September SEP, it is much closer to the vicinity of r-star than it was when the FOMC started to remove accommodation in December 2015. How close is a matter of judgment, and there is a range of views on the FOMC...

10. Sue and Tim worry that the organizational disaggregation produced by this Age of supply chains is harming the development of our communities of engineering practice. Annalee Saxenian's Regional Advantage: Culture and Competition in Silicon Valley and Route 128 is now 20 years old, and yet somehow I do not think we know as much about this as we should: Susan Helper and Timothy Krueger (2016): Supply Chains and Equitable Growth: "Deregulation, market failures, and corporate policies have led to the rise of supply chains comprised of small, weak firms that innovate less and pay less. These problems in supply chains threaten U.S. competitiveness by undermining innovation, and also contribute to the erosion of U.S. workers’ standard of living. A different kind of outsourcing is possible...

11. Gary Clyde Hufbauer and Jeffrey J. Schott: Under the Hood, the USMCA Is a Downgrade for North America: "Trump... called the North American Free Trade Agreement (NAFTA) the worst trade deal ever made. Trade negotiators have branded its intended replacement... a 'modernized' improvement.The upgrades draw heavily from the Trump-abandoned Trans-Pacific Partnership.... The deal also includes costly new regulations and requirements that discourage investment, especially in the auto sector... higher prices for cars at a time when auto sales are flagging. Ford and GM are already laying off workers.... The USMCA limits trade more than promoting it...

12. Paul Krugman: How Democrats Can Deliver on Health Care: "What did the campaigns that led to a blue wave talk about? Above all, health care, which featured in more than half of Democrats’ ads. Which raises the question: Now that Democrats have had their big House victory and a lot of success in state-level races, can they do anything to deliver on their key campaign issue?Yes, they can...

13. Dan W.: "Alan Dershowitz is trying to figure out why Netflix keeps recommending Woody Allen movies for him after it started reading his private messages...

Dan W.: "Alan Dershowitz is trying to figure out why Netflix keeps recommending Woody Allen movies for him after it started reading his private messages...

Paul Krugman: How Democrats Can Deliver on Health Care: "What did the campaigns that led to a blue wave talk about? Above all, health care, which featured in more than half of Democrats’ ads. Which raises the question: Now that Democrats have had their big House victory and a lot of success in state-level races, can they do anything to deliver on their key campaign issue?Yes, they can...

Gary Clyde Hufbauer and Jeffrey J. Schott: Under the Hood, the USMCA Is a Downgrade for North America: "Trump... called the North American Free Trade Agreement (NAFTA) the worst trade deal ever made. Trade negotiators have branded its intended replacement... a 'modernized' improvement.The upgrades draw heavily from the Trump-abandoned Trans-Pacific Partnership.... The deal also includes costly new regulations and requirements that discourage investment, especially in the auto sector... higher prices for cars at a time when auto sales are flagging. Ford and GM are already laying off workers.... The USMCA limits trade more than promoting it...

Sue and Tim worry that the organizational disaggregation produced by this Age of supply chains is harming the development of our communities of engineering practice. Annalee Saxenian's Regional Advantage: Culture and Competition in Silicon Valley and Route 128 is now 20 years old, and yet somehow I do not think we know as much about this as we should: Susan Helper and Timothy Krueger (2016): Supply Chains and Equitable Growth: "Deregulation, market failures, and corporate policies have led to the rise of supply chains comprised of small, weak firms that innovate less and pay less. These problems in supply chains threaten U.S. competitiveness by undermining innovation, and also contribute to the erosion of U.S. workers’ standard of living. A different kind of outsourcing is possible...

Rich Clarida: Data Dependence and U.S. Monetary Policy: "As the economy has moved to a neighborhood consistent with the Fed's dual-mandate objectives, risks have become more symmetric and less skewed to the downside than when the current rate cycle began three years ago. Raising rates too quickly could unnecessarily shorten the economic expansion, while moving too slowly could result in rising inflation and inflation expectations down the road that could be costly to reverse, as well as potentially pose financial stability risks. Although the real federal funds rate today is just below the range of longer-run estimates presented in the September SEP, it is much closer to the vicinity of r-star than it was when the FOMC started to remove accommodation in December 2015. How close is a matter of judgment, and there is a range of views on the FOMC...

Sarah Jane Glynn: Gender wage inequality: "Across countries, women’s labor force participation rates and per capita income have a U-shaped relationship...

Lawrence Mishel: Further Evidence That the Tax Cuts Have Not Led to Widespread Bonuses, Wage or Compensation Growth: "Following the bill’s passage, a number of corporations made conveniently-timed announcements that their workers would be getting raises or bonuses.... Newly released Bureau of Labor Statistics’ Employer Costs for Employee Compensation data allow us to examine nonproduction bonuses in the first two quarters of 2018...

Here at Equitable Growth, our Kate Bahn responds to Redwood Girl in Chico's puzzlement about why she is not seeing opportunity in the low-unemployment economy: @RedwoodGirl: On Twitter: "Does the U6 number also include self-employed folks like myself who need more work to afford to live?..." @LipstickEcon: "It does not, since it only includes unemployed workers plus workers who aren't looking for a job but say they would take one if offered plus workers who are part-time wage and salary workers but would rather be full-time. Under-employed self-employed workers aren't counted here. This is part of why economists like Blanchflower and Bell think U.S. statistics do not capture under-employment accurately, since it doesn't include people who wish they worked more (or fewer) hours but can't find a job that is the right fit of hours https://www.nber.org/papers/w24927...

Suresh Naidu: Imperfect Labor Markets Are a Hot Topic: "We are a long way from "concentration affects wages" and onto the much more precise "outside options affect wages" and it is awesome. Sydnee [Caldwell]... looks at variation in outside options given by hiring at firms that employ your ex-coworkers...

Paul Krugman (January 26, 2010): Obama Liquidates Himself: "A spending freeze? That’s the brilliant response of the Obama team to their first serious political setback? It’s appalling on every level... bad economics, depressing demand when the economy is still suffering from mass unemployment... bad long-run fiscal policy... a betrayal of everything Obama’s supporters thought they were working for. Just like that, Obama has embraced and validated the Republican world-view.... This looks like pure disaster...

Jon Schwarz: The 10 Most Awful Articles in the Weekly Standard’s Short Life IV: "'The Bumpy Road to Democracy in Iraq” by Fred Barnes, 2004. 'Operation Iraqi Freedom has gained impressive momentum', Barnes told us when he ventured to Baghdad a year after the Iraq War began. But like so many of history’s pith-helmeted white people, Barnes was concerned by the recalcitrance of the dusky natives. Iraqis, wrote Barnes, 'need an attitude adjustment.... Iraqis are difficult to deal with. They’re sullen and suspicious and conspiracy-minded.... Papers obsess on the subject of brutal treatment of innocent Iraqis by American soldiers.' But Barnes knew Iraqis were being treated well by U.S. troops, because the troops were super-nice to him. Barnes concluded by saying that he wanted to see Iraqis demonstrate 'an outbreak of gratitude for the greatest act of benevolence one country has ever done for another'...

#shouldread #journamalism #orangehairedbaboons #moralresponsibility

Jon Schwarz: The 10 Most Awful Articles in the Weekly Standard’s Short Life III: "'Case Closed' by Stephen F. Hayes, 2004... Hayes spent years trying to prove that Saddam Hussein and Osama bin Laden were collaborators. 'Case Closed' is a perfect example of his work, in that Hayes successfully demonstrates two things: (1) Iraq had fewer ties to al Qaeda than any other Gulf state, and (2) he is the world’s most gullible human being. Here Hayes faithfully scribbled down the pensées of Douglas J. Feith, then Undersecretary of Defense, and known at the Pentagon as 'the fucking stupidest guy on the face of the earth'...

#shouldread #journamalism #orangehairedbaboons #moralresponsibility

Jon Schwarz: The 10 Most Awful Articles in the Weekly Standard’s Short Life II: "'What to Do About Iraq' by Robert Kagan and William Kristol, 2002... 'If too many months go by without a decision to move against Saddam, the risks to the United States may increase exponentially.... We know... that Mohamed Atta, the ringleader of September 11, went out of his way to meet with an Iraqi intelligence official a few months before he flew a plane into the World Trade Center.... There is no debate about the facts'...

#shouldread #journamalism #orangehairedbaboons #moralresponsibility

1. Hoisted from the Archives: The Democrats’ Deficit Line in the Sand: From ten years ago.... A chain is only as strong as its weakest link, and it seems pointless to work to strengthen the Democratic links of the chain of fiscal responsibility when the Republican links are not just weak but absent...

2. Hoisted from the Archives: An Unrealistic, Impractical, Utopian Plan for Dealing with the Health Care Opportunity of 2007: Think of it as a utopia—and think of it as a utopia coming from a guy who is not a real health economist but has an undeserved reputation because he was good at translating the economese spoken by real health economists like David Cutler, Sherry Glied, Ken Thorpe, Len Nichols, et cetera in a way that made it intelligible to senior Bentsen aides like Marina Weiss and Michael Levy...

3. Comment of the Day: Charles Steindel: Weekend Reading: Paul Krugman (2011): Mr Keynes and the Moderns: When I was in grad school in the '70s it was tacitly taught that the 'General' in the title was essentially Keynes' marketing—what we think of as 'Keynesian' economics was really a special, not general, case.... 2008 taught me otherwise.... Zero rigidities means something like absolutely continuous wage and price setting. That is the extraordinarily "special" case, not the existence of normal human behavior...

4. Weekend Reading: David Brooks (2003): The Collapse of the Dream Palaces: It still amazes me that David Brooks has a paying job...

1. Jon Schwarz: The 10 Most Awful Articles in the Weekly Standard’s Short Life I: "'The Collapse of the Dream Palaces' by David Brooks, 2003. The top four places on this list rightfully belong to the Weekly Standard’s voluble case for, and defense of, the Iraq War. And this David Brooks article is unquestionably the most horrifying of them all.... What you may find is that it makes you feel as though a sweaty, middle-aged man is pointing a gun at you and fervently explaining that people like you who wear red shirts are human scum and you, all of you, are about to get what’s coming to you, at last. Then you look down and notice you are not wearing a red shirt, but the man with the gun is. When you’re finished reading the piece, remember that this was published just five months before the New York Times hired David Brooks as an op-ed writer. In other words, the Times saw this gibbering, so disconnected from reality it is functionally insane, and thought: This is exactly who we want explaining the world to our readers... #journamalism #orangehairedbaboons #moralresponsibility

2. Driftglass99 (2010): David F. Brooks Lying:

3. Claudio Borio, Mathias Drehmann and Dora Xia: The Financial Cycle and Recession Risk: "Financial cycle booms can end in crises and, even if they do not, they tend to weaken growth. Given their slow build-up, do they convey information about recession risk? We compare the predictive performance of different financial cycle proxies with that of the term spread - a popular recession indicator. In contrast to much of the literature, our analysis covers a large sample of advanced and emerging market economies. We find that, in general, financial cycle measures provide valuable information and tend to outperform the term spread...

4. Wikipedia: Colorado College

5. The problem is that British politics is already poisoned by a "leave" campaign carried out by lying liars, and it will be further poisoned by the disruption that Brexit will generate, and by the natural tendency to blame future disruption that Brexit did not generate on Brexit: Robert Skidelsky: The Continuing Agony of Brexit: "It is playing with fire to seek a second vote on the ground that you did not like the result of the first one. And there’s one further issue to bear in mind: Leavers detest the EU more intensely than Remainers love it. If the Remainers win a second vote, a passionate resentment will sour British politics for years. So we must hope that May gets her amicable divorce when Parliament finally votes on it in January... #orangehairedbaboons #brexit #neofascism

6. Interesting euphemisms in this twitter thread from the very sharp but strangely blinkered Geoff Kabaservice... Kabaservice sees conservative political energy back in the age of Nixon-Ford-Carter-Reagan coming from "liberal overreach and failure" on "crime, foreign policy, and the economy" plus "outraged public opinion" because of liberals' policies on "busing, affirmative action, welfare, and feminism". Jonathan Chait parries that the energy for conservatives' 1980s victories was racial—that it was no accident that Reagan started his campaign in Philadelphia, MS, and there did not say what he did not say—that "conservatism was always and everywhere thoroughly racist, morally bankrupt, and populated with hypocrites and authoritarians". Kabaservice's response? That he rejects Chait's formulation and "prefer[s Charles Sykes's]... 'recessive gene' theory". But the conservative whom Sykes holds up as "marginaliz[ing] those uglier voices on the right" is... William F. Buckley. William Fracking "The White community in the South is entitled to take such measures as are necessary to prevail, politically and culturally, in areas in which it does not predominate numerically" Buckley. Buckley does not say that measures then used to maintain white supremacy like lynching Blacks who try to vote and shooting civil rights activists in the head are "necessary to prevail". But he does not say that they are not necessary either. There was a pre-Barry Goldwater pre-James Buchanan smaller-government more-entrepreneurship Republicanism that did not try to harness racial animosity to the task of curbing the New Deal, and did not think that the right to discriminate against Black people was an important right that needed to be safeguarded from an overreaching federal government. Kabaservice needs to reach back to a Teddy Roosevelt who was eager to invite a Booker T. Washington to dinner at the White House—not to a Ronald Reagan who takes his lines and directions from Lee Atwater and company—if he wants to see clearly what needs to be done: Geoff Kabaservice: "How should the left think about the right? The past week brought 4 examples of different approaches. Start with George Packer's historical overview.... Packer's... correct that the actions of the GOP-controlled state legislatures in MI & WI are textbook political corruption and a disgrace to US democracy, as well as further confirmation that Scott Walker has always been toxic. He's also correct that the GOP acts this way because it's the product of an ideological movement rather than traditional coalition-based politics...

7. Jonathan Chait (2012): How the GOP Destroyed its Moderates: "Moderates... do continue to exist in the Republican Party. They merely do not exercise power.... They provide off-the-record quotations to reporters, expressing unease over whichever radical turn the party has taken at any given moment. They can be found in Washington and elsewhere rolling their eyes at their colleagues. The odd figure with nothing left to lose—say, a senator who has lost a primary challenge—may even deliver a forceful assault on the party’s uncompromising direction. For the most part, though, Republican moderation is a kind of secret creed, a freemasonry of the right. It lacks institutions that might legitimize it, or even a language to express itself...

8. Martha Wells: The Future of Work: Compulsory: "IT’S NOT LIKE I haven’t thought about killing the humans since I hacked my governor module. But then I started exploring the company servers and discovered hundreds of hours of downloadable entertainment media, and I figured, what’s the hurry? I can always kill the humans after the next series ends. Even the humans think about killing the humans, especially here. I hate mines, and mining, and humans who work in mining, and of all the stupid mines I can remember, I hate this stupid mine the most. But the humans hate it more...

9. Anna Cieslak and Annette Vissing-Jorgensen: The Economics of the Fed Put: "Low stock market returns predict accommodating monetary policy by the Federal Reserve.... a more powerful predictor of subsequent federal funds target rate changes than almost all macroeconomic news releases.... Stock returns cause Fed policy...

10. Jacob Heilbrunn: ‘The Weekly Standard’: A Record of Failed Regime Change: "For most neocons, however, journalism has never been more than a Leninist means to an end—to form an intellectual vanguard.... Kristol, Podhoretz, Boot, and others belong to a second generation of neocons that never drifted away from the Democrats toward the Republican Party. Instead, they were right from the beginning.... Many seem simply politically adrift, like Russian exiles stranded in Paris after the Bolshevik revolution pining for the ancien régime.  A conference attended by about a hundred people last week at the Niskanen Center, a small think tank located near Capitol Hill, offered a timely reminder of their losses...

11. Gillian Brunet: Stimulus on the Home Front: The State-Level Effects of WWII Spending: "WWII is viewed as the quintessential example of fiscal stimulus and exerts an outsized influence on fiscal multiplier estimates, but the wartime economy was highly unusual...

12. The very sharp Simon Wren-Lewis lives in a Manichean world: good academic economists, bad "City" economists, and bad journalists who do not know or perhaps do not care to highlight the difference. The problem is that here in America we have not a lot of but we do have influential academic economists who manage to neutralize the voice of those who know what they are talking about: Simon Wren-Lewis: Experts and Elites: "The view of the overwhelming majority academic economists that Brexit will be harmful is going to be ignored by many.... The neoliberal right has had an interest in discrediting economic expertise, and replacing academic economists with City economists in positions of influence.... Right wing think tanks like the IEA are particularly useful in this respect.... Just look at how the media began to treat climate change as controversial...

13. John Authers: Ferreting Out Three Fed Rate Scenarios: "Jerome Powell and his colleagues at the Federal Reserve are about to give us the last big market event of the year, with what will almost certainly be a fourth interest-rate rise, followed by what should be a fascinating press conference to explain it. Barring a major (and unpleasant) surprise, the central bank chairman will suggest that rates won’t be rising all that fast next year.... Meanwhile, the agonies for banks in the euro zone grow ever worse. The new reason for their problems, which have happened even though the European Central Bank, unlike the Fed, is still engaged in QE, seems to be a shortage of dollars. This is partly because of the Fed...

From ten years ago: J. Bradford DeLong: The Democrats’ Line in the Sand: "A dilemma for Democratic deficit-hawk economists trying to determine what good economic policies would be should Barack Obama become president.... A chain is only as strong as its weakest link, and it seems pointless to work to strengthen the Democratic links of the chain of fiscal responsibility when the Republican links are not just weak but absent...

Of historical interest only: Hoisted from the Archives: An Unrealistic, Impractical, Utopian Plan for Dealing with the Health Care Opportunity: First, it's definitely not a plan, and it's certainly not a proposal for the current or any forseeable future policy and political environment. Think of it as a utopia—and think of it as a utopia coming from a guy who is not a real health economist but has an undeserved reputation because he was good at translating the economese spoken by real health economists like David Cutler, Sherry Glied, Ken Thorpe, Len Nichols, et cetera in a way that made it intelligible to senior Bentsen aides like Marina Weiss and Michael Levy.

So here it is:

The very sharp Simon Wren-Lewis lives in a Manichean world: good academic economists, bad "City" economists, and bad journalists who do not know or perhaps do not care to highlight the difference. The problem is that here in America we have not a lot of but we do have influential academic economists who manage to neutralize the voice of those who know what they are talking about: Simon Wren-Lewis: Experts and Elites: "The view of the overwhelming majority academic economists that Brexit will be harmful is going to be ignored by many.... The neoliberal right has had an interest in discrediting economic expertise, and replacing academic economists with City economists in positions of influence.... Right wing think tanks like the IEA are particularly useful in this respect.... Just look at how the media began to treat climate change as controversial...

Gillian Brunet: Stimulus on the Home Front: The State-Level Effects of WWII Spending: "WWII is viewed as the quintessential example of fiscal stimulus and exerts an outsized influence on fiscal multiplier estimates, but the wartime economy was highly unusual...

Jacob Heilbrunn: ‘The Weekly Standard’: A Record of Failed Regime Change: "For most neocons, however, journalism has never been more than a Leninist means to an end—to form an intellectual vanguard.... Kristol, Podhoretz, Boot, and others belong to a second generation of neocons that never drifted away from the Democrats toward the Republican Party. Instead, they were right from the beginning.... Many seem simply politically adrift, like Russian exiles stranded in Paris after the Bolshevik revolution pining for the ancien régime.  A conference attended by about a hundred people last week at the Niskanen Center, a small think tank located near Capitol Hill, offered a timely reminder of their losses...