"It is easy to confuse what is with what ought to be, especially when what is has worked out in your favor."
- Tyrion Lannister

"Lannister. Baratheon. Stark. Tyrell. They're all just spokes on a wheel. This one's on top, then that's ones on top and on and on it spins, crushing those on the ground. I'm not going to stop the wheel. I'm going to break the wheel."

- Daenerys Targaryen

"The Lord of Light wants his enemies burned. The Drowned God wants them drowned. Why are all the gods such vicious cunts? Where's the God of Tits and Wine?"

- Tyrion Lannister

"The common people pray for rain, healthy children, and a summer that never ends. It is no matter to them if the high lords play their game of thrones, so long as they are left in peace. They never are."

- Jorah Mormont

"These bad people are what I'm good at. Out talking them. Out thinking them."

- Tyrion Lannister

"What happened? I think fundamentals were trumped by mechanics and, to a lesser extent, by demographics."

- Michael Barone

"If you want to know what God thinks of money, just look at the people he gave it to."
- Dorothy Parker

Friday, August 12, 2011

Sometimes Inflation is Not Evil by Floyd Norris
The chaos that has engulfed financial markets, with new rumors of European bank failures, arose as it became apparent that recovery was unlikely until something was done to write down bad debts, whether American mortgages or Greek government loans, or to make them good again by raising asset values and thus increasing the ability to repay.
And yet the anti-inflation warriors continue to fight old battles. There were three dissents from regional Fed presidents when the Fed promised this week to hold down rates for at least two more years. The European Central Bank has been raising rates on the belief that it must vigorously fight any sign of inflation.
In the future, central banks will have to realize that debt-financed expansions in asset prices can be a threat. For now, it would be nice if they would at least recognize that major deflations in asset prices can be much more important than the relatively small gains in commodities that show up in the Consumer Price Index.

Wednesday, August 10, 2011

Steamroller Ben by Doug Henwood
Comment on today’s Federal Reserve policy decision today, which among other things, included the extremely unusual statement that they’re likely to leave interest rates close to 0 through mid-2013, from Ricardo Perli of ISI, a very mainstream Wall Street research operation:
For the first time in a long time, there were three dissents – Fisher (Dallas), Kocherlakota (Minneapolis), and Plosser (Philadelphia).  Up to now, FOMC chairmen strived to avoid more than two dissents.  The fact that this long-standing practice was disregarded means that Bernanke is becoming more determined to push through what in his view are the appropriate policy moves.  We would expect the influence of the hawkish minority to diminish as a result.
Bernanke is very concerned about economic weakness and wants the Fed to do everything it can to stimulate a return to growth. The release is full of unusual mentions of their "dual mandate," meaning boosting employment as well as keeping down inflation. This is not William Greider’s Fed.
John Burns and Alan Cowell on the UK riots.
Mr. Cameron had hesitated for two days to abandon his summer break at a villa in Tuscany as the looting and arson spread across London, and then to other cities, from its start in the Tottenham area in northeast London after Mark Duggan, 29, who was said by the police to have been a local gang member, was shot and killed by an officer last week.
On Tuesday, a police oversight body said that forensic tests had shown that both shots fired at the scene had come from a police officer’s Heckler and Koch submachine gun, and that the tests had so far shown no evidence that the loaded Italian-made BBM pistol carried by Mr. Duggan had been fired in the confrontation.
For the moment, though, the circumstances of Mr. Duggan’s death appeared to be remote from the forces driving the riots, at least in the assessment of many of those who are most familiar with the neighborhoods affected. Community organizers, neighborhood residents and members of Parliament who represent the districts, including several who, like Mr. Duggan, were of Afro-Caribbean descent, have said, overwhelmingly, that his death, while providing the original trigger for the violence, has had little or nothing to do with the looting and arson. 

The Keynes-Hicks Model by Krugman

FRED Excels! by Krugman
Half-measures from the Fed
For starters, the Fed could take modest steps, like shifting its portfolio toward bonds with longer maturities, which would help to keep long-term rates low and nudge investors into riskier investments. It could reduce the interest it pays on the banks’ huge reserves or even tax the reserves to try to encourage more lending. It could also resume buying Treasuries or other securities to provide additional monetary stimulus. A more aggressive strategy would be letting inflation rise above the Fed’s comfort level of 2 percent or so to, say, 4 percent. That could help the economy by easing the repayment of debt.

Monday, August 08, 2011

Team Debbie 

Meredith Woerner recaps True Blood.
Gateways to Geekery: Ween
state of the union by Krugman
The truth is that as far as the straight economics goes, America’s long-run fiscal problems shouldn’t be all that hard to fix. It’s true that an aging population and rising health care costs will, under current policies, push spending up faster than tax receipts. But the United States has far higher health costs than any other advanced country, and very low taxes by international standards. If we could move even part way toward international norms on both these fronts, our budget problems would be solved.
So why can’t we do that? Because we have a powerful political movement in this country that screamed “death panels” in the face of modest efforts to use Medicare funds more effectively, and preferred to risk financial catastrophe rather than agree to even a penny in additional revenues.
The real question facing America, even in purely fiscal terms, isn’t whether we’ll trim a trillion here or a trillion there from deficits. It is whether the extremists now blocking any kind of responsible policy can be defeated and marginalized.

Sunday, August 07, 2011

Fun with Thomas Friedman by Dean Baker