"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

Saturday, September 03, 2011

Krugman: the beatings will continue until morale improves
When the recession officially ended, [government] spending was rising at an annual rate of around $60 billion; now it’s declining at an annual rate of $60 billion. That difference is around 1 percent of GDP, and maybe 1.5 percent once you take the multiplier into account. That makes the turn toward austerity a major factor in our growth slowdown.
Debt, Deleveraging and the Liquidity Trap

Friday, September 02, 2011

LIBOR

What's in a number?

Team Debbie

Not wonkish, but too-much-information-ish ... I ran across a bad-ass ex-girlfriend at the local Starbucks this morning. Hadn't seen her in years. She sort of reminds me of Debbie Pelt and vicey versey. Since we broke up, she had gone to rehab and hooked up with one of her bad-ass ex-boyfriends that she used to date before we had met. He's her age whereas I'm 8 years older.

On True Blood, Alcide seems more interested in Sookie and helping other people like Sam, than in Debbie. With me, I'm too interested in the things I blog about, like True Blood, politics and economics, things which didn't interest my ex. Plus she ran with the pack who work bars and restaurants and stay out all night, while I had a 9-5 office job.
DeLong on Gauss (wonkish)
Johann Carl Friedrich Gauss said that when you are analyzing variability, you should measure it by squaring deviations from the average and then averaging those squared deviations.
Jonathan Chait on FDR and Reagan's re-elections.

... That caveat aside, this sounds like pure delusion. Roosevelt in 1936 and Reagan in 1984 had high unemployment, yes. But they also had very rapid economic growth. Here's the picture in 1936:


And 1984:


These were situations where the public could discern rapid improvement from a bad situation. No such thing is likely to be the case next year. 1936 and 1984 are not good lessons. They're counter-examples, like learning how to handle a drought by studying what happened during Hurricane Katrina.

Wednesday, August 31, 2011

Part 1 of CNBC interview with Charles Evans, President of the Chicago Fed

Part 2


News from the Philippines:
The secessionist Moro Islamic Liberation Front (MILF) on Wednesday named a former president, two lawmakers, and several former and incumbent officials in Mindanao among the top 10 “spoilers" of the ongoing peace negotiations with the government.

The MILF said the motive of the 10 "is to undermine and destroy the peace process for their own selfish end."
(via Charlie Jane Anders)
Charles Evans of the Chicago Fed is a Mensch, and He Sees the Situation Clearly by DeLong
Martin Wolf on the "second great contraction"

(via Krugman)

Tuesday, August 30, 2011

Yes, We Can Do Stimulus Without Adding Debt. Here’s How. by Robert Shiller
Dean Baker has a new book
True Blood recap by Meredith Woerner, complete with Zoolander clip
Give Marx a Chance to Save the World Economy by Geoge Magnus

(via Yglesias)
Alan Krueger picked to lead the Council of Economic Advisers by Jackie Calmes
The cooler reception came from some on the left, who said the moment called for a big-picture macroeconomist who would push for more ambitious initiatives to reduce unemployment. "The kind of action he’s an aggressive and creative thinker about is relatively small bore, supply-side changes rather than big-picture efforts to fill the gap," Matthew Yglesias, a senior fellow at the liberal Center for American Progress, wrote in a blog.
Mark Thoma, Jared Bernstein, DeLong and Krugman are happy with the choice.

Monday, August 29, 2011

Brief Hiatus by Tim Duy
The failure of Bernanke to push for more aggressive action is even more puzzling in the wake of this speech. According to the Fed chair, the situation is becoming urgent:
Our economy is suffering today from an extraordinarily high level of long-term unemployment, with nearly half of the unemployed having been out of work for more than six months. Under these unusual circumstances, policies that promote a stronger recovery in the near term may serve longer-term objectives as well. In the short term, putting people back to work reduces the hardships inflicted by difficult economic times and helps ensure that our economy is producing at its full potential rather than leaving productive resources fallow. In the longer term, minimizing the duration of unemployment supports a healthy economy by avoiding some of the erosion of skills and loss of attachment to the labor force that is often associated with long-term unemployment.
I suppose I should be happy that someone in Washington considers unemployment to be a crisis, both near and long term. That said, Bernanke follows up with this:
Notwithstanding this observation, which adds urgency to the need to achieve a cyclical recovery in employment, most of the economic policies that support robust economic growth in the long run are outside the province of the central bank. We have heard a great deal lately about federal fiscal policy in the United States, so I will close with some thoughts on that topic, focusing on the role of fiscal policy in promoting stability and growth.
So he passes the ball to fiscal policy. With good reason, to be sure. Congress and the Administration are failing miserably at macroeconomic policy.
(via Mark Thoma)

Sunday, August 28, 2011

A couple of notes on the most recent Congressional Budget Office Projections:

1. They offer a portrait of an economic catastrophe. Here’s the CBO estimates of potential real GDP — the amount the economy could produce without causing inflationary pressure — and actual GDP, in trillions of 2005 dollars per year:

 
No, I don’t know where that recovery in 2015 is supposed to come from; my guess is that it’s basically the CBO unwilling to project a depressed economy more or less forever. But even with that bounceback assumed, the projection says that we’ll have a cumulative output gap of $5.1 trillion, with $2.8 trillion of that having already happened.

Surely it would have been worth making an extraordinary effort to avoid this outcome[....]
Dissecting the Mind of the Fed by David Leonhardt
But you would also find a sizable group of economists who thought the Fed could and should do far more than it was doing. This group, known as doves, tilts liberal, though it includes conservatives as well. If anything, it can probably claim a larger number of big-name economists -- J. Bradford DeLong, Paul Krugman (an Op-Ed columnist for The New York Times), Christina D. Romer, Scott Sumner and Mark Thoma, among others -- than the camp that believes the Fed has done too much.
...
David Levey, a former managing director at Moody’s and another critic of Fed inaction, points out that banks often have more to lose from inflation than from unemployment. Inflation reduces the future value of the money that their debtors — homeowners, car buyers, small businesses and the like — will repay them.
...
"The Fed regional banks represent, in essence, the banking community, which tends to be very conservative and hawkish," Mr. Levey says. "Creditors don’t like inflation -- it’s good for debtors." Indeed, the three recent dissents all came from regional bank presidents: Richard W. Fisher of Dallas, Narayana R. Kocherlakota of Minneapolis and Charles I. Plosser of Philadelphia.